"economic ignorance" vs.
The religion of unlimited higher debt
Finally, I have noticed a strong correlation between economic ignorance and the use of such terms as "runaway debt" and "chronic deficits".
So you demand another Wall of Text..
No. Why would anyone want more economic ignorance on display?
Ouch! That was "uncalled-for" -- the only possible response to that is:
another Wall of Text ---------------
Where there's "ignorance" there has to be truth which someone doesn't know and someone else knows. What's this truth you're claiming to know? such that there has never been any "runaway" debt or "chronic" deficit by any state? and thinking there ever was such a thing is "economic ignorance"?
So, what's this hidden Truth you know? but which those in the "economic ignorance" category don't know? It must be the doctrine spoken earlier by another member of your cult:
"The present and future ability of the USA to pay any debt of any magnitude, denominated in US Dollars, is unlimited."
And this is why there could never be excess debt, no matter how much is borrowed or how much currency is created to pay for it. Why are you and your fellow cult members so sure that the USA has this "unlimited ability" to pay "any debt of any magnitude"? You must be sure of it, because the opposite of this, or denial of it, is what you're calling "economic ignorance."
I'm calling the above "unlimited" debt doctrine
Nutcase Economics. There is no such unlimited power of the USA or any country to do this, and only a cult of fanatics would crusade for such an economic theory. Trying to exercise any such power would collapse in a short time, inevitably and completely, as happened in Germany in the 1920s where we have a classic example of such Nutcase Economics. And so when we continue to run up debt as though such an "unlimited ability" to increase debt does exist, to increase it to historically-high levels with no defined or agreed limit beyond which we won't go, it's "runaway" or "chronic" and is making the nation worse, not better -- whether or not we experience some catastrophic sudden crash.
And you're calling it "economic ignorance" to reject the "unlimited debt" doctrine. I.e., the doctrine that
"The present and future ability of the USA to pay any debt of any magnitude, denominated in US Dollars, is unlimited." If you call it "economic ignorance" to reject this doctrine, that must mean you're a member of the Unlimited Debt cult which promotes this doctrine, because this is essentially what I'm arguing against, while others here are saying it's fine to increase the deficits even higher because there's no limit and "debt of any magnitude" can be repaid with "unlimited ability" to create the necessary currency no matter how high the debt might go.
What about our actual high deficits -- not the above hypothetical -- What is the evidence that these
high deficits in peacetime, which began in the 1930s, have resulted in a net economic gain? deficits leading now to a normal debt/GDP of 100% or higher, when for decades economists said it had to be less than 80%? What is your evidence that these extra-high deficits are now necessary and doing an improvement? What is the benefit we gain from ensuring that the debt/GDP remains so high and goes even higher?
What other answer is there than this Secret Knowledge or Truth your cult possesses? inaccessible to non-members (being in "ignorance")? who can only trust your doctrine of "unlimited ability" to create money, and debt "of any magnitude" because public debt however high can't ever be too much?
Is this the knowledge you have which makes you superior to those in "ignorance"? How do you know you have this superior knowledge that others don't have? How did you acquire this superior knowledge that sovereign nations have a mystical "unlimited ability" to create "any debt of any magnitude" and money to repay higher and higher without limit? Who imparted this superior knowledge to you? Can others also acquire this Enlightenment by undergoing some initiation procedure into your cult?
Is this special knowledge you're claiming similar to the knowledge of the ancient Gnostics, or the Neo-Platonists, who also claimed to have secret cosmic knowledge that others don't have (in their "ignorance")? who knew Truth similar to your transcendental Truth that any state can run up "debt of any magnitude" and create "unlimited" currency to pay "unlimited" debt? and the denial of which you're calling "economic ignorance"?
Are you able to explain how you know this? or are you incapable of anything other than to condemn anyone questioning it as being ignorant and inferior to you? like the ancient Gnostics claimed to be superior to the unenlightened masses? Is this the kind of Knowledge you have that
"The present and future ability of the USA to pay any debt of any magnitude, denominated in US Dollars, is unlimited." ???
You acquired this secret knowledge where? how? What's an example in history where this unlimited ability to create money and debt "of any magnitude" was demonstrated successfully? Of course we see UNsuccessful attempts (e.g. Germany in the 1920s) to exercise such unlimited money-creating power. But where was it done successfully? Why can't you explain how you know this?
