How Did We the People get in this Mess?

To put it simply we expected our politicians to deliver miracles and perform economic feats that in the long run are unsustainable. We vote in politicians and demand retirement, medical services, housing subsidies, education oversight, national defense, domestic defense, lazy high paid government jobs, drug wars, overseas spying, domestic spying and thousands of other things unrelated to protecting freedom and liberty. The programs are cheap poorly thought out schemes in some cases no better than a Bernie Madoff ponzi scheme. Social Security was supposes to be put in a “lock box” back in 1985. Guess what it was robbed. Surprised? People condemn corporations for greed but there is no swine shallower than the politician that would steal grandma’s retirement money.

Problem number one is federal spending. This is not a Democrat or Republican problem. Both parties are equally guilty of spending the United States into oblivion.

Bill Clinton the most fiscally conservative president since Eisenhower?

A quick look at the St. Louis Federal Reserve web site and Federal Consumption and Gross Investment shows a spending increase of 82% for the 1960’s, 92% for the 70’s, a whooping 97% under Reagan and Bush 41, 13% under Clinton and another 86% under Bush 43. The most fiscally conservative president since Eisenhower has been Bill Clinton? Yes that’s what the numbers tell us.

Today our known national debt is 12.5 trillion. Our entire GDP is $14.5 trillion. 87% debt ratio is not good but it could be overcome if that was all we owed. Unfortunately our unfunded liabilities are $108 trillion. Medicare liability being the largest chunk at $74 trillion. Is it any wonder the federal government is fighting tooth and nail to get its hands on Medicare? With baby boomers scheduled to retire by the millions this program alone will financially destroy America. In the coming years there will have to be a huge expansion in the supply of medical care or massive rationing.

It doesn’t matter which party is in control. If the ship is sinking I would rather take my chances with the private sector. I cringe at the thought of being stuck in some hospital ward for months with no care and little food like in England. State wards checking me every few hours to see if I am dead so they can move another patient into my space. Thanks but no thanks. I think I would rather die in a barn than a state run medical facility.

So the federal government has promised the gimme generation generous retirements and medical care for their votes. And for the most part they delivered. Pensioners like my grandmother paid a 1% payroll tax and she never saw her tax increase above 5% matched by her employer. For her paying a few thousand to get a few hundred thousand in benefits was a no brainer. She was at the beginning of the FDR vote buying schemes. It was a great New Deal for her. And now the baby boomers are about to retire and there is no possible way the politicians can deliver on their promises. The lock box is empty, the party is over, the alcohol is wearing off and people are beginning to realize it was all just a generational illusion. One group of citizens getting another to pay for their retirement and medical care. Generational theft as John McCain likes to coin the phrase. Only the generation that got robbed doesn’t even realize it yet. But they will.

Ronald Reagan talked the talk but delivered big government

The average debt per citizen is $40,372. The debt per taxpayer is $113,840. The PPP is $46,400 per citizen. Personal debt per citizen is $53,905. The average tax payer is on the hook for about $190,000 both personal and government debt but he only makes $46,400. And the bills just keep on coming. The president states that he will not tax anyone making over $250,000. Does any sane person think that is true?

This entire health care bill is one big tax hike and rationing program. A complete renunciation of past promises made to the gimme generation. Benefits taken away from the gullible baby boomers that paid for grandma and grandpa their whole life to get negative returns in the end. Maybe the next generation will not be so gullible. Maybe the next generation will have personal savings retirement accounts.

They have the audacity to disguise it as providing health care for all. We are fools for voting them in and drowning them out when Reagan in 1983 and Bush in 2004 spoke up about the insolvency of these programs. This is nothing more than the final nail in the coffin for the United States. Are things ever the same after a personal bankruptcy? The United States will fundamentally change over the next decade. The Obama dictators on the left and freedom and liberty on the right. The states are already filing law suits and making preparations for state rule. They know what is on the horizon and are preparing accordingly.

There are other follies that have contributed to the demise of the United States but they are rooted in the fact that people vote for politicians who promise them the means to live the high life. The Community Reinvestment Acts of 1977 and 1996 opened up home ownership to the “disadvantaged” and gave everyone a piece of the American pie. We learned some people are renters and some are owners for a reason. Maybe everyone should not have a home.

Bush 43 set spending records. So much for the “R” label.

The Federal Reserve and it’s independence from Congress. Hey it’s a bank. It’s a bank that can print money. What do banks that can print money like to do? Maybe print money? It’s not rocket science but somehow our politicians ignore the fact that the dollar has lost 93% of its value since the creation of the Fed in 1913. The Federal Reserve played a huge role in making the Great Depression longer and deeper. In the past half the time the Federal Reserve got monetary policy right and half the time wrong. One thing is certain Alan Greenspan will go down in the Hall of Shame for his 1% Fed Funds rate in the middle of the biggest housing bubble in the history of mankind. With friends like that who needs enemies?

There was a reason Andrew Jackson killed the Second Bank of the United States and reverted back to a banking system of “hard money.” The biggest one was limiting the debt the federal government could get itself into. When the federal government borrowed money it had to pay back the money to private banks. This meant immediate tax hikes or long term debt. There was no game played where the Federal Reserve issues bonds to finance the federal government, sells them to a third party and then buys them back. From 1837 to 1913 if the federal government borrowed money it paid it back or defaulted like everyone else. It was only after the private sector bail out in 1895 of the federal government that New York bankers revive the idea of a national bank. And today we are relearning the lessons Andrew Jackson learned 181 years ago about concentration of wealth and power in a single bank.

The progressives of 1913 put into place their piece of the dictatorship puzzle. FDR put his ponzi schemes in place to move toward dictatorship. Nixon and his communist price controls. Reagan and his crazy spending. It’s been a march for a hundred years now.

Jeckle Island the birth of the Federal Reserve

Some generations have done well and some have yet to be screwed royally. Everyone keeps electing the same D and R politicians and we keep getting the same D and R solutions. What is best for the people will probably never happen but they are:

1. Health Savings Accounts with catastrophic $5,000 deductibles. Simple and puts the power in the hands of consumers.

2. Personal Retirement Accounts. Let the people keep 5% of what they earn in local, state, federal or corporate AAA bonds. At least the people will know what return they are getting on their money.

3. End the Fed. God I sound like an Alex Jones nut-case. I have supported the Federal Reserve my whole life under Volcker and Greenspan but after the disastrous events that have occurred and will occur in the future I simply changed my mind. Peter Schiff, Dan Mitchell and others were right and I was wrong. The Federal Reserve simply cannot be trusted to do what is in the best interest of the people. I would support a return to “hard money” or a limited controlled Federal Reserve that is required by law to increase the monetary base at a set rate such as 3% plus or minus 1%. All other functions are delegated to different institutions.

4. Constitutional amendments further restricting the federal government from all social engineering. Social justice quickly becomes corruption. Let the states decide what is needed in the social justice arena.

There are many events that have led up to the point of insolvency and dictatorship. Hundreds and thousands. But the biggest change that has led us to this point is the change in attitude. During the Great Depression and afterwards a whole generation looked to the federal government for economic salvation. It mattered little that the results were horrible and returns meager. People began voting for politicians that could deliver more and more benefits. No one looked to the year 2019 when the bills came due. It was all fun and games for the “Greatest Generation” and they plundered their children for retirement payments and medical bills. And now the baby boomers are going to retire and the politicians have spent all the money and left an unattainable national debt. The politician’s equivalent of a lump of coal for Christmas. We get the government we deserve.