Endlessly printing money always leads to money that isn’t worth anything.
Everybody wants an “A” but nobody wants to study. Everybody wants to be rich but nobody wants to save. Everybody wants to lose weight but nobody wants to exercise. Everybody wants to go to heaven but nobody wants to die. No matter how you say it, the desire for something without the willingness to do the hard things required to achieve it, will always lead to disappointment. This is the cadence of the conundrum, the drumbeat of the do-nothing dreamer, the national anthem of the nihilist; the perennial I want but I will not work formula for failure.
The signature phrase for the conservatives of this generation of Americans should be, “We all want a sound economy but we aren’t willing to endure the life-style changes it would take to get there.”
Case in point: the coming Fiscal Cliff, the looming disaster of sequestration that every talking head on every network blathers about endlessly, “It will happen” “It won’t happen.” Pick a side and it will be argued back and forth hour after hour, “The President won’t let it happen, “The President wants it to happen.” Over and over we are barraged by the same few people who constitute the pundocracy of America debate what will happen. There is only one thing they are all agreed upon. If we go over this cliff, created by a vote of Congress and a signature by the President it will be terrible for our country. Why stop there? It will be terrible for the entire world.
Just think, if we Americans raise our taxes and reign in our drunken sailor spending binge it will be a disaster for us and for everyone who draws breath on this planet. Not to worry we, the poor unwashed in fly-over country, don’t have to scratch our pumpkin heads and wonder why it would be a disaster if our country took the steps necessary to save our economy the network appointed chatter chiefs are quick to tell us.
One side says raising taxes on anyone in a weak economy may push us over into a recession. This of course comes from the people who evidently don’t buy their own bread, pump their own gas, or know any of the millions who are now permanently out of work, in other words personally prosperous people who believe the Great Recession actually ended. The other side says raising taxes on anyone they don’t consider rich would be a disaster.
Both sides agree that at least half of the spending cuts would be a disaster. One side points at defense spending as a surrender of national security. While the other side points at cuts in entitlements as throwing grandma off the cliff.
The answers they propose are as predictable as a Hallmark Christmas movie. The Progressive Democrats say raise the taxes on the evil rich and cut spending to the defense department. The Progressive Republicans say raise revenues by closing loop holes and cut spending on entitlements. The problem with this is that just like Representative Paul Ryan’s draconian budget it still never gets us to a balanced budget let alone paying down the principle on the National Debt. Both sides favor plans that keep on borrowing even if it might be at lower levels than at present. Maybe we will only borrow thirty six cents of every dollar instead of forty six. Wow! That should really make our arrival at the ash heap of History a few moments later.
And that is the heart of the problem. Or as another old saying tells us nobody wants their own ox gored. It is the “Not in my backyard syndrome” applied by everyone to something. We all want cuts in spending but not in our spending. We all agree that wasteful programs should die but every program has its supporters. This is where reality takes a bite out of dreams. Unless we balance our budget and reverse the slide into bankruptcy our days as a great power, let alone our days as the world’s only super power, are numbered, and everyone knows China is counting off the numbers.
Looking around in the cloistered world of self-appointed opinion writers I hate to have to be the one to tell my fellow Americans this but we have to do the work to get the “A,” save the money to get rich, do the exercises to lose the weight, and we most assuredly will have to die to go to heaven.
We, through our elected representatives, have spent like there was no tomorrow until tomorrow is mortgaged to pay for today without asking the question, “How are we going to pay for tomorrow?” I guess we have always figured we could use the day after tomorrow for collateral. That may work for a while or at least until our children and grandchildren have been sold into slavery to the highest bidder.
Unfortunately my generation, the Boomers who proudly offered Bill Clinton and George Bush the Younger as our contribution to the pantheon of American Presidents, has kicked the can down the road while paraphrasing Louis XV on the eve of the French Revolution, “After me the flood.” Or as many fellow boomers have phrased it to me, “It won’t crash in my lifetime.”
Now the handwriting is on the wall, the torches and pitchforks are seen on the horizon, and it is becoming obvious though the end may not come on December 21, 2012 it isn’t too far off. Anyone who isn’t comatose in the cultural soma of social media and the game can see you can’t continue to spend more than you bring in forever. The interest on the National Debt is going to eat us alive. Our creditors won’t keep lending us more and more once they realize our only answer is to print our way out of debt. Ask any scam artist trying to live by charging their Visa to the MasterCard when the shop keepers start cutting up the cards the happy days aren’t here anymore.
What we need to do is go over the fiscal cliff, and instead of using the ensuing economic contraction as an opportunity to re-launch the United States in a fundamentally new direction tighten our belts. We have got to go through a period of austerity to return to reality.
Endlessly printing money always leads to money that isn’t worth anything. Even if our current leaders think they have figured out a soft landing for this lead balloon they haven’t, and when that bubble pops the economy stops.
Our fiscal conservatives who want to return to a gold standard should tell everyone that doing that will cause a contraction in the value of money that will resemble a train going 100 miles an hour hitting a brick wall. There just isn’t enough gold in the world to value every American dollar at one dollar. A return to gold would give us an economy based on real money, and that would be a good thing. However the proponents of this course need to be honest about the transition from funny money to real money: there will be a great deal of pain on the way back to reality.
There are plans to do something from the right. There is the plan to cut off Social Security at 55. Everyone younger having paid into the world’s greatest Ponzi scheme all their lives get another deal. Even if it is a better deal they will still feel like they are getting ripped off because they are. There is also the plan to cut all the wasteful spending out of Medicare but leave it all over at the Pentagon. These plans won’t fly because they only have one wing.
The left has a plan too. Raise taxes on the rich, and keep on spending. This may eventually pass due to the President’s perceived strength and the Republican leadership’s Progressive inclinations and acceptance of defeat but it will only continue our progress towards national suicide.
The fact is we can either choose to cut the spending, raise revenues, and save the future or we can continue to stagger like drunken sailors spending our children’s as yet unearned money until our creditors pull in the leash. I know calling for higher tax revenues is heresy to most conservatives, and I am not in favor of the government taking one more cent than necessary for Constitutional purposes. Saving the country from ruin is the ultimate Constitutional purpose.
Like any household that is buried in debt we need more money and less spending; the trick is getting both. The slight-of-hand artists in Washington are great at striking Grand Bargains for taxes now and spending cuts that never materialize. That never has worked and it certainly won’t work now. We could do it without tax increases. Without taxes the spending cuts would have to be much deeper and more painful, and we can’t get anyone to sign on for the pain of cuts with taxes.
Here’s the secret of raising revenues with taxes. We can’t raise rates which merely increases tax avoidance. A flat tax would bring in increased revenues by growing the economy and would indeed be fair. In contrast raising rates in a progressive tax system is merely punitive and is a populist trick to buy the votes of those who earn less.
If we don’t endure the pain now, if we don’t endure the necessary radical fiscal surgery despite years on life support, decades of refusing to take our medicine will finally cause our economy, and with it our dreams of a brighter future, to die. However, we won’t get to go to heaven. Instead we will go into debtor’s prison as our beloved nation sinks beneath mountains of debt into the second or third rank. We will watch as a tomorrow which could have been ours becomes someone else’s.
When our children and grandchildren ask us, “Where’s my inheritance?” we will have to say, “We spent it yesterday.” When they ask, “Where’s our future?” we will have to say, “We spent that too.”
Instead of being pushed over the cliff, let’s dive over and then resist any attempt to restore the spending. Let’s take the pain so our children can gain.