Now, let's take a look at where we are currently at in our country. Here is a resource that I am sure most of you have seen before:
This lays out our current fiscal situation and what is acutally going on. You quickly see that we are...uhhh...F'd.
The situation of course is reverseable and we can most certainly return to a sound government and sound money, IF the People demand it. But the wrong
debates and discussions are taking place, thus pushing us away from the real issues at hand, primarily the unsustainablity of the status quo.
So what's the problem? How is this system unsustainable and why?
Currently, we are spending $1 for every $.50 collected through taxation. The rest is either borrowed or monetized (printed) by the Federal Reserve.
Borrowing comes at a cost of higher interest rates, where the FED is often more accomodating.
Because of this deficit spending philosophy, that the status quo is OK, we currently spend nearly $400 Billion every single year in interest alone on
our irresponsible spending. This in and of itself is bad, but what is much worse is that the irresonsibilty doesn't stop there.
Because we monetize the debt, this burden isn't directly felt by the tax payer. Through their monetory policy (Incremental Inflationism, long-term
depreciation of the US Dollar), they are able to facilitate the very government spending that continually benefits NO ONE in the long term.
Here is what we face:
In 2040, the ENTIRE federal budget will be consumed by two items: Medicare and Medicaid. We thus will have three options: Cut federal spending by 60%,
double taxation across the board, or rapidly inflate the money to keep the status quo going. Hmm.. I wonder if we reach that point, which option will
they go with?
All you have to do to confirm this is look at our unfunded liabilities, which now total over $105 TRILLION and is constantly growing. The $12
Trillion we currently have in debt and the $1 we spend for every $.50 we collect through taxes will PALE in comparison to the deficit spending and
explosive debts that we NECESARILY face in the future.
It is no stretch to think that we will reach levels similar to Germany, 1914-1923, when they spent $1 for every $.15 collected through taxation. Of
course all of this was done under the guise of good intentions and of course the people loved it, since they became more and more dependant on the
government as the programs grew.
Eventually the situation was unsustainable and eventually the wheels fell off the bandwagon that everyone was so willing to hop on. This resulted in
the absolute collapse of their currency and the decimation of their entire economy. The German mark, which had traditionally been strong, fell in
value to the point that it took 42 BILLION of them to equal a single US penny by the peak.
Hans Sennholz has a great article on this on mises.org (an amazing site with a wealth of info from the great Austrian Economists that have
consistently gotten it right):
In the end this highlights just another example of how those in power can never be given the benfit of the doubt. We must question them and must get
answers instead of accepting an unsustainable and unsuccesful status quo.
It is impossible to think of our society as free when our dollar is being depricated and our monetary unit is not sound. It is impossible to think
that we are free when the average American taxpayer must labor for 5 MONTHS A YEAR to accomodate his overlords with taxes. And all of it for what?
Give me freedom, liberty, equality, sound money, and sound government that adheres to the Constition ANY DAY, and WE, the People can solve our
problems, NOT government bureaucrats who claim good intentions but deliver nothing but tyranny.
[edit on 17-10-2009 by Boom Slice]