print“The United States is facing a crushing burden of debt – a debt that will soon surpass the size of the entire U.S. economy and ultimately capsize it if left on its present course. This is not the future of a proud and prosperous nation. It is the future of a nation in decline.” Republikeynesians have come a long way; this is their description of the debt crisis in “Path to Prosperity: Restoring America’s Promise” (PDF)—the House Republicans’ 2012 budget proposal, authored by the House budget committee’s chair, Paul Ryan (R-WI). And although the role of the Federal Reserve Bank in monetizing the debt is finessed—this is still more than we’ve come to expect from the GOP:
“The lenders who buy much of the federal government’s debt have noticed the disconnect between the government’s perilous fiscal situation and the low rates of interest it is paying on the bonds that constitute the government’s debts. Some have even decided to purge their portfolios of U.S. debt, and others are advising their clients to do the same.
“Through its interventions into the economy, the Federal Reserve has recently become the largest buyer of government debt in the country, and these purchases have helped keep interest rates low. But the Fed is scheduled to stop making these purchases this summer. Congress must show the market that it has a credible plan for getting the national debt under control, in order to ease concerns over the government’s creditworthiness and stave off an interest-rate spike.
… nearly every fiscal expert and advisor in Washington has warned that a major debt crisis is inevitable if the U.S. government remains on its current unsustainable path. The government’s failure to prevent this completely preventable crisis would rank among history’s most infamous episodes of political malpractice. …”
Of course, the actual steps proposed to ward off stagflation and hyperinflation are not nearly as drastic as they ought to be.
MORE.
UPDATE I (April 6): Vox Day, on Sean Hannity’s radio show, warns of “The Return Of The Great Depression.” A good reality check is my interview with Day, my WND colleague, “Great Depression 2.0’: An Interview with Vox Day.”
Mr. Hannity seemed eager to pick Vox’s brain about prudent investments during a depression. Asset protection, says Vox, is essential, over and above a focus on returns: metal and companies with a real business model; companies that also provide real services.
Listen to the interview. Notice the alarm in Sean Hannity’s voice. Austrian economists such as Vox Day have not wavered in the “apocalyptic” predictions they’ve been making. This column was warning in 2003, if not earlier, of the consequences of endless debt, credit expansion, and the dangers of hyperinflation. As did I explain to those who bothered to listen that production, not credit-fueled consumption, was whence came wealth.
UPDATE II: To Myron, below: Your cynicism alert and my point are not mutually exclusive. The GOP has come a long way, thanks to the Tea Party, in accurately describing the coming, and calamitous, effects of the debt. We both agree that it’s too little too late.
From what I’ve caught of the budget debate I am again amazed at how low we’ve sunk in regards to what passes as our “leaders”. The Democrats remind me of a once rich heiress who is now broke and though she’s receiving foreclosure letters in the mail, still thinks she should get a brand new Mercedes every year just because. The Republicans unveil their supposed “serious” plan to tackle our debt and of course, as is no surprise, there’s absolutely no mention of scaling back our overseas military adventures/commitments. It’s all a show for the benefit of the idiocracy. When you look at the sum total of our national debt, the numbers they’re arguing over are trivial. The dead giveaway that it’s all theater is when they say it’s a “plan to reduce the deficit over the next ten years”. Anybody with a pulse knows they do a brand new budget every year and heck, the Democrats don’t even bother with THAT formality anymore.
Big Cuts in Government are coming one way or another , the longer we delay it the worse it will be down the road , the time to stop kicking the can down the road is NOW !
If you really believe in smaller Government , please join me in calling & articulating this to all politicos & gov. employees at all levels from local to the Federales
Those are the ones who are in a position to affect this situation !
I got to page 11 of this putrid pile of Public Relations by Paul Ryan (who voted for the unconstitutional Bush Medicare expansion among other crimes) – less taxes and less deficit and not a single word about a spending cut. Hallelujah!!! Praise the Lord!!!
I’m sure I’ll find more BS but I have to get back to “work” (sucking off the taxpayers!).
[You don’t think that they did, at least, describe the debt and its consequences well, as I said in my post, something they have not done before? Perhaps I am grateful for too little.]
These 325 words from an LP release:
“Republicans want to spend $40 trillion over ten years. That averages a staggering $4 trillion per year. As recently as 2000, federal spending was only about $1.8 trillion.
