I still haven't figured out exactly how the treasury / debt limit thing is supposed to be a reasonable system. Sovereign debt and government payments is a baffling social construct not constrained by any kind of physical reality.
My example is always the naive confusion between dollar value and actual wealth; headlines and articles say things like "oh a US default will erase $15 trillion from household wealth" which is incorrect; the instant the book value of all those stocks and bonds changes by $15T, the actual physical goods in the country, and the physical capability of the population to create new goods and perform services, did not change.
If our society is collectively so stupid that we just decide to quit working because a number changes in a computer somewhere... well then I suppose we deserve what we get.
A certain amount of government debt is healthy, just as a certain amount of personal debt is financially healthy. It is great for financing things like wars, infrastructure projects, military procrument batches, emergency relief and other short-term expenses. Long-term expenses should be paid for by base-level taxation. Note that this is not a small-government/big-government or a liberal/conservative thing - it is equally applicable for a "The only legitimate permanent government expense is a protective fleet and just enough army to serve as a skeleton for the militia" viewpoint as it is for a "Universal income, health care, and higher education" one. If debt becomes too high, it becomes parasitic, so there is a cap on how much the government can borrow.
There are two huge issues with the system. First, the limit is factored in as an absolute figure, not a percentage of GDP or net Federal income. The second critical problem is that taxes aren't high enough to pay for what most
conservatives want, let alone the expanded safety nets and social programs that liberals want or the wealth redistribution programs pushed by the further left. This could be improved by greater efficiency (the amount the US government pays into healthcare is an embarrassment for the result, to the point where a subsidized system very well might
save money), but you aren't going to efficiency away a "spend twice what you earn" system. Raising taxes (and thus getting a larger part of the available tax pool) and reducing outsourcing of jobs and banking (thus increasing the possible tax pool) is the only real way to solve the budget problem long-term
even if you want a small government.
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Topic: AmeriPol thread (Read 4467544 times)