This brings up an oft-repeated, but oft-forgotten, point: government does not have any money of its own. It only has what it takes from the rest of us. If individuals repay their debts, but their government takes on additional debt, we are all simply swimming against the tide. All forward progress is lost as private debt is replaced by public debt, which must be repaid by private individuals. Whatever gains individuals hope to achieve are negated by the higher taxes or increased inflation necessary to repay their share of a larger national debt.There is no government debt, only debt the government takes out in your name. You've made no progress at all if you to pay down your $15,000 credit card debt while Obama adds $15,000 of debt onto you through overspending. Remember, when he borrows that money, you borrow that money.
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Sunday, April 19, 2009
Thank You, Peter Schiff
He's got a good piece over at Seeking Alpha today. Here's the money quote for me.
..and the politicians consistently distract us from pondering this very reality.
ReplyDeleteOne concern I have is this: If the citizenry perceive that the politicians have involuntarily involved them in some sort of enormous Ponzi scheme, a certain cynicism will take hold in the culture. The rule of law depends upon a general respect for law, and for those who make and enforce it.
If that general respect erodes significantly, it will take years to re-establish.
Old South
mainstreetmattersmore.blogspot.com
From the elites' point of view, there is no problem. The debt will be repudiated (via inflation). They are confident they can navigate those shoals, because in their unarticulated thinking, they've seen it before. After all, when was "The Great Inflation"? A: 60's & 70's. You think our current overlords have a problem with rerunning that soundtrack?
ReplyDelete