Heading Toward That ‘Fiscal Cliff’ – Are We There Yet?

Libertarianism, Republicanism & Capitalism

If you analyze it I believe the very heart and soul of conservatism is libertarianism. I think conservatism is really a misnomer just as liberalism is a misnomer for the liberals–if we were back in the days of the Revolution, so-called conservatives today would be the Liberals and the liberals would be the Tories. The basis of conservatism is a desire for less government interference or less centralized authority or more individual freedom and this is a pretty general description also of what libertarianism is.” – Gov. Ronald Reagan, July 1975

While Governor of California and, later, while President, government grew. Some say the growth represents hypocrisy on his part, but cold reality is governors and presidents are not embued with absolute power to do as they will, at least this was so until one B.H. Obama came along.

Presidents don’t actually decide how funds will be spent and they have no control over tax rates. These are the prerogative of lawmaking bodies – legislatures and the Congress.

Thomas Jefferson observed that it is only natural that government would grow and individual liberties would diminish. This is just the nature of man at work. The question isn’t how much government grew while Reagan was the chief executive; the question is how much did his influence limit the growth of government.

In short order there will be a day of reckoning over our collective debt: national, state, municipal and personal that now stands at approximately $56 trillion. What is the maginitude of $56 trillion? 56-trillion-gross-national-debtAllowing one second of time to represent $1 of money,

Using the figures to the right, compare your concept of $1 million at 11.57 days to $56 trillion at 1,775,748 YEARS. Our nearest neighbor in the Milky Way lies some 400 light years distant. In other words, travelling the speed of light (186,000 miles per sec.), it would take over 400 years to arrive at your destination. Now, do the same mental exercise with $56 trillion gross national debt. On this scale, you would travel round trip to that same neighboring galaxy over 2,200 times.

The value of a U.S. dollar is said to be “fiat currency”, but that isn’t exactly so. Its value is determined by the performance of debt. While true ours is not a gold stand economy, dollar value is sustained and determined by how well we pay our bills. For example, if you purchase a home with a mortgage, so long as you make timely payment, your loan is said to be a performing loan and is treated as an assett, just as much as gold or land or some valuable work of art. Loans are bought and sold on the open market, their values based on expected returns from interest payments against the prime rate.

Thus, so long as we can pay our bills, the dollar has value. However, what happens when we can no longer pay our bills? You probably guessed the value of the dollar falls into the toilet and you would be correct.

Big Government

Big government consumes big dollars form its citzens. Had our government simply expanded proportional to population growth, there would be no problem whatsoever. But, this isn’t the way it works. Government continues to grow disproportionate to population growth. Taxes take FROM gross domestic production (GDP). Investments, earnings, capital gains and free market expenditures ARE GDP. More disproportionate government = less GDP. Got the picture?

So, what causes government to disproportionately outstrip population growth? Before answering that I should tell you this dirty little secret: Our population isn’t actually growing in a sustainable manner because our collectivel reproductivity is declining. Now to the hard part.

We have an aging population, more and more grey heads, fewer and fewer young wage earners. In 1950 for every recipient of Social Security payments there were 16 contributors – 16:1 ratio. At present, the ratio is 3.3:1 and by 2030 it will be merely 2:1. Several factors contribute to the declining ratio: low birth rates, easy enrollment into permanent disability payments and longer life expectancy.

We all like the longer life expectancy. Right? We have to go along with the lower birth rate. Right? Do we have to go along with expanded entitlement programs that greatly exceed the boundaries originally set for Social Security? No. Absolutely no. Look at this chart from the Cato Institute.

social-security-revenues-vs-outlays

Old-Age and Survivors Insurance and Disability Insurance (OASDI) Trust Funds will be bankrupt in 2030

What’s the Cure?

The obvious is to cut entitlements, restricting them to retirees and to adjust the retirement age upward to a sustainable level. OASDI funds were never intended to serve as long-term retirement for people who wished to stop working. The fund was intended to provide  for old people who could no longer work. The cure is simple to understand, impossible to implement.

Our end is natonal bankruptcy. At that point in time, and it may not be far away, you can read endtime Biblical prophecies to understand the end of America, as we know her.

Political Choices

For most of my nearly seven decades of life power has been mostly in the hands of the Democrats, occaisionally under the control of the Republican party. Regardless the party, government has grown to become this all-consuming monster that adds over 100 employees per day on average, 365 days per year, while private employment continues to decline. One can conclude neither holds the solution. Or, you could conclude either party could turn things around, IF. IF is a word signifying  a conditional situation.

If either, or both, major political parties were to inculcate libertarian principles, government would shrink, liberty would expand, general wealth would rise and we would be able to get out of debt. Will TEA Party patriots start a third party? Possibly. I would hope one or the other major party would repent from its “nanny state” way of thinking and stop playing god. The Living God hasn’t surrendered his office just yet. The outcome really isn’t in the hands of professional politicians; it’s all within the hands of We the People – IF We the People learn our history and our foundations.

Stay tuned…

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