Government Bubbles

Government Bubbles

Funny how the mind works. I read Jeremy's and AMT Buff's comments to my earlier post Fair's Fair. I read the post by Robert Goulder entitled Greece's Inability to Tax Itself. For some reason, I started thinking about bubbles.

In recent memory, we had the "housing bubble." Before that, the " bubble." You can keep going back over an endless stream of bubbles: "stock market bubble," "Florida land bubble," "whiskey bubble," even back to the "tulip bulb bubble." Bubbles, bubbles, bubbles: all growing and shimmering ... until they pop! Are we now really blowing another bubble -- the "government bubble?"

Bubbles grow because people put more and more money into something. First it's their own money; then a little bit of borrowed money; then a lot of borrowed money until there is no one left willing or able to provide more money, and the bubble bursts. Is this what is now happening to the government of Greece? Of Italy? Of Spain? Of the United States?

Governments, including our own, seem to grow larger each and every year. The "bubble" grows as more money is blown in to meet the demands of ... [please insert the name of whatever constituency you wish to vilify today]... Pressure builds within the bubble because what was added remains as new demands arise....


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