After The Bond Election
City of Rockwall voters soundly defeated millions of dollars in public debt this month of May. All five propositions were appealing, but ‘gut instinct’ moved them to oppose all but the two more practical issues: roads and downtown improvements.
A locally well known detractors decried my “doom and gloom” warnings about economic uncertainty. If you hear the fire alarm system sound off in your school or place of business, what will you do? Will you heed the warning or sit around griping about the noise?
Full disclosure: I have no college degrees and what little I know and/or understand about finance and economics comes from personal research. Am I smarter than a fifth grader? Probably not, but my nine year-old granddaughter and I seem to be on the same page. She “gets it”.
A question on almost everyone’s mind – Is the American economy going to collapse? Before offering an answer to that question, let’s fortify ourselves with basic information about the American economy.
The Bad News
Yes, life will radically change for most of us in the near future. How can it not? This president, empowered by a Democrat Senate majority, has accrued more national debt than all debt accrued under the administrations of every president from George Washington to George Bush. Today, even as I write this, President Obama has added a fourth trillion-dollar deficit to our national debt. Red State blogger Dan Spencer describes his reckless spending as fanning a “prairie fire of debt” across the land of the free.
Around the world, the U.S. Dollar has been the “gold standard”, the reserve currency trusted universally by every nation on God’s green earth. If the global economy loses confidence in our unsinkable dollar, what does this portend? The Titanic’s maiden voyage serves as a good analogy.
Its builder described her as unsinkable. Perhaps the phrase “too big to fail” comes to mind. It did and we can, too.
A community leader acknowledged the plight of our national economy at the outset of the recession. He remarked, “But we are in the crow’s nest”. Although true, I am compelled to remind you that the Titanic’s crow’s nest followed it all the way to the bottom of the Atlantic.
As I approached this theme among friends recently, a very dear friend walked away, saying he wanted to stay positive. His denial of economic reality reminded me of the ostrich with head in sand – the ostrich just wants to “stay positive”.
The GOOD News
Economic collapse creates enormous, incalculable opportunities. For examples:
- Paul Galvin created the automobile radio in the midst of the Great Depression – he solved a problem.
- Louis M. Pearce, Sr. built up Texas Iron Works during the Great Depression by improving oil drilling technology – he solved a problem.
- Colonel Harlan Sanders started his Kentucky Fried Chicken – he solved a problem.
- Two young electrical engineers, Bill Hewlett and Dave Packard, started their business with little more than $500 – they solved problems.
It is said the Great Depression created more millionaires per capita population than any time in the history of our country.
How can I say the Great Depression brought opportunities? First of all, opportunity fell to those who were not stock market speculators, but entrepreneurs who understood the value of persistence, saving money and serving others. It was a terrific time to start businesses because prices for practically everything were low.
Harry S. Dent, Jr., author of The Great Depression Ahead accurately predicted our present recession, the “dot-com boom-bust” and other events. How is this good news? Did you not read what I wrote in the paragraph immediately above? LOW COSTS, people. Therein lays opportunity. If a Bible student, you must surely appreciate the principle of “jubilee” described in Leviticus chapter 25. God commanded Israel to forgive debts every fifty years. Twice each century all debt was forgiven. At this point, I interject an opinion: bailouts and stimulus spending prolong the inevitable. Sudden bankruptcy is the natural cure to recession and economic depression.
Jubilee positions the economy to restart at a level that assures a competitive edge in world markets. Those businesses that fail are simply those that either unwillingly or unknowingly lose out to lower-cost entrepreneurs.
Not all people can be entrepreneurs, but those of you who have “the calling” need to get off your “blessed assurance”, roll up your sleeves, have faith in God and GO TO WORK. Be problem solvers.
When you see “Bridge Out”, just look for a different route.