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Economic storm is still brewing

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By Robert E. Beckner

We now have a new president and possibly a new direction for our country, so let’s look at how we ended up in this crisis of failed banks, mortgage companies, all kinds of loans, etc. Our new president has been talking down the economy, he is full of doom and gloom, warning that things are dire and bound to get worse.

He’s doing this to forge an early political consensus for Congress to act quickly for his loan request and they did, giving him his asked-for $850 billion. This, of course, in addition to the $390 billion he received partially from the original $700 billion that was spent mostly ($310 billion) for banks and various lenders; General Motors and Chrysler, etc.

During all this time he was telling the nation to brace for trillion-dollar budget deficits “for years to come,” he cautioned. Some experts say all these warnings and selling of his economic programs was only to set a low bar for later measuring his successes.

It was President F. D. Roosevelt at his first inaugural, who said, “Only a foolish optimist can deny the dark realities of the moment.” President G. W. Bush vowed to “recover the momentum of our economy.” President Ronald Reagan said, “These United States are confronted with an economic affliction of great proportions.” President Clinton said the economy had been “weakened by business failures, stagnant wages, increasing inequality and deep divisions among our people.”

Later data and analyses revealed that the economy was not technically in recession when all four took office. However, our new president isn’t really wrong in what he has been saying about the current economic situation.

His conclusions, for whatever his reasoning, need not only to be looked at to really see why and to know how we got in this shape, but also what I call, “a look at our future.” It’s all tied together.

In the past, what grew our country was high savings, low taxes, capital accumulating, limited government and entrepreneurial freedom. We clearly knew the fate of a nation’s currency mirrors a country’s financial health, prestige and influence.

Yet, 75 years ago, we began to have just the opposite; low savings, high taxes, capital consumption, cancerous big government and regulatory interventionism. Instead of expanding what works, we embraced what never works, socialism.

We have all these years adopted piecemeal, a left wing agenda. There is no middle ground, you either have free market capitalism or you have the government fiasco we have today.

The current rush into government bailouts (which are illegal under our constitution) and economic schemes sounded the alarm bell for this once great country. Clearly socialism is killing our prosperity.

Government rules and regulations have choked off corporate innovation. It’s the entrepreneur and free markets that make wealth and progress, not the politician ladling out pork at the government trough.

Socialism doesn’t work, can’t work, and never will. Inevitably, it must lead into a new dark age, that’s where we’re going in America, toward misery, mediocrity and even perhaps extinction. Either we roll back socialism or we perish.

Those are strong words but just look at how all the various administrations over the years, despite many warnings from many individuals, financial advisers, and economists all fell on deaf ears. Our government’s reliance on inflating money and credit made price inflation inevitable. We have embraced the monetary policies of a banana republic.

Today’s leftists, radicals and liberals will never see that the social programs they have created are the cause of inflation and economic retrogression. They will still demand more. As we careen from one economic crisis to another, our society will begin to unravel.

New laws and regulations will curb our freedoms; tax collectors will more aggressively seek out our wealth and new taxes spawned by a government desperate for funds to pay a growing army of the subsidized. With the help of an out-of-control media, they will get officials elected who resort to draconian measures of expropriates.

As our economy continues to collapse, civil unrest will become unbearable. Crime will increase (if that’s possible), demonstrations will become a normal thing; strikes are not far behind and then comes the riots. Social hatred will skyrocket as living standards plummet.

The affluent, the few remaining, will retreat into enclaves that promise security. Entrepreneurs will move offshore and illegal immigrants will return to their origins (we hope). Most importantly, big government, the source of all this agony, will fail one of its most needed jobs, that of keeping all citizens safe from terrorists, etc.

Not a pretty picture, this future of ours, as we look at it today. Washington will become an even worse cesspool of corruption as the subsidized underclass broadens even more. Their values and morality will further corrupt our entertainment, social justice, poverty and inequalities of incomes will dominate the news.

We’ll find talking heads on TV that will stump for even bigger government, ever higher taxes and more subsidies (even newspapers now want bailouts) and even compassionate conservatives will spew out nauseating pleadings for helping a huge and growing class of ethically-challenged moochers. We’ll see the America we once knew vanish under the onslaught of economic backwardness, social welfare, wealth transfer and chaotic behavior.

One way to look at all this is that we just got through the earthquake, with the tsunami yet to come.

We can look back in history and see that no nation has ever escaped the havoc that springs from loose money and credit. Expansion of credit does lead to a boom at first, but sooner or later this boom is bound to crash and bring about a new recession, as we are now experiencing.

As the president is saying, our economic sins are real; they defy ready solutions. Let us hope that our president has or will appoint honest people who can truly see what is needed to get banks and government to put into practice by getting money in the hands of those who truly not only need the help, but also know how to spend it wisely.

Americans seem on average to accept that real jobs won’t come about for at least two years. There’s just no way to reopen businesses that have already failed, to get those that went offshore to come home in a short period of time. Prices must be somehow lowered and purchasing power recreated.

Congress as a whole doesn’t have a clue as to what’s necessary to put America back on the road to greatness, so we are putting all our faith and confidence in a man, who while winning the presidency by numbers, still must convince almost 50 percent of our population that he is the one who has the ability to see to it that all our problems are solved, not in a day or two, but at least as soon as truly possible.

We’ll all be watching and waiting, and as he has said, hoping.

Robert E. Beckner lives in Majestic Oaks with his wife, Sarah. He is a retired private investigator and insurance adjuster. He has also been a photographer and served with the Military Police in the Marine Corps.