It's only recently that I've been able to recognize why the tea party movement doesn't move me. It's because although they say the right things much of the time, they suffer from the same problem that pervades politics: debating the merit of intentions instead of outcomes. They know what they want but have no idea how to get their because they don't understand economics, cause and effect, and the nature of mankind.
I have to think that the Obama administration has the best of intentions. So do the Republicans. So do the independents. I'll be darned, it looks like everyone has good intentions but we're still getting bad results. What we should be talking about is what is possible and correct within the context of economics.
No one seems to believe that debts have to be repaid. We pay lip service to it but it's always with this attitude that "someday" will never come or if it does it will be someone else's problem. Perhaps so, we might be able to kick the can down the road far enough that we'll all be dead and gone before we have to pay the piper. If if it isn't profoundly obvious that this attitude is grossly immoral then I don't know what to tell you. I not only see it as immoral but believe that the piper will have to be paid much sooner, in my lifetime.
I believe that "stimulating the economy" in the sense of getting things going by spending borrowed money is a fallacy. It doesn't improve our situation at all. It only delays the present danger we're facing. The only way an economy can be stimulated is by production; producing real goods and services. In our debates and discussions we have come to substitute money for productivity. Money is only a means of accounting for productivity (goods and services).
No matter how you look at it bad debt has to be borne out by society. The most efficient means to account for bad debt is through bankruptcy and other existing financial tools. The repercussions of bad debt are contained as narrowly as possible, by distributing the burden of debt to the lenders (the folks who signed up for the risk of lending money in the first place). Otherwise moral hazard compounds the problem and makes it more likely to happen again, and the people who can least bear the burden end up carrying it. In other words, let banks fail. Let the automotive industry fail. Let any business fail that isn't producing adequately. Our business climate will allow the assets and talent to quickly reorganize and start producing again while the worthless elements get eliminated.
This shouldn't be a discussion of what people deserve and what they should have. This should be a discussion that accepts the reality that economics is a natural science. We can't violate it's laws anymore than we can demand that gravity doesn't affect some people. What goes up will come down and in this case, no matter how high you throw the debt, it will come back down on your head.
