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THE FEDERAL GOVERNMENT, MORE WIZARDS OF OZ!!!!!
By JOHN SHANNON
AuthorHouseCopyright © 2011 John Shannon
All right reserved.
Chapter OneTHE UNITED STATES OF AMERICA–2011
2011, here we stand, the United States of America, the greatest country economy, civilization, military, etc. that the world has ever known. Americans believe we have the greatest economy; Americans believe we have the greatest civilization; Americans believe we have the greatest military; and Americans believe we have the greatest country. But do we? The better question is 'If you believe we do, how long will the United States of America stay great?'
I believe and will show that we are in the midst of a massive decay if present trends continue. Our position as the number one power, economically, politically, militarily, and socially is deteriorating rapidly.
Let's start with economic power. Who would question we are the most powerful economy? I would!! Our economy is in decay. We are becoming a service economy, a nation of shopkeepers. Loosing most of our high tech and manufacturing jobs to foreign countries, outsourcing every high paying, high benefit job that isn't nailed down. Loosing $25 an hour high tech and manufacturing career jobs and replacing them with $8 an hour service jobs. That is the real squeeze on the American lower and middle class workers. The economic expansion over the past twenty years, as touted by governments, academics, and financial economists is a fraud. The expansion is a façade. The expansion is built on a foundation of mud. Touting a falling unemployment rate over the last twenty years is great until you look behind the statistics to see people going back to work from $25 an hour to $8 an hour. Going back to work from companies that have benefits, like healthcare, vacations, 401(k)s, pensions, education reimbursement, etc. to companies that do not have these benefits.
The government is touting a lower inflation rate, also. That sounds great until you look behind the statistics. The Federal Reserve has massively increased the money supply over the last twenty years, especially or exponentially in 2009 and 2010, depending on which word you choose to describe this printing press process. I believe the massive inflation will begin soon, possibly as early as the fall 2012. The reason inflation has not appeared sooner is because of our appetite for foreign goods, exporting inflation and those same foreigners willing to hold more and more American dollars under the mistaken assumption that this toilet paper is worth holding. Those dollars, not if, but when they come back, will create massive inflation. Please, please, do not forget that the story behind twenty years of buying foreign goods is that foreign factories increase production, hire more workers, pay better wages, have higher profits, higher tax revenues to their governments, build new factories, purchase more machinery and give employees more benefits. In short, their economy expands and their country becomes strong.
The other side of the equation is in this country ... twenty years of buying foreign goods equals American factories have lower sales, decrease production, lay off workers, pay lower wages, lower benefits, lower profits, lower tax receipts to our government (which starts the printing press and Treasury borrowing), closing factories and reducing health care to employees, etc.
In short, our economy squeezes workers into the lower paying service sector and our country becomes weak.
U.S. businesses have a choice to stay in the U.S. and go out of business or move to a foreign country to be able to compete and survive. The U.S.A. is 'hemorrhaging wealth' because of our trade deficit over the past twenty plus years. This is all caused by Wizards of Oz at the Federal Reserve with their monetary policy, and Wizards of Oz at the White House and Congress with their fiscal policy. Our economy each year produces less and less of a percentage of the goods that we consume. The importance of this cannot be understated.
When an economy produces all its own food and hard goods, there is wealth generated to its people in the form of higher wages and benefits to workers, higher profits and investments to the companies, and higher tax receipts to federal, state and local governments. On the flip side of the equation, when an economy does not produce its own food and hard goods, 'hemorrhaging wealth' occurs. Higher wages, higher profits and higher tax receipts occur in the country we are buying the products from. We loose jobs to the service sector and all the U.S. economy produces is printed money. Do not be mistaken ... money is not wealth. Goods produced are wealth, the fallacy of composition must be remembered. If the federal government gives everyone on Wall Street millions of dollars, that is wealth. But if the government gives every citizen millions of dollars, nobody has wealth, just a lot of money inflation. The U.S.A. is generating domestically a lot of money, not a lot of wealth. That is precisely why there is not any wealth to fix our infrastructure in the U.S.
