When One Bridge is Out, Take Another Route

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”.

How do I see my little role? A “Bridge Out” sign comes to mind. 

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”.

This is ‘staying 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.

The Challenge

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.

4 thoughts on “When One Bridge is Out, Take Another Route

    1. Suppy side economics not only doesn’t work during a recession/depression, but it hastens it. During times like these, the economey msut be stimulated according to keynesian principals ie, stimulate nthe middle class, the engine of this type of economic recovery. Bail outs or giving money to corporations, big business or the wealthy will not create jobs. Making money accessible to or giving money to small business and the middle and low income persons will stimulate jobs and the economy. Think about it. Businesses hire when there is demand for their products and services. If the middle and lower income folks do not have any disposable money, they will not be spending it, busineses will not need emplyees to serve the public and everyone loses. If the people have money, they spend it and it stimulates business and jobs. Get it. I recommend debit cards for all tax payers with a sum of money on them, say $5000, that can be spent only on new purchases such as tv’s, car down payments, ovens, furniture, etc. Not credit card or other bill payments. With all that spending going on, busineses will be busy, consumers will benefit and the economy will do much better than giving billions to bail out banks. And, it would be less costly overall. By the way, did you know that corporate welfare costs us far more than welfare to the poor. And, though I am not a fan of Obama,I cannot blame him for the national debt. If you charged your credit card over 1 million dollars, it would take me more than 3 years to pay off your debt. So chill.

  1. Cindy,

    By lack of economics education, if you mean formal university education, you are correct. I actually learned it over sixty years out here in the real world where real people’s wealth rises and falls as a consequence of personal choices and external government policies.

    Let me share some of my economic ignorance with you.

    Your educated assumption believes there are two “sides” to the economy: a “supply side” for which you have disdain and a government side you promote.
    As the greatest president in modern history once said of folks like you, “Well, the trouble with our liberal friends is not that they are ignorant, but that they know so much that isn’t so.”

    Let’s consider your idea to give every tax payer a debit card – really, Cindy? Is this what you learned in college? Do you not imply money is the property of government and not the people?

    Your simple-minded suggestion is expansion of socialism. You believe in socialism; I practice capitalism.

    Using a well-recognized on-line dictionary, let’s compare socialism to capitalism using WordReference.com.

    Socialism: “a political and economic theory of social organization which advocates that the means of production, distribution, and exchange should be owned or regulated by the community as a whole.”

    Capitalism: “an economic and political system in which a country’s trade and industry are controlled by private owners for profit, rather than by the state.”

    Here’s my uneducated, non-scholarly definition of capitalism: It’s the natural exchange of goods and services among a free people, where the value of said goods and services is determined by the degree of benefit to the buyers of said goods and services.

    Now, I perceive you are a reasonably intelligent person, no doubt the product of one of our fine educational institutions. Can I reasonably assume you understand the distinction between an economic theory and an economic system?

    Why is socialism described as a theory? It’s never been proven, Cindy. It will never be proven a valid economic system. My dear Cuban friends in their 90’s agree with me. If alive today, William Bradford would concur.

    With respect to national debt, Cindy, how big is it? How much has it grown and when? Under President Obama, your socialist hero, this administration has accrued more national debt than the sum of all national debt accrued under all previous administrations from George Washington to George Bush.

    At this moment in time, our national debt exceeds GDP.

    In another of my academically deficient articles I provide a frame of reference so even well-educated experts on economics like you can understand the magnitude of our national debt. This link http://bit.ly/NVvfTV takes you to an article I wrote on February 19th of this year (2012) where I relate debt dollars to seconds of time.

    I sincerely thank you for your thoughtful comment and I encourage you to continue the dialog. America may already be beyond the point of no return, but until I see us go over that “massive financial cliff” described by Ben Bernanke, I’ll continue to work to turn America around.

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