Fighting our way out of the credit crunch

We’re at a critical juncture in our history. The American economy has been built on credit, truly huge amounts of credit, and the problem is the American people have stopped seeing the credit they spend as wealth and real money. Las Vegas uses chips as money in casinos, not just because it’s safer or simpler, but because they know the psychology of gambling. A player will find it much easier to put a black chip at risk than a one hundred dollar bill. A blackjack table wouldn’t see nearly as much business if vacation gamblers had to open their wallets and put their hard-earned cash on the table.

Credit cards are the same thing. How often have you made purchases on your credit card (or your debit card for that matter) that you never would have forked over cash for? I’ve done it, and in my advancing years I’ve become pretty conservative. The cliche that we’ve been using our homes as ATMs for the past several years is perfectly accurate. We’ve been spending money we didn’t have, profits we hadn’t realized that banks, mortgage brokers and other financial services entities called “equity.” We’re waking up with a huge financial hangover after many years of binge spending.

Congress is debating how to solve the problem. In truth, they’re debating how best to spin a “solution” to the American people that will make them look clean and faultless in the situation. It’s all politics. What our “leaders” do on Capitol Hill doesn’t, in the long run, mean anything. The problem is well beyond anything they can do to solve it. The vast majority of them don’t even understand it. The only important person inside the Beltway that I can confidently say understands what’s going on is Ron Paul, but he’s been so marginalized by the media, he’s out of sight. That’s a shame of historical enormity, because Dr. Paul gets it. The American people will never realize what our two parties have cost us by spinning Ron Paul into the media wilderness, and I feel sad about that.

There is no solution that Congress and the great mass of Americans will accept, because a true, cleansing solution will be economically painful and will mean a dramatic reduction in our standard of living. There’s no room for that in the “American Dream.” But the American Dream is just that, a dream. It is time to wake up, because the sun is coming up and the new day is starting, even though dark clouds threaten. Many Americans will find waking so disorienting and painful, they’ll try to convince themselves they’re still asleep, and will refuse to face reality. They’ll try hard to maintain their standard of living, but it will be impossible. Faced with an angry populace, our leaders will do whatever they can to keep this false, plastic dream alive. They’ve actually gotten quite good at this over the past couple decades, but they’re having to get more and more dramatic in their “solutions.” It’s getting out of hand, and will escape their control very soon.

At that time, I fear our Government’s only option will be military action to distract the American people from the truth of our economic situation. American forces exchanged fire with Pakistani troops today, and that’s a problem, because they’re supposedly our allies. They’re also a nuclear power. I think what’s happening, is that the Bush administration is pushing really, really hard for some resolution to the bin Laden situation, and telling Pakistan that it’s time to give him up. They don’t want to do that, but George Bush doesn’t want to leave office with bin Laden still free. He wants the image of the man who masterminded 9/11 paraded through the streets of New York in chains to be his lasting legacy. Maybe then, he must figure, will people forget about all the failed policies, corruption and incompetence that marked his administration. But, the Pakistanis won’t go down so easy, especially possessing nukes. It could get very, very ugly, very, very quickly.

Posted in Economy, War
Tags: Bailout, Depression, Economy, War