They talk about tax revenues as if that’s a relevant component of bond market cash flows. It’s not. I have an easy solution for bringing it down to any number

They talk about tax revenues as if that’s a relevant component of bond market cash flows. It’s not. I have an easy solution for bringing it down to any number you want: more government spending, the more wasteful the better. You see, government spending is part of that ‘economic activity’ number. In fact, certain types of especially wasteful spending require purchases that guarantee it will count for double in that number. Of course this creates more debt, so every year you have to create enough money to increase your spending by a huge factor, but it works in the formula used here. This is not a new idea; it was most recently popularized by an Obama economic plan to introduce stimulus on the same premise. And he’s right; spending does bring down the number temporarily. Is it insanity to believe that this represents an economic benefit? Well, you may recognize this response from Rick Santelli: “You can’t buy your way into prosperity. And if the multiplier that all of these Washington economists are selling us is over one, then we never have to worry about the economy again. The government should spend a trillion dollars an hour because we’ll get $1.5 trillion back.” Now as a historical exercise, I would like just one example of a long-term financially-responsible central government that had full control of the issuance of their own legal tender. I’m not suggesting a different system; I’m merely pointing out the possible futility of our expectations.