Sunday, July 24, 2011


Austerity Program II

Unfortunately, as I read the tealeaves, any rationally-sized tax hike will be gobbled up by the medical programs inside of a year or two from now, leaving us poorer in pocket right now and still needing an Austerity Program of biting depth, such as the plus or minus10% per year or so suggested earlier. Continue this tax hiking act each year and you simply dig us a far deeper hole. Let the debt spiral upwards to boot and the debt service will likewise spiral, perhaps even faster because of drastic hiking of interest rates for our borrowing. Job production would continue to go negative with a vengence.

The way out must be deep spending cuts by the government.

It is apparent that the financial world is watching, and may well lower our credit rating despite a healthy rise in the spending cap, which will raise interest rates on us all very rapidly, and could well lead to the formal shift by the world community from the dollar base to some currency mix. If that happens, we are in for superinflation soon thereafter to go with the interest hikes. We could no longer print funnymoney to pay our bills. All of which would be disastrous for everyone but the very rich. All because some of us want to preserve our lush spending ways in the face of impending financial doom.

Obviously, we need to be sensitive to real needs of the disadvantaged, but we do have to achieve savings in the medical arena, which means a major rework of Obamacare, Medicare and Medicaid. The continuation of the defacto policy of raising the limit and raising taxes while promising spending cuts downstream that never happen must stop real soon now, or we will be in a heap of trouble we just might not be able to work our way out of in a pleasant manner. Whoever thought that SS funds were banked for use is wrong. They were diverted to the general fund, with a piece of paper IOU replacing them. They have been spent.

Whether most Americans or their representatives want to avoid these almost draconian cuts is absolutely immaterial and disingenuous because they will be forced on us from without if we don’t act ourselves while we can still set and pay for our own spending, import and export priorities.



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