Sunday, November 21, 2010

National Debt part 1

There are times I could just scream. People enraged about taxes and the national debt (in the same breath) are the same ones creating the problem. Yes, George W. Bush got us into two expensive, poorly thought out wars. Then, in the closing act of his comedy, we got TARP (signed into law Oct. 3, 2008 by President Bush). President Obama was inaugurated to the tune of a traumatized banking system, a stock market disaster and industrial collapse. The stimulus package, health care bill and assorted other economic corks have added to the problems, but none of these address the root of our dilemma. We are spoiled children. We got in this mess by wanting everything, now. We went in debt. We removed laws that kept the financial institutions from making bad loans on real estate. We have a love affair with credit cards. And, we buy Chinese goods at Wal-Mart because they are cheap and we want it, regardless of the consequences.

Look at the reality. Our personal debts are out of control, and this reflects in the national economy. That compounds the problems of the national debt. Take a single issue: Trade imbalance. We have more money going out of this country than we have coming in. If this was your house, you would know that you were headed for financial disaster. However, conservative economists tell us this is healthy. They, and the politicians and pundits that espouse their philosophy tell us, that being in debt is good for the economy. After all, Bush said after 9-11 that we should go out and spend for the good of the country. That’s what we all need when we are depressed, a good trip to the mall.

The fact is, that a bad balance of trade means less jobs. If you are out of work and buying at Wal-Mart you have done it to yourself. That means fewer tax payers. It means more people on unemployment or another way of saying it is, a bigger drain on the working tax payers. Businesses, such as the big box stores, are making bigger profits. Under Eisenhower these businesses paid as much as 91% taxes. Today they pay 30% and cry like a rat eating onions about it. Reagan was blind about the trickle down economy. Profits never trickle down, debt does. Worse, that national trade deficit carries over into national debt. The debt is in dollar instruments. Countries like China use these to buy the U. S. debt in the form of bonds. As our money weakens, they defend themselves by playing with the exchange rate. Our debt grows.

Big business wants it to stay this way. The guiding philosophy of our financial and industrial institutions is short term profits at the expense of long term growth. One is fast, one is slow, that is American. They back the Tea Party movement to the hilt (with lots of money, both overt and covert). This is not conservative nor liberal, this is stupidity. Big money buys our elections. Big money does not care about our long term survival, they are in it for short term profits. They know they will survive. And the masses follow blindly. Buy Wal-Mart, vote Tea Party, it is good for China.

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