Thursday, November 11, 2010

The beginning of the end.....

by Mike Calpino

Last week’s elections were historic, there is no question about that. Voters were fed up with our lurch into socialism and with the rise of the TEA party movement, questions of government spending, control and intrusion were finally being discussed openly and honestly. Many people became involved in politics for the first time, recognizing that politics affects everything in our daily lives and if we ever want to regain some control over our lives (i.e. our liberty) politics can no longer be ignored or left up to the "political class." All this represents a good trend.

TEA partiers and conservatives who pinned their hopes on Republicans are likely to be very disappointed, however. There are two reasons for this. The first is that the new TEA party/conservative Republicans represent a small minority of the total number of Republicans in office, at all levels of government. Because of this, it will be very difficult for them to resist the pressure the establishment has on "public servants". The "system" has been in place for a long time and the beneficiaries of that system are not about to let these upstarts disassemble it. Even if they have the character to resist the pressure to conform, the radical steps necessary to save us from catastrophe will never move beyond their sparse numbers and may be beyond the imaginations of most of them.

What am I talking about? Here are some necessary steps for starters. Ending the Federal Reserve and pegging the dollar to gold. Ending all entitlement programs, a particularly difficult pill to swallow for Republicans who have been demonized for phantom proposals to do so in the past. Remove all the tax and regulatory impediments to businesses so we can return manufacturing to the United States. Eliminate public sector unions and approximately eighty percent of government jobs. Bring the military home from the vast number of places it is around the world and slim it down to a size that will ensure a devastating defense, not a costly and ineffective offense, or even less unsuccessful nation building. Can you see even one of those things happening in the next two years, or even four years with a Republican president and congress? I certainly do not.
The problem is that we have already reached the point of no return and we have reached that point with the complicity of both major political parties. Allow me to explain. We are all familiar with the exploding federal debt which has reached around fourteen trillion dollars, greater than the entire Gross Domestic Product of the country. Then there are the annual deficits which add to that debt which were high under President Bush and have exploded under President Obama. All that is bad. However, because of the way our government fiddles with the numbers and has changed it’s reporting and accounting, this picture is rosy compared to the reality of our situation.

Businesses, when they make reports, must include their future liabilities on their balance sheet. If they only report profits and loans but do not include pensions or health care liabilities, we would say they are fudging the books to make them look better than they are. In fact, it would be dishonest and illegal. The government, however, does just that. Future entitlement liabilities, Social Security and Medicare in particularly, are not included in the deficit projections or in the current and future debt numbers. Allow me to give you those actual numbers. If we used the real, inclusive numbers, in 2008 the deficit was $5.1 trillion, not $455 billion and in 2009 the real shortfall was $8.8 trillion, not $1.4 trillion. Again, this includes the present cash based value of Social Security and Medicare liabilities.

That is a lot of money, more than we can actually conceive of. We know that government spending is out of control, we complain about it all the time. The fact is that we cannot bring the deficit under control without eliminating entitlement spending, something that is not going to happen until the system actually collapses. For example, if we taxed everyone, every business and every corporation in the county at 100%, something the president’s father suggested, we would still be running a deficit. If we stopped spending on everything except Social Security and Medicare, we would still run a deficit. These entitlements are like a bomb that has been ticking for a long time and now we are about to see it blow up in our face.

What will that mean? An economic situation that will make this one look like the "good ‘ol days." A collapse of the dollar which would bring most economic activity to a screeching halt. This will result in a complete realignment of our political and social structure in the next few years. The major political parties will finally receive the blame they are due for putting us in this situation although the apathy and complicity of the American people cannot be ignored. We do have the power of the vote although the stranglehold of the two party system on our country has mitigated against those of us who do not participate in either of those parties having a seat at the table. As someone who ran as a libertarian in the last election, I have seen this first hand.

There will be one of two results of this catastrophe. The first is that the establishment works with other establishment types around the world and they bring about a new world order, not the spooky kind of the conspiracy theorists but like the global realignment of power and structure that occurred after both World Wars. The United States, which has been moving toward a powerful executive-style government at all levels, may see the president, particularly this president, use the "crisis" to take complete control of the country, relegating the congress and judiciary to irrelevance as in Venezuela or the former Soviet Union. The other possibility is this. We the people will build on what began as the TEA party and restore the individual liberty which was the bedrock of the American Experiment. Once the system collapses, we need to rebuild the vision of our founders upon the ashes. There is only one way that happens. First, we need to say "NO" to government solutions when they are offered because we need to recognize that government caused the problem and is the problem. Second, we need to rebuild the family and community ties that have been weakened or destroyed through government policy and cultural degradation. Finally, we need to rekindle that innovative, hard working American spirit that the socialism we have embraced has suppressed. We need to relearn self reliance as opposed to government reliance, community safety nets as opposed to government safety nets, cooperation with our neighbors as opposed to political division.

The second possibility is only viable if we prepare now. The establishment has contingency plans to implement their will in the case of a crisis. Most of us have just woken up and we need a crash course. We need to recognize the extent of the problem and prepare our families first. We also need to demonstrate our leadership in our communities. If we fulfill our role as the "watchman on the wall" to the extent that people recognize our foresight and the ability to provide solutions, we will put ourselves into a position to provide the leadership necessary to steer our country back to liberty and resist tyranny. Time is short, The Fed has already begun monetizing our debt, the last act of a desperate central bank before hyperinflation. Our time to prepare may now be measured in months instead of decades. But our future and that of our children remains in our hands. We need to roll up our sleeves and work even harder now.

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