Obama’s progress
Since inauguration day when John Roberts mangled the oath of office, the 44th president has made great headway in America’s new fight against the present economic calamity. The first step was passing an historic economic stimulus bill and thusly eschewing any notion of following the Andrew Melon model of economic action–which one could rightly call inaction–but which might have had an even worse impact than the aforementioned Secretary of the Treasury’s plan would have given the interconnectedness of the big economic players.
The most promising sign in Washington is that Obama and his people (i.e. Romer/Summer/Geithner et al.) along with the fed chairman (Ben Bernanke) seem to understand that the path to further calamity has a definite recipe (e.g. raising taxes, tightening monetary policy) and is to be avoided at all costs. So, avoiding the 1930’s should be a cinch at this point, right?
Well, not really. In ten years, if deficit spending stays the same or gets worse, the interest on the national debt will be $1,000,000,000,000 per annum, and our collective debt will be well out of contol (even by today’s standards). The only good news is that our debt owners (e.g. China, Saudi Arabia) cannot ever sell off their dollars without sinking the very dollars they are selling (sorry guys, but you should have seen that one coming). So, we’ve more or less stuck them with an economic hot potato that they can never actually get rid of. The bad news for us is that we’ll end up continuing to print money, and by the time we starting printing $1trillion per year to service the debt, inflation will be rampant and the dollar will be worth much less than it is now–and by the way, the dollar is not doing so bad right now. Another side consequence of more inflation and a weaker dollar is that oil prices will skyrocket as never before and, unless we have an alternative energy plan in place, the cost of going to work or driving children to school could be prohibitively high for many (if nor most) people.
So, my advice is quite simple. If we’re going to run trillion dollar deficits, let’s do two things. #1 Universal Health Care — by pooling everyone into one group and nationalizing the providers, we will drive down the cost per capita, we’ll insure everyone, and we’ll take an enormous burden off the backs of corporations. I’ll expand more and make my case in further postings, but for now, let’s agree that everyone deserves healthcare.
#2 Let’s fund, to the greatest extend possible, our best alternative energy research and development options. It’s not merely a matter of saving the earth any longer, but a matter of economic necessity.
So that’s it for now.
