When The Economy Explodes
The players are lined up, the calamity train is rolling, and the White House is poised to shout, “Next”! Who’ll be the next one to crawl on hands and knees looking for last minute salvation from the oval office? “It is I”, shouts California, in a voice of desperation and despair. “No no”, shouts Michigan, “we were in line before you”. “But wait”, says AIG, “our problems are still too big to ignore”. At almost the same instant, in a voice likened to a child looking for sympathy, “I have no other choice but to beg for your help”, says the Pension Fund. Not to be forgotten, the tired strained voice of the Unemployed is heard, “We’ve been ignored for way too long, we want to move to the head of the line”.
Standing quietly on the sidelines, self-assured of their importance and priority, the Department of Defense, Foreign Aid, the IMF, the U.N., the World Bank, NASA, the governments of Afghanistan, Iraq, and Pakistan, watch and listen with a cocky smile on their faces. Their lot is always set aside first.
Seated in a position close enough to hear this multitude of requests, is the head of the Treasury, economic advisors, and ranking members of both houses of Congress. One by one, they lean to whisper in the ears of the White House, “Where will these funds come from”? “Is it possible to satisfy all of these needs, and still appear to be financially solvent in the eyes of the world?” “If we do help all of those in need, will our debt devalue our currency?”
Upon hearing of this “Beggars Parade”, China quickly calls the White House, “Whatever you do, just remember that we hold your debt, and we could present the I.O.U.’s at anytime.” Another call comes into the White House, “Before you spend everything, make sure there’s enough in the Social Security Fund”, says the Elderly on the other end of the line. Suddenly, the requests begin to pour in. There’re calls from education, health care, infrastructure, parks and recreation, the arts, R&D, and Homeland Security.
After a short time of pondering and digesting the requests, realizing the dramatic and devastating decline in tax revenue, the White House sees the reality of the situation. The sincere promises made during the campaign have been compromised by an economic storm of epic proportion. The economy has become a political bomb set to explode at any moment. In all likelihood, this administration will go down in history as the most expensive and debt-ridden of all-time.
“Act I” in this play was the near impossible task handed the new administration by the previous administrations. “Act II” was the failure to address the serious unemployment situation first. “Act III” was the mistake of throwing $Trillions into the financial sector. “Act IV” is yet to finish, but chances are that little can stop rising unemployment, poverty, and the wars. “Act V” will be the exploding economy, and the resulting political bomb that’ll explode on the Obama administration.
Thursday, May 21, 2009
Wednesday, May 20, 2009
Carrying The Load
If we read enough of the daily news headlines, we’ll see a wide variance of speculation as to the timing and extent of an economic recovery. But, how much do we read concerning what happens between now and then? A guess, as to the lack of information and opinions on “what do we do in the meantime”, would be that, “the truth could be politically damaging”. After all, didn’t we hear promise after promise during Mr. Obama’s campaign for the White House that “change” was coming? The references to “change” meant prosperity, transparency, integrity, and genuine representation in government.
The present economic conditions, here and abroad, are forcing the present administration to react by shouldering the burdens of high unemployment, foreclosures, bankruptcies, and financially weak corporations such as the auto makers. In other words, the government “IS” our economy at present. This is not information that the present administration wants emphasized in the daily headlines. Without borrowing ( enormous debt ) by the government, in their efforts to keep the economy going, we would have already been in a state of “economic collapse”.
A legitimate question that needs to be asked, is, “how much longer can the government carry the load?” We’re already hearing that the employment picture looks very dim until sometime in mid 2010. The same timetable has been suggested concerning the housing market. Corporate woes and failures continue to make daily headlines, and though it’s not something spotlighted, the government is pouring $Billions into failed pension funds. These are enormous stresses and taxations on a government already facing huge deficits passed down from previous administrations.
The domestic financial burden is heavy enough without adding the cost of wars and the future financial responsibilities associated with veterans. Where will this revenue come from, and will it come fast enough to keep our dollar from “damaging devaluation”?
