Posted on 07/26/2011 4:04:43 PM PDT by street_lawyer
In the cart below the blue line represents government spending and the red line represents tax revenue. When they say we have a spending problem not a revenue problem I don’t buy it. I think the real problem is that industry has been disappearing from the economy for at least the past 40 years and it would be fair to say the past 70 years. It’s not about what the economy is doing on a year by year. It’s not about consumer confidence. It’s not about spending on national defense, it’s not even about social security and Medicare. The problem is that we have been surviving on a debt as you go plan and a so-called service economy. Neither is wealth producing. China produces wealth, we produce little or nothing. Until the discussion turns toward why we can’t drill for oil, why we can smelt iron, why we can burn coal, why we have an out of control regulatory bureaucracy the future for America is a much lower standard of living then we have had in the past.
I know some want Congress to “compromise”. Just look at the chart and know that there will definitely be a compromise. The blue line will continue to rise and the red line will continue to decline until treasuries are junk bonds, which is undoubtedly going to happen. In fact before President Obama’s programs are in full swing, treasuries are apt to lose their AAA rating. Then interest rates will rise and the FED will be buying treasuries on credit which will monetize the debt and create inflation. That will signal to the rest of the world that the days of the dollar standard are over. China and Iran are already trading oil for commodities and bypassing the dollar. It won’t be long before China decouples from the dollar and allows their RNB to float which will mean everything we buy from China will cost a lot more.
The unfunded liabilities are nearly $115 trillion dollars. If you stack hundred-dollar bills the width and breath of a football field the stack would dwarf the height of the former Twin Towers.
I’m getting the dreaded “red x” Could you upload the chart to photobucket or the like and repost here?
You are going to have to post that image online somewhere convenient and provide an html inline link - if you want it to show up.
Things were sort of booming from ‘45 til Johnson’s “Great Society” came along. Then the spending to buy votes just went berserk. The rest, as they say, is history.
True and well said. One way to get started would be to get rid of local zoning ordinances (now being called “laws” by some counties) against small, new manufacturing starts and outrageous land use regulations against rural properties in sparsely populated counties.
Frank
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