\n<\/p>\n
\u201cAmerican public debt is at economically damaging levels and growing at an unsustainable rate. Congress should stabilize federal debt to reduce the possibility of a fiscal crisis.\u201d Those are the words of Romina Boccia, the Cato Institute\u2019s director of Budget and Entitlement Policy, but they really could be the words of any budgetary expert.<\/p>\n
Figure that a variation of what Boccia contends has been said for decades. It\u2019s what they always say. A \u201cdebt crisis\u201d is always in the future, and the experts always have solutions that will avert what they\u2019re confident is on the way. Well-meaning and wise as Boccia clearly is, it seems what saps her analysis and the Rose Bowl full of budgetary types who said the same before her is that they\u2019re mistaking the problem.<\/p>\n
The simple truth is that we don\u2019t have a debt problem. Evidence supporting the previous assertion is the massive amount of debt that the U.S. Treasury can presently claim. If there were a debt problem, we would have $190 billion in total national debt as opposed to over $30 trillion. Actually, the previous number is how much Russia owes creditors. Russia\u2019s debt isn\u2019t microscopic relative to the U.S.\u2019s because Vladimir Putin is secretly a classical thinker who understands that government spending is a tax, but because investors are very pessimistic about Russia\u2019s economic future. Since they are, they won\u2019t lend to a country that can lay claim to an economy smaller than Italy\u2019s.<\/p>\n
On the other hand, the U.S. has massive amounts of debt in nominal terms precisely because investors think its economic future is more than grand. And because they feel that way, they line up to buy the debt. It\u2019s rather apparent from $30 trillion+ in total debt (and as Boccia would likely add, tens of trillions more in future liabilities) that the markets feel a number that reads as presently enormous will eventually not be so enormous relative to future revenues flowing into Treasury. Which is the point.<\/p>\n
We don\u2019t have a debt problem; rather we have a problem of too much revenue now, and a market expectation of way-too-much revenue in the future. Markets are forward looking, and the trillions in debt are a signal that debt problems don\u2019t loom.<\/p>\n
Still, it\u2019s worth stressing that the spending is a problem. As referenced before in the brief pivot to Russia and Putin, government spending is a tax. Better yet, it\u2019s the worst tax of all. Supply siders focus their happy talk on tax rates as a production deterrent, and they\u2019re right that income taxes are a penalty placed on work. Yours truly has written as much in numerous books.<\/p>\n At the same time, it\u2019s not unreasonable to speculate that individuals with last names like Bezos, Musk and Zuckerberg would be enterprising at all sorts of rates of taxation. One guesses they \u201ctap dance to work\u201d like another billionaire by the name of Warren Buffett. All of which speaks to the horrors of government spending. While Bezos et al would surely work at all sorts of tax rates, they can\u2019t innovate without capital.<\/p>\n Government spending by its very name shrinks the amount of capital available to commercial visionaries. Despite this truth, Boccia\u2019s focus is on shrinking debt as though that\u2019s the crisis. See above. It\u2019s not. Instead, it would help if conservatives and libertarians recognized that to focus on how Congress attains dollars to redistribute is to make a distinction without a difference. What matters is that whether through taxation or borrowing, the extraction of precious resources from the real economy is the true, and economy sapping tax.<\/p>\n The above reality Boccia seems to gloss over. Which is a mistake. Really, what would she prefer: a balanced budget of $6.5 trillion or an annual deficit of $250 billion on $1 trillion in spending? The answer seems pretty obvious, at which point the goal should be to reduce incoming revenues as much as possible. The extraction of wealth is the crisis (something supply-siders have never understood) simply because it enables a growing governmental burden in concert with growing amounts of debt that investors are all-too-willing to buy given an expectation of wealth extraction in ever larger amounts in the future.<\/p>\n It\u2019s something for Boccia and other libertarians and conservatives to think about now. We have a revenue problem as opposed to debt problem, and the evidence is the debt itself. After which, the true crisis is one of an unseen lack of economic progress born of government spending itself, not how the wealth is extracted so that<\/em> Congress can spend.<\/p>\n<\/div>\n\n \u201cAmerican public debt is at economically damaging levels and growing at an unsustainable rate. Congress should stabilize federal debt to reduce the possibility of a fiscal crisis.\u201d Those are the words of Romina Boccia, the Cato Institute\u2019s director of Budget and Entitlement Policy, but they really could be the words of any budgetary expert. Figure …<\/p>\n","protected":false},"author":1,"featured_media":42171,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[161],"tags":[],"_links":{"self":[{"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/posts\/42170"}],"collection":[{"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/comments?post=42170"}],"version-history":[{"count":0,"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/posts\/42170\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/media\/42171"}],"wp:attachment":[{"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/media?parent=42170"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/categories?post=42170"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/tags?post=42170"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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