It’s obvious that the government can’t carry the burdens of the economy via borrowed money forever. At some point, revenue generated through payroll taxes and sales taxes must replace borrowed money. Of course, this is not something the government wants to put a timetable on. To do so, would more than likely cause panic, and may even lead to riots in the streets. The government does not want you to know the very possible and likely scenario of a prolonged government supported economy. They can’t carry the load much longer.
The present economic conditions, here and abroad, are forcing the present administration to react by shouldering the burdens of high unemployment, foreclosures, bankruptcies, and financially weak corporations such as the auto makers. In other words, the government “IS” our economy at present. This is not information that the present administration wants emphasized in the daily headlines. Without borrowing ( enormous debt ) by the government, in their efforts to keep the economy going, we would have already been in a state of “economic collapse”.
A legitimate question that needs to be asked, is, “how much longer can the government carry the load?” We’re already hearing that the employment picture looks very dim until sometime in mid 2010. The same timetable has been suggested concerning the housing market. Corporate woes and failures continue to make daily headlines, and though it’s not something spotlighted, the government is pouring $Billions into failed pension funds. These are enormous stresses and taxations on a government already facing huge deficits passed down from previous administrations.
The domestic financial burden is heavy enough without adding the cost of wars and the future financial responsibilities associated with veterans. Where will this revenue come from, and will it come fast enough to keep our dollar from “damaging devaluation”?
It’s obvious that the government can’t carry the burdens of the economy via borrowed money forever. At some point, revenue generated through payroll taxes and sales taxes must replace borrowed money. Of course, this is not something the government wants to put a timetable on. To do so, would more than likely cause panic, and may even lead to riots in the streets. The government does not want you to know the very possible and likely scenario of a prolonged government supported economy. They can’t carry the load much longer.
Friday, January 30, 2009
Economic Stimulus
After all is said and done, every avenue explored, all tricks tried, and debates come close to duels in the streets, the only solution for long-term positive and productive stimulus is, "Put Americans to work PRODUCING what Americans use and consume".
I know and understand that I've pounded this issue to death. But, it doesn't take an MIT Graduate, nor a Philadelphia Lawyer to figure out what caused the present mess, and what it'll take to correct and stablize our economy.
Tax breaks, Tax cuts, and giving a "one-time" stimulus check to indivduals will only serve to have a "short-term" effect on our economy. We MUST correct that which caused the mess in the first place. Otherwise, our present economic situation will repeat itself for years to come.
Americans "NEED", "MUST" have, the opportunity to earn a "living wage" through pro-longed job growth. We "MUST" establish a continuing growth in the job market to enable us to keep pace with population growth.
Our jobs "Must" span the entire job market, including a continuous demand for employees in the industrial sector. We can't all work in the service sector. Someone has to produce something in order to purchase the services offered by the service sector.
The games being played in Washington concerning our economy make no sense. Their plans will create nothing more than "short-term" fixes to "long-term" problems. In reality, Washington's plans will, in my opinion, produce a socialistic government, forcing Americans to be forever dependent on government. This includes corporate America as well.
I know and understand that I've pounded this issue to death. But, it doesn't take an MIT Graduate, nor a Philadelphia Lawyer to figure out what caused the present mess, and what it'll take to correct and stablize our economy.
Tax breaks, Tax cuts, and giving a "one-time" stimulus check to indivduals will only serve to have a "short-term" effect on our economy. We MUST correct that which caused the mess in the first place. Otherwise, our present economic situation will repeat itself for years to come.
Americans "NEED", "MUST" have, the opportunity to earn a "living wage" through pro-longed job growth. We "MUST" establish a continuing growth in the job market to enable us to keep pace with population growth.
Our jobs "Must" span the entire job market, including a continuous demand for employees in the industrial sector. We can't all work in the service sector. Someone has to produce something in order to purchase the services offered by the service sector.
The games being played in Washington concerning our economy make no sense. Their plans will create nothing more than "short-term" fixes to "long-term" problems. In reality, Washington's plans will, in my opinion, produce a socialistic government, forcing Americans to be forever dependent on government. This includes corporate America as well.
