We just celebrated “Black Friday,” the day in America where everyone goes out to participate in the great merchandising splendor of post-Thanksgiving Christmas shopping! We should feel very blessed to be able to champion such a day where we typically spend somewhere around $8 billion, not for various necessities of life, but for gift-buying items like video play stations and plasma TVs. It serves as a true mark of America’s unrivaled success in economic prosperity, but for all of our free enterprise success do we fully understand the political dimensions of our economic health?
The United States is the number one economy in the world. Our gross domestic product, now over $13 trillion, is greater than that of all the countries of the European Union combined! The average state in the U.S. has a higher GDP per capita than any of the EU countries. In fact, France, Italy, Great Britain and Germany, each have a lower GDP than all but four of our states. At their best, the EU productivity rates can only reach the level of states like Arkansas, Mississippi and West Virginia. The U.S. not only has a greater output, but it’s increasing at double the pace- 4% compared to an anemic 2% for the EU.
There was much talk during the recent elections regarding our government’s spending problems and how it relates to our national debt and deficits. The statements were almost universally condemning and fraught with dire warnings, but how much of this caterwauling is true? As with most things, a bit of contextual comparison is in order, to best understand the issue.
The National Debt is best viewed by its relationship to a nation’s output, or GDP, ie. “debt” as it compares to one’s ability to pay. In 1945, the U.S. had a debt to GDP ratio of 121% and now, it’s half of that at 64%. By comparison, the average American has a ratio of Household Debt to Annual Income of 110%. In other words, most Americans carry a debt, ($51,062.02 on average), that is more than their annual take home pay. This explains why, since 1985, bankruptcy filings have gone up over 400%. Using only Mortgage debt for consumers, the ratio is still very high at 80%. Thus, Americans are more leveraged than the government they criticize for fiscal irresponsibility! In terms of other industrialized nations, the U.S. is in better shape than Germany, France and Italy. Japan, for instance, has a Debt/GDP ratio of 164%!
Contrary to the opinion of the political-opportunists: the sky is Not falling!
Over the past forty years, America’s average Deficit to GDP ratio has been at 2.3%. (The Deficit is the annual shortfall of debt, as opposed to the National Debt which is the overall accumulation of deficits for all fiscal years.) With the surprisingly good 2006 deficit of $250 billion, the current ratio comes in below the forty-year average at 2%. The equivalent analysis for the American citizen is the debt service, or interest payments, to annual after tax income relationship. This ratio is 13.75%, and climbing! Unlike the Federal trend, American consumers are getting worse, not better.
Looking at the Total Debt vs. Total Assets financial picture one can see that the Federal Government has a ratio of 9%, $8.5 trillion vs. $94.1 trillion, whereas the average American, once again, fails by comparison, doubling this rate of indebtedness with 18.5%. Even as home values have appreciated substantially over the years, the leveraged equity, incurred by most homeowners, has increased by even more!
Current unemployment numbers are around 4%, which is the lowest in years, and a rate that most economists view as “full employment.” Inflation is practically non-existent at 1.3%. Tax revenues are coming into the Treasury at the highest rates ever even with the Bush tax cuts, proving again the Reagan “supply-side” model of lower rates spurring greater growth and higher tax receipts. The stock market has been on a historic rally and we remain the envy of the world for our tremendous economic performance! Yet, the politics of divisiveness maintained dire economic predictions during the campaign of ’06.
So, what’s all the fuss? As Americans we always demand more, but we should be mindful of what the the philosopher once said, “don’t let the perfect become the enemy of the good.” We should never allow our interest in improving our situation overwhelm our capacity to continue along the path of “good”results.
During WWII our National Debt increased seven-fold. This was the 121% era of Debt to GDP. We should never forget how we got out of that situation. We grew out of it. Economic growth subsequently dwarfed the amount of all additional new debt. Since 1946, inflation-adjusted debt has grown 84%, but the economy has grown by 429%- more than five times as much! It is a “dynamic” and not “static”economic situation. We should never fall prey to those who suggest immediate tax hikes to “fix” the debt/deficit problem. Such foolish policies would serve only to cripple economic development, thus impeding our ability to grow and expand out of it.
Does this mean we have no financial worries at the Federal level? Of course not. The area of most concern is Social Security and Medicare. Together these two programs amount to an unfunded liability of $33.2 trillion- 8 times larger than our current total National Debt! Without reform, we are left with only two options: (1) raise taxes to levels unseen in American history, or (2) increase the debt ratio to levels comparable to those experienced during WWII. Either way, Americans could expect substantially higher taxes, lower incomes and more poverty.