So according to most of those posting here, the reason we must always raise the debt ceiling is that there's a cult, or cult-members and their guru, who have secret knowledge that
"The present and future ability of the USA to pay any debt of any magnitude, denominated in US Dollars, is unlimited"
which they cannot explain to anyone outside the cult and lacking the secret Cosmic Wisdom known only by the elite members of this cult; or those initiated into the cult. Almost everyone posting here insists that the debt must be increased, but they can't give any reason why, other than the existence of this cult of special Knowers, with special secret Knowledge that the US and any sovereign nation has this "unlimited ability" to run up and repay "debt of any magnitude." And it's "economic ignorance" to doubt this.
Got it.
Blame/credit for the recent increase in federal deficits
(Let's assume the concurrent President is always responsible for the federal deficits during his term.)
This is not to deny real "economic ignorance" here and there, some of it demonstrable. E.g. in my case I erroneously blamed Trump for starting the recent deficit increases after Obama had reduced them, when the truth is that those increases (2016-17) have to be blamed on Obama. But errors can be corrected -- by posting another Wall of Text. Getting the facts straight and refuting the errors (with more Walls of Text) is more important than preaching someone's Enlightenment or secret possession of Truth they can't identify other than just accusing doubters of "economic ignorance."
We should keep posting what we think, even error, until we're corrected or we discover the error -- even though it could require another "Wall of Text" in order to get the error out there, plus a further "Wall of Text" by someone to correct it.
The recent debt increases (before the pandemic) actually happened under Obama's watch, though somehow I missed this and thought the deficits were still coming down until he left office, and only then started back up because of Trump -- I goofed by not checking the numbers closer. Not only 2016 was Obama's responsibility, but also the 2017 increase. Obama had 2 bad years of deficit-increasing, after doing his "good job" of reducing the deficits in 2013-2015 ("good job" unless you believe the cult doctrine that the state can issue debt "of any magnitude" and "unlimited" currency to repay it, in which case there should be no credit to any President for reducing the deficit).
Here's a website
https://www.thebalancemoney.com/def...-of-presidents-budget-deficits-by-fiscal-year to explain the blame/credit to each President for his respective years in office:
According to this,
President Obama is to blame for both 2016 and 2017, when the deficits went back up. The next President inherits the previous year's deficit/surplus, because those numbers are mostly fixed earlier, especially the tax revenue. So I don't deny getting my facts wrong (real "economic ignorance") blaming a Republican for what his predecessor did.
If this doctrine is not the belief of most crusaders for always raising the debt ceiling -- i.e.:
"The present and future ability of the USA to pay any debt of any magnitude, denominated in US Dollars, is unlimited" -- then what is the doctrine always driving them to demand higher debt without exception, and to never question the increase no matter how high the debt/GDP goes?
Why do the raise-the-debt-ceiling disciples seem to have no other Knowledge than this kind? Why is it that their only knowledge is their dogma that the ability to run up and repay debt is unlimited and that anyone who doubts this dogma is economically ignorant (though they can't explain it)?
What is "runaway debt" and "chronic deficits"?
I argued earlier that everyone expresses the need to keep down the debt and yet they keep increasing the debt percentagewise. FDR, for example -- He was an economic imbecile according to almost everyone posting here and their cult doctrine that there can't ever be any "chronic" or "runaway" or excess debt because the state has unlimited ability to run up debt.
In 1932
FDR displayed this "ignorance" they speak of by condemning the deficits of the Hoover Administration. It could be that he knew he was lying and would himself later increase the deficits even higher. But he spoke of the deficits as damaging to the economy and causing much of the suffering, and as something preventable and which should not have happened:
The truth is that our banks are financing these great deficits and that the burden is absorbing their resources. All this is highly undesirable and wholly unnecessary. It arises from one cause only, and that is
the unbalanced budget and the continued failure of this Administration to take effective steps to balance it. If that budget had been fully and honestly balanced in 1930, some of the 1931 troubles would have been avoided. Even if it had been balanced in 1931, much of the extreme dip in 1932 would have been obviated. Every financial man in the country knows why this is true. He knows the unnecessary muddle that has accumulated and is still accumulating in Washington. Now, how can we continue to countenance such a condition? That is a practical question. In all conscience, can an Administration which has so frequently failed in a matter so directly touching its own responsibilities ask for your support and trifle with your common sense by these campaign alibis about mysterious foreign forces and by this specious talk about sound fiscal policies? Would it not be infinitely better to clear this whole subject of obscurity, to present the facts squarely to the Congress and the people of the United States, and
to secure the one sound foundation of permanent economic recovery — a complete and honest balancing of the Federal budget?
www.presidency.ucsb.edu
Must you not condemn him as an economic imbecile for saying the "sound foundation" for recovery is a "complete balancing of the Federal budget"? and thus contradicting the cult doctrine known by the enlightened ones? Why should we reject this judgment of FDR and instead believe the cult dogma preached by most of those posting here that
"The present and future ability of the USA to pay any debt of any magnitude, denominated in US Dollars, is unlimited" ???
