Tuesday, January 11, 2011

America: At Point of No Return

David Stockman, former budget director for President Reagan, and now self-described libertarian, made some powerful predictions and recommendations concerning America's future in a recent interview. These two are a sample:

"It amounts to a failed opportunity to recognize that we are now at a historical inflection point at which the time has arrived for a classic post-war demobilization of the entire military establishment. The Cold War is long over. The wars of occupation are almost over and were complete failures -- Afghanistan and Iraq. The American empire is done. There are no real seriously armed enemies left in the world that can possibly justify an $800 billion national defense and security establishment, including Homeland Security. . . . Unless you have a profound change in foreign policy, you're not going to have the possibility of a radical change in defense spending. The later follows from the former. This is a profound disappointment that there's not even a debate -- a serious debate about dramatic change in our imperialist foreign policy and war-making establishment in this administration -- allegedly the most left-wing administration that we've had in modern time. I don't have much hope that what needs to be done will be done until it's finally forced on us by a world bond market crisis, which will happen sooner or later. . . ."

"We've reached a point of no return. The size of the government. The massive size of the deficits and the national debt that has been created. The precedents that have been established for bailouts and intervention in every sector of the economy. The K Street lobbying system which totally dominates the Congress. All of these are very unhealthy developments. And I'm not sure how they are going to be reversed or eliminated. It may be a permanent way of life. Then, if it is, it'll be both a corruption of democracy and a serious weakening of the private capitalistic economy."

I think his idea of down-sizing the military is a good one. My only fear is that the Congress would use the money saved to create more entitlement programs rather than paying off our debt. I don't read any smart people who agree with Fed Chairman Bernanke's lack of sheer terror (speaking for the whole administration) at the prospects for America's future. Most people who can add and subtract view the future in very dismal terms -- as if there could never be a collapse or revolution in America when it has happened to every country in history that used a fiat (paper money) currency system and a Keynesian-type approach (growth fueled by debt) to economics.

The most immutable law in the universe seems to be cause and effect, or, in biblical terms, reaping what one sows. It would be just like us to think it could never happen here.

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