	Generational Dynamics
	Forecasting America's Destiny ... and the World's

\| HOME \| WEB LOG \| COUNTRY WIKI \| COMMENT \| FORUM \| DOWNLOADS \| ABOUT \|

Generational Dynamics Web Log for 16-Sep-05
President Bush promises gargantuan aid program to Katrina victims

Web Log - September, 2005

President Bush promises gargantuan aid program to Katrina victims

Those who hoped that the economy would "self-correct" are now demonstrably wrong.

As I've been talking about for a couple of years, the level of public debt has been increasing exponentially. The federal government's deficit continues to increase, the monthly trade deficit (indebtedness to other nations) continues to increase, individual credit card debt continues to increase, the amount of investor debt for hedge fund investments continues to increase, and the size of risky interest-only loans fueling the housing bubbles continues to increase.

Not only have all these debts been increasing, but they've been increasing exponentially.

And yesterday they took an enormous new leap - a $200 billion leap.

President Bush's Thursday evening speech from New Orleans promised huge amounts of aid to the victims of Hurricane Katrina. There will be direct aid to allow victims to rent apartments; there'll be medical aid; there'll be job training; and repairs will be made to bridges, schools, and water systems.

And everything will be done in a grand way. No expense will be spared.

It turns out that government spending on Katrina has already dwarfed previous spending on disasters -- $14 billion spent on last year's Florida hurricanes, $15.5 billion on the 1994 Los Angeles earthquake, and $10.8 billion spent on Hurricane Andrew in 1992.

Now, I'm certainly in favor of helping disaster victims, but do we really have to spend TEN TIMES AS MUCH as past disasters?

This is what Generational Dynamics is all about.

When I was growing up in the 1950s, my school teachers talked about the Great Depression all the time, because they had suffered through it. Those teachers must be spinning in their graves over the appalling things that are happening now, as a matter of course.

In the 1980s, the Republicans and the Democrats cooperated with each other to change the Social Security system to make it a sounder system. After that, they cooperated again to specify new rules to control the budget deficit. And in 1996, Democratic President Bill Clinton cooperated with the Republican congress to eliminate the welfare entitlement.

Today, cooperation is impossible, except to spend money and more money and more money. Controlling anything is impossible.

Which brings us back to the "self-correcting" economy. The economy has been self-correcting for fifty years because people who lived through the Great Depression made sure it did. These people imposed disciplines and agreed to compromises to make sure that the economy had the flexibility to correct itself. It wasn't by chance that the economy was "self-correcting"; it was self-correcting because people who remembered what happened the last time made sure it wouldn't happen again.

That's not true today. Nobody in a leadership position today remembers the Great Depression. And that's true in government, in education, in journalism, in finance, and in other professions. These bubbleheads have been taken care of by their parents for decades, and now that their parents are gone and they're in charge, they think that things will still take care of themselves. These halfwits are so busy screaming at one another over their culture wars, that they never stop to think that they have to work with their political enemies to fix things by making sacrifices.

Generational Dynamics predicts that we're entering a new 1930s style Great Depression, with massive homelessnes, bankruptcies and starvation in America. The stock market, which is currently more than 100% overpriced, will fall to the Dow 3000 range. This might start to happen next week, next month or next year, but it will happen sooner rather than later. (16-Sep-05) Permanent Link
Receive daily World View columns by e-mail
Donate to Generational Dynamics via PayPal

Web Log Pages

Current Web Log

Generational Dynamics Web Log for 16-Sep-05 President Bush promises gargantuan aid program to Katrina victims

Web Log Pages

Generational Dynamics Web Log for 16-Sep-05
President Bush promises gargantuan aid program to Katrina victims