Sunday, May 9, 2010

An American Tragedy

Last week the stock markets spiraled out of control. Stocks were on a roller coaster and no one knew what the end result would be, would the market settle down, or would the market continue its downward decline. At one point on the Thursday the market had lost over 9% of its value. By the end of Thursday the market lost 347 points. not nearly as bad as the nearly 1,000 point slide from earlier in the but nevertheless a turbulent day in the market.

The administration searched endlessly for someone or something to blame. The administration searched high and low for a sabotage culprit or a fat finger. None could be found. The answer to the market crash on Thursday is nothing more than investor reaction to Greece's debt worries. The austerity measures that are being forced upon Greece threaten the stability of the European Union. Sovereign Western countries are beginning to fail due to their Socialist governments overspending. Unlike Paul Krugman, investors realize perpetual and ever increasing national indebtedness is not a good thing. eventually the bill comes due and there are only a couple of ways of dealing with the debt problem.

First nations could default on their promises. in other words sovereign nations could declare bankruptcy. Outright bankruptcy and defaulting on debt is ruinous for Sovereign Nations. A Sovereign nation that is unable to pay its bills is unable to borrow additional funds that it may take to reform their monetary policy and infrastructure. The other way for Sovereign Nations to get out from under a mountain of debt is to print more money. This inflationary measure will allow sovereign nations to purchase their debt back but in the end will ruin their monetary value. the last time that happened the Germans were carrying money in wheelbarrows to the market to buy loaves of bread. Ultimately this led to the rise of a madman intent on finding someone else to blame for the ills of a nation. the madman set Europe ablaze and if not for the strength of the America dollar in resourcing the Russians, or the will of the Russians to defend their homeland, or the will of the American people to defend theirs, the world today would be far different.

Yet, the mass spending but the American government did cause the monetary system of this country to fail. Obama rose to the Presidency by blaming others for the ills facing our Nation. At every turn Obama constructs yet another strawman all the while he pilfers the American treasury. the trillion dollar annual debts are what is causing the turmoil in the markets. Investors have seen what is taking place in Greece and are recognizing that our own monetary system is on the verge of collapse. America needs to get its fiscal house in order. We need to ensure our monetary system has a sound foundation on which to rest. We need to reduce our annual deficit and start paying back the debts we owe. America needs its own austerity program. we are not in this mess because we tax too little. No we are in this mess because we spend too much. We are headed for an American tragedy.

1 comment:

Anonymous said...

You're right, but unfortunately, any leader who attempted to fix the problem would see riots that make anything that happened in Greece look like a game of ring-around-the-rosey. Politicians deserve a lot of blame, for not making Americans take this pill decades ago. However, most of the blame lies with us, collectively. Our parents and grandparents always voted for people who promised against all of their own judgement that there were no real problems and that we can have our cake and eat it too. Now, those of us who grew up in the 80s, and especially kids growing up now, are a spoiled lot who actually believe that there is unlimited abundance, and if anyone doesn't have everything that they desire, it is only because some mean guy, usually a Republican, won't let them have it. Most kids think, thanks to lies from parents and our institutions, that when they leave school, they're ENTITLED to a high paying job where they do nothing resembling actual work. Our parents lived that life at our expense, and now the chickens are coming home to roost. It will be very sad, but also a bit humorous to see the reactions from people as their illusions are busted in the coming years. In the present, let's all start getting used to a bit more austerity, it will serve us well in the future.