Is this the end of politics?
I’m reading the latest investment report from Troy Asset Management. It takes a brief look at the idea that a deflationary shock might come from the arrival of the US fiscal cliff at the end of 2012 (the fiscal cliff refers to the moment when the terms of the Budget Control Act of 2011 come into effect and taxes rise as spending cuts start).
The conclusion? “If the past is any guide to the future, politicians will look into the abyss and raise the federal debt ceiling, as they always have since 1917.” That makes sense – particularly if, like me, you’ve just been reading Douglas Carswell’s latest book, The End of Politics.
As he points out, most governments across the world never get smaller. Helped by a mostly co-operative international bond market, regular currency debasements and unequal taxation systems (that load the bill in such a way that the hardest hit groups are too small to protest), they only get bigger.
The biggest bill you’ll ever pay is not the one for your house, for your children’s university education, or for your lifetime’s worth of holidays and cars. Instead, it will be the one you pay for your government.
• Read the full editor’s letter here: Is this the end of politics?