Wednesday, November 05, 2008

The hits keep on coming


Based on recent events, I strongly suspect we're headed for nationalized health care. If you think this is a good thing, I have a challenge for you. Name a problem that the federal government has solved with one of it's big programs.

Consider some of the Federal Government's past "achievements":

-Social Security: Bankrupt. I'll never get anything back from what I put in. And if the current retirees that "depend" on it would have put the money withheld from their checks into a simple index fund with modest returns, they'd have way more money on which to retire than Social Security provides.

-Medicare: A system that makes fraud easy and profitable.

-Medicaid: See above.

-The Community Reinvestment Act (In its various revisions): This one had a lot to do with the financial meltdown. It might ultimately have a lot to do with the next Great Depression.

-Federal Student Loans: Don't think this is a problem? I disagree.

-The Transportation Security Administration: Billions wasted on hassling travelers, in order to create the illusion of safety.

-The War on Terror: A mind-bogglingly expensive boondoggle that's cost the US more in both dollars and international goodwill than nearly anything we've done in decades. It's also cost innumerable lives. And when the enemy is "Terror", how long will it go on? Indefinitely, if it's anything like...

-The War on Drugs: We've probably spent trillions of dollars on this over the last few decades. What do we have to show for it? The highest incarceration rate in the world. And it's about as effective as...

-Prohibition. At least we eventually figured out this was a bad idea. Too bad it wasn't until after it allowed the Mafia to come to power.

-Economic sanctions on [INSERT COUNTRY HERE]: Seriously. These never work. You'd think we'd learn. Check out this clip:



What the hell can possibly be worth 1 million dead children? You wonder why the US is hated around the world. But while we're talking about children...

-No Child Left Behind: Test scores are increasing. But all this means is that kids are being taught how to take tests. And appparently we've created an epidemic of cheating teachers.

In each of the above situations, the Federal Government identified a problem that supposedly had to be addressed. Each time, proponents claimed that justice demanded the solutions they offered. Each time, we spent mind-boggling amounts of money. Accordingly, each time, we sank further into debt. Many times, the problem either became worse, or spawned tragic unintended consequences. Not once did the government solution fix the problem. Yet (with the exception of Prohibition) once these expansions of the Federal Government occurred, they were there for good.*

I'm not a pessimist. I'm a realist. If you hire a mechanic to fix your car, and after 10 tries, and thousands of dollars, the problem is actually worse, would you take the car back to him, with the hope that this time will be different? A careful look at the Federal Government's success rate should make it clear to anyone that it can't fix the health care situation. We shouldn't give it the chance.

*Prohibition was scaled back largely due to the fact that the Federal Government lost the enormous tax revenue from alcohol sales.

10 comments:

Sherry said...

You are a lot more knowledgabele than I am on these things. Brad for President! What should we or the governement do about these thigs? I have no idea, but you understand all these issues better, so what do we do?

Brad Raple said...

Something that's never been done before. Massively scale back the size of the Federal Government. We could start by following the Constitution. That alone would take care of most of the problem.

Barb said...

Sounds good but looks like we are headed in the wrong direction!

Stacy said...

AMEN Brad!!!! I love reading your blogs because, like Sherry, I don't understand all this mumbo-jumbo. But, I DO know that my mom is scared shitless of nationalized healthcare because of her leukemia. I don't know what to do, but I am tired of watching my loved ones be scared and afraid.

Raple Wifey said...

I've read this four times and learn something new each time. It is nice to be able to read the links as well. They are informative and legitimate--more legitimacy than anyone I know packs in their political tool belt.

Also, you are not attacking Democrat or Republican unfairly. All parties are "under the gun" equally--as they should be. I love that. No single party is a God send as many want so badly to believe. Rather, our government as a whole has some serious issues that have not been addressed by any leader we have seen in probably 50 years or more. I tend to think that the bandaging after the last depression was sort of the beginning of a lot of the problems.

