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On the topic we will be discussing on KMUD tonight.
ARE WE COMMITTING SUICIDE BY GOVERNMENT?
America has already experienced the early stages of a dramatic economic reversal. The reversal has simply not completely manifested itself because it is hidden by deficit spending and the financial result of the changes that have already taken place have not yet run their full course. But a fuse has been lit and it is tied to explosive future changes in Americans’ well-being and economic prosperity that are unprecedented. As difficult as the Great Depression was, such depressions historically occur periodically, but the next time it happens, the government is in far worse economic shape and that will exponentially magnify the economic downturns that have occurred in the past and which are sure to occur in the future. One need only take note of five trends that make such a conclusion obvious.
There are five ominous economic/financial trends that can no longer be ignored and which individually portend danger, but it is the cumulative effect of the trends that is so potentially explosive that few Americans can even begin to imagine what the future may hold. Consequently, normalcy bias has clouded our thinking such that too many Americans are ignoring ominous signs, in the form of various economic trends, that our society faces extreme economic reversals. These trends are:
1. Government deficits – soon to reach 16 trillion dollars and it is projected that in approximately twenty-five years the deficit will grow to twice the size of the American economy;
2. Decline in manufacturing jobs and production (we have lost eight million manufacturing jobs since late 1979);
3. Trade deficits;
4. Increases in dependence on various government assistance programs; and
5. The long-term inability to finance current social programs.
As a result of these trends, we will eventually experience a confluence of economic problems that may well overwhelm American society and shake it to its very core.
Of these five trends, the federal deficit – we have run federal deficits of more than one trillion dollars a year for the last four years – is by far the most devastating because it singularly has the potential to completely undermine the American economy and social order. As a society, we have become addicted to debt and government debt levels have become so critical that we have created conditions wherein collectively as a society we may well be committing suicide by government.
We have allowed global elites to create an economy that is ripe for massive decline at a minimum and perhaps even outright collapse. This economic decline will not sit easy with Americans. There are deep ideological divisions within the nation and increasing poverty combined with crushing government debt may cause unprecedented political instability. It is not, for example, hard to imagine one or more of the states realizing that leaving the union is preferable to paying federal taxes that will increasingly go more and more to simply paying interest on the federal debt. If this sounds like sensationalism or exaggeration to you, data released by the Congressional Budget Office (CBO) indicates otherwise.
It is most illustrative to consider the CBO data regarding the national debt in terms of debt per person because it is difficult to grasp the significance of trillions of dollars since most of us have no experience in dealing with numbers that astronomically high. Existing federal government debt per capita is approximately $50,000. If you are married and have three children, your family’s current share of the federal debt is $250,000. In 2008, per capita debt was $35,000. That is quite an increase in just a short amount of time and I see no way that such a debt load could ever be repaid, but what is even more alarming is the level of projected government debt. The trend is downright ominous.
According to CBO projections, at the rate debt is projected to accumulate, sometime in 2037 debt per American will rise to $147,000. Keep in mind that this is just federal government debt. It does not include private debt, state debt, state and federal unfunded liabilities for pensions and social programs estimated in the tens of trillions of dollars, or continued projected trade deficits.
But even when we consider the federal debt alone, there is cause for considerable alarm for anyone except the most ardent pollyannas among us. By 2037, the federal interest payments alone are estimated at $2.7 trillion per year. To put that into perspective, during fiscal year 2011, the federal government collected approximately $2.3 trillion in tax revenue. Of course, it spent more than that due to massive deficit spending.
What really disturbs me is that this catastrophic debt increase seems to be, at least in part, caused by changes in American’s attitudes toward economic matters and debt and such attitudes develop over time and are difficult to change. For most of American history, when our debt was high, Americans paid it down and/or the economy grew reducing the debt as a percentage of GDP. For example, the American Revolution started the nation off with high debt, but our Founders were scared by such debt and paid it down quite quickly. Throughout American history that was the pattern. Wars and economic crises caused government debt, but when stability was reached, government debt was paid down. That all changed in the 1980′s. We became addicted to debt even when times were good. It was not a revenue problem. Government revenues increased dramatically during the 1980′s but federal spending increased even more. The Grace Commission was empaneled to make recommendations to stop the growth of government. The Grace commission’s recommendations were ignored. We will all pay the price for doing so.
The result of our collective lack of resistance to debt and constantly increasing government expenditures is that the federal government spent more money than it took in for 39 of the last 40 years. While the Clinton Administration claims it had budget surpluses, that was only achieved by using surplus social security/medicare funds.
I’m posting this link to a fascinating Arcata Eye article without comment at the moment. Maybe I’ll find something intelligent to say about it tomorrow.
She did actually get over 30 percent of the vote!
Addendum: Okay, she didn’t really emphasize the Tea Party aspects of her belief system during the campaign. She was actually quite articulate and seemed reasonable at the debates. But now that the election’s over, she wants a Grand Jury investigation into whether Mark and Clif have, I guess, committed treason. From her letter to Virginia Bass:
“Supervisor Bass, I urge you to seek independent counsel and convene a Grand Jury investigation into why two supervisors would violate their oath of office and seek to encumber the people of Humboldt County to a smart growth document that is clearly not community-based and undermines our rights and civil liberties guaranteed by our Consitiution.”
The Mountain Democrat has bought into the theory as well. Fortunately, Humboldt County’s voters have taken the reins from the “globe-trotting, fois gras eating hypocrites.” Plan A, Obamacare, carbon credits – it’s all linked to a UN-based conspiracy!
Seriously. Most green types don’t eat fois gras, but nevermined.