Thursday, December 10, 2015

All You Need To Know About The Financial Doom Of America

America is doomed.

It is doomed in a lot of ways. Morally. Demographically. Pretty much by any measure but especially fiscally because that is going to implode sooner rather than later.The problem is really insurmountable. There are tens of millions of people who get "free"stuff from the government and will demand that they continue to get free stuff with the threat of civil unrest if they don't. The government has incurred such a staggering amount of debt that the only way to deal with it is to either just pretend it never existed or devalue the currency so that it can be paid back with super inflated money. There is no political will and therefore there is no path back to solvency.

I don't really need convincing on this issue but every now and again something is said or written that reaffirms what I already know to be true. Today was one of those occasions brought to us by National Public Radio. Now NPR is already very close to a parody of itself by shoehorning "climate change" into virtually every news story. Today the topic was an interview with Peter Beinart from the Atlantic, 'Atlantic' Article Explores How Obama Thinks About Terrorism. The interview itself is mildly interesting, as if we need another look to understand that Obama and Republicans have completely different understandings of terrorism. I would suggest that they aren't as different as they may seem because both propose solutions that increase the power of the state. Two sets of collectivist politicians haggling over which fascist solution is best is not a real debate. Anyway, Beinart said something that really captures the mindset that is leading to the fiscal destruction of America in this exchange (emphasis mine):
But the bad news for Obama is the fact that the United States has more money because the budget deficit has declined and the fact that we are now further away from the trauma of Iraq means that we are moving into a more hawkish cycle - a cycle that I think he suspects could lead to dangerous overreaction which could strengthen our enemies.
Did you catch that? America has "more money" because our budget deficit is lower. In the rarefied air of New York and Washington D.C. that makes perfect sense. Not only that but it is a "fact" that this is true. As anyone with an ounce of common sense knows, and to borrow the vulgar vernacular of fly-over country, that is utter hogwash. The money that makes up the deficit is called "the deficit" because by definition it is money we don't have so we are spending money that has been borrowed against the earning potential of future generations and pie-in-the-sky Keynesian projections that if we just spend a few trillion more in deficit we will magically "stimulate"  the economy, jobs will flourish and tax revenues will skyrocket (assuming of course that our political overlords are not going to keep spending everything the government brings in and then some no matter how much tax revenue they collect). When D.C. treats the deficit as some sort of given, a legitimate source of income to be spent in perpetuity, we end up with a crippling debt that absolutely no one outside of a tiny cadre of libertarian leaning Republican rebels is even willing to speak about.

Maybe I am overreacting but I just can't get over the foolishness of borrowing less money as an indication of having more money to spend. Writers for places like The Atlantic are supposed to be the bright stars of media in contrast to people who write blogs and rags like the New York Daily News but apparently not. With people like this driving the intellectual conversation in America we had better prepare for widespread chaos just down the road.

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