The Government As Identity Thieves

We have reached the point in the United States where the debt our government has accumulated against us is mathematically impossible to pay off. Harder times, likely due to a wave of hyperinflation, will eventually find its way to our streets and I am fearful of how Americans will react. My hope is that we will come together peacefully and help each other, and that enough of us will be aware that the blame rests securely on the shoulders of the Federal Reserve and the special interests. They should not be looked to for salvation. They should not be given more power. Rather, they should be stripped of the powers that allowed them to create this mess in the first place. 

Be careful to whom you look for a helping hand.

Our Unsustainable Debt

What happens when you max out all your credit cards and still don’t have enough money to pay your bills? One thing you could do is get another credit card and roll over the balance. But how long will it be until no one gives you another card? How long before your interest rate goes from 12 percent to 30 percent?

That is the game the United States is playing right now. We are constantly rolling over short-term debt. When our lenders wise up and start setting our interest rates to reflect the risk we’ve become, access to capital will become harder for everyone. It will be more expensive to buy a house, fund a business, or save for the future.

The economy is in a free fall. Politicians know it and the public senses it. Fear is palpable in the eyes of politicians who tell us they have the answers. They know they don't and they know that we know they don't. They are just plodding along, hoping against hope to survive the coming election and maintain their office for another cycle. Unwilling to relinquish their hold on power, they will not get out of the way and let the economy go through the painful but necessary corrections - inevitable corrections which will happen later if not sooner - required before a recovery can begin to take hold.

How To Run a Federal Budget Surplus

Cut spending until income equals outflow. Then cut it some more.

That's it? That's it.

"But what about. . . .?"

This is the universal response that guarantees future government bankruptcies, all over the world. Three words: "But what about," plus a question mark

Nothing in American political history ever since the last year of the Jackson Administration in 1836 has overcome the effect of these three words: "But what about?" There was no national government debt in 1836. Also, that was the last year of the Second Bank of the United States as a government-licensed central bank. Then the recession of 1837 ended the year of debt-free living for Congress. It never happened again.

To head off "But what about?" my recommended reform mandates an across-the-board cut of spending by every Federal agency. No exceptions. Every budget is cut by the same percentage.

"But what about. . . .?" Yes, that one, too.

"But you can't mean. . . ." Yes, I do.

Greece has run out of other people's money (OPM). It ran out of its own money long ago and became addicted to OPM. It is now experiencing withdrawal symptoms. It will happen here unless we act. We will not act in time.