Credit rating agency Fitch has downgraded the US over the debt limit fiascos and public debt generally. The debt limit, the perennial catfight over spending and debt is a millstone around US budgets. Public debt at lower levels is also pretty gruesome.
Cutting taxes and evading taxes helps drive the demand for government debt at all levels. If you don’t have the money, you have to borrow. Fortunately, America’s oversupply of tax-dodging patriots and babbling political idiots has effectively guaranteed this outcome.
It’s a long-overdue slap in the face for America’s irresponsible brattish politicians. One of the things that’s so interesting about American politics is the total refusal to focus on fiscal or any other realities.
Reality has been quite unfashionable since 2016.
How odd.
What a coincidence.
As though it was OK for useless irrelevant out-of-touch delusional retards to manage trillions of dollars and people’s lives.
The trouble with fiscal realities is that they’re expensive. This downgrade just made all of the debt a lot more expensive. Money will cost more, and interest rates will go up by default thanks to the lower credit rating. Therefore this downgrade ensures that more interest rate rises are unavoidable.
There’s no real comparison with America’s debt. Other countries have higher debt relative to the size of their economies, but those economies are dwarfed by the sheer amount of capital in the US. The US debt may now even exceed defense spending over time.
The American revenue system as it is now compared to the past is like a song medley where The Battle Hymn of the Republic is replaced by The Old Gray Mare. The system is a self-fossilizing series of antiquities. The US is the only Western country that doesn’t have a value-added tax, and for no good reason enshrines offshore money as sacrosanct and tax-free.
There are no such things as tax havens. Nobody has a treaty with anyone saying, “break as many of our own laws as possible”. Tax is either payable or it isn’t.
The problem in this case is that the tax wasn’t paid, for decades. America’s Least Credible seem to think that’s OK. It isn’t, it wasn’t and never will be. The debt is based on generations of severe revenue shortfalls. Pandering to pointless plutocratic peasants is always the default political option.
The same people spruiking fiscal responsibility seem able to overlook the fact that revenue keeps the country rolling. If the US government had a moratorium on government contracts that make the plutocrats rich, the wheels would fall off. It needs money to write those contracts. The contracts create debt.
See where this more expensive debt is going?
The other problem is that these government expenditures also fund science and a lot of talent. All this tech requires training, too. Actual education, not “rent a degree” as it is now. Cut too deeply into that, and America’s technical edge can get blunted. Government expenditure also funds infrastructure which tends to fall apart and become physically dangerous if it isn’t funded.
Stop pretending this museum is a working form of law. Stop breeding 1000 lawyers for every sentence in the legislation. Get the patriots to pay taxes for the first time in their worthless lives.
The solution is simple – Modernize the US revenue system.
__________________________________________________________
Disclaimer
The opinions expressed in this Op-Ed are those of the author. They do not purport to reflect the opinions or views of the Digital Journal or its members.
