History tells us that Nero did nothing or played the fiddle while Rome burned.
Is the United States burning before our eyes?
Unemployment, not seasonally adjusted, is currently reported by the federal government at 9.2 percent and has been as high as 10.6 percent in the past year and a half. Many people estimate the true unemployment or underemployment rate is as high as 17 percent.
The federal government reports inflation (CPI) at approximately 2 percent. They tell us they are more concerned about deflation than inflation. However, when we go to the supermarket, we see prices of our necessities (milk, bread, fresh vegetables, meat etc.) jumping by more than 10 to 20 percent and many of the packages shrinking in size. There seems to be a disconnect between what the average American is experiencing in his or her purchasing and what the federal government is saying.
The price of gasoline is a story unto itself. The price seems to increase almost daily, and we are approaching or maybe we have already exceeded $4 gallon in some states. When someone recently complained to the president about it at a town meeting, he said the person should consider trading in his car for a new one that was more efficient. (Maybe we should trade in the president for a new one who knows what he is doing?) The press recently reported that the United States will guarantee debt for offshore drilling in Brazil and the building of a refinery in Columbia. However, we can’t seem to get approval for similar projects in the United States.
Until recently, we considered federal budget deficits of $400 billion to $500 billion to be unacceptable. For most of the past year, the United States has operated without a budget. No large company or large country should operate without a budget. The projected federal deficit for the current year is approximately $1.6 trillion and future year’s deficits, for as far aswe can see, of over $1 trillion per year. Does anyone understand what a trillion is? It is a thousand billion. A billion is a thousand million. Therefore, a trillion dollars is $1,000,000,000,000. That is a lot of zeros.
The country’s federal debt grows every minute; however, the government seems to be oblivious to the magnitude of the problem and its impact on our future.
The United States federal debt is estimated to be $14.3 trillion. The government has been able to keep interest rates artificially low. However, this can’t continue indefinitely. A 2 percent increase in the overall federal borrowing rate, which is not out of the question, translates into a $280 billion increase in the annual interest cost and deficit for the year. Recently, Standard & Poor’s revised the outlook on the U.S. federal debt to negative from stable. The U.S. dollar is falling in value and purchasing power. Gold went over $1,500 per ounce. Commodity prices for raw materials have been increasing rapidly. The above problems have ramifications for the federal, state and local governments of our once great nation as well as for all its citizens.
We are in dispiriting need of leadership that understands: 1. What made our country the great democracy it is (freedom of choice in all matters and limited government), 2. What created the economic power that produced the great middle class of America (capitalism, that rewards the bright and hard working and provides upward economic mobility to its citizens), and 3. Protecting the property right of its citizens is essential (avoids burdensome and confiscatory taxes and government regulations). That leadership also needs to understand the world banking and economy system, the mobility of capital and brainpower, and our economy’s impact to the rest of the free world. Mr. President, wake up and realize that your policies are not facilitating the solution of our current economic problems.
Tom Mitchell Holmdel