“Tim,” whose capacity for economic reasoning is tiny, has confused “debt obligations” with “other expenditures.”
As explained by U.S. Senator Pat Toomey, in a January 19 Wall Street Journal op-ed, “The amount of money required to continue to make payments on all the U.S. government debt is a small fraction of the amount of revenue the U.S. government raises.” Blogging for the Library of Economics and Liberty’s EconLog, David Henderson made quick work of the Geithner fallacy:
To the soul of the subject: The engorged organisms (Anthony D. Weiner is a sample) that currently control the economy from DC can discharge their responsibility to creditors without authorizing more borrowing. To do so, however, they will have to cease their many unconstitutional endeavors, and break the promiscuous promises they’ve made to certain voters at the expense of the vassals, out of whose hides these “promises” are carved.
As it stands, Republicans—and a few Democrats, one of whom has even cosponsored an amendment to cap federal spending—have done no more than perform a budgetary Bonnie and Clyde: If Democrats want to continue the heist and run deficits and debts to eternity, they will need to promise—nudge-nudge; nudge-nudge, know what I mean? know what I mean?”—budget cuts, preferably in the trillions. Or, introduce, not necessarily pass, a balanced-budget amendment.
Another tactic taken by the competing gangs of lawmakers is to guarantee an economic apocalypse if the US government doesn’t continue borrowing apace. This is something the sniveling House Republican Speaker John Boehner has hinted at, but failed to parse. “Apocalypse Now” forecasts cannot be verified, which is why politicians, their in-house economists, and other vested interests make them.
Above all, the emperor’s experts want you to believe that the values and virtues ordinary mortals hold themselves to don’t apply to government; that macroeconomics and microeconomic are two separate solitudes, governed by different laws. But the laws of economics are natural, not political, laws. These very laws Thomas Jefferson was enunciating when he warned that “the greatest danger came from the possibility of legislators plunging citizens into debt.” (Excerpted in “Liberty, State & Union: the Political Theory of Thomas Jefferson,” by Professor Marco Bassani.) “We must not let our rulers load us with perpetual debt. We must make our election between economy and liberty, or profusion and servitude.”
When Standard & Poor’s cut the American credit outlook to negative, the Financial Post’s Terence Corcoran mocked the credit ratings agency’s “special talent for arriving at the morgue and predicting the demise of the deceased.”
Indeed, the United States has already passed on as the world’s economic leader. Having flouted Jefferson for too long, America has succumbed to public debt, the “fore horse for oppression and despotism,” after which “taxation will follow, and in its train wretchedness and oppression.”
©2011 By ILANA MERCER