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As a humble housewife, I don’t understand national economics. I don’t have a degree in business or finance from Harvard or a series of impressive letters after my name. But from their behavior, I’m going to guess our elected officials don’t understand economics, either. To be fair, economics is a blisteringly complex subject, and everyone’s take on it is based on what affects them the most. It’s like that old fable about the blind men and the elephant.
Whether we like it or not, economics affects us all, but in different ways. Take inflation, for instance. I’m pretty sure the yahoos in the Beltway are entirely unfamiliar with what life is like on the ground floor of Real America, but all we have to do is take a trip to the grocery store or doctor’s office to understand that prices aren’t what they used to be. In the real world, grocery prices and energy prices continue to rise, as do health care and educational costs. Ask anyone living on a fixed income whether or not they’re impacted by inflation.
Yet to read federal statistics, it looks like our economy is just hunky-dory. The Consumer Price Index (CPI), which the government uses as the measure of inflation, ranges from a perpetually modest 0.8 percent to 2 percent. Nothing to see here, move along.
Of course, the CPI excludes some of the priciest components of ordinary existence in America, such as food and energy costs. It excludes education and health care costs. Who cares if the price of milk or electricity has doubled in the last few years? Who cares if you can’t afford to go to the hospital or send your kid to college? It won’t affect that miniscule CPI statistic. It’s like a great big elephant in the room everyone pretends isn’t there. Nothing to see here, move along.
In other words, when our government officials try to assure us that inflation is modest to the point of nonexistent, they’re lying through their teeth. “The CPI is no longer a tool to accurately measure inflation, but an instrument of propaganda the government uses to hide accelerating inflation from the public and financial markets,” notes economist Peter Schiff. “While everyone knows prices are rising, the CPI for March 2013 registered a 0.2 percent decrease in consumer prices. … The true rate of inflation is probably somewhere between 7 percent and 10 percent, not the 1.5 percent officially measured by the CPI.”
This figure is confirmed by Shadowstats. This is another elephant nobody admits is in the room. Even if you can’t see it, don’t step in the pachyderm poo.
So why does the government misrepresent inflation? There are various theories, but my personal feeling is the government doesn’t want to send the American people into a panic. Because let’s face it, if We the People knew a) just how screwed up the economy is, and b) how hard our own elected officials have deliberately worked to screw up the economy, then we’d be in the streets with pitchforks and those elected officials would no longer be able to shovel gold and silver into their Swiss bank accounts.
Of course, inflation by itself is not necessarily an indication of a bad economy. To get the true gauge of how weak America has become, we have to look at our debt. Believe me, $16.5 trillion dollars is one humongous invisible elephant. But it gets worse.
“While $16.5 trillion of debt is clearly unsustainable,” notes this article, “what is even more alarming is what we are not talking about: The fact that, in addition to the $16.5 trillion of debt we currently have, every man, woman, and child in America also is on the hook for nearly $400,000 in unfunded liabilities – or, over $1 million for every household. [Italics in original.]
Aha. Yet another elephant. My my, it’s getting crowded in here. And the floor is a mess.
But wait, there’s more. “As Washington wrestles with the roughly $600 billion ‘fiscal cliff’ and the 2013 budget, the far greater fiscal challenge of the U.S. government’s unfunded pension and health-care liabilities remains offstage,” writes Chris Cox and Bill Archer in a piece from November. “The truly important figures would appear on the federal balance sheet – if the government prepared an accurate one. … The actual liabilities of the federal government – including Social Security, Medicare, and federal employees’ future retirement benefits – already exceed $86.8 trillion, or 550 percent of GDP.”
These gentlemen point out that even if the government confiscated 100 percent of every American’s income, as well as all corporate taxable income, it wouldn’t come anywhere near funding the nation’s liabilities. It would be, as they point out, like bailing out the Pacific Ocean with a teaspoon.
How’s that pachyderm manure level in the room? Deep enough? Nope, not yet.
John Williams, an economist known for “asserting the government reports manipulated ‘shadow statistics’ of economic data for political purposes,” says the real unemployment rate for July 2013 was 23.3 percent, not the 7.4 percent reported by the Bureau of Labor Statistics. For purposes of comparison, unemployment in 1934, at the height of the Great Depression, was 24.75 percent.
Wow. Another elephant.
And what about Obamacare? This is the dark horse … er, elephant … of expenses. Right now we know that Obamacare subsidies will cost 65 percent more than estimated in the 2012 budget. That, as Rick Moran points out in American Thinker, is “a massive commitment of federal resources.”
More elephants. We have a whole flippin’ herd of elephants in the room, pooping with abandon on the American people. But our elected officials, high in their ivory towers, don’t have to deal with it. Yet.
I said at the beginning of this column that I don’t understand economics on a national scale. I do, however, understand economics here on our farm. Quite simply, you can’t spend more than you earn, and you can’t “debt” your way into prosperity. If a humble Idaho housewife gets it, why don’t the educated elites in Washington understand?
Or maybe they do. It IS possible for our leaders to “debt” their way to prosperity. It just requires the debt to be on someone else’s back.
There’s a lot of steaming poop piling up with all these elephants in the room. And you know what? Someone’s gonna have to shovel it.
And I have a stinking suspicion it won’t be our elected officials.