Ponder, if you would, the two images below:
I’ve raced sailboats for over a quarter century. The sailor who taught me to sail and race raced on boats similar to the ones on the right. He raced in a class named SORC (Southern Ocean Racing Conference). These are multi-million dollar boats, crewed by a dozen or more. The next class up would be America’s Cup racers. In other words, these are serious sailors. The boat he raced on was the SORC Class winner for years.
When Bob introduced me to sailing, we sailed a 22 foot Creekmore. It was an aluminum hull, fractional rig boat. Lots of fun! But, here’s what I learned about sailing: a dinghy went along with the Creekmore. It was similar to the boat on the left-small, single sail, center board. When Bob said he needed to tune up his sailing skills, or he thought that he needed to get in back to sailing basics, he said he’d go out on the dinghy. He said to remember that all the forces, all the fluid flow dynamics (air and water as a sailboat sails through two fluids) are exactly the same for a small boat as for a large boat.The Bernoulli Principle applies for any and all sailboats. When the tiller gets pulled or pushed, the fluid dynamics across the rudder are the same. When the sail is either trimmed in or eased, air flow principles are exactly the same. Laminar flow and separation along the hull don’t care if the hull is aluminum, fiberglass, wood or carbon fiber. Physical laws are always obeyed. And it occurs to me, the same can be said of economics.
If in your family (or you as an individual) spend more than you take in, you go into debt. The further you go into debt, the lower your credit score and it costs you more to borrow to fund that debt (that cost is called “interest” which is a reflection of the risk that the lender is taking in lending to you). It will eventually get to the point where no one will lend to you, at any interest rate as it becomes apparent that the lender will never get the full value of the loan returned. The same principles apply to national economics. The only difference is that the government has the force of law to use to get its way. It can also print money and force its boss (the citizen) to pay more to it via taxes, tariffs, fees. You can not force your boss to pay you more and you can not print money. None-the-less, the laws of economics, like the Bernoulli Principle and fluid dynamics, are inviolate and not a respecter of an individual, families or governments.
We have inexperienced, arrogant helmsmen with their hands on the tiller that controls the rudder. They refuse to learn to sail or to heed the advice of experienced sailors. They are resolute in saying nothing of the lighthouse they passed sometime ago.They ignore the warning buoys and the readily visible wrecks of previous governments on the rocks and shoals of socialism, Keynesian economics and government intrusions.
If only they would be the only ones that drown when the wreck occurs.
Time for one of two things to occur: either experienced sailors take over the helm. Or it’s time to man the lifeboats.