The Threat of a Global Financial Collapse ... Alan Caruba

The Threat of a Global Financial Collapse

By Alan Caruba

At present, the amount of the annual Gross Domestic Product, $14 trillion—the value of all the goods and services that generate income—is exceeded by the nation’s debts.

America is presently $15 trillion in debt and it grows daily.

In a November 21 Wall Street Journal interview, Erskine Bowles of the presidential advisory commission on the nation’s debt, said “If you take 100% of the revenue that came into the country last year, every single dime of it was consumed by our mandatory spending and interest on the debt.”

“Mandatory spending in English is basically the entitlement programs, Medicare, Medicaid and Social Security. That means that every single dollar we spent last year on national defense, homeland security, education, infrastructure, high-value added research—every single dollar was borrowed, and half of it was borrowed from foreign country.”

“That’s a formula for failure in anybody’s book.”

In truth, we are looking at a coming global financial collapse with experts from Credit Suisse to the Deutche Bank, the CEO of General Motors to Warren Buffett, all in agreement that the question is not if, but when.

It will come at a time when there is little, if any, real leadership to be found either in the U.S. or Europe, the most spendthrift of nations facing this crisis.

Thomas Jefferson, one of the most brilliant of our Founding Fathers, said “I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them.” He also said that “It is incumbent on every generation to pay its own debts as it goes.”

Another Founding Father, James Madison, warned Americans against the concentration of power saying, “I believe there are more instances of the abridgement of freedom of the people by gradual and silent encroachments by those in power than by violent and sudden usurpation.”

Over the years, more and more power has been concentrated in the federal government and it requires the dismantlement and elimination of several of its components. Americans need to say no to the Departments of Education, Energy, along with the Department of Housing and Urban Development. These are all functions previously addressed by the states.

You will not find any of these activities specified in the Constitution. Consider when they came into being:

Education was established in 1953, originally as the Department of Health, Education and Welfare. In 1979, it was subdivided into Education and Health and Human Services.

The Department of Housing and Urban Affairs was created in 1965.

The Department of Energy was created in 1977.

Thus, between 1953 and 1979, a period of 26 years, the federal government took control of key factors of the nation’s affairs, most if not all are dealt with far better at the state and local level.

To these must be added Freddie Mac and Fanny Mae, two government “entities” responsible for the housing mortgage crisis and currently asking Congress for billions more to cover their losses.

The Tenth Amendment of the Constitution specifically says that “The powers not delegated to the United States by the Constitution, nor prohibited by it by the states, are reserved to the states respectively, or to the people.”

Congress is filled with men and women for whom their position has become a sinecure as they are elected and reelected, some for decades But Congress has proved itself unwilling to govern the financial affairs of the nation. A recent vote in the House rejecting a proposed balanced budget amendment reflects this.

In 2012, the voters will have the opportunity to reverse this failure, electing men and women who will vote for term limits, a balanced budget amendment, and other necessary changes.

We have witnessed what happens when Americans lose sight of the vision of our Founding Fathers and the Constitution they bequeathed to posterity.

We are that posterity.

The present generations of Americans are obligated to save the nation or see it fail.

© Alan Caruba, 2011 

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Alan Caruba's commentaries are posted daily at "Warning Signs" his popular blog and thereafter on dozens of other websites and blogs. If you love to read, visit his monthly report on new books at Bookviews. To visit his Facebook page, click here For information on his professional skills, Caruba.com is the place to visit.

There Really Were Good Old Days

There Really Were Good Old Days

A Commentary by J. D. Longstreet

An old friend and I were conversing recently and reminiscing about the world we grew up in as opposed to the world we actually live in today. It is something “old-timers” like us have been doing since the dawn of time.

We were comparing the price of gasoline where he lives as opposed to the price for the same gasoline here, where I live, on the edge of a coastal resort area.

We live in neighboring states, but here in NC we have one of the highest state gasoline taxes in the United States.  Add to that the proximity of that resort area and I, unfortunately, fall into one of those pricing zones set up for the tourist trade. As a result, the price for gasoline is consistently higher where I live than where he lives… substantially higher.  

Of course, we began comparing the price of gasoline today to what we paid for it as teen-agers.  There is no comparison.  Regular gasoline was 13 cents a gallon and high test was 15 cents per gallon.  Really expensive gas was 17 cents a gallon for regular and 19 cents a gallon for high test – and that was before gas wars.  Then it was not unheard of to pay 11 and 12 cents for a gallon of regular gasoline. 

When you went out to purchase a car, you didn’t buy a car that got the best gas mileage – you bought a car you actually wanted!  They had lots of steel and lots of chrome.  Cars of that age had character unlike these generic models that are so similar you can’t tell who made the cussed thing without getting a good look at the trademark on the hood or trunk lid. 

We both remembered the early gas pumps.  They had five-gallon glass containers on top.  There were manually operated.  They had no electric pumps inside them.  YOU pumped five gallons of gas from the underground tanks up into that glass container atop the pump with a pump handle.  Then you placed the nozzle of the hose into your gas tank and gravity transported the gas from the glass container to the tank of your car.  You could only pump five gallons at a time. If you wanted more, that meant you had to repeat the process. 

It was quite an experience when it was raining or sleeting – or worse. A dollar’s worth of gasoline would last you all week!

A teenager on a date could have a ball on five dollars -- and still have money in his pocket when he got home.

A hamburger was 15 cents and a coke was a five to seven cents, depending upon whether we were in North Carolina or South Carolina.  Since we lived right on the border we were then, and remain today, as much at home in one state as the other.

NOBODY, in their wildest dreams, ever thought gasoline would sell for three to four dollars, and more, per gallon.  NOBODY.  It was inconceivable … period.  This was America and such things just did not happen.

But it did happen -- all because we were not paying attention.  We trusted our government to do what was right for America… not what was politically correct.  Suddenly there was something called the Environmental Protection Agency, and something else called the Department of Energy -- and by that time -- we were well and truly had! We were then, and we are now, sitting on a sea of oil.  Yet, our government will not allow us to knock holes in the dirt and suck it out.

We have oil containing rock and oil containing sand and we have vast deposits of oil just off our coasts -- in our own territorial waters.  It’s just sitting there while we pay through the nose for oil we have to purchase from countries that hate us even after we debase ourselves just for the privilege of buying their oil. 

What kind of government does that to its people?  Answer:  The kind of government we have in Washington, DC.

See, back in the good ole days, we made a terrible mistake.  We trusted our government.  Now that we KNOW better -- it is too late.

Or is it?

If, as some are suggesting, we are about to have a global financial collapse, we’ll get a “do over.”  It won’t be pretty and it is going to hurt like the dickens, but if there is a bright side to an economic apocalypse, it may be that we will get a chance to clean our government of the socialists, Marxists, progressives, and left-wing liberals that spent us into this mess. 

Some say the Good Ole Days were not all that good.  Having lived in both I can tell you the Good Ole Days beat the heck out of the mess we live in today!

J. D. Longstreet