On a side note, I really think our front running parties (these days) are almost completely media driven--and almost everyone falls for it. Okay, people, quit relying on Fox News and/or CNN for your political information. They are biased and do not cover the facts. Read the news in other countries...you will get an ear full...do some research and you will find that most if it is true.

On a personal note, the Albright quote shakes me to my core.

Good work, Brad.

jason b said...

Hey Brad:

I don't want to go all contrarian on you, but, I suppose I will. But before I do, I should point out that overall, I agree with you in principle on most of this.

However, your post intrigued me on a number of levels and I'm going to tackle as much as I can.

First of all, I can tell you have been moved by Ron Paul and the accompanying movement. As I've told you before, I find his ideas and principles to be incredible. However, I see his vision as completely unrealistic in the short term, and probably even the long term. He may well be right, but if he can't make things happen, what difference will it make?

The federal government is a monster. By nature, it eats and eats and consumes more each year. Federal governments tend to grow in size and scope until they end. And when they end, they don't end nicely.

Ron Paul sought to change the system within the system. He raised millions of dollars and had millions of followers. Where did it get him? Pretty much no where. He talked in terms outside of the assumptions most of us live by, and so he was laughed off and ignored. And it worked!

He is probably one of the most brilliant libertarian politicians in our lifetime, and despite raising all that money, his impact has been virtually non-existent. We have pretty much done the exact opposite of everything he suggested.

My point is, he may be right in principle, but when you're talking about a revolution, you have to realize that you may not be able to accomplish this peacefully and within the system. People often cite the civil rights movement of an example of a non-violent revolultion, but as we both know, this is far from the truth. The civil rights movement was filled with violence that we have not seen in America in our lifetimes. Without such violence, who knows when change would have come?

I suspect that stripping down the government to the government our framers envisioned would take a high level of violence. Until people are in the streets with torches and pitchforks, the government is unlikely to "decide" to massively shrink itself. It's like asking a CEO to cut his or her salary by 99%. It's just not in their nature.

. . .

On to your criticism of the government and government programs in general.

I agree that the law of intended consequences has come back to bite us a number of times. However, it is in the nature of the government to "do stuff." When there is a problem, doing nothing often seems like a good option, because you can avoid unintended consequences. However, you can't ignore the fact that the status quo already has terrible known consequences. With regard to health care, for example: Even with nearly 50 million uninsured people, The U.S. spends more on health care per person than any other nation in the world. Current estimates put U.S. health care spending at approximately 15.2% of GDP, second only to the tiny Marshall Islands among all United Nations member nations. The health share of GDP is expected to continue its historical upward trend, reaching 19.5 percent of GDP by 2017. The U.S. is the only wealthy and industrialized nation that does not have universal health care. Health insurance costs are rising faster than wages or inflation, and "medical causes" were cited by about half of bankruptcy filers in the United States. Ninety percent of Americans believe the American health care system needs fundamental changes or needs to be completely rebuilt. Two-thirds of Americans believe the federal
government should guarantee universal health care for all citizens.

So, you have a clear problem and you have the people asking for change. It seems that your argument is that the government should leave it alone. In the end, you might be right! But you aren't being realistic. Politicians are elected to "do stuff." People just won't accept it if they say, "we know the system is messed up, but we're afraid if we try something, we'll make it worse." That sounds like a quick recipe to lose their position.

So I believe that politicians will always make changes. We can argue about whether they should and speculate as to what the unintended consequences will be, but changes will still be made. If you accept this as a fact, what do you think is the most positive way to contribute in the short and long term? (This is not rhetorical.)

. . .

