Ever heard of Vertical Democracy? Did you know America's democracy is termed a horizontal democracy? If not, you are missing out on world history in the making, as America will, by its political structure, lose ground against China. I highly recommend to those who wish to catch up on this history in the making, and peer into the future, John and Doris Naisbitt's new book, China's Megatrends, The 8 Pillars of a New Society.
Failure in Washington is not an option. America last year finished its long circular journey from 1940 to return to the precipice of national collapse. Unlike 1929, however, instead of taking that next drop off step, we sidestepped along the edge of the precipice, where we still remain today; at the edge.
CNNMoney.com just put out a revealing article on waste in our health care system. The accounting firm of PricewaterhouseCoopers' Health Research Institute latest research states about half of our annual spending on health care in America is wasted dollars. They found 1.2 trillion dollars in unnecessary and wasteful spending. Over testing and claims processing account for $420 billion dollars of wasted dollars each year.
Congress is working on reforms to be applied to the credit card industry. Good. They need it. But, when it became clear that the government was going to bail out floundering corporations, did credit card companies begin to make themselves insolvent in order to get in line for tax payer dollars? With a few exceptions, the credit card companies did not begin to shut down consumer credit until government handouts were known to be coming and the recession underway.
Deficit spending by the federal government, (spending beyond the budget year's revenues), has at various times in our history been essential and necessary. Necessity has been defined as insuring the integrity of the nation, as in World War 2, or, insuring humane conditions for the American people, as in the Great Depression or Dust Bowl era. Defining essential and necessary deficit spending is not difficult. Defining non-essential and unnecessary spending is a highly improbable endeavor for our American system of government. Therein lies the economic threat going forward. A potential solution sits idly in Congress.
If America doesn't pursue Pres. Obama's agenda, there is no agenda to follow to meet America's crises and challenges. And if there is no agenda to follow for the next 4 years, America will fail. This is a reality of current events which critics of Obama and his administration refuse to acknowledge, rendering all their criticism irrelevant. Let's examine the veracity and logic of these statements.
This afternoon, at his televised California town hall meeting, Obama said he knows folks are angry about the AIG bonuses. He said he is angry about them. He says blame is flying everywhere, at Treasury, Democrats, and Republicans. He said if folks need to blame someone, blame him. He said, ultimately, I am responsible. I am the president. All well and good as far as it goes. His words, however, don't allude to the depth of the first major black mark on his presidency.
A number of folks are trying to affix responsibility for this recession and financial crisis on home buying borrowers. That is illogical, and here is why.
First, for as long as there has been credit, a couple thousand years at least, it has been the lender who bore the responsibility for the quality of the loans they chose to issue. It is the lenders with the experience and mathematical expertise to assess the credit worthiness of potential borrowers. Not the sharecropper, cobbler, or Indian Chief. In a society which functions along lines of specialization of labor, it is the creditors specialized in assessing risk, not their potential borrowers.
Back in 2006, I wrote at WatchBlog, of a coming market and economic downturn and warned 401K investors that 2006 was the time to start unloading stocks from their 401K's. If you followed that advice, transferring funds from stocks to bonds and fixed funds, your 401K is still intact, and you made money in the interim. I am pleased to now write it is time for 401K investors to start transferring fund balances back into stocks. I don't have a crystal ball. I base this recommendation on Fortune Magazine's chart, Warren Buffet's wisdom, and my own education and experience in economics. Details follow.
Debate on the House floor regarding the proposed 825 billion dollar economic stimulus and investment package demonstrated that most Congress persons haven't read it, even fewer understand it, and none can provide any rational assurance it will have the intended effect. Yet, they debated with misinformation, deceptions, and prophecies as to the outcome of such spending. It is necessary to lay down some facts, even if our representatives are bereft of them.
