Obama's Choice
And so the other day on Internet, I saw a Russian sociologist predicted that the United States would eventually collapse and break apart in the coming century.
Crazy?
While I think it's rather fanciful that the United States would break into many different smaller nations (the culture is far to monolitic despite our "diversity"), the idea that the United States government in its current form is impervious to collapse is not necessarily a proposition that I agree with.
The Government Accounting Office has indicated that by 2040 the entire United States budget will be taken up by Medicare, Medicaid, and interest payments on our debt. That leaves no money for education, infrastructure, or even defense.
If history shown us anything, it is shown us that a nation's military strength is closely tied to its economic strength. Additionally, the nation's political strength depends for the most part on its military strength. If the United States continues on its current path of guaranteeing medical benefits to some or most of the population without attempting to rein in the cost of medical care, it does not take a great leap of faith to foresee our nation going bankrupt.
The bankruptcy of the United States, however, will not happen in a vacuum. Rather, it will be a long, slow, painful decline which will see the dollar devalued to worthlessness (think the Argentine peso of the late '90s) and US bonds forced to pay out unconscionable interest rates. As the investing public around the world loses confidence in the US government to repay its debts, less and less investment capital will reach our shores.
Long before the United States reaches this apocalyptic phase, does anyone doubt that the politicians will find any way in their power to squeeze every last tax dollar out of the American public? In fact, you will see the government legislate its way into your supposedly tax-free 401(k) and Roth IRA. There will be an Internet tax and a carbon tax, and most likely taxes on all sorts of things that I cannot even dream of.
No, the economic decline of the United States will drag the welfare state down with it kicking and screaming. The public, in its endless stupidity, will ensure that its entitlements are the last aspect of our budget to cut.
Demographics and simple economics already dictate that our current system is unsustainable. That is, our system is already too big. Not only can it not get bigger, it must in fact shrink in order to ensure the survival of our country. Barack Obama, despite his campaign promises, apparently sees this. While I have no faith in his ability or his will to cut government spending, it appears that the economic necessity will for the time being force his hand.
The interesting question is whether Mr. Obama will stick to the course of cutting the size of government when the current economic downturn is nothing but a bad memory. If he does not, the economic and financial crisis of 2008 will be a footnote in history -- much like the economic crisis of 1907 -- as compared to the impending economic collapse that will occur before the year 2040.
Ironically enough, if any president had the power to put this country on a course away from out-of-control spending, it would be Obama. His position as a minority amongst liberals makes him unassailable, and any Republican that opposed spending cuts outside of the military sphere would have no chance at reelection.
So now all we have is hope -- that the President elect will see the light and cares about his country enough to make the tough decisions in the face of his party's big-spending orthodoxy.
Crazy?
While I think it's rather fanciful that the United States would break into many different smaller nations (the culture is far to monolitic despite our "diversity"), the idea that the United States government in its current form is impervious to collapse is not necessarily a proposition that I agree with.
The Government Accounting Office has indicated that by 2040 the entire United States budget will be taken up by Medicare, Medicaid, and interest payments on our debt. That leaves no money for education, infrastructure, or even defense.
If history shown us anything, it is shown us that a nation's military strength is closely tied to its economic strength. Additionally, the nation's political strength depends for the most part on its military strength. If the United States continues on its current path of guaranteeing medical benefits to some or most of the population without attempting to rein in the cost of medical care, it does not take a great leap of faith to foresee our nation going bankrupt.
The bankruptcy of the United States, however, will not happen in a vacuum. Rather, it will be a long, slow, painful decline which will see the dollar devalued to worthlessness (think the Argentine peso of the late '90s) and US bonds forced to pay out unconscionable interest rates. As the investing public around the world loses confidence in the US government to repay its debts, less and less investment capital will reach our shores.
Long before the United States reaches this apocalyptic phase, does anyone doubt that the politicians will find any way in their power to squeeze every last tax dollar out of the American public? In fact, you will see the government legislate its way into your supposedly tax-free 401(k) and Roth IRA. There will be an Internet tax and a carbon tax, and most likely taxes on all sorts of things that I cannot even dream of.
No, the economic decline of the United States will drag the welfare state down with it kicking and screaming. The public, in its endless stupidity, will ensure that its entitlements are the last aspect of our budget to cut.
Demographics and simple economics already dictate that our current system is unsustainable. That is, our system is already too big. Not only can it not get bigger, it must in fact shrink in order to ensure the survival of our country. Barack Obama, despite his campaign promises, apparently sees this. While I have no faith in his ability or his will to cut government spending, it appears that the economic necessity will for the time being force his hand.
The interesting question is whether Mr. Obama will stick to the course of cutting the size of government when the current economic downturn is nothing but a bad memory. If he does not, the economic and financial crisis of 2008 will be a footnote in history -- much like the economic crisis of 1907 -- as compared to the impending economic collapse that will occur before the year 2040.
Ironically enough, if any president had the power to put this country on a course away from out-of-control spending, it would be Obama. His position as a minority amongst liberals makes him unassailable, and any Republican that opposed spending cuts outside of the military sphere would have no chance at reelection.
So now all we have is hope -- that the President elect will see the light and cares about his country enough to make the tough decisions in the face of his party's big-spending orthodoxy.
posted by The TDL News Team at 3:16 PM
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