Wednesday, May 11, 2011

Earth To Liberal Reality

RealClearPolitics - Boehner's Unreality Check: "philosophy"

This column points up how hard it is for communication to happen when people have vastly different models. As they look across the isle, both sides tend to be absolutely convinced that the the other side is completely out to lunch, "lying", saying things for only political purposes, etc. -- they simply can't imagine a reality that much different from theirs existing.

Reasonable economists can disagree about the effectiveness of the stimulus spending and whether it was worth the drag of the additional debt, but no reasonable economist argues that it hurt the economy in the short term.

Well that pretty much dismisses any potential for "reasonable disagreement"! Let's say that you are an alcoholic and someone gives you a massive amount of alcohol. There is NO WAY you could see that as harmful -- in your model it would be GREAT! If you are addicted to massive government spending, the reaction is quite similar. A business person or an investor looks at a Trillion here and a Trillion there of short term borrowing and goes "uh oh" -- and decides that gold, cash or inflation protected bonds might be a better investment than the stock market, or investing in a new business, or starting a new project, or hiring more people.

So, therefore, "unreasonable" -- it is impossible for the author of this column to imagine a world where the government is a 1/3 part of a 10+ Trillion dollar economy, so when the other 2/3s of the economy see the government being run by an insane clown posse, they reduce their investments in growth on the assumption that "there has to be something coming in the future for the business climate than BO, Nancy and Harry. But then, it is simply "unreasonable" to think like that.

During the early 1980s, taxes were cut and public debt ballooned, from 26 percent of GDP in 1980 to 40 percent by 1986. In 1993, taxes were increased (and spending cut); debt as a share of the economy fell, from 49 percent to 33 percent. In 2001 and 2003, taxes were cut. By the time President Obama took office, debt had climbed to 40 percent of GDP.

Some taxes were cut and others were raised. Revenue went UP -- but so did spending, by a lot more. The cause of ALL our deficits since at least '80 has been SPENDING!! Our revenue as a percentage of GDP has been flat. The government is a drunk to end all drunks -- a drunk can only drink so much, the government can spend an UNLIMITED amount of money, and that is what it keeps doing and is projected to do forever. Only it won't -- because while how much liberals want to spend is without limit, the capacity of the nation to carry pending and debt IS LIMITED.

Listening to Boehner, I began to think the country suffers from two deficits: the gap between spending and revenue, and the one between reality and ideology. The first cannot be solved unless we find some way of at least narrowing the second.

Yes, there is A LOT of "ideology" around. I'm reminded of the Reagan quote; "The trouble with our liberal friends is not that they are ignorant; It is that they know so much that isn't so". One might add that they are always absolutely certain they the right answer as well -- MORE, MORE, MORE .... MORE GOVERNMENT!!!

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