There have long been economic bubbles of “irrational exuberance” (former Fed Chairman Greenspan). An early one was the Dutch tulip mania of 1637.
Some activity or product, tulip bulbs then, is very profitable. Overcome by greed, more and more people invest in it, convinced that it will increase wealth forever. But everything ends. Eventually there’s a painful collapse.
The 1929 stock market crash ended another such bubble. Recent examples include the dot-com bubble of the late 1990s and the 2007 housing bubble.
Now we have the irrational exuberance of a government spending bubble. Politicians, bureaucrats, crony capitalists and others are profiting from government spending. Overcome by greed, they demand more and more, irrationally convinced that government can deliver more wealth forever. But everything ends.
No individual, family or government can increase spending and debt forever. Eventually there’s a painful collapse.
We face a world of hurt unless we start controlling spending now. But those causing overspending — rich leftists and their powerful friends — won’t be the ones hurt.
Most hurt with national bankruptcy, as now in decaying areas of bankrupt Detroit and other almost-bankrupt cities and states, will be the already-suffering vulnerable, the less educated, the poor, the unemployed — and those of us who can’t afford bodyguards.
And, no, small reductions over time in proposed government spending increases won’t be catastrophic, nor will gradual, small real cuts.
Government administrators just need to set reasonable priorities. If they cut necessities instead of extras, they’re incompetent or intentionally destructive and must be replaced.