Is national bankruptsy inevitable

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Fiscal Disaster

The Government of the United States is failing the people of this country.

First, the bad news: Our country is broke. The Federal government doesn’t have enough money to pay its bills. Every day the government spends money it doesn’t have and has no hope of getting. The government does nothing to earn money; its only source of real income is us, the tax payers. Unlike individuals, the government can’t go out and get a second job to tide it over hard times. Because we taxpayers are the government’s only source of income, we all face a national insolvency. We already owe more money than we can ever repay, and massive balloon payments (Medicare, Social Security) are quickly coming due. The government is able to continue to spend only because we are getting temporary “bridge” loans from foreign countries. Unfortunately, these loans are bridges to nowhere--and like our steel and concrete bridges-- they are likely to collapse under the strain of an insufficient support structure.

Now for the good news: Regretfully, there is no good news. We are living in a dream world that is rapidly turning into a nightmare. This bad dream is caused by our over-indulgence in the fantasy that we can get something for nothing. Most of us know that if bills are not paid, unpleasant things happen. Yet, we have accepted the falsity that our government can continue to overspend without consequences. We have chosen to overlook the truth that the government can print money, but it can’t print value. In fact, the more money the government prints, the less its value becomes. Let’s put aside for the moment our current fiscal crisis, and look at the long-term mess we are in. The government does not earn, but it does spend, and far too many open hands demand a share of that spending. Our congressional representatives blithely create programs for which there are no actual funds. At other times, they simply create costs that are passed on to the various states. Politicians are so fond of social programs that they imagine that they actually help the public by spending money we don’t have. Now, even cities and states are in line for handouts. This is equivalent to your deadbeat cousin asking you to borrow money for him to buy a new car. Is it any coincidence that the cities with the worst management and the states with the highest taxes are the ones seeking freebies from the fed’s borrowed money?

The recent election saw candidates vying to give the most “tax breaks” to voters. This vote-buying was successful despite the fact that the candidates and the public should have understood that there was insufficient taxable income to support even the everyday functions of the government (the interest on the national debt alone last year was $412 Billion). There was also talk of “spreading the wealth”. Even if we overlook the philosophical objections to such an idea, we are faced with the obvious conclusion that, were we to actually pay our national bills, there would be no wealth left to redistribute. It is very troubling that many Americans are not pulling their weight (paying income taxes), and yet who demand “tax rebate” welfare. Abraham Lincoln rightly noted that, “Government cannot endure permanently half slave and half free." It is equally true that government cannot long function with only half of the population slaving (working) and the other half free-loading.

Our government continues to let us down. Our congressional representatives (with some exceptions) do not seem to be able to face any reality other than their own political futures. As a group, they deal in sleight-of-hand and basic dishonesty. They engage in deceitful "doublespeak" to disguise actions that, if we understood their real consequences, we would we would never permit. They are high-handed and treat everyone else with disdain and unwarranted contempt (watch congressional "hearings"). The current fiscal situation suggest one possible cure for our problems: Perhaps we should treat congress as a Chapter 11 bankruptcy. Then we could break the corrupt contracts, fire the incompetents and reorganize it on a pay-as-you-go basis.

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