Nanny Bloomberg is nothing if not forthright. He is rich, powerful, and a liberal. He does not care what anyone thinks. Here are his views on the federal deficit.
We are spending money we don’t have. It’s not like your household. In your household, people are saying, ‘Oh, you can’t spend money you don’t have.’ That is true for your household because nobody is going to lend you an infinite amount of money. When it comes to the United States federal government, people do seem willing to lend us an infinite amount of money. … Our debt is so big and so many people own it that it’s preposterous to think that they would stop selling us more. It’s the old story: If you owe the bank $50,000, you got a problem. If you owe the bank $50 million, they got a problem. And that’s a problem for the lenders. They can’t stop lending us more money.
This is the view of Keynesian economists. It is the view of voters. It is the view of Congress. It is the view of every President. They assume that this can go on forever. So, there is no political pressure to stop the deficits.
We are beyond the point of no return. Bloomberg’s statement can serve as the epitaph of the federal government some day. It will default. Those poor souls who are dependent on payment from the federal government will discover that Bloomberg is wrong.
There will be a day of reckoning. Don’t be found among the dependents on that day.