[lbo-talk] More Times fearmongering

Sandy Harris sandyinchina at gmail.com
Tue Mar 30 16:11:42 PDT 2010


On 3/31/10, Doug Henwood <dhenwood at panix.com> wrote:


> The whole strategy of doing a present value analysis of pension obligations
> makes no sense to me, except as a scaremongering tactic. Governments are for
> these purposes immortal, and have tremendous power to tax, and all that
> matters is their ability to cover next year's obligations with next year's
> revenues, ad infinitum. Is there any rational economic reason for this sort
> of analysis except to promote an austerity program?

There are limits on the power to tax, especially if they want to be re-elected. Yes, you can milk the rich some more, but they have options like moving offshore, and they have political influence which leads to hand-outs rather than milking.

Governments routinely cover obligations not with revenue but with deficits. They've been doing that for decades, and some have been mis-treating pension contributions as general revenue. What is the current level of gov't debt? The interest on it?

At some point, the whole ponzi scheme becomes unsustainable. My guess is the US is getting close to that point. Two wars, both expensive, big giveaways to crooked bankers, ...



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