Where will this come from?

Monday, November 24, 2008

The Troubled Asset Relief Program, is, at $700 billion, the largest such outlay in history by the Federal government, but it is hardly the full dollar cost of the current financial crisis. Also passed in 2008 were the $30 billion Bear Stearns, the $150 billion American International Group, and the $200 billion Fannie Mae/Freddie Mac bailouts. This is nearly $1 trillion in bailouts for 2008 alone. In addition, the Federal Reserve may have already lent (as of last Friday) another $2 trillion on an emergency basis to prop up the economy, over half of that in the seven weeks following a relaxation of collateral standards on September 14.

And, by now, we should all know that "loan" is all but a government code-word for "present-day wealth transfer to the unproductive, to be paid for by future productivity on the part of other members of society". Via Matt Drudge, there is news this morning that the Democrats are mulling an additional $700 billion "stimulus" package and the Fed "pledges" -- our words are becoming as inflated as our currency eventually will be -- have topped $7.4 trillion!

So, using the financial crisis as an excuse, the federal government has definitely saddled us with about $1 trillion, may soon definitely saddle us with another $700 billion, and there is (for the moment) a $7.4 trillion ceiling on any loans made by the Fed that turn out to be bad.

The United States is home to roughly 300 million people. Every $1 trillion is thus about $3,000 for every man, woman, child, and infant alive today. About half are working age. (For the sake of argument, we'll pretend that all are privately-employed and all people at this age actually work.) The government can raise this money only by means of force, which is to say, by taxation, inflation, or otherwise confiscating private property.

If you work, you have thus already taken out a loan (in the form of "bailout" packages) for about $6,000 to hand over to complete strangers -- well, not complete strangers: you do know that they're spendthrifts -- and you may be on the hook for as much as another $48,000 (in "pledges", as of today), courtesy of Uncle Sam.

You didn't want to take out a loan or can't afford to? Tough nuts. The government does not care about what you think, except possibly at election time. Your loan is just a small part of the price anyone who has ever felt entitled to government favors or supported government welfare of any kind has accepted (knowingly or not) and is forcing on those of us who do not.

This is precisely the opposite of what the government should be doing.

The time to start working to end this sorry state of affairs is now. My recommendation is to support those who are working long-term to improve our choices at the ballot box by making better bosses of the people who choose our elected officials.

The notion that we exist to serve others and that, therefore the government ought to use us to insulate others from their mistakes or irresponsibility is a philosophical error, and cannot be corrected unless more people become aware of better philosophical ideas and how to apply them. Only then will there be enough voters to cause politicians to take seriously the idea that they should be protecting us from thieves rather than joining them.

-- CAV


Burgess Laughlin said...

Your post deals with the concrete (the looming multitrillion dollar debt) and the broadly abstract (the philosophical principles that caused us to be where we are and, in different form, might rescue us).

So, I think your title is doubly apt: "Where will this come from?"

It can apply to both the concrete (the money) and the abstract (the philosophy). Well done!

Gus Van Horn said...

I'll accept your compliments on the post, but the double meaning of the title is just an accident. Thanks for pointing it out, though, because it is pretty neat!