President Trump’s contrived $5000 offer to adult Americans in exchange for a Congressional majority has been much maligned across the political spectrum as a manner of “buying votes”, but when it comes to the matter of the public purse, most parties in most advanced democracies have partaken in one side or the other of a sort of “balance of payments” ledger that exists between those who are net fiscal contributors to (or beneficiaries of) public finances.
This is a discourse that becomes particularly hostile in the matter of first generation immigrants - particularly in Europe - who require public support in excess of what they can contribute back during their own careers (notwithstanding the contributions of their progeny), or again in the hands of political consultants, most notably in the 2012 US Presidential campaign, which devolved partly along the lines of “Makers vs Takers” and “You Didn’t Build That”.
The sort of divisive language which, ironically, predates the Trump era, also illustrates the fundamental contradiction that exists between mainline pro-growth and pro-redistribution platforms, which in effect dominates the discourse in most Western democracies today, save France, where moderation of policy and a promise of deficit below 3% of GDP by Marine Le Pen - in contrast with student strikes at chronic education “underfunding” - arguably accelerated the bond sell off which France is attempting to now weather. Yes, in fact, if deficit at 3% of GDP is the far right position - 5 years from now, in a country that is expected to grow .4% this year - there may be in fact no hope for those holding the national debt of truly recouping there cost.
This is of course the long term consequence of voters who have voted themselves benefits and politicians who have been unwilling - or otherwise unable - to ignore the costs, primarily because of electoralism. Yes, in fact, if we could vote mummy and daddy out of office for not giving us ice cream after dinner, we probably would.
This is the primary reason that debt monetization is the only likely outcome for most Western Democracies, both in the United States and beyond. As demographic trends continue to age, increasing the dependency ratios of these countries, while immigration causes social distortions and is either insufficient or otherwise of insufficient quality (from a capital perspective) to grow productivity in such a manner that allows these nations to both pay down debt and still pay benefit schemes, debt will be repaid and benefits will be cut. No one, however, is of sufficient “stones” to propose these sorts of schemes to tax payers - without in the very least tax cuts in tow - in order to resolve this sticky issue.
The Great Financial Crisis of the 07-08 period has essentially come and gone with inflation higher, growth moderately higher, but public coffers threadbare. Even normally-chaste Germany’s debt-to-GDP will rise to nearly 80% by 2030, and it has been the lodestar of European fiscal rectitude. Outside the Eurozone, debt-to-GDP is 95% in the UK with growth forecast at 1.3%. Europe’s total population will peak in 2029, but old-age dependency will continue on high until 2100. At last estimate, the United States is only slightly better off: old-age dependency there will peak in 2060.
There are a few issues with this in that - without value judgement of course - when dependent classes can vote - those of limited land, labor or income - they are essentially stupid not to vote themselves benefits. It requires somewhat a state of high altruism to simply go with less because you know it’s “good for the nation”. As a corollary, productive tax-payers would have to practice a high-altruism of their own in order to willingly increase their tax burden, amidst a population that will otherwise always vote itself more benefits. What’s worse, as they vote themselves tax increases, they are essentially voting to diminish their own productivity, economic activity and propensity to spend.
What solutions remain? A tax on savings? Doesn’t sound very Protestant, does it. Mass disenfranchisement of the voter base? Well that would cause a revolution - we imagine. The incremental steps on this “road to serfdom” which we have travelled have led us here - in the midst of such dependency, people also stopped having kids, which was traditionally the only form of old-age security that existed. As such, there is basically no other solution but to monetize debt and make up a reconciliation of accounts based on the political intentions of the voting public. This is Stephanie Kelton for libertarians, as it were.
So, in returning to Donald Trump, what difference does it make when he promises voters a one-time payment of $5000 per adult, if the Democrats offer free healthcare, school debt forgiveness, investments in road, bridges and infrastructure, early childhood care, paid family leave - all benefits that add up to tens if not hundreds of thousands of dollars per US adult over the course of their lifetimes, in a single election cycle, and they will only offer more benefits thereafter? Why, by comparison, Donald Trump begins to seem as stingy as the Duke of Marlborough.
The benefits offered by left-wing parties are meant to substitute high-cost goods and services that are otherwise obtained in private markets. The point of private markets should otherwise be to provide high enough incomes - along with sufficient vendor competition and price transparency - that these goods and services can be generally obtained without the need of government. If all men were angels we wouldn’t need government, but we know the latter scenario isn’t going to happen either, is it.
And so we will go on, debt raising, relative productivity falling, demographic decline continuing to the lowest possible decimal point for TFR, until some time past the year 2100, one single person remains to carry a productive economy, probably operating a leviathan AI data center domiciled somewhere near the center of the Earth. When Keynes wrote “Economic Possibilities for Our Grandchildren”, he perhaps took for mean what would otherwise be absent from the median.