Killing The Frog Slowly – Raising The Debt Limit

Everybody knows the metaphor:  you toss a live frog into a pot of boiling water he will just jump out; you put him in temperate water and slowly bring it to a boil, he’ll just stay there until he is dead.

If you shut down government operations and stop sending out the government checks the people will revolt.  If you raise the debt limit so the checks keep flowing, the debt service and interest increase but this effect is muted and drawn out.  The burden is shifted to the gullible young, who are reluctant to believe that their elders would betray them.  They don’t complain too loudly and won’t really understand what has been done to them until it is too late.  At some point the burden of debt service will become intolerable and undeniable.

Barring that, raising the debt limit is politically easier, so that’s what happens.  And it will continue to happen – every time – unless and until it is no longer politically easier.

It’s a little disconcerting, but not in a surprising way, that at least one of the primary architects of the “budget deal”, Congressman John Boehner of Ohio, knows exactly what he is doing.


Leave a comment

Filed under financial crisis

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s