So, virtually all the politicians condemn the increased debt, even Presidents (or presidential candidates), and yet they keep enacting more debt, meaning a higher % of debt, not just continuing the same debt level as previously. Both parties blame the other for running up the debt, as something they should not do, and when the debt is brought down, rarely, or balanced budget is achieved, both parties claim credit for it.
So, since all the sentiment is to keep down the debt, and yet it continues to increase percentagewise, why isn't it appropriate to call it "runaway" or "chronic"? Isn't it getting away from us if we're trying to hold it down or reduce it and yet it persistently increases over time? Isn't it addictive, even "sick" and "chronic" when we're trying to avoid doing something but we keep doing it anyway out of habit? and because we crave the instant gratification?
If the current proposed budget deficit were being reduced from last year, you might claim that we're making progress (in deficit reduction), but it appears that such deficit reduction may not be happening. It decreased from 2021-2022 (maybe reduced by half, or close to half). But from '22-'23 it's either a very small or zero decrease, or possibly even a fraction higher.
According to the "debt clock"
https://www.usdebtclock.org/ this year's deficit is going to be somewhere between 1.3 and 1.6 trillion. And the '22 deficit was about 1.4 trillion (the latter number seems agreed by all the sources), and the projected '23 deficit isn't clear, but there might be at most a very tiny decrease, if any.
A realistic argument for raising the debt ceiling might be that we had one good reduction of the deficit, 2021-22, and this year's deficit will be low enough, maybe come down slightly, and so therefore we have a little progress in getting the deficit down, and we can wait until next year for it to go down under 1.0 trillion, even with the higher debt ceiling, which therefore should be raised for now. It would be nice to hear this kind of argument for a change, rather than the far more popular
"The present and future ability of the USA to pay any debt of any magnitude, denominated in US Dollars, is unlimited" etc.
Why shouldn't there be pressure to do more cuts, to get it down? every year? This was routine in the 19th century when the debt always came down following the current war to be paid for. And also after WW2 the percent of debt/deficit gradually declined back toward levels close to the 30s:
The Debt-to-GDP ratio is the ratio between a country's debt and its gross domestic product. These charts show the government-, corporate-, and household-debt to gdp.
www.longtermtrends.net
You can see from this graph that the upward trend since 1930 is consistent and reliable, with the only downward part being after the extreme jump for WW2, after which there was the decline back as was normal after a war, similar to after WW1 and after the Civil War. But that decline was only partial before the rise back up, about 1975-85 -- all of which shows the consistent overall trend upward, continuing to the present, and the 2020 pandemic causing another jump up.
The best kind of evidence that a normal recovery from the 2020 crisis is underway would be to show that the deficit is now coming back down steadily. This crisis does not match WW2 in severity, cost-wise, and yet the debt/GDP ratio has now become the worst ever. Why shouldn't there be spending cuts to get it back down -- sacrifice now, both tax increase and spending cuts, to make up for the sharp spending increase in 20-21? It's appropriate to use the debt ceiling vote now to get the deficit down, not only now but in the following years.
Explain how higher deficits make us better off -- why is this so difficult and yet it's so easy to preach the fantasy of "unlimited ability" to create currency to pay "debt of any magnitude"? Where's your evidence that the Hoover-FDR deficits made the economy better off? when the facts are that the economy remained as bad or became worse after the 1932 deficits, leading in to a prolonged Depression, whereas in earlier recessions and crashes (e.g. 1921-22) there were no such increased deficits and the economy recovered faster?
The graph
https://www.longtermtrends.net/us-debt-to-gdp/ showing debt/GDP from 1800 - 2021 shows the overall gradual increase in the debt, also the corporate debt/GDP (scroll down) for the same period. This shows the overall general increase in debt/GDP, with ups and downs, from 1800 to 2021, but the public debt has increased far more than the corporate debt and is far more erratic.
Why can't anyone give a reason for this increase in public debt? explain the need for it? show how it has made anything better? Why instead is there only an impulse to condemn any questioning of the increase as "economic ignorance"? So the "raise-the-debt-ceiling" disciples have a two-fold hate against reasoning: 1) they demand that the debt must keep increasing percentagewise but won't/cannot give any reason why; and 2) they condemn anyone who asks why or wants a reason to be given for always increasing the debt, saying it's "economic ignorance" to not trust the cult to always be right.
