VDH: Oh, the Debts We Will See!

"Never mind the hypocrisy involved, or the mega-fortunes at play in the rise of Obama’s candidacy. Instead concentrate on the effects, both direct and insidious, of his initiatives on capital of the near-do-well. This is a quadruple whammy...

In short, we are soon to see an end to things as they once were for the last quarter-century..."

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March 15, 2009

Victor Davis Hanson

Pajamas Media

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Going broke without style…$3.6 trillion budget.

$1.7 trillion annual deficit. $800 billion plus borrowing stimulus. $600 billion plus in outlays for new nationalized health care, and then another $600 billion again for cap-and-trade.

These numbers are so fantastic, so absolutely crazed, that the thought of ever paying them off boggles the mathematical senses. (I have surreal nightmares that as we haggle with the Chinese for another $500 billion dollar note to fund cap-and-trade, or another DMV-like national health care center, the USS Carl Vinson radios that it is broke and has no credit to buy supplies off Dubai, or its F-18s sit in rows on its deck, gathering brine for want of parts to take off).

“They” will pay

How many of those diabolical rich making $250,000 and above are there left to gouge to pay for this all? It simply doesn’t compute. One is left with the only possibility that we slash defense, or we will inflate our way out, since no foreign debtor will want to supply those staggering sums of cash.

Athens in the fourth century B.C. chose to mint “redheads,” silver coins with bronze cores that were quickly exposed once the patina around the coins’ imprinted busts wore off. Rome did the same thing, and by the fourth century AD simply flooded its provinces with money of little real value. Germany paid off its war debts to France in the 1920s, with deliberately inflated German marks. I lived in Greece during the oil-embargo hyperinflation of 1973, and remember buying individual eggs with three or four inked-in price figures crossed out, as the store-keeper kept upping the price each day. (And I remember farming in the early 1980s when full-strength Roundup herbicide seemed to go from $60 to $70 to $100 a gallon in a single year).

What, me worried?

I don’t think anyone knows what is quite going on. I recently gave a lecture, and a Wall Street grandee afterwards approached the dais, asking me for advice (me, who could not even turn a profit growing raisins, and was a lousy peddler of family fruit for years at Farmers’ Markets), saying in effect something like the following: “Mr. Hanson — Consider: Real estate bad — not going to put money there when I’m not sure where the bottom is. Stocks worse — had I got out at New Year’s, I’d have thousands more than I do now. Cash pathetic — the interest doesn’t even cover what’s lost to inflation. So what’s left — the dole?”

I had no advice, of course, other than some vague warning that we are in a war against capital, sort of similar to what Sallust and Cicero claim that Catiline and his band of dissolute and broke aristocrats were planning, with his calls for cancellation of debts and redistribution of property.

Here are the possible exegeses...

http://www.victorhanson.com/articles/hanson031509.html