System Re-Boot

If nothing else, the two years between the election of Barack Obama and his Democratic supermajority in November of 2008 and the mid-terms of November 2010 have proven one adage to be absolutely true:

Elections do, indeed, have consequences.

For those two years, the vast majority of the American populace has been forced to endure those consequences, and it’s probably not too much of a stretch to say that some probably felt the brunt of those effects more than others – those independents who fell for the happy slogans and the feel-good sensations of placing the first African-American in the White House and marching right along with the rest of the herd by making some sort of reactionary statement to the policies of the evil George W. Bush and his Republican cabal.

Presumably, the greater percentage who firmly ensconce themselves at the center of our electorate didn’t exactly get that for which they originally signed up.

Elections do, indeed, have consequences. It now stands to reason that the people throughout our country who have engaged the political process – most for the first time in their lives – in fighting back against the Progressive agenda by any legitimate and peaceful political means possible during these historic times are expecting some come-uppance to be delivered to the arrogance and the alleged elitism of the Democrats by a newly-minted Republican majority.

While on the surface this is all seemingly blue skies in the immediate, I’d ask you to excuse me if I temper everyone’s enthusiasm for a bit. There are more than a few issues about which to be skeptical and wary, so it might be wise for everyone who has invested himself or herself politically and emotionally during this time period to lower the degree of one’s expectations. Things are most certainly not going to change overnight, and, one might argue, may become considerably worse before they ever even begin to get better. Remember, Americans – and the “citizens of the world”, quite honestly – have during roughly the past 15 years or so come face-to-face with the economic realities of living their lives by the dictates of big-government, big-spending, entitlement-driven lives of immediate gratification. Once accustomed to that drug, so to speak, it’s not so easy to break the habit. The only thing the liberal Democrats have done over the course of the past two years was to attempt to prop up the economy and to prevent a complete collapse for the sake of appearances, using their “benevolent” actions as cover for a drastic re-shaping of the American culture.

In short, the entire system needs to crash before it can be repaired. Certainly, the Republicans have some immediate goals – such as attempting to repeal or replace the economic time bomb otherwise known as Obamacare, as well as trying to incrementally undo some of the damage done by this administration – but, in the most general sense, the Republicans should actually do that for which they’ll no doubt be excoriated more and more over the next two years:

Nothing.

As pointed out above, the system needs to crash, and if that means allowing it to crash, then so be it. Of course, it’s easy for a gainfully employed individual to make what would appear to be such an outlandish statement, a statement that has nary a hint of emotional concern for the welfare of others; those who know this writer as a person, however, know that that couldn’t be further from the truth. The one inescapable fact is that the country must be saved first if we’re to be able to do good in the future. The alternative – descending into the chaos of a socialist structure – is completely unacceptable.

Therefore, a re-examination of the adage that leads this article – that elections do, indeed, have consequences – is in order. From here, the question is from which election will the American people experience consequences? The grasp that reaches from the grave of the 2008 election and its continuing residual effects, or the effects of a mostly Republican Congress that must not allow any more destructive legislation or any more politics as usual?

Once the next Congress is sworn in during January, it’s a pretty good guess that it won’t be too long before we all begin to see the likes of the George Soros-driven, hyperventilating far-left media begin to point fingers at everything the Republicans are – or are not, as the case may be – doing to the country. There’s no doubt that reigning in federal spending by nearly any means possible is going to be at the top of the to-do list. My contention here is that the massive and historically unprecedented level of federal spending under Barack Obama and his sychophants has set this country back probably close to a generation. I think by now it’s pretty safe to say that most if not all Americans know quite well that those stimulus packages were never about jobs; from where I stand, they were about two things: eye-opening payoffs to democratic supporters (after all, Andy Stern did say that he expected a “return” on his investment) and seed money for future elections, in addition to what is probably the most significant but mostly undiscussed issue with regard to all of this – the baseline for all federal spending as a percentage of GDP has been raised to its highest level since World War II.

According to the figures released from the Federal Debt Commission – which, ironically, has now released a report on what needs to be done in order to reduce the deficit, a report that seems to be nearly a conservative’s fantasy – federal spending will now apparently be configured on a baseline of 22% of GDP. Not even during the Reagan-era military buildup did federal spending reach such heights. As stated, all of this spending was never about jobs – it was about establishing a new baseline for federal spending, or, put another way, of permanently ensconcing the apparatus for a gigantic government in the heart of the American way of life.

How does this all speak to an election’s consequences? Well, all those Americans who fell for the Hope and Change in 2008 essentially voted to have all of their hard-earned dollars worth a lot less, and probably a lot sooner than later. There are, of course, plenty of people who are frequent readers of America’s Right who no doubt understand the concept of inflation; however, I’m going to go out on a limb and take a guess that there are some who may not. I’ve actually spent a good deal of time explaining this to a number of my liberal friends over the course of the past couple of years, and I’ve tried to accomplish this by using layman’s terms and more than a few everyday metaphors. Some seem to get it; a few simply can’t accept it, and a couple don’t want to hear it. For those who understand inflation, I beg your patience, because this is a concept around which more and more people are going to need to wrap their arms in the coming year or so.

