Liberals do not think that the fact that the United States is $14.3 trillion, going on $20 trillion, in debt is a problem. Even though hundreds of billions are paid each year in interest on the debt, it does not bother them. They say they will just print more money to cover the costs.
Liberals like to think the laws of economics are like the laws of physics. In physics, particles behave differently on the subatomic level than they do in the macroscopic realm. This is because as one gets smaller and smaller, different forces become dominant and take control of how particles interact with one another thus leading to sometimes counterintuitive solutions. This is why there is an entire field of physics, called quantum mechanics, to deal with this special situation.
Economics however, does not act differently on the macro or micro level. Yes, there are actually two fields of economics; microeconomics and macroeconomics. And economists, for God only knows what reason, actually try to forcibly separate the two. I think this is why liberals get confused.
Microeconomics is officially defined as the study of how people (including businesses which are just conglomerations of people) allocate resources and how prices of goods and services are set. Macroeconomics is officially defined as a study of the entire economy (GDP, exports, imports, etc.) of a group such as a state or nation.
Of course anyone that has ever taken both macro and micro economics, and who passed the courses, quickly understands why trying to separate these two fields is folly. Macroeconomics is really nothing more than an effect of many microeconomic spheres all acting at once. One does not have exports or imports, for example, without decisions on how to allocate resources and determining that those resources must either come into or go outside of their own sphere.
As such, the laws that govern the basic interactions of microeconomics are the same as those that ultimately govern macroeconomics. Liberals disagree. They think that on the macro level things work differently.
This belief is why they think government can print $1.7 trillion to simply pay for programs, handouts and waste that exceeds revenues. You cannot do that in your own household or business however. If you doubt me, try it. Try just ripping out a couple thousand in $20 bills from your home printer and see how quickly no one will accept the "money" you have just created. Then sit back and wait to be hauled off to jail as an added bonus.
Liberals do not think that the fact that the United States is $14.3 trillion, going on $20 trillion, in debt is a problem. Even though hundreds of billions are paid each year in interest on the debt, it does not bother them. Even as they are faced with the reality that in a few short years, unless they can artificially keep interest rates at zero percent, that couple hundred billion will be a trillion and liberals laugh in the face of reality. HA, HA, HA they chortle. They say they will just print more money to cover the costs and they believe that people will keep lining up to buy bonds in return for a future payment of interest when, these liberals hope, their policies of big government actually generate enough revenues to cover the expenses.
To some extent, yes, liberals can just keep printing money. They can do this especially if all other nations around the world do the same to cover their own deficits. But the only reason this works is because everyone is ignoring reality and delays obvious economic consequences. These consequences are horrible things like artificially high inflation and lack of trust in the ability of government to pay future obligations on freshly printed money resulting in a need to increase production of worthless paper yet some more. The terrible secret is that eventually critical mass is reached.
At that point of critical mass, regardless of what other nations are doing, the economy of the United States collapses because no one has any faith in the government anymore. The most basic of rules of economics tell us that on any level you cannot continue to arbitrarily print and spend money year after year, after year, after year, after year. Many nations have collapsed because they tried to do just this. It happened to the Soviet Union and it is happening now in China.
Most famously it happened in the Weimar Republic. You know it probably better as pre-World War II Germany. The Weimar Republic tried to just keep printing money to solve its economic problems too. It also lived off of loans and spending more money than the economy could produce. Hyperinflation quickly consumed the nation.
Ever hear people refer to a wheelbarrow full of money being needed to buy something? This is where it comes from because the people of Germany at the time literally needed so much money to by the basic essentials of life. And it was no joke. The Germany currency was so worthless that it was a laughing stock of the world. Ultimately, the Weimar Republic proved that the principles of economics on the macro level are the same as on the micro level.
What was worse is that the malfeasance of the Weimar Republic lead to the rise of Hitler and the NAZIs. Yeah, something that was not good in most people's books. But it was a response by the people of Germany to the horrid economics they had tried to force to be real.
And what have we here in America done? We have instituted the latest version of this failed experiment based on the regularly disproven fallacy that nations, by virtue of simply being nations, are not subject to the basic laws of economics.
As much as liberals decry American arrogance in the realm of foreign policy and military expansionism, it’s ironic that they endorse fully an unwarranted American arrogance in fiscal and monetary policy – the assumption being that the dollar’s reserve-currency status is some kind of immutable law of the universe and that America’s status as the world’s benefactor entitles it to a different financial standard than the rest of the world. As long as everyone else on the international stage plays along admiring the emperor’s fine suit of clothes this system works just fine, but folks are finally starting to nudge each other and go “Do you see what I see?” If at some point we lose our coveted status as the naked emperor who the rest of the world sees as finely clothed and fall to the status of the mere mortals who have to actually be accountable for their policy decisions, woe to America.
I’m an independent who knows a lot of more liberal-leaning folks. This article above comes across, not as a rational informative work, but rather as someone who is distressed and not seeing things clearly. I don’t know any liberals that don’t think that the debt isn’t a serious issue. That doesn’t mean that some of them still wouldn’t want other services that there isn’t money to pay for. Democrats and Republicans are fully responsible together for having created such a debt. To try to break it down and to blame one group in particular is ridiculous. If anything, in a such a ridiculous exercise, you might actually give liberals the upper-hand since the deficits and debt have mushroomed primarily since 1980, meaning primarily under Republican control. Again though, it’s a ridiculous exercise. Both parties are equally to blame.
J.J.,
I actually believe there are a simpler set of circumstances at play here. How liberals view the economy is the problem.
First; they believe that the economic pie is static as opposed to dynamic. For one to ‘win’ another must ‘lose’ in their worldview.
Second; All wealth belongs to government. This is the reason de tendre behind an aggressively progressive tax system and the constant piling of more taxes upon the wealthy. They’re only ‘taking’ what’s rightfully the government’s to take in the first place.
Third; since all wealth belongs to government. The only entity that can create more wealth is the government; by printing more money. A dollar is a dollar because they said so. More dollars means more growth in their eyes. They create wealth out of thin air the same as they create rights out of thin air. In their world view, they didn’t create a trillion dollars of debt; they expanded the economy by a trillion dollars.
In their eyes; printing dollars cannot help but ‘expand’ the economy because there are now more dollars. Since faith in government approaches religious levels; they cannot comprehend that any other entity would ever have anything other than undying admiration and respect for government. Especially a government that such people of obvious superiority as themselves, have designed This is why the Obama economic team has such a difficult time understanding why their policies have failed.
deficits and debt have mushroomed primarily since 1980, meaning primarily under Republican control.
“Under Republican control”, of course, referring to the presidency. It’s worth mentioning that congress controls the purse strings. Nevertheless, the Obama administration is on pace to accumulate as much debt by the end of its first term as it took Reagan and Bush a combined 16 years to accumulate. I think the “It’s all the Republicans’ fault!” bit can be pretty safely retired in light of this administration. We’re not in Clinton Democrat country anymore.