Posted 4/9/2011

SHUTTING DOWN THE GOVERNMENT, SOONER OR LATER

This week, the U.S. government came within a whisper of shutting down tight and completely.

It's all because we are violating a basic law of nature:

WHAT CAN'T STOP GROWING WILL ONE DAY STOP

To understand this principle, think cancer. When cancer cells can't stop growing, they simply stop – when the body dies.

Or think ambition. When Napoleon's ambition could not stop growing with his conquest of Europe, his Grand Armée simply died – at Moscow.

Or think greed. When Bernie Madoff's greed could not stop growing, it simply stopped – at discovery, prosecution and incarceration.

Or real estate. When the bubble could not stop growing, it burst.

Now think the debt of the United States. It cannot stop growing until it stops – with the bankruptcy of the United States. If you doubt this, examine the following facts:

1. Neither political party is interested in stopping the growth of debt. While Democrats are big spenders, Republicans have added far more to the national debt between the times of President Wilson in 1911 and Barack Obama today.

2. Historically, Washington has found it easy to cut taxes, but well nigh impossible to cut spending.

3. There was hope that the Tea Party folks would energize the Republicans and "Blue Dog" Democrats to band together in a major spending reduction move. But the Tea Party seems more interested in pushing highly divisive interests like abortion, NPR radio and Environmental Protection Agency power.

4. Government spending even grew during the incumbencies of Presidents who campaigned on "smaller government" platforms. Reagan, for example.

5. National debt growth is accelerating rapidly – producing an upward trajectory similar to every other bubble in economic history.

6. Falling currencies are a symptom of a failing country – and the value of the dollar is falling rapidly. In 1913, the Federal Reserve was created to protect the value of a dollar. At that time, a twenty dollar bill could buy a twenty dollar gold piece. Today it takes 50 twenty dollar bills to buy one twenty dollar gold piece. Thus, the dollar has fallen 98 percent since the Fed was created. Soon a dollar will be worth less than a 1913 penny. In 1955, the dollar could buy 400 yen on any street corner in Tokyo. Today the dollar can buy only 82 yen.

7. The falling dollar is driving up the costs of everything from fuel to raw materials. Now all products are being affected. Soon we will be staggering under sluggish economy and a high inflation – the kind of situation that produced malaise during the Carter administration.

8. The American public seems unable or unwilling to grasp the crisis. The rich, the middle class and the poor are all demanding more from government than they are willing to put in. Corporations derive their greatest return on investment by lobbying – and not by producing and selling. Has everyone forgotten President Jack Kennedy, who said, "Ask not what your country can do for you. Ask what can you do for your country"?

9. As the national debt reaches $15 trillion, we are crossing the threshold into the pattern exhibited by Portugal, Greece and Ireland, which required Euro bailouts.

10. But at the end of the line, there is no one big enough to bail out the United States.

Tom Brokaw wrote a great book about the people of the Great Depression who fought World War II. He called them The Greatest Generation.

Will his grandson write a book about us and call it The Greediest Generation?

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