LETTER FROM WISCONSIN Dear Uncle “No matter how hard you try, you cannot whiten your teeth in one day”- an analysis of US public debt In Nov, 2009 as I feverishly prepared for my 20th high school reunion of my class from that great school, I felt that as the Head prefect of my year, I should show up with a bang, more like the most successful person of my group. But as I was barely able to meet the minimum amount of contribution required, I had to rethink my strategy. Now with my pentagonal based-pyramidal head (balding at the time), rotunda body coupled with two crooked front gap teeth and knocked knees to match, I also was very much aware that, I would be overmatched in the beauty department. Then suddenly a brilliant idea chanced in my head, more like an epiphany!! I would show up as the guy with the whitest teeth. Off to Walgreens pharmacy, where I secured 1500 strips of CREST whitening strips at an astronomical cost. I must confess that my teeth still remain off-colour after four years of religiously applying these strips. It must be obvious to even the uninitiated that after collapse of Communism, Capitalism appears not to be far behind. It is becoming increasingly clear that the concept of Capitalism is one big giant glob of a Ponzi scheme. One prime example of this is the US public debt which borrows money from new people and pays to old borrowers at interest rates and the whole thing continues to circumnavigate as a boomerang till it finally falls apart. The problem is that the whole world has been sucked into this complex system of thievery and trickery that no one is immune from its deleterious effects. In effect, there is no use even storing your money under a mattress because it still will lose its value when this whole ‘magic’ process begins to fall apart. And as I see it, is only a matter of time. When Tea Partiers become overly obsessed with the Federal Debt to the extent that they continue to hold the whole country hostage, it is worth educating people that the United States has held a public debt its inception in 1776. And as a matter of fact their so-called Conservative Party has contributed more than enough of their fair share to this debt. Why the sudden realisation of this fact to these people stay remains a mystery to me. Let us examine some facts The US started incurring public debt in 1789 after the American Revolutionary War. Its debt at that time was 75,463,476.52. The debt then increased exponentially to about 2.7 billion dollars at the end of the Civil War. The debt has since increased exponentially in times of wars and recessions like the current Great Recession. To better understand this whole scenario, it will be prudent to compare apples to apples and hence comprehend the concept of debt to GDP ratio. The debt to GDP ratio was at its highest at the time of President Truman and stood at 117% mainly explained by the cost of World War II. A careful analysis of the trends clearly shows that Democratic presidents have reduced the debt to GDP ratio compared to Republican presidents. As an example the debt to GDP ratio in 1980 at the end of Jimmy Carter’s era was 26%. Then my idol, Ronald Reagan was elected and enacted deep tax cuts but refused to curtail spending by experimenting with Star Wars and amassing military arsenal while all the while continuing to expand the Social Safety net: at the end of his governance the debt to GDP ratio had increased from 26% to 40.9%. No wonder his Excellency, the former Vice President; Dick Cheney retorted that “Reagan proved that deficits don’t matter.” His successor also a Republican president, George Herbert Bush also increased the ratio to 43%. When Bill Clinton finished his term, the economy was on to a healthy surplus and the debt to GDP ratio had decreased to 33%. In fact the National Debt Clock was turned off in 2001. Lo and behold the neo-conservatives took over and gave new meaning to what I call “let us blow the dough”. They cut taxes twice, fought two wars and hid the cost of the War in a supplementary budget and expanded Medicare D at great cost. At the end of 2010 the GDP to debt ratio had increased to 62% as a result of their accounting gimmicks. So when the ‘Kenyan-born’ Obama came in he did exactly as his predecessor had done and that is “lets blow the dough” till is no more. And suddenly from nowhere some “Sanctimonious Historically Inaccurate Tricorner Hatted Egotist And Dimwitted Simpletons” (SHITHEADS)-acronym borrowed from NPR not mine- are crying foul of the public debt and how dangerous it is for all the Universe including planets yet to be discovered. Here is my take on it. When running a Ponzi scheme, you need to portray confidence lest the whole shit blows up. It has taken us over 200 years to amass 17 trillion dollars of debt. Let us agree that it will take us another 200 years to slowly pay this debt. There is no need to advocate for precipitous cuts in budget at the time when the effects of the ‘Great Recession’ are ongoing. This year alone the deficit to GDP is at its lowest in years. To wit it will take time to fix this mess of a Ponzi scheme for no matter how hard you try, “you can never whiten your teeth in one year”. Your yellow tainted-teeth nephew Lionel Lloyd Ludwig Van Berko
Posted on: Mon, 21 Oct 2013 13:20:20 +0000