A Great Sentence

When politicians sell debt, they are not selling entitlements to the product of their own labour, but everyone elses. Only if they spend money in a way which allows everyone else to satisfy those entitlements more easily will it have been worth it.

But lending to government is about the most risky use of scarce resources that one can imagine. Sure, the risk and cost of malinvestment appear small to the borrower and lender, but that is at the expense of everyone else.

When bereaucrats--who have neither the incentive nor feedback to invest money wisely--squander resources, the costs are socialised. I fully expect that government "investment" now will reduce the economies' ability to honour its debts in the future.

This is the opposite of an investment, this is not the road to prosperity. Let us just hope that the private sector can do enough to compensate for such waste.

I wonder if "one dollar (paid in tax), one vote" is the most stable form of government.

It would certainly seem to address the issue Hamilton discusses here.

Now he tells us.

Government debt will not be paid back in dollars worth anywhere close to what they were worth when they were borrowed. I bet. I believe Mr. Schiff has it right.

Suppose that you were approached to invest in a new company.

After some investigation, you discover that the manager has no experience, huge debts, and frequently lies. He never monitors profits, his career may benefit from corruption, and he is not personally liable for any losses.

It would be disastrous for an economy if the government subsidised investment in such a company using taxpayers money, wouldn't it?

What's the problem? Can't the taxpayers just get in line for the bailout too?

[This IS a joke, but I'm betting some people think like that...]