America, with all of her talent, resources and freedom to accomplish such remarkable things as “Black Friday,” all in the cause of Playstation 3, surely can find the wherewithal to produce a practical answer to solving the fiscal needs facing the strongest Economic Nation on Earth!
Since the Tax and Debt options, (ie. paying options), are unrealistic, logic tells me, it’s the Liabilities themselves that are the most unrealistic of all! Today’s unfunded liabilities remain- tomorrow’s tax or debt burden! (send comments to WFC83197@aol.com)
Monday, November 27, 2006
Tuesday, November 14, 2006
America : Open Your Golden Gate
“San Francisco Values” has just taken over in Washington D. C. Voters rejected Republican leadership a week ago and now they have unwittingly turned the country over to radical leftists like Nancy Pelosi-the presumptive, new Speaker of the House. Pelosi would be third in line for the presidency in the unlikely event of something happening to Bush and Cheney. Given her views on the War on Terror, and her anticipated elimination of certain important safeguards like the Patriot Act, Homeland Security, NSA wire-taps, etc., such a scenario, engineered by an emboldened enemy, may not be so far-fetched. Whatever it was that prompted voters to toss out the GOP, somehow, I don’t think they imagined they would be endorsing this type of militant socialism taking control of the U.S. Congress. The proverbial barking dogs of the Left have now “caught the car,” and so, we all await the strange and bizarre consequences emerging from this paradoxical success.
Nancy Pelosi has represented California’s 8th district, including San Francisco, for nearly 20 years. She has served in a leadership role with the House Democrats since 2002. In the last Congress, Pelosi received the highest liberal rating given , (95% approval), from the ADA, the Americans for Democratic Action group. She also serves as an Executive Committee member for the Progressive Caucus which is connected to the Democratic Socialists of America- a group purported to be “the principal U.S. affiliate of the Socialist International.”
The Progressive Caucus was begun in 1991 by avowed-Socialist Bernie Sanders, congressman from Vermont and former Socialist mayor of Burlington. Their main goal is the promotion of government-directed wealth redistribution via a multitude of collectivist-engineered social policies. In short, Class Warfare. Their agenda, which is now America’s agenda by default, is: socialized medicine, radical environmentalism, subordination of American foreign policy to the UN and Internationalists, pulling out of Iraq, and eliminating the “War on Terror tools” such as the Patriot Act and NSA wire-tapping as well as other Intelligence gathering procedures currently being employed by the Bush Administration.
There are several prominent democrats who are members of this Caucus who will likely chair many of the House Committees during the next session. Radicals like John Conyers, Barney Frank and Henry Waxman will wield tremendous power and influence over the next two years. Even if they were to personally wish to mute some of these extreme positions, their unhinged, core constituencies won’t be so easily placated. The pressure to launch endless investigations into the Bush Administration, including impeachment proceedings, will no doubt be raging in full force during the tumultuous months to come. At a time of war- was this the type of government that Americans really wanted? Was this the type ofgovernment that Americans truly voted FOR?
One thing’s for sure, it seems to be the type of government that our enemies wanted! From the Terrorists in Tehran to the Communists in Caracas, the joyful jubilation of our foes was hard to miss. Israel outwardly mourned the results of the election as they saw it as a serious blow to their ongoing and all-important American support. Ahmadinajad, the leader of Iran, proudly proclaimed that “Israel’s destruction is near!” One simply cannot deny that our enemies are vigorously encouraged by this abrupt power change in Washington.
What other surprises will there be from Pelosi’s new reign? Even though one can rightly gauge a considerable victory for certain, ideologically “conservative” initiatives from the ’08 election, (seven states overwhelmingly rejected homosexual marriage), Pelosi, on the other hand, represents quite a contrast. She has voted for: homosexual marriage, federal funding of abortion, gun control, amnesty for illegals and a time-table for withdrawal from Iraq. She’s voted against: cutting taxes, the death penalty, drilling for oil in ANWR, school choice, reducing the death tax, renewing the Patriot Act, and criminalizing flag desecration. “Speaker Pelosi” has also endorsed Jack Murtha for Majority Leader. Murtha is notorious for having condemned American soldiers in Iraq of “killing innocent civilians in cold blood!” This helps explain the numerous reports of troop dismay and discouragement coming out of Iraq since the election.
They’ve known all along that the only way they could possibly lose this war is through a lack of support from domestic, “cut and run” policies on the home front.
The electoral results of 2008 amount to a gigantic fraud being perpetrated upon the American people. We have been hoodwinked into embracing a new, transgendered, “Government in Drag.” It can’t be denied that the American People had some valid concerns regarding the direction of their government: the War in Iraq, the disaster of illegal immigration, out of control federal spending and various issues of Congressional corruption, but did this mean that Americans were equally willing to go marching off with Pelosi & Co. down some forlorn, left-wing alley- “arm in arm” with a cadre of Socialists, Abortionists, Peaceniks and Gun-grabbers in one big, tax-raising Gay Pride Parade? I don’t think so! San Francisco Values are not America’s Values yet! Thank God!
(send comments to WFC83197@aol.com)
Nancy Pelosi has represented California’s 8th district, including San Francisco, for nearly 20 years. She has served in a leadership role with the House Democrats since 2002. In the last Congress, Pelosi received the highest liberal rating given , (95% approval), from the ADA, the Americans for Democratic Action group. She also serves as an Executive Committee member for the Progressive Caucus which is connected to the Democratic Socialists of America- a group purported to be “the principal U.S. affiliate of the Socialist International.”
The Progressive Caucus was begun in 1991 by avowed-Socialist Bernie Sanders, congressman from Vermont and former Socialist mayor of Burlington. Their main goal is the promotion of government-directed wealth redistribution via a multitude of collectivist-engineered social policies. In short, Class Warfare. Their agenda, which is now America’s agenda by default, is: socialized medicine, radical environmentalism, subordination of American foreign policy to the UN and Internationalists, pulling out of Iraq, and eliminating the “War on Terror tools” such as the Patriot Act and NSA wire-tapping as well as other Intelligence gathering procedures currently being employed by the Bush Administration.
There are several prominent democrats who are members of this Caucus who will likely chair many of the House Committees during the next session. Radicals like John Conyers, Barney Frank and Henry Waxman will wield tremendous power and influence over the next two years. Even if they were to personally wish to mute some of these extreme positions, their unhinged, core constituencies won’t be so easily placated. The pressure to launch endless investigations into the Bush Administration, including impeachment proceedings, will no doubt be raging in full force during the tumultuous months to come. At a time of war- was this the type of government that Americans really wanted? Was this the type ofgovernment that Americans truly voted FOR?
One thing’s for sure, it seems to be the type of government that our enemies wanted! From the Terrorists in Tehran to the Communists in Caracas, the joyful jubilation of our foes was hard to miss. Israel outwardly mourned the results of the election as they saw it as a serious blow to their ongoing and all-important American support. Ahmadinajad, the leader of Iran, proudly proclaimed that “Israel’s destruction is near!” One simply cannot deny that our enemies are vigorously encouraged by this abrupt power change in Washington.
What other surprises will there be from Pelosi’s new reign? Even though one can rightly gauge a considerable victory for certain, ideologically “conservative” initiatives from the ’08 election, (seven states overwhelmingly rejected homosexual marriage), Pelosi, on the other hand, represents quite a contrast. She has voted for: homosexual marriage, federal funding of abortion, gun control, amnesty for illegals and a time-table for withdrawal from Iraq. She’s voted against: cutting taxes, the death penalty, drilling for oil in ANWR, school choice, reducing the death tax, renewing the Patriot Act, and criminalizing flag desecration. “Speaker Pelosi” has also endorsed Jack Murtha for Majority Leader. Murtha is notorious for having condemned American soldiers in Iraq of “killing innocent civilians in cold blood!” This helps explain the numerous reports of troop dismay and discouragement coming out of Iraq since the election.
They’ve known all along that the only way they could possibly lose this war is through a lack of support from domestic, “cut and run” policies on the home front.
The electoral results of 2008 amount to a gigantic fraud being perpetrated upon the American people. We have been hoodwinked into embracing a new, transgendered, “Government in Drag.” It can’t be denied that the American People had some valid concerns regarding the direction of their government: the War in Iraq, the disaster of illegal immigration, out of control federal spending and various issues of Congressional corruption, but did this mean that Americans were equally willing to go marching off with Pelosi & Co. down some forlorn, left-wing alley- “arm in arm” with a cadre of Socialists, Abortionists, Peaceniks and Gun-grabbers in one big, tax-raising Gay Pride Parade? I don’t think so! San Francisco Values are not America’s Values yet! Thank God!
(send comments to WFC83197@aol.com)
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