September 15, 2011|Ron Smith
When considering our economic crisis, remember this: The yet unborn and those now too young to vote won't be paying off the debts piled up by the "Greatest Generation," the Baby-Boomers they sired, members of Gen X or any of their other predecessors.
Predicting how the future will play out is a fool's game, but I make the above prediction with great confidence. If you haven't yet grasped it, government debt in the U.S., Europe and Japan has grown to such heights that it is literally unrepayable.
People play with the figures all the time, but we can be confident that the actual federal debt alone is nearly $17 trillion.
The current system is kaput, and the financial and political elite are aware of this, but they prefer financial sleight-of-hand to revolution, which is certainly understandable. However, as we shall see pretty quickly, the game is over, and the only question now is how the collapse of the global economy will take place.
All of the political theater over raising the debt ceiling limit can't conceal the fact that the economy in question was built on perpetual debt, created out of thin air. Federal Reserve Chairman Ben Bernanke is wedded to the fantastical notion that creating vast new debt won't affect interest rates. He's promised to keep them at their current levels for two more years, but will the markets allow that to happen?
Even should the answer be yes, it does nothing to help Joe and Jill Sixpack as massive unemployment will persist and living standards will continue to fall. All the presidential exhortations to "pass this [jobs] bill now" are hollow words.
Job creation is a byproduct of a growing economy, not the cause of one. The wagon cannot pull the horses.
The debt ceiling fuss was carried out under the fictive notion that our elected representatives were desperately trying to save our bacon. The way it was represented in the major media was as a clash of disparate political beliefs, with tea party Congress critters cast as the penurious villains gumming up the finely tuned machine of governance.
So-called mainstream Republicans were certainly willing to do their usual surrender to the Democrats, but elections have consequences, and the 2010 election of dozens of GOP representatives resulted in a sizable bloc willing to buck the system that had gotten us into this mess in the first place.
In the end, though, what was delivered was just another delay of game's end. The nation's elites want the system that has allowed them to loot the economy to continue as long as possible. After all, the financial oligarchy that bought the people that ostensibly represent all of us is still flying high, though I'm certain the members of it are well aware that time is short and they'd better grab all they can before the final whistle blows.
Perhaps the biggest story of the week was the release of the Census Bureau's annual snapshot of living standards, which showed that median household earnings have fallen to 1996 levels and that poverty levels are up to more than 15 percent of the population. This is despite 2010 showing a growth of 3 percent in the GDP.
You can't fool people about their own diminished circumstances. They're living them.
There is a growing anti-federalism afoot, which will undoubtedly play a major role in the elections next year. Democrats are a bit shell-shocked after losing the New York special election Tuesday to fill the seat of the recently departed Anthony Weiner. New York's Ninth Congressional seat has been filled by a Democrat's bottom since 1923.
With President Obama's job approval ratings falling to new lows, the Democrats hope to hang onto the White House by having their rivals nominate an unelectable candidate. They think, for example, that Texas Gov. Rick Perry might be an easy target because of his comments about Social Security being a Ponzi scheme and his onetime suggestion that his state should consider secession.
We are warned to be careful of what we wish for, and the Democrats may find out in 2010 that what sound like wild-eyed ideas to the establishment are just what voters are looking for.
Ron Smith's column appears on Fridays. His email is rsmith@wbal.com.