With regard to government programs:

I believe that social security is a decent program. It seems like a good idea to give old people a small check. Of course the program could be designed to make better use of the money. Changes will have to be made, like raising the minimum age and possibly reducing the benefits. But I don't see this program as the disaster that you do. And I believe it would defeat the purpose if each person was left on their own to manage the money. Does that sound socialist? That's because it is! Social security is a socialist program. The US is a semi-socialist, semi-capitalistic country. We have been for a long time. However, I don't think most people realize this yet. However, the truth is, the world is mostly two types of governments, dictatorships and socialist states. You may not like it, but I think you'll find it to be true.

I agree with you on the CMA, somewhat on student loans, the TSA (especially the illusion of security), the war on "terra," the war on drugs, and so on. However, I do think I can name quite a few things the federal government has done that we can be proud of:

The Interstate Highway System: Authorized by the Federal-Aid Highway Act of 1956. It is both the largest highway system in the world and the largest public works project in history. We owe much of our economic success (as well as our security) to this project.

The US military: As much as we question how it is used, there is no doubt that it is a highly trained group that has done a great job of keeping us safe from traditional invasions since the early 1800's. Naturally the rise of terrorism and what I would call the new guerrilla warfare have reduced its effectiveness. However, I must say that over a century of maintaining the integrity of our massive territory is quite an accomplishment.

The Federal Criminal Judicial System: For all the pessimism that surrounds our courts, I must say that if I were the one charged with a crime, I would feel far safer in the US than just about anyone else in the world.

Elections and voting: For all of the claims about voter fraud and the like, I believe that we have a very sound, successful and fair system in place. It could be better, but as the most recent election demonstrated, things tend to go fairly smoothly and peacefully.

. . .

I think it is time to wrap this up. I apologize if this lacks some polish and organization. I typed this fairly quickly in the comment box which probably isn't ideal.

Coming back to my original point, I agree with you more than I disagree. There is an awful lot screwed up in the federal government. Naming good programs isn't easy. I could have named more, but it wasn't as if there were a litany of choices. But in the end, we do trust the Federal Government with an awful lot, and despite the recent crisis, the water is still running, the stores are still open, the banks still have money and the streets are safe. People are still significantly more well off than the vast majority of people in the world now, and of course in world history. We're living longer, we're healthier, we have more stuff, and we have more access to information.

There are plenty of problems, but there is also quite a lot that is going right.

Either way, at least we'll be able to say we lived in interesting times.

Cheers,

Jason

Brad Raple said...

Jason: Sorry for the delay. I've been busy. My response is below.

"I see his vision as completely unrealistic in the short term, and probably even the long term. He may well be right, but if he can't make things happen, what difference will it make?"

First, I think he is right, and so do a lot of other people. Probably more and more every day. This is a big change. It will take time, and I'd rather be right than popular anyway.

"He is probably one of the most brilliant libertarian politicians in our lifetime, and despite raising all that money, his impact has been virtually non-existent."

I agree on the first part, disagree on the second. Of course he didn't win the presidency, but when people hear his ideas, many of them like them. I think he's already changed many people's attitudes about the way thing should be. Eventually, this will impact the two main parties. This is a good thing, and shouldn't be trivialized.

"I suspect that stripping down the government to the government our framers envisioned would take a high level of violence."

Or economic collapse. Which seems inevitable.

"However, you can't ignore the fact that the status quo already has terrible known consequences. With regard to health care, for example: Even with nearly 50 million uninsured people, The U.S. spends more on health care per person than any other nation in the world."

I think the insurance system is the problem. I don't know the answer, but I don't think that Universal Health Coverage will fix this.

"The U.S. is the only wealthy and industrialized nation that does not have universal health care."

All of us have central banks, too. That hasn't worked out well. If your friends jumped off a cliff, etc.

"Health insurance costs are rising faster than wages or inflation, and "medical causes" were cited by about half of bankruptcy filers in the United States. Ninety percent of Americans believe the American health care system needs fundamental changes or needs to be completely rebuilt. Two-thirds of Americans believe the federal
government should guarantee universal health care for all citizens."

