Conservatives need to face up to
reality and stop worrying about the rise of the entitlement state and
increasing debt and deficits. The
reality is that none of it costs anything anyway, and no one believes us
when we walk around shouting that the sky is falling.
Under Barack Obama, government
handouts like food stamps, unemployment benefits, welfare, disability, and
others have risen steadily, and none of
these increased programs have cost the government any extra money – any real
money. Sure, we’re handing out cash benefits or vouchers that have real
cash value, but there is no real cost to that. It’s an accounting gimmick that
shows a rise in the deficit here and an increase in the debt over there. But
what does that actually cost? Nothing.
Seriously. Taxes haven’t gone up
in more than ten years, but government expenditures have. Where has that extra money come from? Not American taxpayers, so
how can conservatives continue to say that these government handouts cost real
money? They don’t. They cost pretend
money on some accountant’s ledger that says we owe a little more money to
ourselves. And the people in charge of spending the money are in charge of deciding
whether it ever gets paid.
If you’re asking where the money
is coming from to pay for all these handouts, the short answer is that we’re
printing it. If the government needs to
write a check for something and there’s no cash in the bank, it prints more.
It’s wrapped up in fancy terms like “quantitative easing,” but the reality is
the same: we’re printing whatever it costs to pay for more benefits and bigger
government. We’re printing it, we’re
not paying it.
“Surely,” you’re saying, “there is
ultimately a cost to printing money. After all, putting more money in the
economy devalues all money, so there is a hidden cost.” Come on, conservatives,
wake up! That’s just a bunch of economic gobbledygook. Printing more money is supposed to create more inflation, but inflation
has remained low during the Obama administration (only 1.76% as of last month). Obviously conservative
economists have it all wrong.
In short, the people who collect
government handouts are most likely in the 47% of Americans who don’t pay
federal income taxes, so for them, those handouts don’t cost anything. For the
other 53% of Americans who do pay federal income tax, even as government
handouts increase our taxes have not. Clearly there is no cost to increasing government handouts. We can keep
printing money as long as we need to in order to pay for these wonderful
handouts, and inflation clearly isn’t a problem. Face it,
conservatives, more and more government handouts don’t, in fact, cost anything.
So get on board.
Finally, Heathen, we can agree on something -- sort of.
ReplyDeleteDon't let the low inflation rate fool you. Hyperinflation is undoubtedly in America's not-too-distant future. With gold prices artificially suppressed by the government to stave-off a panic (despite hovering around $1,700/oz.), and the Fed's multiple series of quantitative easing along with all their under-the-table funneling of billions of dollars to prop up other nations' central banks, it would seem the house of cards is on the brink of finally tipping over.
In reality, all the "government handouts like food stamps, unemployment benefits, welfare, disability", etc., are really a drop in the bucket compared to what's happening off the books.
As usual, you make a big deal out of a pimple on the forehead, ignoring the aortic aneurism that's about to rupture inside.
HR are you joking with this story? or just trying to point out that it isn't free and we are all gonna pay when the hyperinflation hits?
ReplyDeleteWell Brian, do you see anything here that's funny or untrue? I've always believed that deficits and debt matter. I've always believed that printing our way out was a recipe for inflation. I'm a heathen, so my world doesn't have room for faith-based views. I need to confront the world as I find it.
ReplyDeleteThis is my attempt to look at the world realistically. Apparently, deficits and debt don't matter. Apparently printing money to pay for government handouts doesn't cause inflation. Or hyper-inflation. I'd love to be proven wrong, and I'm not seeing it on my own. Please, show me my error.
Talk of "when hyperinflation hits" sounds like the end times prophecies of my evangelical upbringing. Step 1: Predict the end of the world. Step 2: When the end doesn't come as predicted, make a new predictions.
Conservatives have been predicting a reckoning for decades. Obama is the ultimate test of these predictions, reaching levels of spending never thought possible. When will these conservative predictions come true?
My brand of conservatism has no room for faith. Let's all start looking at the world as it is, not as we believe it to be.
I understand where your coming from and I do agree in general the public it tired of us calling wolf and the sky is falling. I think the country can endure a lot more debit before we have a problem. Think of it like this lets say the average American family makes $60,000 and has loans and debit of $200,000 approximately 3.33 times there income. So if we apply that to the USA we could probably take about 50 trillion in debit and be in the same kind of shape as the average household in America. I do that that one of the reasons people find it hard to grasp that our government should have no debit or little debit but its OK for me to have a lot of it.
ReplyDeleteIf we are not the party of financial responsibility, where do we go?
We do need to rethink many social polices, gay marriage, legalize marijuana, how to handle illegal immigrants and to make it easier to become a citizen.
we have been out maneuvered by the democrats, but that does not make them right
On January 1st and 2nd, a series of tax increases on all levels of income, on savings instruments, health insurance and medical supplies, is scheduled to go into effect, aimed at increasing federal revenue some 19% year-over-year. The justification for these increases is the need to control the deficit.
ReplyDeleteThe fifth largest expense of the federal government--after the military, Social Security, Medicare and Medicaid--is interest on the national debt. In 2012, this cost $360 billion--more than $1100 per citizen, five times the cost of food stamps, 19 times the budget for NASA.
Tell me more about how taxes aren't going up and debt doesn't matter.
Simple. Taxes may not go up on January 1st and 2nd. If they don't, what's your argument then?
ReplyDeleteTaxes may go up on January 1st and 2nd, but how do you explain the last four years. Obama has had $1 trillion deficits for four straight years and there have been no real consequences. He has done that without raising taxes over those four years.
Finally, taxes may go up on January 1st and 2nd, but do you really believe a single dollar will go do paying down debt? I certainly don't. New money rushing into the treasury will be spent on new laws and more government handouts.
