I firmly believe that the United States is on the wrong path – culturally, morally, and, above all, economically. In the late 1970s, I began predicting a collapse of the U.S. stock and housing markets, nationalization of major banks, the demise of the dollar, an accelerating march toward socialism … and more.
To be sure, I wasn’t alone in these dire predictions. A number of other free-market thinkers had the courage to speak out as well. But the corrupt media condescend-ingly brushed aside those of us who called for a return to moral and fiscal responsibility as “doom and gloom” alarmists.
I must confess, however, that I was wrong in one respect: I believed that a total unhinging of the U.S. economy – and, as a result, a forced ending to our addiction to living beyond our means – was just a few years away.
Timing Can Make All the Difference
Then, along came (1) Ronald Reagan, with his infectious optimism, and (2) an explosion of technology – particularly computer technology – that increased wealth production, pushed prices downward, and elevated wages.
Even more important, government poured countless dollars (both paper and electronic) into the economy to help reinforce the illusion that people drowning in debt were somehow well off. In the end, it was the extension of easy credit that served as the nuclear reactor that, in turn, enriched the economic uranium used for our financial meltdown.
Which brings us to 2009 and the most dangerous administration in U.S. history. The guys who have their hands on the fiscal and monetary controls are economic clowns – economic clowns who are focused on their own power. All are ignoring the real causes of our demise and, instead of allowing people to be free to naturally stimulate the economy through free-market transactions, they are forcing “solutions” on us that are guaranteed to make things worse.
These socialist charlatans excel at shouting nonsensical phrases and slogans such as “shared prosperity,” “real change,” and “Yes we can!” – while the mesmerized public wildly cheers them on as though they had come up with a cure for AIDS.
The one thing all politicians have in common is that they are unwilling to tell the American people the truth. However, to be fair, I should say that I’m not certain all of them really know the truth. After all, to a politician, truth is whatever gets you elected … or reelected.
The Economic Chickens are Coming Home to Roost
It’s getting harder and harder for the government to sugarcoat the truth, because the realities of our once free-market economy are far more powerful than the lies and schemes of politicians. Right now, rising prices of certain essentials (such as groceries) along with collapsing housing prices are two of the most visible examples of this.
Also visible are the failures of major companies – even whole industries. The airline industry, for example, was never intended to operate as a conglomeration of flying Greyhound Bus services. With fewer and fewer people able to afford air travel, airlines are being forced to adhere to market realities.
I see only two possible scenarios for airlines: (1) A government takeover (which is preferred by those with a big-government mind-set) or (2) a continuing and dramatic increase in fares, which would force airlines to return to their roots – meaning a mode of travel to be used only by those who can actually afford to fly. In blunt terms, it would mean that the backpack-and-sandals crowd would have to go back to traveling by bus.
Even though few people in America have the slightest understanding of the underlying causes of our financial demise, the harsh reality is that there is no turning back. Actions have consequences, and decades of politically inspired socialism cannot escape the effects of universal law.
However, because there are so many factors that come into play, I no longer try to predict the timing of events. But with a reasonable amount of knowledge, an understanding that universal law is immutable, and a bit of common sense, it’s not difficult to predict the ultimate consequences of fiscal irresponsibility.
There are two possible outcomes to all this. One is a deflationary depression, which in many ways would be far worse than the Great Depression of the 1930s. The second (and more likely) scenario is runaway inflation, which would render the U.S. dollar worthless. With their vote-buying bailouts and “stimulus packages,” this is the path the U.S. government is now on.
Obviously, politicians favor an inflationary “solution” because they are painfully aware that telling the public the truth is a sure path to defeat in the next election. Even so, in all honesty, neither I nor anyone else can say with certainty precisely how all this madness will play out.
The only thing that is certain is that the new Obamastration and Congress will raise taxes, continue to increase the money supply, endlessly bail out failing industries and homeowners who cannot pay their mortgages, and increasingly clamp down on individual liberty. In other words, shades of the late seventies – only far worse.