I'm not sure where you got this information, but lots of things are rising faster than the rate of inflation, including education, which has heavy government involvement. Also, just because something is popular, doesn't make it a good idea. For example, New Kids on the Block moved hundreds of millions of dollars of merchandise. It doesn't make them talented artists.

"It seems that your argument is that the government should leave it alone. In the end, you might be right! But you aren't being realistic."

I agree that politicians will feel pressure to act quickly. Just like they did with the Patriot Act. And we know how well that worked out. Just because Ron Paul didn't win the presidency, and Libertarians didn't sweep Congress doesn't mean we should all abandon our principles.

"So I believe that politicians will always make changes. We can argue about whether they should and speculate as to what the unintended consequences will be, but changes will still be made. If you accept this as a fact, what do you think is the most positive way to contribute in the short and long term? (This is not rhetorical.)"

Simple: Spread the word about why things are screwed up. People will catch on, eventually. If not, I'd at least like to try.

"I believe that social security is a decent program."

I completely disagree.

"It seems like a good idea to give old people a small check."

Sure, why not? Why not give them a big check, while we're at it? Or why limit it to old people? Why not give everyone a check? Except what you're giving them is really restitution in the form of a small piece of the money the government took from them years ago, on which they could have received a much larger return had they invested it on their own, even poorly.

"Of course the program could be designed to make better use of the money. Changes will have to be made, like raising the minimum age and possibly reducing the benefits."

Cutting benefits only serves to make the already terribly inefficient program more so.

"And I believe it would defeat the purpose if each person was left on their own to manage the money."

People should be responsible for themselves. They couldn't manage it much worse than the Federal Government already has. Even if you think we have a societal duty to give old people money, whether needed or not, why stop at old people? It's not based on need. Warren Buffett qualifies for Social Security.

"Does that sound socialist? That's because it is! Social security is a socialist program."

This is why I don't like it.

How would you feel if the government managed your 401k, without you having a say in the matter? What if instead of investing your money, it was immediately given out to other people to whom the government owed money, and you were promised a chance at a small part of it back in the future, but no one really knows how much, if any, will be left? What if you had no choice but to participate? That IS Social Security.

"However, the truth is, the world is mostly two types of governments, dictatorships and socialist states. You may not like it, but I think you'll find it to be true."

It seems a lot of your points seem to argue that because the status quo seems difficult to change, I should accept and be happy about it. That's wrong, any way you cut it.

"The Interstate Highway System: Authorized by the Federal-Aid Highway Act of 1956. It is both the largest highway system in the world and the largest public works project in history. We owe much of our economic success (as well as our security) to this project."

Infrastructure for interstate commerce. Fortunately the Constitution expressly allows Congress to do this.

"The US military: As much as we question how it is used, there is no doubt that it is a highly trained group that has done a great job of keeping us safe from traditional invasions since the early 1800's. Naturally the rise of terrorism and what I would call the new guerrilla warfare have reduced its effectiveness. However, I must say that over a century of maintaining the integrity of our massive territory is quite an accomplishment."

It has been grossly misused, and largely ineffective since WWII. After WWII ended, we had a massive, standing military. We haven't won a war since. Yet this availability has tempted Nearly every president since then to become involved in numerous wars, most illegal, and none effective.

It has also cost, literally, trillions of dollars.

"The Federal Criminal Judicial System: For all the pessimism that surrounds our courts, I must say that if I were the one charged with a crime, I would feel far safer in the US than just about anyone else in the world."

Really? What if it's a drug crime? In many countries, you wouldn't be charged at all. You certainly wouldn't face the shocking sentences mandated under federal sentencing guidelines. The Federal Criminal Judicial System is largely why the United States has 25% of the world's prison population, with 5% of the world's actual population.

"Elections and voting: For all of the claims about voter fraud and the like, I believe that we have a very sound, successful and fair system in place. It could be better, but as the most recent election demonstrated, things tend to go fairly smoothly and peacefully."

