http://www.bitsofnews.com/content/view/8652/
"First and foremost, you can't keep taking on more and more debt without it eventually effecting day-to-day operations. All that debt requires interest payments and degrades overall credit quality. When credit quality declines interest payments rise. Eventually these forces start a negative feedback loop and the whole system crashes."
"The bailouts so far is estimated at a staggering $1.43 Trillion. About 10% of America's GDP."
Comments ... #
Interesting piece, but now my brain hurts. I've also made the decision to sell my gold chains and man-bracelet.
posted by justareviewer on Jul 28, 2008 at 10:29:45 am #
...the change would force America to start investing rather than speculating. To save rather than spend.
No rational person disagrees with this - but since the welfare state the single most expensive part of our government, (10% of GDP or half the existing government activity - nowhere near defense or the Iraq war which is less than 2% of GDP), it means that we have to have a taxation system based on income which naturally discourages productivity and savings.
The taxation system that encourages savings and investment is consumption based. But that shuts out the ability re-distribute wealth.
Hmmm. I guess the New Deal is a unsustainable Ponzi scheme after all.
Who said if you rob from Peter to pay Paul, you will have Paul's support? I guess that's why, despite the obvious, liberal's cannot stop seeking Paul's support - they would be out of business otherwise.
I thought you were a card carrying chickenhawk?
Liberals like Ike? (for whom Ikea isn't named.)
We perhaps wouldn't be in this conundrum if soldiers fought for free with cheaper weapons in wars worth fighting. Is that what you're saying?
The government spending category that matters in the context of this article is social spending. It absolutely dwarfs military spending and has ever since the end of WWII. Moreover, if you want to look at trends, social programs have been rising for the last half century while military spending has been falling as a % of GDP.
Liberals always frame economic discussions with military spending as the "expensive" thing that is dragging us down and causing our deficits. But that's only because they remove social spending from the equation first. For liberals, social spending is the reason they exist - so it is not on the table. With social spending out of the picture, then yes, military spending becomes the biggest remaining nut.
However, if you look at government spending not from a liberal's eyes but from something more rational like, say, a spreadsheet, you will find that social programs cost 4 times more than military programs ($0.5 trillion vs. $2 trillion) each year.
This makes it very hard for me to get worried about the "military-industrial" complex. Personally, I worry about the biggest guy in the room and if you take your liberal sunglasses off, that would be the socialist-political complex, not the military-industrial complex.
Ike was concerned that the struggle with communism would require a continuing military expansion for decades to come and we had to be careful not turn into a military state. I think we've done well in that regard. The president doesn't wear a uniform and the welfare state is way, way ahead of the military state.
Let's put it another way.
The projected deficit for 2008 was just released this week as $500 billion.
If we were to pay for that by taking it all from one category, then which category would we choose?
A) A 100% reduction in the military
B) A 25% reduction in social programs
There is only one time when liberals become fiscally conservative and that is when it comes to defending ourselves.
Likewise, there is only one time when they are concerned with individual liberty and that is when it comes to telephone conversations with terrorists.
Notice a pattern?
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