It's often been said in the last couple of years that the Democratic party doesn't
stand for anything. I've been making a lot of jokes lately about how the Republicans don't have any good ideas that they didn't steal directly from us. Well, ladies and gents, I think I have just seen the point at which those two statements intersect.
Doug links approvingly to
this truly jaw dropping article at RedState.org. Here's a little sample:
Here's why we don't have small government: People don't want it. They say they do, but when you threaten to give it to them, they vote for the Other Guys. It took Republican politicians decades to figure this out, and most Republican voters still haven't figured it out. The fastest way to become the minority political party in the United States is to become the party of government frugality and fiscal discipline. Let the Democrats do that. We've been there, done that, and have Bob Dole to prove it.
This article is a truly amazing piece of wankery. Don't be fooled, Doug!
First off, it's a big "f%$k you!" to the libertarians, the anti-taxers (I'll get to that in a second) and the small government conservatives who traditionally are the base of the Republican party.
Second, it's dumb. If we're worried about China buying battleships to use against us, shouldn't we be equally worried about giving them all of the tools they could possibly need to wreak havoc with our currency and our country's financial markets? By dumping parts of the debt load or flooding the market with cheap dollars, even by threatening to do so, China can have extremely serious impacts on us. This is a situation that is only getting worse as we spend our way into penury.
Third, later in the article he talks about spending money to bolster society as though this is a new concept. I'm curious if the author is unaware that there is another political party out there which has been talking about something similar for a long time now? What exactly makes spending money on abstinence only education a better investment than spending money on comprehensive sex ed? (Other than the fact that one makes cons happy and one is designed to actually work.)
Fourthly, despite the author's contentions, some percent of these debts will come due eventually. Ask anyone who thought they can roll balances between credit cards forever or scrape by making minimum payments. Once you have leveraged all the credit that the financial world is willing to give you, you'd better have some means of paying them back. Payments can be ducked and deferred, but they can also be extracted in bankruptcy court. Go look at the budget of the State or the Feds and find out what percent of the GNP goes to "debt service." That's the "minimum payments" we make each year on all of these debts. Notice that that number always seems to be increasing. Eventually that leads to the governmental equivalent of bankruptcy court. And what is the governmental equivalent of bankruptcy court? Tax increases! And massive ones at that.
Fifthly, the author repeatedly compares the investment strategies of Japanese companies favorably with those of American companies. Need I mention that Japan is in a decades long recession? Or that their economic system is quite different than our own with more public/private interaction so it's a poor basis of comparison anyway?
And that's just off the top of my non-economist head. This whole article smacks of something written in the late 90's, when it seemed like the money would never run out. Or perhaps the author sells Option ARM's for a living. Sure it works in your favor...so long as the market performs exactly the way you want it to.
Apparently, the major difference between the fiscal policies of Republicans and Democrats is that they both like to spend, but Democrats like to actually finance their spending while Republicans think they can get by on little more than hope and sunshine.
Hey, sound finance might not be as sexy as "squirting" money at your problems, but it makes a lot more sense in the long run.
(On a personal note: REW and I went for a 30 year fixed-rate mortgage on the
Powerhouse. We were scoffed at by finance people who insisted that we would be better off with a 5 year interest-only mortgage that we could refinance if we decided to stay in the house longer than that. Why? Because we could get by with a smaller downpayment, roll the principle money into higher grossing investments over the next five years and ultimately sell the house for more than we paid for it creating "phantom equity", so it would be a double gain-twice as good as simply amassing equity. Sound familiar? Let's check back on this post in five or ten years and see who ends up having made the smarter investment.)