back to 1835!

Max Sawicky sawicky at
Wed Aug 4 08:01:01 PDT 1999

Max Sawicky wrote:

> If you think public debt benefits rich bondholders,
> you might like to answer the question of why the
> Administration is going ass-over-teakettle to
> eliminate public debt, with the tacit approval
> of a lot of Republicans. . . .

There's some of the answer, at least for the repugs, which is the easier part. Rich people don't need government bonds, except to balance portfolios.

"Except" is a big word here. But if we take your point, then the bit about bonds as a device for redistribution holds less water.

Most don't hold many anyway (as a percent of their holdings). They would invest in alternative assets with more risk, higher returns, and, in the republican view, such investments are inherently more productive (adding to private capital).

On the factual issue, I wouldn't know, though mucho govt bonds are held by upper income persons. I would dispute the potential implication that Repubs care about the social productivity of their assets, rather than their individual financial return (i.e., 'fictitious value'). If we're talking policy viewpoint, then sure private capital is exalted over govt bonds by conservatives and most others.

Repugs get a smaller govt too. The more eliminating the debt is seen as a completely good thing and accomplished, the harder it will become to later expand spending.

It's harder to spend when you dedicate your receipts to debt reduction, but at the point where your debt service savings are large enough, you have more capacity to spend, in the vulgar static view. Remember my point about the logic of the long term projections, which have the Gov owning trillions in private sector financial assets.

The deficit and now the debt are a major obstacle in the way of tax cuts, for mystical ideological reasons. Many conservatives are quite unhappy about this.

I agree that debt liquidation is something Clinton would like to add to his freakin legacy.

>>> . . .

There is no end because the tax cuts and accompanying deficts were a plan to shrink govt spending.

Some lunatic wrote a piece on this in 1991 entitled "Up From Deficit Reduction."


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