The Political Bomb

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.

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.