Mark Steyn gives us one of those insights that clarifies a vexed issue in an instant. While Congress debates raising the debt ceiling, Steyn points out a fundamental truth: we can't really control our debt ceiling, because once you borrow so much that you can't make the payments, nobody is going to lend to you any more.
Pimco (which has now dumped US Treasuries) estimated last month that, under QE2, 70 per cent of the US Government’s debt is being bought by the Federal Reserve.This is beginning to resemble check kiting.
In other words, under the 2011 budget, every hour of every day, the federal government spends $188 million it doesn’t have, $130 million of which is “borrowed” from itself.
We shouldn't fool ourselves that money men will go easy on us out of the goodness of their hearts. We are prodigals and, if you remember the parable, the prodigal son squandered his inheritance in a foreign land and ended up in poverty.
And he went and joined himself to a citizen of that country; and he sent him into his fields to feed swine.The politicians won't be the ones who suffer. The middle class and the poor and aged are the ones who will be destroyed. People like Harry Reid and Barack Obama, millionaires, won't lose their benefits, but they'll see their wealth eaten up by inflation. Young people with jobs will pay higher taxes and given little in return. We can only hope they learn from our folly.
And he would fain have filled his belly with the husks that the swine did eat: and no man gave unto him. (Luke 15:15-16)