The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. … Increasing America’s debt weakens us domestically and internationally. Leadership means that “the buck stops here.” Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.

– The Hill

Fast forward to February, 2010:

Behind closed doors and with no cameras present, President Obama signed into law Friday afternoon the bill raising the public debt limit from $12.394 trillion to $14.294 trillion.

–Jake Tapper, ABC

Guess what Barack. America still has a “debt problem and a failure of leadership.”

[H.T. The Classic Liberal]

Even the most cursory reading of world history will make one fact crystal clear: war is expensive; very, very, very expensive. In fact, it’s the most expensive thing a country will ever do. Historically, most countries that engage in large scale war eventually bankrupt themselves in the process and are forced to stop. Take the war of 1812 as an example. The U.S. was forced to sell $69 million in public bonds to finance that war. It took almost 25 years to pay off that debt – just from one large scale war. It was this debt load issued through the Bank of the United States and all of the shenanigans that followed it that directly led to the panic of 1819, as I’ve discussed here before.

The Mexican-American war in 1846 again forced the issuing of $63 million of public bonds. That was roughly equivalent to the entire federal budget. They hadn’t even made a dent in it. And, of course, all of this public debt issuance led directly to another bubble/banking panic known as the Panic of 1857. By the time the War for Southern Independence rolled around in 1860, that debt was still hanging around.

It’s also a fact of history that Napoleon sold Thomas Jefferson the Louisiana territory (Louisiana Purchase) to fund his war with England. That should demonstrate the amount of cash needed to fight a large war. He was willing to sell us almost an entire fifth of the North American continent in order to get enough gold to fight the British. And, this isn’t atypical. It’s entirely normal. As I said, war is really, really, really expensive. The cost of sending thousands of men and machinery across the globe to fight a war is just enormous.

All of this leads to the real issue I want to address. How is it then, that the United States apparently can continue to wage war multiple times per decade in seemingly endless fashion and not have any trouble paying for it? One answer: inflation. Massive, massive inflation. That’s the only way that this type of thing is possible. Robert Higgs calls inflation “death fuel” for this very reason. The only way to make war affordable for a country is to inflate it’s currency through debt creation, which then gets monetized by the Fed. That debt then goes to fund military endeavors quickly, before the money has lost it’s buying power. In this way, we are funding war by lowering our purchasing power on a daily basis. At least the selling of war bonds is an up-front way of accounting for the costs of war. Funding it through inflation is more insidious, since nobody sees it happening. It makes killing seem “free.”

Think inflation isn’t driving war? Take these figures:

• The first gulf war cost about $61 billion.
• The Iraq war currently stands at $700 billion.
• Afghanistan is currently at around $200 billion.

I’d say that those numbers show some serious inflation happening. When your government can spend almost a trillion dollars on something and you don’t even notice it economically, you can bet that there are some major inflationary games going on. Just for perspective, by the time we conclude the Iraq and Afghanistan wars(if we ever do), we will have spent more on them than the entire balance of the Social Security Trust Fund(if there was one). That means that we spent more in 10 years than the balance of a program that has been accumulating money since F.D.R was president. That, my friends, is inflation. Also, known as death fuel.

This recent article that my buddy sent me describes the beginnings of the coming breakdown in college prices:

The clock is ticking for Alisha Hull. She’s been looking furiously for a job since she graduated from Ball State University in May with a degree in microbiology.

But with the economy sagging and no real prospects in sight, the honors graduate soon will have to make that first payment on her $55,000 in student loans — or ask her lenders for a delay.
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Hull, 23, is one of 1.4 million people who graduated from U.S. colleges in May. More than half of them are being dumped into a bad economy loaded down with debt — a total obligation estimated at $32.5 billion. It’s the largest debt ever recorded for a nation of college graduates, and some economists and student advocates say it could hamper not only the buying power of young families struggling to set up households but also an economy struggling to shake off a recession.

–Dana Hunsinger, Indy Star

College has become 13th grade. For many, many young people, it’s a way to get out from under the supervision of their parents without having to actually take responsibility for anything yet. And when you throw in fraternity nonsense it just makes it even more so. Either parents get stuck with the bill for this 5 year party or the college grad finances most of it and comes out absolutely loaded with debt. But, don’t expect to hear the straight truth about all this in the media or from the college establishment. They are going to continue to try and force-feed us the notion that college is worth it for everybody. It’s not:

Andrea Barner, 32, won’t be getting a mortgage any time soon. After being laid off in April as a supervisor of caregivers, she has fallen behind on her $500-a-month payments.

Barner, who is single with a 10-year-old daughter, said she lives with a friend and pays rent, but the looming debt issue hangs over her every day.

“I went to school trying to do the right thing — so I could get a good job,” she said. “Now I wonder about it all.”

–Dana Hunsinger, Indy Star

It’s time to get back to the old way of doing things. Apprenticing. I’ve got a better idea for those non-professionals seeking entry into the job market. Do not waste your money on college. Instead, go out and take that few thousand dollars you have and use it to finance a low-wage or even no-wage internship doing something that you are interested in. Do you like electronics? Go and offer to work at a local electronics or computer repair shop for 60 days for minimum wage or even for free just to learn the ropes. Think insurance is a good career? Get in touch with a successful local insurance agent and offer to work for free for a few months in exchange for being taught hands on by someone who’s good at it.

The bottom line is that I know so many people with college degrees who work in fields that are totally unrelated to their degree. If you are willing to work your butt off for someone in exchange for being taught, they will reward you. Unless you’re planning to be a professor, lawyer, doctor or accountant, college is NOT mandatory. All that’s mandatory is hard work and a good work ethic.