Don’t worry about national debt, be happy
By Steve Hirsch August 6, 2019
A perpetual motion machine is a contraption that works forever without ever needing an energy source. Inventors have been trying to invent one for hundreds of years, but alas, it’s hard and no one’s succeeded. Some say it’s impossible, especially the scientists. They say the concept is unworkable because it violates something they call the laws of thermodynamics.
I’m not a scientist, but the laws of thermodynamics say something to the effect that to run a motor, you need to insert a battery. I’m simplifying, because some motors work on gas or can be plugged into the wall. But regardless, the scientists are pretty clear on one thing: in the case of battery-charged machines, you need to eventually replace or recharge the battery while in the case of gas-driven things, you’ve got to refill the tank.
I’m not sure if it’s a thermodynamical law, but I bet the scientists would also say that if you keep withdrawing more than you deposit from your bank account, you go broke. And under normal circumstances, I’d believe the scientists.
It’s just, these aren’t normal times.
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All of the smart non-scientist people called politicians agree there’s no such thing as scarcity. They’re not worried that as of December 2018, national debt was $16.1 trillion. Republicans and Democrats just agreed to a 2019 deficit of another trillion bucks. In normal times, the two parties don’t agree on much, but they’re in bipartisan agreement: don’t worry about borrowing, be happy.
Witness last week’s Democratic debates. What’s weird isn’t that all the Democratic candidates took swipes at Trump. It’s that none of them bothered to attack Trump for the deficits being racked up during his watch.
Likewise, what’s abnormal about Trump’s attacks against the Democrats’ proposals to wildly increase spending is that he doesn’t complain that their ideas would increase the deficit.
These are abnormal times.
Further confirmation of the freakiness of these times is that it’s not just the politicians. It’s the economists too. In normal times, economists are always going on about the dangers of government debt. But in today’s abnormal times, there’s a whole new breed of economists who theorize that the federal government can borrow to its heart’s delight, ad infinitum. Their theory is called Modern Monetary Theory.
In today’s abnormal times, economists who believe in Modern Monetary Theory run around telling people that the federal government is a perpetual money machine.
Take, for example, an article in Forbes by a woman named Frances Coppola. She writes, “for advanced economies in good standing, the government’s debt capacity appears to be infinite.” In normal times, an editor wouldn’t have published anything so vacuous. It’s like saying, “as long as a person is young and healthy, that person can live to an infinite age.” In normal times, this is called circular reasoning.
In normal times, the Frances Coppola who wrote this would be a nobody, and I wouldn’t care about her insane thought processes. But because these are abnormal times, she’s a somebody. Her bio says she writes about economics not only for Forbes, but also for the Financial Times. She even says she’s been quoted in The Economist and the Wall Street Journal. (Not to go off on a tangent or anything, but it’s ironic that in normal times, Francis Ford Coppola wrote Apocalypse Now, but in today’s abnormal times, a similarly-named Frances Coppola writes that borrowing ad-infinitum is Panacea Forever.)
Witness another beauty of a quote, this one from a New York Times article by economist Stephanie Kelton: “Unlike a household, the government doesn’t have to trim other parts of its budget to make ends meet. Congress can always create more room in the budget…to put more resources into education, infrastructure, defense and so on.” Stephanie isn’t speaking satirically. She’s the mother of Modern Monetary Theory. And she’s a big deal in today’s abnormal world. Her Wikipedia bio says she’s got a phD from New School, she’s a professor at Stony Brook University, and she used to be Chief Economist for the Democratic Minority Staff of the Senate Budget Committee until leaving in 2016 to become an economic advisor to Bernie Sanders’ campaign.
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Panacea Forever is a cool name, huh? I should write a script for a fantasy movie set in a fictional nation that’s a little like ours, in that its politicians are its best and brightest. Being the best and brightest, these leaders figure out something that’s never occurred to less bright people: as long as their government’s financial standing is good, their government can borrow an infinite amount of money. The theme song is Bobby McFerren’s Don’t Worry, Be Happy.
Can you guess what the best and brightest are going to do in my movie?
You probably guessed they borrow like crazy, but that’s not all. A nation’s best and brightest politicians are always coming up with big ideas, so in my movie, they come up with the idea that since there’s no limit to what the government can borrow, there’s no need to have taxes anymore.
Forget cutting taxes. They eliminate them.
Also, since there’s no limit to what they can borrow, they come up with the idea that there’s no limit to what they can spend. It’s bipartisan panacea. My movie has the rightists getting to increase military spending one-hundred-fold and the leftists getting to institute free healthcare with no deductibles or copays. Also, every citizen gets a guaranteed salary of a million dollars per year.
And that’s not all. The government invests one gazillion dollars into something it calls the Green Panacea Deal. And you guessed it, the Green Panacea Deal funds research and development for a perpetual motion machine. The nation’s leaders, who remember, are its best and brightest, have something to say about the laws of thermodynamics: Don’t worry, be bipartisanly happy.
It would make for a great fantasy movie. Except fantasy movies have to be fantastical and this would be too much like today’s reality. Abnormal times.