Economic Stimulus or Deliberate Fiscal Suicide?

January 29, 2008

Note from Pajamadeen: We’d like to introduce NightieKnight to you. This is her first post here, so be nice to her, smiles. She’s our economic and financial maven. Welcome, NightieKnight!

Stocks Tumble on Wall St. as Recession Deepens

Last week, George W. Bush finally acknowledged the long-expected downturn in the U.S. economy and announced a hastily passed economic stimulus package as the solution. In the next few months, everyone in the United States will receive a check in the mail. The total expenditure on this little endeavor is expected to top $150 billion. Americans responded to the plan with skepticism…and for good reason. The problems within the U.S. economy run much deeper than the mortgage meltdown and the unscrupulous lenders currently being vilified. Worse still, the solutions being proposed will only wreak further havoc in an already precarious situation.

The reported cost of the war in Iraq is rapidly approaching $500 billion. However, that figure does not include many of the incidental costs. These include the increased cost of oil, rebuilding the U.S. military forces, and medical expenses for injured troops. Once these costs are factored in, prominent economists estimate the cost of the war exceeds $2 trillion to date. This is a mind-boggling amount, which raises the question…where is that money coming from? Certainly not directly from the pockets of the American people; Bush has actually cut taxes since he took office. Out-of-control spending and the failure to tax the American people to cover the cost has resulted in a dramatic increase in national debt, which is the real impetus for the current economic crisis. How exactly is adding another $150 billion to the already staggering debt load going to help?

Dependence on Foreign Oil, The Achilles Heel of the American Economy

If that isn’t scary enough, consider this…Corporations have outsourced production at record levels over the past 20 years and, as a direct result, the trade deficit has been growing at a record pace. In addition, the value of the U.S. dollar in world markets has decreased by up to 33 percent in the past few years. Do the math. A lower dollar value and a higher trade deficit results in a substantial increase in the average cost of goods in America. The smoke and mirrors crowd will try and convince you that the lower dollar will quickly begin to erode the trade deficit by increasing the value of U.S. exports in world markets. What they fail to point out is that the cost of oil is on the rise and U.S. manufacturing is crippled by its dependence upon foreign oil. If the dollar decreases 33 percent, and the cost of oil increases 10 percent, then the cost of the fuel required to produce goods in the U.S. has effectively increased by 43 percent. How are U.S. manufactured exports going to compete on world markets when the cost to produce them is rising so dramatically? Has the Bush administration recognized this problem and addressed the decline in the dollar? No…quite the opposite. In order to ward off the public’s awareness of the dire economic situation and prop up the financial markets, the Fed continues to reduce interest rates, putting added downward pressure on the U.S. dollar.

At this point, we hear you asking yourself…What the heck are they doing? It’s an excellent question. Why would those in power in America (those really in power…not their minions in government and the media) want to weaken the U.S. militarily and destroy the nation economically? Why couldn’t their advisors, who are well-educated in macro-economics, predict this outcome? The answer has to be that they could…but not only have they done nothing to stop it, they have exacerbated the problem. Why? What can possibly be gained?

Ahhhhh…now we are getting somewhere. Consider this…

The Universe Revolves Around Me!

Throughout history, one factor has been the sole ingredient required to incite a revolution…an orchestrated or contrived state of chaos. Americans have been indoctrinated for generations with the belief that they are special and that they live in the greatest country in the world. In recent years, the media and the government have been fanning the flames which fire this arrogance at an alarming rate. Contemplate, for example, the marginalization of people of other nationalities. Over the past year, while the economy was collapsing around them, Americans have been inundated with the exaggerated crisis of illegal immigration. The media has convinced a majority of Americans that the root of all problems within the U.S. can be traced back to illegal immigrants, particularly those crossing the border from Mexico. We’ve been told over and over that these people are low-life criminals who are wholly undeserving of the benefits of American citizenship. Americans are much, much better than these people and entitled, by the mere place of their birth, to so much more.

Mother and Child During the Great Depression, Photographed by Dorothea Lange

So what happens when Americans are thrown into an economic crisis not seen since the Depression of the 1930s? What happens when the standard of living they have become accustomed to is nothing but a memory? What happens when all they have been convinced they are entitled to goes up in so much smoke? Somehow, I don’t think it is in the nature of Americans to roll over and meekly submit to this distressing fate. No, they have been primed over generations to expect better, to demand better, and as such they will rise up to fight, en masse. Voila…a revolution is born!

 

But why? Who would want to incite an internal uprising? Who stands to gain by the collapse of the United States as the world’s economic and military power? Human beings are extremely self-serving…it’s long been proven to be the primary factor that drives us. Given that, the answer to these questions has to lie in following those who will benefit in the long run from the collapse of the great United States of America and the resulting anarchy.

New World Order

A few decades back, the predominant buzz words in the political lexicon were “New World Order.” This was not a new idea, however. It has been around for centuries and was the primary motivation for inciting many other political revolts, beginning with the French Revolution. In more recent times, it was the inspiration behind the development of the United Nations and the World Bank. One world government…one super-national dominion ruled by the intellectual elite and world bankers. While the words “New World Order” have become politically incorrect in the past few years, the powerful proponents of this system of global sovereignty are alive and well. They have convinced themselves that it is a utopian prospect. Unfortunately, the inordinate amount of power held by the United States, whether real or simply perceived by others, has increasingly become a detriment to the ultimate goal. Due to decades of bungled foreign policy initiatives, the majority of the world’s population simply doesn’t trust America’s leaders and they believe that the U.S. holds too much power within the United Nations. Until this perceived supremacy is minimalized…perhaps through the weakening of America’s military strength and the destruction of its current economic superiority…most of the world’s citizens would never buy into the idea of the United Nations as the single worldwide authority.

It’s a brilliant strategy really, and at its core it is an idealistic vision for world unity. The ultimate outcome, however, is a world-wide dictatorship ruled by the intellectual elite and history has shown, time and again, that absolute power corrupts absolutely…regardless of the ideals that inspired the establishment of that power.

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