Gonzalo Lira: Why Democracies Will Always Go Bankrupt - 1 views
gonzalolira.blogspot.com/...s-will-always-go-bankrupt.html
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shared by Gary Edwards on 14 Jan 11
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once a democracy’s debt reaches a point of unsustainability—either because it cannot borrow more, or it cannot service the debt it already has—the democracy becomes bankrupt.
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It's an overall concept I've designated as the Democratic Bankruptcy Paradox: The paradox by which every democracy eventually goes bankrupt-regardless of the people's will and intention of keeping it from going bankrupt. That's why it's a paradox: The citizens of a democratic state are supposed to control its destiny. They obviously do not want their nation to suffer bankruptcy-yet in spite of their will and intent, democratic states always go bankrupt. Always. This post will outline my proof of why this is so. I will first explain the logic of my Democratic Bankruptcy Paradox theory, and how it is derived from a rather recently articulated problem in philosophy called the discursive dilemma, or sometimes the doctrinal dilemma; an aspect of group agency that has been used primarily in legal theory, but which I've realized has some fairly interesting-and radical-applications to macro-economics and public finance in representative democracies. I will then explain how the discursive dilemma, when applied to macro-economics and fiscal policy in a democratic regime, leads to the Democratic Bankruptcy Paradox. It is here that I will prove two general conclusions: * One: Democracies always act in a fiscally incoherent manner. * Two: Democracies always go bankrupt-without exception. Finally, I will show how my Democratic Bankruptcy Paradox theory applies to the American case, and explain why the U.S. governments at the local, State and Federal level spend more than they bring in-even as their citizens uniformly oppose this state of affairs.