The only way to solve America's debt problem is to stop spending and pay it off.
The World Net Daily headline stated "China warns Obama deficit spending must stop." It was a strange phenomenon considering that it came in mid-December rather than earlier during Obama's trip to China. It was also strange in the sense that China, whom many consider our enemy is actually giving us good advice, although one must admit that the results of ending the immense deficits would benefit both China and the USA. But at the core of the Chinese statement was one key fact; in their opinion the world does not have enough money to continue buying unlimited amounts of US Debt. This opinion is supported by the declining health of the US economy and its reduced imports, which have effectively reduced China's cash reserves available to loan back. The Chinese are not fools, and can see the writing on the wall. American productivity cannot now support continued deficits, and the current government will reduce that ability even further. Thus the situation is untenable.
Meanwhile, Vasko Kohlmayer in "Fiddling While Treasury Burns" calls the legislature "spending junkies" while they propose increasing the debt ceiling because "we have to pay our bills" in the words of House Majority Leader Steny Hoyer. As Kohlmayer correctly points out, Hoyer is lying. He has no intention of paying the bills. Instead, he advocates borrowing in order pay the interest, while borrowing still more to increased spending. It is a cycle I've seen before.
Years ago when I lived in California my office had a significant consumer bankruptcy practice. Along the way I did a lot of client counseling and learned a significant amount about how people got themselves into financial problems. Generally it started with spending well beyond their means in order to impress others. Then things started to go wrong and they weren't able to make the monthly payments. They started borrowing from other people, or transferring balances between credit cards, and eventually had no recourse other than to call it quits and start over again. The United States of America is heading down the same path.
Meanwhile, despite government claims to the contrary the economy continues to fail and tax revenues decline with it. This makes the situation worse, and the only medicine Washington is willing to prescribe is more taxes and more government spending. It seems that they are intent on killing, rather than healing the patient. In fact, rather like the bankruptcy client who is unable to figure out how to stop spending until it is too late, the legislature is caught in its own trap. And unlike the debtor in a bankruptcy, it doesn't personally owe the money, and its members are likely to figure that they will somehow personally survive the effects of the inevitable crash.
The current problem has essentially two root causes. They are 1) a failure to follow constitutional limitations, and 2) the desire to use government spending for personal political purposes. It was not the intent of the founders of this nation that the national government stick its fingers into every aspect of the nation's affairs. It was to involve itself only where necessary, which was the reason for the enumerated powers found in Article I, Section 8. Unfortunately, over the years these enumerated powers have been interpreted so loosely as to allow essentially everything. When Mary Landrieu says that we will let the constitutional lawyers figure out what justification there is for a nationalized health system she wasn't speaking only from ignorance of the document; it is likely that some legal scholar somewhere has said that it is the duty of the government to enact such a system. After all, back in 1993 a so-called scholar from Yale opined to an audience (myself included) at the University of San Francisco Law School that it was the intent in 1789 to establish a "socialist welfare state." Excuses can be found for pretty much anything if you look hard enough or are blind enough.
As for the second root cause, it has been true for many years that many legislative seats are bought and paid for by spending government appropriations for pork back home. "Elect me and I'll spend money in your district/state!" has been the motto and it has been an easy one to keep sounding. It costs the average legislator essentially nothing, and they can easily claim responsibility for any jobs and local prosperity that might result. Then, there are entitlements which quickly become sacrosanct and untouchable, and which rapidly expand well beyond the limited budgets and purposes for which they were intended. Finally, in government, the importance of a program is frequently measured by the amount of money it consumes, and the more money a legislator is responsible for, the more power he or she has. Thus, there is always a reason to spend more, and rarely one to spend less, until the inevitable day when one has to pay the piper. Our representatives have been putting it off for decades, while pretending all was well. When former Comptroller General David Walker sounded a dire warning not so long ago, almost no one paid attention. Certainly no one in government did. I was one of those lucky ones who heard him interviewed by Glenn Beck.
Now we hear Barack Obama saying that we are out of money while he proposes even more spending, asserting that if we spend more it will save us money. The truth is what Rush Limbaugh has been saying quite frequently of late; that the left lives in a universe of lies. They will continue to spend, any way they can. The result to the nation is of no consequence as long as they get another term in office.
Some decades ago a reporter asked Jesse Jackson how we could afford to pay for all the social spending he was proposing. Jackson responded that we couldn't afford not to. This is the type of mentality that we are facing now. No one wants to stop the madness. The only solution is to cut spending and to do so will mean cutting government back to what it was intended to be. This is my pet peeve with Newt Gingrich when he was Speaker of the House. He had effectively shut down government by refusing to enact a deficit budget. Then he caved at the moment when he could have achieved victory. If he had persisted, and the world had not ended, the emperor's new clothes would have been exposed for a fraud. We could have been saved a lot of the agony that is now inevitable. But Newt is a Washington insider. He will do things "the company way" just to get along. It won't solve any problems.