Elections are handled at the state and local level. This is not a Federal program.

"But in the end, we do trust the Federal Government with an awful lot, and despite the recent crisis, the water is still running, the stores are still open, the banks still have money and the streets are safe. People are still significantly more well off than the vast majority of people in the world now, and of course in world history. We're living longer, we're healthier, we have more stuff, and we have more access to information."

Much of this is because we've exported our debt. And the banks only have money because the Fed prints it for them, largely on demand. We have more foreign owned debt than any nation in history. It's getting worse, literally, by the second. It cannot last forever.

jason b said...

Great responses. I really enjoyed it. Forgive me for not countering you on most of your responses at the moment. You bitch slapped me pretty good on a lot of stuff and I have new questions I would rather get to--perhaps you can bitch slap me on those. I might revisit some of the previous stuff at a later date.

*Is it possible that this is all more complicated than we really understand? I mean, is the entire world really built on a faulty system that cannot be sustained? How can we be know this? Why would the people in charge of our system want to build a system that isn't viable? What will you say if the financial situation turns around, unemployment goes down, stocks go back up, housing recovers and so forth? How long would things have to be good again before we could say that the system worked out and was sound after all?

*I really like what you said about sticking to your beliefs vs. going with whats workable in the short term. I suppose I find myself somewhere in between. I mean, I don't want to spend too much of my time arguing about how things should be in the future, when I could be worrying about how to make the most out of the current situation. However, I applaud you for sticking to your beliefs. I do care about the future of the nation, and I would like us to leave a sound and intelligent government behind.

*As I said, I do like the concepts that Ron Paul promotes. Jefferson has always been my favorite president. I have always believed in the idea of states rights. I just look around and it seems like that was all from a different era and we're not the same country. Perhaps you are right though, maybe someday enough people will get on board and we will go back to our roots. We would probably be better off. Although, I do believe that the socialist state has its advantages. I've been to a lot of really nice places that have a lot of socialist programs. The ultra-free market types believe that without such programs, private charity would fill the gap. I'm not so sure, and if they don't, I question how well the free market will work if we have hundreds of thousands, or even millions of broke, homeless, sick, unemployed, drug addicted and mentally ill people out on the street. I'd rather give some of my money away than have to deal with that, even if it violates my principles or annoys me.

*One thing about Ron Paul that always troubled me was the lack of detail that I heard in some of the sweeping changes he promotes. (Yes, the same thing people said about Obama, and should have said about McCain as well). I know that you are not him, but I was hoping that you might have some ideas as to some of these questions:
*If you oppose amnesty for the millions of illegal aliens that are in the country, what do you propose that we do with/about them? If it isn't feasible to remove them all, what should we be doing?

*Although many people claim that Paul is in favor of going back on the gold standard, I understand that is not exactly true. Perhaps you know better than me. In any event, I know that he wants to change our system of money. How would he change it and what would it accomplish? How would this work in the short term? Do any countries currently use the gold standard?

*How would you get rid of the Federal Reserve System, income taxes, the FBI, the CIA and the IRS? Where would tax revenues come from? Where would our intelligence information come from? How would we pay for the national defense? How would we maintain our infrastructure? While we might agree on the problems created by such organizations, how could you actually get rid of them, and what would the consequences be?

*As I understand it, Paul believes that a government should not be allowed to conduct surveillance on its' citizens. In the age of international terrorism, would this not be an incredible risk? As much as I disagree with the Patriot Act, if I had to decide between overzealous surveillance and none at all, I would have to reluctantly take the former. What about you?

*You seem to have a very doom and gloom outlook on things. I can't blame you, but I'm curious how far you picture this going. If the recent bailout will make things worse, it seems that our entire system will collapse. Do you think that is what is going to happen? Do you think we're looking at the end of the country? This is pretty heavy stuff.
Alright, I think I've rambled enough. Talk to you soon.

Brad Raple said...

