You may be too young to remember the Depression-era hit “Brother, Can You Spare a Dime?” But a hit it was, underscoring the widespread, almost universal, anguish and economic dilemmas millions of Americans found themselves in.
Breadlines and soup kitchens were everywhere, in big cities and small towns. Huge numbers of fine people were homeless, or moving in with other family. Skilled and experienced people couldn’t find jobs, and many sought menial work, even digging ditches and cleaning streets. Anything to put something to eat on the table.
Many notable and laudable charities started during the late ’20s and early ’30s. Driven by necessity and compassion for others, citizens found ways to work together to help those who simply couldn’t help themselves. They couldn’t depend on the hapless government, which seemed paralyzed and clueless, so they banded together in various ways, determined to find and create answers.
You may not have lived through this period; I didn’t myself. But I’ve read and learned a lot about it, and I hoped this country would never experience anything like it again. But I ask – does any of the above sound familiar right now, today, in America?
You know it does, but let me share a few facts about our current situation.
For reasons unknown to me, our government abandoned the gold standard during the Nixon administration. Up till then, every piece of U.S. currency was backed by an equivalent dollar value in solid gold. The relative value of gold might vary, and with it the value of the dollar – but the American dollar was always literally worth its weight in gold. So it became the currency standard of the whole world, the currency against which all others were valued.
Since then, our dollar has steadily declined, over time, against the pound, the yen, the deutschmark and today against almost every other currency. And as our national debt spirals upward like debris in a tornado, China and India and Japan are seriously questioning why they still hold U.S. bonds, or would want to buy (lend) any more.
As economist/author Bob Wiedemer reasonably suggests: “Ask someone if he would give a loan to a business, if it had debts equal to eight times its revenues (not profits – revenues). Most people would laugh at the proposition. Now ask that person how the government can get people to lend it money. He’s likely to answer, ‘Unlike you and me, the government has a printing press.'”
Exactly! People know that’s the basis for our tremendous “credit line,” so to speak. But it’s also the source of our downfall.
Bob points out that nobody wants to lend our government money if they can see that they’re going to be paid back (if at all) in currency that is worth much less. I can understand that, can’t you?
So a vicious cycle has been created: The Fed keeps the printing presses whirling (as Chairman Bernanke proudly showed on “60 Minutes”), inevitably leading to runaway inflation and devaluation of the dollar, in turn creating predictable reluctance among investors to buy our bonds. So the Fed keeps printing yet more paper money … and on it goes, spiraling beyond repair.
You and I, just ordinary citizens – homeowners, business people, housewives, even the guy that delivers pizzas – can see instinctively this can not go on!
Why can’t this administration, even our Congress, see this picture? They do. They do; they just can’t bring themselves to do anything really effective about it. They’re embroiled right now in a tug of war about raising the debt ceiling even more, and wrangling about how to make commensurate spending cuts to offset the resultant spiraling taxes. And the vicious cycle continues.
The Heritage Foundation just revealed:
- $2.4 trillion – the estimated overall tax increase faced by American families, seniors and businesses if current tax cuts are not made permanent.
- $1,716 – the average tax increase for 100 million Americans if temporary tax cuts expire, according to recent economic estimates.
- $2,034 – average tax increase that will hit 17 million seniors if the tax cuts of 2001 and 2003 aren’t made permanent.
- $3,637 – estimated tax hike, on average, that 26 million small-business owners will be facing if current tax cuts are revoked or allowed to expire.
- $1.5 million – number of jobs destroyed by the Death Tax (so-called estate tax), which causes many survivors to sell homes and farms and to shut down or sell small businesses to pay the tax.
- $16.5 billion – the amount spent by Congress on frivolous “pork projects” that use taxpayer funds to reward special interests and insure their own legacies.
- $503 billion – the initial cost of “Obamacare” tax increases, cunningly buried in the huge takeover bill and identified specifically by the Heritage Foundation research.
Is all this OK with you? Do you feel you’ve even had a voice in the decisions leading to all this?
Even granting that people of goodwill can have differing opinions and envision different economic solutions, aren’t a couple of things just as obvious as the decline in your purchasing power right now?
- You cannot reduce debt by increasing it. Our president somehow believes, and tries to convince us, that by steadily piling on more outlandish debt … $1.5 TRILLION A YEAR … that we’ll magically pay it down, a few years after he completes his second term. Do you buy it?
- We’ve got to quit selling America to foreign investors, period. Not just our bonds, which are really borrowings on our part, with unpayable interest – but foreign investors are buying our companies and other properties. They now own more than $16 TRILLION in U.S. assets!
- We’ve got to cut our whole government bureaucracy in half, or more. Almost 30 percent of active, good paying jobs today are government jobs, often redundant, unnecessary and even unconstitutional. This would greatly reduce our annual debt.
Rep. Paul Ryan has a well-researched, well-thought-out plan of spending cuts, tax relief and shared, temporary austerity. Sen. Harry Reid is determined that the Democrat-controlled Senate will defeat it. Why? His political base doesn’t like it.
Friend, if we citizens don’t rise up and demand that our public servants serve us, and not their own political ends, some of us may well be on a street corner, singing the title song of this column.