Ohio lawmakers vote to give themselves a pay raise

[pbrower2a]

(06-12-2019, 09:44 AM)pretty Wrote: Maybe the debt will be paid off by illegal immigrants, technology, a zero percent tax rate, or magic fairy dust, but the reality is that the US debt is increasing constantly, no one cares, and spending more money to reduce the debt will only lead to disaster.

The federal debt ideally buys infrastructure that facilitates taxable, private economic activity or serves as human investment that enhances incomes and makes taxpayers out of people either unemployed or underemployed. Debt is typically the summation of deficits less surpluses; deficits usually accumulate most in times of economic distress.

Maybe we would be wise to not promote speculative booms that lead to financial panics that begin recessions and depressions -- and wars for profits.

Quote:Debt didn’t work out too well for Rome, Germany, Japan, Greece, or Zimbabwe.

Rome -- the problem was the political system that promoted the enrichment of elites at the expense of everyone else including the peonization and enslavement of multitudes. The Roman Empire had no middle class capable of innovation and entrepreneurship that would have allowed the system to advance technologically and broaden its basis of economic activity. The Romans were not that much more primitive than the West in the 1700s. They could have used steam power, water power, paper, and printing -- and they would have advanced to the nineteenth century.

Germany? The hyperinflation that debased German currency resulted from two factors:

(1) deficit financing of the First World War, and
(2) the vindictive treatment of Germany by the victorious powers

War is profitable for warmongers, but destructive to everything else to the extent of its severity. The Allies should have treated the Weimar Republic with more generosity, as it was not going to invade its neighbors and mistreat religious minorities. Hyperinflation required the bankers of the reparations-takers to lend money to Germany, and when that lending stopped, the economy melted down. A people with hurt feelings and a sense of economic loss is always vulnerable to the soothing appeals of a demagogue, and the Antichrist of the 20th century filled that bill.

Japan?

Not so long ago the Japanese were famous for personal thrift. Japan was so pro-thrift that it did not tax interest by savers and bond-holders but did not allow businesses to deduct interest as a cost of doing business. What was the Japanese problem? Speculation. Jap-an went as far as it could with economic development through industry, and the country hit a brick wall in which it could go no further. It could be that there is a natural limit to economic development, and Japan hit that before other countries. Japan had a serious recession in the 1990s that it has yet to get out of.

Greece? Greece is closer to the Middle East in economic development than to Germany or the USA -- and the Greeks started trying to live like Germans or Americans. Bad idea. The country lacks the resources.

Zimbabwe? Print money to cover deficits, print even more money to cover bigger deficits, promote radical social reforms instead of investment, and you start printing this:



It is now worthless as currency. Zimbabwe even abandoned its national currency in favor of hard foreign currency. The moral of every story of hyperinflation is that money is valuable only to the extent that it can buy something. That is the difference between meaningful fiat currency and paper valuable only for what paper can do.

Quote:Those who fail to learn from history are doomed to repeat it.

Just as much a hazard is failing to interpret history appropriately. Hitler thought himself an expert.