Find Insurance Online

In an article from MSNBC on the public debt crisis facing some of the EU’s states, the reporter writes: “Analysts are also growing more worried about the U.S. budget deficit, which remains higher than that of most eurozone nations. But Greece, Spain and other troubled countries in Europe do not command the kind of economic clout the United States does and, in many cases, have yet to escape the Great Recession.”

I contend that this statement is misleading because it is premised on a category mistake.  Firstly, the EU is not simply “eurozone nations.”  In having a Parliament, Supreme Court (the ECJ) and a Senate or Council representing the states, the EU has a government. Accordingly, some of the governmental sovereignty that used to be held by the state governments has been transferred to the EU, so the governments of the union and its states are both semi-sovereign.

Secondly, of course the respective state governments of the EU do not “command the kind of economic clout the United States does.”  That they should evinces a category mistake. Both the US and EU operate common markets.  That a part of one common market is not equivalent to a common market made of such parts should go without saying (see: fallacy of treating a part as a whole).

Thirdly, in treating the US public deficits and debt as equivalent to those of the EU’s state governments, one ignores the fact that many of the US’s state governments also face daunting public deficits and debt.  In other words, comparing the US debt to those of the EU’s state governments is misleading.  Because the EU government does not have a significant debt (that I know of) and some of the US states do have such debt, the comparison understates the debt on the US side.

In general terms, the presumed comparison assumes that there are no significant differences between a union of states and a state of such a union with respect to political or economic functions.  It might be, for instance, that because an empire-scale union is further from the people, accountability with respect to running up debt might be different than in a state.  I suppose it could be argued that the political entity composed of the states could be expected both to buffer public demands for more spending and to be more profligate than what the people want.  In any case, my point is that different dynamics come into play at the empire-level. Ignoring the qualitative differences in going from a kingdom-level polity to an empire-level policy made up of kingdom-level polities results in the kind of statements I have critiqued here (i.e., as if the US merely has more economic clout than a state of the EU, rather than that the US is not comparable with a state in another union). 

I think we moderns tend to skip over category mistakes when they have become the default in our societies.  This makes us susceptable to relying on erroneous results from comparisons based on such mistakes.  In other words, we take too much for granted in what we read (and hear) in the public square.  Although we don’t realize it, we desparately need Socrates-like writers (and speakers) to point out to us that we don’t know as much as we think we do.  This goes for such writers ourselves.  My thesis on the EU and US is of course merely a theory or argument…far from perfect, perhaps wrong, and doubtlessly improveable by others.  One way out of our epistemological presumptuousness is to subject taken-for-granted assumptions in the public square , including my own, to critique.  We simply do not go far enough, which permits vested interests to get away with too much.

Socrates, where art thou?  You should have slipped out when you had the chance. You were aiding Athens…not corrupting the youth.  Your detractors were just jealous (they owe you a written Apology).  Please come back. Spit out that hemlock.  We need you!

Source: http://www.msnbc.msn.com/id/35268117/ns/business-washington_post/

James Madison wrote in Federalist #10, “a rage for paper money, for an abolition of debts, for an equal division of property, or for any other improper or wicked project, will be less apt to pervade the whole body of the Union, than a particular member of it.”

That is to say, it is in the interest of the wealthy that power be taken from your State capital and deposited in the US Government. Is it any wonder, therefore, that consolidation has eclipsed federalism in the U.S?  Given the diversity that naturally exists in an “extended republic” such as the U.S. (i.e., an empire-scale polity), this one-size-fits-all interest of the rich is ultimately self-defeating with respect to the continued viability of the United States. The question is perhaps whether the financial elite will be oriented to the long or short term, and, relatedly, to public or particular interests.

“The power to borrow money is general and unlimited . . . By this means, they may create a national debt, so large, as to exceed the ability of the country ever to sink. I can scarcely contemplate a greater calamity that could befal this country, than to be loaded with a debt exceeding their ability ever to discharge. If this be a just remark, it is unwise and improvident to vest in the general government a power to borrow at discretion, without any limitation or restriction. (I)t would certainly have been a wise provision in this constitution, to have made it necessary that two thirds of the members should assent to borrowing money—when the necessity was indispensible, this assent would always be given, and in no other cause ought it to be.”

Brutus, Letter 8 (January 10, 1788), 2.9.95, in Herbert J. Storing, ed., The Anti-Federalist, Chicago: University of Chicago Press, 1985, p. 151.

"It's a great disappointment, a tremendous disappointment, because--what is it, $858 billion in two years added to the deficit? I mean, that just breaks your heart. What the hell do you think we've been talking about?"

Sen. Alan Simpson (WY-R), on the two year extension of the Bush tax cuts in 2010. Newsweek, December 27, 2010, p. 28.

"It will be precipitous. It won't be six months, might not even be six weeks. It might be six days when they suddenly start the flight. And I know how bankers are: once the flight starts, and the money and rumors, it'll be fast and difficult. . . . We don't know the tipping point. But the tipping point will come if you fail to address the long-term problem of debt, deficit, and interest."

Sen. Alan Simpson (WY-R), on the Chinese pulling out as a creditor of the U.S. Government holding Treasury bonds. Newsweek, December 27, 2010, p. 28.