There’s nothing to prevent the federal government from creating as much money as it wants and paying it to someone.” — Alan Greenspan
Hm. The person often blamed for seeing the housing bubble building and doing nothing about it is now your guru. Interesting how the worm turns.
At any rate, Greenspan was right that there’s nothing to prevent us from doing it, as long as you ignore the negative financial consequences.
Here’s my favorite:
You know, Paul, Reagan proved that deficits don’t matter. We won the mid-term elections, this is our due. — Dick Cheney
You seem to be operating as if we are still on the gold standard. Good luck with that.
Ah. So, anyone, to you, who does NOT agree that deficits don’t matter must be a “gold bug”. :-)
Reminds me of John McCain accusing anyone who wants to cut the military budget of being an “isolationist”. That’s a rather puerile way of trying to cut off a conversation, don’t you agree? As well as being logically fallacious.
It also means that about 98% of the nation are “gold bugs”, including the vast majority of our politicians, our economists, the CBO, and the ratings agencies, who will ultimately penalize us if we decide that “deficits don’t matter.”
What would happen then? Well, they would lower the credit rating of the US, which would increase the cost of our borrowing, which would then lower the social utility of the taxed dollar, seeing that an ever-increasing % of that dollar goes to debt service rather than the government programs it was intended for.
This creates a “circle the drain” effect, where to maintain the existing programs at their current levels, you need more and more money in taxation to support them. You never get to improve on any of the programs, however, because you’ve locked yourself into a cycle of compounding debt service which is even more extreme than the one we’re locked into today.
So, when I say “good luck with it”, I am simply pointing out that virtually nobody has your cavalier attitude towards the national debt, thankfully. Except a few cynical politicians who most likely know this is all unaffordable, but intend to try and ride the wave to electoral success, so they can continue doing absolutely nothing of value to the American people, but from nicer offices.
That said, I ignored this little throwaway line of yours earlier, now I think it’s time to address it:
Have you ever heard anyone opine how we are going to pay for the next military surge? Of course not. Theres a reason this line of “thinking” only comes up in response to any sort of social welfare program.
You’re not thinking correctly to ask a question like this. The reason “nobody worries” (some do, but let’s not digress) about the cost of the “next military surge” (or hurricane relief, for that matter) because those are one-time expenditures which can be amortized against tax receipts. 100B for Harvey is a rounding error in the total national debt.
But — and this is the key point to be made — military surges and hurricane relief do not represent an ongoing fiscal commitment on the part of the US on into the future. So, yes, we concern ourselves with long term obligations and paying for them; one time expenditures…..not so much. And that makes perfect sense.
And….why do we (e.g., our congresscritters) concern ourselves about either? Well, because two entities which matter, the FOREX markets, and the ratings agencies, are VERY concerned about them; the FOREX markets ultimately control the value of our currency, while the ratings agencies can markedly affect that interest rates at which we borrow.
And, if our currency is devalued, or our national credit rating diminishes…..well, see the above comment on “compounding debt service”. You have to raise revenues just to keep programs you like at their current levels. Forget about ever expanding them.
Because there’s enough neocons in both parties to prevent any cuts from happening to the military.
Hope that helps.