(T)he US is in a superior position for a separate reason. We own the printing presses for the currency in which our debt is denominated. Furthermore, that debt just so happens to be the reserve currency of the world.I've seen this on blogs and in pundit pieces from both left and right and it reminds me of the story of the frog being slowly boiled. Up until the point where it expires, the frog feels things are just fine.
We're now at the point where people blandly talk about printing money to solve our debt problems as if that's no big deal at all.
Amazing.
I wonder if the people who say this sort of thing, realize that having the government print, say, 10% more money is practically identical to a flat, across-the-board 10% tax on all cash holdings? No "progressive taxation", no loopholes[1], just "OK, the government has just walked off with 10% of the value of your cash, and there is nothing you can do about it."
ReplyDeleteIt's basically the tax that gets charged by default when Congress won't cut spending or raise taxes explicitly.
[1] well, aside from dumping your cash to buy real property instead, but then there's the whole property-tax thing.
Tim, it's not clear that they care. Just like me, they all have their favorite hobby horses to mount and use any opportunity to do so. The Firedog Lake fellow uses this as an opportunity to attack the rich, the military and Goldman Sachs. That it doesn't really apply is beside the point. Dittos for the conservatives who don't want any taxes raised, ever.
ReplyDeleteThere doesn't seem to be a connection between income and spending. I would argue (and have, ad nauseum) that this is a convention of our age and one that is coming to an end with the financial ruin of places like Greece. On blogs like Firedog Lake and in the Portugese newspapers, I'm looking for evidence that anyone understands this.
Score so far: Portugese 1, Progressives 0.
Another interesting thing is that firedoglake is a leftist site. When they make statements about the dollar being the world's reserve currency, do they not realize that depreciating it amounts to expropriating wealth from other countries to fund our welfare programs? Many of those countries are much poorer than ours. Is that just?
ReplyDeleteGreat point, Jeff. I hadn't thought of that.
ReplyDeleteI have always contended that there is a disturbing level of unseriouness to statism/liberalism. More confirmation.
ReplyDelete