What I Noticed in Passing….
“The lowest ebb is the turn of the tide.”
In the closing line of his poem, “Loss and Gain,” Henry Wadsworth Longfellow crafts a remarkably intimate sense of outcome. In the grander sense of his complete verse (which I include below), his words refine the totality of possible error to which one may be a risk if looking only to the past as a mechanism for predicting the future.
Although I tend to favor an outlook akin to the optimist and it is fair to suggest that H. W. Longfellow may as well still he does say: “…is the turn of the tide.” offering no characterization of what follows the “turn” only that it will. This of course is one of the many possible interpretations and perhaps we can agree that mine is, if only for the purposes herein, reasonably reliable. Still, I believe the Nation has not yet seen the full inertial draw of the tides reflux; our collective horizon suggests continued moderate to severe flooding in our future.
Let’s for a moment or two, pursue a gentle query on the metaphorical phenomenon of “The lowest ebb…..” by juxtaposing the idea with the following: Does this notion of ebb and tide lead one to wonder if the lowest ebb occurs only once your feet touch the bottom and you no longer have to tread water or only after the tyrant of inept government drowns under weight of its own anchor and will there be sufficient cause in remains to raise and repair the salvaged hull. This too remains unclear.
The point of this exercise is simply to conjoin a variety of observations in an effort to illustrate what many Americans seem to be figuring out all on their own. I believe that as a Nation we may be trapped in The Ebb of Decline and however one chooses to resolve what seems to be an unrelenting issue I do believe I’ve managed to craft a routine, metaphorically speaking, that manages to describe our common perspective:
“Something very dreadful is going on and it seems to be getting worse. We’re not quite sure what it is, we don’t quite know why it is, we think there should be a way to fix it however the people charged with making sense of the mess they’ve created don’t seem to have a clue about what the mess is, why the mess is and how to go about undoing what it is they’ve done. What we do know is there’s an awful lot of chatter surrounding something no one seems to know anything about but they’re sure spending a lot of time making sure they preserve their ability to get reelected so they can keep doing whatever it is that they do even though no one seems to know what that is!”
The Federal Government, and many of the fifty States, is engaged in aggravating what will become the American post-ebb era. An outcome is most definitely assured although at the moment it is not entirely clear what type of wave it will be. One thing is clear; the consequences of past errors in judgment have accumulated and they’ve come calling for their just due. What is also clear to most is that Congress and the President will do everything in their power to avoid facing them head-on.
At the time of this writing Congress was merrily pistol-whipping one another with various kick-the-can over-the-cliff scenarios. Over the past few months I’ve offered a fairly uniform prediction of what I considered would be the likely outcome. I suggested that it would be a politically survivable response that would split the debt-ceiling increase in $1 Trillion increments tied to slightly greater projected cuts. The second installment would be tied to commission-mandated reductions none of which will occur until after the 2012 election however expect no mandatory enforcement mechanism. Expect cuts to be projection based estimates in the neighborhood of $2.4 Trillion. I confess that I was being a bit sarcastic with my prognostications and I never truly considered that I might be so close to being accurate. To be quite honest, I rather hoped to be dead wrong.
In the end, sadly enough, it doesn’t matter whether I am an effective soothsayer or not for the simple reason that there’s no escaping the reality as it is regardless of what I say or for that matter whether or not anyone agrees with me. Here are just a few of the unassailable facts and its high-time someone start paying attention to each of them:
Source for the following: CBO, U.S. Treasury, I.R.S. and/or Federal Reserve
- 2011: Federal Debt is $14.5 Trillion and growing.
- 2015: Federal Debt is projected to be $23 Trillion.
- 2011: Federal Deficit is $1.4 Trillion.
- 2015: Federal Deficit is projected to be $2.3 Trillion.
- None of the Projected Debt or Deficits include the effects of implementing Obamacare whose latest projections now suggest that by 2014 will add $195 Billion with as much as 8-11% per year growth through 2035.
- Unfunded Federal Mandates are at $112 Trillion and growing.
- Federal & State Government spending (including debt service costs) accounts for 59% of the U.S. GDP and it too, is growing.
- 2011: Annual Net Interest on Federal Debt is projected to be $397 Billion.
- 2015: Annual Net Interest on Federal Debt is projected to be $585 Billion.
- Based on 2009 Statistics: Even if you doubled the taxes on the so-called “rich” at best it would generate $440 Billion and barely enough to pay the interest on the Federal Debt.
- Over each of the next 10 years the following spending mandates will occur: Defense Spending: 2.3% per year. Medicare Spending: 7% per year. Medicaid Spending: 9% per year. And, Social Security: 6% per year.
If you’re counting, that’s no less than an average of $536 Billion per year for these Four Entitlement Programs combined and yes, I consider Defense Spending to be an entitlement program (more on this point some other time.)
Now then, armed with this information, you must ask yourselves two very important questions:
A. Is cutting a meager $2.4 Trillion over a 10 year period (that’s $240 Billion per year) anything other than completely meaningless? Let me put it to you another way and let’s see if it clarifies the intended point. You’re on the Titanic and I offer you a tea cup. Attached to the handle of the Tea Cup, by way of an intricately woven piece of twine, is a small pamphlet. The title of the pamphlet reads as follows: “Emergency Bailout Device – Turn page for detailed instructions.”
B. Without a strategic plan for reformulating the U.S. Economic Engine and Gov’t spending practices, does anyone really think the U.S. Economic Outlook will improve? Unless you’ve got bailout-friendlies in the White House, The Fed or have ties to Messrs. Frank, Schumer, Rangle or McCain, don’t count on it.
I’ll toss one last sign of the times and let’s see if the image further clarifies: Apple reports cash reserves of $76 Billion yet I am not able to find a single item in their product line manufactured in the U.S. – so much for the refining attributes of Globalism! General Electric, one of the top-ten largest U.S. Companies paid ZERO taxes in 2010 – seems as though the U.S. doesn’t have the highest corporate tax rate after all now does it!
And then of course there’s the brooding tax the rich mantra. How perfectly ignominious can one get. The answer is not to tax productivity, the answer is to tax non-productivity so that you force revenue creating in abundance by forcing non-productive income into domestic productivity cycles and then and only then can you appropriately tax revenues! I’ve written several books and articles on this subject so please do take the time to read more on my tax and revenue generating strategies; I believe each of them to be worthy of the effort.
As is always the case, the answers are there, the solutions abundant and we do possess a choice of outcomes. We are a Nation stuck in the Ebb of Decline and for whatever reason we have not yet cleared our senses sufficiently to realize that what we are breathing is not air at all but the structural equivalent of water. Perhaps even more bewildering is that it’s our own government creating the flood. The further out-to-sea we drift the more severe the current and distant the shore become and I see little to convince me that, as to a best possible outcome, the current direction-of-choice mirrors what American’s had in mind.
Loss and Gain
~Henry Wadsworth Longfellow~
WHEN I compare
What I have lost with what I have gained,
What I have missed with what attained,
Little room do I find for pride.
I am aware
How many days have been idly spent;
How like an arrow the good intent
Has fallen short or been turned aside.
But who shall dare
To measure loss and gain in this wise?
Defeat may be victory in disguise;
The lowest ebb is the turn of the tide.
Curtis C. Greco, Founder