What's a widget worth?
Dr. Robert Owens
What's a widget worth? Who determines the price of widgets? Is there an answer to the escalating cost of widgets?
How much is a widget worth if there is only one widget? What about if there are on hundred widgets? Or one million? What if there are trillions upon trillions and they are being produced at the rate of 514 million per day? The obvious answers to these questions aren't lost on a normal four year old. Observe such a child in the sand box. If there's only one shovel they'll kick and scream to keep it. If there are 1,928 billion of them the child probably wouldn't notice if someone else used a few billion here or a few billion there. Unfortunately the wisdom that's normal for any four year old doesn't seem to exist in Washington.
President Obama publicly laments the rise in fuel prices. Of course when the teleprompter isn't guiding his every word and he doesn't realize his every public word is public he says that high gas prices really aren't a problem they've just happened too quickly.
Could this precipitous rise in energy prices be tied to the precipitous fall in the value of the dollar? The devaluing of the dollar appears to be a policy that shows no sign of slowing. Even pro-administration sources such as MSNBC say the dollar is approaching record lows as compared to other currencies. There is a real possibility of a credit downgrade due to the inability of Washington to address the ever-growing debt. A leading Hedge fund manager says panic has set in and people are beginning to dump their holdings in dollars.
Could this escalating rise in energy costs be government policy? Mr. Obama's Energy Secretary Steven Chu believes that Americans should pay for gas at the same rate as Europeans which at the time of his statement was seven to nine dollars a gallon. Consequently to the central planning enthusiasts who're working to transform America it isn't the current high prices that are the problem it was our previously lower prices which were an impediment to the accomplishment of their goal. What we must realize is that their goals are not our goals. Looking at our current leaders it appears as if they see their mission as managing the decline of the United States and everything they've done since gaining power has furthered the reality of their vision.
Why is the price spiking ever higher? This isn't a supply problem. In the face of a spiraling price rise the Saudis who usually boost production to stabilize markets have instead cut production because there is currently a worldwide surplus. The main reason for the current spike is that the dollar is worth less every day. And as the debt ceiling approaches the vultures are circling. Articles and commentaries constantly equate a refusal to raise the debt limit with a default. But the two are not synonymous.
While Federal officials cry the sky is falling Senator Pat Toomey (R-PA) proposes to protect the "full faith and credit" of the United States by legislatively making interest payments the Federal government's top priority. In an opinion piece Senator Toomey shows that the necessity of a default is shown to be instead a choice by the reality that "if Congress refuses to raise the debt ceiling, the federal government will still have far more than enough money to fully service our debt. Next year, for instance, about 6.5% of all projected federal government expenditures will go to interest on our debt, and tax revenue is projected to cover about 67% of all government expenditures. With roughly 10 times more income than needed to honor our debt obligations, why would we ever default?"
Yet administration spokesman such as Treasury Secretary Timothy F. Geithner continue to use scare tactics predicting that if the debt ceiling isn't raised the government will default and our credit will be ruined. In addition, the largest banks using the default straw man are pressuring the perpetually elected to raise the debt ceiling lest they miss a moment at the Federal trough.
All these theatrics about raising the debt limit is reminiscent of the weekly re-runs of the Continuing Resolution Show that we endured earlier this year. The spendthrifts in Washington cannot conceive of their ability to mortgage our great grandchildren's future to pay for whatever it takes to buy enough votes to stay in power forever. Whenever anything appears on the horizon that threatens to rain on their perpetual parade to penury they begin chanting their mantra spend, spend, spend, elect, elect, elect.
What can we do about this problem which is causing prices to rise? How can we possibly avert the looming insolvency? How can we end this mad rush to fiscal collapse?
Stop the presses! Stop the deficit spending, balance the budget, and pay off the debt. Don't raise the debt limit and force the Federal government to live within its means. It makes no sense for us to tighten our belts so that our leaders can continue their spending binge.
What's a widget worth? Ultimately everything is worth what you can get someone to pay for it. If you're paying in U. S. dollars the price just went up.
Dr. Robert Owens teaches History, Political Science, and Religion for Southside Virginia Community College. He is the author of the History of the Future @ http://drrobertowens.com View the trailer for Dr. Owens' latest book at http://www.youtube.com/watch?v=_ypkoS0gGn8. Follow Dr. Robert Owens on Facebook. © 2011 Robert R. Owens