No one, including myself, enjoys reading bad news about the economy. But when we brace ourselves enough to take the bitter pill of the news of the day, it's important to keep up with events, who or what is causing them, and who has a good plan to save our country from economic ruin. I mean, the last thing you want to do is put your trust in the same people who caused this mess. Right?
Well, while the country argues with itself on how all of this mayhem happened and who is actually to blame, there are some important things to keep in mind. One is that our country is in serious debt trouble. That means we cannot afford to spend our way out of this mess and still expect to remain an economic superpower. For years we have borrowed huge sums of money while getting further and further into debt with the seeming intention of outgrowing the debt. While the ratio of national debt to GDP was low, it didn't seem to matter how large the debt was to the politicians who continued to spend wildly to keep constituents and donors happy. Much of the money to fund the government has been borrowed from other countries, like China for instance, by selling them bonds which they can cash in whenever they feel like flexing their muscles, or if/when they feel threatened by us. Though it is more likely that since China' s economy is so tied to ours, they would do that only if they felt our country slid past the point-of-no-return on our economic down-slide.
Second, unfortunately the slow growth of personal income for your average worker bee has not kept up with the growth of GDP or government spending, nor has it kept up with the rise of the national debt. And so our ability to collect enough money from tax revenue to pull ourselves out of debt in case of ...well...a depression,... has also been hampered. With so many businesses laying off workers and so few businesses claiming profits this past year or projecting them this coming year, we should not expect a rise in tax revenues. In fact, we should expect a sharp decrease.
Third, our nation pays interest on the national debt each year. We cannot avoid paying this by simply throwing it onto the already huge national debt pile we already owe. It must be paid each year in full. In recent years it has eaten a significant portion of our tax revenue--- about 17.5% at the end of 2007 when times were still good. Our government raised $2.5 trillion in tax revenue the same year, from which it paid $430 billion in interest on the national debt consisting of $9.3 trillion. Although I always thought Ross Perot was a bit "off" at times, he was right to sound the alarm back in 1992 about how the interest we were paying on the debt was money we could have spent on other things (or better yet not at all, but given back to us!). Now it looks to swallow us whole.
Today's national debt has grown to nearly $10.9 trillion, and is expected to go up to significantly higher levels with the new stimulus (porkulus) package and President Obama's new earmark-soaked budget plan. With those you can add about $4 trillion to the existing debt ($1.7 trillion this year alone!) along with an undisclosed amount too scary to contemplate to the annual interest payments. Expect the interest due each year to almost double in size. And with profits going down, more unemployment and decreasing incomes, tax revenues will go down sharply in 2009 with even some surprising shortfalls to come on April 15th of this year for 2008 income tax revenue. See the graphs and pie charts on the current state of the economy HERE.
If the trend continues with this current administration we will soon cross over to the point of no return. Long before the national debt interest payments become equal to or overtake the amount of tax revenue the government collects we will go belly-up. Can you picture all of our tax revenue going to pay debt interest with no money left to pay for services like highways, national defense, etc.??? The entire cost of services would go straight to the national debt, which would in turn increase the interest payments in the following year. It would be a never ending cycle. But long before that, either foreign countries like China will simply stop gambling on us and cease buying our bonds, (they might simply run out of money sooner than that, themselves), or they will pull the rug out from under us when they figure out where we are heading and cash in said bonds (like a run on the bank).
If we print more money (huge sums, like some have suggested) then inflation will skyrocket, and not simply like the Carter years, but much higher --more like with your average 3rd world nation or even worse. It will mean economic collapse much more devastating than the old Soviet Union. And let us not ignore the effect it would have on the rest of the world: there are no democracies beyond us capable of saving the world from oppression. We will no longer have the power to stop rogue nations from attacking their neighbors and perhaps swallowing whole continents. If the aggressor inspires enough fear, it could accomplish much of this without firing a shot...or much of one. Remember Hitler's Anschluss? He swallowed a lot of territory before anyone actually tried to stand in his way. Countries that could get away with it today under such circumstances are run by people who speak of slicing off heads and subjugating women, and who will soon be nuclear-capable.
