For decades, the United States has relied on a tortuous financial arrangement that knits together its economy with those of China and Japan. This informal system has allowed Asian countries to run huge export surpluses with the United States, while allowing the United States to run huge budget deficits without having to raise interest rates or taxes, and to run huge trade deficits without abruptly depreciating its currency…an obsession of bankers, international economists, and high officials like Fed Chairman Ben Bernanke…” Debt Man Walking, John B. Judis, the New Republic, 12/3/08
Did you think it was going to last forever? Nothing is free. An individual life comes and goes, a candle in the wind. The triumph in the Cold War in 1989 led to a two-decades party in which the celebrants, dancing naked past the cemetery of a dozen old empires, neglected to notice the blank marble tombstone and the open grave. If they had, would they have known it was for them?
The writer, scorned by family and friends for his opinions, has been noticing this for a very long time. Hubris, that ancient Greek word, has been raising its skeletal fingers in warning for years. Historical parallels, even within our own time, are laughed at, or simply unknown. Think, for instance, of the transition between the Kennedy-Johnson era and that of Richard Nixon. For eight short, intense years, the United States acted as if, in the old communist locution, anything was possible. We had conducted an enormous war without considering taxes to pay for it. We had launched a series of missions to send human beings to the moon. We threw off our clothes. We plunged into drugs. We drove cars so fast that the officers and EMS medics at accident sites suffered post-traumatic stress from the ghastly scenes of blood and gore. We spat on history, tradition, family, economic sense, and imagined a timeless space of endless triumph. We believed it possible to liberate human beings from work, duty, and mortality. We lost everything and hated Richard Nixon for six years for his struggle to right a shattered republic, finally chasing him out of Washington as if he were a cancerous lesion.
Americans don’t like to admit the failure of dreams. Even in telling the truth about the way our material desires have been paid for, Judis can only go so far as to recommend the same sort of programs that contributed so much to the federal and private debts financed by the Japanese, the Saudis, and the Chinese over the past twenty years. And the previous and new Administrations? They’ve proceeded as if the world were made of cotton candy, all of it destined to be eaten by their constituents.
I ask you now to turn away from the bogus bonus smokescreen over…compensation for AIG employees. It is a pittance compared to the gargantuan spending spree happening right under our noses. The AIG bonus price tag amounts to one-tenth of one percent of the total AIG giveway ($85 billion in September, $37.8 billion in October; $40 billion in November; $30 billion in early March, which took place with the assent of a Republican administration, a Democrat administration, and the congressional leadership of both parties…they moved Thursday to dump another $5 billion into the failing auto industry…on top of the Thursday announcement by the Federal Reserve to print up $1 trillion to buy up Treasury bonds and mortgage securities sold by the government…that no one else wants to buyLook Beyond the Bogus Bonus Smokescreen, Michelle Malkin, 3/20/2009 (syndicated column)
What is the effect of such a grandiose expansion of public debt?
A)Those expected to buy it, such as the Chinese, who talk and write every day about their plan to extinguish American hegemony within the next decade, will, if they choose to pay for a very low grade investment vehicle, have enormous influence over every area of American government policy, foreign and domestic. If they choose not to buy, as looks to be increasingly likely, they will force us to devalue our currency by printing money to buy T-bills (already happening). The loss of wealth and spending power has been estimated to start at fifty percent or more for every American.
B)It shows an American leadership utterly out of touch not only with a vast proportion of Americans, but with reality itself. Like an Argentine Colonel in the 1980s, the current President apparently believes that all he has to do to revolutionize America, is print the money, go on the Leno show, and promise health care for all, clean air for the entire world, and green jobs for everyone. The man is a fabulist. His policies will, as a group of Argentine Colonels in the 1980s, destroy America as a world center for development.
C)The fantastic increase in government debt will crowd out American entrepreneurs from investment capital for a decade or more. There are suggestions that this will create a mess like the depression of 1873, which lasted for twenty-three years. For a generation in their twenties, vanished expectations will mark the bulk of their most creative and productive years.
This writer would go further and describe this as a massive crime wave originating in Washington, DC. Rather than buck up, cut spending, open our energy resources to domestic development, restrain consumption with a flat tax and value added tax, steps absolutely required in most opinion on the subject, from The Wall Street Journal to Investors Business Daily, for the American economy to recover the robustness lost in the housing crash, the gang from Chicago has decided to loot the entire society, spread some of the booty to their favored special interest groups, and put us at risk of losing control of our sovereignty to a hostile government. This is a long way from “preserve, protect and defend.” Why would they take such steps?
Like it or not, they’re defending not the Constitution, but the mob’s fantasy of the good life. Everyone’s entitled. Everyone gets their choice of everything that’s out there. Nobody has to worry about not having enough money or spending too much. This is the mob, with their imperial dream, that the gang from Chicago is serving. They are not serving you.