Grassroots Commentary
Is the Inertia Greater Than the Momentum?
The causes of our problems are not hard to see. Americans aren't obese because evil restauranteurs are forcing them to eat fried butter on a stick. We are bulging at the seams because we eat too much and exercise too little. Americans aren't trapped in upside down mortgages because evil bankers waylaid us and forced us to sign up for a house that was too big and cost too much. We're living in homes we can't afford because we wanted them and thought we deserved them even though we didn't have an income that could support them. Americans aren't buried in personal debt because credit card companies mailed us credit cards. We carry an average of $14,517 household debt because we wanted what we wanted when we wanted it and couldn't wait until we could pay for it. And America isn't drowning in national debt because we did anything more difficult to understand than electing people who bought our votes with entitlements we didn't need and couldn't afford.
The problem isn't that we don't know the answers. Instead it's that we don't want to face up to the fact that the free ride has to stop if we're going to get off before we land in Athens. America's economy is beginning to resemble one of those increasingly ridiculous action movies where the hero gets blown up, shot, stabbed, and hit with a brick only to jump up ready to roll. Every time a bubble bursts instead of allowing the economy to bottom out and correct itself the Government spends as it borrows from foreign countries and the Fed creates money out of thin air to pay for it. It's time our leaders learn we have learned that blowing up a bubble to take the place of the last burst bubble is not building an economy.
As boom and bust turned into boom to boom to boom we have inevitably made our way to KABOOM!!!
The coming crash in this double dip dilemma is going to be a double whammy. We are currently blowing up a new financial bubble providing Fed funds at near zero % that the banks then loan out at 3-4% pumping more and more money into the system. And in a reprise of the 2000 dot.com crash the social media bubble is once again giving us billion dollar companies that aren't making any money for anyone except the gamblers in the stock market casino.
The Federal Government keeps inflating bubbles to avoid the real crash so they can continue to buy votes with entitlements and pay for them with funny money. This postpones paying the piper, but it increase the bill when it finally comes.
Today the government Leviathan is devouring America's income. In 2012 it's estimated that the central government will consume 24% of GDP kicking back 4% to the States and localities, the States will swallow 10% of GDP, and the local entities will inhale 11%. Subtracting the 4% Federal to State shell game and the governance of America is today costing us 40% of America's production. On top of that the regulatory burden grows heavier every day until everyone everywhere is in violation of something. And we wonder why industry isn't expanding? When you eat your seed corn and make impossible to follow guidelines for planting you can't expect a bumper crop.
With money pouring out of a 5" hose how can anyone take the politicians promises to cut the deficit and reduce the debt seriously? The most draconian plans suggested so far, such as Representative Ryan's doesn't balance until 2040 and that is only if future politicians decide to play nice and not buy votes with free goodies which is about as likely as a dog with fleas not scratching.
That's the problem: a dysfunctional government made up of kleptomaniacs writing phony checks on the future and a population addicted to easy money and unfunded entitlements.
What's the solution? We as a people must kick the entitlement habit. Like any addiction our national addiction to freebees has debilitated us. It has made us dependent on the outside stimulus. Where once families and churches took care of the needy we have been taught for generations that Uncle Sugar will do it, so we have let Uncle Sugar do it. How has that worked out? Ever since the government bureaucrats have stepped between the givers and the receivers welfare hasn't been well and it isn't fair. Many of us know people who need help who are denied and people who should be helping themselves who are riding in their Cadillacs to spend their food stamps.
After more than 15 trillion dollars and four decades of a war on poverty the percentage of Americans below the poverty line is higher than it was when we started. There are more people on food stamps, more on disability and more that have just dropped out of the work force than ever before, and the only answer Washington seems to have is we haven't spent enough yet. That's like telling the heroin addict who almost died last night of an overdose that the problem was he didn't shoot up enough junk.
How do we stop spending? How do we balance the budget? This is like the question the backslider always asks, "How do I get back to God?" The answer to the backslider is, "You get back to God." The answer for the nation is, "we stop spending more than we bring in." The politicians have a way to make that solution work: raise taxes until income matches outgo. This brings up another problem: we can't eat the goose that lays the golden egg and expect to collect more eggs tomorrow. In any country that robs Peter to pay Paul eventually everyone changes their name to Paul. Case in point, we now have more people qualifying for disability each month than people finding jobs.
Yes, this is a call for austerity. Yes, this will cause major dislocations. Yes, when drug addicts quit taking the poison their bodies have come to crave they get sick. In time drug addicts recover and once again becomes normal people able to stand on their own without the chemical prop of a debilitating drug. In time if we as a nation will kick the habit of cheap money and government handouts we will once again learn to stand on our own two feet, hold our head up high, and proudly say, "This is America the land of the free and the home of the brave."
