Sectoral parochialism, I just spontantaneously invented it to refer to being gung ho (in spending , subsidies etc.) on a particular sector to the detriment of the overall fiscal and macroeconomic condition. I googled the term, there's no mention or definition yet, so I may have accidentally coined it :-)
I think almost everyone has sectoral parochialism so the result is ever expanding spending and borrowings even with zero economic or financial crisis. The overall fiscal condition is massaged to appear "fiscally sustainable".
Public economics is very different from household economics. In the latter, if you are always in debt, you can be called "Maluho, magastos, matabang, gastador,..." and people will avoid lending you until you become poor and forced to change ways.
In government, regardless of administration and country, endless borrowings and rising debt are always justified.
One reason why the US avoided recession in 2023 was the huge spending and borrowings by Biden. Federal debt $31 trillion in 2022 jumped big time to $34 trillion in 2023.
This 2024 out of around $6.7 trillion total federal budget, $1 trillion of that is interest payment alone. More ratings downgrade could be coming, overall econ condition would be tighter and riskier.
https://www.visualcapitalist.com/cp/timeline-150-years-of-u-s-national-debt/
Four good articles I saw.
1. Massive Money Printing Will Accelerate as Debt Soars
Daniel Lacalle 02/19/2024
https://mises.org/wire/massive-money-printing-will-accelerate-debt-soars
... between October and December 2023, the deficit ballooned to a staggering $510 billion....
The Congressional Budget Office (CBO) expects an unsustainable path that still leaves a 5.0% deficit by 2027, growing every year to reach a massive 10.0% of GDP in 2053 due to a much faster growth in spending than in revenues.
Why America Will Never Surmount Its Mountain of Debt
BY SCHIFFGOLD FEBRUARY 18, 2024
https://schiffgold.com/guest-commentaries/why-america-will-never-surmount-its-mountain-of-debt/
The Federal Mega-Debt is Here to Stay
Jane L. Johnson 02/16/2024
https://mises.org/wire/federal-mega-debt-here-stay
There are only four means by which government can capture resources for its own use:
1. Outright confiscation of property for public use, which is prevented by the US Constitution’s “taking clause” without just compensation of the property owner.
2. Taxation.
3. Debt issuance.
4. Inflation that erodes the nominal amount of the debt over time, harming lenders.
Some observers would argue that this fourth strategy is perhaps what we are beginning to observe in the US and some other countries around the world...
Jim Grant: We’ve Yet to Feel the Full Consequences of the “Era of Free Money”
BY SCHIFFGOLD DECEMBER 12, 2023
https://schiffgold.com/key-gold-news/jim-grant-weve-yet-to-feel-the-full-consequences-of-the-era-of-free-money/
----------
See also:
Fiscal irresponsibility 31, Another US government shutdown, implications for PH and other countries, September 28, 2023
Fiscal Irresponsibility 32, US public debt rising by $7.7 B/day, October 29, 2023
Fiscal Irresponsibility 33, More about the US deficit and debt, November 18, 2023.
No comments:
Post a Comment