Look, I've always believed that debt mattered. Looking around me, it appears I've believed a lie.
Assuming what we're told about the fiscal cliff negotiations is anywhere close to what's actually being discussed, the chance of avoiding tax increases in the new year is nil. The debate now is how much and for whom.
ReplyDeleteThe nature of debt (public and private) is that we get the benefit now and pay the cost later. Suppose I get a car loan and bring home a new car. For the first month, I do nothing but enjoy my car, paying nothing. Would it make sense to say that car was free? Of course not, because the cost is in the future. That doesn't make the cost any less real.
You seem to see two possibilities: That debt is all that matters and we should've collapsed already, or debt doesn't matter at all and economics is a lie. There's a middle ground. Debt matters, and the consequences are real, but they're not immediately catastrophic, at least not for the US.
"You seem to see two possibilities: That debt is all that matters and we should've collapsed already, or debt doesn't matter at all and economics is a lie. There's a middle ground. Debt matters, and the consequences are real, but they're not immediately catastrophic, at least not for the US."
ReplyDeleteI appreciate your clarity; it helps me understand what you're hearing me say. This post is a rant. Conservatives have been saying for -- literally -- decades that there are consequences to the kind of debt we are carrying. They said it in the 1990s when our national debt crossed $5 trillion. Hell, the left complained about debt in the 1980s when it crossed $2 trillion.
When we've been hearing for decades that there are real consequences to high national debt, at $2 trillion and $5 trillion, and the debt tops $16 trillion, at what point do we stop believing that those consequences are real?
What's real is that there have been no consequences to higher debt. There have been no consequences to increasing government handouts. There have been no consequences to printing more money to pay for government spending.
Your argument is the same we've always heard: but there will be consequences. Maybe you're right, but I've been hearing that there would be consequences for $14 trillion dollars and 25 years. How long should I keep the faith?
Is it any wonder that the American people and our elected leaders don't believe they have to worry about the consequences? There haven't been any so far.
I see your point and its very logical. Debit has not been a problem we seem to be able to spend and print money with no discernible consequences.
ReplyDeleteI found this and thought it was eye opening
http://www.usdebtclock.org/world-debt-clock.html
http://www.usdebtclock.org/
many countries have a lot more debit as a percentage to GDP and are still around looks like you are correct we can spend like drunken sailors for a long time
Since tone is often hard to decipher over the web, I'm not entirely certain where this is supposed to land on the sarcasm/serious scale; but I agree with it about 50%.
ReplyDeleteConservatives need to accept an important reality of modern America -- our economy doesn't need our population. We can satisfy everyone's needs on about half the amount of actual work we're able to do. We could address this problem by cutting the standard work week to 20 hours; by getting more married couples to limit themselves to one breadwinner; or encouraging shorter working careers.
The current arrangement -- borrow from China on hollow promises of payback, might work for a while. But will become a disaster when the low-skill, young population of Hispanic immigrants becomes old and starts drawing more benefits than they paid into the system.
America is the only industrial country whose young workers entering the full-time labor force, are less educated than the retirees leaving it.
Brian T: In my opinion, a family with $60K in income and $200K in debt is looking at serious financial trouble in the near future. One glitch - loss of a job, large unexpected expense, etc. could easily sink that ship.
ReplyDeleteGood point HR. No, really.
Printing money doesn't cause inflation. Demand exceeding supply causes inflation, the greater the excess, the higher the rate of inflation. Printing dollars devalues the dollar versus other currencies that are not doing the same thing, but many of them are.
Devaluing our currency compared to other currencies will increase our cost for goods made in those other countries, but that is not necessarily a bad thing for us. Higher costs for foreign-made goods helps to drive manufacturing back to the U.S., or at least to slow down the movement from the U.S. to other countries.
It could be argued that the QE's caused more money to end up in the hands of consumers and therefore should increase demand and drive up inflation, and this would be accurate, except that not enough money was printed to cause this effect - at least not yet. Without the QE's it is possible that the economy could still be contracting and this would indeed have become another "depression" as opposed to a severe recession. So rather than causing hyperinflation, the amount of money printed through the QE's more or less kept us level. Without this we might also have seen negative inflation, which can be even harder on an economy than mild inflation. In fact, when our economy is at its healthiest state, we should have about 4.5% unemployment (churn) and a low level around 3% inflation which indicates a solid and growing demand for goods.
As you indicated HR, the only problem with a huge debt is huge interest payments, and eventually the need to pay off the debt. High interest payments are a drain on our economy but won't collapse it, at least not at these levels. It does put us in the position where our fifth biggest expense is giving money (interest) to China (mainly).
We have much more to fear from our government under Obama than tax rates and printing money - these are just the distractions they are feeding us while they push their hidden agendas.
I used that example because that the national average, and you wonder why government spending does not bother most people
ReplyDeleteNo matter what we do, the deficit will continue to go up. There is not enough cuts to override our spending problem. As long the Federal Reserve continues to print money, congress will continue to spend. Its laughable that the big deal of having the rich pay more taxes will lower our deficit.
ReplyDeleteWill the #2 hit the fan someday? Probably! But, politicians will continue to play the game of kick the can down the road...its not a real problem because U.S. is to big to fail right? (saracasm)
BTW, remember the Clinton so-called surplus? Go back and see if our National debt went down? It has continued to go up every year (even in those years) and the govt has not slowed its spending one bit.
We don't print money, we borrow it. If we printed it, the debt would not go because we would not owe it to anyone.
ReplyDeleteI left out the word "up". The sentence should read, "...the debt would not go up..."
ReplyDeleteMr. Bernanke has essentially tripled the monetary base during his tenure. How long before the bottom falls out is anyone's guess. Hopefully OUR landing won't be as bad as Argentina's was.
ReplyDelete