Deficit spending dependencies.

There’s an entire branch of economics and associated taught controversy dedicated to deficit spending by governments.

On the one hand, there are welfarists and other bleeding hearts who imagine that money grows on trees from whence it can be costlessly plucked and redistributed based on neediness, that paragon of idealistic virtue. Sometimes there’s more than enough to redistribute, sometimes not. For when there’s not, these folks are very much in favour of deficit spending by governments and totalitarian iatrogenics in particular as a means of smoothing out the economic booms and busts created by their earlier interventions into matters of import. This translates to  large-scale infrastructure investments, loans to private industry, bail-outs, and grants as a means of kickstarting the economy and upholding the social contract. How very mean.i

On the other hand, there are the war-mongering world police who imagine that money grows on trees from whence it can be costlessly plucked and redistributed based on the particular monster waiting under your bed on that particular day.ii Sometimes there’s more than enough to redistribute, sometimes not. For when there’s not, these folks are very much in favour of Diocletian’s proven formula of a fear-driven war-time economy as a means of smoothing out the economic booms and busts created by their earlier interventions into matters of import.iii This translates to large-scale military investments, loans to private industry, bail-outs, and grants as a means of kickstarting the economy, which is arguably just as mean as the first, though if done correctly, it does have the economic advantage of appropriating resources that can then be funnelled back to the empire.iv Not to mention the resulting inventions. Less mean, but not all that much less corrupt.

Both sides in this little debate are quite in favour of deficit spending when push comes to shove, primarily because it’s a politically expedient manner of concentrating wealth from the hands of the productive and narrowly connected to the hands of the merely well connected.v The similarities are the avenues of extraction : taxation and inflation. The difference lies primarily in the specific industries and individuals that have the good fortune of being on the receiving end.

At the end of the day, while both sides may argue as to the circumstances necessitating deficit financing, where the future is mortgaged against the perceived needs of the moment,vi both are perfectly content to construct a sufficiently persuasive position from which they can launch their attacks. This is at least how it works in the conventional paradigm of democratic fiat nation states, those lecherous old men with desperately empty eyes.

Outside of this narrow range of dead-end possibilities lies La Serenissima, capable of running up deficits thousands of orders of magnitude greater with nary a fuss and no possibility of sublimated violence as a means of reconciling its debt.vii  This is possible because Bitcoin, The Most Serene Republic Of~ is a based on voluntary rather than coercive taxation. Remember the tithe³ ? Ya, that thing.

So while revenues are decentalised and therefore off the book, expenses are for the greater good and therefore on the book. So it’s not that B, TMSR~ is tripping on LSD and thinks it’s supercallafragically invented a way to extract more juice from a single lemon than there has ever existed in all the lemons that have ever lemoned, it’s that voluntary agreements between gentlemen open up new understandings of accounting that flip the fiat fuddy-duddery right on its head and expose it for the contrived perversion that it is. Isn’t it incredible what can happen when incentives are aligned ?

So, as ever, the idea that deficits are bad mkay very much depends on who’s running them. Not all are created equal.

___ ___ ___

  1. Mean, which is to say, ignoble, small-minded, inferior in rank, and mostly damning : average. []
  2. At least this is the current manifestation of a “conservative.” They used to be goldbugs, back when shiny metal was a thing worth the bother as a means of limiting inflation. Not that it worked, mind you. At least it didn’t hold back Kings Henry VIII and Edward VI. []
  3. Don’t have an enemy at the gates ? Make one. This isn’t always figurative either, as the US has aptly demonstrated in the Middle East, over and over again. []
  4. Note that in this sense peacekeeping is an utter waste of resources, at least in the social media age where citizens are already mentally taxed at 100% and have never been less reliant on government for distracting headlines. []
  5. This is what you get for electing broke-ass politicians ferfucksake. []
  6. Governments with control over their currency, such as pretty much every nation state extant, can of course wriggle their way out of debts by printing more currency with which to pay back their creditors. Individuals – meaning Mr. 30-Year-Mortgage over there who just “invested” in real estate because his money was burning a hole right through his pocket and into his skull and his money-burned noodle now imagines that a multi-decade bet against interest rates rising was the definition of a grown-up – have no such privilege. Which is why Mr. 30YM is fucked. He doesn’t see hyperinflation coming. “No one could’ve foreseen another Weimar.” []
  7. How does a five quintillion seven hundred and ninety-eight quadrillion seven hundred and ninety-six trillion eight hundred and fifty-seven billion nine hundred and sixty-seven million four hundred and ninety-six thousand eight hundred thirty-four percent deficit hit you ? Because that’s what it is. []

14 thoughts on “Deficit spending dependencies.

  1. […] the strong-handed Putin and the limp-wristed Obama, to say nothing of the differences between La Serenissima and that headless torso, the reluctance of sheep without a shepherd to lead themselves makes […]

  2. […] associations are brilliant, beautiful, ethical and just, don’t get me wrong, but without some measure of skin in the […]

  3. […] them great, their yeehaw cowboy sense of individualism and independence, and Sovietised under a mountain of debt, crushing the whole system into a collectivist morass from which there cannot be and will not be a […]

  4. […] when I say that government debt is fucking CRIMINAL because the political incentives of a popular democracy dictate that overt and therefore unpopular […]

  5. […] time, money, and emotional energy to help starving children in Africa ? Can you please take out a 30-year mortgage on an asset guaranteed to last no longer ? Can you please be less mean and more nice […]

  6. Adam T. says:

    How does inflation suck for Mr. 30-Year-Mortgage? He will be able to pay off his 1MM home with one wheelbarrow full of cash from a day’s labor in 15 years.

    • Adam T. says:

      Or are you saying he didn’t get a fixed rate loan?

    • Exactly. Without a 30-year fixed loan rate, which, as far as I know, is pretty much unheard of, a ramp up in inflation will affect Mr. 30YM first by allocating an increasing amount of his monthly income towards increasingly costly food, energy, etc. and away from his mortgage costs, potentially putting him in a bit of a squeeze, and after that, when inflation really takes off and the central bank steps in to raise interest rates, he’ll not only be renegotiating with his bank at a higher-than-anticipated rate but the increased carrying costs will also depress the value of his initial ‘investment’ and the housing market as a whole.

      Also, we can’t assume that Mr. 30YM’s wages keep pace with inflation. This is rarely the case.

  7. Adam T. says:

    Around here (US) 30 year fixed rate mortgages are very common and the rates are extremely low. I just googled these up:

    From a bit of research it appears that abroad this is not the case. I think this explains why I was confused by the logic in this post.

  8. […] on your bread, there’s always more government dole for you to suckle on. Y’know, until there isn’t. But hey, that’s future you’s problem, innit […]

  9. […] now, if you’re living in Edmonton and “own” property, you really have to wonder : what if a sign on the front lawn of my house says […]

  10. […] = “less than you make” under absolutely any and all circumstances, unequivocally). You’re not a government and you don’t have a license to print money, even if your bank is presently retarded enough […]

  11. […] thus presently uses coined money of gold should also tell you something : they’re all fucking broke! […]

  12. […] no idea what to do with it all! Compare and contrast this fortune-feted fate with that of the pretend sovereigns in Washington, Ottawa, and everywhere else besides. As to Bitcoin being fraudy, it’s sadly […]

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