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Thursday, January 28, 2010


Steve Cole reports:

The state of the United States of America, my friends, is dire. A year ago, we stood on the edge of a cliff, hanging onto the crumbling edge by our toes. Instead of doing the proven things that would set the country right again, President Obama drove full speed over the edge and down the steep incline, and shows no sign of realizing his mistake, much less correcting it. There is worse to come. The bottom of this cliff is not just hard rocks, but a deep ocean full of sharks.

This mess was triggered by the collapse of the housing market. That market should never have been as inflated as it was; there never should have been a "real estate bubble". There was one because Congress ordered the banks to make risky loans to people who could not pay them back (in the name of "social fairness"), and once the banks realized how much profit that was (there was no risk as they just packaged and sold the mortgages to investors who assumed that there was no better investment than a US home mortgage), the banks went totally crazy, and stopped even trying to verify that the loan applicant had the income he claimed he did. The sub-prime market was a ticking time bomb, and it exploded. Thus, the recession of 2008-2009.

How do you get a country out of recession? Not by government spending; that's been proven to never work. It has failed every time it has been tried. Government spending is a temporary fix that lasts only a few months, does not create any real permanent jobs, and does nothing but drive up the deficit. The "Stimulus Bill" was (as we all knew at the time) nothing but pork to pay off pro-left groups, and was never going to create jobs. Instead of getting this country moving by the time-tested and long-proven methods (cut taxes on businesses and let them grow new jobs), we wasted a year debating "health care", a misnamed issue used to disguise a government power grab. Fortunately, that move to socialism failed when the independent voters and conservative Democrats of Massachusetts said "no" to socialism and repudiated everything President Obama had tried to do.

The question for today is, what do we do now?

What happens now, by all appearances (from President Obama's State of the Union speech), is another year of getting nothing accomplished, at least, nothing that actually helps. President Obama has yet to realize that he never had a mandate for his socialist agenda; he still thinks it can happen, and should happen. At least, we won't get Cap & Tax and we won't get the Union Thug Relief Act. (It was so hard for the thugs to coerce the votes they wanted when the ballots were secret, but at least it seems now that those ballots will stay secret.)

So, then what? Well, a year from now, the Republicans are going to gain a lot of seats in the House and Senate, maybe not enough to take control (that depends on how well the Democrats fool the American people), but a lot of seats, enough to deadlock anything from happening in the two years after that. Why? Because that is how American politics works, or rather, doesn't work.

In 2008, America (for valid reasons or not) was tired of Republican rule. Considering that the eight years of Republican rule doubled the national debt, I was kind of unhappy with them as well, but not so unhappy as to put the Democrats in power. I knew what others did not, that a vote for the Democrats was not going to be seen as a vote against Republicans, but a vote for Obama's socialist agenda. And now, when the only hope of stopping the socialist agenda is put the Republicans back in control of Congress, a vote for Republicans won't be seen (by the Republican National Committee) as a vote against socialism, but as a vote for Republican leadership à la 2005. I have said many times, if there had been a "none of the above" on the 2008 ballot, we would have had six months of caretaker government and a new election with new candidates.

I got a letter from the Republicans the other day. It was a survey, the first fourteen questions amounting to "Do you oppose this thing President Obama wants to do?" and the fifteenth being "How much money can you send us?"

My answer was "Not a dime until you give me something to vote FOR, not just something to vote against."

I am, to be sure, totally against the Obama socialist agenda. I do not want taxes raised (that's been proven to slow the economy andproduce less money for the government). I do not want free pass amnesty (along with free retroactive social security and welfare benefits) for illegal aliens (but maybe some rational program could be found). I do want English as the official language and I do want "bilingual education" eliminated (since it teaches kids to retain Spanish and not learn English). I think we need a voucher system (since the public schools are churning out graduates who don't know how to spell but do know to vote for Democrats) but I don't want a bunch of fly-by-night private schools springing up like mushrooms to grab the free money. I want tort reform, an end to lobbyists getting the legislature to force everyone to buy certain coverages that only a whacky minority want, and interstate health insurance sales. I do not want a subsidized government plan that would run like Medicare (badly!) and drive the good insurance I have now out of business. We don't need a draft and we don't need a hippie-style citizen's volunteer corps that gets military pay and benefits for raking leaves. We need to treat terrorists as enemy war criminals, not as common crooks with ACLU lawyers. I absolutely oppose making Homeland Security a bunch of unionized civil servants more interested in their jobs than their duties.

