Wednesday, June 4, 2008

Tough Times Coming (Part I)

One of the reasons there will most likely be tough economic times coming is that for the past 30 years, six presidents and Congress have done little in those problem areas listed below. Obama now promises “change”, something that every president promises but rarely delivers.

What we as voters must do is make sure “change” really does take place. We can no longer have business as usual if we are to survive as the nation we believe we are. We must hold our representatives in Congress and the statehouses accountable. We must pin down the presidential candidates regarding specifics – what will you do to make this country energy independent, for example?

Obama gave a rousing speech in St. Paul on Tuesday night, filled with platitudes but no specifics. He and McCain must give specifics, and then we the voters must hold them to it. We may not like some of their solutions to these problems, but we as a people must be willing to make sacrifices for the common good. We can’t go on as we have been. These problems must be fixed now – we can’t wait any longer.

I’m not usually a pessimist, and I’m definitely not an alarmist.

However, I am not at all optimistic these days because of some of the things I see happening in this country and in the world.

I believe there is a convergence of a number of trends, that when taken all together, could possibly result in a severe economic crisis in our lifetime.

· The high cost of energy, which causes everything else to become more expensive;

· The higher cost of food, resulting from both higher energy costs and the diverting of corn and wheat to the making of ethanol;

· The higher costs for other things, reducing people’s buying power and creating the risk of inflation;

· Our dependence on foreign sources for oil, with the risk of serious disruptions in supply, with not enough domestic supply to fall back on;

· Disruptions in the oil supply could result in disruptions in the food supply and other critical items that are transported by truck;

· The unfavorable trade balance resulting from importing about 60% of our oil and buying so many foreign made products;

· The offset to this unfavorable trade balance is significant foreign investment in the US, which if pulled out, would have devastating economic consequences.

· Our continued exporting of jobs overseas, which results in either unemployment or under-employment (again reducing buying power);

· Running a huge federal budget deficit, which is unhealthy for the economy and limits what the government can do to help get us out of a recession;

· The large national debt, which will cause hardship when we start to pay it down;

· A social security problem that, when finally addressed, will cause taxes to go up significantly;

· A deteriorating and often inadequate infrastructure (roads, electric grid, bridges, etc.) that will cost a lot to fix because of decades of neglect (and the money that was supposed to go into funds to pay for upgrades was diverted to other uses by our politicians who used them to pay for their favorite projects instead of the purposes for which they were intended);

· Instability in the Middle East, with all the risks that it implies.

I’m not saying these things to scare you, but to prepare you spiritually and emotionally for what might lie ahead in the not-too-distant future. More on this in a future post.

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