America - Is Bush Breaking Us?

The leadership of America continues to throw money around the world like we are Friday night rich.
Between our:

• tidy little war
  
• our outrageous cost of the deficit
  
• government waste
  
• tax refunds for millionaires
  
• fraud
  
• helping our “former enemies” dispose of their cold war waste
  
• disposing of our own cold war waste
  
• trying to find somewhere to put our commercial nuclear waste
  
• funding homeland security
  
• haphazardly throwing money around to belatedly respond to disasters
  
• playing savior to the developing world
  
• paying illegal immigrant's medical bills
  
• giving money to “faith based” church programs
  
• supporting young drug addicts with social security
  
• (and the like,)
  

We are pretty much acting like we’re drunk and think there is no end to the money. CBS News reported this month that since the start of the Bush administration, the dollar has lost more than a third of its value against foreign currencies. Just as an example, in December, 2004 the Dollar/Euro exchange rate was 1.3466. At this writing A Euro is worth 1.249 U.S. dollars.

There are those who say we may be skirting on the verge of bankruptcy. Among them is Boston University Professor Laurence Kotlikoff whose academic paper on this subject was published by the Federal Reserve of St. Louis Review. His paper(
Is the United States Bankrupt?) says that radical reform of U.S. financial institutions is necessary to secure the nations economic future. The London Telegraph has done a great treatment with their report on this academic discourse.

Professor Kotlikoff ominously warns that we have only a small window of time to address our financial situation before the markets do it for us. He quotes a study that list the nation’s “fiscal gap.” at almost 66 trillion dollars. How much is that? A good perspective comes from a web site that gives a graphic representation of how much a trillion pennies would stack up to be. (Additional perspective on "trillion" can be found here, and this site that shows our "trillion" is not like everybody else's "trillion.")

In getting perspective on how much a "trillion" is, it is important to realize that China's Capitalization in the United States is almost 2-trillion dollars.

Another economist, George J. Swanson addresses the topic of potential American Bankruptcy in his book America The Broke. Here is a quote from the front cover flap:

One day soon, our government will suddenly run out of cash, unable to meet its payments, leaving the United States as bankrupt as any banana republic. We are far more vulnerable than most Americans realize. . .
With a debt of $7.3 trillion, if interest rates were to hit the levels we saw 20 years ago, it would take every nickel collected in income taxes just to pay the interest on our existing debt. There would be no money left for defense, or homeland security, or education, or Social Security.

We have previously warned in this commentary that the U.S. is playing fast and loose with international finance. (China and the Growing Economic Conflict, The President's Claims About the Impact of a Tax Rebate on the Economy are Bull, Being Old is Not an Option in Ameirca,and There Are Too Many Americans).

The current administration’s response to the Social Security/Baby Boomer retirement problem that is coming at us like a freight train was to try to push through a plan that would dramatically cut the amount of money going into the program and hand a piece of that income over to stock brokers. Next, they claimed to fix Medicare by setting up a prescription drug program that lets big business rob the federal cookie jar and the old folks go begging again.

Our country is fast becoming a banana republic. What characterizes a banana republic is bankrupt government, enormous corruption at the top political levels, economic victimization by foreign interest taking advantage of the corruption, over population, bad health care, indigent elderly, inability to appropriately respond to disasters, turning the insane onto the streets to fend for themselves, oppressive and dogmatic religious influence, having a handful of citizens who are enormously rich as a result of exploiting their fellow citizens, and inadequate education of the young (to name a few). Does any of that sound familiar?

We can no longer afford to let our choice of national political leaders hinge on abortion, stem cell research, or whether or not they have accepted Jesus as Lord. If they claim to have Jesus in their hearts and their hands are in our pockets, we have to throw the bums out and let Jesus deal with them later.

The country is being run by crooks and incompetents, and it’s hard to tell them apart. We have previously addressed in this commentary The Cost of War.

It is becoming apparent that the cost of war, out of control government spending, crooked raiding of the federal treasury, and our inability as voters to call our leaders to financial accountability will cost many Americans their retirement. All of this has already taken its toll on our ability to get health care and good education, and is leading to some very rough times ahead if we don’t wake up.