Starving the Beast

[The Yankee]

The government will nearly never default on its own. It's more a question of when people decide to stop putting up the funds for this endeavor. But, given how lucrative it is for those supplying the capital and how important keeping the US in somewhat decent shape will be, we can continue this for some decades.

 

[crabapple]

The government will raise taxes before it defaults on its loans.

yes I am sure that politican that do that will surely be popular

rasing taxes to put it into the black hole

 

[crabapple]

The government will nearly never default on its own. It's more a question of when people decide to stop putting up the funds for this endeavor. But, given how lucrative it is for those supplying the capital and how important keeping the US in somewhat decent shape will be, we can continue this for some decades.

exactly, but somewhere, in some time, there will be an end

 

[JohnRM]

yes I am sure that politican that do that will surely be popular

rasing taxes to put it into the black hole

Yes, that politician is named Hillary Clinton, the Democratic Party front-runner for President.

Quite popular, indeed.

 

[Godwynn]

yes I am sure that politican that do that will surely be popular

rasing taxes to put it into the black hole

exactly, but somewhere, in some time, there will be an end

If there is such an emergency, spending will be exterminated. The Federal Government will not default, hence its credit rating is above AAA. I don't even think it is classified it is such a secure investment.

 

[Till]

I think putting in such an amendment would limit the government's options to stimulate the economy during down times. However, politicians being politicians, the economy somehow always needs stimulating and once they're in there, might as well take a bit for themselves while they're at it.

If you stimulate during down times, you have to reduce spending when the economy is doing well. And that's just very hard to sell.
Not to mention that stimulation programs need some time to kick in, so if you get the timing wrong, you might end up acting procyclical!

 

[The Yankee]

If you stimulate during down times, you have to reduce spending when the economy is doing well. And that's just very hard to sell.
Not to mention that stimulation programs need some time to kick in, so if you get the timing wrong, you might end up acting procyclical!

Of course.

Though it's just funny to see the same person say "The economy is doing well" then turn around and say "This program will stimulate the economy...so on...so forth."

 

[El_Machinae]

Historically, you guys haven't raised taxes in order to pay debt, you've just diluted your currency.

 

[BasketCase]

If there was a sure-fire win anywhere in politics, everybody would be using it--thereby dropping everybody back down to 50-50 odds.

So, no. The "starving the beast" trick is not a sure-fire way to curtail government spending. But it's still a necessary tool in the bin. Politics is just one great big poker game with 453 players, and if you limit your options, the other players will catch on and take advantage.

 

[Shadylookin]

well it didn't work for Regan. Really it's just making the problem worse and pushing it off to a later date, all the while hoping for a miracle that won't ever come.

 

[skadistic]

Maybe we should just starve Congress.

 

[Godwynn]

Maybe we should just starve Congress.

Here is an idea we all can get behind.

 

[GoodEnoughForMe]

Maybe we should just starve Congress.

First we have to get them all together, which is next to impossible.

 

[skadistic]

First we have to get them all together, which is next to impossible.

Send them all a memo indicating there will be hookers of both flavours and special interest money. That should cover every one.

 

[Stewbert 08]

I think that after Katrina, anyone who publicly supports a "Starve the beast, drown the government in a bathtub" philosophy should be deported.

We pay roughly $250 Billion dollars per year to a private banking corporation to loan us the US Dollar. Thank you Congress for abandoning your sole duty to print US currency (at NO fee whatsoever other than cost of production).

Where did you read this, on Pope Ron Paul's website? Jesus Christ, learn some basic econ.

 

[bigfatron]

I think that after Katrina, anyone who publicly supports a "Starve the beast, drown the government in a bathtub" philosophy should be deported.

Where did you read this, on Pope Ron Paul's website? Jesus Christ, learn some basic econ.

Agreed. The US pays $250bn a year to foreign investors who are lending it money to cover its debts - mostly China and other Asian dragon countries. The main driver for this is excess consumer & government spending and a savings shortfall (equally true in the UK btw).

Actually the US has been enjoying a small but useful free lunch for forty years - as the 'de facto' reserve currency for the world and currency of agreement for oil and other major commodities, the US Government has enjoyed an artificially low charge for credit. Current deficit spending, de-pegging the Yuan, and the trend toward larger proprtions of EUR as sovereign reserves and to settle commodities transactions means that this benefit has been starting to unwind. This trend will likely continue over the next twenty years.

No easy answer to this one, but an end to 'pork barrel', action on the pensions side and a more manageable military spending plan would be a start.
BFR