Chop-logic from Wonderland.
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But there’s a new element today. Governments can only inflate away their debt if lenders are unwary. Today, market participants are more alert than ever. If incipient inflation is spotted, “bond vigilantes” demand a higher interest rate to compensate for the dollar’s decline. This makes inflation more problematic. Rapidly rising interest rates—they are historically low right now—would soon overwhelm the federal budget. Which means that the Fed has to be careful about its money creation.
Lewis Lehrman, chairman of the Lehrman Institute and normally an optimist, has referred to America’s “dire and deteriorating position as a massive debtor,” propped up “by the exorbitant privilege of the dollar’s role as a global reserve currency.” Our private national wealth, he adds, “has been indirectly pledged as collateral for U.S. government debt and its enormous unfunded liabilities.”
The main problem has been our endless expansion of debt, and the assumption by Democrats and the media that once spending is pushed through, as happened with TARP in 2009, the GOP is trapped. It will have no option but to “raise taxes” to keep pace. The increase in spending is treated as a ratchet that can move only in one direction.
An underlying problem is the tax code, which rewards debt (with tax breaks) and punishes savings (with taxation and inflation). Those incentives should be reversed. But wait, that would help “the rich”…
A man of faith in a godless age is hitting Americans where it hurts.
Mr. and Mrs. American Spectator Reader, let P.J. O’Rourke talk sense to your kids.
In Britain, defending your property can get you life.
The debacle of this president’s administration is both a cause and a symptom of the decline of American values. Unless Congress impeaches him, that decline will go on unchecked. An eminent jurist surveys the damage and assesses the chances for the recovery of our culture.
It won’t take long for conservatives to scratch this presidential wannabe off their 2008 scorecard.
The American Christmas, like the songs that celebrate it, makes room for everybody under the rainbow. Is that why so many people seem to be hostile to it?
Was the President done in by the economy, or by the politics of the economy?
H/T to National Review Online