I refused to believe that a failed President like Obama could defy the laws of political gravity. It was inconceivable to me that he could win. Now we know that we have reached a tipping point that nothing really matters anymore in terms of performance. The political tribe called the Democrats will follow blindly their leadership and drink whatever Kool-aid is given to them--even if it kills them.
Without a truly productive underlying economy, you can only run this game so far before it collapses. The collapse of course will bring wage/price controls, rationing, etc. It will require, by necessity, war power type executive orders to enforce.
Federal government spending is 25% of GDP and when you add state and local spending it is probably closer to 40% or more. That kind of money can buy lots of support--not only public sector employes but crony capitalists who feed at the government trough. And there are others who benefit indirectly from such spending. The government can only tax people for so long before they kill the goose that laid the golden egg. We may fast be approaching that time. If interest rates go back to historical norms, we will have an immediate crisis not unlike what Greece is going through.
What does this mean in the big picture? Well, that which is unsustainable cannot last, but the road back is going to be nasty, brutish & long. No one is getting out of this the easy way. We may never live to see a return of the republic, but it will resume in some form or fashion after reality bats last.
If Greece is any example, it will be next to impossible to emerge. Unlike Greece, there is no one to bail the US out. We not only owe $16 trillion, but there is also the $60 trillion unfunded liability of the entitlement programs. Add to that another entitlement program, Obamacare, that will never be cost neutral. Medicare costs more than nine times what it was projected. Obamacare will be worse. And if the IPAB starts reducing payments to doctors and hospitials, there will be a political firestorm and the politicians will cave into public pressure. This will hasten our bankruptcy.
I have stated before that if Obamacare is implemented, the Republic is finished. Well, Obama won and it will be implemented fully. SCOTUS could have ruled it unconstitutional, which would have finished Obama off IMO. I agree we are headed for some terrible times. I have no faith in the political elite to do the right thing. They can't handle the truth. Very few will avoid the coming pain and suffering.
But for the 7-10 million voters (both R&D) who sat out this election, my guess is that they are those who would typically be referred to as "informed voters". They know the score, and are at least mentally getting themselves ready for the "big suck".
Side notes:
- Travis, I ping you periodically, because you have perhaps the strongest insight into how this will actually play out in the streets. I figure a few side notes sent your way about the underlying financial drivers will help when it comes to rally/explain these events to the next generation.
- Kart - same explanation - the message needs to be clear so that history is accurately recorded.
- Edmund - you're a very smart guy, just a little bit naive. In many ways, a young(er) Kabar. It's a tough process to finally come to grips with what has happened. But once you get over that hurdle, you can become an effective voice to rally the movement.
All causes, in order to be successful, have to have the moral advantage. We need to be able to clearly explain what occurred, and how, while redemption might yet be achieved, it's going to be a hard, painful process.
Let it happen, the sooner the better. Let the people reap what they have sowed. At least those of us who saw it coming will be the most prepared to ride it out.