Put your actions where your words are

One of arbat’s commentors writes:

Calling current deficit spending “unsustainable,” he warned of skyrocketing interest rates for consumers if the U.S. continues to finance government by borrowing from other countries.

“We can’t keep on just borrowing from China,” he said. “We have to pay interest on that debt, and that means we are mortgaging our children’s future with more and more debt.”

Holders of U.S. debt will eventually “get tired” of buying it, causing interest rates on everything from auto loans to home mortgages to increase, he said. “It will have a dampening effect on our economy.”

And why didn’t Americans elect the person who said the above their President? Oh wait, they did — it’s a speech by Obama himself.

I just had an idea — there are two of them out there: Barack Obama and Borat Obama. One of them, of course, is a [time traveller]. Borat sits in Washington and works on economic policy, while Barack travels around New Mexico and makes speeches.

In case you have no idea what it is he is going on about, compare the quote in italic from above with these charts:



In gray is evil conservatives’ spending. In red — you-know-who’s:



And finally, I love this figure:



Greg Mankiw comments:

To put those numbers in perspective, imagine that the head of a household with annual spending of $100,000 called everyone in the family together to deal with a $34,000 budget shortfall. How much would he or she announce that spending had to be cut? By $3 over the course of the year — approximately the cost of one latte at Starbucks. The other $33,997? We can put that on the family credit card and worry about it next year.

Nu, nu. I hope I don’t have to tell you that it’s your money, folks.

Keep remembering this: whenever the government “finances” or “stimulates” something, it does it with your money. Not just money out of your paycheck. The extra money you pay for products which did not become cheaper, because their manufacturers were taxed and did not invest extra money in product development. In those products that you cannot afford. In extra you pay for house, for your amenities. In all that civilization advances on which you missed out — about which, of course, you don’t know since they are not there.

So, I guess, in one sense it’s not so bad. It’s like living in 19th century without toilet paper. It sucks, but you don’t know it does, since you don’t know what you’re missing.

I hope you enjoy those stones.