Excessive borrowing, far in excess of our country's ability to produce, has kept the nation's economy tottering along for the last 2 years. Like a person in a credit death-spiral, we have been borrowing additional monies just to keep up with the interest payments on the existing debt. We can only keep doing this for so long. This nation is bankrupt. This nation is in denial about the problem. Reality is going to be painful when it makes its appearance.
(For complete background and insightful commentary on the impending collapse, I recommend you add Karl Denninger at The Market Ticker to your daily reading list)
Like Europe before us, we allowed our public servants to appease our appetites with bread and circuses; with welfare and entitlements. As long as there were enough suckers to keep the scheme alive, and other nations were willing to buy our paper, this was sustainable. That well is rapidly going dry.
Unlike the 1930's, the US manufacturing base is decimated. China makes most of our consumer goods, along with Korea and Singapore. Durable goods come from Japan, with a smattering of companies still making them domestically. Our blue-collar workers are now union-pampered, with wages and benefit packages that are crippling what's left of our domestic companies.
In all this, the government has been complicit. In all this, be it the flight of our manufacturing jobs, or our ever-expanding entitlement structure, the Feds have had a hand in it. The politicians have used their legislative ability to pick winners and losers; to grant favors to politically-favored companies which line their pockets with campaign contributions; to write labor laws which ensure a ready supply of votes for the status quo, but which have destroyed their host companies. And yet, they act surprised when companies take what's left of their capital and flee overseas.
Now, President ObeyMe wants to do another round of "stimulus" as the money supplies contract at record pace. Like a drug addict who cannot recognize the source of his own destruction (or who does, and wishes to hasten it), O-bow-wow is pushing for more of the same poison that is currently killing us.
It is almost as if he is trying to destroy the last vestiges of capitalism left in the US. In order to believe that, I have to buy into the theory that our current president is a traitor to our founding principles. The evidence is beginning to mount, however. Only time will tell if he does, as Woody Allen suggests, appoint himself dictator for a little while. (No, I don't think he will do so. But, the Left wants it...). Usually, the modern dictator gets elected, then changes the rules to prevent further elections.
In any case, the economic situation is a paper bubble and it is about to burst. Greece will not reform, and the Euro will be taken down because. This will cascade over to the US as Europe enters into another spasm of civil strife and unrest. China won't keep buying our bonds for much longer, especially if the Korean peninsula devolves into open warfare. China is currently siding with Kim Jong "Very-Ill" Il and we have an alliance with Pyongyang which will pull us into the mess. Couple these going-on with our changing relationship with Israel, whose ability to defend themselves depends in large measure on our weaponry and support, and you have a recipe for world-wide unrest. A "crisis" if you will.
And, you should never let a crisis go to waste...
Are you ready?
Pax,
Newbius
2 comments:
The president and his administration are doing everything in their power to transform our republic into a workers' paradise before the 2010 elections, no matter the consequences and whatever else rears its ugly head before then. The Europeans are learning that trusting economic reports from their poor cousins and then integrating their economy with theirs is hazardous to their health. South Korea is waking up to the fact that the lunatic to their north is not kidding when he says he wants to restart hostilities. Israel is waking up to the fact that Obama will let them dangle in the breeze if the Arabs/Iranians decide to try to push them into the sea, and if they're smart they're considering every option to ensure their survival.
So what do we do? I'm thinking we tighten our seatbelts. The next few years are going to be a bumpy ride. Roosevelt used World War II to justify his third and fourth terms. Obama can't get re-elected but once more, so he'd have to go to an even more extreme to justify a power grab. I think it would take something like nuclear terrorism before the herd lets Obama make himself President for Life/Temporary Dictator/God-King of the Americas. But once the sheep get to moving, all he'll have to do is guide them to where he wants to go.
"Are you ready?"
None of us is ready. But the storm approaches.
"No people will tamely surrender their Liberties, nor can any be easily subdued, when knowledge is diffused and Virtue is preserved. On the Contrary, when People are universally ignorant, and debauched in their Manners, they will sink under their own weight without the Aid of foreign Invaders."
-Samuel Adams
"God damn you all to hell".
-Charleton Heston, Planet of the Apes
Here comes the endarkenment.
Will it be for 10 years, or 50, or 200?
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