David Stockman, former budget director in the Reagan administration, has been banging this drum for a while if I recall correctly, the one about the inevitable crisis the U.S. is setting itself up for if it doesn’t change its ways. Still, he makes some very good points in an interview with Raw Story, at the same time saying we need to shrink the military, and lamenting that even with a purportedly leftist government the subject isn’t even being discussed.
The problem, the reason everybody in Washington talks about the debt but nobody’s willing to take a stand, is because they don’t have to. For one thing, the Fed is making the cost of borrowing absolutely negligible. For all intents and purposes, Washington these days has a blank check. The other thing is, the government is trading on the name and standing of the United States. The thought of the U.S. defaulting is almost unthinkable (it used to be absolutely unthinkable, but the Panic of 2008 and aftermath we’d imagine put some shadow of a doubt out there.)
So the federal government can issue as much debt as it wants. Any day of reckoning is still more than an election cycle or two away, and that’s as far out as our current breed politicians can think. Besides, if the feta really hit the fan, they could always just sell a national park or two.
The whole Stockman piece is worth reading. Here’s a taste:
“So the addicts in Washington are now unfortunately terrified to stop all this borrowing whether it’s for guns or butter for fear of the economy will collapse…That’s why we’re just at the beginning of solving this massive financial collapse we had in 2008 and not in the process of healthy recovery as some of the pals in the White House or on Capitol Hill or on Wall Street would have you believe.”