Can I borrow a Buck?

Cactus at Angry Bear has a Post on actual Tax rates since Eisenhower. Study the graphs he has put up, and then imagine what a graph of growth of Government Expenditures would look like over the same Period superimposed on the charts. Remember that We have been engaging in Debt finance in all but a couple years of the Period. It is always beneficial to realize how much that Congress itself screws up any sound fiscal policy through catering to Special Interests and Politics. I would establish a Chart outlining the potential Strength of the Dollar over the Period, if deficit spending was not used, versus the actual Strength of the Dollar during the times involved; that is, I would do so dependent upon a greater success with charting which I don’t possess.

Mish shows that Fannie and Freddie suffers from the same budget accounting as does the federal Government, and suggests that the Financial markets will not handle the $223 billion, which is too large a sum to be rolled over in the next six Weeks. I will agree with that assessment, and state any Treasury absorption of the Debt will be totally Inflationary. My Solution would be to allow both Organizations to fail, a Crisis which would be less than the dragging decay of the Financials today. The major element, here, it the stoppage of these Two from issuance of further bad paper, either to Investors, or the private Mortgage companies. We will never get such bad practice stopped, unless We first stop the Organizations.

Mark Thoma and Jonathon Chiat espouses that the Bush Boom and Two Recessions were not so much a Recovery inside flanking Recessions, as it was simply an increase in Public Debt plus Tax advantages for the Rich. I can’t find much to digress from that evaluation. One has to search for any economic growth which was not financed by either Public or Private Consumption debt. Borrowing other Peoples’ money does not a Boom make! One has to worry when these same People desire for a return of their money, a Subject relevant in the discussions of Fannie and Freddie, and also in foreign sales of U.S. debt. lgl