"Is it possible that this is all more complicated than we really understand? I mean, is the entire world really built on a faulty system that cannot be sustained?"

It's happened numerous times throughout human history. Monarchy didn't work. Imperialism didn't work. Communism didn't work. Etc.

"How can we be know this? Why would the people in charge of our system want to build a system that isn't viable?"

See above answer. Also, people tend to look to the short-term, rather than dealing with problems for the long term. i.e. Payday loans.

"What will you say if the financial situation turns around, unemployment goes down, stocks go back up, housing recovers and so forth?"

Yay?

"How long would things have to be good again before we could say that the system worked out and was sound after all?"

Until our national debt was taken care of.

"I really like what you said about sticking to your beliefs vs. going with whats workable in the short term. I suppose I find myself somewhere in between. I mean, I don't want to spend too much of my time arguing about how things should be in the future, when I could be worrying about how to make the most out of the current situation. However, I applaud you for sticking to your beliefs. I do care about the future of the nation, and I would like us to leave a sound and intelligent government behind."

That's why I tell people about my beliefs.

"As I said, I do like the concepts that Ron Paul promotes. Jefferson has always been my favorite president. I have always believed in the idea of states rights. I just look around and it seems like that was all from a different era and we're not the same country. Perhaps you are right though, maybe someday enough people will get on board and we will go back to our roots. We would probably be better off."

I hope so.

"Although, I do believe that the socialist state has its advantages. I've been to a lot of really nice places that have a lot of socialist programs. The ultra-free market types believe that without such programs, private charity would fill the gap. I'm not so sure, and if they don't, I question how well the free market will work if we have hundreds of thousands, or even millions of broke, homeless, sick, unemployed, drug addicted and mentally ill people out on the street."

Federal programs have done a lot to make many of these people the way they are. Many of these people would find something to do, if they had to. If they truly couldn't, I'm very confident that many people would step in to help. Twenty cents from a good charity could probably do as much good as $5.00 from your average government entitlement program. Also, with fewer taxes, people would likely have more to donate.

"One thing about Ron Paul that always troubled me was the lack of detail that I heard in some of the sweeping changes he promotes. (Yes, the same thing people said about Obama, and should have said about McCain as well). I know that you are not him, but I was hoping that you might have some ideas as to some of these questions:"

I'll give it a shot, but I'm not a pro at this.

"If you oppose amnesty for the millions of illegal aliens that are in the country, what do you propose that we do with/about them?"

Deport them as they pop up. You don't need sweeping crackdowns, just have them deported when they encounter law enforcement, rather than ignoring the fact that they're there illegally. I know for a fact this occurs. It was policy in some of the prosecutor's offices I worked in.

"Although many people claim that Paul is in favor of going back on the gold standard, I understand that is not exactly true. Perhaps you know better than me."

Actually, I think he is.

"In any event, I know that he wants to change our system of money. How would he change it and what would it accomplish?"

By changing it to a currency exchangeable for a set amount of a precious metal, most likely gold.

"How would this work in the short term?"

It would cause some confusion. But countries reset the value of their currency all the time. Except this would do more than lop off a bunch of zeroes. Further, it would greatly curtail inflation, which is far higher than the official government statistics indicate.

And the short term is far less important than the long term.

"Do any countries currently use the gold standard?"

The Swiss Franc was backed by gold, at least until 2000. See what Wikipedia has to say about it:

The Swiss franc has historically been considered a safe haven currency with virtually zero inflation and a legal requirement that a minimum 40% be backed by gold reserves.

"How would you get rid of the Federal Reserve System, income taxes, the FBI, the CIA and the IRS?"

I'd have to be elected president first, and I'd probably need a very cooperative Congress.

"Where would tax revenues come from?"

Look at this chart: http://en.wikipedia.org/wiki/United_States_federal_budget,_2007

Less than half of the Federal receipts come from the Individual Income Tax.

