posted on Dec, 26 2007 @ 05:26 PM
Massive debt is always the inevitable consequences of supply side/free market economics.
Back in the robber baron days at that beginning of the industrial revolution, the draconian business practices of those in positions of wealth lead
to constant boom bust economic cycles, and a completely un-manageable capitalistic economic systems. Powerful corporate interests succeeded in
turning our economy into a Darwinian nightmare.
The Fed Res was created to control and balance this process, the creators thought that they could continue to rob the public blind by manipulating the
banking process. This worked for awhile, but eventually lead to the great depression.
The neocons, who are the same as the old cons, began trying to repeat this experiment back in the eighties, and once again when they took over
congress in 1995. This has lead up to historical proportions of public and private sector debt not seen since, you guessed it, the twenties.
We are currently set up for the perfect storm, and my opinion is that the people who created this frankenstein monster of an economy have no clue as
to how the fix the looming problem. They are just hoping and praying that the trends change direction and the whole thing smooths over, and that
maybe the poor and middle class will have to suffer some. The truth is that we are in deep doo doo. Real unemployment, which means counting all
those who are currently deemed unemployable, is somewhere above 18%. While many want to claim that the mortgage crisis has peaked, it really has just
began, the over pricing of real estate might have been one of the greatest run ups of all time, which means that the fallout will most likely be of
equal proportion. What goes up must come down. Not only was the Christmas shopping season disappointing to retailers, it was financed primarily with
credit card debt. There was an article on the internet that has disappeared stating that this is the first time in decades that Christmas shopping
has been financed primarily with debt. In the mean time, oil prices are continuing to rise, Saudi oil production has probably peaked, and the easy to
get, good quality, cheap to produce oil is probably on the decline, which means high energy costs are going to get much worse.
Markets require two main components, supply and Demand. Without demand, all the supply in the world does no good. This is why China concentrates on
selling to the U.S.. China doesn't have homegrown markets, and before their economy can ever succeed they will have to grow markets at home. The
U.S. consumer is the consumer for the economies of the world. With stagnate job growth, stagnate wages, and historical levels of personal and public
debt, it looks like the U.S. consumer is tapped out once again. Of course, the beginning of the boomer retirement starts the year after next, and all
that money that has been invested for boomer retirement will now start to be withdrawn, which will grow into an ever larger drain on the economy.
These levels of historical debt could not come at a worse time.
Are we doomed? Not necessarily. Retiring boomers also mean job openings, as boomers leaving the work force leave a vacuum of skilled labor behind
them. The income tax has become an un-necessary burden on the middle class, who are paying for things that they should not be paying for, the huge
national debt created by military expenditures, our overseas military presence, and medicaid which subsidizes illegal immigration. These massive
government spending programs primarily benefit giant international corporations, and so giant international corporation should start paying for these
Eliminating the income tax with greatly decrease the cost of skilled U.S. labor, and allow us to more fairly compete with labor around the globe.
ending illegal immigration will push up overall wages, and stimulate demand. If we move if these directions, we could return to true prosperity.