The Miracle Of Democracy, Again.

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It would seem to many students of American history that when America is faced with dire tragedy, the people choose the leaders needed to overcome. America came face to face with a pending economic calamity just prior to the elections, and the majority of the people clearly elected the best of the candidates to take on the challenge. Just as Lincoln was the right choice at the right time to keep the United States united for posterity, the election alone is insufficient to overcome the challenge, but supporting the right leader through their term of office could be.

Lincoln had to marshal the resources of the people in the right way and at the appropriate times. And the people had to be willing to be marshaled. Such appears to be the unfolding of events today as America attempts to prevent itself from taking that next inertial step into an economy abyss. The American voters do not hold Ph.D's in economics. Most would not be able to read an economic graph correctly. But, the American voters had an enormous number of politicians to choose from in the primaries and the general election, and they chose the one candidate who understood the economic problem and was able to demonstrate to the people that he did.

To be sure, Pres. Obama's plan for rescuing America from the bankrupt condition of its financial institutions, from the potential default of its current government debts, and from the downward spiral of lost jobs reducing business, in turn causing more lost jobs, is being debated by political interests. But, as the polls suggest, the majority of Americans believe they made the best choice in November of 2008, and that Pres. Obama gets it as the people get it.

Most Americans are concerned by the prospect of actually being forced by a failing economy into first hand experience with bankruptcy. The American people understand bankruptcy. Not the legal details, but, the general circumstances of it. And with that understanding, they understand Pres. Obama's approach.

This is what the wise majority of Americans understand about our economic condition.

Our economic condition is not a lot different from a person who has stepped too far into personal debt. They have a choice to make. They can go further into debt, and commit a larger amount of their future income to their debtors, and work to increase their income as time goes by. Or, they can go bankrupt now, stop paying their creditors for lack of funds, and rely upon the mercy of their creditors, and the court to relieve them of their mismanagement consequences and whatever assets they currently have. Of course this latter option carries a long term penalty with it, aside from giving up one's assets and starting over poor like a kid out of high school. Years and years of carrying a bad reputation when it comes to credit. And as we all know, the majority of opportunities in this land absolutely depend upon a good credit rating.

This understanding by the majority of wise American voters of bankruptcy is very analogous to Pres. Obama's understanding of the perilous choice our nation faces regarding its economic condition. Pres. Obama understands that if the many financial institutions, which are insolvent due to their holding of collateral mortgages and other papers of questionable value plus cash as assets against debts which exceed their cash and collateral assets, go into bankruptcy, our credit markets will seize up. Pres. Obama understands that if our credit markets seize up, nearly all construction in America will halt, an enormous number of small and medium size businesses will be forced to lay off workers for lack of payroll cash, and unemployment will rise even faster than it already is, and our economy will grind to a halt.

Pres. Obama understands that if our economy grinds to a halt, not only will domestic private sector businesses be forced into bankruptcy, but government revenues will diminish far greater than they already have, and our government itself could face bankruptcy and default upon its interest payments to its creditors like the Chinese and Saudi Arabians, which in turn would kill any future prospects for America borrowing money going forward. And that would result in America being at the mercy of its creditors and the International Monetary Fund for funds to keep a minimum of government operations active like police, military, and other emergency services.

Pres. Obama understands, as do the majority of Americans, that our government and private sector financial institutions face the same choice the person who has gone too far in debt, faces. We can borrow more and keep from defaulting on our debts, or give up and give in to that debt, and rely upon the mercy of creditors for permission to start over from scratch as a poor bankrupt nation.

Now the political insider debate is over whether the American government should be going deeper into debt, or not, in order to keep the financial institutions and other businesses in America from bankrupting, and keep American workers employed or, give up and allow the American private sector and government to default on their debts eventually. The government would eventually default due to the economy coming to a near complete halt and the government having very few persons and corporations to collect tax revenues from, in order to pay its creditors.

Most Republicans and some blue dog Democrats (fiscal conservatives) argue we should not go further into debt and let the collapse and bankruptcy occur. And out of the ashes, some international corporations and domestic businesses which provide staples to those who can afford them, will begin to rebuild the economy as if it were 1783 and the American Revolutionary War had just ended.

Now, one has to ask the question, do Republicans and blue dog Democrats really seek to bring the American economy to a grinding halt? Is that their goal? Or, is it that these persons are so intently focused on defeating their political opponent's agenda to save the country in order to win power in future elections, that they fail to even consider the consequences of a failing economy in their aspiration for more power?

Fortunately, the majority of Americans understand the basics of bankruptcy and that the price of a failed reputation for years or a decade or more, is not worth the sacrifice of borrowing a bit more, paying one's creditors, and working diligently going forward to increase one's income to insure that one will eventually be able to pay off their debts and become prosperous again. The majority of Americans understand that paying one's creditors is the responsible course of action, even if borrowing in order to pay them is the only means to keep one's credit worthiness intact. The American people understand that America's credit worthiness is vitally important to our nation, our national security, our domestic tranquility, and our future prospects.

The American people understand that more borrowing today will cause limit some of the opportunities to spend and buy in the future as borrowing today means paying creditors for more years into the future. But, as long as we are paying our creditors, our creditors can continue to keep us employed, and we can continue to earn an income, work to increase our revenues, and work toward the dream of being out from under our debt one day in the future, instead of allowing that debt to take all we currently have, and force us into starting over again as a poor and bankrupt nation.

President Obama gets it. The American people get it. They get it because they are not blinded by dreams of political power in the future to fashion in America according to their agenda. President Obama and the majority of Americans already have the power to keep our American dream alive and out of the clutches of our creditors who would foreclose upon us if we defaulted on our debts today.

To be sure, those who argue for default and not borrowing to pay our creditors today, will themselves spend and borrow to plaster misinformation, lies, and half truths to serve their political ends, and persuade the American people that they don't get it, that they made the wrong choice in Nov. of 2008, and that paying our creditors and working to increase our revenues going forward is the wrong path to follow. I for one, looking back at history, do not believe such efforts to persuade the American people they made the wrong choice will be successful.

Our great presidents elected by the wisdom of the American people, who led the nation out of peril and threat, to a person were less than perfect presidents. Each in their own way made mistakes, even grave ones such as violating our Constitution as in the cases of FDR, and Abraham Lincoln. Despite their errors however, they led this nation to overcome the threat and challenge of their day to America's future. And they are our greatest presidents.

In times of great peril and challenge to our future, the American people have demonstrated an inordinate capacity to elect a leader to assist them in overcoming such perils and challenges. This time of peril and challenge appears to be no different. And so far, Pres. Obama has shown promising signs of becoming one of America's newest great presidents in history, to the credit of the majority of American voters.

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This page contains a single entry by David R. Remer published on February 28, 2009 8:03 PM.

Congressional Reliance Upon Industry Experts was the previous entry in this blog.

Myth: Homeowner Borrowers Are At Fault is the next entry in this blog.

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