Rising Hegemon
Under Ronald Reagan, the first George Bush, and Bill Clinton, payments on federal debt often got above 3% of GDP. Under Bush the second, payments were about where they are now. Yet suddenly, we are in a near collective hysteria.
Gee what could be the difference?
4 comments:
Why I thinks it's the nig[loud clang of bell].
--Gabby Johnson, sounding the alarm in genuine frontier gibberish since that other sheriff came to town.
The main problem with the cumulative debt is the annual interest on that debt. When it grows rapidly, it does two things--it begins to squeeze out appropriations for useful programs, and it can further increase annual deficits, so, in effect, interest on the debt becomes more debt, thus paying interest on interest payments.
That's when things begin to get dicey, especially when a central bank is involved.
Some interest payments should be expected, but, the real damage comes when yahoos such as are in the House now want to engage in slash-and-burn tactics on social programs which have the dual purposes of keeping people from abject poverty and keeping some economic stimulus going. The right thing to do at such moments is to increase revenues from the most obvious sources--the people and corporations with lots of spare cash.
The problem is that these entities, after thirty years of tax cuts and coddling, have now come to feel entitled to even more, and are telling Congress and the President exactly that, with campaign dollars that are incredibly difficult to turn down, which, in turn, creates subtle or overt obligation.
We've got a bunch of skeevy fucks who can't say no to the money, and can't say no to the rich--even for the good of the country. It's a damned sad situation.
the really bad part of all of this is, is that we do have a very similar situation in our not too distant past to look to for "gee, I wonder what would happen to our recovery if we cut spending..." information.
zombie w.
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