It seemed counterintuitive to inject another layer of costs onto a system that by and large was already working, but of course deep wallets kept paying for the message to lull everyone into thinking this was a good time.
In the United States today, cash flow, like water, seems to finds its way into only the deepest pockets. What drove most of the frenzy behind the mortgage collapse, besides the insane concept to consume more based on never-ending equity increases? The capitalization of mortgage payments into asset-backed securities so that Wall Street could feed off that cash flow to create even more wealth for the already wealthy, and get towns in Norway looking for a slightly better investment vehicle to pay them for putting together all these asset pools.
Why would towns in Norway do that? Because, prior to the mortgage meltdown, Americans would do almost anything to not get behind on their mortgage. Everyone believed the safest cash flow stream around was American's paying their debts. Most of the world still believes that because we are now by far the world's largest debtor nation.
So the question is why do we owe so much money? Because like a lot of the people caught in the mortgage meltdown, we as a nation have made promises we cannot keep, while somehow convincing the world we would find a solution. Can we keep those promises if we so choose?
The answer is, yes, but at a much higher cost than we currently pay. Higher taxes are only part of the solution. with reduction in entitlements to a more affordable level being even more important. Even if we could find a way to eliminate all government waste and obvious "pork", rein in public employee costs, and reduce the unfunded pension liabilities, it still wouldn't make a dent in our public debt. No matter how much some people may want us to believe that cutting all those items will balance the nation's budgets, they can only nibble away at the margins.
Continuing to improve our national savings rate, already improving from a negative savings rate in 2007-2008, will help too. How do we achieve that? By consuming better, by making every dollar we spend go the farthest. By consuming only when we have the money to spend it, which many have already been forced to do because there just isn't an easy way to get credit any more. This helps because with less debt we are less susceptible to the effects of inflation.
More thoughts on this later, but we need to stop vilifying public employees, because they are not the enemy. They are our neighbors who provide the services that many of us do not have the skill set to provide, nor the desire to work at day in and day out, yet we want all of those services provided without question.
3 comments:
Do you think people are vilifying public employees or the unions?...I would say the unions.
I believe it is both, because of the perception that public employees are getting something for nothing.
The unions were just as guilty of making promises that could not be kept, but they did negotiate based on the information available at that time. They tried to get the best deal they could for their members, if only because this made it easier to collect dues from their members.
Is there a continued need for unions? Maybe so, but that is a question for another day.
It's petty and the politicians/public needs to focus on the bigger picture. We need not be brats about this. There are much larger forces fucking us up at a much larger scale than the public employees or their unions combined.
How can we successfully break the promises made to those on Social security, and successfully raise the taxes (even much more so on the richest in this country)?
Those are two of the most important questions of now a days.
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