GENERATIONAL PONZI SCHEME

Pretty soon the elephants and donkeys that run the zoo we call the federal government are going to lock horns (tusks? hooves?) again over raising the debt limit. The elephants will make a big show about closing part or all of the zoo down and will eventually cave to the donkeys. We’ve seen it all before.

We, the monkeys, will grin and chitter, as we’ve done before. The government will print more money and borrow the shortfall and the zoo will stay open—for a while.

If it were a one-sided deal, perhaps we could push the debt off forever. After all, we have children, who will presumably have more children, and so on and so forth. Three generations from now, the great-grandchildren can hand off the, say, $170 trillion to their kids. The fly in the ointment, unfortunately, is that we have to have—darn it!—people willing to take our dollars. And a growing number of experts are warning of signs that the tenure of our greenbacks as the world’s reserve currency is coming to a close.

We could reverse course, start living within our means, pen a real budget, tighten our belts and begin the slow, painful road to recovery. But, as we’ve seen with the elephant-donkey wrangling over the sequester, which was simply a reduction in the continued growth of spending, this is not going to happen.

We could, as I’ve pointed out in a previous blog, become the world’s foremost oil producer with our new-found fracking abilities and vast shale oil reserves, continue with out current rate of unbridled spending growth, and perhaps even have enough left over to slowly pay down the debt. This could buy us more than a century of wanton progressivism—perhaps even pay for full-fledged socialism. That assumes our entry into the marketplace doesn’t further destabilize the Middle East, which largely depends on oil as its source of income.

In the meantime, though, we’ll print and borrow for as long as we can.

Generational theft is a crime not punishable by law, only God.

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