The history of sovereign debt appears to be a history of default, repudiation, and limited debt enforcement. Why, then, do investors keep going back?
Government spending and borrowing has been and will continue to be seriously out of control, with dire longer-run consequences if not addressed, while addressing it would be far less of a fiscal disaster than it will be if the country is left to follow its current course.
Strong centralized nation-states are good at marshaling resources to defeat other nations in wars. But how have more recent “wars” we’ve fought against drugs, poverty, and terrorism turned out? Society has gone through staggering changes since 1941, and so have the problems we face. The left should think long and hard about these changes before planning its next round of wars.
If those on the left who subscribe to MMT believe political history will end once they finally implement their enlightened government programs, they are guilty not just of bad economics but of astounding political naivete.
With the ratio of debt to GDP exceeding 100 percent, a crisis is not unthinkable.
The bottom line is that none of us can afford the true budgetary costs of the Democrat Socialist dream. And that’s just the financial costs. It says nothing about the stifling of innovation, of entrepreneurship, and of work under such plan. It’s amazing what twenty-five years can do to a political party’s ideology.
What would happen if local governments had a lot more control over policy? Some localities could lower taxes and provide fewer services, while others could do the opposite. Local school boards could have much greater control over curricula and measuring outcomes. And many aspects of the culture wars could be settled at a level where far more consensus likely exists.