Economy Fall Down Go Boom!

The GOP and Dems say to the people,
"Cut taxes for the rich and cut your
Social Security checks, or the dog gets it!"

Here is why the economy is in the shape it's in.

As long as $500 to $750 billion more in capital leaves our national economy each year than we take in, the United States will grow poorer and poorer. Today will be viewed as an employment high point in 50 years. 

The economy is like a bathtub. The water is capital. Except, the tub has a crack in the side (the trade deficit). You can try to refill the tub as many times as you want with tax cuts, spending cuts, or new spending on jobs, but as long as the crack remains in the side of the tub, the water will continue to drain out. And what will happen in time? It will all run out. All. Economy fall down go boom.

And without water, without capital, we cannot grow the economy. All we can do is shift jobs from one place to another, as Hickenlooper is attempting to do with his program. He wants to take businesses and jobs from other parts of the country and transplant them here, making other places more poor than Colorado.

Now, we could change all this, but it won't happen overnight. It will take restoring tariffs to the levels they were at before the trade deficit's crack appeared with Reagan's cuts. That will encourage foreign producers to build manufacturing capacity in the US... that is if they want to sell anything here. 

In other words, they will then have to invest capital here. That means a gain in capital for the domestic economy. 

If we don't do this, we will continue down the road of the economic theory called Development-Dependency. It's in-part how the US became so wealthy in the 19th and early 20th centuries, by taking capital from Africa and South America. Now, it's being done TO us, as our former communist enemies sell us the TVs and, to quote Kruschev, "rope" with which we will economically hang ourselves.

We can fix this. But clearly, nobody in D.C. has the political cojones to do so. They simply will not do what is right. They'd rather continue down the path of a failed economic policy called "free" trade that is not now nor ever has been free, let alone fair.

And as the late historian, Will Durant once said, every civilization collapses by relying too much on its founding principle. Will US civilization now fall down go boom?

--- What was the original American Aurora? The Aurora was a newspaper published by Benjamin Franklin Bache , a grandson of Benjamin Franklin. The Aurora was published in Philadelphia, our nation's capitol at the time.

The Aurora was highly critical of what Bache felt was the tyrannous Federalist governments of presidents Washington and Adams.

The result? Adams imprisoned Bache for sedition, where he languished, awaiting trial, until his death from yellow fever at age 29.