There are two things in life that are as stubborn as you can possibly imagine and impossible to avoid: facts and math. The old expression that “more is less, and less is more” is probably the easiest and most effective idea that can be used to help people to understand the storm cloud – the system crash – that is waiting for us on the horizon. In short, one of the iron-clad axioms of human existence and mathematical/financial physics, so to speak, is that whenever there is a surplus of something – anything – it is by nature worth a whole lot less. The economic laws of supply and demand (hey – did someone just say the Free Market?) cannot be avoided. In this case, we’re talking about an unprecedented supply of excess American dollars.

What happens when billions of dollars are simply printed and injected into the economy? Simple – more dollars, less value. On November 3rd – the day after the election, which I find interesting but will admit that such a development could be entirely coincidental – the Federal Reserve began montetizing our national debt, which has been driven through the roof by the Obama administration. In short, they began printing money, which makes the American dollar a lot easier to come by. Cheap. Junk.  Of course, there’s a really handy financial term that makes all of this sound so much more legitimate – “Quantitative Easing” – which, if you ask me, makes me think that those really, really smart people in the Federal Reserve plan to give us an enema, one way or another.

What does this mean for the average American? Well, at first, most people won’t necessarily notice anything; however, as with all things in life, this will be an evolutionary process – some price hikes here, some price hikes there, until one day a person wakes up and finds himself living in the I-can’t-afford-anything reality. And remember, we’re not talking about luxury items such as fancy clothes, big-screen TV’s, etc.; we’re talking about the everyday necessities of life, such as food, gas, and rent.

Let’s start with a reasonably simple – perhaps even quite silly – example. Let’s say, for instance, that we’re staring at a high school gymnasium filled wall-to-wall and floor-to-ceiling with Twinkies. Pretty appealing, right? Party time, right? All that easy, come-to-papa squishy golden cake goodness, just there for the taking. And even better? There’s only you and your best friend there to eat them all.

I think we all know how this story ends – two sick people who, at the end of all of it, are being suffocated by Twinkies. The only way that these people can now be extricated from this mess – since they’re sick to their stomachs and are too fat to move – is to somehow, someway, get rid of all the remaining Twinkies in the gym, and there are probably thousands of them. Since there’s not an overwhelming demand for Twinkies nowadays, that’s not going to be easy. Even giving them away won’t be easy. Consequently, our two sick, fat friends being suffocated at the bottom of a mountain of a pile of junk may, in fact, be doomed.

This is what happens when there exists an excess amount of anything and not enough people to “consume” the product. In our case, with the ridiculously high level of real unemployment in America, we are now being burdened with a mountain of excess dollars during a time when we do not have enough working Americans to “consume” them.

It’s actually quite helpful to think of the economy as a living, breathing organism, which in many ways it is. Economist Adam Smith’s explanation of “The Invisible Hand” – the natural process of supply and demand – has never truly been refuted. The Kenseyian model of economics – that demand can be created – is laughable , and I’m being kind in that assessment. How can there be demand for anything, when no products are being created?

Like all living organisms, the economy must be in balance. The dollars (or wealth) that is created must be in direct proportion to the number of workers available to consume them. As more wealth is created, more jobs are created, and the cycle of economic growth begins.

Since the Federal Reserve has begun printing billions of dollars in order to monetize our debt, the excess number of dollars in the system – none of which represent honest, hard work and production – has left the economy badly out of balance. It is weighed far too heavily to the available cash side, and employment is far too low. The only way to get those excess dollars out of the system is to charge more for everyday, incidental items, since these dollars are junk and easy to come by anyway.

It’s important that everyone understand that based on the obscene level of federal spending since the 2008 election, the American economy must go through this. The economy must go through a process by which it is brought back into balance. To be fair, there were problems that pre-dated the Obama administration, but nothing in those problems ever came close to approaching the breadth and scope of the damage that has been done since.

The only possible way that I can see our economy finding a way around this is a drastic slashing of taxes, which is the wellspring of life for both job creation and federal tax revenues (despite what liberals will defiantly state). In the end, IT’S MATH. Permanently extending the Bush-era tax cuts would be a start but would most certainly need to be augmented by some other type of program that addresses tax cuts across-the-board. I will not, however, hold my breath, and I’m not entirely sure it would get us out of this problem, anyway.

Assuming that hyper-inflation does come to pass – and there are already indicators that it’s on its way –  the Republicans who will by that time have been sworn into Congress will be the handy target for blame by those on the far left. So be it. Conservatives and Independents who have now been awoken by all of the Hope and Change need to make a leap of faith, hang on tight, and have the internal wherewithal to see themselves through the hard times. The liberal voice of temptation, one that has a soothing manner about it and can manage to convince millions of people that Democrats can make “all the bad stuff go away”, will be an easy one to which to succumb when the going gets tough. We know, though, what the tough have to do during times like that.

