I don't think there is any point in our history where the national debt has been as sharply high while taxes have been so low. On another thread today, Stormcloud posted this "Where else are you asked to disregard your observations of the natural world and believe in something unseen?" This is a stunningly profound question to ask. A favorite theme of mine that many of you are aware of is the theme that in choosing Ronald Reagan in 1980, we collectively voted as a nation to ignore reality and pretend that reality could be whatever we envisioned it to be. It was a choice to say that we could, in one fell swoop, simply negate everything that had occurred prior and be something completely different. VooDoo economics indeed.
To be clear on one thing, this is not a dump on Reagan the man. It could have been anyone. People were enraged at the haplessness of Jimmy Carter and they would have embraced anyone who showed up and said, "This guy is full of bullshit, American's don't suffer like the rest of the world because we are better." Looking at the results of what started after Reagan, we have enormous, unquestionable trends that show how sharply we divorced ourselves from believing in the seen in favor of the unseen. Taxes dropped like a rock, spending shot up, the debt exploded. The fantasy here is that we have convinced ourselves that not only are those things NOT a chain of causality, they are not even related. As our economy went to shit and we transferred all of our jobs overseas in order to perpetually consume cheap comforts and live beyond our means, the growth of people on government assistance skyrocketed. Predictably, we blame government handouts for the lack of willingness to work, but we do not cast a second glance at a dogma that preaches there is no higher moral then allowing competition to crush our middle class.
What we've individually embraced seems less important then what we have collectively embraced. I've certainly got my blind spots being left of center, but what I most want to see is a strong middle class. Not a middle class that pretends they are something better and lives like they are wealthy, but a middle class that works everyday, provides for their family, and takes pride in it. There is no political philosophy that will bring that. What will bring that is a decision that that goal is more important than any philosophy we cling to. Clinging rigidly to things that make us feel good, like low taxes in a time of war and debt, like having the world's biggest military and drones to attack whoever we want whenever we want, like cable news and all the bitterness that comes with that, will not bring what I want to see. Nor, apparently, will voting for Democrats who are unwilling to show leadership. At best, we will likely see a piddling tax increase on the top earners that will not change their lives one tiny bit and will not remotely begin to pay down what we have rung up in debt to please those with money and assets. Lack of change will have little to do with Obama the man, but everything to do with America writ large.
Max, read my topic on MMT
ReplyDeleteModern Monetary Theory
Max
ReplyDeleteYour post should be required reading for all high school students. I say high school because those further advanced in their lives are past learning the basic truths you have illustrated here.
Your history is spot on and your description of the rise and rise of fiscal and societal debit cannot be surpassed. It is not only the entitlement mentality, now spreading like a plague of locusts throughout the world, but the belief so well implied in your post that "Americans are better". A laudable sentiment no doubt but a simple examination of a once great culture and a prosperous economy illustrates the stark truth.
America for decades has over reached in terms of living standards, foreign policy still based on the credo that wars are best fought on foreign soil. We see the establishment and fostering of economic standards suitable once, but no longer affordable. And successive governments who actually try to live by the aspirations of the spin doctors rather than the bottom line in the national accounts.
Your “Middle Class” is a misnomer to all but Americans; you appear to consider trades people (electricians, bricklayer’s auto workers and mechanics as middle class. I think you are alone in that belief and in most other countries these are the working class. Middle class are the professional graduates, Doctors, Accountants etc. I accept that both your country and mine live by egalitarian principals (providing we can do so without sacrificing either our personal position or standing!
I read elsewhere in these posts today that although you have 14 trillion in debit, it does not matter because you have far greater asset backing! If so, why not reduce the debit so that you pay no interest. The tomato soup referred to elsewhere will taste good when you sup it from a spoon you own rather than a spoon you bought on credit.
Cheers from Aussie
Thanks Kingston for a thoughtful reply. Well, you've seen the posts here and on MW. There are many very simple truths we don't acknowledge in this country, particularly, by those who should know much better. It's a fair point you make about middle versus working class. I would probably look at those two terms as being a bit more fungible. I think that educated people like doctors and teachers should be in the upper class rather then middle class, but current economic thought is rapidly redefining the value we place on those professions.
DeleteIn this country, I believe our class system has become investor class and then everyone else. We seem to have a great deal of esteem for the investor class and no doubt, there are countless numbers who hope that someday they can earn their money by buying and selling rather then slogging out a daily existence showing up for a full day's work as a bricklayer or even a doctor. As a nurse, the function of my job is very labor intensive despite the level of education required. Because of that, I suppose I identify much more with working class then anything else.
Your last para there has quite a bit to chew on. Because we have chosen to focus so intensely on protecting asset prices, we have given ourselves, IMO, a very false sense of security in how much wealth we possess. We used to be savers and owners. Now, we all long to be investors which is a polite word for trader. If we started to strengthen our dollar, our assets prices would fall. While this would greatly benefit those with fewer assets but more cash, it would hurt those whose asset numbers far surpass cash reserves. Again, I am posting very simple logic here, but I don't think many people get that. Those who work for wages in this country are in a very bad spot right now and will be for a very long time.
Middle class in the US is defined by income. The working class, assembly line workers at one time were middle class, homes, new auto's a summer cabin. Today that has change due to the buy foreign philosophy. That is why our middle class is shrinking, many of our high paying manufacturing jobs have been exported for cheap TV, iPods and the like.
ReplyDeleteElectricians, carpenters, brick layers much the same and paid very well. In the not so recent past we began hiring illegals to do the same work at a fraction of the cost, low wages, few benefits. Today in the cities, it's rare to see an Anglo tradesman.
The debt today stands at 16.2 trillion. An insurmountable debt however the interest rates are kept very low with the ave. interest rate paid at 3%. In 4 years it's expected to pass 20 trillion possibly up to 22 trillion. Even with low interest rates, we are quickly becoming insolvent. A sad ending to a once great idea.
In the midst of all of this "middle class" class warfare tripe our constitution remains. Blaming our current malaise on cable news is laughable, simply laughable. As if diversity of opinions a bad thing, talk about Newspeak.
ReplyDeleteJudicial fiat leading to abortion on demand with it's loss of over 40 million souls in the US alone leading to a cheapening of life has contributed to 4of10 children being born as bastards.
Our revolution was not the French revolution, our fad of a leader is temporary. Fifty years of leftist education has done much damage, but damage that can be reversed.
1773-2003 We continue to gain strength.
"Judicial fiat leading to abortion on demand with it's loss of over 40 million souls in the US alone leading to a cheapening of life has contributed to 4of10 children being born as bastards."
DeleteYeah, take away abortion and our respect for life in this country will shine like a city on a hill
How would you turn around the fact that seven of ten black children are born out of wedlock Max?
DeleteOr does that fact not bother you.