–Ignorance at work: $14,300,000,000,000: Debt Limit Showdown Looming

The debt hawks are to economics as the creationists are to biology. They, who do not understand monetary sovereignty, do not understand economics.

Once again, Congress and the President will go through the meaningless debt limit dance. It truly is frightening how ignorant of economics these people can be.

First, it is Congress and the President who decide how much to spend and how much to tax. So presumably, the purpose of a debt limit is Congress’s way of preventing itself from spending too much or taxing too little. In short, by enacting a debt limit, Congress tells voters:

“We are too stupid and reckless to know that when we increase spending or reduce taxes, this will add to the debt, so we need to set a limit to tie our hands. Then after we debate for months, deciding exactly what to spend and what to tax, we can go back later and in a few days revise all the well-considered decisions we made earlier. Or we can close down the government. Even after we pass spending or taxing bills, they never can be relied upon, so no one can plan for the future. That’s how we geniuses run the economy.”

Second, and even more important, a monetarily sovereign nation should not set a “debt limit,” because that nation has no limits on its ability to service any debt of any size. So, here Congress tells voters:

“We are too stupid to understand, and too lazy to learn, what monetary sovereignty means. We think we still are pre-1971, when we were under a gold standard, and a limit on debt was necessary. We do not know why we eliminated the gold standard, and we don’t care. We’ll continue to act as though it still were in effect. Don’t blame us; we’re just politicians.”

When you read and hear all the debate about the debt limit, you will experience the ultimate of Congressional and Presidential prevarication. If anyone simply tells the truth — “The debt limit not only is unnecessary, but harmful” — it indeed will be a miracle.

Rodger Malcolm Mitchell
http://www.rodgermitchell.com

No nation can tax itself into prosperity. Those who say the stimulus “didn’t work” remind me of the guy whose house is on fire. A neighbor runs with a garden hose and starts spraying, but the fire continues. The neighbor wants to call the fire department, which would bring the big hoses, but the guy says, “Don’t call. As you can see, water doesn’t put out fires.”

3 thoughts on “–Ignorance at work: $14,300,000,000,000: Debt Limit Showdown Looming

  1. More financial problems caused by ignorant debt-hawks:

    The Associated Press
    Sunday, November 7, 2010; 9:43 AM

    “WASHINGTON — Republican Sen.-elect Rand Paul says GOP lawmakers must be open to cutting military spending as Congress tries to reduce government spending.”

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  2. Further harm caused by debt-hawks:

    By Rob Stein
    Washington Post Staff Writer
    Monday, November 8, 2010; 7:52 AM

    “Federal officials are conducting an unusual review to determine whether the government should pay for an expensive new vaccine for treating prostate cancer, rekindling debate over whether some therapies are too costly.”

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  3. Great post. One of the best yet.

    http://en.wikipedia.org/wiki/United_States_federal_budget#Military_spending

    “President Obama’s 2010 budget proposal includes a total of $663.8 billion, including $533.8 billion for the DOD and $130 billion for overseas contingencies, primarily the wars in Iraq and Afghanistan.”

    $130 billion this year alone for Iraq and Afghanistan, yet “some therapies are too costly”.

    Yeah right. It’s amazing that we haven’t had a Civil War over this crap every year since 1971.

    Oh yeah, and all this is run on taxes?

    “During FY 2009, the federal government collected approximately $2.1 trillion in tax revenue”

    Then proceeded to spend 3.5 billion. 1.4 billion coming from thin air of course.

    It’s all about the priorities you know.

    Like

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