They're Spending My Money!

You can't turn on the cable news these days without hearing someone screech: "They're spending my money." By which they mean that the government is spending tax dollars.

But since an elite few citizens pay most of the taxes, these talk-show hosts qua aspiring demagogues are really proclaiming their own wealth and status.

Histrionics aside, our government has become notably profligate. We should be concerned. But that does not excuse fuzzy thinking.

Sad to say, but once you pay your taxes, the money is no longer yours. It's theirs. It belongs to a democratically-elected government that is exercising the people's will.

That does not mean that the government is tyrannical. As long as we have a voice and have representation, the government is not a tyranny.

If you want to protest, the best way is to "Go John Galt." Otherwise, once you earn it, the democratically-elected government has a right to take some of it.

If you are still suffering over the fate of what used to be your money, try this for consolation. The government is not paying for the new stimulus bill out of tax receipts. It is borrowing the money from China and Japan.

Strictly speaking, the government is not only not spending your money; it is spending other people's money.

When you see that new lighthouse being built, it is not your tax dollars at work. It is Chinese and Japanese loans at work.

Thus, the people who are paying tax are not paying for the stimulus. Their children and grandchildren will be paying for it at some indeterminate time in the future.

If you now feel bad about sticking your descendants with a mountain of debt, you can console yourself with the thought that the Federal Reserve is working overtime to ensure that it will be paid off with worthless money. Now that the Fed has declared war on the dollar and is actively working to produce inflation, you know that the dollar your grandchild will use to pay off today's debt will be worth far less than the dollar we borrowed from Asia today.

It's a great scheme, and will continue to be a great scheme, until our creditors decide that they might not want to continue throwing good money after bad.

But what if China and Japan decide that what's good for General Motors is good for America.

What it they figure out that when the federal government was GM's lender of last resort, it leveraged its power by imposing conditions--- or attaching strings-- to the loans. For example, CEO Wagoner was fired.

But if creditors have the right to attach strings before loaning money, why would China not try to impose its own conditions before lending us any money?

Of course, that will never happen, but, then again, those sound like famous last words.