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Post details: Americans for a Balanced Budget Amendment

Americans for a Balanced Budget Amendment

As we are overcharging our national Mastercard with the abandon of a drunken sailor, I noticed that mainstream media are falling head column over heels to pooh-pooh the problem of runaway public spending. From TIME magazine to Huffington Post, debt apologists are out in full force, fanning the flames of fiscal fires and parroting Reagan's old adage about deficits that don't matter.

As I perused some of reader's comments I noticed a very cavalier attitude toward the very concept of money. Most readers were under the impression that our debt problem can easily be solved by the infinite wisdom of the central bankers. The saner ones argued that we can run GDP faster than debt, which -with all available fingers and toes double crossed- will make its size eventually manageable. Never mind that perennial growth approach will sooner or later run against the wall of limited resources. Those who think that Earth can support infinitely many people, please, raise your hand.

Then there are those who believe that all we need to do to solve our debt addiction is to ask the Fed chief Ben Bernanke to sit down at his computer, put on some white gloves and peck a few extra zeros to central bank's mysterious balance sheet. I even suspect that hidden in the vast underbelly of the economic blogosphere there are types who profess that no such complicated action is necessary and all we have to do is give the money tree a firm handshake and our future will be rosy again - as long as we can stay away from the edge of the flat Earth and not fall into the Big Ditch.

But the truth is that debts matter. The goods and services we purchase for the borrowed money have actual value: road construction, new hospitals, stealth bombers, teachers' salaries etc. Whether we like it or not, that value will have to be repaid one day. And there are pretty much only two choices - either our children will pay it back or we'll turn on the printing presses and subtract that value directly from the purchasing power of our own currency in the process known as inflation. There is no other way. The value borrowed has to be returned.

Sure, running astronomical deficits may taste sweetly at first - who doesn't like the intoxicating smell of credit - bankers and their media sidekicks obviously do - but underneath its cloying aroma lurks a sinister aftertaste. While the herd of disoriented scapegoats circles the altar of materialism, the plumbing of debt serviceability slowly congests. Month by month, trillion by trillion, we are turning into a swarm of flies stuck on a raspberry tart. Or baklava. Delicious but deadly.

Those who believe in the monetary free lunch are dangerously deluded. Currency can function only so long as it represents something substantive. You can increase the national wealth by working hard and producing or inventing something that other people would be willing to exchange for something else (money is merely an agent that facilitates this barter). The notion that printing little green pieces of paper with images of dead presidents on them will make us richer is as preposterous as hopes that pouring a gallon of water into a gallon of beer will produce two gallons of beer. No, it won't. It will produce two gallons of a foul tasting liquid.

In the middle of the growing chorus of fiscal insanity that would make old Kremlin's financial cadres blush, I found a rare voice of reason - an organization named "Americans for a Balanced Budget Amendment" which is based on a very simple premise: you should not spend more than what you take in. At this day and age it may sound like a quixotic endeavor, but I give them two thumbs up. And if we managed to return our government to its original scope - which is taking care of foreign affairs, matters of defence and monetary policy, it would even sound realistic.

But I am not holding my breath. We don't live in the age of common sense.


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