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What’s next?

Now that the Democrats have had their first big spendileptic convulsion, we need to figure out what just happened.  So here’s the deal-ee-oh.  First, understand that only about half of American households actually pay federal tax.  The bottom half starts with a low enough percentage and gets enough breaks, credits, exemptions, etc., that its actual tax burden is effectively zero.  This leaves the upper half to pay for everything.

In that upper half of taxpayers you have some 50 million-ish households.  These are on the hook for $733 billion that just swirled down the government sewer.  In round numbers, that amounts to about $15,000 of new taxation per household.

You think $15,000 might affect your budget?

Democrat spendileptics will probably try to cover this with borrowing rather than taxation.  But it’s no longer a sure thing that lenders around the world will continue to furnish the money indefinitely.  The rich people in China and Japan are no different from rich people anywhere else; many of them got that way by being smart with money.  They do the same arithmetic I just did, and at some point, they will conclude that a Democrat controlled America is no longer a good credit risk.  The day lending dries up, I forecast it will do so in the pattern of a traditional financial panic: Everyone will stop lending all at once, and they won’t resume until something fundamental changes.

What would come next after that?  Predictable as sunrise, the Federal Reserve will monetize the debt, meaning they will start issuing official counterfeit dollars to cover the spending.  It’s worth noting that they don’t even have to print money.  All they need do is click on a few trillion computer digits and presto! new money pops into existence.

Once the Democrat spendileptics discover they can create infinite amounts of free money with the click of a mouse, what restraint do you honestly expect from them?

Oh, so you think they’re not that stupid?  Well, then how do you explain what they just did?

One Comment

  1. Dad

    Is there any way I can forward this to my congressman?

    Posted on 15-Feb-09 at 14:51 pm | Permalink

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