What evidence is there
that the "economic stimulus" deficits made the economy better? today, 50 years ago, or the period of 1933-40 when the "economic stimulus" deficits started? All we know is that the new higher deficits gave us instant gratification each year, at the expense of higher costs passed on to future taxpayers who were made worse off. Plus there was funding for an emergency like WW2, but also non-emergencies like 2023 or other times when the only need was the "jobs! jobs! jobs!" babble of demagogues like Donald Trump and Bernie Sanders. The best example of the "jobs! jobs! jobs!" deficits were the Hoover-FDR deficits beginning in 1932 which instead of better times led to the most prolonged Depression ever.
So it's not facts about the outcome which tell us we need these higher and higher deficits without limit, but rather the Secret Knowledge of the higher-debt cult, expressed here by our raise-the-debt disciples in their doctrine
"The present and future ability of the USA to pay any debt of any magnitude, denominated in US Dollars, is unlimited"
And anyone doubting this or worrying about excess debt or "chronic" or "runaway" debt is not answered but dismissed for their "economic ignorance" -- Why should we not see these higher-debt crusaders as members of a cult who believe this unlimited-ability-to-pay-any-debt doctrine, since this doctrine is the closest they come to offering any explanation why the debt must always continue to rise higher, with no limit?
Those who demand compliance to their doctrine but can't give answers other than to accuse the doubting ones of "ignorance" are usually the ones in error.
It's about "jobs! jobs! jobs!"
We have at least one clue what it is that really drives the Higher-Debt-Without-Limit cult members who insist that the debt ceiling must always be raised no-matter-what. And that is the "jobs! jobs! jobs! jobs!" religion preached by Democrat and Republican demagogues alike. Most of these peacetime high deficits were driven largely by the "job creation" fad which has taken hold for at least 100 years now. The mantra always preached by the higher-debt disciples is the "jobs! jobs! jobs!" chant, over and over again.
And possibly an argument can be made that, even though the "stimulus" deficits don't produce a net economic gain long-term, because they must be repaid later, still, maybe somehow there's an increase in the number of "jobs" created which has some kind of permanency into the future. At least this possibility is easy to imagine, as some uncompetitive jobs might be saved, and before they finally get eliminated there's another "economic stimulus" deficit to save them again, and perhaps other economic benefits are given up as a sacrifice in payment for the higher number of the marginal uncompetitive "jobs" generated, which job slots are needed to absorb some job-seekers, to at least keep down the number of these riff-raff and keep them off the streets, or out of mischief, by inserting them into makework jobs, like factory job slots created by the "bring back the factories" hysteria, or other places to put them, where the riff-raff at least are rendered less dangerous to society.
Somewhere in this "jobs! jobs! jobs!" hysteria we probably have the best explanation why the debt has to keep rising percentagewise, as these "economic stimulus" deficits are thought to cause some increase in the net total number of jobs out there, so that much of the low-class population can be reduced as a threat to society, because having them absorbed into the job slots prevents many of them from going on a rampage through the streets and the cities where they would do more damage than they would in the job slots where they aren't needed but at least are prevented from inflicting mayhem and plunder and more cost overall to society.
This "jobs! jobs! jobs!" fad is probably the best explanation why the deficits must continue to rise, and why the higher-debt disciples have to keep groping for phony reasons to run the debt up still higher and higher, being unable to give an honest explanation for it.
The "jobs! jobs! jobs!" hysteria of our time probably has its origin (most of its origin) in the 1920s and 30s, and this mostly new mindset became so strong or dominant in the popular culture that a new crusade to run up deficits ("economic stimulus" deficits) came into being, i.e., a new "job creation" vision was born, to have government do whatever is necessary to goose the economy to fabricate artificial "jobs" as something not for production but for absorbing excess job-seekers who were seen as some kind of waste or by-product of the modern economy, as a possible threat to be neutralized somehow.
This mindset had been developing over a long time, going back centuries, but by 1920-30 it had grown dominant enough in the thinking so that now there emerged a new crusade for government to mobilize forces to neutralize this worsening threat, as people envisioned hordes of unemployed riff-raff stampeding loose in the streets, overrunning communities and businesses, even homes, plundering everything in their way.
This vision, or mindset, or paranoia, might be more subconscious than conscious, but it's a widespread delusion expressing itself in the "jobs! jobs! jobs!" sloganism of modern political propaganda and demagoguery. And one major result of it is the repeated "economic stimulus" deficits which have developed way beyond any such debt pattern prior to the 1930s (i.e., debt pattern continuing over a long duration). The 1930s period marks a turning point toward a new form of continued repeated inevitable deficits, going ever higher, driven by factors which cause the employers to keep decreasing in relation to the job-seekers who keep multiplying.
www.salon.com
) and utilities and property under the umbrella of a very small number of people would seemingly be the bigger threat to the average American in the future.
