China is the largest foreign holder of U.S. government bonds. But,
instead of buying more of those bonds as our skyrocketing national
debt leads to more bonds being issued, China has been selling some of
its U.S. government bonds this year.

The Chinese are no fools. They know that all this unbridled spending--
even when it is called "investment"-- means that inflation is coming.
That in turn means that the dollars with which U.S. government bonds
will be paid off will be worth a lot less than the dollars with which
the bonds were bought.

Governments around the world have played this game for centuries,
robbing those who trusted them enough to buy their bonds. Like Bernard
Madoff, they call it "investment."

Inflation also means that all the talk about how higher taxes will be
confined to "the rich" is nonsense. Inflation is a hidden tax that
takes away the value of money held by everyone at every income level.

Abraham Lincoln once asked an audience how many legs a dog has if you
count the tail as a leg. When they answered "five," Lincoln told them
that the answer was four. The fact that you called the tail a leg did
not make it a leg.

It is too bad that Lincoln is not still around today. He might
emancipate us all from our enslavement to words.

When you call something a "stimulus" package, that does not mean that
it actually stimulates. The way individuals, banks and businesses in
general are hanging onto their money suggests that "sedative" package
might be more accurate.

This is not a new phenomenon, peculiar to this administration.
President Bush's "stimulus" package did not stimulate either. The same
was true back in the days of Franklin D. Roosevelt's "pump-priming" by
spending government money to get private money flowing.

The circulation of money slowed down back then the way it has slowed
down today.

Some of our biggest political fallacies come from accepting words as
evidence of realities. "Rent control" laws do not control rent and
"gun control" laws do not control guns.

The big cities with the tightest rent control laws in the nation are
New York and San Francisco. The nation's highest rents are in New York
and the second-highest are in San Francisco.

There is a very straightforward explanation for that. Strong rent
control laws can bring residential building to a screeching halt. Once
politicians have milked the political advantages of passing rent
control laws, they have to avoid a backlash if all building of
apartments stops.

That leads to an escape hatch in the rent control law. Luxury
apartments with rents above a certain level are exempted. That leads
to the shifting of resources away from building affordable housing to
building housing that is unaffordable.

It is even more painfully obvious that "gun control" laws do not
control guns. The District of Columbia's very strong laws against gun
ownership have done nothing to stop the high murder rate in
Washington.

New York had very strong gun control laws decades before London did.
But the murder rate in New York has been some multiple of that in
London for more than two centuries, regardless of which city had the
stronger gun control laws at a given time.

Back in 1954, when there were no restrictions on owning shotguns in
England and there were far more owners of pistols then than there were
decades later, there were only 12 cases of armed robbery in London.

By the 1990s, after stringent gun controls laws were imposed, there
were well over a thousand armed robberies a year in London. In the
late 1990s, after an almost total ban on handguns in England, gun
crimes went up another ten percent.

The reason-- too obvious to be accepted by the intelligentsia -- is
that law-abiding people became more defenseless against criminals who
ignored the law and kept their guns.

The same thing applies internationally. We might keep that in mind as
the Obama administration pursues the will o' the wisp of banning
nuclear weapons. If that Utopian dream ever came true, those nations
naive enough to get rid of their nuclear weapons would be at the mercy
of those rogue states who kept theirs.

http://www.tsowell.com
http://townhall.com/Columnists/ThomasSowell/