After World War II, the U.S. economy produced all its own food and hard goods. Factories were humming and wealth generated. All the wealth generated at that time produced massive tax receipts for government: Federal, state and local to build roads, bridges, schools, fire stations, parks, etc., etc., etc. Today we, as Americans, import our hard goods and food, which does not generate tax receipts or wealth to pay for the same roads, bridges, schools, etc. We are only generating money, not real wealth. This is why our public infrastructure, i.e. roads, bridges, schools, etc. are collapsing, because our private infrastructure, i.e. factories, equipment, etc. are shrinking, or being used overseas. A strong private infrastructure, i.e. plant and equipment is 100% necessary to generate a strong public infrastructure, i.e. roads, bridges, school, and/or a vibrant service sector economy. A strong private infrastructure cannot occur with massive imports and trade deficits as the U.S. has experienced over the last forty plus years. To repair our bridges, roads and other public infrastructure, spending, as many in the Obama administration and others have proposed, would be absolutely inflationary, costly and ill-conceived until a massive build up in our private plant and equipment infrastructure can be attained. This can only be done by an elimination of the trade deficit, or a massive increase in investment in plant and equipment in the U.S., not foreign countries.
After twenty years of shrinking private infrastructure (plant and equipment) during the 1960's and 1970's, Ronald Reagan unleashed a twenty-year boom of private infrastructure spending (plant and equipment) that lasted through the 1980's and 1990's. Because of his economic policies, i.e. supply side economics, 401(k)'s, IRA's, deregulation, competition, etc., this high tech economic boom was slowed by policies of George Bush Sr., Bill Clinton, Larry Summers, Rubin and others, and was grinded to a halt by Alan Greenspan's interest rate policies in 1998 and 1999. This Federal Reserve policy lead to the economic problems from 2000 to the present time. The Wizards of Oz, working behind the curtain, do not inspire confidence, or trust, that they will make the correct decisions for our economy. Only a President like Reagan, whose policies let you decide what is best for yourself, not the Wizards of Oz.
Is the U.S. strong economically with a debt burden the size of the Gross Domestic Product (G.D.P.)? 15 trillion dollars, a debt burden of almost $50,000 per person for every man, woman, and child alive today. This is not even counting the debt burden of all state and local governments. There is more total debt in the U.S. economy today than total assets in the U.S. economy. That is a fact and that is not a recipe for an economically strong county.
In short, the U.S. economy is plagued with unprecedented debt, trade deficits, budget deficits, massive money creation, lack of capital investment in plant and equipment, crumbling public infrastructure, a growing lower economic class of poor, a real unemployment rate of almost 18%. I believe it is very safe to say that the U.S. is not the greatest economy and is rapidly heading in the wrong direction.
Now let us look at our military power. Who would question that we are the greatest, most powerful military? I would!
If this country continues to loose all its manufacturing and high tech industry, as it has been for the last twenty years because of government policy, and make no mistake about it, it is government policy, Federal Reserve, Treasury, Congress and the White House both Democrat and Republican, then the U.S. military power is just a façade. In a real conflict, the engine of this country is run on imported energy and material. This country is even recently importing 10% or more food and agricultural products. The Iraq and Afghanistan war that the military is fighting has left it strained, to say the least. China, with its export policy is building up its economy to be a world-class military power, if not already. The U.S. and China are like the two 15-year old boys where one thinks he is tougher than the other. Then for a year the weaker boy starts lifting weights, boxing and taking Karate. The stronger boy sees him a year later and still thinks he can beat him. This can be a fatal mistake.
If the U.S.A. does not have production to supply our military from this country, we will not be a powerful military. A façade is a building front with nothing behind it, as in the old western movies. Going to war with small countries, the U.S. military can look very strong. But in a global conflict with a country like China, that is pumping up its industrial base and does not obtain its supplies of hardware from foreign sources, can be a different story. The United States in 1940 had a massive industrial base to expand and win World War II. If in 1940 the U.S.A. was a service economy, as we are today, we would be speaking German and listening to Handel.
