I almost can’t believe that I forgot to mention this last time.
It’d be easier to believe if I didn’t forget exactly one thing every single time I go to the grocery store.
The other trouble with Keynesians.
It links into that endless fiddling with the knobs, oddly enough. If we justify deficit spending on the basis of “keeping the economy going”, then we fall into the trap of justifying deficit spending whenever the government thinks that the economy needs controlling.
The effect of which on public debt being one I think requires no explanation.
Obviously, endless deficit spending is not sustainable. Borrowing from Peter to pay Paul works out for a time if the interest rates are low, but credit agencies are starting to lose their optimism on the long-term prospects of government debt.
Eventually, the party has to end. If you really want to keep deficit spending on the table of potential responses to a crisis, then you have to use it only as a response to a crisis.
Otherwise, you’re not going to be able to afford it when the actual crisis comes around.
It’s the Boy Who Cried Wolf on a grander scale, we’ve just changed the title to The Government That Cried Spend.
Let’s look at our current situation. Yes, we’re winding down from a couple wars, but leaving that aside…
No major military opposition. Yes, China is elevating its spending, and clearly gearing up for a confrontation with the United States in the Pacific, but that’s a problem we can deal with with spending on the Navy and Air Force. No offense to friends in the Army, but right now, the Army is bloated vastly beyond our requirements for it.
No current economic crises. The “Great Recession” is over, and has been for years. The economy is growing slowly, yes, but exactly why that is the case can be debated endlessly without changing anyone’s mind, given how divisive the political climate in the United States has become.
Yes, we do have an international crisis brewing in Europe. A crisis that, oddly enough, has its roots in the same sort of endless deficit spending we ought to be avoiding.
In all honesty, do we have any reason to be spending more than we’re bringing in in taxes at the moment?
In my opinion, not really. What we have is elected officials terrified that if they turn off the tap, something bad might happen and they might not get reelected. Nobody knows anything, no matter what the talking heads like to say in their various programs and columns. Furthermore, even if it does cause another brief recession, we have to ponder whether another short stint of hardship now is better than a long stint of hardship in the future.
Yes, in the long run we’re all dead. The nation, however, will outlive us all.