posted by Helen at 9:56 AM
Friday, July 02, 2010
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8 Comments:
You know, I am not saying Mr. Day is wrong. He might be right. But the longer I am alive, the more I notice that predictions aren't truly predictive, but often reflect the mindset or worries of the predictor.
Again, Mr. Day might be correct.
The future isn't as horrible as we fear, or as wonderful as we hope.
Just my opinion.
The future isn't as horrible as we fear, or as wonderful as we hope.
Maybe. Sometimes it's worse than we can imagine.
Would you budget your household the way the US Government budgets its spending? I'm thinking that the answer is no, unless you're in or on the way to bankruptcy court.
Out of the last budget, approximately 1/3 of the spending - roughly $1 trillion - was borrowed. If we keep deficeit spending like that, at some point all the revenue will have to go to debt service and all the spending will be with borrowed money.
Or we raise taxes at ridiculous pace. And when that happens, businesses will close, and people will lose their jobs. And it is rather difficult to pay your taxes if you don't have a job, or have lost your business.
I would also speculate that somewhere along the line the monetary supply will go up, way up. That has the affect of reducing the value of the debt. It also means that there will be more dollars chasing fewer goods and services, and the prices we pay will go up. If our incomes don't match, then we'll get screwed, big time.
And don't forget that you'll be required to buy health care, or face fines and/or jail time.
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Honestly, like I said, Mr. Day could well be right. And of course I disagree with current fiscal policy (in fact, uttering the word "fiscal" should cause economic advisors during the last two administrations to burst into flame).
But I well remember Paul Ehrlich's "The Population Bomb" filled with very dire predictions. The book came out in the 70s, and predicted hunger riots in this country by the 90s. Mass famine, world wide, in the 80s. Running out of everything.
And it didn't come to pass.
Yet no one holds Professor Ehrlich responsible for his alarmist predictions, which are invariably coupled to proposals for more statist control over a world economy. He continued to make extreme predictions, which continued to not come true.
And is still lionized by many. Including the POTUS' current Science Advisor.
Again, Malthus is right...eventually. And bad news can come true. But I ask you: if people believing in bad news puts money in the bad news announcer's pocket...well...
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Hayek was right, Keynes was wrong.
Ironically, even Keynes argued against the type and extent of government spending being done in his name.
Eric Blair,
While I share your skepticism at pessimism I am afraid Vox is more right than wrong. I was hoping to retire <10 years but I don't see it happening. We are losing respect for personal property and capitalism. We are doing more of the same mistakes. I do business internationally. The US is the economic engine of the world and we are in trouble. There is too much politics (domestic & international) and very little skeptical thinking (What is your debt to savings ratio? Include national and state debt.) Learn more about Japan and the 1980's. They still have not recovered and they are the number 2 economy in the world. Pessimism can be preventative thinking and we have not had enough of that. A recession or depression is a market correction-better to correct early and small which government has repeatedly shown a complete inability to accomplish. Final question-why is indebtedness by the government at a level that would put you in jail ok or even a good thing?
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