Chris Powell: Merchants are more honest than Sen. Blumental about debt

In the early 20th Century, the National Consumers League promoted the “Shop Early Campaign". This systematic multi-year publicity campaign used cartoons, letters, editorials, articles and advertisements, sending materials to hundreds of newspapers and retailers across America.

MANCHESTER, Conn.

What would the holidays be in Connecticut without U.S. Sen. Richard Blumenthal warning his constituents about the perils of the season -- dangerous toys, fraudulent business practices, Republicans, and the like? (Poking the Russian bear on its own doorstep has yet to make the senator's list.)

Last week the senator affected alarm about merchants who advertise products available for purchase with deferred payments -- “buy now, pay later" promotions. People who purchase something by agreeing to pay in the future may find that when the bill comes due that their financial situation has deteriorated. Worse, the senator notes, being late with a deferred payment may trigger penalty interest charges. 

Of course, anyone who has graduated from high school might suspect these risks. But then maybe the senator understands that many Connecticut high-school graduates can't read, write, and do math at a high school or even an elementary-school level. 

In any case the senator overlooks an argument  in favor  of “buy now, pay later" purchases, an argument that members of Congress especially should understand: inflation and the decline of the value of the U.S. dollar and wages paid in dollars. Amid inflation certain goods -- if not worn out, damaged, or perishable -- may actually  increase  in value and, when payment has to be made, may be worth  more  than their original price.

Indeed, Blumenthal misses the great irony in his warning people against deferred-payment schemes: his having been for the last 15 years an enthusiastic supporter of the federal government's own “buy now, pay later" policy. 

For the federal government increasingly finances itself with borrowing, and its total debt now exceeds $38 trillion, an unfathomable number. 

Government debt is not necessarily bad; it can be productive. But this is a matter of degree, and in recent years the federal debt has gone wild, as suggested by the country's recent severe inflation and the heavy burden of federal government interest payments, estimated at about a trillion dollars annually and rising.

Most of this debt is not for long-lasting capital projects that will benefit the country for decades but for ordinary operating expenses and income supports, with the interest requiring payment far into the future by people who never benefited from the debt. 

This is borrowing for current expenses, which used to be considered immoral. But in national politics today, especially among Democrats like Blumenthal, money is believed to be infinite. (Most Republicans know better without acting much better.)

Today in Congress if any Democrat sees a need, actual or merely political, he'll put it into an appropriations bill, and, if he's friendly enough with the ranking Democrat on the House Appropriations Committee, Connecticut Rep. Rosa DeLauro, she'll put it into the next federal budget with no concern about the federal debt, inflation, or interest burdens.

Members of Congress love this system because it lets them distribute infinite goodies, essential or not, and pay for them indirectly, not with taxes but with inflation, a disguised tax few voters understand or can fix responsibility for.

That's why the merchants promoting deferred payments are actually more honest than the senator who is warning his constituents against them. 

Stick to a merchant's deferred-payment plan and you'll pay only as much as you signed up to pay. But with the federal government, whose costs are increasingly financed by borrowing, debt monetization, and inflation, you pay now, later, and -- since the debt is never actually repaid at all, but just keeps rising -- you pay for the rest of your life as well for what you get or once got from the federal government,  and  for what you didn't get but others get or used to get.

So what's really more dangerous -- the toys Blumenthal is scorning, whose small parts a 2-year-old might pull off and swallow or stick in his nose or ear, or a government that, when the kid turns 18, will welcome him into adulthood largely ignorant and unskilled but, as a taxpayer, already heavily mortgaged?

Chris Powell has written about Connecticut government and politics for many years (CPowell@cox.net).