Not a Global Weimar, but a Global Soviet Supermarket

There's an interesting commentary in the Wall Street Journal today suggesting we are heading for a global Weimar Republic where every government will print money to pay down their debts.

The major powers think that the crisis is only fleeting, and that we'll soon return to the old order. No one really wants to undertake the profound changes necessary to resolve it.

Although the world's public debt should be cut, now it is only being increased. Everywhere, out of fear of a recession, the survival of the system is being financed by all those who still have resources: the banks, when they choose; the governments, when no one else can. Since there is no talk anywhere of increasing taxes, the governments themselves are getting into debt, borrowing from national or foreign investors and, as a last recourse, from the central banks.

The numbers show it. When the American debt ought to have been reduced, it increased in 2008. The Geithner bailout, just like the Paulson plan, will increase America's public debt even further. The European debt is also increasing sharply. Many more borrowers will default on their loans: derivatives, credit cards, mortgages. And no one is there anymore to buy them back.

This takes you only half the way there. First, I agree with most of the article. World events call for everyone to reduce spending, increase savings and pay down debts as much as possible. World governments are doing the exact opposite. The lack of creditors to buy all the debt being generated through idiocies like the Democrats' Stimuloid Porkgasm™ will force the government into some combination of raising taxes, cutting benefits and printing money. There aren't going to be enough earnings to make raising taxes worthwhile and cutting benefits is impossible for the Democrats, so they're going to print money.

Once that begins in earnest and inflation hits, what do you suppose they'll do? My bet is wage and price controls. The end result will be Soviet supermarkets.

We are the ones we've been waiting for! Now let's hope someone brought some bread.