Deficits Don't Matter

I simply cannot resolve the cognitive dissonance developed when I read this from our representatives in the U.S. Congress:

"Republicans and some moderate Democrats want all the [Bush tax] cuts extended, saying that raising taxes during an economic slump would be disastrous."

Yet, didn't these same tax cuts exist all throughout the supposed boom years between 2001-2007? And what, exactly, did those provided us, huh? An entirely hallucinated economy borrowed from the future. All the wealth created over those several years was entirely hallucinated -- this supposed wealth never existed. Every goddamn day we hear how we've lost ~$x.x trillion since the peak, but indeed, no one ever questions if this wealth was even real. It was a paper loss on wealth than never existed. My dad would say these were Chinese dollars. I would agree with that characterization.

Republicans who believe that tax cuts ought to be extended for the uber-wealthy during a slump are, in my opinion, misguided. Misguided, because there has never existed in this grand nation a greater wealth disparity than now; misguided, because I don't believe there is a true correlation between slumpy job creation and tax credits for the wealthy. Tell me -- with seven trillion in Obama stimulus over the past two years while the Bush tax credits were still in effect, why did those 7 million jobs disappear? What, it was something other than those tax cuts?

I am totally blown away with Obama's compromise this week; not because he compromised, but because all three major themes a) extension of all tax cuts, b) dropping the SS tax by 2% and c) extending unemployment benefits ALL THREE! come from borrowed money. Have we not learned one damn thing from this recession? That borrowing and spending money you can't pay back caused it? That continuing to do so is a guaranteed recipe for future disaster? The tea party? Their silence on this new $700,000,000,000 added to the national debt is deafening.

I can't tell you how much I enjoy all this political bullshit; it will keep me blogging up until the day this nation self-destructs. And it will likely occur now sooner than later -- we cannot resolve our perpetual, annual federal trillion dollar deficits; we cannot resolve our fourteen [and soon to be sixteen] trillion dollar national debt; we cannot resolve our $22 billion dollar state deficit. We cannot resolve our personal credit card and housal unit mortgage balances. I would most certainly enjoy watching this grand nation of ours implode into a bankrupt second world republic. Think of the classic traits of banana republic finance -- massive (and chronic) government debt issuance -- reckless monetary expansion to absorb it -- and economic distortions that lead all wealth to flow uphill to the top of the economic ladder. Sound familiar?

I want us to fall apart, solely for what we'd gain from the experience -- we'd become a better people, a people who'd value work over consumption, who'd value energy and learn to live in a stable, productive society that uses a fraction of the energy we currently consume. We'd reverse this trend where over half the adult population will be obese by 2025, because we'd reverse the social trends of instant-gratification and self-glorification that are (as best as I can tell) the underlying causes. We'd value neighborhoods, value our neighbors, value our relationships with them. That is, after the really bad shit we'd have to go through during the implosion.

As for these tax cuts -- I really could care less about their extension, because either way, I'm assured our elected officials will again fail to address the true causes of our problems and will never be able, politically, to suggest we take the austere road out through gasp! eliminating debt and productive effort. No -- we add another trillion on top of the trillions already borrowed to put off real reform farther down the road, to future elected officials who won't do it either. Think about it -- any elected official who even suggests that we reduce entitlements for today's populace is doomed to defeat; he/she will easily be defeated in two to four years by others who continue to push up trillion dollar deficits.

We just increased our national debt by seven hundred billion, just in one day, and you can rest assured that this will eventually rise to well over a trillion because of our fantastic accounting measures we use. I've a theory regarding why our government did what it did; our representatives cannot take the hard road because it is political suicide when the American electorate are cultural adolescents.

We have learned absolutely nothing from trying to maintain an energy intensive, consumptive lifestyle on home equity, credit cards and personal loans -- money we didn't have. We've instead shifted the borrowing to the federal government, which by itself tried to maintain two energy intensive wars along with Medicare and Social Security entitlements...all with borrowed dollars. We accept this because of our cultural adolescence -- we cannot accept we've been living on borrowed wealth.

We had thirty years of fake wealth -- thirty years of surplus sloshing around as a result of re-fis, equity lines, equity appreciation, such that there are whole segments of our nation who can live off this surplus, based on the labors of others. The 1960's counter culture couldn't have existed without all that surplus, without an underlying oil-based economy powering it. Yesterday I saw the same thing in the Telegraph area in Berkeley -- whole segments living off the slosh of surplus. Today it isn't quite so obvious but it's still all around us - with million using EBT, social security disability, on and on. People living on borrowed moneys that represent our national surplus wealth.