"Deficit spending is simply a scheme for the hidden confiscation of wealth." ~ Alan Greenspan
A Silver Lining Shines Within the Odious Debt
Column by Marcel Votlucka.
Exclusive to STR
Co-winner (with Mark Davis) of the 2011 Strike the Root "Odious Debt" essay contest
Fourteen trillion, one hundred twenty-three billion, five hundred eighty-nine million, three hundred-seven thousand, one hundred ninety dollars and fifty-three cents.
That’s the total US national debt as of February 17, 2011. I figured I’d write it all out to try to impress you. Within a few short months this impressive sum is on track to “surpass the size of the total U.S. economy” as asserted by the Washington Times.
$14,123,589,307,190.53. You can’t even comprehend that number. Even if you round down, $14 trillion is so impossibly big that magazine articles have to come up with all sorts of snazzy imagery to describe it: 14 trillion dollar bills lined end to end would circle the Earth X number of times; 14 trillion bananas would feed a family of monkeys for X number of years; you could buy X number of SUVs or timeshares or Lady Gaga CDs or whatever with $14 trillion, and those CDs would weigh X number of tons; and so on. But I’m afraid I’m not that creative. So here’s a video and website with plenty of snazzy imagery for the more visually oriented, like me.
OK, so now that we have even less of an understanding of just how much god-damned money $14,123,589,307,190.53 really is, let’s ask ourselves the “$64,000 Question”: Is government debt really an odious thing?
Yes, it is pretty bad, or so I’ve been told by countless articles, speeches, videos, funny cartoons, manifestos, and just a bit of uncommon sense. I could just leave it at that, or I could go the Murray Rothbard route and suggest we repudiate the debt – it’s not “our” debt anyway, it’s “public debt” racked up by a bunch of crooks acting in our name.
Clearly, though, all this agitation hasn’t reduced government debt by one wooden nickel. But I’m less of a pessimist than people think, so it has occurred to me that maybe there’s a silver lining in all this incomprehensible debt. Government debt, and the issues connected to it, grants a fine teaching moment for libertarians to nudge their friends and family into seeing the State’s insanity in a plain and raw way. How, you ask? It shows three things: that statism is unsustainable; that statism is exploitative; and that statism is useless.
Let’s start with “unsustainable.” The US is not the only country with huge government debts. Ireland and Greece just received bailout loans from the EU, Spain and Portugal may not be far behind, and Belgium, Japan, and Britain also bear massive loads of debt. Han China, the Roman Empire, the French Empire, and the Soviet Union collapsed all or partly due to debt. Germany’s war debt contributed to its infamous hyperinflation, economic crises, and the eventual rise of the Nazi Party.
Today, a growing (and aging) population increasingly demands for all its needs to be met by the State, further adding to this burden. The Roman emperors used “bread and circuses” to keep their downtrodden people from brutally stabbing them in the back. The US may eventually go bankrupt from our modern-day versions of “bread and circuses” such as free health insurance, cheap mortgages backed by Uncle Sam, Social Security, and wars against scary brown people who don’t speak English. Meanwhile, Congress keeps raising the legal debt ceiling, the Fed keeps printing money and issuing cheap credit, and both arrange the occasional bailout to keep the elites afloat.
Question: How long can their game last? Looking at history, what consequences can their game hold in store for us if it doesn’t last?
Next, we come to “exploitative.” Anyone who understands human nature will understand that a gang of crooks will continue running a successful racket as long as they can get away with it. Indeed, there’s no reason in heaven or hell why they should stop. The ruling class can defer paying the bill. You can’t defer paying your bill to them, of course. Your role in this game is paying for the ruling class’ debt like a good patriotic tax sheep waiting in line for the shearing. Don’t mind the gun pointed at you if you don’t pay up; that’s just, um, positive reinforcement. Meanwhile, since federal tax receipts don’t even cover the federal government’s yearly expenses, more money must be created. Economists call this “liquidity” to make it sound respectable. Bankers and corporations get the money first so they see all the benefits. But inflation erodes this money’s value by the time it gets to you, making you and your family poorer. Talk about “trickle down” economics!
This cycle continues over and over, year after year. What does it pay for? Support for foreign dictators abroad, TSA agents and other thugs who treat you like a criminal, Social Security programs that impoverish younger workers to nominally support retired ones, Wall Street excess, wars that murder poor people who’ve done us no harm, and subsidies for corporations who pollute our land or lay off our families and friends and then pocket the difference – plenty of ink has been spilt on statist excess.
Question: If we live under a system that lets a ruling parasite class feed off the working class in this way, what’s the perfect word to describe their methods? What other word fits but “exploitation”?
Finally, we come to “useless.” A state of affairs that is a) unsustainable and b) based on exploitation should start raising doubts in our heads, and you can see a certain impatience shown in the current revolts in the Middle East, the protests in Europe, and the pugnacious political spot in the US. Yet many people claim that government debt represents spending on programs, infrastructure, and services that benefit all of us. At present the government has its fingers in security, law and contract enforcement, health care, education, jobs, and roads (when the ruling class isn’t busy trying to run the economy or dictate how we should live our personal lives, of course). And they assume that the State is naturally necessary despite its abuses and excesses.
But why can’t a strong civil society provide these services if we were to “cut out the middleman”? Nobody has ever answered that question. Indeed, the history of organized labor, immigrant populations, and black markets emerging from even the most rigid Communist dictatorships gives us examples of how people either work around the State or create their own institutions to meet their needs. Many writers such as Kevin Carson and Murray Rothbard have fluently discussed these examples and more in their work.
I think we’d be less alienated from each other without the idea (or excuse) of Big Brother taking care of everything, and we’d be more likely to instead build stronger community structures to help provide for our needs. As members of a self-governing local community, we’d have a deeper concern with, and more direct say in, our affairs than when the decisions are made far away under some fancy Cupola. We’d feel antagonistic toward those outsiders who would take everything away. So we’d build – this is important – greater solidarity against those who would impose a new ruling class on us. And we’d have the social capital needed to build free market- and community-based structures that provide for our needs.
Question: If a decentralized civil society can indeed take care of its needs, then where is the sense in propping up Leviathan and his abuses, his extravagance, and his reckless debts?
To sum things up: Most critics of “public” debt see it merely as a problem of dollars and cents or a mere case of not getting what we’re (forced to be) paying for. But it actually provides a number of strong exhibits to point to as we make our case for liberty and sanity. Why? Because the problem can’t be fixed by reforms to restore the supposed integrity of Good Government. In fact, it is a natural and unavoidable part of how government functions as it grows bigger in size, wealth and scope. It is the tactic of a parasitic class that is as useless as the aristocrats of Old Europe and Asia; we foot the bill as they try to keep their game going.
So we can change the common narrative into one that highlights the State’s unsustainable nature, exposes the extortion by the ruling class at its core, and raises doubts about whether we really need a stifling State in the first place. We can channel popular hostility toward irresponsible government into popular hostility toward the State itself. That is the first step toward real “Change We Can Believe In.”