Election Angst, Fearing the Future
Posted by Warren Peterson on November 8, 2012
Two days after the election and I am still depressed. I share “National Review” writer Victor Davis Hanson’s concern that we may have crossed the dependency line where more voters are takers than payers. We are headed down a slippery slope of out of control spending and debt without the political leadership or will to even seriously discuss a recovery plan.
This condition can go on for years, perhaps decades, Greece didn’t go belly up over night. But at some point, the economic system corrects itself. How? Two ways: inflation, the most insidious tax of all and/or default. Look to post WWI Germany and Argentina for examples. Economic Pollyanna’s hope for no pain alternatives such as growing the economy but this works only if we stop adding to the debt. Another is a technological breakthrough like super cheap and abundant green energy. Neither is likely.
Billions spent on the presidential and congressional races resulted in stalemate. The next milestone is the 2014 mid-term election. I saw on TV election night photos of five potential candidates for president in 2016. No wonder I fear for the future. There is hope for the so-called “Grand Bargain” that President Obama and Speaker Boehner almost agreed to last year. One blogger I found has an interesting post regarding the chance for rebirth of this compromise on spending, debt reduction and taxes. See: Grand Bargain II. Nevertheless, I am not optimistic mainly because reducing a $16 trillion debt on its way to $20 trillion requires a disciplined long term plan but Congress reconstitutes every two years plus fiscal discipline is not a natural trait of any legislature.
Some related, “I told you so.” Clear Fog posts: