Pity our congress, we have a sour economy and they just can’t seem to do anything about it. Unemployment is stuck at 9.8%, the trade deficit is out of control, the national debt is about equal to the GDP (gross domestic product) so we are technically bankrupt, the Chinese don’t want to lend us anymore money so we have to print some up. Some people are even talking about a double dip recession. What shall we do?
If you look at the methods congress has used to fix financial problems it has mostly been to “Spend Money”. But now, this one tool they have to fix it isn’t working anymore. For example: the education system isn’t working, “Spend Money”, seniors are unhappy, “Spend Money”, you have no friends. “Spend Money”, you can’t cure AIDS, “Spend Money”, the country is going bankrupt, “Spend Money”.
It’s like a car mechanic with only one size wrench in his tool box and nothing else, but he keeps trying to fix everything that one tool. But people are starting to realize that one tool is just not working anymore. Some other tools are needed, like a little less strangling regulations on small business or maybe a few tariffs to to protect what’s left of our manufacturing sector from foreign countries that are dumping products on our shores at below manufacturing costs. Or maybe just creating a balanced budget. Or maybe creating an environment here that businesses can survive under. Maybe just stop doing only things that sound good in a college class room on social theories and instead doing proven things that work in a real business world. But NO, our politicians can only “Spend Money”, the universal cure all? It doesn’t work at all, but who cares!
The latest “Spend Money” plan is to buy back our own debt with about $600 billion in newly printed money, some economists have warned this will only cause inflation, but do nothing to improve the economy and it will cause wild speculation in the stock markets, (remember the Weimer Republic in Germany before World War II).
Then they extended the President Bush tax cut plan with a $858 billion bill that congress approved and this maybe the final act that bankrupts America because we now (as mentioned) owe more than the GDP and this will finally put us over the line.
What the Bush tax cut plan originally did was to avoid having Americans pay for the Iraq War so they will not resent it as much as many already did because the war made no sense to many Americans. In other words, the war may not be so bad if people didn’t have to pay for it. But putting off payment of the bills only adds to the interest payments making it all even more expensive. It establishes the fact that politicians don’t care about the cost of anything and pulling a fast one on the public is easy.
The bill to extend the Bush tax cuts also has a provision attached to it to extend unemployment benefits; but this adds about $50 billion to the deficit that we can not pay off anyway. This just has to affect our credit rating that will in turn make it more expensive to borrow money. But the government has gotten so used to spending money it doesn’t have, that they don’t even think about it anymore.
As bad as the tax cut plan is, it must be realized that it also has a provision to cut Social Security taxes by about one third. The thinking behind this is that by putting a little more (very little) money into the hands of working people this will stimulate the economy; but the $800 billion stimulus bill already proved that the economy can not be stimulated, it’s too bound up with debt and counter productive regulations and stupid laws. And, this cutting of money going into the Social Security account will only push Social Security closer to bankruptcy. The most likely result of this is to cause congress to declare that Social Security must be “reformed” by changing it from a program that was financed by workers for their own retirement, to a plan that comes out of the general tax revenues that will only be added to the growing list of programs with no way to finance it. In other words, kill Social Security and increase citizens dependence on the government.
As bad as all of the above is, there is however one bright spot, Harry Reid the Senate majority leader, killed the famous “Omnibus Appropriations bill”. This was a $1.1 Trillion dollar bill congress wanted to pass that included $125,000 for fishing equipment, $413,000 to study Peanut Butter and they also wanted to build a “Tea Pot” museum (Why I don’t know). The bill was 2,000 pages long, which meant they didn’t want anybody to read it so they can push it through congress just like the $2,000 page health care bill. But maybe Harry Reid actually read the Omnibus Appropriations bill and figured that it was OK for America to go bankrupt with all the other reckless spending he and congress made. But to go over that spending limit might cause riots in the streets and that would be embarrassing. But it must be noted that many in congress were perfectly willing to pass this outrageous spending bill.
Maybe the current mess really started with President Lyndon B. Johnson who had a “Guns and Butter” plan of fighting the Viet Nam War and at the same time starting his “Great Society” anti poverty programs.It all just got a lot of people killed and wasted a lot of money, without accomplishing anything except for creating a lot of inflation and debt that was never paid for. Then along came President George Bush (the small one), who fought the Iraq War and at the same time started some expensive domestic spending programs (no child left behind etc.) along with the before mentioned Bush tax cut plan. These two presidents did not realize that a war is a very expensive activity that strains the nations resources to the limit and you just can not pile expensive social programs on top of it, then just pass the expense on to the next generation that then does the same mistake. If these two presidents had paid for the wars at the time they were being fought or soon after, and held off on the social spending until after the war is paid for in a sort of pay as you go program, we will not have the massive debt we have today. But they just had to “Spend Money”.
President Obama is now doing the same exact mistakes that Johnson and Bush made by fighting a war and raising domestic spending at the same time, he’s even not paying for it just like Johnson and Bush. I guess these presidents want to go down in history as great men because they fixed everything; but they only did the exact opposite by making everything worse, and made themselves look very bad in the process. This massive spending only wrecks the economy, and we’ve had three presidents that did this. NO wonder America is an economic basket case.
How does that song go, the one by Peter, Paul and Mary?
“When will they ever learn?”