Richard Hanania and the Myth of the Inevitable Debt Crisis

Richard Hanania is usually on the mark, but misfires in his recent post, “Why Socialism Isn’t Coming to America.” Beneath the paywall, he parrots tired arguments about the national debt and spending: “We’re already running a $1.9 trillion deficit. In other words, we have less money coming in than going out, and the problem is about to get much worse,” and “In the end, you will need some combination of tax hikes, cuts to entitlements, and borrowing. You can’t indefinitely borrow with increasing deficits and no long-term plan to balance the books.” This came as a surprise because I generally assumed he rejected the debt-crisis alarmism typically seen on the libertarian right. I always pegged him as a monetarist or a neo-Keynesian. It’s also wrong. His claim that the “books must be balanced” only makes sense if you think linearly that there is some finite quantity of capital that is being consumed subject to such constraints, which, when exceeded, causes the system to fail. But there is…