Think you’re scared enough about the economy, the ballooning deficit, and the prospect of ruinous tax rates and runaway inflation to pay for astronomical government debts? If you haven’t read Boston University economist Laurence Kotlikoff’s August 10 article for Bloomberg (“U.S. Is Bankrupt and We Don’t Even Know It”), you probably aren’t.
Government is the only institution whose power and budget grow when it fails. A crisis, real or perceived, is considered an “opportunity” for government to expand, as President Obama’s Chief of Staff, Rahm Emanuel, reminded Americans shortly after Obama won the 2008 presidential election.
Cutting taxes is again in vogue in a Washington, D.C., increasingly dismayed by the utter inability of the massive Obama stimulus package to jolt the economy back to life. President Obama himself has become a grudging disciple of the Bush tax cuts, and is now advocating an extension of the tax reductions beyond their expiry at year’s end — but only for Americans earning less than $200,000.
It was news to many when Scott Powell announced that an obscure novel published in 1957, Atlas Shrugged, “may be second to the Bible as the most influential book read in America.” His statement that BB&T, the 12th largest bank in America, which resisted taking TARP bailout funds, requires reading of that same book as part of its management training program astonished many more.
Economist Niall Ferguson of Harvard wrote an article entitled “Complexity and Collapse” for the March/April issue of Foreign Affairs, a publication of the Council on Foreign Relations. Ferguson uses the visual image of a series of paintings by Thomas Cole, The Course of Empire, which currently hangs at the New York Historical Society, to illustrate his point that every society goes through five stages. He says that Cole “beautifully captured a theory of imperial rise and fall to which most people remain in thrall to this day.”
When Kevin Hall, writing for McClatchy Newspapers, said “the Obama administration got what it was looking for at its summit on the future of housing finance,” he was very close to the truth: No matter who spoke at the summit or what “new” ideas might be proposed, nothing would change — the government would remain fully in charge of mortgage financing for the country.
The first warning about the possible bankruptcy of the town of Vallejo, California, was reported by the Associated Press on February 28, 2008, when Councilwoman Stephanie Gomes said, “Our financial situation is getting worse every single day. No city or private person wants to declare bankruptcy, but if you’re facing insolvency, you have no choice but to seek protection.”