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alstry (< 20)

Happy Dependence Day



July 04, 2010 – Comments (1)

Over the last thirty years or so, the American economy morphed from a production based economy to a consumption based system.  In the past ten years, much of our consumption was simply a product of borrowing massively and spending among ourselves and importing from others.

We collectively borrowed and spent more money in the past ten years than the total accumulated in the prior 224 years since our Declaration of Independence.  Our borrowing was the primary driver of the world's production.

Our economy/consumption became addicted on the bankers lending the private sector trillions of dollars each year, regardless of our ability to repay....and it was our borrowing and consumption that drove most of our production....and jobs.

We borrowed and spent to create jobs.....just like how Nancy Pelosi said a few days ago...that  the government borrows and gives unemployment benfits to create jobs. 

You have to admit, it is sorta strange logic but true.  Those with jobs depend on those without jobs to spend so they can have a job? Why would anyone in a free country give up their life to serve someone without a job simply to get money that the person without a job gets handed to them by the government for doing nothing?  Why doesn't the government just give everyone free money...this way no one would have to work.

Back to the economy and its dependence on credit to allow us to consume plus drive production.

Once the bankers cut off the private economy from credit, it was obvious the private economy in America would collapse......and the only way for our system to function would be for the government to borrow massively......even though the government was bankrupt.

In just a few years, our deficit has grown from a few hundred billion per year to approaching $2 trillion and likely to grow much larger as production declines and demands on government increase.

Few have a perspective on exactly how large $2 trillion really covers most of government funded heathcare, all 40 million food stamp recipients, 7 million highly paid federal workers, 16 million unemployment recipients and leaves a nice chunk left over for millions on welfare.

Without the government's borrowing and spending, our consumption collapses...and even with the massive borrowing and spending by government, private sector production is still declining as evidenced by rapidly rising commerical vacancy rates.

Whether we like it or not, we have all become dependent on government borrowing and spending to survive.....and the amount required to maintain our consumption is so large that no nation, or group of nations, in the world has the capacity to lend us anywhere close to the needed the only alternative we have is to simply print it out of thin air by creating the illusion we are borrowing it from our primary Wall Street banks so we can continue to consume....

the other way is to force other nations to hand over their production so we can consume.......

As we are continually expanding credit to government and a few select banks, we are contracting credit to the private sector for the first time since The Great Depression.  As a result, the credit dependent private sector is collapsing while the credit enriched government and few select banks are taking over a larger and larger percentage of the economy through foreclosures, bankruptcies, and shutting down.

IN LEGAL TERMS, THIS IS ESSENTIALLY AN OUTRIGHT TAKING OF PRIVATE PROPERTY AND HANDING IT OVER TO GOVERNMENT AND A FEW BANKERS.  It is simply what mathematically happens when you cut off credit to a credit dependent consumption economy and only bail out a few....those that get bailed out will eventually own everything.....and everyone else will be dependent and become the slaves of the few in order to consume.

By the way, this process started well before President Obama came to office...but it is ironic it is occuring under the watch of the first African Amercian President.

At this point, the government is basically healthcare, defense, government employment, and education....with real estate, construction, retail, and manufacturing collapsing.......whatever little production we have left is simply the proximate result of government consumption...which is now primarily based on borrowing.

As revenues have collapsed and the massive debt burden suffocates a greater and greater percentage of the cash flow.....many more producers in America are about to go out of business.  At that point, which is basically now, the government will be the only show in town and we will all be dependent on handouts in order to consume......

You knew it was coming, you felt it coming,yet few said anything.....and it is now here.  Happy first annual Dependence Day.....where in the future money will not be gold, or silver, or will be digital vouchers provided to you by government in order so you can consume.......anything else will not be Legal Tender.

Some will get more, some will get less....but it will be the government that chooses and NOT YOU!

Our current food stamp system provides the perfect template.....and it is also spreading in Europe and around the world.

You gave up your Independence when you allowed the Federal Government and a Few Select Bankers to bail themselves out with unlimited credit but left the massive debt without restructuring it upon the cities, counties, states, hospitals, schools, businesses and bankers cut off of credit in a system dependent on credit to function.

What kind of Fool would let that happen in a society celebrating its Independence from governmental tyranny and the creation of nation grounded in the principals of individual liberty and property rights?

HAPPY DEPENDENCE will only get more dependent as Summer rolls is not the end of the world...simply the end of a world as you knew it....welcome to the Digital Age...I promised it would be exciting as fewer and fewer will be requred to work and digital technology replaces human functions.

Now the question is what are we going to do with all these non producing people in the Digital Age?

7.9 million jobs lost, many forever...

1 Comments – Post Your Own

#1) On July 04, 2010 at 10:53 AM, alstry (< 20) wrote:

We have now become dependent on Government BORROWING trillions annually to fund American consumption driving most of our production:

Because the bankers cut off credit to the private sector, the citizens production, tax receipts, is collapsing and no longer sufficient to support our current consumption..not even close.

The primary way we consume is because our government BORROWS and spends massively on military, health care, social security, unemployment, welfare and food stamps......this consumption drives everything around us.

Now the key question is how long can America consume a HUGE amount of the world's production yet produce a relatively small percantage of it.......?

As we are all dependent on government spending, we have all become dependent on government borrowing to support consumption to our investments, businesses, cities, counties and states......without government borrowing and spending....few of us will be able to consume like we did before.....with government borrowing and spending...eventually none of us will have any "freedom."

When a nation gives up FREEDOM for consumption....soon it will have neither because at some point government will not be able to borrow..........

Happy Dependence Day.


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