Hebrews 12:1-2

"..let us run with perseverance the race marked out for us. Let us fix our eyes on Jesus, the author and perfecter of our faith..." - Hebrews 12:1-2

Wednesday, August 17, 2011

Why I Think America Is In Deep Trouble

Last week I was thinking about all of the hype surrounding the debt-ceiling when it occurred to me that I haven't check the status of the Federal Reserve's Monetary Base lately. What follows is a lengthy post where I try to recapture all of my thoughts on this and various topics that I have written about over the course of the past few years.

I started tracking the Monetary Base prior to attending the April 15, 2009 Tea Party in downtown St. Louis, after which I posted my reasons for attending the tea party event. Included in that post was a graph showing the National Debt Per Capita and the Adjusted Monetary Base.

I'd like to quickly review my reasons for attending that rally, with updated comments written in red:
The following reasons are listed in no particular order:
Reason #1 – The Federal Government is much too large for it to function efficiently and smoothly and it doesn’t take a brain surgeon to figure out that all that red tape and back scratching leads directly to wasted taxpayer funds. This has not changed and has, in fact, become and even bigger problem.

Reason #2 – The Taxes levied by the Federal government have become too burdensome and outrageous for the common man to be able to understand, let alone keep track of them all. A large part of the debt-ceiling debacle was around raising taxes to help cover the deficit. Obviously, this continues to be a nightmare.

Reason #3 – The total national debt is out of control. Yes, this has been a problem for a long time, but that doesn’t mean that we shouldn’t acknowledge this problem and begin taking the necessary steps to tackle this problem. When the government consistently, year upon year, spends more than it takes in, continues creating more wasteful programs and refuses to reign in and reduce spending, then the obvious outcome of that snowballing debt is a complete and total debilitation or failure of the economic engines that propel American prosperity. If you or I ran our house like the Federal government controls its checkbook, we would all be bankrupt and in prison for falsifying documentation, counterfeiting, and stealing. The debt is much larger than ever before and continues to increase in size every day that no significant change is enacted. There is no reason why the United States of America should not have had its credit rating lowered by all of the financial agencies in the world. Regardless of what Warren Buffet may think, this country is not worth the risk of loaning money to in its present state of affairs.

Reason #4 – The devaluing of our currency is an economic and moral nightmare. The Federal government has pumped so much cash into the economy over the past 6 months 3 years that it would seem altogether impossible for this action not to result in inflation at best, or hyperinflation at worst. Either outcome is harmful to American and its citizens and should be avoided by all means necessary. At this point, the question is how to begin reducing the amount of currency in circulation and the answer is one that the Federal government refuses to accept: let the free market correct itself and determine the true value of the dollar. While such action will undoubtedly lead to tougher times ahead, this correction is necessary to overcome the mistakes of our past and ensure that we are standing on solid financial ground in the future. The rate at which the Fed continues to print bad money is astonishing. Here's an updated graph of how hard the printing presses have been working for Uncle Sam since January 1, 2008:

Presidential candidate Rick Perry may think it's almost treasonous to continue printing money, but I don't think that's quite harsh enough. I consider it an incredible form of fraud that is being propagated by the Federal Reserve on both the American citizens and the people of the world who are somehow tied to our currency (whether through government loans, support or investments). It's unconscionable what is happening and, in my opinion, unconstitutional. There is no reason to expect that this trend will cease which means there is no reason to expect that the dollar will increase in value anytime soon.

Reason #5 – The free market is being crucified by career politicians who have grown so fat and rich off the lobbyist dinners and donations that they cannot relate to the middle class, let alone the poor. … When the government injects itself into any market, the dynamics of that market are altered until the government removes itself from that market. People are still wanting to know when the recovery will really begin. I think the answer to that question is "as soon as the government gets out".

Reason #6 – States rights appear to have ceased to exist. It was never the intention of the Constitution to allow the Federal government to dictate policy to the states. The Constitution exists to promote ease of commerce, transportation and defense of the consortium of states, allowing the states to determine all other issues as they see fit. The lawsuits surrounding 'Healthcare Reform' are a perfect example of this abuse by the Federal government. It seems rather obvious that this issue should be escalated immediately to the Supreme Court and yet I do not expect to see them attempt to tackle it until it is more politically convenient.

