Thursday, October 15, 2009

Thursday’s Musings

Job creation is the top concern of the Obama administration and Congressional Democrats. The several million lost jobs and millions more underemployed are creating real hardship for the affected, and imperiling Democrat election prospects in 2010 and 2012. Imagine, then, that China has to create 15 million jobs a year to keep pace with its graduates and those moving from the countryside to cities. And, for the most part, it has succeeded.

It would be good for the U.S. dollar to lose its reserve currency status. The U.S. is able to issue debt in its own currency. If it could not, because others did not accept the dollar as their official foreign exchange reserves, it would be harder and more costly to issue public debt. The higher cost of debt would have the salutary effect of making it more difficult to run large budget deficits and pile up a massive national debt that future generations will have to repay.

Thursday, October 8, 2009

Thursday’s Thoughts

In years to come, immigration reform will doubtless extend government subsidized health care to illegal immigrants, either by granting them amnesty, or because the courts will rule that excluding them is discriminatory. Since every human life is valuable, why not include in health care/insurance reform all Mexicans living within ten miles of the U.S. border?

China has managed the financial crisis of 2008-09 better than the U.S. and all other Western industrial democracies. Let’s invite some of the leading Chinese economists and financial officials to lecture our economists and officials on what they did and why they succeeded.

It is often said of U.S. public debt that we owe it to ourselves, hence it’s no big deal. Not so. Almost half is held by foreign institutions and individuals. Foreigners do not pay tax on their interest earnings on these assets.

The U.S. needs an educated population to compete with other countries in the global economy. What has been happening in inner-city Chicago in mid-September 2009, gang murders of students, bodes ill for the future. The same can be said of Detroit, Oakland, Philadelphia, and numerous other inner city residents across the country.

Friday, October 2, 2009

Rehabilitation of the Sheriff of Nottingham

It has been an American tradition that each generation could look forward to a higher standard of living than its predecessor. No more.

Robin Hood stole the onerous taxes taken from the poor by the Sheriff of Nottingham and gave the money back to them. This much maligned sheriff has been rehabilitated in the twenty-first century.

Bush and Obama, aided and abetted by Republican and Democrat congresses, have burdened future generations of Americans with a large and growing public debt to finance wars, maintain entitlements, create new entitlements, expand existing programs, and implement new programs. Projections show a quadrupling of the publicly-held national debt during 2001-2019. Servicing and repaying this debt means (1) higher taxes, (2) higher interest rates (raising the cost of credit), (3) higher inflation (reducing the purchasing power of the dollar), or (4) some combination of the three.

By comparison, the Sheriff of Nottingham looks like a piker. He only stole from the living poor. The U.S. government is stealing not only from our children and grandchildren, but as yet unborn generations.