I use to own a Lionel model train and it had three rails. It could not run without the third rail that delivered the power.
The solution to fix our budget needs a third rail. We need to cut spending and raise taxes; however, we also need to free our "free markets". Our free markets have been destroyed by government allowing core industries to be taken over by a few large corporations choking off competition.
One of the primary responsibilities of government is to protect its citizens from tyranny; both, foreign and domestic.
An affect of this take-over by oligopolies is that the distribution of income in this country has been distorted. If this is corrected income disparity would shirk, less government welfare programs would be needed, we would be more innovative and tax revenues would increase.
America is losing it and it will take drastic action for us to get back on course. Why has this happened?
- We forgot, never learned, how to compete.
- We allowed our government to fail
- We put ourselves in too much debt and became over leveraged.
- We mortgaged the future.
- Education has taken a back seat and thus, so has our future.
Failing to Compete: We were spoiled by the greatest generation. They won World War II and there was no competition standing after that horrific event. As a result we indeed did prosper; however, we did not learn to compete globally because there was no one to compete against.
Consumption: We learned how to consume and became addicted to it. We consumed for the sake of consuming without paying attention to the economic progress that was being made by the rest of the world. Eventually we began to distribute our wealth to the rest of the world by our addiction to consumption.
Government Failure: Our Politicians, who in fact are us, also got intoxicated with consumption. They failed to look out for the general welfare of the Union. They have allowed the free markets' power to create wealth and goods to be destroyed by oligopolies. Our representatives failed to create and enforce rules that would guarantee the freedom of "free markets". Instead, these oligopolies have bought off our representatives as a result of their addiction to consumption.
Further the politicians bought off many voters by allowing the creation of expensive pension plans, both private and public, that are not totally funded. This shoe has yet to drop.
Over Leveraged: We borrowed money from future generations and have no plans in place to pay them back. We have not used the money to invest; but rather, we used it it to feed our addition to consumption. The sub prime crisis brought it to a head, but the problem has existed for some time. The problem is further exasperated by the enormous amount of unfunded and hidden costs of future pension benefits that we are obligated to fund.
We are Squandering our Education System: When you have an addiction, education is neglected. Our education system use to be the best in the world. We are slipping and parts of society do not look at dollars spent on education as an investment. Instead, it is looked at as something that limits our ability to consume even more.
To solve these problems, we must take drastic action; sooner rather than later. I don't think we have the gonads to do it. Do You?