So where will all of this lead? Should we believe the Chairman of the Federal Reserve when he says that his policy of lowering interest rates should ease us through this crisis? Or, perhaps we should believe our new President who’s promising to make the economy his top priority and, through a combination of stimulus and bailouts, guide America back to the path of prosperity? And even if they are right in the short-term, and we do make it out of this recession — what is the ultimate path that our nation is on? Where is it heading?
The thing is, no one really needs to ask. You already know. It’s uncommon that I meet someone who doesn’t seem to know that:
- Our country is broke and only the kindness of strangers keeps it from being bankrupt
- We are losing our competitive edge to overseas competition
- That we are an empire in decline
And so you don’t have to ask me where our country is going to end up. It’s obvious to any who dare ask the question and ponder the answer with any amount of objectivity. We are going to witness a collapse of our currency and, possibly with it, the corrupt body that serves as our government. We may not revolt and overthrow the government; perhaps we will only revolt against the taxes it levies as it tries to keep itself afloat for just a little while longer. But right now, the whole apparatus of the US Government is made to spend other people’s money in large quantities: the lobbyists are there to ask for it; the politicians usually got there to begin with on the backs of campaign promises to spend money; the Federal Reserve is there to create it; and the Congress is there to spend it.
Once the magic fountain of being able to print unlimited quantities of the world’s reserve currency has ended, we are left with a very different picture. If the government is to spend money, it must borrow, raise or print it. Given that we will have all but exhausted the printing and borrowing option, we will be left with a situation where money spent must come from current revenue. In other words, every dollar spent by the government must first come from someone else.
In that scenario, I doubt that politicians will get elected on platforms of how much money they’re going to spent to try and improve the economy. People will inherently understand the absurdity of that statement; money spent by the government to benefit the economy must first be removed from the economy. Thus, I think it highly possible that the government will be forced to suddenly discover frugality not soon after the voters pay more attention to their representatives actions and start holding them accountable. The entire scenario would reflect a far different kind of government functioning than we see today, and a better one.
Henry Hazlitt wrote a novel entitled Time Will Run Back
I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.
It would indeed be a shame that Jefferson had the answers to all of these questions back when our nation was founded, but that we chose not to listen.
At any rate, our near term future is very dark for those of us who are not prepared for it. For the majority of America’s citizens this will serve as a rude awakening. They will discover that borrowing for the purposes of consuming is second only to war in terms of its economic destruction. I am sure that by that time we will have had our fill of both war and borrowing to consume, but this newfound austerity will be a forced one. Like many empires before us, we will stop attempting to conquer because we can no longer afford to support an army capable of the attempt. Like many peoples before, we will discover that we were not really entitled to the wealth of the world as we had deluded ourselves into believing.
The specifics of the future are impossible to predict, but I am sure that It will prove a very harsh awakening.