Did you see that sign we passed about three years ago on the road of rampant government spending? It read, “Now Passing: Point Of No Return.”
You might have missed it though. See, it was obstructed by one of those nice big pretty signs President Obama had put up proclaiming how the American Recovery and Reinvestment Act was providing funds to have the road repaved. Now we are well past the point of no return and most people do not even know it.
We have a huge problem with our national debt. The debt, the official debt anyway which does not include massive expenditures such as unfunded liabilities, has been vacillating up and down recently and over the debate whether or not to raise the debt limit. Believe it or not, since May 17th the debt has been going down by about $12.5 million every day. That however is peanuts when you consider that the debt stands at just south of $14.5 trillion. Do the math and find out how long it would take to pay it off and you see why that is a paltry amount of reduction.
To summarize where we stand, Democrats, for the most part, want to keep cranking up the printing presses and spending the money coming off of them as fast as they can and then some. President Obama, for example, earlier this year proposed a $3.7 trillion budget for 2012. That is about $1.2 to $1.5 trillion more than the government is expected to bring in.
On the other hand Republicans, for the most part, want to cut the printing presses back to about half capacity and spend those dollars as fast as they can. Rep. Paul Ryan, for example, has proposed a federal budget for 2012 that would spend a little south of $1 trillion more than the federal government is expected to bring in. By 2021, his vision is that America will still be running about $385 billion in the red. Overall, Rep. Paul Ryan wants to add roughly $6 trillion more to our massive federal debt.
For years the federal government has been dumping wheelbarrows of money into the economy, providing grants and subsidies for all sorts of things as well as employment to tens of thousands more federal busybodies than we reasonably need. In the past three years the federal government has upped the ante. They are no longer using wheelbarrows. They are dumping 747’s full of cash into the economy.
I get called “naive” by apologists for this sort of activity. I get called worse too. Especially when I point out that no sound economy can be based on such a principle. People, who themselves are insane, think I am mad when I call for trimming back all the unconstitutional spending and literally hacking ideally upwards of one and a half trillion dollars, that's per year mind you, from our current 2010-2011 spending levels and at the very least spending no more than we bring in. “But J.J.,” they wail, “too many people depend on that money the government is spending!”
Yeah, they are right. In 2010 and 2009 we spent roughly $1.7 trillion more than we brought in. In 2008 we spent $1.4 trillion more than we collected. In 2006 and 2007 we spent $500 billion more than were our receipts. I will let you do the research as to how much we went into debt in the years prior to this. It was not trillions each year. But it was still a lot. And it has added up.
In each year, all that extra money which we did not have went to line someone’s pockets. Indeed a lot of people depended on that money to earn their living; a living fleecing the tax payers. But if we do not stop spending that money we are doomed. I do not care what lies those who want to keep this ungodly level of spending put forth. You cannot make up the difference by taxing the rich or corporations. You cannot support spending more than you bring in, not when we are now burdened with a national debt that is nearly six times total yearly revenues.
We are going to crash and burn hard if we keep up with the status quo. Eventually people want their money and eventually you do not have enough money to pay them. Sorry. That is just basic Economics 1. It is not even Economics 101. If we keep spending more than we have there will be a crash from which there will be no recovery except from the ashes of an America burnt to the ground. There will be no base to build on. Everything will have to start anew.
But cutting spending back to match revenues would doom us too. The good news is however that it is doom, unlike the alternative doom, from which we could be saved. Yes, cutting off the spigot that has been recently dumping trillions of phony dollars into the economy is going to cause a lot of pain to a lot of people who have been living on those dollars. We are talking about taking a large chunk of money, phony as it may be, out of the economy. In fact, and I do not dismiss this, it would most likely crash the economy worse than we crashed in 2008. But it would not rend America to nothingness.
In fact, you would probably see a recovery within six months to a year. The economy would begin to rebuild as people adapted to the lack of all these paper dollars no longer being dumped into the economy. Yes, there will be instability and it would be rough. Yes, there would be a lot of people hurt. But the recovery would come.
Compare that to what we see right now. Following the crash of 2008 we pumped and pumped and pumped in the cash. Here we are three years later. It is now 2011. Housing prices have double dipped and according to ADP there were just 38,000 payroll jobs added in May. Unemployment just ticked up again. We are still waiting for the promised, “Summer of Recovery.”
Lots of people have gotten rich off this whole scenario. They have sucked up government dollars and increased their wealth. But what is obvious is the pump and dump plan of Presidents George Bush and Barack Obama has not worked. It has not worked just like the New Deal of FDR did not work and actually sent an economy, already recovering after the 1929 stock market crash, into a true depression.
Why doom ourselves and commit ourselves to never being able to recover? The point of no return has been passed. To quote James “Clubber” Lang from Rocky III, the correct prediction is nothing but “pain”. We must choose our pain wisely.
Copyright ©2011 J.J. Jackson