Reblogged: Obama, Goose, and Gander

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In response to a reporter’s questions during his October 8 news conference, Barack Obama offered the following argument in favor or raising the debt ceiling:

magine, in your private life, if you decided that I’m not going to pay my mortgage for a month or two. First of all, you’re not saving money by not paying your mortgage. You’re just a deadbeat. And you can anticipate that will hurt your credit, which means that in addition to the debt collectors calling, you’re going to have trouble borrowing in the future. And if you are able to borrow in the future, you’re going to have to borrow at a higher rate. Well, what’s true for individuals is also true for nations, even the most powerful nation on earth.

Obama is right: Nations, like individuals, should pay their debts. (He falsely implies that raising the debt ceiling necessarily means defaulting on our debt obligations, but let’s set that aside.) Why limit this fine analogy to the payment of debts? In what other ways is what’s true for individuals also true for nations? And in what other ways should it be?

The government’s massive “stimulus” programs of late are based on the Keynesian notion that spending (consuming) causes prosperity. Is that true for individuals?

Suppose you threw budgetary caution to the wind and started borrowing and spending money willy-nilly, emptying out your savings, maxing out your credit cards, tapping your home-equity credit, and so on—spending and spending, but, like the government, not producing value in the marketplace. What would happen? Would you thereby become prosperous and financially secure?

And suppose when you could no longer borrow, you set up a printing press in your basement and began printing Ben Franklins. What would happen? Would you be met by the law with a tip of the hat?

What’s true economically for individuals is true for nations—and what’s true legally for individuals should be true for nations (at least in this respect).

But the goose-and-gander analogy carried to such sensible conclusions doesn’t serve the leftist agenda. So we’ll hear none of that from the likes of Obama.

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Related:

• The American Right, the Purpose of Government, and the Future of Liberty
• ObamaCare “Exchanges” Are Not Markets

Link to Original

[CrowEpistemologist]

Exactly. Imagine emptying out your savings and then going into debt many times your yearly income. Imagine interest payments on that debt being perhaps 20% of your total yearly income. What kind of idiot would do that? For the answer, see below.

 

Thankfully the USA is only in debt about 80% of its yearly income, and its interest is less than 1% of its income. Thankfully most of the US "debt" is money it owes itself since US citizens actually carry most of the Federal debt (and on balance compared to debtor nations, even more), and a more apt analogy is a person with a ton of savings making a "loan" to themselves that they vow to pay back.

 

And to my answer to the above? Try virtually every single new home owner in the USA. If you are trying to convince people that the US debt is no big deal in the grand scheme of things (and it actually isn't), that's a great way to do it.

 

I'll once again charge the OS with mindlessly towing the Republican Party / Fox News line. "Dumdums who don't think too much for Objectivism". Oh boy.