President Bush proudly signed off on a $170 billion stimulus package last week. Congress willingly approved. The two peacefully joined hands for the first time since they surmised to free Mesopotamia.This time, however, they focused their do-gooder righteousness on the struggling American consumer. In a last-ditch effort to avoid the big “R,” Washington procured no less than $300 ($600 in most cases) for every man, woman or child who earns a paycheck or receives Social Security.Mr. Market smiled. The cadence of the buy-now-pay-later American generation lives to see another day.

Morality aside, dear reader, you must forgive us for spoiling the fun. But from where exactly does this $170 billion magically come?

The last time we checked, Congress doesn’t produce widgets for Chinese consumption. It doesn’t sell government land. Nor does it rent its legislative acumen to some chaotic third-world country. It’s up to its ears in debt. The latest budget promises only to borrow much more. So where exactly did Congress find $170 billion?

We assume the deal went something like this…

The U.S. Congress turned to the U.S. Treasury. The U.S. Treasury turned to foreign buyers (China). Foreign buyers should (and will) require a higher rate of return for holding a depreciating fiat currency. But they shrugged. They knew that money would make its way back to China through a Wal-Mart near you. So they acquiesced. They lent Hank more money. Meanwhile, the juice keeps running.

Unfortunately, before long, Washington will receive a bill. It’s postmarked “Beijing.” Government opens the little white envelope to find it owes the Chinese $170 billion big ones, plus interest. It sighs…

So once again, Congress will turn to the U.S. Treasury. The Treasury balks. Chinese loans aren’t an option.

Hmm… It scratches its head.

Then, like a child playing one parent against the other, Congress runs down the street and knocks on the other benevolent banker’s door.

But “Helicopter Ben” squirms.

Lower rates inject more money, he muses, but there’s only one way that money will make it to Washington’s bank account.

The endgame: Congress must tax.

At first, Washington turns to tariffs. “Tax the foreigners,” it shouts. “Secure our borders! They’re the ones who stole your jobs… They’re the reason we’re in this whole mess!”

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The rest here (I hope this link works tomorrow): http://www.pennysleuth.com/TodaysSleuth.html