Ah. The good old days are returning. If you can remember The Great Depression, get ready for déjà vu.
Eighty-odd, very odd, imbeciles have done more damage to this country than we can presently foresee.
You thought that you lived in a democracy. If you count Pakistan, Mexico and Iraq as models of democracy, then you’re right.
Didn’t we once have a democracy we were proud of? Now we know that an out of control minority can get their druthers by blackmail and obstruction of the democratic process.
Everyone paying attention knows that our foremost problem is the insufficiency of money flowing through the economy. So, Washington’s answer is to take another two and a half trillion dollars out of the economy.
The basic problem of too little money in the economy means the hole of unemployment gets even deeper. The only way to increase the amount of money in the economy in the long term is to create jobs. That’s important to the jobless but it is important to the country. Cut government jobs. Cut jobs of government vendors. Cut jobs where all of the newly jobless used to spend their money.
The estimates I’ve heard are for a million or so jobs lost. I think those people are wearing rose-colored glasses or have graduate degrees in wishful thinking.
The word seems to be that, even though the debt ceiling will be raised, interest rates will rise. I’m not quite certain it will but that is a possibility.
With unemployment definitely going to increase and the prospect of increased interest rates, the most obvious reaction will be a lot of red arrows in the bottom corner of your flat screen.
Stocks will fall. I’m admittedly not a fan of gambling in casinos where the house ensures you lose and counters your bets with their own. Even if you are far more reckless than I, you must realize that now is the time to cut your losses.
It would be easy to say that the direction of the stock market is irrelevant. That’s not true. It should be but it’s not. People have been trained to look at the Dow Jones. Emotion is the dominant factor in the market. That means the market reacts based on perceptions.
It also means that reactions of businessmen and the general public are dependent upon their perceptions of what the market is doing. These two aspects feed on each other. The market will go down. Businessmen and the public will be pessimistic. They will help push the economy lower.
A failure to raise the debt ceiling would have had a more immediate and obvious detrimental effect on the economy but not necessarily worse. Comparisons are not needed here because the policies being followed by Obama and most members of Congress are headed in the same direction. It seems now that a double-dip is unavoidable.
Who’s to blame? All of us. No, we’re not all as stupid as a Washington politician but we are culpable. We are not equally guilty but, in a democracy, we, the society, get the government we deserve. Perhaps we shouldn’t have tried to get education on the cheap. We have produced too many people unable to think for themselves, unable to discern nonsense, unwilling to put any effort into parsing the spiels of con men.
Well, at least we have The Housewives of Beverly Hills and the largest butts in the world. What more could you want?
Our national trait of assuming we are the greatest in all things is insufficient to maintain the illusion much longer.
Greece, Rome, France, England. They enjoyed centuries leading their worlds. The US will not get to spend a commensurate period basking in the sun.
Unless we are willing to discard those fun house mirrors and face reality, the middle class will atrophy to a point that it can no longer be the propulsive force of the economy. We will have to get used to eating the dust of those nations that respect education, intellect and other attributes that are alien to our politicians and our electorate.
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My grandmother who never finished high school used to say, “You can’t borrow your way out of debt.”
I think she was right.
We tried several stimuli and they didn’t work. All they did was increase our debt, while jobs continued to disappear. I have no problem with recognizing that we need to tighten our belt and curtail our spending. That can’t work any worse than what we have tried so far.
Ah, Ed. I thought you were listening. Judging a complex national or international finance system as one would a personal budget causes more trouble than we can imagine. You can’t print money. The federal government can. You can declare bankruptcy. The federal government can’t. If you can’t pay your bills, you suffer the consequences. If the government doesn’t, the entire world suffers. Debt is not the problem. As long as someone will loan us the money or we can print it; as long as we can manage the interest payment; debt is not the problem. The stimulus did NOT contribute… Read more »
Damn. I forgot the 100 word caveat, again.
🙂
You well know what would happen if the government just “printed money” to pay our debt. Heck, if it was that simple, we would just fire up the presses.
And really, it is not all that different for countries or individuals. You have revenue and you have expenditures. Ideally, the expenditures, including some to savings should equal the revenue. Only the so salled economists make it difficult.
I mentioned printing money as one option, primarily to show a difference between individuals and national governments. I hate to break it to you but it has been used on occasion. I can’t fault the average voter for seeing individual budgets as having a great deal of commonality with government budgets when the politicians who should know better are equally unsuspecting of the very different and complex nature of the beast. I am going to scream the next time I hear someone equate running a business with running a government. Probably we all should scream in that case, as few… Read more »
Almost?
Mea culpa
2 words
In the 2010 federal budget, interest on the national debt was only 4.6% of the total spending. In that sense, I agree we have other areas to address that affect the debt more. I still think, however, it is wrong to disregard the debt as no big deal.
And I’m not as naive, ignorant, or stupid as you try to make me look.
I certainly wasn’t trying to make you look less than the alumus of Notre Dame that you are. You know I respect your intellect. I am publishing these articles to inform those without background, education or experience in these particular subjects to better understand their government and their role. Our boy in Seattle has his area of expertise. You have yours. I have mine. I do think almost everyone, including almost all politicians, have no grasp of the singular nature of government. For the man on the street, that is unsurprising. For the politicians, that is unconscionable. The debt is… Read more »