Economic Tsunami

An economic tsunami is fast approaching this country as we continue to amass record debts due to the reckless spending and tax cutting. The last four years has seen debt rise faster than anytime in the history of the U.S. The total debt (public and private) of the U.S. has gone over $40 trillion and that breaks down to $136,479 for every man, woman and child in the U.S. The ratio of total debt to GDP is now almost 400%. To put things in perspective, the ratio of total debt to GDP had reached 150% in 1929 before the Great Depression. Just prior to Japan's collapse of the 1980's, the ratio of total debt to GDP reached 250%.

For years the GOP has called democrats tax-and-spend-liberals. Well at least tax-and-spend implies a certain degree of responsibility; after all, if the government is going to spend money, should it only do so if it raises the money with taxes. The GOP has adopted a policy of tax-cut-and-spend which has ballooned the deficit by irresponsibly spending money on programs for which there is no funding. Clearly, the GOP has become the party of big government and soaring debt.

What’s doubly amazing is that Bush has run up record deficits and then tells the world that the U.S. government is not a reliable investment in direct violation of the Constitution. The Constitution reads:

(Amendment XIV, Section 4): "The validity of the public debt of the United   States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned."

Bush has called into question the U.S. Treasury bonds held in the social security trust fund by calling them “worthless IOU’s”. This is a direct violation of the Constitution and his oath of office and has served to weaken the integrity of U.S. debts. The social security trust fund holds the same U.S. Treasury bonds backed by the "full faith and credit of the United States" that we sell to foreign governments. If the President of the U.S. is calling our debts “worthless IOU’s” why should other countries continue to finance us? If someone is trying to sell you an investment, and told you they were “worthless IOU’s”, would you invest? Why is it important to maintain confidence in the U.S.’s ability and willingness to repay our debts? We have now become the world’s largest debtor nation and without continued foreign confidence that we will repay our debts, the holders of dollars abroad will start selling their dollars. The result could be massive fleeing from the dollar as the price plummets. The dollar would become nearly worthless on world markets.

If the dollar becomes nearly worthless in world markets, the U.S. will no longer be able to afford to import the vast quantities of oil necessary to keep our economy running. Due to the shortsighted policies discouraging conservation and alternative energy development and encouraging wasteful consumption (for instance Bush's removal of the $2000 tax credit for buying a hybrid car that gets 50 mpg and the addition of a $25000 deduction for buying a Hummer which gets about 10 mpg), we are now almost entirely dependent on imported oil for most of our energy needs. The gas lines of the 70's will seem like a walk in the park. This economic tsunami will sweep through our economy. The transportation system will not be able to distribute food and other goods without gas or diesel. The economy will not be able to function without the massive infusions of foreign oil. Industry will largely grind to a halt. Jobs will disappear. It could be a grim time indeed unless you have taken steps to protect yourself and your family.