You Just Need to Look Out the Window

We as a nation have spent the last 35 years borrowing more money than we can possibly pay back. After three and a half decades of decadence we appear to be coming to the absolute limit on our ability to borrow as a nation.

As we come to this precipice, our nation’s economic elite that sold us this debt are imploring us to continue to borrow at our current unsustainable rate. They say Keynesian Economics will allow us to pay off the extreme debt that we hold now with cheaper money that our friends in China and the Middle East will loan us in the future.

They say that as long as we continue to borrow, Keynesian Theory will just magically and painlessly make our debt problem disappear… poof.

Although this sounds wonderful and magical, it is mathematically impossible. An extremely debt heavy accounting balance sheet “always” slows economic growth.

So I have another name for what our economic elite are trying to call “Keynesian Economics”. It’s called “fraud”. This would be borrowing money knowing full well that you are incapable of paying it back.

The fact is that all economists derive their paychecks from Wall Street or our wasteful government. Who else would hire them?

So if they want to be employed, economists must always recommend more debt, more consumers spending, a larger financial sector and a larger more wasteful government.

It is all about growing the source of their paycheck.

Upton Sinclair stated it best during the roaring twenties when he said “It is difficult to get a man to understand something, when his salary depends on his not understanding it”.

Economists are salespeople. They are hired guns that will create a “flawed” model for anyone that gives them a paycheck.

I know their models are “flawed” because economists as a group are incapable of predicting major turns in our economy. Their track record is zero. They have missed predicting every major event for the past 12 years:

· In 2000 they missed predicting the biggest stock bubble in our nation’s history.
· In 2002 they rallied for “end of the world” monetary and fiscal stimulation to prevent the continuing collapse of the stock bubble that they could not see in 2000.
· In 2005 they could not see the biggest housing bubble in our nation’s history caused by the “end of the world” monetary and fiscal stimulation that they recommended in 2002.
· In 2006 they could not see the biggest credit bubble in our nation’s history caused by the deregulation that they recommended in the 1990’s.
· In 2007 no major economist saw the coming recession even though every economic indicator pointed to a recession.
· In 2008 they rallied again for another round of “end of the world” fiscal and monetary stimulus to continue the housing bubble that they could not see in 2006.
· Now in 2011 no major economist can see our current asset bubbles in commodities and bonds.
· In 2012 they will again suggest “end of the world” monetary and fiscal stimulus to prop up the commodity and bond bubble that they can’t see now.

Economists continue to ignore the destructive bubbles in the economy until they realize that a bubble has popped. Then they demand that our elected officials use “end of the world” monetary and fiscal stimulus to prop up overpriced assets in an attempt to continue the bubble.

Our bubble economy is making fortunes for the sellers of helium of which the economists get their cut. But there is a huge cost to everyone else. No jobs are created as fortunes are being borrowed from our children and given to Wall Street speculators and our monstrously wasteful government.

I suggest that our method for predicting the economy is hopelessly broken and cannot be fixed.

So what does one do when the speed indicator of your car is broken and can’t be fixed?
You look out the window to judge your speed.

And if you look out the window this is what you will see:

1) We are borrowing money from hostile foreign nations … This must stop.
2) We are destroying our free markets … This must stop.
3) We are sending our productive manufacturing jobs overseas… This must stop.
4) We are heavily subsidizing our “destructive” financial sector … This must stop.
5) We are rewarding people for uncontrolled speculation … This must stop.
6) We are punishing our savers … This must stop.
7) We are destroying our currency … This must stop.
8) And worst of all we are borrowing money in our children’s name to continue this madness … This absolutely must stop.

Nothing our economists are suggesting today appears in any economic textbook of the past. They have thrown away 4,000 years of economic thought from the geniuses of history as they prostitute their profession in order for their employers to steal money from our unborn children.

In a perfect world any economist that recommends more debt on top of the $100 trillion that we have already borrowed from our kids would immediately be labeled as a financial child abuser.
They would then be included on a “child predator” list and never be allowed to suggest that theft is the key to economic growth.

This one law would make all current economists unemployable. These villains would then learn firsthand what is like to look for work with no skills in the economy they have almost single handedly created.

But alas, our world is far from perfect.

And our economic theory is hopelessly broken and can’t be fixed.

Change will start when we stop looking at our broken economic theory and take a look at the reality that is happening around us.

We just need to look out the window. 

Charlie Husen

Tax Home

Charlie Husen owns a tax accounting business in Pleasant Hill California. You can contact him at charlie@incometaxhome.com.