Fiscal Crisis: Don't Worry, Be Happy!

Over at Ricochet Claire Berlinski introduces us to the 'Don't Worry, Be Happy' approach to the looming fiscal crisis:
Why Anarchist Anthropologists Shouldn't Make Economic Policy

Anarchist anthropologist David Graeber explains why we needn't worry about deficit spending in the New York Daily News. It's all wrong to imagine that governments, like households, must be concerned by debt, he argues. Why? Five reasons:

1. Households can't levy taxes.
2. When households owe money, they owe it to other people. The U.S. debt is owed mainly to ourselves.
3. When households owe money to other people, they can't just print it. The government can.
4. When someone in your household writes a check, the recipient tends to cash it. Not so when the U.S. sells Treasury bonds to banks in Brazil or China.
5. If a household doesn't pay its debts, creditors can take them to court or call the cops. Internationally, we are the cops.

Feel reassured now?
I know I do!

So....Graeber's main argument is that we have nothing to worry about because Government budgets are nothing like family budgets? If you think that is looney, don't read his OpEd any further, or you will run into amazing logic such as this:
"A major reason the U.S. has a deficit to begin with is that we spend more on our military than all other nations in the world combined."
and this:
"Most probably know that if we ever really did balance the budget, it would likely throw our economy into a tailspin."
OK...military spending bad...deficits good!

I hate to break it to you Daaaave, but even if President Obama zeroed-out the Defense budget in his 2012 budget proposal, he would only cut his deficit in half. You see the real-reason we have a deficit and climbing debt are not the discretionary spending, but the mandatory spending (SS, Medicare, Medicaid, Interest on the debt) which keep expanding and are of course "mandatory".

And I for one did not know that a balanced budget would throw our economy into a tailspin. I can't wait to read your sources and evidence.....oh wait, you didn't cite any. Shocking....


Democrat's Cottage Retirement Industry

Today Instapundit asked the question:
"How safe is your Roth IRA?"
He was quoting from a Megan McArdle article on the fact that some (many?) on the left would like love to get their hands on all that cash which is never going to produce any more taxes for their schemes. (except of course when it is spent...)

So McArdle also dispenses with some unorthodox investment advice on how to avoid any lefty machinations, like perhaps buying a vacation home with the cash. Professor Reynolds adds:
"Or maybe buying a vacation home overseas, the way inhabitants of third-world kleptocracies have done for years to avoid desperate grabs by debt-ridden regimes."
Of course this is an especially apt observation, if by "third-world kleptocracies" he meant Congress, and by "inhabitants" he meant Chris Dodd, or Charlie Rangel.

Here is Congress putting the McArdle plan in action...



Or inaction if you prefer:

Take heed America!


Milwaukee Bob

"Don't talk about fraud! Fraud?! There is no fraud! Everybody knows there is no fraud,
and anybody who mentions it is, by that mere mention, an agent of discord and deceit."

[h/t - Instapundit]