Includes thoughts and comments about energy needs, resources, conservation and their relationship to politics at home and around the world.

Tuesday, July 19, 2011

Debt, Deficits and The Economy

As the battle continues over raising the national debt ceiling and deficit spending, those who provide jobs are waiting with baited breath for the outcome. Job providers are that way, they need confidence in the future else they will not hire more people or risk losing their money on new ventures. It is especially difficult now because payments on the national debt are increasing rapidly as a percentage of GDP and getting to the point where a collapse of the economy is likely if we don't cap it off. When 40% of every dollar spent by the Feds is borrowed money, something has got to change and change quickly.

If we continue raising the debt ceiling, we are simply delaying the day of reckoning and passing the problem to future generations. I would much prefer we bite the bullet now and even face a total economic collapse if necessary. If that happens, close down all government agencies except the military and homeland defense and rebuild the nation from scratch along the lines envisioned by the founding fathers. A total collapse is unlikely, however, because no one in Congress has got the guts to do it, but we must start the process of reducing government spending. Here's how:

Balanced Budget Amendment

There is no reason why the federal government can't tighten its belt just as many states and the hard working private citizens among us have learned to do. The feds will not do it short of a constitutional amendment requiring it. It usually takes a awhile to get an amendment ratified by the states, so the process must not be delayed any further.

Term Limits

Career politicians are a major part of the problem, not the solution. They get too comfortable and complacent the longer they remain in office. With that comfort and complacency too often comes fraudulent activity of one sort or another at worse, or inflexibility in the least. Many states already have term limit laws and there is no reason why the federal government can't do the same. If it takes another constitutional amendment to do it, so be it.

Federal Department Review

The need for each federal department must be reviewed objectively. Those not needed should be closed down. Two candidate departments come to mind immediately---Education and Energy. Those for which there is a continuing need should be reviewed with an eye to reducing staff and streamlining the organization for greater operating efficiency.

Federal Reserve

The GAO's shocking report on their findings in the first ever audit of the Federal Reserve ought to insense anyone who cares about the future of this country. Reportedly during the period of December 2007 through June of 2010, the Reserve doled out $ 16 TRILLION to major banks here as well as international banks at 0% interest ! This shocking information alone is evidence enough that the Reserve should be closed down.

Late News

The bill to raise the debt limit was signed into law by Obama on August 2. Initially most observers saw it as a minor victory for Tea Party Republicans and a defeat for the Democrats. Further analysis indicates that the only winner is Obama, which is testimony to his talents in deception. He avoided immediate cuts in any of the nation's wasteful programs with any cuts that were in the bill all slated for the out years when he and most of his cronies are not likely to be in office. He also avoided another battle over the debt ceiling limit until after the 2012 general election.


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