Make no mistake about it ... I am for having the strongest, most well equipped and highest paid military (in the world, not all over the world)! The only positive factor of being in Afghanistan and Iraq is military equipment is invented and upgraded, i.e. military robots, new weapon systems, etc. The down side is our military is being strained and our servicemen killed or injured. On the other hand, China is quietly taking in all the world trade, building its private infrastructure of plant and equipment, and using its great infrastructure to produce public infrastructure and military spending. If not now, but very soon, China will be the greatest military power. History is littered with countries that thought they had the greatest military power until the country with the industrial base and public infrastructure turned the tables and defeated them. The most forgotten thing in history is not so much how strong the military is at the beginning of a conflict but how a country is able to produce military hardware that is destroyed. This does not manifest itself with the U.S. fighting small countries, but would be a major factor in a conflict with a larger opponent.
History shows over and over again the side with the greatest production and ability to produce goods wins the conflict. The North was destined to win the Civil War not just because it was right, but because all the manufacturing was done in the north at that time. World War II would have been won by the Germans, if the U.S. had not entered the war. The Germans had all the factories at that time, compared to other nations. As soon as the U.S. entered WWII, the Germans were destined to loose, not just because they were wrong, but because the U.S. had far superior production facilities and manufacturing potential. There are many other examples of this throughout history.
In short, I do not think we are the greatest military power. We are a shell, or skeleton of a great military power. Massive amounts of nuclear weapons and existing military hardware cannot win a conflict with countries that produce their own food and hardware as opposed to importing them. A China that is turning out ten engineers to our one, a China that is producing people who work and think rather than look for handouts and watch Oprah, a China that is producing wealth not printing it, will be the next world military power.
Now let us look at our great civilization in the United States. Who would question we have the greatest civilization in the world? I would. The dictionary defines civilization as the type of culture developed by a particular people. Have we developed a great culture??
Let's examine some aspects of our culture:
1) Dysfunctional families. Husband and wife and three children from both parents were the norm in 1960. Today that is rare. Stepfathers, 2nd, 3rd, and 4th marriages, half siblings, gay couples with children, stepmothers, one parent families, 4 brothers all first named Jose ... the list goes on and on. OK, OK, I have heard the arguments for dysfunctional families many times, but the majority of Americans still favor the traditional family unit. All civilizations that are strengthened and improving do so with traditional family units. All decaying civilizations have this dysfunctional aspect to it. 2) Selfish Society. In 1960, the greatest percentages of mothers cared more about their children and husbands than themselves. The greater percentage of fathers cared more about their wife and children than themselves, also. Children thought the church, school, candy store, parents, home, government, building, etc. was bigger and more important than them. Not today!! The 1960's ushered in the selfish society. Me – me – me – me. A great percent of mothers today are more concerned about the guy next door on their favorite TV show, or their career than their children. Children are learning to be so selfish and concerned only with themselves that schools, parents, the Solar System, etc. revolve around them. Another symptom of a decaying civilization. 3) Violence on TV, video games and movies. Many years ago my father and I were talking about violence on TV. He said there are three stages of violence: 1) You cringe when you see violence; 2) You accept it; 3) You get to like it. He explained when he was young and movies first came out people cringed when something appeared on a movie of a mildly, mildly violent nature. He noticed years later people just sat through the violent scenes ... they had accepted it. He said now some people are starting to like it. He explained that a Nun or other good person may reach stage 3 in 350 years, so they may never reach that stage in their lifetime, but others are reaching stage 3 very quickly in this country. He made this observation in 1982. If he could see the video games of today, or movies, like Hostel, he would be cringing. I agree with him 100%. Our civilization is teaching our children in both movies and video games to like, or should I say love violence and killings. One other point my Father made was he said people survived the Depression of the 1930's with a low crime rate. If there is ever another depression in this country look out because people have learned to like violence. They are ready to use a depression not to pull together to survive and help each other but to use it as an excuse to rob, rape and pillage, with or without a Capital One card.
Excerpted from THE FEDERAL GOVERNMENT, MORE WIZARDS OF OZ!!!!! by JOHN SHANNON Copyright © 2011 by John Shannon. Excerpted by permission of AuthorHouse. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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