The following are not RNC or Tea Party views. They come from my economics studies, an MBA and 30 years’ banking experience. They come from seeing people plan properly, succeed and help others; or neglect to plan — and fail, often blaming others.
My views reflect my parents' self-sacrifice and my years of meticulous planning to pay our mortgage early and fund a retirement plan outside of Social Security. Now, though, we have fallen prey to our government's co-sponsored class warfare notions and become, in the view of an unnamed acquaintance, part of the “1 percent.” Based on our modest incomes, how could that come to be?
At my bank a customer continually bounced checks. Finally, tiring of returning their checks, I called, explained the cost to themselves, merchants and our community and told them to stop or we would close the account. The response? “But I’ve got to pay the bills.” Spending money we don't have is exactly what our government does. That spending is supported way beyond taxes by "money" created by debt which is a claim against our future productivity. Where will the money come from to pay that debt when we already borrow to support current programs? People who ignore these basic questions flood our bankruptcy courts.
How does debt create money? The paper we use to buy things is not truly money; Treasury Notes and Bonds issued by the U.S. Treasury Department are. Why? Because they are backed by "the full faith and credit" of the U.S. government. If that becomes questionable, so does our money.
Put simply, notes and bonds become money when the Federal Reserve or foreign governments buy them. The purchases create deposits which are lent out in several cycles to support more loans. Thus, much more "money" is put into the market than the original purchase of treasury instruments. This all started from nothing. The Fed creates deposits electronically. Look that up if you doubt it. The Fed has no reserves and is not even part of our federal government; it is private and independent. Look that up too, if you wish. It is not answerable to us but determines a great deal of what happens to our economy. But taxpayers must repay all that debt and interest which will soar when record low interest rises because of that "full faith and credit" — our future taxes or productivity — yours, mine, our grandchildren's. Remember, a great deal of that claim on our future productivity is held by foreign governments.
As our debt increases, more and more money is created from nothing. The money goes to purchase a limited supply of goods but also to pay for government which produces zero goods. That results in inflation. Who gets hurt the most by inflation? It comes out of the pockets of everyone, but the heaviest burden falls on those with low or fixed incomes. These are the very people whose votes are bought with promises they will be taken care of with all this debt. Inflation is a deliberate and pernicious means of taxation.
When artificial money is created, much more of it enters the market than the original debt amount. Turn that situation around. When creditors who support our country's deficit spending demand payback, every dollar of debt repaid sucks many more out of the economy. Those same countries where we have sent mega dollars to buy cheap goods will also dump those excess dollars into purchase of our assets. It's already happening. We will awaken from our poppy highs of easy money, something-for-nothing and cheap foreign goods and have to go cold turkey.
The colossal calamity ravaging our European neighbors is dangerously close for us and will come very suddenly. Remember, the "full faith and credit" of our government which gives our dollar value as a medium of payment, in turn is represented by taxing power against our future productivity. When that no longer supports repayment of our debt our country is bankrupt. Our days as a prosperous and sovereign nation are over. For many that will lead to desperate search for easy answers. Sadly, while the opiates of entertainment “stars” and fancy toys have replaced God for many, mind-numbing distractions can't help. Thus tranquilized, desperate and unwilling to face hard solutions, taxpayers take the easy way and so become enslaved to government, quite possibly to a despot like Hitler. That same government has been a co-conspirator, along with their own abandonment of responsibility, in their downward spiral. Our government has become a power superior to and aside from all of its constituents. We, The People have to demand that it not sell us out but stand with us in pursuing policies to strengthen our country.
At the outset, I talked about my background. I am not the sharpest tack in the box; there are lots of smarter folks out there to figure this out. And yet, our government's abetting of our decline is reckless and irresponsible and, in my studied view, just plain stupid as to effect; believing that our government cannot be that stupid I seriously question whether those actions aren't deliberately designed to subvert our country. The Federal Reserve and some very wealthy people are in the middle of all this. To whom do they answer? Not you or me. Who is to gain from all of this? I believe if we continue to ignore that question, We The People share blame for our country's decline.
In considering our predicament, I recalled a recent sermon which I felt was a strong and vibrant metaphor for the bind our country is in. The homilist pondered hopelessness such as we might now feel. "However," he continued, "In impossibility, there is always possibility." He emphasized individuals' roles in reviving ourselves as individuals, as a church or as a nation. My question in turn is, are We The People ready to cast aside despair, surmount mere inconvenience, refuse to be a part of our country's decline and instead take part in its revival?
Pat Tebo is a Hayden resident.