LegendaryLife Blog

7.5 trillion dollars is a lot of change!

ABC News published an rather interesting article about how the United States is trying to spend itself (to the tune of 7.5 trillion dollars) out of a self-caused and predictable economic disaster.

Mmmm… predictable? Well… YES!

From what I understand of this financial crisis, the path it took should have been easily predicted by those in the “know”. Put people into houses they cannot afford, have investment institutions re-sell the mortgages to other investors (washing their hands in the process) and the population, including the government, borrowing off the backs of future generations to solve NOW problems. Living in debt only causes MORE debt to be accumulated.

Empire USA?

I don’t know where to start but the United States has been run like an empire for as long as I can remember. They have military bases all around the world, five nuclear powered aircraft carriers with more on the way along with subs etc… basically, there isn’t a place on Earth where the United States does not project it’s power though its dominant music, language and financial practices. I have been in the boonies of Malaysia and heard Michael Jackson as well as shanty towns in the middle of nowhere in the Philippines and yes, again, heard American music. I don’t think there is a place on Earth that isn’t Americanized in some degree. This isn’t a good or bad thing, just a fact from personal experience. The US dominates this planet, in the sea, air and even space! This is more power projected by the United States than the Roman Empire could have ever imagined!

Resources Ending!

What does the Mayan Empire, Roman Empire (to a certain extent), Ottoman Empire and even the Russian Empire have in common? Well, they all RAN OUT OF RESOURCES! Russia went essentially bankrupt, so did the Ottoman Empire when their currency dropped due to the Spanish influx and the Romans had a rather similar issues as the USA is facing now (army spread thin, attacks and deflation). History does repeat itself, and sadly, people, especially governments, always seem to think that they are the one “exception” from the rule. Why is running out of resources bad? Well, no money means cut-backs by everybody involved, exponentially more vulnerability to outside influences and generally a hollowing-out of the citizenry who support economic activities (middle class). If you are in debt and have a negative net value, you are essentially broke… the United States needs to realize this NOW and make decisive changes NOW to avoid the end of the United States as we have all known it.

What can we expect in the coming years (decades)?

Generally speaking, an economic collapse usually happens VERY FAST! If the USA goes down, China will soon follow because, guess who is the guarantor of most of US debt? Well, you guessed it… the communist country that has become the worlds factory! Second is, I believe, Saudi Arabia! So, two very valuable economies would surely go bankrupt very fast leading to a worldwide depression that makes what happened in the United States decades ago look like a drop in the bucket. Basically, the two main columns that support the United States onto ever-precarious heights will be squashed by the weight coming down. This is what the world leaders fear as, you guessed it, the weight would also crush their economies! The last G20 meeting, didn’t you notice that not one world leader shook hands with President Bush when they stood for a portrait? The United States Empire is incredibly fragile, more than the government will ever admit and it’s literally scarring the shit out of other world leaders! The consequences are already being felt, municipal, state and even federal coffers are full of IOUs, there is a lack of money to fund education, housing, social security and the vast list goes on!

Any Solutions

First, who ever said deficits don’t matter belongs in a loony bin or is eating too many Lucky Charms. If debt matters to you and me, it sure as hell matters to those “higher-up” the food chain! The bigger the numbers, the bigger the headaches, as governments around the world are well aware of. You cannot SPEND YOURSELF OUT OF DEBT! So, solution number one – NO MORE BORROWING. This means lots of tough decisions need to be made, better now than on the backs of future generations!

Second, if you are super wealthy, time to pay-up! If you make over 10 million a year TOTAL, it’s because of your country, the lives lost in war and investments by the public into YOU that you are so wealthy. Sure, you probably worked your ass off as well, but 10 million is a heck of a lot of money, if you can’t live off that, you need a quick trip into a ghetto for a reality check. Anything over 10 million means 90% tax rate (without any allowable deductions).

Third, cut the government by 75%! The role of the government is to help run things but not to provide jobs to everybody who wants one. This means military spending needs to be dramatically cut along with a lot of other redundant roles, many of which can be automated.

Forth, lead by example. If your congressman can have free health care, than the general public should as well. Basically, whatever you give to the “higher-ups” must automatically be given to those “lower-down”. Power shouldn’t lead to free lunches.

Fifth, and most important, get health care out of the private sector. When people no longer need to worry about their health care (within reason), then they can concentrate on improving their lives and that of their family. Now, I would also go a step further and ban access to people who abuse their bodies by living an unhealthy lifestyle or at the very least, make them PAY until they are healthy, otherwise, tough luck. You don’t care about yourself, we don’t care about you. Getting hit by a bus is usually an accident, choosing to drink and smoke and eating junk food all day is quite another.

Sixth, if there is NO money for something, you can’t do it. If you want to build a vast array of wind farms across the world, the private sector needs money so why shouldn’t the government be held to the same standards?

Seventh, automatically spend 10% of GDP on research and development. Money comes from advances in the future, not living in the past, preach entrepreneurship to children, not 905, tell people it’s up to them to create the life they want, not to believe in tooth fairies to improve their lot. Basically, stop being dilusional and become a realist.

Eight, NOBODY is “too big to fail”. This is pure nonsense, that is as dumb a philosophy as “pre-emptive attack”. What happens in a forest when the biggest tree dies and falls? Well, a new clearing is formed and innovation, growth and ultimately, NEW life emerges. If GM, CitiCorp or (name your company) fails, it isn’t the END… it’s a huge opportunity for new beginnings by more innovative firms and people! Trying to support a dying company is like trying to keep a person on life support, the end has already come and passed, you are just prolonging the agony. No matter the cause, shit happens to everybody and if it causes you to fail, so be it.

(feel free to suggest your own)

The Bottom Line

Pay now or pay later, either way, you have to pay but sooner is always better than later.

Buzvia: ABC News 7.5 Trillion dollars in borrowing!

Note: This is my 300th post on this blog…