Purely Political, By James Buckley
It should be clear now that the so-called “national debt” — $31.4 trillion at yesterday’s count, but who’s counting? Certainly not anyone in government — will never be paid back or reduced in any real way. Overspending has been a way of life in the nation’s capital for decades.
Some influential congressional leaders defend the wild spending spree, professing to believe that the spending can actually reduce the deficit.
During a talk at a House Democratic Issues Conference in March, for example, House Speaker Nancy Pelosi opined that “Seventeen Nobel laureates in economics said that the (Build Back Better) legislation does not increase inflation. It is non-inflationary because of the way it is written… The government spending is doing the exact reverse, reducing the national debt. It is not inflationary.”
Fortunately, Speaker Pelosi and her party didn’t have quite enough influence or votes to pass yet another mammoth spending bill.
Otherwise, the inflation rate would probably swell to 15% or more.
It is not debatable that rampant government spending, the free printing of dollars and spending as much of it as fast as it can, causes rampant inflation. Government also “borrows” money (by buying its own debt) at an accelerating clip, fixing interest rates well below that of the inflation it is causing.
This year alone, the dollar will buy nearly 10% less in goods and services than it could have purchased last year. The cost of everything has risen by 10% for U.S. residents, hitting retirees particularly hard. The dollar amount of what the U.S. owes its citizens and the rest of the world remains the same, but its value has shrunk by 10%.
The way our Congress thinks of money — and I’ll include a big contingent of Republicans in this — is why the Biden administration could simply pick up and leave nearly $100 billion in military hardware on the ground, in tents, on tarmacs and probably in private homes, and abandon Afghanistan without a thought as to the value of those items left behind and their probable worth to a group that will likely become an enemy at some time in the future.
Money means very little to the Washington, D.C. crowd (it is there to spend whichever way they decree), which is why the Biden administration could also simply sign an executive order to halt construction of the southern border wall and allow newly fabricated steel segments valued in the billions of dollars to rust and deteriorate in the California-Arizona-New Mexico-Texas desert. There was no public discussion as to what to do with this valuable material or where it may be used more productively. No discussion whatsoever.
Unlimited funds, unharnessed by any meaningful restraint, is also the reason that more than a hundred thousand “immigrants” pour across our southern border every month and are assigned iPhones, given spending money, housing and transportation — all on the government dime.
Money is no object.
Let’s not forget that when the first Iran nuclear deal was approved and signed by all parties, the U.S. government not only released $150 billion or so of frozen Iranian funds but also loaded private planes in the middle of the night with pallets of cash totaling some $1.7 billion in currency — dollars, Swiss francs, British pounds and euros — as part of the deal. Where that money came from has never been explained, but there is apparently a large stash of unaccounted-for government (taxpayer) cash sitting around and available for who knows what other situations.
Within a decade, the likelihood is that “money” as we’ve known it for centuries will no longer exist. Actual U.S. dollars will disappear. Hard currency will be replaced by a software point system that every citizen (and non-citizen) will have access to, much like one’s credit card points and similar to the way welfare recipients are currently paid.
Debit cards will be used by everyone to buy, spend and maybe even “save,” though “saving” will be discouraged (as it is now), and anyone who doesn’t spend the allotment given to them will be pressured to do their patriotic duty to buy stuff.
All of which leads me to wonder how it ever got this crazy.
The spending guardrails were pushed toward the outer precipice by President Lyndon Johnson in the late 1960s, when the demands of his and his Democratic Party’s “Great Society” ran into the real needs of the war in Vietnam. Budget deficits became common as the war heated up.
In 1971, President Richard Nixon and a compliant U.S. Congress separated the dollar from gold and rescinded the post-World War II Bretton Woods agreement (activated in 1958) that promised the U.S. government would purchase gold from any nation at a guaranteed $35 an ounce. After President Nixon’s move to rescind the offer, the U.S. monetary system devolved into printing what is called “fiat” currency, with no backing other than the good faith and credit of the United States.
The dollar overtook the British pound early in the 1960s as the world’s reserve currency. And it’s that status that allows the reckless spending taking place today, with no end or even restraint in sight, until that is, the U.S. dollar ceases to be the world’s reserve currency.
Next week, we’ll delve into the insidious nature of collective bargaining by federal employees as one of the causes of the uncontrolled and dangerous over-spending taking place at every level of government and in every governmental agency.
James Buckley is a longtime Montecito resident. He welcomes questions or comments at email@example.com. Readers are invited to visit jimb.substack.com, where Jim’s Journals are on file. He also invites people to subscribe to Jim’s Journal.