While you're looking at the chart, compare the amount taken in for Social Security, Medicare, and Medicaid. Look at how much more is spent on those programs than is coming in RIGHT NOW. The gap will only get worse as the population ages. Still think Social Security is a good idea?

"I'm not completely sure, but Where would our intelligence information come from?"

The CIA and FBI can't get us good info the way it is. And we operated for a long time without them.

"How would we pay for the national defense?"

You'd be surprised how much cheaper it is to defend one nation than it is to "defend" hundreds. Especially when we're giving weapons to both sides in many conflicts.

"How would we maintain our infrastructure?"

States should do most of what a lot of people call infrastructure. Interstates, ports, etc., the federal government should do. But why should we take money from Kansas, filter it through a Federal bureaucracy, and spend what's left on a bridge to nowhere in Alaska? That kind of stuff happens all the time.

"While we might agree on the problems created by such organizations, how could you actually get rid of them, and what would the consequences be?"

I think we won't have a choice. We'll run out of money, otherwise. As to the consequences, fiscal responsibility comes to mind. So does decreased debt. So does less foreign war.

"As I understand it, Paul believes that a government should not be allowed to conduct surveillance on its' citizens."

Not true. Paul believes that surveillance should be limited to the boundaries of the Constitution. Is it really that hard to get a warrant, supported by oath or affirmation, based upon probable cause? If so, you probably don't need to listen to the person's phone calls.

"In the age of international terrorism, would this not be an incredible risk?"

Why? I don't think we're catching many terrorists using warrantless wiretapping of American citizens. You know what they are catching? Drug dealers, mafioso, and other people who didn't get the memo that Bush repealed the Fourth Amendment.

And it's not just criminals. I don't like how the TSA can confiscate your laptop when you go through the border, without any need for suspicion, and will return it to you when they see fit.

Many people say that if you don't like government surveillance, you must be doing something wrong. You might call these people naive. I like to call them morons. I'm not doing anything wrong when I go to the bathroom, but I don't want strangers watching me do it. Same goes for my phone calls with my wife. Or my mom. Or anyone else.

"As much as I disagree with the Patriot Act, if I had to decide between overzealous surveillance and none at all, I would have to reluctantly take the former. What about you?"

I'll take the third option. Surveillance within firmly established constitutional guidelines. The Fourth Amendment comes to mind.

"You seem to have a very doom and gloom outlook on things."

That's because I look at things, and they look pretty doomy and gloomy.

"I can't blame you, but I'm curious how far you picture this going. If the recent bailout will make things worse, it seems that our entire system will collapse. Do you think that is what is going to happen?"

Yes.

And "bailout" is not singular. We've had a bunch lately, all designed to keep credit flowing, and keep overvalued assets inflated. I don't think they will accomplish those goals. But even if they do, it will only prop up an inherently flawed system a little longer. We might be able to export our debt another few years. Home values might be propped up a few more years. But it has to end at some point.

"Do you think we're looking at the end of the country?"

I certainly hope not. But we can't continue down this path forever.

No one can offer a decent explanation as to why it's OK for us to sink deeper and deeper into debt as a nation. If an individual spent more than he earned for decades in a row, and borrowed money to make up the difference, he'd be bankrupt. Eventually his creditors would cut him off.

How could the same strategy possibly work for the US Government? Are we too big to fail? AIG wasn't. GM isn't. Ford isn't. Banking institutions over a century old are dropping like flies. And their debt pales in comparison to the US debt.

"This is pretty heavy stuff."

Agreed.

"Alright, I think I've rambled enough."

Agreed.

"Talk to you soon."

You too. I have to get some sleep.

Sherry said...

I have one more question. Should people still be investing their money in the market if it will collapse eventually? We can't count on social security and we can't count on the market now, so what do we do? Put it in the banks and earn maybe 1% interest,CD's, or under our mattresses earning no interest, but at least its safe? I really would like to know what you think on this.