Budget talks: This is getting nasty

http://www.theonion.com/video/biden-criticized-for-appearing-in-hennessy-ads,14392/

 

I posted this somewhere on here at one point. The yield on a 10-year treasury right now is at 2.75 percent. The one thing the U.S. has going for it, is that despite our stupidity, the rest of the world looks worse, so we are still attracting safe-haven money.

With our ability to borrow cheaply, if "stimulus" to the economy was really possible (and no, it is not when it is done in a government centralized planning way, but. ....), you can argue we have this windfall ability to borrow cheaply.

We have a construction industry that has higher than 20 percent unemployment. And we have an infrastructure that could benefit from some building and upgrades.

One could even argue that putting people to work that way -- borrowing cheaply, and spending on infrastructure -- is as much "investment" as it is "spending," because even though I can't measure it, a bridge that might last 100 years might bring in a return on investment over that 100 years in terms of the economic activity it makes possible.

That would be the argument for more of the same.

Add to that that the only time our country has ever paid down debt, it didn't occur because of politicians coming up with some masterful plan. They are full of shit and are beholden to special interests, which require them to spend more and not end the handouts to the special interests that are keeping them in power. The way we have ever paid down debt, was in periods like the 1990S when the economy was growing and their ability to spend couldn't keep up with the unexpected tax revenues the expanding economy brought in.

The problem with that is the same problem as always. It starts with the special interests and the corruption of giving our politicians the power of a purse. We got sold on "stimulus" in 2009 with BS terms like "shovel ready" projects. As it turned out, the shovels weren't ready, and we didn't get those projects. So we essentially pissed away close to another trillion dollars, and the beneficiaries -- the special interests that got paid -- did nothing to help our economy. They actually cost our economy, because what our fuckwit Congress, Senate and President did was take money from potentially productive areas of the economy that could have been fueled by demand, and funneled it to their hand-picked areas for corrupt reasons.

So despite the case I made above, I wouldn't advocate doubling down and doing more of the same. Yes, we can borrow cheaply. Yes, we can use infrastructure upgrades. Yes, we could put a lot of out of work people to work that way.

And I can guarantee it will end up a boondoggle, in which we add way more to our debt than we get in economic benefit, in reality. Same as 2009. A complicated spending bill filled with payoffs to everyone and everyone willing to pay kickbacks to keep the people voting for it in office.

It's human nature. Centralized planning, as Hayek pointed out over and over again, doesn't work, because government by its nature creates bigger problems than markets and then creates inflation to extend its ability to create more problems.

The sad reality is that our debt is going to get worse, because our economy is going to stagnate for a long time. And with that stagnating economy we won't get the kinds of tax receipts that help pay down debt despite government's attempts to sabotage things.

That's why I am looking for more of the same, and thanking our lucky stars that we are not Grecian levels of drowning under debt yet, and there is still time to right the ship somehow.