Let’s say you’re behind in all your payments, and your house is close to foreclosure. You crank up your photocopier and start making thousands of copies of your last twenty dollar bill.
Your next residence will be the Graybar Hotel. If you’re real lucky, maybe Club Fed.
That is, unless you happen to be a lawmaker for the Federal Government. In that case, you can trumpet the accomplishment as “saving” the country. Too bad we can’t all do the same thing.
The massive “stimulus” package is all but a done deal, merely awaiting Obambi’s signature sometime next week. It’s interesting to consider what this really means.
First of all, what would have been the effect of a McCain win last election? Would that have made any difference?
Not in my opinion, other than in some pretty insignificant ways. McCain signed onto the original “bailout” – a massive pork-laden monstrosity – even “suspending” his campaign in order to do so. Were McCain now President, a “stimulus” bill would probably already have been signed into law, because there would have been little to no opposition to it from GOP congresscritters. Oh, it might have a bit less pork – though that’s by no means a sure bet, given the nature of the original “bailout” – but we’d still have turned on the printing presses under liberal McCain.
As predicted by moi and others, McCain’s loss has given GOPers the freedom to actually begin acting like small-government fiscal conservatives again, and they seem to be stepping up to the plate, with the exception of the three Senate “moderates” who fall into the “usual suspects” category: Collins, Snowe and that pig Specter.
By the way, I suspect Specter was acting as McCain’s “beard”, so that McCain wouldn’t have to “cross the aisle” so soon after the election and prove all his critics right.
This “stimulus” is touted as providing significant “tax relief” for broad swaths of taxpayers. But there are two kinds of taxes: direct and indirect. When the government turns on the presses and starts cranking out money that’s not backed by anything – either tangible such as bullion reserves, or intangible such as enhanced revenues based on a rising GDP – then they are taxing people indirectly by causing the value of the dollar to fall. So though they may be lowering the DIRECT tax burden on the public, they are increasing INDIRECT taxation through inflation and devaluation. This means that the value of any cash you hold is going to become less valuable in terms of real and tangible wealth.
An example: in the 1880s gold was valued at about $8/ounce, which was the equivalent of about ¼ of a cowboy’s monthly pay of about $30. Today, gold’s still the equivalent of about ¼ of a skilled blue-collar worker’s monthly pay, but it’s now valued at about $850 or so per ounce. Meaning the dollar that used to buy 1/8 ounce of gold now only buys 1/850 ounce of gold.
Bottom line: your money becomes less valuable, undermining your savings, 401(k)s, and other such instruments of wealth accumulation. Buy real estate (if you can).
What are the political ramifications of all this? Well, interestingly enough, the Democrats seem pretty outraged now that the GOPers are starting to play the game the same way the Dems have since 1994. Boo hoo.
More importantly, there will be a price to be paid for all this profligacy once the effects are felt and realized by the voters, and the GOPers will profit if their fingerprints aren’t all over it.
Flush with “success”, and after waiting fourteen years to again hold all the reins of power, the Democrats’ natural hubris is bound to reassert itself as they try to ram forward their social agenda to restructure society: environmental mandates, amnesty for illegal aliens, wealth redistribution, universal healthcare, behavioral modification (anti-smoking laws, for example), among others.
But there’s no doubt that from this point forward, any efforts to redefine society in this way are going to face a debate on the costs involved, and that may well prove to be the Democrats’ Achilles Heel.
It also provides the GOPers with a golden opportunity to rebrand themselves, and to return to classic Republican ideals (none of which would have been possible if McCain had won, incidentally). It may not be easy; good things rarely are. But with a modicum of spine, the GOP could resurge next year during the mid-terms, and actually be worth supporting.