Opinion Editorials, March 2008
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You load $168 billion, whadaya get?
By Ben Tanosborn
ccun.org, March 4, 2008
-- Another quarter older and deeper in debt
-- Saint Peter don’t you call us cause we can’t go
-- We owe our souls to the Empire store.
Fiscal responsibility and conservatism may still be thought of as a
traditional married couple in our nation, certainly in the nostalgic
minds of some chronologically-challenged Republicans. But rest assured,
and economic historians will attest to it, that the conjugal bed of that
couple hasn’t been slept in since Barry Goldwater left the Senate after
his first double-tour of duty (1953-1965). You can accept it as
factual and uncontroversial that Republicans squander with just as equal
affinity as the more reputedly spendthrift Democrats. And just two
weeks ago, Americans were given bipartisan evidence of such Capitol Hill
waste; true unashamedly pilferage from the yet unborn.
By overwhelming ratios of 5 to 1 in the Senate and 11 to 1 in the House,
economic stimulus legislation totaling $168 billion was passed, and
signed into law by Bush on February 13th. What an insult from a reckless
legislature aiming perhaps at attaining brownie points from the voters
as the result of a belated, and forced, Christmas gift from grandkids to
grandparents – president and legislators acting as the benevolent
mythical Santa Claus! What hypocrisy… what gall! Here are
our elected career politicians trying to appear concerned about an
economy they helped drown, either directly or by default. Centurions all
in this duumvirate empire ran in a quadrennial game of musical chairs,
these legislators patriotically cast their votes for more of the same
measures which for more than a generation have been pushing the nation
into the waters of an economic whirlpool.
And to boot, those billions won’t do a damn bit of good, none! If
anything… mislead us for yet another day, and postpone the consequences
of a government which rules only to benefit the few instead of the many.
Can someone explain exactly what these $168 billion extracted from the
future sweat and blood of our grandchildren are supposed to do?
Keep us squandering some more, maybe for another quarter? But that
isn’t even true! That amount of money, which is barely 5 percent
of the GDP for a single quarter will not even begin to cover the hidden
costs that our government won’t dare talk to us about, such as the true
inflationary costs if measured correctly against an appropriate basket
of goods and services; or the continuing phony unemployment figures
drawn from an improper base; or the ever diminishing services being
received, particularly in healthcare, that people do without as their
income proves insufficient to cover the basic cost of housing, food and
energy.
Sorry for the old news, but recession has already been around for three
or four months, at least for two-thirds of the population – you know…
those who assume CNBC is just a television version of the monopoly game;
nothing else. These folks needn’t be told by any government agency
that they simply have to do with less, that the dreaded “R” is finally
here… and that “to squander” is already, for them, an archaic verb; that
they are no longer the once affluent American middle-class, only the
victims of a globalization process coupled with an upsurge of the
predatory and thieving elite class.
Although it should be patently obvious that in the United States we’ve
reached the limit in the average household income – unless we put our
young children to work or refuse to add to the statistics the millions
of undocumented immigrants – we appear to be in total denial and won’t
admit it. In fact the probability of a declining average household
income, when adjusted for inflation, is not only real but right now
staring us in the face.
And while that probability looms, so-called experts living off the real
estate industry still prophesize of housing righting itself in a year,
two at most, and for never-ending profits to continue from then on.
Never mind that prices probably need to take an additional downward
adjustment in the 20-30 percent range, when a true housing inventory
(non speculative) is allowed to rule the day; instead of so many homes
being held until such a time as the market “normalizes”, a big joke
which only forces a temporary inelastic supply. After all, you
don’t lose money until you sell; yet they tally their housing assets at
an unrealizable “market value” which is but a contradiction in terms.
And what seems so evidently clear in housing, applies to commercial real
estate as well although with a different set of variables coming into
play. The realization that both the retailers and the hospitality
industry may have an “overbuilt” capacity well in excess of 20 percent
brings to mind our ridiculing of the socialist central planning system
during the days of the cold war. Well, even in inefficiency we are
proving we can outdo them!
Sorry, but consumer’s confidence is not a self-fulfilling prophecy, not
when the footings in the economy are made of rotting wood. Stupid
gimmickry, such as cash handouts by mall operators (Atlas Park shopping
center in New York, last week) is but a reflection of consumers’
ignorance, as well as that of the people they elect.
Of course, some progressive legislators, as if to make amends for this
farce of an economic stimulus package – and thus find redemption – are
asking the citizenry to spend/invest in sustainable products which they
well know to be nothing but political posturing… a second farce.
Let’s remember that it is not savings or profits that will be pumped
into the economy, only more borrowing: your grandchildren’s blood for
you to do the vampire act.
Ben Tanosborn
ben@tanosborn.com
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