Gary North has an excellent summary of the situation we are in over at LRC...
Governments in the USA have hit the brick wall of taxation. The Federal government is using massive debt to get around this brick wall. This can go on for a time, but its end is sure. Herb Stein was right.
There will be great political battles ahead over whose oxen will be gored by the tax revolt. Oldsters will probably be the last to have their budgets cut. But it is sure that this will happen – not just in the United States, but all over the world. He who drops out of the labor force will live to regret it.
When he says anyone extending credit to the government is skating on thin ice, he also means if the govt owes you medicare or social security (in essence you have extended credit to the feds...) you are in trouble in the measure you depend on it.
The feds will default, piecemeal and in ways, you will feel, but they can get away with. Another important point in the article: govts run up debt and default because lenders keep coming back.
1 comments:
You’ve assisted my understanding on what is usually a hard to tackle subject. Thank you!
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