Debt’s Steep Slope: How Do We Climb Higher From Here?
Now that the total debt of the U.S. federal government of limited and enumerated powers has reached 0.01634 quadrillion dollars, around $50 billion shy of the congressionally mandated limit, the question at hand is:
How do we as a society get debt to climb higher up the ever-steepening slope that we have built?
Nobel Laureate Keynesians, such as Paul Krugman, would tell you that U.S. fiscal deficits are too small, and that far more government spending is needed to propel the economy higher in order to make up for the lack of private spending.
This is very true, if the goal is to prevent a deflationary meltdown of the entire Keynesian debt-based monetary system that funds the status quo: Unless the supply of cash is continually increased (by loaning it into existence), the additional cash needed to pay back the interest on the previously conjured cash simply is not there.
Defaults, write-downs, and charge-offs shrink the loan assets of the banks, and bring them ever closer to failure. Deflation is the mortal enemy of central bankers and anyone who wishesContinue Reading →
Keynesians would let the central planners, rather than capitalists and entreprenuers, decide the best way to spend. So far, the planner are doing a great job: Think Solyndra, A123, GM, and high-risk, environmentally devastating water-cooled nuclear reactor technology!