Thinking About Responsibility

by Fred Cederholm
National Debt is hovering at $14 TRILLION. $5 TRILLION of that is owed Social Security to repay its borrowed & spent surpluses, and Medicare and Medicaid are disasterously underfunded.

I’ve been thinking about responsibility. Actually I’ve been thinking about the midterm elections on Tuesday, November 2nd, the swinging pendulum, the Democrats, the Republicans, the economy, the debts/ deficits, US treasuries, the US dollar, and foreclosures. All elections are important, but there is an urgency about the one being held on Tuesday. We should brace ourselves for a quantum change in elected officials. The party in power traditionally loses ground during a midterm election. In my lifetime I have never seen the negatives toward the serving “public servants” holding office. I have also never seen such a barrage of negative campaigning. Ok, we have had mudslinging before, but I feel this go around sets the standard downward even farther than what we normally experience.

You see voter dissatisfaction is ripe right now. There is a good reason for this. Governmental profligacy at the national and state level (and even in many county and local governments) has been out of control for a generation, or more! The debts/deficits continue to break records by the hour. It took US/us from 1789 until the early 1980s to acquire our first TRILLION of national debt. Now we can add a TRILLION in NINE months, maybe less. Our national and state governments never met a dollar they couldn’t spend. Presently 41 cents out of every dollar spent is financed and goes directly to the debt. A generation (as in twenty plus years) of hundreds of BILLIONs of Social Security surpluses is over! National Debt is hovering at its present $14 TRILLION cap until after the election when Congress will again vote/ approve another (HIGHER) ceiling. Five TRILLION is owed Social Security!

National Debt in actual dollars, uncorrected for inflation
US national debt

We need restraint in Washington DC, and our state capitols. Programs will have to be cut bigtime. We cannot keep up our world bellicose “Civis Americanis Sum!!!” big stick foreign policy of adding yet another war against the so-called terrorists of the world. If the casualty numbers can be believed, it is costing us roughly $10 MILLION to kill off each of these so-called “bad guys.” We just can’t afford THAT any more (and besides, we should be able to buy them off cheaper than that)! Conflicts in Afghanistan literally broke Alexander the Great, the British, and the Russians and they accomplished zero there. We are doing no better! These “policing actions” in the Middle East and Central Asia are accomplishing nothing. The public is fed up. The only plus is the economy does not appear as bad with the war(s) given how much Uncle is spending.

The Democrats are poised to take a beating on Tuesday --- losing the majority in the House of Representatives, and even possibly in the US Senate. The Republicans are set to clean up --- “clean up” in the sense that they should win more seats than the Democrats even though their alleged “clean up” of our economic and financial messes is highly shy of any details on how they plan to accomplish this (?). There is plenty of blame to go around. Our deficits and debt ballooned under Reagan, Papa Bush, “W”, and Obama. The so-called Clinton “surpluses” resulted from a gridlock between the White House and Congress. They couldn’t agree on anything INCLUDING spending money! The Democrats had a great opportunity these past two years and blew it. Their attempt at national health care is a bad joke. Unemployment really stands at 22%. Ninety-nine weeks of unemployment compensation is set to expire for MILLIONS of Americans. Five hundred plus banks are at insolvency even with the warehousing of $800 BILLION of their Cleverly Rigged Accounting Ploy investments at the FED at face value for “the duration.” This slight of hand swap is no solution. Nothing we have seen out of DC is a solution!

Uncle $ugar is “borrowing” upwards of $4 BILLION every day to pay his bills. Effectively the Federal Reserve is printing money to buy new Treasury debt because the foreign $ugar daddies are not anteing up like they have been. This US right hand buying the US debt from the left hand will only blow up on the US dollar in the near future. We are laying foundations for a massive inflation/ default.

As deregulation ran amuck in the past twenty years, nothing was done to change the foreclosure “system,” so the churning and “securitization” of mortgages has blown up now, too. Systemic fraud and forging of signatures on documentation is ripe, and judges are throwing the foreclosure actions out of court. It now takes two to two-and-a-half years to get a non-paying mortgagee out of a defunct real estate deal. This problem is breeding on itself as more households get their backs to the wall. Families who are “upside down” (owing more than their places are worth) are stopping payments even if they can afford them. They are living effectively there “free” for a couple of years. The declining cash flow is killing the investors in the insurance industry, pension/ retirement plans, mutual funds, and banks.

We need to take responsibility for our messes and hold the elected officials to their promise(s) of real and much needed reform. Buying our own debt instruments in fictitious transactions with our own freshly printed green backs, not CLOSING badly the run financial institutions, not prosecuting financial crime offenders, and saddling coming generations of Americans with a legacy of debt just won’t cut it any more. Please vote!!!

I’m Fred Cederholm and I’ve been thinking. You should be thinking, too.

Copyright 2010 Questions, Inc. All rights reserved. Fred Cederholm is a CPA/CFE, a forensic accountant, and writer. He is a graduate of the University of Illinois (B.A., M.A. and M.A.S.). He can be reached at asklet@rochelle.net.

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This story was published on November 1, 2010.