The federal deficit: The bar tab will have to be paid

Lonesome Hobo Economics

…Kind ladies and kind gentlemen…
I did not trust my brother, I carried him to blame
Which led me to my fatal doom
to wander off in shame…..

Bob Dylan, JWH, Lonesome Hobo 1967

The Congressional Budget Office announcement of a nearly $10 trillion price tag on government borrowing for the next decade has sent a shiver down the spine of the most committed liberals.

Some time ago economic pundits were debating the “multiplier” effect of the stimulus. For every dollar spent, how many jobs would be created? How much real value would be created in exchange? Capital investments in infrastructure, for example, are generally thought to provide the biggest bang for the buck: mass transit, universal single-payer health care and other investments in public health, high-speed Internet, and education come to mind as high return spending.

However, these take longer to get into the pipeline and people are hurting now. Bailouts to bankers, while necessary to prevent financial collapse, have not provided much bang. Unemployment benefit extensions likewise, while vital, have less octane. Of course, replacing unemployment with national and regional service, employer-of-last-resort spending, would rank rather high on the return value list.

The bill will have to be paid by ourselves and our children. We will probably have to “inflate” our way out of some of this debt; the dollar will likely fall relative to other currencies and we will pay even higher prices for imports — especially oil. If the more-bang-for-the-buck return on spending is too small, that will mean a lower average standard of living in the US.

Of course no one will stand idly by for that. But the rich have abundant defenses most lack in the scramble for crumbs. Unless of course we all put our shoulders to the wheel and begin to kick some serious butt!

The Hobo heard Limbaugh yesterday whining about Obama’s “zombies” of “union thugs” and “OFA zombies” that are now showing up in force at more town meetings and scaring the bejeezus out of the creeps, screamers, white supremacists, outright ignoramuses and insurance company employees tea-bagging health care reform.

I even detect a note of apprehension in Limbaugh’s rants, wondering if “show trials” for his ditto heads may be coming. My wife is a Quaker, and thinks it is a good thing for due process that the Hobo is not president, as he would have difficulty resisting such trials for forces seriously working to destroy American democracy: the torturers and flagrant liars and scoundrels.

The era of class struggle is not over. It turns out the owner of the bar has been drinking most of the profits and now wants the loyal patrons to double down on the tab. We better get him now before he scoots out the back door and we are the only ones with glasses when the cops come!