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Abstract

LOWER THE DEBT CEILING Like a well-fed teenager, the national debt keeps growing and growing. On Dec. 31, it bumped its head against the statutory ceiling that never seems to contain it. That would be $16.394 trillion, or the cash equivalent of 360.7 million pounds of $100 bills. We write in support of the ceiling. Reciprocally, we write against the debt. At prevailing pygmy Interest rates, we are bearish on the bonds of which it consists. We oppose, too, the sneaky nomenclature of American public finance, including the title affixed to the Department of the Debt. Inasmuch as the Treasury holds no net treasure, Timothy Geithner's agency should be properly and frankly rebranded. And we oppose the monetary legerdemain by which so much of the debt is financed, notably the nonstop bond buying of the Department of Money Printing. This is the bureau known officially--another misnomer--as America's "central bank." The operating procedures of the departments of Debt and Money Printing didn't come from nowhere. They sprang from the heads of learned economists. As imbibed by somewhat less learned politicians and journalists, the economists' ideas were reduced to bite-size, destructive, policy-ready form, e.g., "We owe it to ourselves," and "America issues the world's reserve currency, so what's the harm?" and "A family has to balance its budget but a nation is different." IMAGE1 The first debt ceiling was enacted in 1917 after the United States entered World War I. It authorized the sale of long-dated 4% bonds in the sum of ...

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