But how could all of this happen in a country like ours? After all, our politicians are not stupid. They are not suicidal. They are all patriotic folks who love America and want it to succeed. Right? NO! They are lascivious fools who are blinded by ambition and starving for money and power.
We should simply be quiet and leave the driving to the experts. Right? NO! What we need to do is to take the power out of the hands of the people who ran the economic bus into the ditch and hire new people---smart people, honorable people, people who feel subject to a power higher than themselves! Not some punk with a messianic complex who doesn't know his you-know-what from a hole in the ground, or his sycophantic entourage of tax cheats.
Should this strategy be limited to politicians? NO! It includes power brokers who rely on our patronage of their businesses. It also includes media outlets who "powder the bottoms" of the wrong candidates while crucifying the good ones. It means boycotting movies that feature actors who otherwise make large sums of money and use them to cause mischief in Washington and elsewhere. IT MEANS GETTING INVOLVED AND MAKING CHANGES, not sitting back idly and voting only if you fall madly in love with the candidate. Even John McCain would have been better than this garbage...
In the meantime make your politicians aware of how you feel. Go online and get their phone and/or fax numbers. Google them! Or better yet, click HERE. They might have an office near you. Tell them to stop spending so foolishly. Notify sponsors of programs you find offensive that they can no longer count on your business. Call the networks and sponsors of those networks and tell them you don't appreciate slanted news that glorifies incompetent politicians while ignoring their crimes, ie., NBC, CBS, Barney Frank, Maxine Waters, Barack Obama, etc... Vote in primary elections and throw out bad Republicans like Arlen Specter. Get involved. The future of your country depends upon you.
Well, while the country argues with itself on how all of this mayhem happened and who is actually to blame, there are some important things to keep in mind. One is that our country is in serious debt trouble. That means we cannot afford to spend our way out of this mess and still expect to remain an economic superpower. For years we have borrowed huge sums of money while getting further and further into debt with the seeming intention of outgrowing the debt. While the ratio of national debt to GDP was low, it didn't seem to matter how large the debt was to the politicians who continued to spend wildly to keep constituents and donors happy. Much of the money to fund the government has been borrowed from other countries, like China for instance, by selling them bonds which they can cash in whenever they feel like flexing their muscles, or if/when they feel threatened by us. Though it is more likely that since China' s economy is so tied to ours, they would do that only if they felt our country slid past the point-of-no-return on our economic down-slide.
Second, unfortunately the slow growth of personal income for your average worker bee has not kept up with the growth of GDP or government spending, nor has it kept up with the rise of the national debt. And so our ability to collect enough money from tax revenue to pull ourselves out of debt in case of ...well...a depression,... has also been hampered. With so many businesses laying off workers and so few businesses claiming profits this past year or projecting them this coming year, we should not expect a rise in tax revenues. In fact, we should expect a sharp decrease.
Third, our nation pays interest on the national debt each year. We cannot avoid paying this by simply throwing it onto the already huge national debt pile we already owe. It must be paid each year in full. In recent years it has eaten a significant portion of our tax revenue--- about 17.5% at the end of 2007 when times were still good. Our government raised $2.5 trillion in tax revenue the same year, from which it paid $430 billion in interest on the national debt consisting of $9.3 trillion. Although I always thought Ross Perot was a bit "off" at times, he was right to sound the alarm back in 1992 about how the interest we were paying on the debt was money we could have spent on other things (or better yet not at all, but given back to us!). Now it looks to swallow us whole.
Today's national debt has grown to nearly $10.9 trillion, and is expected to go up to significantly higher levels with the new stimulus (porkulus) package and President Obama's new earmark-soaked budget plan. With those you can add about $4 trillion to the existing debt ($1.7 trillion this year alone!) along with an undisclosed amount too scary to contemplate to the annual interest payments. Expect the interest due each year to almost double in size. And with profits going down, more unemployment and decreasing incomes, tax revenues will go down sharply in 2009 with even some surprising shortfalls to come on April 15th of this year for 2008 income tax revenue. See the graphs and pie charts on the current state of the economy HERE.
