By TRB
Sometimes I wonder what I will be doing, where I will be driving to, where I will be living when it all comes down. And I worry about us all.
National debt problems in the United States are now so scary that one has to be more than a simple optimist to believe that there is any path out of this financial cave or any end to it, for that matter. We are $14 trillion in debt - that is $46,250 per person (not per household) in the United States. The average income in the U.S. is only $40,584. (All these figures are from either the New York Times or USA Today, and represent the known figures of 2010.)
While the clueless president and the two-faced Congress were struggling over budget figures of $30 - $50 billion several days back, scoring all the points they could for their various ideologies, no one was saying a damn thing about the $14 trillion debt hanging around the nation's neck. The silliness of it is maddening.
For example, as Congress and the President were suggesting the economy could be shut down last week over figures like $30 - $50 billion, interest was accruing on the National Debt. This year it is expected to go over $400 billion and will probably top $700 billion in 2013. And that $14 trillion just gets larger all the time.
You ask to whom do we owe this money? We actually produced this money to use for ourselves over time. Then, to "service" it we began selling it in bonds to foreign nations. China is now one of the largest holders of these bonds. And they have reason to wonder whether these bonds are worth anything.
Will they purchase more? Probably not. Will the Japanese? They have their own problems. And Europe knows better. So, short of selling off parts of out national debt in bonds, what can we do? Nothing. We can sit here and watch it rise. In fact Obama want to raise the debt ceiling this month.
In the background of all of this is the possibility that the dollar could become so weakened that it would no longer be the international monetary standard. People around the world are afraid of the U.S. dollar, afraid that it is not worth its value. If that attitude intensifies, which is more of a possibility now than it has been since the dollar first occupied this possition, then the value of the dollar would drop, through lack of demand.
It could lose value. Some believe it could lose 50 percent or more of its value. Meanwhile, Americans, who can afford to, are buying gold, even some other foreign currencies that are stronger than ours at this point.
Meanwhile we continue with the macroeconomics of "supply side," which those with knowledge in the rest of the world openly call "idiot economics." Its inventor Ronald Reagan called it "trickle down" economics. He didn't know what he was talking about. The deal - and it was a deal if you were wealthy or owned a corporation - was that your taxes would be lowered every year. Just natually, that would give you, the millionaire, the CEO the extra bucks you needed to expand your business or to hire more employees.
But that never happened. It didn't even happen once during its entire over 30-year history. Now Reagan's former head of the treasury David Stockman agrees that supply-side economic do not work and never will. His budget plan for today is caled R.E.D. As outlined in New York Magazine it means we have to Raise revenue (taxes), lower or better control Entitlements and cut the Defense Dept. to ribbons.
And the U.S. government has to do something about income disparity. It is so out of hand, it borders on criminal. The following figures are from the New York Times list of highest paid CEOs: Number one is Viacom CEO Philippe Deuman, who was paid $84 million last year. Frank Irani of Occidental Petroleum got $76 million. And Larry Ellison of Oracle got $70 million.
All of this would not mean much, except the Corporate Branch of the U.S. government (and it is a Branch, as powerful as Congress) went crying to Congress for money after the financial institutions were caught stealing back in '08 and the Fed bailed them out for trillions in losses. To be "good guys" about it, they took all that money that you and I and our children and grandchildren will have to pay some day and they did not give themselves raises.
Well that day has past. Since 2008, while the rest of the nation has seen a loss of jobs and a loss of income and benefits, the CEOs have experienced a 12 percent increase in pay - across the board. So their pay is now greater than it was in the pre-Depression years. Our largest corporations don't pay taxes at all. Heck, the governemnt owes some of them money.
This is the kind of greed and carelesness that is eventually going to bring the dollar down, lower its value on the world market and transform us, against our wishes dreams and hard work, into a Third World Country.
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