My thoughts on the future

I’ve been trying to put this together in my mind in the simplest way. Certainly it’s all more complicated but that’s what keeps it from coming to the forefront and getting the attention it deserves.

We have:

1) high unemployment (presented figures at around 10% but more accurate figures at over 16%. http://www.bls.gov/news.release/empsit.t12.htm when considering marginally attached and discouraged workers.)

2) Artificially induced low interest rates.

3) Devalued dollar.

4) Unprecedented national debt with the assurance of more as the new Administration’s spending goes unchecked.

5) Record foreclosures

6) Low tax revenue.

I’m not sure what comes first in the scenario going forward.

Start with debt. We have this enormous debt and an administration bent on more spending, which obviously only leads to further debt.

A stimulus package was voted through and money was directed to the financial industry both here and overseas, threatening that without it the financial system would collapse! Yet now many have been reporting record profits. My sense (granted it’s not always correct) tells me that if we were so close to financial collapse it should have taken a bit longer (sarcasm!!!) to turn things around and have these severely ailing companies get healthy again. Frankly, I don’t believe anything significantly constructive has been done to remedy issues in the financial industry and that there are issues bubbling below the surface just waiting to erupt.

Nevertheless, the financial, educational, and environmental investments really have had no impact on significant job creation or improved the financial situation of most Americans, just added to our debt.

All the ‘cash for clunkers’ program has done is run through existing inventory and add more to our debt, but realistically done nothing to warrant increased production or increased employment.

Now we are being warned health care reform must be passed to save the economy yet I’m some how not seeing this argument laid out in black and white. It’s being lost in all the other superfluous bickering and spin.

How many times will we listen to the boy crying wolf? “We must do this to save the economy.”

We are finding it hard to sell our debt (Treasury auctions) and being forced to buy it back, which clearly is a losing proposition.

To satisfy our unchecked government spending (Remember this Congress can’t even cut $100 million from their budget given 90 days to figure out how.) the Administration must raise taxes. Obviously as unemployment is so high fewer have jobs and thus the tax base has declined significantly. Outside of going after ‘those making more than $250,000/yr.”, the next choice is to tax businesses. This simply leads to higher cost of doing business, which leads to higher cost of goods sold, which is simply a ‘hidden’ tax on those making less than $250,000/year. Don’t have to be a genius to see where this heads.

Again, with high unemployment fewer customers are out buying higher cost goods so the net revenue of businesses falls and their tax contribution falls. Likely the businesses contract and/or look to locations outside America to produce, or opt to close. Even more concerning is the impact on new business ventures. Budding entrepreneurs trying to crunch the numbers are likely going to be put off or again look to other locations or simply invest their money out of the country.

The other option being pursued is taxing so called luxury goods like alcohol and cigarettes. Clearly this is another tax on those making less than $250,000/year but it’s going to happen anyway.

Our government is going to be forced to keep the dollar value low (inflation) to service our debt, which means further contraction of our consumer driven economy, which leads to further unemployment or at the very best slower reemployment, which leads to lower tax revenue, etc… Hyperinflation anyone?

The number of people, and institutions, to blame for this is myriad but play a huge role in deflecting attention to the problem continuing. Each consecutive administration can blame the last, and their policies, but the facts remain, they each are doing nothing to truly eliminate the problem. They all continue to grow government’s role in the market and outspend the revenue stream.

This is just a downward spiral. The government spin-doctors and ‘expert’ advisers can try to reinflate the bubble but that just prolongs the inevitable. With bureaucrats sticking their fingers in how the market works we are never, ever, going to get out of trouble. Each new group will have some new, and likely worse (but better sounding), plan to lead us out of collapse.

I see the option simply as forcing government out of the market. We are the ones who are going to lead America out of this death spiral and we’ll do it by writing our Congressman and Senators and letting them know our thoughts and wishes. If they don’t react we vote them out. This country does need “CHANGE” but not the kind that takes us down the road to socialism rather the kind that leads us back to strong Democracy, respect for individual freedoms with opportunity for all to succeed. - MBC