… and that pretty colored thing you’re about to stick in your mouth, which came from the back side of the alleged unicorn, is not candy.
How many times do we have to go over this? How long will you, dear reader, continue to suspend disbelief and basic logic along with 5th grade mathematics?
Take a personal inventory on this MLK day. Let us presume that today, at 12:00 Noon local time, you are fired and discover that all of your credit (visa/mc/discover/amex/store cards/etc) have been revoked. The Federal Government comes up on the TV and radio, telling you that all social payments (Medicare, Medicaid, Social Security, Disability, Unemployment, etc) have been suspended as there’s no money to pay them.
How bad is it?
Think about your car sitting outside at work. Is there enough gas in it to get home? If not, do you have actual cash in your wallet or in your bank checking account?
How much food is in your refrigerator and pantry? Again, how much cash do you have access to? Actual economic surplus — funds you earned and stored in some form or fashion.
How long could you pay the electric, gas and water bills? Keep food in the pantry and gasoline in the car? Take that honest assessment, right here, right now.
10% of the people reading this would not make it home. Their cars have less fuel in them than it takes to get there, and they have zero cash in their wallets and nothing in the bank. They literally would not make it to their house.
More than half of the people reading this would not make it through the first two weeks. They have insufficient food and supplies in the house to last that long and do not have enough money in their checking accounts to manage to pay the rent (or mortgage) gas, electric and water bills plus fill the refrigerator for two weeks.
If you want to know why the government has refused to address the problems we face, that’s a big part of the reason. They know — factually know — that this is the situation in front of us. They also know on a factual basis that Americans have become addicted to the government tit and despite the so-called claim of “rugged individualism” promoted by Reagan and others, almost none actually live this way.
It’s not really all that hard, by the way, to fix this over time. You need to decide that you’re not going to smoke that $5 pack of cigarettes or that $6 six-pack of beer, and will instead stash the cash. You will not go out and spend $30 on a dinner, instead you will spend $4 eating at home. You will not buy a new car with debt; instead you will find a used one at half the price or less and drive it, because transportation is more important than vanity. You will not take that expensive vacation because you can’t pay for it in cash up front without seriously damaging your reserves — or you have no reserves at all, and are forced to charge it.
After 2000, and especially after 2007, you’d think people would have learned. They did not. To the contrary; the newest “i-scam” is far more important to Americans than having three or six months of cash reserves at hand for when (not if) something goes wrong.
The problems facing Greece, and the imminent default there, should be a further wake-up call. It’s not. Yet Greece is not the issue with its relatively small stature in the world economy. Rather, it’s everyone else. Italy, Spain, Portugal, Ireland (again) and more — they’re all next. And behind them is Britain and the United States, both of which have made ridiculous political promises and are sustaining them with federal spending they are unwilling — or unable — to collect in taxes.
This must, mathematically, end. It will end. And when it does you’re going to hear much wailing and gnashing of teeth, along with the predictable complaints that we must do something “for the children” or that we must “correct the imbalances by taxing the rich!”
But there isn’t enough money held by the rich to correct the imbalances by taxing them. The rich, for better or worse, simply don’t have it. Nor does cutting defense spending solve the problem. Nor does eliminating “fraud, waste and abuse” resolve the issue, never mind the obvious question — since all politicians are always against “fraud, waste and abuse” why is it still taking place and why haven’t they stopped it?
The truth is much more sobering than anyone wishes to accept: We made political promises on a global scale that we cannot keep. We must accept this and each nation and her citizens must have a public and honest discussion and debate about the scope of government limited to that which the people of that government are willing to pay for with current tax revenues.
This means that on balance and on average everyone’s standard of living will shrink.
It cannot be otherwise as on balance we’re all spending money, either directly or by proxy, that we do not have and did not first produce with economic output.
As for previously-contracted debts taken unsecured (which all sovereign borrowing is) either pay it down over time or default it. Pick one. This means contracting the size of government to that which is fully funded by tax revenues less a paydown amount.
Those who argue they “paid into” some government program are simply wrong. You did not. You paid a tax. I know you think you did something else, but what you think you did and what really happened are two different things. It doesn’t matter what you think happened; what matters is the truth.
The truth is that you paid taxes and they were immediately spent on other things — things you demanded and voted for. The argument that these funds were “stolen” is specious — you demanded the immediate spending and you got what you voted for. The money was diverted with your explicit consent and by your explicit demand and as a consequence what is to come is your responsibility.
I know you don’t want to hear this, but it doesn’t matter what you want to hear. What matters is what is, and this is the truth.
Like it or not.
The necessary adult conversation and acceptance must happen now.