Is the inertia greater than the momentum?
By Dr. Robert Owens
The causes of our problems are not hard to see. Americans aren't obese because evil restauranteers are forcing them to eat fried butter on a stick. We are bulging at the seams because we eat too much and exercise too little. Americans aren't trapped in upside down mortgages because evil bankers waylaid us and forced us to sign up for a house that was too big and cost too much. We're living in homes we can't afford because we wanted them and thought we deserved them even though we didn't have an income that could support them. Americans aren't buried in personal debt because credit card companies mailed us credit cards. We carry an average of $14,517 household debt because we wanted what we wanted when we wanted it and couldn't wait until we could pay for it. And America isn't drowning in national debt because we did anything more difficult to understand than electing people who bought our votes with entitlements we didn't need and couldn't afford.
The problem isn't that we don't know the answers. Instead it's that we don't want to face up to the fact that the free ride has to stop if we're going to get off before we land in Athens. America's economy is beginning to resemble one of those increasingly ridiculous action movies where the hero gets blown up, shot, stabbed, and hit with a brick only to jump up ready to roll. Every time a bubble bursts instead of allowing the economy to bottom out and correct itself the Government spends as it borrows from foreign countries and the Fed creates money out of thin air to pay for it. It's time our leaders learn we have learned that blowing up a bubble to take the place of the last burst bubble is not building an economy.
As boom and bust turned into boom to boom to boom we have inevitably made our way to KABOOM!!!
The coming crash in this double dip dilemma is going to be a double whammy. We are currently blowing up a new financial bubble providing Fed funds at near zero % that the banks then loan out at 3-4% pumping more and more money into the system. And in a reprise of the 2000 dot.com crash the social media bubble is once again giving us billion dollar companies that aren't making any money for anyone except the gamblers in the stock market casino.
The Federal Government keeps inflating bubbles to avoid the real crash so they can continue to buy votes with entitlements and pay for them with funny money. This postpones paying the piper, but it increase the bill when it finally comes.
Today the government Leviathan is devouring America's income. In 2012 it's estimated that the central government will consume 24 % of GDP kicking back 4% to the States and localities, the States will swallow 10% of GDP, and the local entities will inhale 11%. Subtracting the 4% Federal to State shell game and the governance of America is today costing us 40% of America's production. On top of that the regulatory burden grows heavier every day until everyone everywhere is in violation of something. And we wonder why industry isn't expanding? When you eat your seed corn and make impossible to follow guidelines for planting you can't expect a bumper crop.
With money pouring out of a 5" hose how can anyone take the politicians promises to cut the deficit and reduce the debt seriously? The most draconian plans suggested so far, such as Representative Ryan's doesn't balance until 2040 and that is only if future politicians decide to play nice and not buy votes with free goodies which is about as likely as a dog with fleas not scratching.
That's the problem: a dysfunctional government made up of kleptomaniacs writing phony checks on the future and a population addicted to easy money and unfunded entitlements.
What's the solution? We as a people must kick the entitlement habit. Like any addiction our national addiction to freebees has debilitated us. It has made us dependent on the outside stimulus. Where once families and churches took care of the needy we have been taught for generations that Uncle Sugar will do it, so we have let Uncle Sugar do it. How has that worked out? Ever since the government bureaucrats have stepped between the givers and the receivers welfare hasn't been well and it isn't fair. Many of us know people who need help who are denied and people who should be helping themselves who are riding in their Cadillacs to spend their food stamps.
After more than $15 trillion and four decades of a war on poverty the percentage of Americans below the poverty line is higher than it was when we started. There are more people on food stamps, more on disability and more that have just dropped out of the work force than ever before, and the only answer Washington seems to have is we haven't spent enough yet. That's like telling the heroin addict who almost died last night of an overdose that the problem was he didn't shoot up enough junk.
How do we stop spending? How do we balance the budget? This is like the question the backslider always asks, "How do I get back to God?" The answer to the backslider is, "You get back to God." The answer for the nation is, "we stop spending more than we bring in." The politicians have a way to make that solution work: raise taxes until income matches outgo. This brings up another problem: we can't eat the goose that lays the golden egg and expect to collect more eggs tomorrow. In any country that robs Peter to pay Paul eventually everyone changes their name to Paul. Case in point, we now have more people qualifying for disability each month than people finding jobs.
Yes, this is a call for austerity. Yes, this will cause major dislocations. Yes, when drug addicts quit taking the poison their bodies have come to crave they get sick. In time drug addicts recover and once again becomes normal people able to stand on their own without the chemical prop of a debilitating drug. In time if we as a nation will kick the habit of cheap money and government handouts we will once again learn to stand on our own two feet, hold our head up high, and proudly say, "This is America the land of the free and the home of the brave."
If we will do this the last half of the twentieth century will be but a prelude to the American Century. If we don't, the sun will set on the American dream as we devour ourselves in an orgy of hedonism and self-gratification.
The election is coming fast. Survey your choices and find people who have the courage to lead us in a return to fiscal responsibility before we face the coming collapse of the world we have known. For if we cast our bread upon the water it will return to us after many days, but if we sow the wind we will reap the whirlwind.
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 or Twitter @ Drrobertowens © 2012 Robert R. Owens