Tuesday, December 22, 2020

The government has to print money to keep going after tax cuts

Though I don't agree, it's interesting to hear Senator Rand Paul criticize other Republicans (and Democrats) for passing the corona virus relief bill. He's one of 6 Republicans who voted against it.

He's definitely worried about the rising federal debt. He says we are just printing money and giving it away.

He criticizes something called Modern Monetary Theory which downplays concern about the debt; under certain circumstances at least. If inflation doesn't appear to be rampant, Modern Monetary Theory downplays worry about creating new money to cover the debt.

Rand Paul mentions former Republican Vice President Dick Cheney as one who pushed deficit spending, wasting billions on a useless war in Afghanistan.

Interesting to see Republicans quarrel among themselves.

About the virus, he believes we should just allow business to open up again. Allow indoor dining, bars and so forth. Don't spend money to allow people to wait out the virus.

I got to thinking that we would have to accept a higher death rate under his type of libertarian (small government) thinking. We now face the problem of hospitals being overwhelmed, but we may have to accept more death without going to the hospital first. A harsher reality; like on the American frontier of 150 years ago. Harsher than people are used to today.

Most people would, probably, still survive a higher death rate from the virus, so some folks ask, "what's the problem?" I think much of libertarian thinking has roots in the America of years past; in many ways a harsher time.

As for printing money over the past decades, we could have had higher taxes. There are a lot of wealthy people, including even a big number of upper middle class.

Raising taxes might have slowed down some of our greedy and wasteful expectations, but it could have brought revenue more in line with government spending. It would have been more "pay as you go."

We didn't do that. Instead we have expanded the money supply greatly. I think there is no shortage of money, however.

More money has lead to inflation, but future generations can just move the decimal point over a notch. The idea that we have "stolen" from future generations doesn't seem quite accurate.

Future generations just move the decimal point over and go on with their lives. Houses that sold for $50,000, when I was in college, are now well over $500,000. For the most part, we survive and life continues.

Problem is that not all things inflate at the same rate. Some prices and wages are still closer to what they were in my college days making it harder for people and businesses, in those sectors of the economy, to keep up with the rest of the economy.

Inflation has been a reality in certain sectors, but not across all parts of the economy, so it's tempting for folks advocating Modern Monetary Theory to say that inflation isn't a problem.

Advancing technology has created so much nearly free wealth that it's tamped down inflation in many sectors, but it also threatens to inundate the planet. For instance inundated in plastic.

Money is basically just an accounting tool that we tend to take too seriously.

The quality of life, which may be harder to objectively measure, is really the bottom line in my opinion.

Thinking about libertarian versus traditional republican thinking can provide useful insight into how society has gotten into the predicament it is in. Both share the dream of very limited government, but republicanism is more of an impure mix. Libertarian ideals are at it's base, but political expediency morphs it into not making the harsher choices that purely libertarian folks would make. Not having government funded Medicare, for instance. Sharp reductions in spending for military and veteran's benefits, for instance. Less government even means a form of defunding the police.

We have become accustom to a certain level of comfort and safety so cramping down dramatically on government spending is a political non starter. At the same time tax cuts remain popular; thus the rising national debt.

Republicans push a form of hybridized libertarian philosophy.

Another element of republicanism that is less evident in pure libertarianism is religious values. Pure libertarians are more likely to be pro abortion as one means of reducing the costs; especially reducing the number of less productive people in society with birth defects and so forth. Survival of the fittest.

I believe that there needs to be a healthy balance between government and free enterprise. Yes, government can go too far. There can be government overreach. A balance seems most healthy.

Different people set that balance point in different places. I tend to avoid the extremes.

Extremes are a problem while another problem is hypocrisy; especially in mainstream republican thinking. Cutting taxes is popular, but, for obvious reasons, republicans can't really cut spending. They can talk about it, but just about anyone trying to slash spending runs into the fact that we have become accustom to a fairly high level of government services in our modern society.

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