Refocus On Socialism
As each day passes, the world economic picture becomes gloomier than the day before. Because of economic dependency one nation to another, the crisis is no doubt, deeper than just our situation here at home. We’re sharing the pain left in the wake of a Global Economy gone awry. Although good intentions may have been at the heart of unlimited, and unmonitored global trade, the system has now failed, and the world is peddling uphill in an effort to lessen the blow. Also, corporate greed and fraud within various financial institutions contributed to the economic storm. The timing of events created an economic cyclone.
The reaction seems to be that of panic and wishful thinking at the same time. So far, the established line of thought is, “doing nothing would be a disaster, with consequences even harsher than the present crisis itself. The wishful thinking is that of “pouring huge amounts of money into a select group of financial institutions and banks, along with a few select corporations, will right the sinking economic ship”. Of course, money alone is not the answer, and will eventually become an addiction so strong, that the economic survival of this nation, and the world, will hinge solely on this dependency.
This “false sense” of being cured by a sudden influx of enormous amounts of capital will be short-lived. Without addressing the issues that caused the crisis, additional doses of monetary medicine will be required in order to treat the crisis, once again. This could become a perpetual treatment for the world’s economic crisis. Where will this money come from, and what strings will be attached to ensure the control and monitoring necessary to track its’ use? This is where governments, ruling bodies, come into play. Terms and conditions attached to these loans may include government ownership, partial government ownership, government rules and regulations, government over-sight, government monitoring, and in some cases, government control. Of course, we could see all of these apply, or any combination of them applied, given the right circumstances.
We’re basically looking at socialism replacing capitalism. We’re basically looking at government controlling supply and demand, corporate success or failure, employment, profits, and fair market share. The domino effect will cover unions, pension plans, medical coverage, wages, and mergers and takeovers. Publicly traded stocks will be manipulated and influenced by government favoritism, and commodity futures will be influenced and controlled by subsidies.
At this point, very few corporations and businesses have the financial resources to bounce back without the government’s help. In addition, soon, many citizens will seek help from government assistance programs. In short, the lack of jobs and our debt will force us to turn to the government for help. This dependency will create control by the government. The more that we become a suppressed people, the more control our government will have. The deeper this economic crisis becomes, the more likely desperation will steer corporate America and private citizens into the waiting arms of government. Whether we like it or want it, socialism seems to be on the horizon, here, and abroad.
And the next step after socialism is?
The reaction seems to be that of panic and wishful thinking at the same time. So far, the established line of thought is, “doing nothing would be a disaster, with consequences even harsher than the present crisis itself. The wishful thinking is that of “pouring huge amounts of money into a select group of financial institutions and banks, along with a few select corporations, will right the sinking economic ship”. Of course, money alone is not the answer, and will eventually become an addiction so strong, that the economic survival of this nation, and the world, will hinge solely on this dependency.
This “false sense” of being cured by a sudden influx of enormous amounts of capital will be short-lived. Without addressing the issues that caused the crisis, additional doses of monetary medicine will be required in order to treat the crisis, once again. This could become a perpetual treatment for the world’s economic crisis. Where will this money come from, and what strings will be attached to ensure the control and monitoring necessary to track its’ use? This is where governments, ruling bodies, come into play. Terms and conditions attached to these loans may include government ownership, partial government ownership, government rules and regulations, government over-sight, government monitoring, and in some cases, government control. Of course, we could see all of these apply, or any combination of them applied, given the right circumstances.
We’re basically looking at socialism replacing capitalism. We’re basically looking at government controlling supply and demand, corporate success or failure, employment, profits, and fair market share. The domino effect will cover unions, pension plans, medical coverage, wages, and mergers and takeovers. Publicly traded stocks will be manipulated and influenced by government favoritism, and commodity futures will be influenced and controlled by subsidies.
At this point, very few corporations and businesses have the financial resources to bounce back without the government’s help. In addition, soon, many citizens will seek help from government assistance programs. In short, the lack of jobs and our debt will force us to turn to the government for help. This dependency will create control by the government. The more that we become a suppressed people, the more control our government will have. The deeper this economic crisis becomes, the more likely desperation will steer corporate America and private citizens into the waiting arms of government. Whether we like it or want it, socialism seems to be on the horizon, here, and abroad.
And the next step after socialism is?
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