At the outset of the creation of the euro in 1999, it was expected that the southern eurozone economies would behave like those in the north; the Italians would behave like Germans. They didn't. Instead, northern Europe fell into subsidizing southern Europe's excess consumption, that is, its current account deficits.
I stated that I'm a libertarian Republican, which means I believe in a series of issues, such as smaller government, constraint on budget deficits, free markets, globalization, and a whole series of other things, including welfare reform.
In times of huge fiscal deficits, no new revenues can be ignored, and renouncing any becomes well nigh politically impossible.
To finance deficits, the government must sell bonds to investors, competing for capital that could otherwise be used to invest in stocks or corporate bonds. Government borrowings raise long-term interest rates, stifling economic growth.
Deficits must be cut, yes, but the rush to austerity risks undermining the fragile global recovery.
The biggest reason we know Justin Trudeau will raise taxes is because his never-ending deficits will force him to.
The tea party movement and its passion arose in response to trillion dollar deficits as far as the eye can see and out of a sense that Washington is in need of dire fiscal reform.
The modern GOP has perfected this cyclical deficit outrage ritual. Republicans run up the tab when they control the White House, then scream about deficits when Democrats win - insisting that 'serious reform' means cutting only Democratic budget priorities.
With its record spending and deficits, the Obama administration has shown little interest in taking fiscal responsibility. That is a mistake.
But if they want to really think about the fiscal future of this country, then think about how we have moved from hundreds of billions of surpluses to hundreds of billions of deficits.