But that is not enough. I don't just want the Republicans to stop the Democrats; I want the Republicans to stop being what Republicans have become (spend-aholics) and start being what Republicans were (responsible conservatives with some core values).

I will donate money to the Republicans when I see the RNC show some "change" in the right direction. I want the budget balanced, PERIOD, no excuses. I want the Republicans to swear that the deficit will be reduced to zero in two or three years and then I want the national debt paid off in ten or fifteen. I want term limits, campaign finance reform (real reform, that eliminates payolla equally across party lines, not that bogus "bipartisan" reform McCain tried to sell where labor unions get to spend all they want but businesses do not), an END to the Congressional health insurance and retirement plans, and transparency in government. I want Republican candidates who are not Democrats with a Republican name tag.

We had better realize that if we put the Republicans of 2005-2008 back in charge, the budget won't get balanced, and the country will collapse. The Republicans need to promise that they'll be fiscally responsible, not just that they'll be less irresponsible than President Obama. (What we really need is to make the Tea Party a real third political party of middle-ground independent voters who just want the budget balanced, but the way US election laws work, that's just impossible.)

We need to change our ways, and fast. Trouble is out there, and it's going to come sooner than later. There is more than one ticking time bomb out there, and we cannot survive any of them, let alone all of them.

One ticking time bomb is the foreign debt. Sooner or later, China and the rest of the world are either going to refuse to buy American Treasury bonds, or demand a higher interest rate. When that happens, the US economy is going to hit a brick wall. The only way to fix this is to balance the budget and start paying down that debt.

Another ticking time bomb is the state debt. Half of the 50 states are bankrupt and most of the rest are headed that way, due to the economy which cannot sustain the previous overspending. When the economy went down and "services" stayed the same, the state deficits ballooned to a current $500 billion. We can fix this by the tried and true method (cut business taxes to get growth going again). It wouldn't hurt states to realize that while giving the taxpayers a lot of services is kind of cool, it's also very expensive and we just cannot afford it.

Ok, California is bankrupt because it was run by a bunch of socialist idiots who cannot grasp the concept of dynamic models. (A few other states are on the same path.) They think if you raise taxes on business and give people lots of "services" they did not know they needed, the businesses will just cut back on undeserved bonuses. Instead, the businesses left the state and took the jobs with them.

The third ticking time bomb is the Balance of Payments, also known as the Trade Deficit. The US is buying more than it is selling, and that cannot last much longer. We've pretty much destroyed our manufacturing jobs and have created a service economy, then shipped the service jobs to India and Bulgaria. The biggest part of this problem is energy (oil and other types). We need to drill for oil everywhere we can at home to buy time for other solutions to become practical. I hate to think of government meddling in the free market, but we may have to think in terms of cutting the trade deficit by fiat rather than hoping that something we do causes it indirectly. We may have to impose import quotas, and require any company or country selling things to us to buy things from us, things like manufactured goods, not real estate or bulk ores. We need to stop exporting logs and importing furniture made from those logs, or at least force the people buying the logs to buy cars or tractors or something that we make here from American resources. Sure, that's going to cause disruption. Heck, it's going to cause chaos, but you can have less pain now or more pain later.

The fourth and final ticking time bomb is the personal debt of Americans who grew up in the instant gratification generation. In theory, the Free Market will ensure that banks do not give you more unsecured credit than you can pay off. In reality, they did, and now we have people on Suze Orman and Dave Ramsey complaining that they (somehow) ran up $80,000 in credit card debt and have no idea what to do about the banks raising their interest rates and minimum payments.

Here's what to do: STOP SPENDING MONEY YOU DON'T HAVE. I'm a free market guy, but the free market gave you too much credit, and the free market failed you. How about a law that nobody can have more unsecured debt than three months of their income? To be sure, tens of millions already do, but at least they would get no further in debt, and everyone would suddenly have to grasp the concept of living within their income. Sure, you're going to have to cancel your cable TV, sell the third car, cancel your magazine subscriptions, stop eating in restaurants, and quit making $300 trips to Walmart when you feel depressed, but it will be good for you!

I have covered a lot of ground here, and looking back on what I have written, it is a bit of a ramble, but this is not a simple situation that can be solved by one simple answer. I hope you take away my key points. We need the Republicans to understand that when they get back in power, it's not so they can spend money, but so they can balance the budget.

We need to stop spending money we don't have, on a government, national, state, and personal level.