Posted by Jason | Posted in Economics, Government | Posted on 23-10-2009
For some reason, Americans have been sold on what I’ll now term “the free ride theory”, in which we think we can live our collective lives like we’ve lived our lives over the past decade by racking up our collective debt for today’s keep up with the Jones. Under the Bush administration we racked up debt for a prescription drug program, pork projects and wars. Not to be shown up, Obama has increased our yearly deficits four fold. Is there any end in sight?
No, of course not.
Why stop spending when you can buy votes with so called free goodies. We need to nationalize health care, because we don’t want to pay Wal-Mart for our $4 prescriptions. We need to bail out banks, because supposedly we’ll all lose our jobs if we don’t. We have to take over GM, so that a company, which none of us wants their products, can stay in business. We have to bribe granny with a $250 check, because we don’t want to lose her vote. We have to spend billions to create so called “Green Jobs” because there is no market for them. We’re talking about bailing out newspapers; although most of us get news on the internet. We pay farmers to destroy crops, because we think prices need to be high enough for them to keep producing. With all this frivilous spending, how do you think it is going to be paid for? It is going to be paid by the enslavement of your children, my children and our grandchildren.
This is not just colorful language. It is grounded in the reality we will soon bare witness to.
What is debt? Debt is you promising tomorrows labor for today’s expenditures. When you buy that new car with a loan, you are saying I am going to work X number of hours in the future to get you the money for this plus interest, so that you can give me the car now. If you don’t work those hours, you don’t make the money. If you don’t make the money and pay them, they take the car back. Personal debt is bad enough, but at least you are only enslaving yourself.
What is the most dispicable aspect of what we (yes that includes me) are doing is we are not just enslaving ourselves. We are not saying, I will pay for this. We are building up so much debt that my two year old daughter, my nine year old son, your children, our children’s children and who knows how many generations to come will be enslaved. We are not pledging our future labor for today’s useless expenditures. We are pledging ours and future generations. We aren’t even giving them the chance to say NO. We are saying, “Sorry future Americans, but we want ‘free health car’. We don’t want any job losses (they haven’t stopped have they). We want bridges to nowhere. We want research how to manage the smell of manure! And we want you to pay for it.”
Now, economists would argue that deficits cancel themselves out. They explain this by saying that while we borrow the money, the future generation will hold the Treasury Bonds (an asset) and receive the interest plus principle of those bonds. This basically negates the theory that debt robs one generation by the previous. While this may be true, I emailed the economist that had this in his book. I asked “that may be true if all the debt was held by Americans, but what if China is holding a large portion of that debt. Would that not mean, that A) China is holding the Treasury bond as an asset, and B) won’t they be receiving the interest.?” He responded Yes, that is correct. The book would only apply if future generations means all people regardless of borders. So, not only are we enslaving our future generations, we are enslaving them to China, Japan and other nations. We are saying we want all this stuff, and we are willing to make the next generation work for it in order to transfer the value of their production out of the country. Does this sound like a recipe for a brighter future for our children? While our children are working, the rewards of their work is not bettering their lives. It’s being transferred out to better the lives of foreign nations.
Does this sound like it’s just theory? As of right this second (it goes up constantly), each citizen owes $343,785. If you have a family of four as I do, multiply that by four, and you get your household debt. Just this week, Moody’s rating agency said the US is a few years away from losing our AAA credit rating. This has never happened. It would be catastrophic to our country and economy. It would mean higher interest on the debt, which would mean even more future labor pledged to today’s expenses.
What does it say that our Secretary of State is begging China to buy more of our debt? We are begging our children’s masters to enslave them. How moral are we?
The financial crisis, we are still in the midst of, undoubtedly woke a lot of people up to the evils of excessive debt. Unfortunately, it has not awoken our politicians. While many families have cut back spending to bring their lives under control, they have at the same time asked the government to continue and even ramp up the very actions that caused them harm in the first place.
While this post is a little depressing, hopefully it will serve as a call to action. A call to stop asking for free handouts from the government that your children will be enslaved for. Stop electing politicians who promise the world and buy votes with pork. Vote for politicians who are going to address the debt problem and speak the truth. With every government policy you hear about ask “How is that going to lower the debt?” Lastly, realize that nothing from the government is free. Everything you ask for from the government comes at the lost liberty of you and your children.