I have written a few times that the United States does not deserve the strength of its currency or its ability to borrow more money to fund more reckless deficit spending if looked at in pure economic terms:
- Our balance sheet is a disaster, thanks to Barack Obama, with now more than $18.3 trillion in debt in an economy that is about $17.4 trillion in size.
- The Federal Reserve has kept interest rates near zero for over SIX YEARS, fueling a stock market bubble and robbing itself of any power to influence the economy if it slips back into recession (the Fed cannot drive interest rates below zero).
- Meanwhile, the current and future costs of entitlements, which now include the monstrosity known as Obamacare, are skyrocketing, leaving over $100 trillion in unfunded liabilities for the nation to default on as we all grow older.
And yet our massive federal deficits each year continue to be financed in large part by foreign nations….their willingness to hold dollars defies the fundamentals of our situation.
And at the same time the Federal Reserve can print dollars 24/7 without fear of trashing the currency in world foreign currency markets, as would happen to any other nation that flooded its economy with so much paper currency.
And So not only can the USA print its own money, even wildly, with no consequences, it can also borrow itself blind, with no apparent consequences.
How can this be?
There is only one reason, and it is not a reason that you’ll see in economics text books: The United States can get away with this reckless conduct because it is the dominant global superpower, possessing large military forces enabled by the most advanced military technology.
Yes, The American fighting man is the reason that politicians can continue to throw orgies of runaway spending and flood the economy with dollars without consequences.
Now, do we like to borrow money and then thumb our nose at the lenders of that money, because we are a superpower?
Stephen Colbert apparently does.
He said this to Donald Trump last night:
At a certain point, does it even matter how much we owe, because it’s like trillion, quadrillion what does it matter? Come and get us, we’ve got the armies, right? What are they going to do?
Yes, he actually said the phrase “what does it matter” about the serious issue of our national debt, and touted the great American military as the ultimate backstop against accountability.
Let’s recall who else used a similar phrase, “what difference does it make”:
Here’s the thing, Stephen: our federal debt, now heading towards $20 trillion and bigger than our entire annual economic output since the early years of Obama’s first term, DOES matter, and to say it doesn’t undermines the notion that you are somehow a savvy commentator.
Or maybe no one believes you are a savvy commentator, I don’t really know.
But you have a voice being heard in the media, and need to own when you take a shameful Hillary Clinton “what does it matter” stance on things that do matter.
So if you are a Liberal, and you are proud of Obama’s latest infamy — accepting thousands of Syrian refugees — just know that (a) we cannot afford to take them, we are bankrupt, and (b) the only reason there is the illusion of wealth in this country is because of that thing you probably hate: the U.S. Army, Navy, Air Force, and Marines.
But you owe it all to them, and never forget that.