Ending The US Economic Tailspin
After WWII, with the advent of the jet engine, a race was on to see who could break the Sound Barrier first.
To pick up the final burst of speed in order to get past Mach I, just over 760 mph, test pilots would go up to 45,000 feet, and then point the nose down and fall to earth. At the last moment, they would “pull up” on the stick, expecting for that to pull the plane up and out of the dive.
Several pilots killed themselves in crashes, until in October, 1947, one pilot, Chuck Yeager, realized that pulling up on the stick was making the plane go down even more.
Today, in the US, we have a similar situation with the Economy and government spending. Recent Presidents and FED chiefs have been trying to goose the economic speed that our country’s flying at by pulling up on the stick – or piling up on the spending and printing stick.
Instead of the Sound Barrier, they are approaching the Light Barrier – roughly $5.5 Trillion in government spending each year. When they pass that level, our fearless leaders will be spending faster than the Speed of Light – around 186,000 Dollars per Second.
However, as they pile up ever more deficits and monetizations, they are finding themselves crashing the US Economy into the ground. More government “Stimulus” and more FED Quantitative Easing (though no longer by that name) are doing the opposite of what they expect.
Why would any sane person expect that spending beyond your means will make you rich? Why would they think that debasing the currency, by flooding the politically supportive sectors with free paper Dollars, is good for the Economy? Why would they think that more and more interference with our Free Market – the Capitalist System which originally made the US the richest country in the history of the world – would make it work better?
Just because they use the word Stimulus doesn’t make it so. It should be obvious now to one and all that more government is pushing our country into the ground. How long will it take until we have somebody in Washington, DC, with the brains to recognize that pushing the stick down – cutting not just deficits but actually cutting spending – will pull the US Economy out of its tailspin? And, somebody who has Chuck Yeager’s guts to try it?
There are many economic analyses available, a few of which I’ve re-blogged here at US-Issues.com, which suggest ways to cut spending. This is not rocket science.
However, so far even the strongest budget hawks in Washington just don’t understand the magnitude of the problem. Cutting a couple of Trillion over 10 years is a joke. We need to cut a couple of Trillion Dollars from government spending EACH YEAR!
The US needs to Balance the Budget – today rather than maybe somewhere in the distant future. We need to run Surpluses now so that we eventually can pay off the National Debt. We need to cut some more, to control the Unfunded Liabilities, variously estimated at well over $200 Trillion. We need to keep cutting so that, once interest rates return to Free Market levels, and the interest on the National Debt triples, we still will have enough surplus to reduce our government’s indebtedness.
To do this – to cut a couple of Trillion from government spending each year – it necessarily means that the truly harmful government programs must end. For example, ObamaCare will have to end. Subsidies for wind and solar power, and for electric vehicles, will stop. The various Entitlement programs will need to be phased out. The army of rent-seeking bureaucrats will need to be sent looking for jobs in the private, productive sector of the Economy. And, the list goes on.
The US still has, nominally, the largest GDP of any country in the world. On a Purchasing Power Parity basis, China already has passed the US. On a per capita GDP measure, several countries already have left us in the dust.
If the US is to slow and stop our decline to the level of the “also rans,” we need to act now. We can’t afford to elect yet another socialist into the White House. We can’t afford to vote for more of the same socialism in Congress – in both parties. We can’t allow – and shouldn’t put up with – only candidates for office who will continue and expand socialism in the US.
Capitalism is what made us rich and will make us rich again. Socialism is what is destroying our country. It really is that simple.
Robert (Bob) Shapiro is self-taught in Austrian Economics and has consulted briefly for the governments of Mexico, Greece, Portugal and Spain. He has traded Gold & Silver and their stocks since 1970. Bob Shapiro’s blog is http://us-issues.com