“They also want to increase the federal debt from $15.0 trillion to $23.1 trillion. I hope our children and grandchildren enjoy paying interest on that extra $8.1 trillion.
“People should not judge the quality of this Republican plan by the standard President Obama has set. Everyone knows Obama is a big spender. Democrats rarely campaign on cutting government. What this budget shows is, Republicans are hypocrites. They have no intention of cutting the federal government down to size. In 2021, Paul Ryan still wants the feds to be spending 19.9% of GDP. That’s a higher percentage than during Democrat Bill Clinton’s second term. In 1997, federal spending was 19.5% of GDP, and it dropped to 18.2% by 2000. Paul Ryan is worse than Bill Clinton.
“Another unfortunate but predictable thing about Paul Ryan’s budget is that it continues to mollycoddle the Pentagon. Paul Ryan is the Military-Industrial Complex’s best friend. He apparently can’t find one penny to cut from Obama’s bloated levels of military spending. Only a big-government Republican could come up with language like ‘reinvesting $100 billion in higher military priorities.’
“It’s interesting that when the Republicans controlled both houses of Congress and the White House from 2001-2006, they did nothing to shrink government, or even slow down government growth. On the contrary, back then, Paul Ryan was busy voting for expensive foreign wars, No Child Left Behind, and the huge 2003 Medicare expansion. More recently he’s voted for the TARP bailouts and even ethanol subsidies.
“We Libertarians propose eliminating federal functions that are not authorized in the Constitution. Furthermore, Libertarians propose ending foreign wars and foreign troop deployments, allowing huge cuts in military spending. Libertarians would cut the federal government down to less than 10% of GDP, and we’d keep cutting once we got there.”
Years ago, an older friend who was a yacht owner always told me to “Prepare for the worst and Hope for the best” whenever one tied-up one’s boat for the night.
I have read Vox Day’s “THE RETURN OF THE GREAT DEPRESSION”. HAVE YOU?
My wife and I have prepared.
If the politicians do not take drastic, remedial actions, I fear the worst. My grandparents, as I understand the history, had to hide their gold Francs from FDR’s confiscation of them. For more perspectives, find and speak with any Germans who survived their hyper-inflation years.
I hope for the Best…but often, wishes do not come true. Good Luck.
Ilana – your point about sounding the alarm on the deficit would be more valid if the Ryan Report was not so obviously self-serving. Much of this garbage like Medicare, TARP, doubling DoD, DHS, Housing Bubble went under the Bush-Ryan GOP yet Ryan has set up a quasi-strawman that makes it all look as if the “non-linear out-of-control” budget started with Obama. His projection of the (eeeek!!) Obamacrats spending 80% of GDP in 2075 is a bit ludicrous since I don’t even think the Soviet Union in its heyday spent 80% of GDP. So:
YES !!! – they are correctly pointing out that there is a MASSIVE BUDGET PROBLEM !!!
BUT – this is all to get some digs in at Obama so they can get back in the White House!!
As for “saving Medicare” – I haven’t seen anything that I can be happy about. The report is about the equivalent as the Democrats pointing out something like the rise AIDS in the 1980’s and blaming it on Reagan and projecting that everyone would be dead by 2010! It is always good to sound the alarm if you can blame your enemy and take no responsibility.
Remember Bill Clinton’s budget spent 18.2% of GDP!
Too little, too late. 2012 is less than a year away, the Republicans are going to give Obama the extensions he and the Democrats want; because, they don’t want to look like they were the one’s to destroy the economy during an election year. Obama has undercut the war party by going into Libya, and using NATO which everyone knows is an American auxiliary so he can keep the empire vote. Nope, whole thing is a sham. Mr. Hannity repeated the comment that if the Republican’s compromise, they will lose. For myself, I think the fix is in, just the window dressing remains.
Hyperinflation in Germany happened due to the hapless Weimar Central Banker trapped by the political economy of the Versailles Treaty. It is fundamentally the fault of The Allies – US, Britain and mainly France. The burden was far, far higher than the projected US debt for the next couple decades.
The Great Depression on the other hand was about a large deflation.
And anyone calling for hyperinflation ought to put his money where his mouth is or keep quiet. Folk Austrians have been screaming about hyperinflation for about 3 years now. Its time to put up or shutup.
Make that “making a call for hyperinflation”…