Posted on 03/01/2010 6:39:45 AM PST by shortstop
The other week, while you were watching “American Idol,” Greece went bankrupt.
Not all the way, but pretty close.
And people have been rioting in the streets.
See, the government had been financing things for years on end with debt. The government was taxing and spending, of course, but it was also borrowing. A lot. A staggering amount.
So much that the people who do the lending decided they’d had enough. Which left Greece insolvent. Which brought the economy to collapse.
Which created a crisis for the European Union and for its currency, the Euro.
Which made the world jittery.
Which endangered you.
But Germany and France bailed the Greeks out, so now you don’t have to worry anymore.
Except, of course, for the fact that the United States is in the same position. America is only a half a step behind Greece.
Our politicians are as stupid as theirs, our policies are as unsustainable as theirs, our peril is as great as theirs.
The simple fact is that the American economy can collapse at any moment, because of the suffocating load of federal-government debt. That is not a political opinion, it is not a talking point, it is not the ranting of an alarmist. It is a simple economic truth. We are living beyond our means and money does not grow on trees. The simple truths that govern family budgets apply as well to the affairs of nations.America is bankrupt.
And the only thing that keeps our entire economy from disintegrating is the fact that there are still people and nations who will loan us money. But as they increasingly realize that there is no honest way we can pay them back, their willingness to give us their money will evaporate.
And then we will riot in the streets.
Because our money will become valueless, the government trough will be empty, our jobs and savings will be lost, and we will go hungry.
In the end, nobody is too big to fail.
Not even us. Not even the United States.
And the current policies of the United States government, building on some 70 years of fiscal foolishness, destine the nation for failure.
Let me repeat: We are destined for failure.
It is not a question of if, it is a question of when.
Unless a dramatic and painful sea change is made, our financial doom is certain.
Here’s why.
Our annual budget deficit for the foreseeable future is in excess of a trillion dollars. More than a trillion dollars of new borrowing every year.
On top of the other trillions we’ve already borrowed.
That poses two immediate threats.The first is that our creditors will recognize that we are a bad risk – that we are sub prime. That will hurt our credit rating and, consequently, increase the interest we have to pay.
That’s kind of what happened to the Greeks. It would be devastating to us, as the cost of government – already unsustainable – would jump dramatically.
Which would come out of our hide.
The other threat is that the government will try to cheat its way out of debt. It is called monetizing the debt. The government can simply print more money and make its payments that way.
Doing so, however, would cause inflation. That would be good for the government, as it would be paying debt with devalued dollars. It would be terrible for us, because the true value of our paychecks, investments and savings would plummet.It would force an overlay of poverty upon the nation, devaluing not only possessions but dramatically lowering lifestyles.
We would all be poor.
Our economy would not work.
Our prosperity, our security, our freedom and even our existence would be jeopardized.
It’s not a matter of opinion, it’s a matter of natural law. You can’t spend what you don’t have, and if you try, it’ll come back to bite you.
We’re about to get bitten.And neither we nor our politicians have the stomach for the austerity necessary to avert catastrophe.
On the contrary, our dependent class demands more, our politicians want to spend more, our greed lusts for more. Our culture has become drunken on entitlement and government beneficence.
At first, politicians promised beyond their means because they knew they wouldn’t be around to pay the bill and clean up the mess. Now, it seems, they promise beyond our means because the want to hasten and benefit from the ultimate collapse.
And so they promise more benefits and take over more of the economy, further enmeshing the nation’s wealth in their failed and immoral policies.
That will soon end – either by our wiser choices, or by our nation’s economic collapse.
Welfare and entitlement programs must be gutted or scrapped. All citizens must be brought into the shared burden of income taxation. We must return to the understanding that the only American entitlements are those listed in the Bill of Rights. Politicians must stop bringing home the bacon, and realize that they never should have taken it away from there in the first place.
The government must get its hands and its snout out of the economy.
Or it will kill the economy.
Something which, as the Greeks could tell us, is horrifyingly close to happening.
Thanks for posting your reply! You have nailed it in my opinion, including your optimism towards the end with your USA 2.0 scenario. Very insightful.
I don’t want to see my kids and future grandkids trapped in a no-growth society simply to pay off the bonds issued by our generation to sustain the welfare state, and keep the big money flowing to the New York corruption.
I’m not so invested in fixing the problems as I used to be. I’m more into preparation for the discontinuity, and thinking about the other side.
As, obviously, are you. Again, nice post.
The trend line.
“Obama reflects the ills of society, nothing more, nothing less.”
///////////////////////////////////////////////////////////////////////////
///////Right, Obama is only a giant pimple on the rear end of America, the cause is the poison in our blood, that poison is laziness.
Health care reform today is all about getting someone else to pay for their health care, not lowering actual costs.
Who wins this battle may well determine our economic future.
It is likely a good indication of the actual proportion of takers verses producers.
If Obammy believes that then he is even dumber than I thought.
I reject the media tale of his great brilliance but I also reject the idea that he is just so stupid that he thinks what he is doing makes sense. I reject it for the simple reason that I don’t think anyone THAT stupid could even read a teleprompter.
You and Elvis.