If the trend continues with this current administration we will soon cross over to the point of no return. Long before the national debt interest payments become equal to or overtake the amount of tax revenue the government collects we will go belly-up. Can you picture all of our tax revenue going to pay debt interest with no money left to pay for services like highways, national defense, etc.??? The entire cost of services would go straight to the national debt, which would in turn increase the interest payments in the following year. It would be a never ending cycle. But long before that, either foreign countries like China will simply stop gambling on us and cease buying our bonds, (they might simply run out of money sooner than that, themselves), or they will pull the rug out from under us when they figure out where we are heading and cash in said bonds (like a run on the bank).
If we print more money (huge sums, like some have suggested) then inflation will skyrocket, and not simply like the Carter years, but much higher --more like with your average 3rd world nation or even worse. It will mean economic collapse much more devastating than the old Soviet Union. And let us not ignore the effect it would have on the rest of the world: there are no democracies beyond us capable of saving the world from oppression. We will no longer have the power to stop rogue nations from attacking their neighbors and perhaps swallowing whole continents. If the aggressor inspires enough fear, it could accomplish much of this without firing a shot...or much of one. Remember Hitler's Anschluss? He swallowed a lot of territory before anyone actually tried to stand in his way. Countries that could get away with it today under such circumstances are run by people who speak of slicing off heads and subjugating women, and who will soon be nuclear-capable.
But how could all of this happen in a country like ours? After all, our politicians are not stupid. They are not suicidal. They are all patriotic folks who love America and want it to succeed. Right? NO! They are lascivious fools who are blinded by ambition and starving for money and power.
We should simply be quiet and leave the driving to the experts. Right? NO! What we need to do is to take the power out of the hands of the people who ran the economic bus into the ditch and hire new people---smart people, honorable people, people who feel subject to a power higher than themselves! Not some punk with a messianic complex who doesn't know his you-know-what from a hole in the ground, or his sycophantic entourage of tax cheats.
Should this strategy be limited to politicians? NO! It includes power brokers who rely on our patronage of their businesses. It also includes media outlets who "powder the bottoms" of the wrong candidates while crucifying the good ones. It means boycotting movies that feature actors who otherwise make large sums of money and use them to cause mischief in Washington and elsewhere. IT MEANS GETTING INVOLVED AND MAKING CHANGES, not sitting back idly and voting only if you fall madly in love with the candidate. Even John McCain would have been better than this garbage...
In the meantime make your politicians aware of how you feel. Go online and get their phone and/or fax numbers. Google them! Or better yet, click HERE. They might have an office near you. Tell them to stop spending so foolishly. Notify sponsors of programs you find offensive that they can no longer count on your business. Call the networks and sponsors of those networks and tell them you don't appreciate slanted news that glorifies incompetent politicians while ignoring their crimes, ie., NBC, CBS, Barney Frank, Maxine Waters, Barack Obama, etc... Vote in primary elections and throw out bad Republicans like Arlen Specter. Get involved. The future of your country depends upon you.
Outstanding, inspirational and well-supported rant, Matt! As for your soon-to-be retained two cents, didn't BO promise you "change?"
ReplyDeleteAs for contacting my federal representatives, I happen to be represented by Senator "Eddie Haskell" Durbin and Senator "Oh, you meant how many times I actually talked to Blago's brother?" Burris, and Rep. Luis ("We're not spending enough") Gutierrez. Think I'll spend a nickle or a minute contacting them?
Your other suggestions ring true, though. What else can the little guy do? (I might suggest telling the next phone solicitor from the RNC that you'll be glad to make a contribution if he/she guarantees that not a penny of it will go to Specter or the two GOP Senators from Maine. Otherwise, send your "widow's mite" to the Club For Growth.)
Keep laying it on, good buddy.
Excellent post.
ReplyDeleteI'll have to let Schumer know how I feel. But he said that we don't care. What a disgrace.
I love rants like this. Bravo!
ReplyDelete