I was speaking with a colleague about the current economic conditions. We were discussing Greece and their predicament, and why that could (and frankly should) happen in the United States. By all measurements, especially Debt/GDP we are in worse shape than Greece. Why haven't we started to fix this I asked?
He expressed a good point: the common people don't really know how this is going to effect them. College professors, politicians, etc. can talk about GDP, National Debt, Keynesian theory - but until someone says "if this happens, no one has a job" people will continue to argue for Government spending.
So in that spirit, here is my attempt at making this simple.
The United States Dollar is the reserve currency of the world. This means that EVERY country will pretty much accept your US dollar. Our CURRENT debt estimate for the next ten years ($107 Trillion) is so high that we are UNABLE to service our debt. We have been effectively servicing our debt by rolling it to a new borrower, much like shifting the balance of my Visa to my MasterCard. In the end, they BOTH want to be paid, but we just CAN'T pay right now. We can not increase taxes enough to cover this debt. We can't even really inflate our way out of this debt. The only way to take care of this is CUT spending. Period. The Supreme Court has the authority to FORCE Congress to uphold their oaths. They can follow the Constitution and eliminate all other government spending that is not dictated in that document. This means Social Security, Medicare/Medicaid, etc. (this alone could possibly fix it) and even Defense (which is dictated) could be cut in half, because we DON'T have to police the world.
Now, how does that effect you? If the government defaults or inflates the dollar supply ALL of your money becomes useless. You will NOT be able to purchase food, housing, etc. with it. It will be as useful as toilet paper.
What do we do to fix it? We have to elect Representatives that will make the tough choices. That will ACTUALLY cut spending. And then we need to NOT PUNISH them for doing what needs to be done. What do you all say?
PS - If you are interested this article explains this concept fairly well.
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2 comments:
Jeff,
This is clear application of true principles, as usual.
I have hope that people will wake up and realize that many in government are not working in their best interest, and need to be fired.
There are days that I feel despair because I also see some citizens who are so used to having things handed to them, that they will not make the hard choices in their own homes. This person will not have the fortitude to search for the candidate who will tell them the bad news.
I join Jeff in the idea that we must make the hard decisions now, or we will be pushed into a place financially where we will lose the ability to make choices at all.
We must get our houses in order so we have credibility when we chastise Congress. Thankfully, many of us have already awakened.
*Applause*
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