What it will take to save this nation | Eastern North Carolina Now

    Publisher's Note: This editorial from our friends at the Beaufort Observer makes enough sense that it rings true like a bell. I recommend you read this one if you are concerned about the future of our nation.


    We either fix this problem or a dictator will

    This, we believe, is the most significant article we have ever posted, not because we harbor any illusion about its impact, but rather because of the topic of content.

    The reason this is so is simply because this nation is faced with the most significant crisis in our history...greater than any war we have ever fought and much worse than the Great Depression. We face the possibility that our nation will cease to exist as we know it and even worse, that such will happen while most Americans worry about just making ends meet and with far too many worrying about who is kicked off American Idol.

    We have a $14 trillion debt. If we do not gain control of that debt, the dollar you make today will be worth only pennies and the cost of a gallon of gasoline will be over $10.00. Your electrical bill will be more than ten times what it is today. So what the debt means is that our way of life will vanish.

    But here's what's important about all this: The catastrophe will not and cannot be avoided by either cutting spending or raising taxes or even a combination of the two. The only way to avoid disaster is to increase productivity and wealth creation. The measure of that is the Gross Domestic Product...the value of all transactions for goods and services.

    And the only way to increase wealth for everybody is by investment, not in government, but in things and actions that produce a healthy return on that investment.

    We keep hearing about the "ten-year projections" of what the deficit/debt will be. All of those projections, and ultimately the reality, will be meaningless unless we increase productivity significantly more than the projections anticipate. That is the way to eliminate the deficit and ultimately get the debt under manageable control.

    But here's the real problem. We have a gaggle of leaders in Washington that either do not understand these simple principles of economics or they don't care (because the "benefits" will come after they leave office). The leader of that gaggle is the President of the United States. The proof of that was seen in his recent speech offering his "plan" for dealing with the crisis. Listen carefully to him and ask yourself whether what he proposes will produce more wealth or simply move it around.

    And for Obama to make such a speech without addressing the role capital-gains taxes play in producing investments in productivity is simply an indication of his incompetence and ineptitude in economic matters. And the same should be said about his administration's record of insuring that small businesses and entrepreneurs have adequate access to credit; it is nothing short of dishonest.

    In the vernacular, the only thing that will save this country is for more Americans to make more money. And money is made by more people investing in things and activities that produce more wealth. And as this wealth "turns over" time and time again it increases the amount of revenue the government has available to it and if, while that is happening, the government spends less, then the deficit is reduced and even eliminated and thus the debt begins to either go down or become a smaller part of our total income (GDP). This is the only way to avoid catastrophe and save our nation and way of life.

    Barack Obama and the Democrats who passed the "Stimulus" do not understand this, or providing government handouts to their friends is more important than saving the country. Had that not been true, the money from the "Stimulus" would have been "spent" on investments that would have produced greater returns, all of which is explained in this article.

    Moreover, in order to finance the massive $14 trillion debt, we have to have investors who are willing to invest their money either in bonds or in the means of production in our country. To attract this investment, much of which is from outside of the USA, we must have a thriving economy and by thriving we mean an economy that makes things other people want to buy.

    Only if we have a growing and thriving economy will we ever be able to manage the debt we have already created and keep future debt under control. Reducing spending and even increasing taxes are only means to an end. The end that President Obama, the candidates in 2012 and our representatives in Congress must be focused upon is growing the economy.

    Government payments, whether for employees, health care, social security or whatever will not save our way of life. Only economic productivity will do that. Thus the testing of any "plan" to reduce the deficit that does not increase productivity and thus wealth--dramatically and significantly - will not be successful.

    A person who obviously understands these fundamental principles of economics is Quin Hillyer, who, writing in the American Spectator, applies them to Obama's recent "Deficit Plan" speech. Read it and be prepared to weep.

    As if that were not enough and you want even more proof of just how incompetent Obama actually is, then consider this: Obama on technological innovation and the role of democracy in an economy.