Mark West
Real recession now...or deep depression later?
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By Mark West
June 10, 2010

Date nights are great nights! My wife and I enjoyed an awesome film during one of these over Memorial Day weekend.

Typical for a Russell Crowe film, Robin Hood was brutal! Yet it was just the film to fit my flavor for "history" flicks. I would have called it, "Robin Hood: When Governments Go Broke" as this name is a better fit for the story.

In this version of the legendary tale, the newly crowned King John (his bro King Richard dies), incites a rebellion against his crown. He does so by imposing a heavy tax upon the citizens that would be collected at the point of the sword.

The Crusades had bankrupted the kingdom so he needed income and quickly! This tyrannical taxation caused a revolt and...well I don't want to spoil the film for you but I will paraphrase a line from the film. "If you think it is hard collecting pay from a living king, just imagine how difficult it will be when he is dead."

Sadly, the tale in modern economics is all too similar. Debt makes the world go round in our finance based system of derivative debt. Our economic stability is based on our confidence in debt. Am I the only one who finds this bizarre?

Nationally and individually, we are all in debt up to our eyeballs (imagine Uncle Sam on a riding lawnmower with a cheesy, cheeky grin and you will get the picture).

We owe $13 trillion nationally, which is approximately 90% of our Gross Domestic Product (GDP). However, when we add our estimated unfunded liabilities...the whole Social Security/Medicare $208 trillion-pound gorilla in the room...we encounter a debt that is actually 834% of GDP. By the way, GDP is a measure of how nationally productive we are...think of it as a sort of fair market value.

Your tab is about $394 thousand...and you just thought you were in debt! What do you mean? Of course YOU owe the debt! Haven't you taken the time to read your money? It's a Federal Reserve Note, meaning that whatever money you have is actually debt that is owed to the Federal Reserve Bank.

Just like a House Note (mortgage) or a Car Note, a Federal Reserve Note is really a legal debt that must be repaid to its owner. And this owner expects repayment with interest.

My trusty bible tells me that "the borrower is the slave of the lender." So, who owns our national debt?

The United States Treasury issues requests for money. The FED responds by printing the currency at interest. Half of our national debt is owed to the FED. Just over a quarter is owed to foreign entities (like China) while the rest is owed to a combination of investors, states and municipalities.

Tragically, we print this currency out of thin air, yet we must pay it back in cold hard cash...and the cash we pay it back with must be printed by the FED, including interest.

Honestly, we can't ever fully repay our debt to the FED...topic for another day!

As I said, our economic survival and sustenance depends on how confident we are in our debt.

Political posturing has led to demonizing Democrats and denigrating Republicans rather than owning up to the real nature and cause of our debt. US!

As angry as we are, it is still a matter of supply and demand. We have demanded expensive centralized government programs and the politicians have supplied that demand, indebting the nation in the process.

Both sides are to blame and the truth spares no victims!

Regrettably, every other modernized nation is facing the same problem. The Euro is collapsing under the weight of sovereign (national) debt in Europe. Iceland and Greece were the first dominoes, Spain, Portugal, and even England are in the crosshairs as the cumulative debt imbalances seek to unravel themselves before our eyes.

History teaches economic malaise contributes to wars. National debt leads to war. In Robin Hood, King Richard died storming a castle in order to gain more loot to fund England's debt.

Global debt leads to world war. World Wars I and II escalated during economic tribulations.

Rather than deal with the devil of debt, we continue to allow that devil to be kicked down the road to the next generation. Eventually, the devil will seek his due.

Selfishly we have placed our children and grandchildren on the tab for our comfort today. We should be ashamed. Yet, our shame should give us resolve. Resolve to end this now rather than allow it to linger.

I promise you the cumulative imbalance of debt will balance itself. We've delayed this balancing act for a decade now. We can't add much more weight to the rope before it snaps.

We've used medicine (more debt) to comfort the victim rather than seek a cure (debt destruction) for the illness. Anybody who has ever dealt with illness knows that the longer it lingers the harder it is to cure.

We will either willingly cure our debt crisis...or it will cure itself. You decide...real recession now...or deep depression later?

A date night with economic depression is not something anyone desires!

© Mark West

 

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Mark West

Mark West is Corporate Office Manager for Mechanical Construction Services, Inc., in Newark, Arkansas, and serves in an evangelistic preaching ministry. He is a devoted husband to his wife Kristy and father of three children. As a political analyst, he devotes his writing and speaking to the social and financial impact of public policy. Mark is a member of the Constitution Party, serving in public relations for Arkansas.

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