A reader wrote me:
I am curious about how concerned you are about the Fed budget deficit. The world seems upside down when the Republican administration and Congress are not up in arms about the ever growing deficit.
I can understand during an economic downturn that rolling back the tax tables is a good short term stimulus. The thinking is the lost tax revenue can be made up once the economy is in recovery and sustaining growth, taxes can go back to where they were.
The US economy from 2004 to the current moment is in a recovery/growth mode when the tax shortfall should be being made up. Yet the proposed budget has a larger deficit ($400 billion) than last year.
Further the President is determined to make the temporary cuts permanent.
What am I missing that the Republicans see? It seems to me the world has been turned up side down and as a Conservative thinker I am scratching my head…….
I referred him to Empire of Debt: The Rise of an Epic Financial Crisis by Bill Bonner and Addison Wiggen. This book zeros in like a laser on this reader’s concern and puts our predicament today into historical context. It heaps scorn equally on Democrats and Republicans and the authors do so with biting wit and beautiful writing. Upon finishing this book, I immediately started reading it again from page one. It captures a great many of the ideas and concerns I am trying to convey through this letter.
