printIn the eyes of Thomas Jefferson, observes Marco Bassani, “the greatest danger came from the possibility of legislators plunging citizens into debt.” Bassani, a professor of history and political theory at the university of Milan, Italy (and a Facebook friend), has written perhaps the best book on “the political theory of Thomas Jefferson.”
“We must not let our rulers load us with perpetual debt. We must make our election between economy and liberty, or profusion and servitude,” quotes Bassani in Liberty, State & Union. The “fore horse” for oppression and despotism is public debt [which is better relabeled government debt]. “Taxation follows that, and in its train wretchedness and oppression” (p. 106).
If only the high-minded Jefferson, author of the Declaration of Independence, had written the Constitution with crooks in mind.
UPDATE I (April 18): What took them so long? Standard & Poor’s has cut the American credit outlook to negative, reports Bloomberg.com:
“S&P assigned a one-in-three chance it will lower the U.S. rating in the next two years, saying the credit crisis and recession that began in 2008 worsened a deterioration in public finances. Budget differences among Democrats and Republicans remain wide and it may take until after the 2012 elections to get a proposal that addresses the concern, S&P said.”
And that’s not the half of it.
Despite the skewed reporting on the move, even the New York Times recognized that what the following sources say must be included in their report, today:
“The idea that the U.S. public finances are on an unsustainable trajectory is hardly new news,” economists from Capital Economics said in a research note. “Indeed, we warned that the U.S. might be downgraded, or at least put on negative watch, as far back as nearly two years ago.”
What has “You-Can’t Fix Stupid” got to say for himself? He blames partisanship, of course, for the S & P’s belated reality check—but then responds to the economic reality reflected in the S&P’s downgrade with … a wave of his magic political wand:
For their part, administration officials played down the revision while reiterating Washington’s determination to act. Treasury officials “believe S.&P.’s negative outlook underestimates the ability of America’s leaders to come together to address the difficult fiscal challenges facing the nation,” an assistant secretary for financial markets, Mary J. Miller, said in a statement.
President Obama has initiated a bipartisan process that will help make progress on restoring fiscal responsibility, the statement said.
“I think this is fundamentally S.&.P’s making a political judgment,” said Austan Goolsbee, chairman of President Obama’s Council of Economic Advisers, in an interview with Bloomberg TV news, pointed out that President Obama in a recent speech had said that there would be actions taken to promote fiscal responsibility. “I don’t think that the S&P’s political judgment is right.”
UPDATE II: I.DING THE CORPSE. The S&P’s “special talent is to arrive at the morgue and predict the demise of the deceased,” writes the Financial Post’s Terence Corcoran.
The United States has already forfeited its role as the economic leader of the world. Under the Obama administration’s program of rising debt, soak-the-rich tax policies, spending expansions and regulatory overkill, America is already establishing itself as a fiscal and economic mediocrity.
An admirable effort that will ultimately prove futile given that the average government agent, in whom the powers of arrest apparently reside, is functionally illiterate.
If the central planners thought that local, state and federal law enforcement as well as the U.S. military were something other than common dolts, than there would be some cause for a belief that a return to a Framers’s Intent were possible.
With the aforementioned serving as willing conspirators in our government’s “debate” concerning “The People’s Business,” there is essentially no reason for the central planners to regard the likes of Ron Paul, amongst others, as anything other than a momentary distraction.
Of course, any Constitution can only be as good as the people are willing to enforce it. This one was slowly getting wounded like a prizefighter but staggered around for a while until receiving a technical knockout in 1937.
If government spending was productive, it would not be an enormous problem but most of it is malinvestment – very few “dividends” come out of a bomb dropped on a Pushtun, a Social Security check to a retired millionaire, or an agribusiness subsidy.
The unproductive Welfare-Warfare leviathan must be fed with taxes from the rich, taxes from the middle class, counterfeit inflation, or debt – and in this case, a toxic combination of all 4. Debt, however, is growing out of control. Should interest rates go from 2% to 6%, the interest on the current debt (and the Fannie-Freddie part) will grow by $3000 per taxpayer / year. This is all highly unsustainable.
Jefferson also said that one generation shall not bind another generation but the WWII and Boomer Generation have already bound the next two into debt slavery.
Since Ron Paul thinks that the Fed is the ultimate source of our ripening economic catastrophe, that’s all he is: a “momentary distraction”. The real issues are structural: 30 years of open-borders cheap labor insourcing that has destroyed working class real$ purchasing power, and 30 years of “free trade” job outsourcing that has destroyed middle class real$ purchasing power. In the context of this hollowed-out economy, Bernanke and Co. are doing about all they can do to keep the sinking ship afloat yet awhile longer: monetize just about everything. Won’t work much longer, but I don’t blame them for trying. And I’m not stupid enough to believe that you libertarians have any solutions.
Making people debt slaves works until it doesn’t. Eventually the American economy, built entirely on the principles of a Ponzi scheme, will tumble and fall. Anyone that thinks we’ll ever pay off our enormous debt is seriously delusional.
The real question: how will Americans respond to the collapse? Will they be like the Japanese in the aftermath of the tsunami, and withstand the pain to come with stoicism and resolve, or will they lash out against their neighbors in a Hobbesian temper tantrum?
Of course, getting angry and marching against those responsible for the debacle is encouraged, but that would require an educated populace. We don’t have that.
It could get ugly. Keep your powder dry.
Although Ron Paul is most known for monetary policy, I believe he is more well-rounded than some would believe-particularly in foreign policy. However, I wish he were more like Jefferson in that aspect. It probably would not prove beneficial given that most Americans are unable to consider our foreign entanglements based on the evidence at hand. In this regard, I suppose the appropriate political consideration is not to question entanglements dating back one-hundred years, as I would. He is right to question whether our Middle Eastern foreign policy presents an immediate national interest. He is also right to conclude the occupying Afghanistan-Iraq-Pakistan during an Islamic revival is definitely not within our national interest-despite however much it would cater to the meddlesome neighbor that is our national psyche.
In my previous response, I was expressing my skepticism that our march toward default and/or totalitarianism was inevitable because prerogative writs remained within the hands of government agents who are more than willing conspirators and/or incapable of retrospect. Regrettably, it is self-evident that the Framer’s Intent was designed for a classically educated and religious populace, who were bound by common ancestry and blood. It is perhaps incompatible with present day America-I am not certain how to resolve that.
Compassionate Fascist: “And I’m not stupid enough to believe that you libertarians have any solutions.”
I hear this statement on most of the conservative and liberal sites I visit. Nowhere in any libertarian concepts do I find any statement that we do have the solutions. We say, small governments can solve their problems better than large governments and that large governments cause large problems. We do not try to be “know it all-with one solution fits all.” The citizens themselves are always responsible for the solutions. Arizona looks at immigration different than New Jersey, for example, even cities inside Arizona see it differently. Looking for a government leader, Republican, Democrat or Libertarian is asking for a dictatorship and ducking personal responsibility.
Hey Glisson, I support your point.
Compassionate Fascist…ya, that worked out well for the German Jews, the Gypsies, etc.
I really wish anyone who owns a home would go to City Hall and try to get their Tax Valuation lowered. Next, ask this question to your vehicle licensing authority: Why is my vehicle plate tax based on the “purchase price” of the vehicle – if in your state it is – rather than the “Gross Vehicle Weight”. Vehicle weight, not value, wears-out the road. Finally, imagine what that would be like if it were the Fed’s bureaucracy with which you had to deal.
FASCISM: A fantasy for those who “kiss ass”, but can’t produce anything or even find joy in working for producers.