The Psychology of Debt — and Obama’s Rendezvous with Political Reality [Victor Davis Hanson]

pajamasmedia.com ^ | July 16, 2009 | Victor Davis Hanson

[Billthedrill]

Hanson is a marvelous historian but economics isn't exactly his field. In fact, what dropped Bush's numbers so precipitately wasn't debt, but Iraq among the independents and his immigration policies among his base. The former was fed by a vigorous media campaign whose Democrat partisans smelled blood. Neither had anything to do with the budget directly.

The real difficulty is, as he has proposed, psychological and hence political, but there does come a point at which people looking at an unstable currency are less likely to take risks than they might otherwise be: psychological and hence economic. And if those people are, say, foreign people looking for a place to put their surplus cash that won't imperil it by inflation, that tends to be a problem considerably more than the psychological.

There isn't actually anything particularly stunning about a tax break increasing revenues, and there Hanson embarrassed himself a bit. The bite the government takes out of flow is considerably greater than the one it takes out of any static pie, and that's true whether your name is Keynes or von Mises.

[ProtectOurFreedom]

Can’t deny that. They’re all miserable, corrupt people with no respect for the nation or its citizen taxpayers.