Reason #7 – The America I grew up in is disappearing. My daughter was born on November 10, 2008, the same day the bailout of AIG was announced. Since that time, the politicians have done their best to make certain that my daughter has an ever-increasing amount of Federal debt hanging over her head, growing it at a rate that defies imagination and pushes the current form of government to the brink of extinction. The total US Debt has increased from 10.2 trillion dollars to over 14.6 trillion dollars since Lydia was born.
As of today, the per capita debt is $46,996.49. The average increase in the debt has been  4.3 billion dollars per day which calculates to $50,421.71 per second. That means that at the current rate of spending, every second that passes by the Federal Debt increases at a rate that is greater than 100% of the average current citizen's load of the debt. There is a net gain of 1 American every 12 seconds.That means that for every person gained to help pay for the debt in the future, we are increasing the per capita amount many times over the capacity for them to ever pay it. For every second that passes without significant change, we are literally altering the landscape of America for future generations.
Reason #8 – Political correctness and political dishonesty are accepted as the norm. Somewhere over the past few years this nation has seemed to forget the idea that everyone can form their own opinion and has the right to voice that opinion in a peaceful manner. ... I refuse to point my finger solely at one party and refuse to vilify any one person for the actions our government has taken over the past several years. Every politician is to be held responsible for their votes and actions, and I am determined not to let political or religious affiliation to dissuade me from holding their feet to the fire that they have created, fueled and allowed to grow out of control. There's a growing list of people who need to be getting ready to pack up their offices and move back home. It's time for people with fresh vision, fortitude and willingness to make the tough calls to step in and give the Federal government an extreme makeover.

Reason #9 – The political machine of America is broken and we need to fix it. This isn’t about a party. … This about what is at the core of the idea behind America. It’s the idea that when I disagree with how the Government is being run, I can speak up against it without fear of retribution. This is about me standing up for what I believe is common sense and good governing practices. This is about me fearing the direction our government is heading and wanting to help raise awareness and bring about a renewed sense of what I believe our Founding Fathers prayed for. … There’s more than enough blame to go around. Let’s stop pointing fat fingers and start slimming down by doing the hard work that is necessary if we hope to get out from under this mounting calamity.
There is still to much posturing and not enough decision-making happening in Washington, DC. While they argue over jobs saved or created, future budgets that aren't increased and the need to raise taxes, America is dying on the vine. Stop running for re-election and start making the tough decisions that will allow America to turn herself around in time.
Since then, I have followed with a post about the Total Outstanding Debt Owed by the US Federal Government in February of 2010 where I wrote:
As you can see, the trend is almost a reliable increase of debt every year, with recent history showing an unbelievable amount of debt owed by our government increasing by incredible margins every year.

I fear the repercussions of this terrible fiscal behavior and believe that this debt will one day become the downfall of the prosperous United States of America. I pray that our representatives will determine to reduce the size and span of our Federal Government, reduce the taxes imposed on the American people and commit to reduce the debt every year until it is entirely removed. (Yes, I am a dreamer.) 
It doesn't take Nostradamus to figure out that we were/are on an unsustainable path. Obviously, the politicians have not done anything to reduce anything about the Federal government, other than reducing the nation's credit rating.

In February of 2010 I also wrote What Uncle Sam's House Looks Like, which was my attempt to boil the national situation down to the household level.
The typical American family is broke and digging a deeper hole each year. The federal government is getter bigger each year, and does not generate any income on its own. What this means is that the Federal government will have to continue to raise taxes to cover that minimum payment, which will result in more families going bankrupt. As more families go belly-up, the tax base shrinks, leading to less "income" for the government. And so the cycle becomes self-perpetuating, leading to the eventual collapse of the government as laid out by the Founding Fathers, only to be replaced by a much different structure and format.
Part of the reason the debt-ceiling issue came roaring to the forefront is because the tax base has grown smaller and the amount of taxes being generated are less than previously. Again, I am not a psychic, just a normal guy who knows how to keep his checkbook balanced and his savings account in the black.

Then, in March of last year, I wrote the post Money Makers, in which I stated
Who says you can't spend what you don't have? Our government does just that and then prints more money to reduce the deficit between their spending versus available funds. I fully anticipate to see this line continuing to trend upward, much to my dismay and as an ever-increasing, impending threat to our nation's economic security.

How's our economic security looking right now? I think it is fair to say that we are on some pretty unstable ground right now. How do we get from where we are to where we should be? In my opinion, there has to be significant cuts to the current Federal budget, not future versions of what might be expected. There needs to be no new tax increases. The government needs to get out of the market manipulation business and let supply and demand propel industries to innovation and transformation.. The Federal Reserve has to stop printing more and more money and should be required to disclose any proposed adjustments to the monetary base prior to that action happening.

Now that I am all fired up I will end this long ramble.
If you read through to this point, you deserve an award or something. 

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