We are a commune of inquiring, skeptical, politically centrist, capitalist, anglophile, traditionalist New England Yankee humans, humanoids, and animals with many interests beyond and above politics. Each of us has had a high-school education (or GED), but all had ADD so didn't pay attention very well, especially the dogs. Each one of us does "try my best to be just like I am," and none of us enjoys working for others, including for Maggie, from whom we receive neither a nickel nor a dime. Freedom from nags, cranks, government, do-gooders, control-freaks and idiots is all that we ask for.
Congress, ever more a re-election committee for incumbents of all parties rather than a legislature, has shown scant relish for either cutting spending or raising taxes on the middle class, both of which create instant voter resentment. So it is likely to borrow still more in the bond market.
Of course one way for a government to get out from under an unsupportable debt load is to inflate its way out of it. The national debt is dollar-denominated, so a raging inflation would make it worth less as a percentage of GDP. In the inflation-ravaged 1970’s, the national debt nearly tripled in dollar terms (from $370 billion to $909 billion) but it fell as a percentage of GDP from 39 percent to 34 percent.
The Federal Reserve’s number-one job is to maintain price stability. If the Fed — despite what will be enormous pressure from politicians desperate to avoid having to take responsibility for their folly — does that job, I don’t think the present debt course will be sustainable.
How that will play out is anyone’s guess, but it will be ugly, to put it mildly.
I know a person who "hasn't slept very well since Reagan started his (fill in the blanks)".
Same person says "This is Bush's recession".
This person is certifiable, and yet, so average for Portland. Every bad thing in life has a root somwhere in Republicanism.
re: the Cromwell piece below- There will always be a straw Republican to blame things on. My bet is, the more crazy it gets (crazy taxes, crazy inflation, crazy debt, crazy wars) the more Bush/Cheney or even Reagan will be blamed.
(this might work for LA gang bangers- just use birders for all your drive-bys, say "Cheney did it...")
If you owe yourself money, can you call the IOU an asset on your personal balance sheet?
If you pay yourself back do you have more money afterward? Of course not! On a cash basis, this is just left pocket, right pocket.
The SEC and FASB prohibts such practices as fraudulent. If present with the situation, any rational analyst would subtract such a fictitious asset from both assets and net worth. But this is what the government does.
The US government is the largest holder of UST bonds at $4.2 trillion. When you strip away the smoke and mirrors, the real national debt is $10.5 trillion or 73% of GDP and not $6.3 trillion or 40% of GDP.
What this means is that all of those trust funds such as Social Security and Medicare are already essentially bankrupt on a cash basis. Medicare is cash flow negative today and Social Security will be cash flow negative by 2016. The treasury will have to issue even more debt to get the funds to pay those maturing obligations.
This is a house of cards. Anyone who did this in the private sector would go to jail and justifiably so.
Is this how it ends for us, as Americans. We suffocate under an avalanche of debt?
We have gutted out our manufacturing strength, become consumers instead of produces.
Are we really going to die of a death of a thousand debts?
When I occasionaly sober up and peruse current events,
invariably someone will point out the path that this country has taken in arrears of common sense. Its pretty simple actually, if you take away my beer then you find out what pissed-off means. It involves guillotines.
For all of the talk about "de-leveraging", there is no true de-leveraging in my estimation.
All that is happening is a shift in debt from the private sector to the public sector - from the backs of irresponsible to the backs of everyone (in particular the responsible).
It is the only way the government can get its claws into the responsible.
We have found a way to take the greatest nation on earth with the greatest form of government governed by the greatest single document on government (the Constitution) ever written and found a way to let the lowest common denominator destroy it all.
I fear that the level of human suffering in the future will be greater than anyone can imagine as government becomes much less benign.
Barrett ... I don't think of our government as actually benign, necessarily. I think of it more as the free interaction of human selfishness to bring about a relatively benign result.
When I was a young thing in my twenties, I lived just outside Princeton with my new husband who was the son of a Princeton professor. [Naturally, he was a Fabian socialist.] We went to an evening lecture by Jacques Maritain, the French philosopher, and he said something which has stayed with me for all these years, that "democracy is the free operation of pressure groups." Like all 'nutshell definitions' it's necessarily oversimplified, but the nugget of truth is there. It's when busybody politicians intervene and interpose toxic controls, that the elegant system gets screwed up. Naturally, economic chaos results.
I think I may have chosen my words poorly. The original construct of the Consitution gave the federal government very limited powers and delegated most of the power of government to the states.
I was thinking of that model and the way America originally functioned as a more "benign" government. Of course, this is juxtaposed with a more aggressive or malignant government, or put more kindly, a less benign government.
This is the process I see unfolding if nothing is done about it.
First, the government will use any and all manner of excuses to erode and confiscate the assets and wealth of the repsonsible. Of course, the responsible are the only true opposition.
Second and concurrent, the government will use its legislative power and, to the degree possible, the courts to make it harder for citizens to defend themselves. Take any of the gun control measures currently in Congress as examples. (Of course, making it more difficult to purchase ammunition via regulation or taxes is another way of exacting gun control.)
Third, weaken the rule of law whenever possible. The rule of law is the thin line in the sand that protects us from tyranny. The government is presently undermining contract law (which also helps accomplish my first point).
The history of unchecked governmental power is full of bad stories for the citizenry of those countries.