“I always wonder about this ratings, the bond ratings before the crash three years ago wasn’t helpful, so sometimes I wonder if it’s political theater to build up the fear.”
said Dr. Paul on Bloomberg TV yesterday. Of course it is, but is he doing the same thing?
But I'm not sure that I agree with the rest of his assessment: that the country is insolvent and bankrupt and got that way by excessive spending on the health and welfare of Americans. It's a bit like telling your spouse that the family could go to Disneyland more often if they weren't saddled with life insurance and a retirement savings plan, but I don't think one can rightly compare the financial problems of an individual or a family with the problems of a country in such a simplistic fashion.
One becomes insolvent and enters bankruptcy because one's income is insufficient to be able to manage one's debt. An individual does not always have control over how much money he makes; can't always find a job, can't always be healthy enough to work, can't always pay medical bills.
That's not so with a government. Our revenue shortfall is in some large part voluntary; an effort to "starve the beast" by thwarting its ability to run programs that the electorate voted for. That attempt is also a bit of political theater with a lot of smokey pyrotechnics and a bit of dramatic hand waving involved so as to obscure the fact that very low taxes on large incomes do not raise revenue, by magic transfer from the people who put much of their incomes into hedge funds and equities to the people who spend most of their incomes on food and shelter.
So yes, Social Security, a government program that did much to create the Middle class and take tens of millions of older people out of abject poverty, is going to run out of funds eventually because they're going to make it run out of funds so that they can do away with it. So yes, it's also political theater designed to create fear and panic, but perhaps the word 'theater' isn't quite strong enough. I'd call it a scam.
That's not so with a government. Our revenue shortfall is in some large part voluntary; an effort to "starve the beast" by thwarting its ability to run programs that the electorate voted for.
ReplyDeleteA brilliant observation!
I agree with John on your "starve the beast" point.
ReplyDeleteAnd then there's Paul's take on insolvency. Which is incorrect.
The US has spent itself into the abyss on military spending. Period. What was that thing I posted a while back? That the US outspends the next 12 countries combined, or something like that, which takes up 54% of the US budget when all the hidden military costs are included. That's how Rome was beggared, wasn't it? Britain too, and before that Spain. I don't get why something this obvious just isn't on anyone's radar? Or is it that the US just needs to put up a big armoured front to cover up its own international insecurity?
Military spending and, I forgot to include, massive tax breaks to the rich, of course. Ugh.
ReplyDelete...but I don't think one can rightly compare the financial problems of an individual or a family with the problems of a country in such a simplistic fashion.
ReplyDeleteSay it again and again, Captain. Every time there is discussion which compares the country's budget to that of a family my head hurts. The latest evolution of this simplistic comparison is the notion of a constitutional amendment to require that each year the federal government has a balanced budget. It sounds so reasonable; I have to balance my budget, why shouldn't the government. However, as most state legislatures that have balanced budget amendments can tell us, if they are truthful, an annual balanced budget requires severe cuts to programs and an increase in revenues. When there is no increase in revenues annually, then the cuts are draconian. The federal government needs the ability to borrow, and borrow heavily to serve as the source of if all else fails funding needs of the states. Imagine a year with multiple hurricanes of the magnitude of Katrina. Oops, well, we have to balance the budget so FEMA won't be providing any assistance.
Of course, the solution is to extend tax cuts to the wealthiest 2% and they in return will create jobs that will lead to wealth for all. How long will the public at large continue to believe in these voodoo economics?
Well said, it is a scam and the majority of the victims are too blind to see that they are being bamboozled.
Well look what Voodoo did for Haiti.
ReplyDeleteIt bothers me more that the whole movement is lead by cynical, self-serving people trying to milk the peasants dry like some feudal lord than that Americans are so damned stupid and gullible.
I think this all descends from the same kind of thinking that defended slavery as being best for all concerned. They had it taken away from them, so now the plan is to make serfs of all of us -- for our own good of course, since nature intended for there to be a ruling class and a serving class, right?
But we have all those weapons - we must be still a great nation and we need them since without them we'd be. . . well, you know.
“I don't think one can rightly compare the financial problems of an individual or a family with the problems of a country in such a simplistic fashion …”
ReplyDeleteCaptain and Sheria,
If I may enlarge on this thought, the simplistic analogies that compare the running of a government with, say, the running of a business, fail to take into account the ONE fundamental property that makes government different from a business.
Businesses makes financial decisions to enhance shareholder value; governments makes moral decisions to advance the welfare of its people.
Of course, you can’t argue this point, or any point, with a libertarian. Their antipathy towards government resembles a cult. Any belief system based on faith tends to create its own infinite fault loop immune to whatever empirical evidence you throw at it. Arguing with rocks is far more productive and satisfying.
The Newsweek I got the other day has a picture of Mrs. Bachmann on the cover with mention of her crusade against the "evils of Government"
ReplyDeleteI wonder, if she thinks Democracy is evil, what she thinks is good.
What a world we live in if anarchy is being sold as Conservative!
Clearly, the lunatics are trying to run the asylum.
ReplyDeleteYes, it's asset-stripping directed at the middle class and the poor. A socio-economic order cannibalizing itself this way, I think, may well be a sign that the Republic's end isn't far off. At some point, it will become pointless to keep up the charade of democratic process. We aren't quite there yet, and even the APPEARANCE of democratic process is worth hanging on to, but things are looking worse and worse all the time....
ReplyDeleteDino:
ReplyDelete"a sign that the Republic's end isn't far off."
I keep think of Road Runner cartoons -- are we just noticing that we ran off the cliff a long time ago?