Yesterday, I attended an economic summit. I left somewhat more concerned for America’s future than when I arrived. Not so much because of the deals that probably will not be made during the lame duck session of Congress, which is something that should not be allowed anyhow, but because of our insistence in swallowing the snake oil that is Socialism. We continue to swallow this snake oil, no matter how bad the taste from our last dosage is. We have continued to swallow the snake oil, even though that taste still lingers in our collective, (pun intended,) mouths. Our nation really has become two nations. One is made up of large Urban areas that will always vote for allowing the government to take on an ever growing role as the ultimate authority and provider of everything from A to Z. The other America is the flyover country, those knuckle dragging rubes who seem to feel that outdated ideals such as a constrained government that is not permitted to intrude itself upon the daily lives of those who make up the citizenry is what’s best for America.
We have reached a tipping point, where the two populations are almost equal in size, with very little in common. The result is that compromise is fast becoming a thing of the past, and now means, “your side should just capitulate already.” Know this going into the next couple of months. The people who voted for Barack Obama, and voted for a Senate to be controlled by Democrats, voted for increased government largess and a larger more intrusive government. Those who voted for Republicans to control the House voted for the opposite. In short, Americans got together again this year and voted for gridlock. For those of us who are conservative in nature, gridlock is the best that we can hope for. The Republican controlled House is our cease and desist order for the Obama agenda, and it is still in force. The Tea Party movement in the House is the only Republican contingent not to lose any seats in the shrinking Republican majority in the lower chamber, and has now become a larger voting block in terms of the percentage of the GOP makeup in that chamber. In a world where the Senate has shifted to the left in dramatic fashion, and a President who’s own lame duck term in office will take any centrist constraints placed upon him with the specter of facing an election, the pressure to hold strong will be wielded by a stronger Tea Party movement in a weaker Republican House coalition. In short, don’t look for a deal concerning the supposed fiscal cliff, embrace the self imposed defacto balanced budget amendment, for the two months that it will last.
Economic hardship is coming, and it will not be the sequestration and discontinuation of idiotic and wasteful spending that brings it. If anything, the fiscal slope will be something that softens the blow. The reason that I refer to the events about to unfold as a slope is that it’s effects will not be felt all at once. It will take a period of about 6 months to fully unfold, and the result will be the government not spending more than what it it takes in, in terms of revenue. The ill effects of Obamacare on the other hand, those will be severe, and will begin to be felt almost immediately from today forward. We have already seen several dozen businesses announce layoffs, cuts in employee hours, hikes in prices, movements to foreign markets, etc. directly attributed to Obamacare. We have also seen reports of Doctors, already retiring early, starting other professions, and giving up the practice of medicine, directly attributed to Obamacare. So enjoy your second dosage of that Marxist snake oil America, too bad it will taste no better than the first dosage. Thank goodness that there’s a Tea Party controlled majority in the House to keep us somewhat tethered to reality, how ever loosely.
There is a mistaken belief that people have that says our spending is greater than our taxation, which results in deficit spending. So, here it is. Government spending is taxation. That form that we all think of as taxation is really just the revenue portion of the taxes we pay, the rest is made up of quantitative easing, and debt. After all, the tooth fairy is not waiting somewhere with a bag full of cashed in lost teeth just waiting to make us whole again. While your 401k’s might very well still be reflective of values that have larger numbers in them than when we first elected this President, the purchasing power is most probably less or possibly only the same. In other words, their values were eaten in the quantitative easing tax that nobody actually voted on but was imposed none the less.
Long story short, if you keep stealing money from the private sector in order to continue the Santa Claus fantasy of your promises of free crap to be gifted from the public sector, eventually the private sector will quit trying to produce so much that people see them as a ripe target for theft. They’ll take their toys and leave. Mexico, China, India, or Columbia will become even more attractive places to conduct commerce. When that happens, it won’t matter what the promises were, there will be nothing left to hand out.
Our debt limit is a ridiculous notion at best. Those who lend our government $4 Billion each and every day could care less what our self imposed idea of our limitations are. The debt limit that does matter is our creditor’s willingness to continue this farce. When they begin to worry about the risk of loaning us money, (falling credit ratings should be ringing some bells,) or when they feel the sting of being ripped off due to being paid interest in devalued currency, that limitation will hurt a hell of a lot more.
Economic pain is a necessary part of any economic system, capitalism and socialism included. It is a signal that people need to change their methods and products of production. If left alone, the free markets have allowed those changes to take place with very tolerable signals, that has not ended in whole sale misery. On the other hand, promises to be able to remove all economic pain from the equation has only delayed said pain and always served to amplify the ill effects of ignoring those market signals. The great Depression was a failure of bad government policy, and history has shown that increased government intervention did far more harm than good. There are not solutions, just trade offs.
At what point in our national discussion will we notice that the areas of Urban blight that continually vote for more government control are the areas where misery is experienced in its greatest amount. Likewise, flyover country is where the economic conditions are still relatively strong. At what point will we notice that we should be implementing the economics of success in those places where misery is prevalent rather than the other way around. After all, there is only so much of other people’s money that can be stolen before they are tapped as well.
Tags: Fiscal Cliff