Rational Thought

Over at Ms. Magazine blog you’ll find an article entitled “A Feminist Economist Speaks Out: Deficits are a Grrrl’s Best Friend” that’s unintentionally hilarious in its absurdity. Be sure to read the comments.

I too responded with a comment but apparently the moderator found it too offensive to post. I’ve reproduced it here:

The magical thinking behind this article is breathtaking. It is the inflationary currency devaluation insanity that most advanced economies learned not to engage in decades ago. Recall the stagflation, price controls, astronomical interest rates, gas rationing and general malaise of the ’70s under Nixon and Carter? You don’t because you’re too young? Educate yourself and you’ll see why responsible people wish to avoid it.

The premise of this article is a non sequitur. Think printing. A mouse click in the Treasury is NO different than printing Dollars to increase the money supply when it isn’t supported by growth in the economy. Issuing Treasury Bonds is selling debt and is exactly like a national credit card. The global economy buys these bonds which must be paid back by USA taxpayers WITH INTEREST. Failure to make scheduled payments is called Sovereign Debt Default. If you wish to understand how the inability to print dollars makes a difference, read about any state that’s in financial trouble due to abysmal bond ratings (think California, Illinois, etc.). The low credit rating means less interest and more risk in buying their bonds because of mismanagement of state economies, i.e. structural deficits (spending more than your revenues). These states have higher borrowing costs. There’s a reason many states have balanced budget amendments.

Want to see the future this “feminist economist” (what the heck is that?) would produce? Look at Greece, who spent 115% of their annual GDP (Gross Domestic Product) for years. They’re being bailed out by the EU (really, the frugal Germans, Europe’s largest economy). Point being, no entity is large enough to rescue the USA if we continue on this unsustainable path. The USA, with 5% of the global population produces 25% of global GDP.

Bottom line: Spending does not create economic growth. It’s exactly the inverse. Also, don’t source your information from ideologues who bend facts to suit their world view. Anyone who places “feminist” before their job title falls into this category.

“With 20,000 delegates, advocates and journalists jetting to Copenhagen for planet Earth’s last chance, the carbon footprint of the global warming summit will be the only impressive consequence of the climate change meeting. Its organizers had hoped it would produce binding caps on emissions, global taxation to redistribute trillions of dollars, and micromanagement of everyone’s choices. China, nimble at the politics of pretending that is characteristic of climate change theater, promises only to reduce its ‘carbon intensity’ — carbon emissions per unit of production. So China’s emissions will rise. Barack Obama, understanding the histrionics required in climate change debates, promises that U.S. emissions in 2050 will be 83 percent below 2005 levels. If so, 2050 emissions will equal those in 1910, when there were 92 million Americans. But there will be 420 million in 2050, so Obama’s promise means that per capita emissions then will be about what they were in 1875. That. Will. Not. Happen.” –columnist George Will

“When you knowingly pay someone to lie to you, we call the deceiver an illusionist or a magician. When you unwittingly pay someone to do the same thing, I call him a politician. President Obama insists that health care ‘reform’ not ‘add a dime’ to the budget deficit, which daily grows to ever more frightening levels. So the House-passed bill and the one the Senate now deliberates both claim to cost less than $900 billion. Somehow ‘$900 billion over 10 years’ has been decreed to be a magical figure that will not increase the deficit. It’s amazing how precise government gets when estimating the cost of 10 years of subsidized medical care. Senate Majority Leader Harry Reid’s bill was scored not at $850 billion, but $849 billion. House Speaker Nancy Pelosi said her bill would cost $871 billion. How do they do that? The key to magic is misdirection, fooling the audience into looking in the wrong direction. I happily suspend disbelief when a magician says he’ll saw a woman in half. That’s entertainment. But when Harry Reid says he’ll give 30 million additional people health coverage while cutting the deficit, improving health care and reducing its cost, it’s not entertaining. It’s incredible.” –columnist John Stossel

“The administration has taken the steps to make sure that we can solidify our economy,” Shelton said, adding that Obama “inherited eight years of bad economic planning and has stepped into an initiative in which we find our country losing jobs at an astronomical rate.” — Hilary Shelton, senior vice president of the NAACP

When did the US Economy become centrally planned?

Perhaps Ms. Shelton meant we’re in need of such. I recommend a history lesson.

Interstate Commerce Clause: Ramirez illustrates.

“In questions of power, then, let no more be heard of confidence in man, but bind him down from mischief by the chains of the Constitution.” –Thomas Jefferson

Lux et Veritas?

• “Obama Takes On Health Care Critics”–headline, NPR.org, Aug. 11
• “Obama Takes On Health Care Reform Critics”–headline, Voice of America Web site, Aug. 11
• “Obama Takes On Health Care Critics”–headline, Associated Press, Aug. 12
• “Obama Takes On Health Care Critics”–headline, USA Today, Aug. 12
• “Obama Takes On Critics at Town Hall Forum”–headline, Chicago Tribune, Aug. 12
• “Obama Takes On Health Care Critics”–headline, Slate.com, Aug. 12
• “Obama to Take On Health-Care Critics”–headline, Washington Post, Aug. 14

WSJ Best of the Web by James Taranto August 17th, 2009