Saturday, October 25, 2008
Burning down the house
I know it's cynical of me to say this, but I actually hope that economic conditions continue to worsen. Why? Simply for this reason alone: Every time the fed/congress makes a move that is ineffectual in improving the US economy, which essentially means every move they make, they further expose themselves as the charlatans they are. Eventually, even the thickest US citizen will come to see that those in DC are nothing more than the equivalent of "that man behind the curtain."
No one person, group, or country can evade reality forever. Reality states that consuming more than you produce is, eventually, a one-way ticket to ruin. In fact, the only possible way one can consume more than they produce is by taking it from another who has produced more than they can, or care to, consume. This is the state of our economy today. We, as a nation, are consuming more than we produce. The way we can do this is via foreign investment of around two billion bucks a day in promises to repay with future taxes. Without that daily infusion of money, we wouldn't be able to function in the way we have been conditioned to expect. Take it away and things get ugly fast. Reality will reassert itself and demand to be heard, and its message will be this: Live within your means or perish.
This does not mean that I think credit and borrowing are bad, for under the right circumstance, they are not. The right circumstance means one would use that money in a way that helps to produce more income, such as when a business buys a piece of equipment that makes them more productive. If the loaned money won't help one become more productive, it shouldn't be asked for. Borrowing should not be looked at as another income stream, as it is with the US government, and too many US citizens, today. Using borrowed money to finance consumables that produce nothing but an obligation is irresponsible, immature, and immoral.
It is impossible to get something for nothing in this universe, but that's exactly what the electorate has come to believe, and it shows via the representatives they elect and keep in office. Somewhere along the line, this something-for-nothing fantasy will answer to reality. I believe we are seeing reality's preliminary questioning of the fantasy now, with a full-blown interrogation to follow.
All of the babble we are hearing today about this or that financial shenanigan is merely obfuscation for the undeniable fact that we have violated the key principle of living within our means and not spending more than we make. Until we, as a nation, face our profligate ways soberly, the kindling for the eventual fiscal meltdown will continue to pile higher and higher and make the coming conflagration more and more destructive.