Day by Day

Saturday, May 04, 2013

Back from the Wilderness

It has been quite a while since I actually did any blogging, but there has just been too much for me to ignore of late, and it's high time I had a chance to vent my spleen, as the saying goes. (And if it doesn't actually go that way, we'll just have to force it somehow.)

It will be a little while before I get the hang of this, and it doesn't help that the damned system keeps insisting that I have logged out somehow, but those are technical details that just require a bit of tweaking, so for now, I will just say "Thanks!" to Ragin' Dave for the chance to let off that steam.

Since there is absolutely no chance that the cowards in the House will ever get together and pass Articles of Impeachment (the listing of Barry's High Crimes and Misdemeanors would take too long, but being actively complicit in the murder of a US Ambassador and imprisoning US citizens for exercising their First Amendment Rights is a good place to start), and the traitors in the Senate will never get 67 of them to vote in favor of said hypothetical Articles (remember Clinton and his fellow Democrats in the Senate saying "He's not guilty enough"?), we will be stuck with Obama until he gets good and ready to leave, but I have been saying that there will be a Second American Revolution not later than about 2025 since the mid 1980s, and I see nothing to cause me to change my mind.

It's no longer a question of "if", but "when and how", and so it's time to start thinking about where the pieces will fall. The rift is narrow, but very, very deep, and it all boils down to reality and how it is being avoided by those who really ought to know better.

The differences between the political parties are almost non-existent, and there just isn't a third party powerful enough to pick up the pieces (yet), but remember that can that has been kicked down the road for the last two generations? Well, we are now facing a big yellow sign reading "Road Closed", and the bills are starting to pile up at our feet. There isn't enough paper on the planet to print the amount of money needed ($123.82 trillion-with-a-T as of this writing -- http://www.usdebtclock.org/index.html) to cover all the financial promises that the Federal Government has made.

A quick economics lesson for those who don't get it: Wealth is not money, and I include all of the precious metals that are used as a practical synonym for cash, just as I include the colored bits of paper and stamped bits of metal printed with denominations of one sort or another, in a hundred languages.

Wealth is fresh water. Wealth is arable land. Wealth is the lumber, metal and stone used to make things. Money is just an efficient means of trading those things without having to carry around (say) a bushel of wheat or sticks of lumber or blocks of stone.

But even before we need a form of government, we need some means of trading efficiently. If we have 100 potatoes, and 100 dollar bills chasing those 100 potatoes, that does not mean that the potatoes are worth $1 each, only that they cost that much. (A fine distinction, but a very real one, as you will see in a moment.) If the government then prints another 100 dollar bills, that does not mean that the potatoes are suddenly worth twice as much, only that they cost twice as much. (See?)

In actuality, that means that the dollar is suddenly worth half of what it was before the sudden surge of currency, because it takes twice as many to get the same number of potatoes.

I need you to get the distinction between wealth and money, because while money cannot be created out of thin air without ruining the value of that money, wealth can be, and routinely is. Wealth is what happens when you take the raw materials, and turn it into something more valuable. Take a raw piece of flint, and turn it into an arrowhead, and it becomes valuable to the hunter through the application of skill and effort. Take a few trees and some adobe, add skill and effort, and you have a house capable of keeping the weather outside.

Case in point: the value of the buildings in (say) the city of Los Angeles had to come from the application of skill and effort to raw materials, rather than the expenditure of money, because there simply wasn't enough money available to steal on the planet to pay for all those buildings, much less the rest of the State or country. That wealth was created, it wasn't stolen from the third world or "the down-trodden".

But our government has been borrowing money in the hopes that there would be the wealth to pay for it later, and the can has reached the end of that particular road.

All it takes is one bank to say "well, I don't think we're going to loan you any more money, and those T-bills are mighty pretty, but they are just IOUs and I don't think you would be able to pay them off when they come due", and it will trigger what is known as a "preference cascade": when all those people who have been nursing their own private doubts for so long finally realize that not only are they not alone, they are actually in the majority.

Governments cannot declare bankruptcy, as long as they retain the power to tax, but we already owe in current debts more than the annual collective effort of the 320 million people who live within our borders. If the Federal Government were to simply take -- excuse me, "collectivize" -- every cent that was spent by every person in every endeavor, and seize the cumulative assets of every person on the Forbes 400, it would STILL not be enough to pay off just what is currently owed, never mind all the future payments that have been promised.

And what cannot go on forever... won't.

Not with a bang, but a Ka-ching...

Anyhow, thanks again to Dave for giving me an outlet...

1 comment:

Ragin' Dave said...

Mi Casa, Su Casa.