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The last time it occurred was 17 years ago. Now, after a debt deal failed to be reached in Congress before the month ended, a partial government shutdown started on Tuesday morning. As it begins, we ought to remind ourselves that we still shouldn’t expect Washington to learn anything from the experience.

 

In reality, the only reason a budget debate continues to come up year after year is because the US government is in the hole. It’s an institution in total denial, dead broke, with $16.7 trillion in debt and more than $125 trillion in unpaid future liabilities. The only way the government can continue to finance itself while going into more and more debt is by relying on the Federal Reserve and its printing presses. 

 

So-called “quantitative easing” which has appeared in recent years is little more than a time-tested increase in the supply of money, pulled out of nowhere, created only by an arbitrary government decree.