So, like the proverbial thief in the night, I steal onto the scene with yet another installment of (quite lengthy) ranting and vitriol.
You guys may be wondering where I've been, and I will gladly explain.
Just before the 2010 Congressional election, some few of you may remember my saying that the election wouldn't be the saving grace everyone expected. The left wing was all set for their majority to remain intact, and that wasn't going to happen; the right was all ready for their team to storm into the Congress like gangbusters and fix all that ails our beleaguered country in one terrifying, awesome stroke of conservative policy, and that wasn't going to happen either.
You may recall; what I said was that the Republicans would win the election in a landslide... and then proceed to business as usual, which would be a dagger in the heart of the nation.
Sadly, as you may recall from past predictions, I am not often wrong about these things, and this is one of those times.
You ever have a time when you didn't WANT to be right?
That.
So, as I have watched, jaw agape, expression of shock, horror, and despair firmly plastered on my face, our Congressional leadership thundered into the halls of power with a vast mandate from the people, and did...
...Well, nothing, really.
As I expected, they've spent ONE HUNDRED PERCENT of their time in office thus far on things that don't, and shouldn't, matter; gay marriage, again. Abortion, again.
For FUCK'S SAKE.
Really?
Where I've been is too fucking bummed out by our current government to make myself blather about it; I'm only posting tonight because my girlfriend and a couple of my buddies pestered me relentlessly to see what I'd say about recent events.
So, ok.
We hit a golden opportunity; a place and time where events conspired to allow Congressional Republicans and TEA Party members to ACTUALLY DO what they were elected for; reign in spending, massively, and thereby cut the debt and the deficit.
See, the federal government hit the debt ceiling.
Wait, wait, back up.
It occurs to me that as is so often the case, many of you might not know - even if, having watched the nightly news, you think you do - what exactly all this brouhaha was actually about.
So, let me back up to the beginning of things, and explain.
See, we owe a shitload of money, as a nation. (Don't worry, I will get into detail later.)
But since we spend like addicts, and we are hooked on Failurenomics, the federal government ends up blowing all the money it takes in in actual revenues like Gary Busey and Charlie Sheen on a weekend bender, and then in order to keep paying for things, we have to borrow more money.
What the debt ceiling is, really, is a statutory - note that word - limit on how much outstanding debt the United States can hold at one time; in other words, we took out all the payday loans we could, and Crazy Eddie's Fast Cash Express cut us off.
No more, you're done, turn in your chips and back away from the gaming table.
THAT was the opportunity.
See, in order for the government to remain in operation, it had to be able to continue to borrow money...
Wait, wait.
Back up some more.
Why the hell did we hit the HIGHEST AMOUNT OF DEBT WE'RE ALLOWED BY LAW TO HOLD in the first place?
Well, that one's easy; we've been doing it routinely for essentially the entire history of our nation.
See, the Founders were bright guys, but in their day, spending more than you bring in was considered so obviously poor business sense that they didn't see a need to put a requirement for a balanced budget into the Constitution; "Surely," said they, "no-one would be dumb enough to destroy a nation because they couldn't add."
...Or words to that effect, anyway.
Knowing what I do of Ben Franklin, my guess is probably fairly close.
At any rate, they didn't put in a limit on spending in the Constitution, and as a result, our government has spent more than it earned throughout basically its entire history.
Periodically, the Congress has quietly gotten together and raised the limit on outstanding debt, so that there wouldn't be any disruptions to the average citizen, and importantly, they've only once made any serious provision to pay any of it back.
There are payments here and there, but never a serious attempt to actually reduce the country's debt burden in a meaningful way, by paying any of our actual creditors OFF.
The thing is, this wasn't actually a problem until recent years; the amount of debt our nation carried, until the 70's - the long national nightmare that was the Carter administration - was small enough to be easily manageable within our budget.
To see what I mean, let's go back in history.
The first reported annual debt figure for the federal government was in 1791; we owed a bit over $75 million.
That pesky war.
So, by 1800, we were at about $82 million; Jefferson cut the budget, cut taxes, and somehow managed to reduce it far enough that by the second year of James Madison's presidency, we only owed $53 million.
Monroe, however, somehow managed to contrive a debt of $91 million by 1820, and somehow managed to get himself re-elected. (WTF?)
John Quincy Adams didn't do much better, and was in fact accused of "public plunder" by his opponent in the 1828 election, Andrew Jackson, who evidently wasn't kidding, as he managed to bring the debt down to $48 million - a reduction of almost half - by 1830.
Martin Van Buren, Jackson's VP and protege, was the unfortunate inheritor of a massive market crash; 1837 saw businesses and banks alike go away. Van Buren's response was to slash government expenditures so severely that he managed to get the debt down to $3 million.
Of course, he was pilloried for the measures he took to get us there, despite his ideas' success in maintaining our national solvency, and he was booted out on his ear.
The next decade was bad. William Henry Harrison turned into the first President to die in office in 1841, leaving the presidency to John Tyler, who managed, well, not much. Polk and Taylor managed to drive us back up to the $60 million range by 1850, Fillmore, Pierce, and Buchanan held the line, keeping the debt level to 1860, and then came Lincoln.
The Civil War and the Reconstruction really put us in a bad way; $2 BILLION in 1870. The thing is, it stabilized; from 1870 to 1910, the national debt stayed right around $2 billion.
Then came Woodrow Wilson, and the seeds of our current problem were sowed. Wilson brought the debt up so much that it was almost comical; $25 billion by 1920, and along the way passed the Federal Reserve Act.
Don't worry, we'll come back to that.
Calvin Coolidge, a few years later, slashed taxes and tried to clean things up, bringing us down to $16 billion by 1930.
Then came the Second World War and Korea. Spending for those battles was, to put it mildly, astonishing; leaving us at $257 billion in debt by 1950, and $290 billion by 1960.
The 60's, for all that people blathered about how much Vietnam cost, weren't too bad as far as the debt; the main cost of Vietnam was human and psychological. By 1970, the national debt was $389 billion.
Then, somewhere along the way, we elected Jimmy Carter. Remember me saying something about him?
By 1980, the national debt had almost tripled, to $903 billion.
Damn.
But at that point, you see, the sinister fruit of the Federal Reserve Act were coming ripe; by 1990, the debt was $3.2 trillion; in 2000, $5 trillion; and then...
Well, Bush brought us up to $10 trillion, and now Obama's gotten us up to over $14 trillion.
Bad.
But you may be wondering why I blame Wilson and the Federal Reserve for all this mess.
Well, it's because a huge chunk of the national debt is FUCKING FICTION.
Long-assed history lesson, which most of you probably didn't need, to get to a certain point. Notice how the debt started taking off into the stratosphere after the Wilson administration, and never looked back?
It's because of the Federal Reserve.
See, previously, the Department of the Treasury was responsible for printing money.
But after the Federal Reserve Act, the Federal Reserve Bank took over that function.
So, if Treasury doesn't print the money, how do they get it?
Well, they BORROW IT, AT INTEREST, FROM THE FEDERAL FUCKING RESERVE.
That's right, one part of our government - despite the transparent legal fiction, anyone who thinks the Fed isn't part of the government in PRACTICE is sadly mistaken - loans the rest of the government money every year, at interest.
Then loans it more money, at interest, to make the interest payments on the money the government borrowed last year.
Anyone see how this might, say, spiral out of control?
This, in case anyone was aware of it, was the core of Congressman Ron Paul's idea for reducing the national debt; do away with the fiction that the Fed is an independent entity, and simply erase the portion of the national debt that is owed to ourselves.
It's as though my left hand loaned my right hand a dollar out of my wallet and then demanded a dollar ten back.
...Errrr?
Ron Paul's idea wouldn't work, for a very simple reason; the Fed carries the interest payments as part of its asset sheet. Simply erasing the debt owed internally would cause all kinds of financial fits and convulsions, which would be bad.
But stopping all interest charges on future transfers of money to the Treasury? Ah, now that's the ticket; the government would continue paying the previously accrued interest payments, and over time, the amount of the debt would actually decrease.
You may be wondering about China, and how dem dam furriners is buyin' 'murca.
And therefore you may be surprised to know that it's not quite as represented.
Hong Kong owns $139 billion in U.S. securities.
An association of Caribbean banks holds $147 billion.
Brazil holds $185 billion.
OPEC holds $210 billion.
Insurance companies hold $261 billion.
American banks hold $270 billion.
England holds $511 billion.
State and local (domestic) governments hold another $511 billion.
Mutual funds hold $638 billion.
Pension funds hold $706 billion.
Japan holds $877 billion.
China holds $896 billion.
Private investors and investment firms hold $1.46 trillion.
...And the Fed holds over $5 trillion dollars of U.S. debt.
If we refused interest charges on future Fed checks, the savings from the interest charges alone would pay off Japan and China in about 4 years.
So, everybody lay off with the terror about foreign investments, hmmm? The Fed holds more U.S. debt than all foreign investors combined. (Total for the top 7 foreign investors? $2.96 trillion.)
So, now we come to it.
We hit the debt ceiling.
The White House screamed that senior citizens were going to get screwed out of their Social Security checks.
Nobody screamed that Congress would lose THEIR paychecks, of course.
But after several weeks of increasingly frantic rhetoric to inflame the public with terror about the consequences of hitting the debt ceiling without raising it yet again, the White House had backed itself into a corner.
ONE HUNDRED PERCENT of what the Republicans and TEA Partiers had to do to accomplish real, meaningful, lasting change in our government's spending habits was...
...Not cut a deal.
See, the President told the world that the sky would fall and the rivers would turn to blood if we didn't reach an agreement; having said that, he had no choice but to act as though he was, at least sort of, telling the truth, and the debt ceiling "crisis" was of such magnitude and importance that the left would bargain away anything in order to prevent that kind of collapse.
All the Republicans had to do was present a massive package of entitlement cuts, then stick their fingers in their ears and shout "LA LA LA I CAN'T HEAR YOU" until Obama signed it. That's it, that's all, tag it and bag it.
And they caved.
Instead of making a "deal" that would actually address the problem, they lost their nerve, and signed a deal that doesn't make anybody happy; it doesn't raise taxes, but it doesn't cut spending either. It doesn't require a balanced budget amendment, one thing we cryingly, desperately need, but instead requires a vote on whether or not they should have one.
And while they're at it, provides the federal government with an additional trillion dollars or so in "borrowing power" - read, spending power - PER YEAR, until fiscal year 2021.
Which will make the federal budget higher than the GDP.
They really don't want you to actually read this bill, guys. Good thing I'm here for that.
The real danger to our economy isn't the debt.
The real danger to our economy is the persistent, endless grind to spend more than we earn.
We had our national credit rating downgraded, not for obstructionism, as some in the media would have you believe, but because having reviewed the debt deal that was passed, S&P - the ratings agency - determined that it did essentially nothing to address the actual causes of our financial instability, namely, our out-of-control entitlement spending. As such, they downgraded us, because they don't see a way we can recover our economy as long as people on welfare have tattoos, cigarettes, beer, nice cars, laptops, and big screen TVs, while the people actually earning money and paying taxes have none.
...Or at least a lot less of it.
If you think I'm kidding, I'd like to point out to you that Social Security and Medicare alone constitute more than half our annual federal spending; anyone who tries to snow you with bullshit about how the War on Terror has cost us the house and the farm is simply lying to you. The total cost of the War on Terror to date, all ten years of it, including all theaters of combat, materials, payroll, and support for the soldiers after they come back home, is less than $2 trillion - in other words, less than what Social Security and Medicare spend in a SINGLE YEAR.
See, fixing the economy isn't complex. They want you to believe it is, because if you believe that it is some kind of sinister wizardry that only the designated acolytes can truly understand, you'll be more likely to go along with their bullshit.
But in fact, the problem isn't complexity; it's lack of national will.
Fixing the economy is simple. It's just PAINFUL.
In order to fix our economy, we'd have to take measures to drastically reduce welfare; drastically reduce government funds for healthcare, including repealing Obamacare; gradually phase out Social Security; means-test the shit out of anything where someone wants a fucking handout; cut capital gains, cut the gas taxes, and institute some new trade laws.
Really, really painful trade laws. (Which I absolutely promise to address in an additional article sometime in the next two weeks.)
We'd go through maybe 5 really, really bad years.
And then, like a sword blade, refolded in the fire again and again until the edge is a million layers of fuck you all ready for battle, we'd emerge from the fire lean, mean, and ready to compete against the countries that HAVE a national will.
But we'll never do it.
And by our failure of will, we've made things so very much worse.
(I am posting this now, so you guys can read it; I will be making the text pretty and adding supporting linkage tomorrow, but tonight it's 3 AM and I'm done typing. If you read this and are interested in my sources, check back tomorrow late in the day and I should have it all linked up.)
