Liberal Insanity

How can any sane person advocate spending money he doesn’t have?  Funds could come from one of only two sources.  Compel others to pay it (thievery) or borrow it (with no foreseeable ability to repay it, bankruptcy is inevitable). 

But, of course, different rules apply to government, don’t they?  Sure, forcing others to pay money can be called taxation and borrowing funds can be labeled fiscal policy.  And the Federal Reserve, in effect, can simply print more money.  But different names don’t change economic realities applicable to individuals and governments alike.

Increased taxation will decrease the ability of the private sector to fund economic growth.

Increased borrowing will up the national debt from already astronomical levels of $16 trillion.

Expansion of the money supply (“print it”) will eventually result in inflation.

But no matter.  This is what President Obama wants.  And that is insanity.

But why, liberals respond, fear a growing national debt?  Don’t we owe most of it to ourselves?  Yes, but 40% of the debt is owed overseas, China in particular.  Interest, of course, must be paid on 100% of the debt.

With the economy still in a rather sorry state, interest rates on the national debt are historically quite low.  But history tells us that they won’t remain so.  How are those increased interest payments to be paid? 

Let’s assume that the current interest payment is 1% on the national debt.  (It is actually less, now.)  That’s $160 billion a year.  Put the interest rate at its historical average of 4% and interest payments rise to $640 billion.  That is one half of our current annual deficit of $1.25 trillion.  How is that going to be paid? 

The downward spiral will accelerate. 

Why do liberals think [or do they even contemplate the prospect?] that we won’t share the Greek fate?

Is it possible that taxation and borrowing won’t be enough to pay our current national debt?  Printing more money wouldn’t help.  The value of the dollar relative to other currencies will drop due to inflation.  Creditors will demand even higher interest rates to compensate, as a result. 

It is insane to think that the consequences can be otherwise.