The Economy – One Last Chapter

This entry is part 7 of 50 in the series 2011A

My friends. I have not yet gotten around to publishing my book – Molecular Politics because it needed one more chapter dealing with our monetary system. After a lot of reflection and study of the subject I am finally ready to write it. Here is the first installment.

An Out of Control Economy

We have to do something about our out-of-control borrowing and spending or this time period will mark the real beginning to our troubles instead of the end of a financial downturn.
There are several things on which the vast majority agrees. The problem is there is major disagreement on how to proceed with these agreed upon problems.

(1) The weakened dollar needs strengthened.

(2) The government spends too much and the federal budget needs some common sense control just as a family budget does.

(3) We do not want to borrow so much that our children and grandchildren will become poor debtors.

(4) It is dangerous to borrow so much money from countries that are potential enemies, let alone from friends.

(5) We pay way too much interest on borrowed money, currently around $450,000,000,000 a year and if interest rates or the debt ceiling changes this could go way up. This is an insane situation.

(6) There is far too much waste and fraud with taxpayer’s money.

(7) There is too much frivolous spending and political paybacks that add to the wasted spending.

Almost every politician gives lip service to these causes of financial problems but few will support any kind of action to solve them

Why?

Because any time there is a cutback in spending some individuals and groups will feel threatened with loss. – then, after that threat occurs, these people will lash out in every conceivable way at the politicians who tried to be fiscally responsible.

We do not see many attempts at fiscal restraint in the federal government because representatives are not limited by a balanced budget amendment. The case is different with many of the states, however, where a balanced budget is required.

Therefore when we had the financial disaster that started in 2008, even though all governments were short of funds, the federal government borrowed and spent more than ever. A shortage of funds provided no incentive to conserve spending for politicians were terrified of voters complaining of cutbacks.

On the other hand, some states were forced to make cuts in spending whether the politicians wanted to or not.

In my home state of Idaho we have a balanced budget amendment. Since we were hit hard by the Great Recession like everyone else action had to be taken. Governor Butch Otter had to look at ways to increase revenue and cut spending.

To increase revenue he proposed a one-penny increase in the gasoline tax. When he did this you’d think he was ordering a pound of flesh from each of us. Both conservatives and liberals cried foul and the proposal was dead in the water.

Then to offset cuts made to parks and recreation Otter increased various fees for camping, registration and services. Again there was a outcry, especially from senior citizens who had to pay more to enjoy Idaho’s beautiful campgrounds.

He then talked of turning some underfunded campgrounds over to private enterprise who would keep them open for a profit.

This time there was great suspicion from the Left who does not trust that business has the public interest as a priority.

Because of the budget shortfall Otter found he had to look at every possible avenue of spending when considering cuts. Finally he had to look at the sacred cow of education. He cut education by about 7.5%. He explained that this was not as bad as it sounded because the percentage of the budget dedicated to education actually increased. The problem was that the budget itself was much less because of shortfalls.

Again, there was a major outcry, especially from those involved in education. Letter after letter appeared in local papers making known their displeasure and painting a very undesirable picture of our governor. Here are a few things they said.

(1) We should have used our reserve account for emergencies to keep education fully funded.

The trouble with this idea is hard times are continuing and the reserve account may soon be gone no matter what we do.

(2) The governor was accused of supporting funding for his pet projects while leaving education out to hang.

The trouble with this argument is that no governor is squeaky clean enough to escape this accusation. Since values are a matter of opinion then those hit by cuts will always think money is not fairly spent or distributed.

(3) The governor was accused of being anti education or hating education.

I don’t think this is true of any governor in the union and is a cheap shot.

(4) Many liberals voiced this cut and dried, yet simple criticism. The governor and legislators lacked guts enough to just raise taxes enough so cuts in education will not be necessary.

Even if the conservative governor was willing to do this he would have been crucified by his own party and may have lost his bid for reelection.

What do we learn from this reflection on state and federal spending?

We see that one of the reasons the federal government overspends so much is they see what happens to State leaders who do support legitimate spending measures and then get attacked for it. It just seems so much easier for them to borrow more money, supply the needed funding and be done with it.

Except this time round we are reaching a critical mass in borrowing. Even the general public, which usually does not pay much attention to financial matters, is waking up to this and demanding action.

The problem is that many will complain no matter what cuts are made.

So far we have presented some ideas of what can be done to restore financial security, but this will not be enough. Sooner or later we will have to apply one more all-important measure – a reform of the monetary system.

Some think that this is wishful thinking, but I submit that it can be done and will present a plan that can turn this country around and head it in the direction of its true destiny – the economic light of the world.
Copyright 2011 By J J Dewey

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Copyright 2011 by J J Dewey

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7 thoughts on “The Economy – One Last Chapter

  1. The best way to keep politicians from over spending and inflating is to not give them any money or any control over the monetary system. Thousands of years of history has proven trusting politicians with money they have not earned is like trusting teenagers with car keys and whisky.

    1. yes, and we have all been teenagers, and we still can’t be trusted with money. All of us are flawed.
      We cannot keep politicans from control. We elect them to do exactly that.

  2. You wrote:

    “Some think that this is wishful thinking, but I submit that it can be done and will present a plan that can turn this country around and head it in the direction of its true destiny – the economic light of the world.”

    I think the answer is not some new idea, but simply going back to an old idea that made America great in the first place. It is properly called laissez-faire capitalism. America needs to become friendly again to business and innovation. A lot businesses are going overseas or expanding overseas because America has become terribly unfriendly and the cost of doing business in the U.S. keeps going up and up.

    By “becoming friendly to business” I do not mean doing favors for big business. What I mean is reducing taxes and regulations and government just getting out of the way of innovation. Government doesn’t need to “help” business. It just needs to get out of the way. People in government have no real idea how to fuel innovation and the only innovation government can come up with is the realization that government is not the solution, but rather the problem.

    In the big picture it really comes down to two choices. You can have some form of socialism (where we have been headed for a long time). The true goal of socialism is equality for all. The reality though is that socialism can only promote equality of poverty. Socialism is incapable of creating the explosion of wealth and opportunity that once characterized America.

    On the other hand you can choose freedom and free enterprise. This is not the “freedom” that leftists espouse where they imagine freedom as equality of result. This is the freedom of opportunity. It is absolutely true that in this system there will be a great disparity of result. Some will be very, very rich and some will be relatively poor. However the “poor” in such countries tend to have a lifestyle that exceeds the average in most countries that don’t give people economic freedom.

    In nutshell you can have the equality of poverty or the wealth of opportunity. You can’ t have both. You must choose one or the other.

    The Obama’s and Socialist Apparatchik of the Democratic Party want the equality of your poverty while they enjoy wealth and power managing the poverty of the masses.

    lwk

    1. Thanks for the typo corrections Larry. I invite all who notice any to point them out as they are difficult to catch. When Artie goes over this with a red pen she’ll catch some more things. I deleted your corrective suggestions and implemented them.

      As you know I agree with you on free enterprise. The problem is in implementing it. I think our best hope is returning power to the people while educating them in the process, as I talked about in parts of the book already written. This final section will present ideas that will make for a sounder money system, without which a free enterprise or any other system will be quite limited.

  3. Larry Woods says,

    You clearly nailed the problem. But this is not unique. Many successfully pointed out the problem before. I admit that few managed to do it so succinctly. I eagerly await your solution. That will not be so easy. You will keep our attention if your solution is 1)Understandable – which it will be if it turns on principle and 2)Workable – of course, this must not only work mechanically but must also work politically despite the problematic situation you describe. No pressure… but we do expect and need some miracles from you.

    Your brother,
    Larry Woods

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