It doesn’t take a genius to see the problem with spending your way out of a debt crisis (the geniuses, in fact, seem to be blind on this one). The idea that an ever-increasing level of spending can make a nation more prosperous (and keep it that way) is clearly ridiculous.

In an article posted today on CNN Money.com, entitled “Is the Fed out of bullets?”, the following quote appears:

"Whenever the next recession comes, it is very important that policymakers have had the opportunity to reload their gun to fight the downturn," said Lakshman Achuthan, managing director of Economic Cycle Research Institute. "Today it's not clear that there's a lot more policymakers can do."

What is he saying? The Sheriff is out of ammo. This is hardly surprising, but it is very bad news. With our national debt so high that even Alan Greenspan thinks we’ve hit our limit, the futility of our national policy becomes evident to everyone. Everyone except the career politicians in Washington, that is. With each administration vying to outspend its predecessor, it’s hard to tell one party from another (though one offers us unaffordable foreign wars while the other concocts unsustainable social programs).

Of those who still think we can spend our way out of our mess, some have cited Japan as an example of such a policy in action. It’s too bad for them that in Japan they have come to the conclusion it isn’t working.

Ever since the early 1990’s, when Japan’s “miracle” economy stalled, unemployment started to grow and stagnation became the order of the day, Japan has been furiously borrowing money to spend, in an effort to return to their glory days. Unfortunately, no amount of money can make a super power, economic or otherwise, out of a has-been. The money has been spent (on social programs mostly) and now Japan has a national debt equal to twice their gross domestic product. There really isn’t a way out for them other than repudiation of the debt and severe trimming of their social programs.

Japan is in a place we do not want to be. Where Japan is, however, is where we are clearly headed, and only a few short years lie between us and that destination. For us, though, the problem will be much worse due to mostly foreign holding of our debt (about 95% of Japan’s debt is domestically held). When the cost of our borrowing rises (it will) and holders of our debt become concerned with our credit-worthiness (they already have), and the costs of our programs spiral out of sight (they did that a while back), we will have the perfect storm.
“The foolish man … built his house upon the sand; and the rain fell, and the flood came and the wind blew, and beat against that house, and great was the fall of it.”

I’ve been out around the neighborhood a lot recently, knocking on doors and getting to know people. It seems that everyone I meet wants a change in Washington. And it’s not hard to see why. Many more people are loosing their homes to foreclosure, unemployment is still hovering around 10% and government deficit spending, a major contributor to the problem, continues at a record pace.

We stand on the very edge of a major economic melt-down, similar to what is already happening in Europe, where high expectations on the part of the people as to what their countries should do for them and low expectations on the part of the same people as to what they should be doing for their countries, have made a huge mess of things.

We’re heading for the same place for the same reasons. The poor don’t want to work, the working people want to live like kings, and the wealthy want no-risk gambling for themselves. Did I cover everyone? This is a crisis of expectations more than anything else. We talk about how rich America is without realizing that all wealth is finite and perishable. Wealth is created, renewed and sustained by work, and a population unwilling to work reduces the wealth of nation. For America to continue to lead the world in Freedom and Justice, we must lead the world in work.

 So what would I work towards if I were Representative for Missouri’s 3rd Congressional district? Balancing the budget is a must. How? Let’s start trimming the Federal budget:

-       Cut all non-military salaries by 10%,

-       Switch from pensions to retirement accounts funded by deductions from salary

-       Raise the retirement age for those with pensions to 65

-       Trim each department’s budget by 20%

-       Withdraw the majority of our troops from Iraq and Afghanistan. 

-       Raise Social Security early retirement to 67 & eliminate cap on contributions

-       Eliminate the earned income credit

-       End franking privileges for congressmen

-       Suspend implementation of new health care law for 10 years

Then let’s increase revenue:

-       Institute temporary federal sales tax on electronics, alcohol and all interstate sales (dedicate receipts to debt reduction)

-       Help cover homeland security costs with temporary fee on incoming visitors

At the same time, let’s take some concrete steps to create more employment.

-       Dialogue with industry leaders to build American manufacturing

-       Encourage cottage industry and individual initiative; ease self-employment rules

-       Give incentives to small business to hire and retain employees

 All of the above ideas are necessary and important to building a stronger, better America and the sooner we get started, the better. You can help. Please contact me at 314-504-6692

 or campaign2010@edwardcrim.com 

or 

Citizens to Elect Edward Crim 

7019 Mitchell Avenue

St. Louis, Missouri 63117