There aren’t too many people left who actually lived through the Great Depression. The memory of those years has dimmed with time. Since then, the Federal Government and the Federal Reserve have attempted to keep us from ever falling into that black hole again but have only succeeded in making a New Black Hole while supposedly keeping “America strong.”

The stimulus package brokered by Pres. Bush and Congress to keep the economy afloat is only one of many such fingers in the dike attempts over the decades. And as good consumers, we are to spend and buy --- whether we need it or not --- to keep the economy afloat.

Then we have the controlling factor of the worldly Federal Reserve coming to the aid of the banks, cutting key rates from 4.25 to 3.50 percent, with another possible cut to come next week.

Why is it that Congress and the past five presidents have not been able to control their spending? When you hear that the U.S. trade deficit is at an all-time high, close to or over $1 trillion; that the National Debt with all unfunded liabilities is approaching $80 trillion; that Americans are carrying a load of debt, excluding mortgage loans, what are we to think about our nation’s future?

The fact is, when the 2002 tax cuts went into effect, they were useless, because the government did not cut their spending, therefore accomplishing nothing.

Maybe we need someone like Gov. Arnold Schwarzengger who recently announced an economic budget plan for California which cuts all departments 10 percent. Imagine the shock of the legislature---what, cut back, who are you kidding?

The American Dream has also gone down that black hole. Americans can no longer count on good jobs. From 2000-2005, 3 million manufacturing jobs disappeared as the companies moved overseas for cheaper labor and to avoid paying their full share of U.S. Taxes. Now less than 12 percent of American jobs exist in manufacturing.

The present administration claims millions of jobs have been created. But what kind of jobs? Sure, there are the service and hi-tech sectors --- but what do they “produce” in the way of goods? Ask Americans. Many of those replacement jobs are part time with no future.

Is there something inherently out-of-wack in this bigger picture?
Imagine a lake surrounded by a wall. The lake is a stable, but progressive, robust economy. But the wall is old, developing small bubbles that ooze. While the oozing is small, no one worries. Then one threatens to burst, bleeding into other areas and possibly upsetting the stability of the whole economy. There are only two responses: Let it happen -or- control and stimulate the economy back to what is considered a normal cycle -- and going into debt.

This game of control on the part of the Federal Reserve Bank and our Federal Government cannot continue. But it will, adding the complicated factors of foreign investors and nations such as China who have exchanged American dollars for Euros. The American dollar is of minimum value which also drives inflationary times.

So, while Pres. Bush and Congress stick their fingers into the dike, trying to plug a couple of holes in order to keep the economy going, I get the feeling that they’re going to run out of fingers and toes to plug the multiple holes threatening our economy’s dike.

Americans have not been encouraged to live within their means for the last 50 years. Instead, they have been propelled into supporting the economy by going beyond their means into debt loads which are catching up with all of us. Savings? What is one percent interest earned compared to what banks used to offer--4.75 percent on savings.

How many stimulus packages with no money behind them can keep America going? How many times can the Federal Reserve Bank cut the interest rates?

The dike is developing more holes than there are fingers and toes to plug them. The whole dike through neglect is now threatening to burst and bring us into America’s Last Great Depression.

“A democracy is always temporary in nature. It simply cannot exist as a permanent form of government (because) voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will always collapse due to loose fiscal policy.” -Alexander Tytler, 18th-century Scottish historian as quoted by Gerald J. Swanson, in America the Broke

© 2008 Bonnie Alba
tttalba@hotmail.com