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I don’t want to talk about the curious timing and hypocrisy of America’s current shitfit about deficit spending, not just now at any rate. Most of what could be said is self-evident anyway. I would, instead, like to propose a good, common-sense plan for reducing America’s federal budget deficit, as a sorely-needed alternative to the non-substantive posturing and shouting which surrounds the issue.

1. Starting in, say, 1986 when oil prices were largely recovered from the oil “shocks,” implement a very small nonrenewable tax on oil, coal and other fuels which involve depleting a finite stockpile (in addition to their various other flaws). Slowly but steadily raise the tax over time. A bit of this revenue could be applied to promoting renewable energy research, though the mere fact of the tax would draw greater private investment to that area and thus most of the revenue could be left in the general budget. (Over time, revenue would presumably peak and go into decline as financial incentives promoted a shift to renewable energy, but by that point the tax should have contributed substantially to the treasury’s coffers, and the economic impact of replacing expensive, imported oil with domestically-produced renewable energy would likely have a generally positive impact on tax revenues as well.) (more…)

Earth, 1946: World War II is over and the Cold War looms. The result, at least for the victorious industrialized nations, is a combination of euphoria with an undercurrent of growing existential dread. And yet, in the long run these seemingly-conflicting emotions lead to the same end, economically: spend freely.

The key to this paradox is the nature of the new threat, largely unprecedented in human history: nuclear annihilation. Humanity lives under imminent threat of destruction, as often before, except now destruction is for practical purposes likely to be over in an instant. As Albert Camus wrote, in The Fall:

I could better understand that friend who had made up his mind to stop smoking and through sheer will power had succeeded. One morning he opened the paper, read that the first H-Bomb had been exploded, learned about its wonderful effects, and hastened to a tobacco shop.

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You almost had me there, Andrew Sorkin. Financial crises, the boom and bust cycle, hey-ho; that’s life, right? Strikes and gutters. We can never prevent the next one because each one is different, and just like the army, regulators end up always prepared to fight the last war.

I was buying it.

Then you tried to cap things off with a neatly topical quote, and I woke up:

In his memoir, Henry M. Paulson Jr., the former Treasury secretary, recalled telling President George W. Bush in 2006 that it was impossible to spot a coming financial blowup.

“We can’t predict when the next crisis will come,” Mr. Paulson told the president. “But we need to be prepared.”

Whoa. Whoooooooah, there, hold on just one second. Uhm, sir? I remember 2006. I remember that the irrational underpinnings of the mortgage market bubble were quite apparent to an awful lot of people, even if those people happened to mostly work outside of the Dept. of the Treasury. I remember “Flip This House” and “Flip That House,” and I remember people laughing at the term “NINJA loan,” invented for the large number of mortgage recipients with “no income no job (and no) assets.”

Gosh, that one was so funny.

Plenty of thinking people were quite well aware, however, that clever acronyms or no, America’s financial sector was dancing atop a rumbling volcano. The fact that nothing was done to move us to safety was not the result of forecasting economic perils being inherently impossible. It was the result of spineless, useless, worthless, brainless and gutless tools being in positions of “leadership,” with an assist from a journalistic “watchdog” too hopped up on goofballs to offer up even one good “bark.”

Unfortunately, though, Mr. Sorkin’s larger message that the next economic crisis will be along sooner or later is very likely to be proven true, even if his suggestion that the last one was unforeseeable is baloney. Those who do not learn from history…