Wednesday Morning Rant

Although the origin is disputed, the great quote, "a billion here, a billion there, pretty soon, you're talking about real money" is usually attributed to Everett Dirksen. It has held on for so long because it does quite a good job of underscoring the cumulative effects of the government's cavalier dismissal of stupendous sums of money. Whatever cockamamie scheme they come up with, all is well. A couple of million bucks for lesbian cowboy sculpture in Idaho or whatever really is nothing in the grand scheme of things, right?

Well, inflation is a cruel mistress and now the reckless cavaliers in Washington throw around hundreds of billions - or even trillions - of dollars on pet projects. The projects are bigger, too, of course. They're nothing if not ambitious. The latest bit of insanity to come across my desk is from the great Janet Yellen, who sauntered from the Fed over to Treasury to continue sowing destruction when her term as Fed Chairman came to end. She wants to throw around trillions, too. Every year. For decades.

Harris-Biden Treasury Sec. Janet Yellen says their "transition to a lower carbon global economy" will "require no less than $3 trillion" each year pic.twitter.com/Ho5AoT3e9e

— RNC Research (@RNCResearch) July 28, 2024

To save Mother Gaia and defeat the Dread Carbon is a mere nothing. It will just "require no less than $3 trillion in new capital from many sources each year between now and 2050."

Well, that's doable. Let's get right on that. Super easy. Barely an inconvenience.

Where's the money going to come from, Janet? And don't say, "taxes" or "investment incentives" or "private/public partnerships." Those are played out. Remember, you said new capital. $3 trillion worth of it. Every year. For decades. Where are you going to get it? How much new capital do you think there is in this country? The government can't produce it. It can allocate it, but cannot create it. And it's a lousy allocator. It misallocates so much that it runs a $1.7 trillion deficit - about half what you claim this new madness requires - and has lost control of inflation as a result.

Where does she expect to find this unencumbered capital - that is, capital and money owned free-and-clear with no other obligations like existing debt? So much is in hock. The federal government's assets - land, structures, etc. - are in hock courtesy of that stupendous national debt. Most states and localities are in debt up to their eyeballs, too. Staggering numbers of businesses have dangerous balance sheets. Household debts are nothing to sneeze at, either. So where is this "new capital" going to magically come from?

The answer, of course, is that it won't. I doubt very much that this is a serious proposal but even if it is, all it can do is speed the day of reckoning. To get the kinds of money Yellen is talking about, there are only two methods that could even get close: haircuts (selective default on existing obligations to free up capital) and naked expropriation without compensation. Either crashes asset values across the board and, while they can unencumber capital and even transfer its ownership, they do so at a fraction of its prior value. The amount of stuff - and cash - required to achieve that $3 trillion equivalent rises no matter what.

Serious or not (and I suspect not), what we have here is a bureaucrat proposing that we take the equivalent of the cash spent on government's most fiscally disastrous programs - medical spending - double it, then add it in as net-new spending while cutting nothing. She's proposing an increase in spending of a whopping 60% over the government's current $5 trillion or so in outlays. No plan, just spending. For "climate." It's okay, though, because it will come from "many sources." Just don't ask what they are.

It's so outlandish that Dirksen's putative quote doesn't even apply at this point. At this point, we're talking about fake money.

posted by Joe Mannix at 11:00 AM

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