The Kobayashi Maru of American Capitalism

It really is what this economic crisis is. It is a no win situation. There is no way to pilot yourself out of it and save the ship.

Our debt levels prevent us from instituting the New Deal style works programs necessary to weather the storm, our culture makes it impossible for us to move dollars from defense spending into domestic spending at this time, we have a large generation that will be pulling assets out for retirement.

1) Debt levels. The credit card is maxxed out. We can't really borrow our way out of this mess. We can only run trillion dollar deficits for so long before other countries become doubtful that they will see a return on their investments. Not even taking into account US corporate or consumer debt.

2) Military industrial complex is a significant portion of our economy. 651.2 billion for this year including the wars in Iraq and Afghanistan. The need for a very large military has been sold so well to the populace over the past 60 years that it is politically impossible to make cuts in that spending and shift it to domestic investment. If anything the budget will be increased even though we can't afford it.

3) Baby boomers retiring. A large amount of stocks in this country are held in mutual funds, pension funds, 401(k)s, IRAs etc that will all start to be drawn down in the next 10 years. The stock market is a market so as these assets are drawn down they will need a buyer. This money is not in cash. The value of our stock market will decline as retirees pull their assets that they have saved their entire life. It would not be a problem if we had a generation behind them making similar wages that would be investing. We don't, wages are decreasing and with that so will investments. This is not to even include the time bomb awaiting us in Medicare and Social Security with lower paid workers replacing higher paid workers leading to less revenue.

I could write more on structural problems in the United States both politically, socially, and economically but these 3 issues will be the biggest killers of our way of life.

Essentially we are staring into the same future the Soviet Union faced under Gorbachev. A bloated empire without the political will to do the things that were necessary to save itself.

The big capitalists are transglobal companies that will move manufacturing and labor overseas to avoid wage laws, taxes, and environmental rules in order to save a buck.

Company A wants to make a buck so they shift the manufacturing to China or Mexico to save a buck, thus screwing the American worker while benefiting the American CEO or Board of Directors.

Savings in this country have to go up. Probably to 15 - 20% of earnings like other countries.

Spending on the military has to decreas. $100 billion / year would be a good figure. This can be achieved by closing all bases around the world, bringing all troops on foreign soil home, and reducing spending on weapons systems.

Baby boomers can't retire early, and probably not at 65. Those who can, will have to continue working.

Medical expenses of 16% of GDP cannot be afforded. Health care needs to be cut by a fourth or more to 12% or less. Health care insurance re-imbursements should not be made for unproven procedures, non-generic medicines, and medical devices that are not proven effective.

None were politically popular, which is where we get tripped up.

No politian will get elected on the platform you have stated above.

It is the cultural problem, making sacrifices for the common good is not popular in America in 2009

As for baby boomers continue to working, they can't unemployment is going to reach 15% within a year.

The United States is no longer in a position to live beyond its means.

It has lost its economic superpower status.

It will soon lose its military superpower status because it is unaffordable.

Millions of people who thought their economic future was secure and have been handed pretty statements showing lots of money are going to wake up to the reality that their future isn't that secure and the prospects of continued employment is not assured.

The people will turn on the leaders.

Assuming people will react in a sane rational way when this reality sets in, is a bad assumption.

The establishment is in firm control of the political process and will achieve a slow transition.

At worst we would have a Deng Xiaoping or Vladimir Putin. Not a Stalin, Mao or Hitler.

that they can't do this orderly. They were doing so good for 30 years but the greedy fuckers can't help themselves. They went nuts with the mortgage and credit card thing. They had willing victims that they could feast off of for years but they went crazy with the ARMs and 30% interest rates.

All of the establishment's wealth exists on one place. Paper. The parasite started to believe a little too much Ayn Rand. All those mortgages they hold and the property they will hold will be worthless if they don't have tenets to pay them. All the corporations they have will be worthless if they don't have consumers to buy their goods. The banks will be worthless if they don't have people making deposits. The stocks will be worthless if they don't have pension funds and 401(k)s pumping up their value.

The establishment is fighting amongst itself right now over who gets to be king of the crumbling empire and trying to aquire as much worthless paper as they possibly can. The only place their wealth exists is on paper.

Remember a house that was worth $500,000 is now worth $300,000. Their assets are about to take a nose dive as well and oh yeah, they've been financing their shit with debt as well.

This collapse will not be a slow march it will be a fast sprint to destruction than chaos than rebuilding.

FDR saved the fuckers from themselves by making rules for the game that wouldn't allow them to crash the entire nation again like they did in 1929. They spent 60 years unwriting those rules and they crashed the nation again with their greed.

And get the top marginal tax rates to the point that those that have been siphoning off the nation's wealth and hoarding it themselves are forced to pay it back and get more balance back into our economic system.

The question though is do we have the political will to force politicians to do this for our votes.

The propoganda by the corporatist concerning government, from regulation to taxes has left us in a bind.

Its not a question of whether or not there are solutions. The question is can anyone in the current political environment pass them. My answer is no. 60 years of propoganda is about to bankrupt the nation.

There were ways the Soviets could have saved themselves from collapse in the 80s. The problem was it was impossible to do so politically within the Soviet political system. Any leader who tried it would disapear because people were totally trying to maintain an old dying system. The result was their empire collapsed.

The 401(k) and allowing pensions to invest in stocks has allowed these fuckers to justify their salary by pumping trillions into the stock market.


Getting Social Security was important to them because it would allow for a new source of investment to pump up stocks. They didn't get it. They are still trying to hold onto their $100 million dollar salaries. It won't last long because the assets won't be there to pay them.

Much of our wealth exists on one place. Paper.