Joe Doakes from Como Park emails:
I’ve been bewildered that Democrats don’t care about Obamacare and Social Security running in the red. Nobody acts irrationally in their own minds. Whatever they’re doing, it makes sense to them. But how can the government run in the red forever? How will Democrats repay the debt racked up to cover it? What’s their plan?
I figured it out. They have no plan; at least, no plan beyond today. They’re like teenagers looking at the newest iPhone. “I want that, I can afford the monthly payment, I’m buying it.” They know making the minimum monthly payment doesn’t pay down the principal but they assume something will come up, maybe Daddy will give them money for their birthday. As long as the teenager can make the monthly payments, there is no problem so they need no plan.
Now that Democrats are the government, they continue to make the minimum payment on the national debt and raise the debt limit to run up more. They won’t have a problem until the minimum payment required to service the national debt cannot be covered by additional borrowing. And since the government borrows from the people it appoints to print the money (the federal reserve), there is effectively no limit to additional borrowing and therefore no problem, now, or ever.
It’s genius, really. It’s a wonder nobody in history ever thought of that plan before.
Joe Doakes
Some conservatives describe liberal economics as “governing as if unicorns will descend from the heavents to un-screw things”. And to be honest, the unicorns make more sense.
I once asked a union official (regional) I know how the debt would be dealt with if the market crashed and some big creditors (China, Canada,etc) divested themselves of their bond holdings.
“Easy” he replied “we’ll nationalize the big corporations like Apple, WalMart, and Microsoft and use their money to pay off the debt, they can afford it!”.
He’s a big fan of Venezuela who believes their current problems are solely the result of rich people hiding the money they’ve stolen from their workers.
The problem is that if daddy, or a unicorn, shows up with some extra money it never gets used to pay off the bill on the new iPhone. Instead it gets spent on pizza and piercings – and on raising the debt limit.
That’s cute, you think Trump’s tax cuts will have offsets. That’s a real Laffer! I wonder if the dollar index is rising because of Republican future deficits. They’ll need to be financed.
All of the Laffer and supply side stuff is nonsense when government is so big and we have such voracious unfunded liabilities. They are never going to get productivity up enough and spending down enough to fix everything.
The world may crave our bonds and currency for external reasons for a long time anyway, but that will just make the collapse worse. http://bit.ly/1pZkhDH
They will have to overhaul the global monetary system someday and there is going to be capital controls for political stability, but in the long run this just lowers global GDP. A “prison planet” LOL
We have to get rid of that damn ACA as fast as we can and switch to the Swiss system with fat deductibles. The problem is the Left will hijack anything you socialize even a little.
All of the West has too much centralized government generating too many non-public goods; this kills GDP. Then throw in that they all lie about their actuarial systems. So the central banks constantly ease to goose the economy generating less and less productive debt. They can’t stop without it collapsing. In the long run it lowers GDP. Good thing we have an into an aging, less productive demographic LOL. They can get away with it because they have modified their CPI to not show the true inflation rate. China basically does the same thing. So the global debt to GDP is on a path to collapse. Have a nice day.
I very strongly believe this is NOT about people’s character, especially when the GDP never goes up to normal levels. We have a bad system really doesn’t pay if you are just going to be productive, honest, and prudent. It’s all theft, graft, and speculation.