I was born during WWII on a tiny farm in South Carolina. I grew up poor enough to have some idea what it was like “pre-1900”. My old body won’t stand up to that very long but the pathetic part is that most of our really young people would give up before I would, they have no clue what is involved. You cannot tell people what it is like to get up in the morning, feed the pigs, milk the cow etc. before you got to school and come home in the afternoon and cut firewood until time to milk the cow and do the feeding again. You can’t tell them what it is like to spend your summer walking behind a plow in high humidity and ninety five degree temperatures with heat spells sometimes of well over a hundred degrees. You can’t tell then about picking fifty pound watermelons and hauling them in that heat. You can’t tell them about coming home from school to pick cotton in sweltering heat with caterpillars hiding on the cotton leaves that have stinging needles all over them, they feel like being stung by a hive of bees at once. You can’t tell them about pulling your end of a five and a half foot saw cutting oak trees when you are still in grade school to keep your family warmed in the winter, you can’t tell them about swinging an axe for hours at a time when you are still a preteen.
Such things must be experienced to be understood.
“Pre-1900 I don’t really want, I want what 2010 could have been if people and governments had not gone insane.
That is doable if we froze spending, completely. Eliminated capital gains taxation. Then the next year cut federal spending two percent per year until the budget is in surplus. Say 10% per year.
This approach would work, is the most doable and the least painful. Unless of course we are too far behind the compound interest curve. Long term repeal the income tax amendment and replace it with a national sales tax. Transition from SS to IRAs of some type.
They won’t do it though. They will keep doing what they are doing and the fall will be much harder because of it.
For later reading.
I have an advantage of an example.
I have one liberal friend, about whom the term “libtard” could have been penned. This fellow is, believe it or not, a successful small business owner. But he has been driking liberal kool-aid since he was a kid, lifetime Dem voter, subscribes to progressive magazines, etc.
I consider him brainwashed. He really seems incapable of understanding conservative arguments that several of us have made repeatedly to him. But, in other ways he is quite intelligent. His business is fairly technical, for instance. He’s great at computer stuff.
I think Obama is like that. Not as smart as his supporters claim, but a slightly above-average intelligence that hs been twisted by continual indoctrination since childhood.
Nobody here can add, everyone is just screeching hysterically for tendentious political purposes.
It was Twain I believe who once said “there’s not a sadder sight to see than a young pessimist.” Well, if Twain had seen what’s going on right now, I would have to assume that he couldn’t blame a youngster like me for being pessimistic.
I was not poor growing up, but we raised all our own food, and cut firewood for winter (we burned 6 cords/year heating our house). We had a '49 Ford tractor in 1980, used a horse-drawn model hay rake, and built our own buildings, hay wagon, etc.
We harvested our food, our animals' food by hand. I also helped neighbors put up their hay when I had some extra time.
The result was a family that knows the value of hard work, that worked too hard to get into trouble, and grew close to each other and God based on our experiences.
Yes, there were some bad experiences (moved some bee hives one night and I received dozens of stings that night and the next day, I've had trees fall on me, I carried a new-born calf several hundred yards to the barn--because he mother refused to care for it after birth), but the overall experience was great.
What's not to like about early America? We didn't eat if we didn't work.
“Before a nation goes financially bankrupt, it must first go morally bankrupt.........................”
This nation has been in bankruptcy since 1933. Moral bankruptcy...certainly there now, probably many years before 1933.
Has Europe bailed out Greece?
Nope. I think we've discussed before? The trend line that worries me is the percentage of the budget needed to service debt. That's what is getting Greece. They can't borrow enough to roll over their notes.
We are still selling ours, at low rates, but I think there is some question as to how much of it is being bought by the Fed, and their agents.
The fact that China seems to be selling now, and Japan is holding isn't good. Who is going to buy $1 Trillion a year in US debt, for the next X years? Of coures we can raise rates (Geithner, hated by everyone, deserves a lot of credit for keeping our rates so low). But raising rates means that the big hunk of bonds we need to sell to roll over and service debt just got bigger.
Those are the trends that worry me.
Obviously, a better management of our budget could start to turn this around, restore trust, keep rates down.
Do these things bother you at all?
“What’s not to like about early America? We didn’t eat if we didn’t work.”
///////////////////////////////////////////////////////////////////////////
Early America was fine in its time! The hard work and struggle I went through gave me a great advantage as an adult over those who had not done those things I had to do.
The point of my post is that most younger people now know nothing of all that and don’t have a clue what it all means. We cannot go back to that way of life without losing the majority of the population through disease, violence and starvation. Even though you may know something about it you refer to the tractor your family had in 1980 so you are not a twenty something yourself, remember that pre-1900 means no tractor of any kind, it means following a horse or mule or a team. Have you ever seen an adult who has never used an axe try to cut wood with one? I assure you that a healthy man can wear himself out before he goes through a stick the size of my arm, it seems so simple but it isn’t quite that simple. Recently I decided to buy a new pole axe and I couldn’t find one in a store worth having, apparently you have to order from Sweden or somewhere now to get an axe that has a proper bevel.
The amount of knowledge needed to live that lifestyle is far and away greater than most young people can conceive of, to live the “simple” life just ain’t that simple. I still have some of the old knowledge but nothing like what my parents had, they could, “make a dollar out of fifteen cents”.
We may wind up going backward but I am afraid that if it happens we won’t be able to stop at pre -1900, we may go back a lot farther than that.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.