If we will do this the last half of the twentieth century will be but a prelude to the American Century. If we don't, the sun will set on the American dream as we devour ourselves in an orgy of hedonism and self-gratification.
The election is coming fast. Survey your choices and find people who have the courage to lead us in a return to fiscal responsibility before we face the coming collapse of the world we have known. For if we cast our bread upon the water it will return to us after many days, but if we sow the wind we will reap the whirlwind.
Dr. Owens teaches History, Political Science, and Religion for Southside Virginia Community College. He is the Historian of the Future @ http://drrobertowens.com © 2012 Robert R. Owens drrobertowens@hotmail.com Follow Dr. Robert Owens on Facebook or Twitter @ Drrobertowens
5 Comments
Adrien Nash in Crescent City, CA
Sunday, August 5, 2012 at 5:07 AM
Ouch! Watch where you're shining that light, -you just might laser those who are in need of it. It's better to compare the excess spending to excess eating, rather than to ingesting drugs. Eating, like maintaining a government, isn't something we can stop doing (unlike quitting drug use) but neither government nor the dependent public know how to not be dissatisfied with consuming less, i.e., to go on a diet and stick to it. That creates privation and no one wants to suffer privation, hence the lack of any willpower to curtail the excess that has become the norm, -the expected, -the "needed".
Just as drug addicts need to "hit bottom" before they will see the light, and the error of their behavior, so it probably is true of nations also, as seems to be the case with Greece and France, and other European nations. They haven't hit bottom yet and are still quite spoiled by their profligate ways of spending and compensating workers. We fail to recognize ourselves in their example. The point that could have been emphasized more is that everyone that speaks of reviving the economy fails to acknowledge the fact that what they are really talking about it resurrecting another bubble economy inflated by excess borrowing by the public (to buy things they can't afford) and by government, -which is robbing Peter to pay Paul, but the Peter that is being robbed is the taxpayers of the future, not the present. No one wants to raise taxes on them. Hence there is no way out of the tunnel that we've dug for ourselves. We want entitlements that we can't afford and aren't willing to pay for, while the trends are all in the wrong direction, -age-wise, job-creation-wise, outsourcing-wise, and regulation-wise, and Congress is divided and more likely than not to heap evermore regulations onto the backs of businesses, while robbing citizens of their constitutional rights (individual mandate). Welcome to the new normal, where excess borrowing and spending are a thing of the past for everyone not wearing blinders. The Las Vegas-ing of the United States doesn't have the future it once had, and what little opportunities there are to exploit our natural resources are commonly squelched, without any regard for the fact that they were what made the preeminence of American possible.
Howard Last in Wyoming
Sunday, August 5, 2012 at 11:16 PM
How do you say, "Weimar Republic"? My brother one day (this had to be around 1953) was in the basement looking at my father's things he picked up during his all expense paid tour of Europe during 1944 and 45, his tour director was a G.Patton. Mike came running upstairs all excited because he had found over $1 million dollars of Germany money. When my father got home from work Mike ran to him saying we are rich. My father immediately knew what was going on and said, "you needed a wheel barrel of money to buy a loaf a bread". Anyone want to invest in a company making wheel barrels?
Holmes Simons in Tampa
Monday, August 6, 2012 at 2:40 PM
Dr. Owens, for once I have to disagree with you. The abusive government spending resulted from the election of meglomaniacal criminals and pseudo-intellectuals who believe they can manipulate the behavior of 315 Million people. The current crop of elected dishonorables bares this truth. Like their predecessors, they operate outside the constitution and the laws by which they demand other citizens to adhere. The average citizen can only accept blame for being so naive as to believe the lies told by political confidence men that result in their election to office. America as a Republic is about to become a fatality, if it has not already. As CJ Roberts uneloquently placed blame on the voter while giving his cronies the power to tax citizens for any type of activity, an entire system of government and freedom for millions will be undermined precisely because the voter has no recourse for accountability after the fact.
enemaofthestatistquo in GA
Monday, August 6, 2012 at 9:56 PM
Our Congress, POTUS, et.al. speak of re-building our infrastructure, what they really mean is they will invest in quadrillions of orange plastic cones to be placed on roadways nationwide every election year, to demonstrate your tax dollars at work.
enemaofthestatistquo in GA
Tuesday, August 7, 2012 at 7:37 PM
But MAC- We may not need roads, bridges, & other infrastructure in Obulitthats Brave New World. But the USDept. of Transportation, State Depts. of Transportation, & city, county Depts of Transportation, etc. will still exist because a government agency is forever, so they wiil molecularly transport the orange cones onto the extant roadbeds in front of every voters home, to show your tax dollars at work. Invest in the only private sector growth industry of the future- manufacturers of orange plastic cones.