“WE’RE IN AN AWFUL MESS! THERE IS NO WAY WE CAN GET OUT OF THIS! IT’S JUST A MATTER OF TIME BEFORE SIXTEEN TRILLION DOLLARS OF GOVERNMENT DEBT, ALL BEING SPENT WASTEFULLY, RUNS THE NATION INTO AN END THAT IS TOO HORRIBLE TO CONTEMPLATE AND THIS WON’T CHANGE UNTIL OBAMA AND HIS LEFT WING DEMOCRATS ARE OUT OF THE WAY SO WE CAN FINALLY CUT SPENDING, CUT TAXES AND LET THE ECONOMY GROW ON ITS OWN LIKE IT IS SUPPOSED TO!!!
AND IF ANYBODY TRIES TO SAY ANYTHING CONSERVATIVE, THE MEDIA JUMPS ON THEM LIKE THEY WERE THE HUNDRED YEAR PLAGUE!!!!!”
So say all of my conservative friends, and, goodness knows, they may be right. It is for sure that they will get a chance to be proven right because the next few years will feature draconian cuts in entitlements and just about everything else they want. When the pattern of social mood turns back down and the bear market resumes, the crowd will scream for pulling in our national horns and they will get it. This happened in the thirties, and it will happen again this time, but on a grander scale.
Too bad, I can’t find any instance in history where a nation “conserved” itself out of an economic funk. Can’t do it. Conservatives will say that government spending inhibits growth in the private sector. I’d like to know how cutting back on ordering helicopters for the military and buying school lunches for poor kids crowds out private enterprise. But socionomics tells us that after going too far in the direction of expansion, the nation will become overly conservative, cut spending, exacerbate the depression, and insure that the debt we already have will go into default.
Fear is what promotes the irrational idea that cutting spending and cutting taxes will enable the nation to pay off its debt. I realize that it is counterintuitive, but we need to be taking risks here.
Think of it, The United States Government can borrow all the money it wants at almost zero interest and take thirty frickin’ years to pay it off. We could use this money to retrofit all of our antiquated airports, rebuild all of our crumbling infrastructure, maximize the nation’s internet connectivity, all done by hiring private companies to do the job. We could hire thousands of teachers for early education, demonstrably the best time to fit kids out for lifetime learning. We could underwrite hundreds of thousands of higher education scholarships for qualified students.
It would be a grand gamble, but, chances are by the time those thirty year bonds came due, the nation’s GDP would be three times what it is today, generating tax revenues to put the nation’s finances in permanent surplus.
There are times when going for broke is the only way. My favorite story about this kind of move is probably apocryphal, but it tells well: One Friday, early in their startup, the guys at FedEx were almost out of cash. To make payroll, they flew to Vegas and gambled all night with their last fifty thousand dollars. Luck was with them, they made payroll, and you know the rest.
Socionomics posits that ultra-conservatism is what we’re gonna get at this stage of the cycle. Too bad. What we need is a national epidemic of cojones.