There are a lot of "if onlys" concerning the Iraq war. If only we had sent more troops. If only we had not disbanded the Iraqi military, government or the Baathist party. If only, if only, the results might be more favorable.
The fact of the matter is the war is wrong. It is illegal, immoral, unconstitutional and, for the right-wing Christian nutballs who so enthusiastically support it, a war of aggression to take another country's natural resources is unbiblical. There is just no right way to prosecute a wrong war.
The same can be said of the economy. If only we had a more fair tax structure. If only there wasn't so much wasteful government spending. If only, if only, things would be better.
While there is certainly much room for improvement in these areas, it is tantamount to polishing brass or rearranging chairs on the deck of the Titanic. The good ship USS Economy is doomed. How so?
Like the war, it is wrong. It is a debt-based economy. That is, to get money into the economy, it must be borrowed in. All money in existence has been borrowed into the economy. A dollar bill in your pocket may be your asset, but it is someone else's liability. As long as it exists, someone is paying interest on it. The greater the debt in the economy, the greater the burden of debt service. It now takes 25 percent of GDP just to service the debt, which in turn requires more borrowing.
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Twenty-five years ago the total debt in the economy (government, corporate and consumer) was less than
$5 trillion. It now stands at
$43 trillion. In a debt-based economy, the debt must keep expanding at an ever-increasing rate. During the '80s, the economy took on new debt at the rate of $0.8 trillion a year. The '90s, $1.2 trillion average per year. From '01 to '04, $
3 trillion. And the last two years, $4 trillion. Debt is like a drug: It takes a bigger fix to get high. We are rapidly being overwhelmed by the law of diminishing returns. Since '01 we have seen the weakest job creation and GDP of any growth period since World
War II.
Giving government almost unlimited power to tax, borrow and spend and the banking system the easiest credit policy in history has produced the "twin pythons" of debt and bureaucracy that are strangling the life out of the economy. Government (federal, state and local) confiscates one-half of the wealth the economy produces. Most of this goes into the pockets of middle-class bureaucrats who live off the system, to welfare recipients who give nothing in return and to fight needless wars of choice. With one-fourth of the wealth going to debt service, three-fourths of the economy is thrown down the drain. we are left to fight over what is left. To get ahead, you have to "get it away" from someone else. This is a zero-sum game. One man's win is another man's loss. This system causes strife and suspicion between individuals and wars among nations.
This tax-and-debt burden has evidenced itself in two ways:
1. Business can no longer pay a living wage to American workers and is outsourcing jobs to the Third World. 2. It now takes two or more incomes to provide for a household. When the boomers were babies, say
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50 years ago, tax rates were low and debt levels, by today's measure, were non-existent. Americans manufactured their own consumer goods, and one income provided a livelihood for the typical American family. Mothers were at home with their children. These were "happy days."
Perhaps we can go on a "fiscal diet" as The Forum editorialized (Nov. 24). Or return to "fiscal discipline" and "put our fiscal house back in order" as Sen. Kent Conrad, D-N.D., (Sept 18) exhorted. Way too late for that. Bank credit is the fuel that runs a debt-based economy. Stop borrowing and the whole system collapses. Keep borrowing and we are overwhelmed with debt service. It is a self-destructing system. It has to collapse. It is frightening to think that the soon-to-be chairman of the Senate Finance Committee is as clueless as the American public about the very nature of our economy.
Our most fundamental problem is idolatry. We have rejected God and His institutions of nuclear family, extended family and local church (the only necessary social service agency) and put our faith in politicians, bureaucrats and bank credit. Like the foolish man who built his house upon the sand, so America has built her economic house of cards on sand consisting of a hybrid between highly regulated, heavily taxed debt capitalism and socialism. We have rejected the solid rock of free-market equity capitalism. America's house will suffer the same fate as that of the foolish man, and great shall be its fall.
Ross lives in Hawley, Minn.
E-mail mar.56549@earthlink.net
