Tuesday, July 07, 2009

England is NoticingOur Debt Too

The US economy is lurching towards crisis with long-term interest rates on course to double, crippling the country’s ability to pay its debts and potentially plunging it into another recession, according to a study by the US’s own central bank.. Thomas Laubach, the US Federal Reserve’s senior economist, calculated the impact on long-term interest rates of rising fiscal deficits and soaring national debt. Applying his assumptions to the recent spike in the US fiscal deficit and national debt, long-term interests rates will double from their current 3.5%...The impact would be devastating by making it punitively expensive to finance national borrowings and leading to what Tim Congdon, founder of Lombard Street Research, called a “debt explosion”. Mr Laubach’s study has implications for the UK, too, as public debt is soaring. A US crisis would have implications for the rest of the world, in any case. ..US Lurching Toward Long-Term 'Debt Explosion'...,Philip Aldrick, Banking Editor, UK Telegraph, July 6, 2009

Even before the debt explosion overwhelms rational markets, the super-deficit funding of Federal programs like health care “reform”, bailouts, and cap-and-cronyism will steal a huge proportion of investment capital from the private sector, and make what's left prohibitively expensive for US private firms to recover, never mind expand. Why the Democrats are doing this may be a question whose answer has a graver consequence than a debt explosion.

The chief political objective of socialism, wherever it has been tried, is for the state to totally dominate the economy regardless of the impact this might have on the nation and its people. In France, for example, decades of socialism has led to decades of double-digit unemployment and to a crass neglect of the old and disabled (see prior post on "real debate on medical care") that is appalling.

Women in the workforce might take notice of this as well. As wonderful as socialized medicine and other liberal programs may sound for working women,especially those with children, it is worth noting that the dramatic expansion of the U.S. economy from 1983 onwards formed the primary support for the expansion of jobs. Without that expansion, the explosive new opportunities for women might never have happened. When the state dominates in a socialist program, it is not very supportive of revolutionary changes. Indeed, socialism may be said to be a kind of pathological conservatism, where nothing changes except your range of movement and your freedom of expression. This may be why the Left is so fond of Islamic fascism. And, thanks to Phyllis Chesler and other students of that political pathology, we know what that group thinks of women.


No comments: