08 Mar NATIONAL DEBT
The PC narrative: America has a huge economy, taxes on the rich can always be raised to pay down debt; it doesn’t matter what the US national debt is.
- Economies are sustained on millions of daily transactions, which depend on the rule of law, which in turn depends on transparency and integrity and truth, from the smallest business to the largest.
- Laws of economics cannot be avoided:
- Taxes are the cost of doing productive work; raise taxes and you’ll get less productive work. Taxes cannot be raised without limit.
- Borrowing money in excess of the ability to repay (whether borrowed by government, business or you) leads to default, which is a failure to fulfill a promise, which leads to a loss suffered by the lender.
- The failure to fulfill a promise violates the concept of trust, and reshapes the behavior of the lender and the circumstances of the borrower:
- New lending will not be made to a borrower who fails to fulfill his promises.
- The borrower who cannot obtain new loans will not have loaned money available to fulfill promises he has made to others (employees, vendors, contractors).
- The ‘others’ to whom promises were owed by the borrower will not have money to fulfill promises they have made to still others…and on and on and on.
- Printing money to effectively give it to the lender rather than having the borrower earn it and repay the loan cheapens the value of money—which causes a collapse of trust in money.
- This collectively is what’s known as the collapse of an economy. And it could happen in America if the US national debt is not brought under control.