The Coming Economic Crisis

By Paul M. Weyrich | September 22, 2008 | 11:03am EDT
Judging from what I can tell of the current financial and economic woes of the nation, I am beginning to believe that this presidential election may be a “no-win” proposition – the loser might very well be the lucky one, indeed.
We always will have our economic downturns.  They basically are cyclical and we’ve suffered through many since World War II.  There is simply no way of getting away from them. 
Our current situation, however, is quite different.  This time the difficulties are not a few in numbers but entail a rather long list.  Neither are they simplistic but instead very complex, and I believe that they will take quite a long time, perhaps even a decade, to resolve. 
Instead of looking at a recession, we might very well be looking at a complete economic meltdown more global in nature rather than national, something that most of us never have seen.
The problems include a very weak American dollar; a trade deficit that will come to roughly $700 billion at year-end; the cost of foreign oil that has literally tripled over the past two years; possible trade wars with countries like China, which own sizable portions of our bond markets; a ballooning Federal budget that has gone from $2.1 trillion to $3.6 trillion in just eight years – a whopping growth of 75% (!); a national debt of $9.6 trillion, closing fast on $10 trillion with a debt ceiling placed at $10.6 trillion and which cost the American taxpayer $230 billion in interest alone last year; untold numbers of jobs that are being outsourced to foreign nations through Free Trade acts adding long-term pressure to unemployment; a nation which has maxed out on credit-card debt; millions of Americans losing their homes due to the subprime lending debacle; and last but not least tens of millions of baby-boomers now coming close to retirement, which will dry-up America’s tax base while adding huge amounts to Social Security  and Medicare outlays. 
A growing number of financial institutions including banks are tanking-out with government picking up the tab in bailouts and payments to depositors at taxpayer expense.  Bear Sterns, Fannie Mae, Freddie Mac and IndiMac and so many other big names, believe it or not, are only the early warning signs of what I fear is yet to come.
Neither presidential candidate, you will note, has done much talking about any of this either because he doesn’t have an answer; doesn’t want to give us the answers because this may only turnoff voters in the midst of a race for the Nation’s highest office; or is simply afraid of panicking the Nation, thereby adding fuel to the fire.  All reasons have some validity.
If and when this meltdown does occur, whoever is president, of course, will be blamed and blamed heavily for the crisis, taking his party with him.  But we should remember that successive administrations over the past 40 years all bear a share of the responsibility. 
Both government -- and we overly consumer-minded Americans as well -- must realize that we cannot continue to spend what we do not have nor receive that for which we refuse to pay.  Put simply, there is no free ride in this world.  And government at all levels, not only in Washington, has failed to understand this. 
Whoever wins this election had better be prepared to show some real leadership and be willing to take strong action immediately to save the Nation from what could be tantamount to a catastrophe. 
A good place to begin, I believe, would be freezing the federal budget and begin working toward some deep cuts and re-prioritizing expenses in favor of the Nation’s infrastructure.  Balancing our federal budget and making some headway against an out-of-control national debt are an absolute must.  There must be a return to sound fiscal policy.
Realizing that this could be political suicide for the new president, I can only say that he most likely will go down in history as the one who saved the nation.

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