America.com - no way to run a country

Now GWB has finished flushing the American international credibility down the toilet its also time for him to resume flushing our economy down the toilet. Not that it hadn't been doing a fine job of spiraling down all of its own accord, but in yesterday's speech about his favorite tax cuts he made it amply clear that he thinks it needs an extra flush or two.

Of course he wasn't actually using those words to sell his grand plan to revitalize America's economy. Of course not, he has an MBA and lots of rich business friends who really know how to run and market a business so he truely believes that we will really buy his proposition to borrow another $650 billion to keep the country running. That is around $2500 per man, woman and child. For comparison our national debt it about ten times that figure. Now I don't have an MBA but when someone says the best way out of debt is to earn less, spend more and borrow more, well you've got to wonder if IQs didn't sharply since last century. Or maybe its that history is about to repeat itself?

"What history would that be?", I hear you ask. Well that would be the history of the dot com era during which a bunch of over financed MBA's decided that the best way to run a business (cf. America) was borrow hard (cf. deficit), spend like crazy (cf. tax cuts) on marketing and acquisitions (cf. new agencies like Homeland defense, financing war and invasions). Then all you have to do is hoodwink the rest of world that you'd just invented the proverbial golden egg laying goose and it was time for them to give up their hard earned crust (cf. rights and wages) to keep funding the pyramid (cf. corporate growth).

Yesterday I was listening to a recent episode of This American Life which was mostly about living on the edge, being in debt and making poor financial decisions. You know, the stuff like blind investing in the stock of companies about which you know nothing and then having some dot com wannabe CEO come along and destroy the whole company. Or how much it sucks to be working for 11 years as a janitor making minimum wage. Or getting into more debt than you make in a year, or owing twice in car loans than your car is worth because you wrecked it and spent the insurance money on something else.

One person they interviewed was Dave Ramsey who runs a no BS call in show for people with financial problems. So guess what he says to the people who owe $30,000 and make less than that a year? Well usually its something like, "You're going to be getting another job, working 80 hour weeks for three years, eating beans and rice, rice and beans for three years. But you can do it, in three years you can be out of debt". To the person who said they didn't want to take another job, well he said, "I can't help you, if you're not prepared to work hard to get out of debt then that's just plain lazy." What Dave? You mean if I'm $7 trillion in debt and only raise $2 trillion in taxes every year then I can't just keep borrowing to get out of debt?

Of course the sad thing is the vast majority of Americans are now working harder, for longers hours, for less pay and for fewer benefits than they ever have. And this isn't just the lower class - the 33 million or so living in poverty now. No, its the middle class too, for the most part thats you, me and pretty much everyone else reading this blog. Just read White Collar Sweatshop for all the gruesome details. In fact its pretty much everyone except the top five percent of nations wealthiest who are worse off now than they have ever been since 1970. That's over thirty years ago with no net increase in living standards for the vast majority of the American population, supposedly the, yes the number one country in the world. The country everyone else supposedly aspires to emulate, or used too...

And all those people having such a hard time, are the complaining? Are they questioning where all the nations money is disappearing to? Heck no, they are too busy spending more and borrowing more than they ever have. Just like our government we're completely buying into the "gotta spend more" to make more mentality.

Of course most people with more than a couple of brain cells now realize that the whole dot com era was one giant legalized pyramid scheme based on over inflated revenues that fueled a never ending cycle of increased capital gains taxes, increased government spending and feel good marketing that we've never had it so good. The smart sold out while the going was good, or transfered their assets to something more tangible that isn't so venerable to the way the economic winds are blowing. The naive lost most of what they never had, or lost more than they ever had and landed up in debt. That includes the State of California and many others so were in fine company. The rest, well they made out like the bandits they are.

So I wont be at all surprised when the same thing happens to America. The giant pyramid scheme scam first took the dot com-ers down, and will now most likely take the government down and maybe eventually bring the entire country down as we over extend America Inc. throughout the world for decreasing gains and increasing risk. Sooner or later the rest of the world will point at the King and realize he has no clothes. At that point the Empire will fall along with all the Kings men and all the Kings horses.

A year and a half ago when American troops were massing to invade Afghanistan my neighbour across the hall said: "The economy is in the crapper, we've gone to war, the country is back into deficit spending - hmmm, must be the Republicans in power again." Well he was right. A year and a half later the economy is even worse off, we're still at war, the deficit spending is still growing and the Republicans are still in power. The more things change the more they stay the same.

History repeats... repeats... repeats... repeats...