Monday, June 7, 2010

I give you a better argument for raising government deficits

Before I give you a fake argument for deficits, everyone should be aware of my personal feelings toward stimulus.  Send me a $100 and the economy will boom.

The issue at hand, politicians and hysterical economists want a reason for Congress to borrow.  There is only one reason to borrow. to get a reasonable deal in disposing, for a long time, state pension obligations.  Taxpayers would borrow to get a deal that greatly reduced their pension payment obligations in the medium term. Meaning: Force the public sector unions to cut a deal and taxpayers might perk up.

What math describes the government channel out of balance?  Mis-matched entropy, hence the steep treasury curve. The flow rate of government goods, total transactions at all levels of the supply chain, does not have anything close to equal variance of inventory at each stage. We actually now have one entitlement too many, and we multiply less than one each go round.  The tax payer knows this, and the taxpayer knows that we will eventually have one entitlement less. 

Public sector unions are one of five in this heap, above widows and orphans, and well below Obamacare.  Now is the time for smart union leaders to cut good, cash out, deals.

No comments: