June 20, 2011

I Have No Idea What To Do

Category: Economy — Cranky @

There’s kind of a schizophrenic attitude going around the United States right now. The Republican party is beating the drum on drastic cuts in spending, and across the nation people are nodding their heads. “Yes! Cut spending now, lest the debt grow out of control! And let’s focus on job creation. Cut spending, create jobs!”

The problem is that drastic cuts in spending by the government means an immediate rise in unemployment. As in, right away. The government will shed workers as it shuts down programs. Businesses that provided services and supplies to those programs will shed additional ones. Subsidiary businesses like restaurants near those businesses will shed workers. Trickle-down economics might not work, but trickle-down unemployment absolutely does.

Withdrawing trillions in spending will hurt the citizens of the United States. The debt is already out of control, too. Even if the Republicans get all of the cuts they’re demanding, it’s still not enough. Not even close. Behind closed doors, I’m sure they all know it. The question is no longer, “How do we bring our debt back into stability?” It has become, “How long can we stave off complete collapse?”

In the litany of mistakes being made because they’re stuck in denial, some stand out significantly. Education should be funded until money stops being money, otherwise they are trading their future away in order to delay the collapse for a very tiny period of time. The same goes for research funding. They should be focused almost exclusively on tearing down government by rooting out mandate overlaps, unnecessary layers, and duplicated services. Only then should they start large-scale cuts to entire services, like Planned Parenthood.

Also, the idea that construction workers can draw unemployment benefits when there is infrastructure work to be done mystifies me. If you have to pay him, put him to work, whether it’s filling potholes or fixing bridges. Get something for that money. That’s the thing people forget about some of that spending – sometimes it’s not just an expense. If the government creates a make-work project to build a needed bridge, at the end of it all they have debt… but they also have a bridge. So cut unnecessary government before you cut the bridge.

So while the U.S. continues to hemorrhage money, and the policy-makers fight over the debt ceiling (which only matters in the short term), I’m now wondering, is it finally in sight?

In December of 2007 I wrote, “I thought that a recession was coming. Now I think it’s much, much worse… I don’t see the crash decades away. I don’t even put it years out. I think the crash will begin in earnest in 2008.” Not a bad short-term prediction for a guy who is clearly not an economist.

In May of 2008 I wrote, “This is it, folks. The massive reset has begun. In a few years things will improve, but the artificially inflated lifestyle of the American will never return.” Well, I botched that prediction. It’s been three years. It’s taking far longer than I expected for this to all play out, and the global scale of it all was a complete surprise to me.

My problem is I have absolutely no idea what to do about any of it. I can’t advise anybody. What if I’m wrong, and the government pulls the U.S. out of its tailspin? Just because I don’t see an out doesn’t mean there isn’t one. What if things are simply not as bad as I’m assuming? I could be looking at reality through my own jaded little glasses, seeing an economic apocalypse where there is none.

Bah. It’s all so damned complicated. That’s the problem.


1 Comment »

  1. Personally, I’m not sure there’s anything that can be done at this point. I think I may have been twelve years old (maybe a little older) when I looked around me and said to myself, “This is what the collapse of a civilization looks like, isn’t it.” Fredric Bastiat once said that “Government is that great fiction through which everybody seeks to live at the expense of everybody else.” These days, it seems that’s the way most people want to live. It isn’t that there aren’t jobs. It’s that people are, for the most part, either unwilling or unable to take the jobs that are there.

    The company I work for is ALWAYS hiring. We can’t hold employees. We either have to fire them for incompetence (an inability or unwillingness to learn) or sometimes dishonesty. I think the problem isn’t government… or rather it is, but it is the government of the past that is the problem, the government that sought to protect people from the consequences of their actions. A government that socializes losses and privatizes profits on every level, from the bottom on up. The result being that people no longer know how to live.

    It certainly isn’t everyone that’s like this; lots of people are pretty successful at what they do. But I think we’ve hit a sort of critical mass.

    Comment by DASawyer — June 21, 2011 @

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