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Vin Suprynowicz
Like we're ever going to pay off this debt
If I invoke the phrase "Greek debt crisis," do your eyelids start to grow heavy?
Do you somehow find it difficult to summon up a fresh wave of outrage if someone mentions that when Barack Obama's National Commission on Fiscal Responsibility and Reform (better known as the Democratic Tax-Hike Justification Front) convened for its second monthly meeting last week, Congress was already 41 days past its April 15 deadline for passing a budget resolution -- scared to death to admit in an election year just how much new debt and spending they intend to crank up?
If these topics fired the American imagination, the most popular prime-time television shows would feature teams of CPAs wiping sweat from their brows as they raced to figure out a tricky tax return on their desktop calculators.
So let's try to avoid a page full of decimals and percent signs. Pardon my ballpark figures.
Go watch the federal debt clock at http://www.usdebtclock.org/. It shows the federal government has promised to pay the folks who bought U.S. bonds $13 trillion which they don't have. Your personal share is about $117,000. Make that $180,000 when all government debt is included.
Total United States unfunded liabilities? I believe that says $108 trillion. With average family income at about $62,000 per year, can you ever pay that off?
Someday soon, people are going to stop loaning money to these Pharoahs of Fakery, these Ptolemies on the Potomac, or else Washington's creditors are going to start demanding some serious collateral for their loans that won't be politically popular. Like, maybe, the Hawaiian Islands.
The Poor Soul tries to envision a solution.
"Gee, Vin. We have to keep paying interest on the debt, and we have to keep meeting our obligations to Social Security, Medicare and Medicaid, since those are moral commitments. Unfortunately, when you add all those up, you get more than half the current federal budget. So if we cut everything else -- the armed forces, farm subsidies, federal courthouses, everything -- by two-thirds, that's a one-third cut in the federal budget. Do that, and stop borrowing -- an end to borrowing is the first step if we really want to start paying down the debt -- and we can at least cut taxes by one-third. That's a good start."
No it isn't. If you stop borrowing, under this keep-on-spending scenario, you have to raise taxes enough to replace the cash flow that was previously covered by your borrowing. Taxes would remain essentially the same, in exchange for which people would get a lot less in government "services." How long would such an austerity regime be tolerated?
Besides, actually paying down the government debt is a terrible idea. Have you ever paid off a credit card? Suddenly your mailbox is full of new credit offers.
If our hypothetical conservative/libertarian austerity administration took over, gutted all those federal "services" people line up for and actually started paying down the debt, how long would it be before the socialists returned to power, only to find they could now borrow even more, because (thanks to our well-intentioned but idiotic efforts) the U.S. of A. would actually now have a better credit rating?
No, if you want to get the U.S. government off the borrow-and-spend treadmill, there's only one answer: default.
You have to win only one election, at which point you declare Social Security, Medicare and Medicaid all bankrupt and closed -- in default. You believed the promises of those lying politicians? Your problem.
You own U.S. bonds? Tough. The politicians lied when they said they had the power to make succeeding generations pay their debts. We're defaulting. You don't get another cent.
Presto. Half of those "mandatory" federal expenditures are gone, overnight. Now slice everything else by two-thirds and you've reduced both federal expenditures and federal taxes by 80 percent.
But here's the best part. Four, six, eight years later the pendulum swings, as it always does, the socialists come back to power. They go back to the folks who used to loan money to Uncle Sam, saying, "Hi, remember us? We're the compassionate progressive collectivist redistributionists, and we're back. We'd like to borrow a few trillion again to re-animate some of these great federal programs that our evil predecessors nailed into coffins and buried out back."
"Loan you money? You just defaulted. Your credit rating is zero."
"No, no, no. That was the evil conservative/libertarians. They're gone now."
"Yeah, and in four years they could be back, and default on your debts all over again. Take a hike."
A massive federal default would prevent the redistributionist thieves from running Washington into debt again, for as much as 50 years.
Start asking the candidates: "Would you vote to default on the federal debt? Why not? The only other solution is to hyperinflate our way out of it, which amounts to the same thing but renders my dollar-denominated savings worthless in the process.
"I don't remember signing anything that said I'd pay all the debts run up by these crooked politicians, while they all retire to a nice ranch. They swore an oath to obey a Constitution that authorizes only a tiny portion of this spending. Isn't a default the only way to end the borrowing and deficit spending for good? Why would that be bad?"
Vin Suprynowicz is assistant editorial page editor of the Review-Journal, and author of "Send in the Waco Killers" and the novel "The Black Arrow." See www.vinsuprynowicz.com/.
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Hopefully, the successors to the current gang in Washington does not implement the solution of Sulla.....proscriptions are so messy BUT VERY profitable!...don't worry someone will come to that eventually.....
"I believe that banking institutions are more dangerous to our liberties than standing armies. Already they have raised up a monied aristocracy that has set the government at defiance. The issuing power should be taken from the banks and restored to the people to whom it properly belongs." - Thomas Jefferson
KD,
What facts does Dr. Krugman discuss that you can show are untrue or are you just spouting an ad hom attack?
Winston whatever,
No. When will you be getting help for your delusional outlook on relity?
Mark, are those the same "credible economists" (of the Keynesian persuasion) that manipulated us into this mess?
Of course, our debt-based monetary system was designed by the fascist/globalist banksters to put us in the position to collapse that we currently find ourselves. They created the federal reserve for exactly that purpose.
"If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them (around the banks), will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered." - Thomas Jefferson
Too bad we didn't listen...
Interesting piece. If we default, we'd better do it while we are militarily strong. That would take care of outside forces looking to despoil us. What would happen domestically? Are there enough adults that we wouldn't have a repeat of Greece?
Mark, you are actually quoting Krugman, the most partisan economist ever? He is willing to change any of his previous findings to support a liberal agenda*. Deficits are the devil for Reagan, but a useful tool and nothing to worry about for Clinton and Obama. He got his Nobel price by SUPPORTING free markets and choice and now is spending the majority of his life refuting his own conclusions.
* http://econjwatch.org/articles/when-the-white-house-changes-party-do-economists-change-their-tune-on-budget-deficits
And cue the insanity by Vin...now.
Read what credible economists have to say about our debt and deficit before listening to an amateur without a clue.
Try here:
http://www.cepr.net/
And readers, with actual reasoning skills, could also read Paul Krugman, Nobel prize in economics professor to understand more, or they could remain ignorant and read Vin with a degree in what???
My bet is hyperinflation. They don't have the courage to do anything else.
Imagine a train full of freeloaders heading toward some promised destination. There's strong rumors that the bridge is out ahead. Exactly where nobody knows. But everyone on board wants to get to the destination quickly and in comfort.
The engineer tells the people he has to slow down, maybe even stop the train, maybe even back up. They growl and become angry. They want to go full speed ahead! If the engineer won't promise them a comfortable trip, they'll throw him overboard and vote in a new engineer.
And so it goes.
Although it would be an option the lobbyists would never let it fly. The scary thing is that one day the oil rich countries and China will refuse to buy any more debt instruments and the shaky deck of cards will fall. Those government programs now set in stone will have to evolve, like the pensions in Greece which are being reduced by 20 percent and more.