Financial Options: Cut Spending, Hyperinflate, or Default

Without seriously drastic cuts — cuts that would make Paul Ryan blanch — we can’t fix this economy without wrecking the government. …

Can we tax our way out? Back to Lindsey:

The tax-the-rich proposals of the Obama administration raise about $700 billion, less than a fifth of the budgetary consequences of the excess economic growth projected in their forecast. The whole $700 billion collected over 10 years would not even cover the difference in interest costs in any one year at the end of the decade between current rates and the average cost of Treasury borrowing over the last 20 years.

Clinton-era tax rates won’t even begin to cover the spending problem. Not even close.

That leaves us with three possible outs: Cut the budget to the bone, hyperinflate away our debts, or default.

The most serious budget-cutter we have, Congressman Paul Ryan, is not nearly serious enough about the disaster we face. Or if he is serious, he doesn’t have enough of his party backing him up. And even if he had that, Ryan still would face a public too uninformed to understand or tolerate what must be done.

Option One, in other words, is off the table. Ain’t. Gonna. Happen.

So how about Option Two, Hyperinflation?

Inflation only as high as eight or ten percent is harmful to a nation’s economy, its savings, and even its social fabric. Hyperinflation destroys all of those things. It’s no remedy; it’s a cure worse than the disease.

That leaves us with Option Three: Default. Simply put, the government of the United States simply refuses to honor its debt obligations. It’s called “sovereign default” because you can’t take the government to its own courts to make it pay up.

Default would be terrible. The dollar would cease to act as the world’s reserve currency and that inflation we’ve spent the last forty years exporting to the rest of the world, would come flooding back to our shores all at once. Can you imagine how expensive a barrel of oil would be, if we had to scrounge up enough euro or yuan from our meager reserves, to pay for one?

And what about our budget? It would still be seriously out-of-whack — but Washington would lose the ability to borrow from overseas to cover the shortfall. Washington would either have to balance the budget — and right then, buster! — or start rolling the printing presses again. Call it “The Mother of All Quantitative Easings.”

Or just call it Option Two. We’re back to hyperinflation.

Read the whole thing. There’s a bad scene coming. Via Vodkapundit » It’s Delightful, It’s Delicious, It’s Default.

Animal Rights and State’s Rights: Not Quite Right

Per this article, we have a great sentence:

Matthew intentionally, intelligently, and persuasively avoids any discussion of “animal rights,” writing not about the putative “rights” of animals but about the moral obligations of humans.

I have said for a long time that you don’t “own” your pets. Instead, you are “responsible” for your pets. Much as I love my dogs, I think it’s fair to say that animals don’t have rights, per se; we have duties toward them as living creatures capable of joy and suffering.

Similarly, I have said that there is no such thing as “State’s Rights,” only “State Powers” (as delegated to them by the People).

I find these kinds of distinctions useful, not for pedantic reasons, but so that we can think more clearly about what actions are appropriate and effective.

On the Finiteness of Resources

The point is not that the number of atoms (or molecules, or whatever other physical form or substance you wish to name) available on earth to human beings is not finite or unable to be enlarged.  Of course these things are finite.  Instead, the point is that “resources” is not, ultimately, a physical concept; it’s an economic concept.  And to be limited physically is not necessarily to be limited economically.

What is and isn’t a resource is determined by human ingenuity.  Likewise, human ingenuity determines how much “utility” – satisfaction; gratification; pleasure; relief-of-felt-uneasiness (call it what you will) – can be gotten at any moment in time from any given unit of physical stuff.  As long as human ingenuiity is free to create, there is no necessary practical limit to the amount of any ‘natural’ resource that is available for humans to use productively.

Read the whole thing. Via On the Finiteness of Resources.

My New iPhone 4

Those of you who know me from when the iPhone first came out will recall that AT&T jerked me around on getting one for a month, and how I swore after the experience that I would never purchase one from them. You may mark your calendars: I bought an iPhone 4 last night. Commence the gloating and I-told-you-so’s.

Granny’s no terror threat

For people serious about security, the entire TSA is a joke. “The whole system is designed to catch stupid terrorists,” says security expert Bruce Schneier. Trying to keep weapons or explosives off planes by embarrassing grannies or terrorizing toddlers is a waste of time, and the TSA knows it.

Former TSA head Kip Hawley admitted in 2008 that “all they [terrorists] have to do is walk through the airport clean and then have someone throw something over a fence.”

The reason for the current dog and pony show is to make passengers feel safe so we’ll keep flying. Which is another reason the granny groping is counterproductive. How can I feel safe when my life is in the hands of TSA agents who think “The Golden Girls” represent a terrorist threat?

via Granny’s no terror threat – BostonHerald.com.

Gay Marriage as Grass-Roots Effort

The earliest milestones on the road to marital equality were made quietly, privately, and far from any civil authority. The public recognition of gay unions emerged gradually, reaching wider and wider circles until finally even governments started climbing aboard. Contrary to the rhetoric you still hear from some of the idea’s opponents, gay marriage was not cooked up in some D.C. laboratory and imposed on America by social engineers. It was built from the bottom up, and it was alive at a time when the typical social engineer thought homosexuality was a disease.

via All in the Gay Family – Reason Magazine.

Gay Marriage, and Freedom

No smoking anywhere. No salt in your food. No fast food. No saturated fat. No hydrogenated oils. No fried food. No drinking. No speeding. No gasoline. No oil. No decent light bulbs. No nuclear power. No hydro power. No coal power. Only corn power.

Is any of this newsworthy? Nope. Our freedoms are being stripped from us one by one and all I read about in the newspaper and online is that gay people can now file married-joint on their 1040 form.

Plenty to agree (and disagree) with in the post. Via A Simple Desultory Philippic (Or how I was Main Stream Politics’ed Into Submission) – Ricochet.com.

D-6: Packing for Nashville, and Fight Club

I’m moving to Nashville on Saturday, and I’m spending time this week packing up (and cleaning, and giving-away, and throwing-away). Fight Club has been on my mind during the process, where Tyler Durden says (in the book) “Then you’re trapped in your lovely nest, and the things you used to own, now they own you.” I got this sentiment before; I’m not one to become attached to particular material stuff. But moving it all makes me remember how I am responsible for it: both for its presence, and for its care.

Steak Night, and Scotch

Tonight looks to be the last Steak Night at Casa de Jones in Memphis. Benito fixed a porterhouse with peppers, onions, and mushrooms, with a great claret (2007 Faithful Hound from Mulderbosch). I bought a bottle of the 25-year Highland Park scotch, seeing as I fell in love with it on my recent trip to Seattle, and we finished off dinner with that — mmm mmm.

Picture courtesy of Ben Carter.