If you voted for Hope and Change in 2008 and still believe in it, all I can say is that I hope you’re happy with the consequences of your individual decisions.

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Comments

  1. Yes we can, stock MRE's says:

    Better ‘HOPE’ to have a basement full of stores, and ‘CHANGE’ the locks on it to heavy duty locks. If you ask me, things are gonna get u g l y.

  2. Gail B. says:

    John, nice to near from you again.

    I wish I could say you’re wrong, but every word you wrote rings true.

    I loved what Jeff said the other day about investing in canned goods and ammunition, the next most valuable assets. (Gold and silver don’t really taste good after all, do they? And what good is silver unless you’re the Lone Ranger or Tom Mix?)

    Okay, upstarts–don’t get smart and ask who Tom Mix was!

  3. Rangel reboot says:
  4. No habla Korean,Chinese,Asian says:

    http://www.youtube.com/watch?v=efLd2RmTT0g

    Hate to just name call in here, but this pres is an empty suit.

  5. I’m not seeing the gloom and doom. I’m more in the Lawrence Kudlow “half-full” camp on this. Provided the new Congress is up to beating back the Progressive gang and stopping Obama’s agenda cold, the marketplace will respond with traditional American optimism and dynanism. Then the really good news will in fact be a generation that knows first hand elections really do have consequences, meaning total political death for Leftists.

    http://libertyatstake.blogspot.com/
    “Because the Only Good Progressive is a Failed Progressive”

  6. John Buyon says:

    wow you spent an awful lot of time explaining the simple concept of inflation.

    anyway I have a question to ask
    Interest rates have been low and getting lower for decades to a point where (right now) they are around 1 % How come the economy doesn’t grow? and business’s don’t expand and borrow cheap money to create jobs?
    I am wondering if it is because there is low demand. Don’t argue against stimulus spending because it does increase demand, however artificial or temporary. $800 B in spending does create demand it is silly to think it doesn’t. however the ethics and wisdom of stimulus spending can be debated, but not its effectiveness in the short run.

  7. Gail B. says:

    @John Buyon

    “wow you spent an awful lot of time explaining the simple concept of inflation.”

    John did it so idiots like you could understand it without arguing. Sorry, you left yourself wide open for that one. Couldn’t resist. The Devil made me do it! :-)

    Got a question for you, Hon. Other than the “high demand” for extended unemployment benefits (which uses my money and that of others), what, exactly, IS the PRODUCT that the government has that there is such “high demand” for?

    If I read you correctly, you’re saying that government spending hasn’t produced much of a boost in the economy, and you’re wondering why, right? Well, if the Democratic “brains” behind the wheel of this vehicle speeding off the cliff would remember that businesses are corporate tax collectors for the government, CUT TAXES and CUT GOVERNMENT SPENDING, you’d see the economy grow. Thanks to the Obama Regime, prices are going up, up, up, along with federal government employees’ salaries (and God only knows where there’s space to add any more than Obama has already created jobs for). But how is that helping the American people? It ISN’T! And, it WON’T! Don’t hold your breath.

  8. John Feeny says:

    John Buyon -
    Yes, I did spend an inordinate amount of time explaining what should be a fairly easy concept. Suffice it to say, you and I understand it, as many of the readers of this site more than likely do; however, I think you’d have to admit, there are probably literally millions of average, everyday Americans who do not. When they hear the term “inflation”, I’d guess that they seem to know that there’s a negative financial connotation that goes with it, but beyond that, probably not much more of a deeper comprehension. I’m not criticizing them for it; I’m merely dealing with what most likely exists. They need to be made aware of what inflation is and how it will absolutely have a corrosive effect on their day-to-day lives.

    As for stimulus spending, once again, you and I are in agreement – I’ll grant what you’ve stated, that it is “artificial” or “temporary”. That’s exactly what it did to the Dow Jones….inflated it. In fact, when all this stimulus spending began, I referred it to “performance-enhancing financial steroids” when conversing with a friend. Geez, since McGwire and Clemens have gone down for it….
    But, in the end, it’s not real.

    As for low interest rates, it’s pretty difficult for low rates to have a beneficial effect on the economy, when no one has a job, money to spend, or, for that matter, can even get a job.

  9. stimu,stimu,stimu,stimu...lus says:

    there’s that dang stuck jukebox again.

  10. stimu,stimu,stimu,stimu...lus says:

    Oh Canada

  11. Anonymous says:

    Stimulus is like a college loan, making things easy for a while, but boy are they a beeotch to pay back.

  12. @John Buyon: Everything Gail B. said, plus this: the uncertainty generated in the marketplace by the overwhelmingly stifling web of federal regulations, both implemented and constantly threatened, by this Administration. Google ‘dysconomy’ for my dictionary definition of this condition.

    http://libertyatstake.blogspot.com
    “Because the Only Good Progressive is a Failed Progressive”

  13. Cloward & Piven says:

    @John – 6:12 am

    Thanks for pulling me out of the hole I dug!

  14. Gail B. says:

    @John – 7:12 am

    Thanks for pulling me out of the hole I dug.

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