by Calculated Risk on 1/19/2023 04:46:00 PM
This was written in 2014, but I never published it!
A short comment on “short memories” …
Voters have “short memories”. Sometimes “short memories” are good. Albert Schweitzer once said, “Happiness is nothing more than good health and a bad memory”.
Many people think having a short memory is helpful in sports (not letting previous failures bother you) and in life (forgetting bad things and / not holding a grudge / letting go).
But for the economy and policy, short memories are a negative. There will be always be another generation of financial alchemists who think they can turn radioactive waste into gold. And once again the riches will flow, until the economy suffers. The next serious bubble and crash is coming, we just don’t know when.
For policy, forgetting what actually happened (with the help of political spinners) is standard practice. We’d actually have much better policy if voters had better memories, but unfortunately, they don’t. Politicians take advantage of this collective forgetfulness and act up in odd years – something everyone should be aware of as we head into 2015 (edit: now 2023) (I expect some episodes of DC craziness).
As far as the “debt ceiling”, the “debt ceiling” sounds virtuous, when, in reality, the vote is about whether or not to the pay the bills – and not paying the bills is reckless and irresponsible. The “debt ceiling” is redundant (once a budget or a continuing resolution is passed, then the impact on the debt is pretty much known). This is like someone not paying their credit card bill to teach themselves not to use so much credit! Irresponsible.
I prefer the term “default ceiling” because that is what it is.
best to all.