There has been much reporting about the debt ceiling debate, political positioning, and alternatives. However, the official debt ceiling is not the issue. The “unofficial” debt is the issue. Medicare, Medicaid, and Social Security unfunded liabilities require an additional $20 Trillion over the next decade as they are currently defined. Raising the borrowing capability of an addict to buy more drugs does not rehabilitate the addict.
When have politicians kept their word ten years out in the future? Kicking the can down the road has been the standard operating procedure for decades, specifically since 1971 when the gold disconnect began. The U.S. keeps the war machine in place for “national security” purposes. Meanwhile, China acquires hard assets around the world to support future growth and economic strength. Time is ticking away for the transfer of power to be complete. China’s problem is they have too many people to manage, a diseconomy of scale. Larger populations generate complexities that consume productive resources and can ultimately crash an economy.
A new wave of internet companies will create a bubble similar to the 1990’s tech bubble. Unbelievable valuations are coming out of Silicon Valley once again. Social networking companies are converting to public companies creating millionaires once again. The insatiable appetite for information rather than revelation is fueling this surge. “If I can just get more connected, life will be better” is the chant across the country. If that were true, University professors would be running the world. The mindset of economics continues to disconnect from reality. Moving from tangible value to intangible value prevails. Our service economy will implode sooner rather than later. When things get tough, services are the first thing we cut. Heck, I can mow my own lawn and fertilize it if need be.
Perilous times are ahead. Revelation, not information, is needed. We must seek Our Heavenly Father and open our ears of understanding if we are to minimize the pain coming our way. We don’t need more debt, we need less “stuff”.