The fact is that the government needs to stop spending now. The only effective way to do so is to slam on the brakes and let the economy recover on its own. It always has when the government gets out of the way and it will again if given the chance. Right now we are stuck with the failed programs of yesterday, enacted by people who claimed that they would do something new and revolutionary. All they did was kick the can down the road for someone else to take care of.
If we are lucky, there will be enough people willing and able to take such action before it is too late. Or maybe the Chinese will rescue us by refusing to lend or refinance any more debt. There is nothing like the cold hard slap of reality to change one's mind.
COngress will continue down this 'road to ruin' in 2010 as all they know how to do is spend money. Here are some 'predictions' for 2010
1. Health Care legislation will not survive a Constitutional challenge in SCOTUS in late 2010. Progressives will blame the decision on ‘judicial overreach’; a concept formerly near and dear to their hearts.
2. Credit will remain tight, forcing many small businesses to declare bankruptcy in 2010. Forcing the US government to downgrade tax receipts by 20%
3. The ‘second shoe’ of commercial real estate foreclosures will hit the economy in the first and second quarters, further battering an already weak mortgage market
4. Hyper-inflation will begin to rear its head as the FED will be unsuccessful in unwinding the enormous amount of liquidity pumped into the country during 2009.
5. The FDIC seized 140 banks in 2009. Expect this number to rise above 350 next year.
6. While cap & Trade will not pass the senate; the ability of the EPA to regulate greenhouse gasses will provide the second of the ‘one two’ punch in the stomach of small business, the first being the increased employee costs decreed by health care reform. Expect hiring to slow dramatically in 2010 and the use of contract employment services to skyrocket.
7. These two described effects will further depress the employment outlook, with unemployment continuing to remain at or above 10 %. The administration’s only reprieve will be just as many people dropping off the rolls in disappointment as are added. The disingenuous manner in which they calculate such things will hide the true unemployment rate which will continue to hover at 17%
8. Iran will test a nuclear weapon. The administration will want to initiate a ‘summit’ to inquire as to what to do about it.
9. The Democrats will lose 6 seats in the Senate and 35 seats in the House in 2010 as a result of ignoring constituents’ input all during 2009.
10. The Obama administration will continue to blame its ineptitude in all policy areas on the previous administration.
Do what we've done; refuse to participate in this madness. Have a Happy 2010!
This is one of those increasingly common "prophet returned from the desert" wailings of impending doom unless we all repent and repent soon. In fact, articles of this genre are so common in today's conservative literature the desert must be jam packed with wandering prophets, bumping into each other, crowding the areas set aside for Porta-Johns, littering at will.
And the same, familiar bill of indictment followed by the now standard remedy, vague, almost wistful in nature – in this author's words: "there will be enough people willing and able to take such action before it is too late" . Which people? Exactly what action? How many is enough? He doesn't say. But the author did make one penetrating accusation describing the nature of modern democracies, "the desire to use govt. spending for political purposes". Depressingly obvious revelation to most conservatives but, up to now, a political reality impossible to change or to channel within a productive direction.
As to the rest of the author's prophecy, China isn't about to supplant America, nor do they wish to. They have more citizens without indoor plumbing or a reliable, fresh water supply to their homes than we have citizens living within these United States – and that's a lot of folks. This was precisely the point China's representatives to Copenhagen offered in response to requests they curtail their heavy industry to avoid Global Warming. India's representative was nodding vigorously in agreement with these sentiments while loading his plate with free shrimp provided by his Western hosts. China and India are proud modern nations now, off the world's welfare rolls and not for one minute about to curtail helping ALL their citizens obtain the good life due simply to "save the planet" pleadings from the West. However, indoor plumbing isn't a problem for us, we have it and our problems stem from too much wealth rather than too little, an undeserved collective legacy our ancestors left their spoiled children.
This author wrapped himself in the Constitution but he should have speculated out loud whether our present form of constitutional government is really effective within a modern nation state battling for economic dominance among more populous enemies. (Note to the FBI: This remark isn't a call to armed rebellion in any respect, just an intellectual exercise, go back to investigating why terrorist slackers visiting Detroit failed to detonate those bombs they shouldn't have had in the first place.) Let's put aside the sacred Constitution for a moment, primarily because we have a "Living Constitution" now (yes we do, and holding your breath until you turn blue won't alter that fact) which means it's completely irrelevant what the Founding Fathers thought about governance in colonial times.
The government is confiscating ever larger portions of our national wealth and spending it for political purposes – but, more importantly, on things that have no economic value to our collective culture. How has our democratic, republican political system functioned to prevent squandering our national wealth on poor investments – it hasn't, it has failed, it's become the problem, not the solution. Should we cling rigidly to our present form of government hoping that by doing the same things over and over, future reality will somehow change? Maybe we should, maybe we are no longer the daring innovators our ancestors were and tinkering with our form of government in hopes of improvement could prove well beyond our collective abilities.
