Category Archives: Economy

Debt-Ceiling Derangement

Here are some salient points I’ve picked from Anthony de Jasay’s essay, “Shall We Borrow from the Children?”:

* Government expenditure rises first, “with revenue seldom if ever catching up. The money never runs out, for unlike households, the government can always borrow whatever it needs to cover the deficit, almost regardless of how large it is. It owns a sort of widow’s curse whose magic lies in the state’s power to raise the taxes in the future that it has no stomach to raise in the present. The day of reckoning need never come, for old borrowing is always refinanced from new borrowing.”

* “… the markets tolerate high ratios for unsecured government borrowing whilst they would demand individual debtors to put up some security.”

* “Governments buy support by spending money, not by siphoning it away in taxes. Spending now and deferring the matching taxes to an indefinite future is dictated by the most elementary political know how and it should not surprise nor shock anyone to see it happen again and again, especially when elections approach and politicians start getting desperate. They are not wicked [I disagree], they are just playing by the democratic rules. That the electorate is quite content with these rules, or at least does not try to alter them is perhaps more difficult to explain. It may be that the bulk of the electorate just does not see the connection and cannot be bothered to think about it.” [Or perhaps they are “wicked”?]

* “The US has tried to stem [the deficit and public debt problem] by placing a ceiling on the federal debt, a measure whose only effect is to oblige the Congress to raise the debt ceiling every time the rising debt catches up with it.”

[SNIP]

The “contrast between [the electorate’s] collective and private behavior” is evident in the polls, if they are to be believed. “Americans strongly oppose government shutdown,” yet “the majority of Americans [also] oppose President Obama’s demand that Congress raise the debt ceiling without any spending cuts—by a margin of nearly two to one.” [Heritage]

The Warmongers: Not Looking Out For Us

Business, Economy, EU, Free Markets, Iran, Media, Russia, The State

“The Warmongers: Not Looking Out For Us” is the current column, now on WND. An excerpt:

To listen to U.S. government officials there is only an upside to the punitive sanctions imposed on Iran by the United States and a reluctant European Union. Consequently, the emphasis is forever on how to toughen the punishment; never on whether to lift economic sanctions on the long-suffering people of Iran.

But what about the effects of trade boycotts on American businesses?

Chris Harmer of The Institute for the Study of War estimates that the Boeing Company alone forfeits a minimum of $25 billion in business every year because of U.S.-imposed sanctions on Iran, a niche market that is filled by the Russians. Overall, Harmer puts the value to U.S. business of trade lost due to the economic embargo on Iran at approximately $50 billion per annum.

For example, Iran imports $1.5 billion worth of cars a year, the beneficiaries of which are companies like Nissan, Toyota and Peugeot (when they might have been General Motors and Chrysler). Peugeot does an added half a billion dollars’ worth of commerce with Iran just in car parts.

The Iranian economy, moreover, has diversified and is adapting to life without the U.S. The rest of the world—pockets in Europe and most of Asia—has not isolated Iran, with the result that the country has many trading partners other than the U.S. And while Iran has lost petroleum revenue due to sanctions, the trend will not endure. China, Japan and South Korea are hungry for the country’s crude.

Not to be overlooked are the costs to Americans of sanction enforcement, avers Harmer. In addition to the opportunity costs—the missed business aforementioned—there are “direct costs.” The Office of Foreign Asset Control in the U.S. Treasury Department squanders around $1 billion a year in developing lists of “financial institutions that are subject to sanctions,” and then infringing on the rights of individuals and companies to freely exchange privately owned property.

“Indirect costs” are incurred in the course of cultivating a massive U.S. intelligent infrastructure—a veritable alphabet soup of agencies—upon which the Treasury draws in enforcing a regimen of sanctions.

So too are the “deterrent costs” borne by the American taxpayer who pays for patrolling the Persian Gulf, the Northern Arabian Sea, and the Strait of Hormuz. …

… As a general rule, state-enforced boycotts harm honest, hard-working Americans who use the economic means to earn their keep. …”

Read the entire column. “The Warmongers: Not Looking Out For Us” is now on WND.

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Simple-Minded Pinkos Are In For A Health Scare

Economy, Healthcare, Left-Liberalism And Progressivisim, Socialism

The pinkos at Politico.com are simple souls. “[A]lready, despite the unceasing GOP campaign to sink the law, Obamacare has exceeded expectations in some significant ways,” gush two female reporters, who then proceed to celebrate the fact that the central planner has instructed insurers on how to “effectively” allocate resources. Planned economies have such a stellar history, now don’t they?!

More than 3.1 million young adults gained coverage because they could stay on their parents’ insurance; 17 million children with pre-existing conditions can no longer be denied coverage; and insurers have been forced to issue more than $500 million in rebate checks to consumers because they failed to spend at least 80 percent of premiums on medical care.

READ on, if you can tolerate the imbecility.

Pinkos generally see only one part of a complex picture. Thus, if the central-planner has legislated against service providers and in favor of consumers—why, it’s all good.

Deeply stupid liberals believe that an act of force—a law—is all it takes to make medical manna fall from the heavens.

People with insurance are already paying enormous co-pays and deductibles to cover the costs of the freeloaders … There is no free lunch.

Like A Shark, Government Never Stops Moving

Debt, Economy, Government

The State never stops. Like a shark that must keep moving to keep breathing, the governmental predator never really stops.

“Here’s the truth about a government ‘shutdown,'” writes ANDREW TAYLOR of the Associated Press:

Social Security checks will still go out. Troops will remain at their posts. Doctors and hospitals will get their Medicare and Medicaid reimbursements. In fact, virtually every essential government agency, like the FBI, the Border Patrol and the Coast Guard, will remain open. Furloughed federal workers probably would get paid, eventually. Transportation Security Administration officers would continue to man airport checkpoints. … shutdowns … happened every year when Jimmy Carter was president, averaging 11 days each. During President Reagan’s two terms, there were six shutdowns, typically just one or two days apiece. Deals got cut. Everybody moved on.

Sad but true.