But we're also a people who habitually generate hope for our nation's future, all isn't lost by any means, we'll throw those political bums out come next election, then things will change, we'll return to self-reliance, we'll return to those virtues that once made this nation an economic giant. We will? Really? No, we won't, things won't change, our government's actions will remain as formal and rigid as a Medieval dance. But what if our collective survival depended on changing our form of government, what are we prepared to do?
Pat
You almost seem to revile the author’s quote of; "…there will be enough people willing and able to take such action before it is too late". But I find it to be a salient question. De Tocqueville himself questioned what would become of the Republic once a majority discovered it could vote itself largesse from the Treasury.
The US Senate, in a pre-dawn Christmas Eve vote, just passed their version of Health Care legislation; a budget busting bill by anyone’s measure. They also raised the debt ceiling by $290 billion; and that was only meant to get the government through the next six weeks!
I distinctly remember progressives publicly castigating Dick Chaney when he made comments to the effect that “…deficits don’t matter.” I also recall campaign rhetoric in 2008 excoriating Republicans (as well they should, I thought) for running up a $500 billion deficit. What is that deficit now?
You ask; “But what if our collective survival depended on changing our form of government, what are we prepared to do?” I cannot answer for you, but I know what I intend to do about it.
I refuse to be content with screaming and throwing stuff at the TV any longer. After the recent T.E.A. Party, we asked; “What now?” My personal choice was to run for county office. Here in Arkansas, we just had a County Clerk take $175,000 and pass it out to County Employees as Christmas Bonuses because the money didn’t get spent on software upgrades as it was originally allotted. All this; while wailing over how to close a projected $300k shortfall in the 2010 budget projections.
The current situation at all levels of government exists because; while we’re all willing to blog on some web site about what’s wrong, none of us is willing to take the time to hold our representatives accountable. Scrutinizing the candidates’ records and qualifications in preparation for the vote is not the end of the process, but the beginning. If you’re not attending the County Board-of-Supervisor’s meetings, criticizing wasteful programs, and holding their feet to the fire on issues important to you, how can you possibly expect them to change? If you cannot make the meetings because your life is so full, then request FOIA copies of the minutes of those meetings. Start commenting locally, in the papers, on local web blogs, and on local radio stations, about what you see as wrong and why. People believe they cannot make a difference: And that is exactly what the average activist WANTS you to believe. He already knows that if he keeps writing, blogging, and commenting long enough and loud enough he can get HIS way. The last thing he wants you to do is discover the secret.
A long time ago my Brother-in-Law told me an interesting story. He’s a UAW member and he gave me a glimpse into how his local was run. He said that even though there were several hundred members in his local, only about 5% ever bothered to make the meetings. As a result; maybe 40 or 50 people ended up creating the work rules for hundreds of members. The secret is that participants are the ones that garner attention.
“The squeaky wheel gets the grease” may be cliché, but it is correct. Take a page out of the oppositions’ playbook and become vocal.
I'm not as astute as the previous posters, I admit that from the beginning. But, nonetheless, I believe we still have serious problems that are not being addressed adequately. To wit…
First, Healthcare is NOT the most important issue we are facing. Important? Yes. Should it be compulsory? No. Why? Because it amounts to a tax on simply being alive. That is against the Constitutional limits placed upon Government. Besides, why are we creating a whole new healtcare program when Congress has what amounts to one of the best there is. Give us that program. It already exists, just needs to be expanded to handle the citizens who are paying for it anyway. Further, Congress could have been more productive with their time had they done this. Which leads to…
Second, jobs should have been the primary issue this past year. Jobs should have been at the top of every politician's agenda. The stimulus package at the beginning of the year did not create jobs, it bolstered an industry that should have been allowed to sink or swim – the market should have determined who survives and who fails. Look, a business survives by being smart savvy and capable of understanding what products or services are in demand. Businesses need people to run them. The strength of any nation is in its manufacturing base. The US manufacturing base has eroded so much that this nation risks sinking into the miry clay of despotism and, gasp, second world status. And we are all the weaker for sending those manufacturing jobs overseas.
Third, government should stop asking the citizens of this nation to conserve, save, and be more responsive, and also foot the bill — all while encouraging businesses to make sure the American public buys products they don't need, can't afford and shouldn't buy. Hmmm… The problem here is that our government needs to look within, find the bloated bureaucracy and over employment and, yet another gasp, cut jobs. Corporations are cutting back and requiring fewer employees do more work, shoulder more responsibility. But our government has actually GROWN over this past year. What a great example for the American people: they lose jobs while government rolls grow! Yeah, that will win friends and influence people.
If you want someone to be an example, you should set the example first, not be hypocritical in your demands that others need to do what you will not even consider.
If this nation is doomed, it isn't because the Founding Fathers couldn't foresee what we're doing. Quite the contrary. They understood that bloated government is a danger to the liberties and freedom of a democratic system. We are doomed because we have become self satisfied and of a mind that we are above reproach, and, yeah, too big to fail.
You know the old saying: the bigger they are, the harder they fall.