Commentary
Six down, six to go . . . trillion dollars!
By Ben Tanosborn
Online Journal Contributing Writer


Jul 2, 2008, 00:13

America’s economic misery index is fast climbing, yet most people still discount the current state of economic affairs as an “oil crisis,” or a “housing crush,” or a “credit crunch” . . . or simply one more “mild recession” in the unavoidable cycles of economic life that tune up the free marketplace in this mighty USA. And even our affable, if short-sighted, noteworthy economists are turning to their econometric models of old trying to forecast when and how we’ll start seeing the next upturn. Incredible fools!

Those econometric models happen to be, as are the professionals making use of them, in a world somewhere between highly outmoded and totally obsolete. We insisted on creating an open global economy, one which requires a compass to navigate about, yet we continue as old sailors using the currents, the winds and occasionally some celestial navigation. Our economy is in shambles and we fail to acknowledge it, using the toil of our future generations to pay for our wars, our pilfering ways and our over-consumption.

It isn’t just the near 10 trillion-dollar national debt that could enslave us, but the other untold inconvenient economic truths, in a properly quantified manner, that could add up to another 10 trillion that would surely push us, in a global economy, into the purgatory of Third World status.

Back in 2005, the ASCE (American Society of Civil Engineers) was telling us of the horrific status of our infrastructure -- aviation, bridges, roads & transit, brownfields, dams & levees, drinking and wastewater and inland waterways -- one which they claimed to require $1.6 trillion to update-repair. A figure which by now is 20 to 25 percent understated. If to that we add future costs of massive population relocations due to the anticipated effects of global warming, together with the investment required to become energy-independent as a nation, all in all, we could need as much as $10 trillion. And, of course, we are not even considering any shortfalls in the Social Security and Medicare programs. And, definitely, we are not making allowances for future wars

But if all of this weren’t enough, Americans were left to contend in the last year-and-a-half with “phony,” make-believe wealth greater than the entire national debt.

By spring 2007, capitalist hot air had added at least $12 trillion of “wealth” in the valuation of assets to America’s high-flying balloon-economy. Since then, as many as 6 trillion of that fantasy-greed overvaluation has been erased; however, there are at least another 6 trillion remaining in inflated values . . . in housing (residential, single and multi-family), commercial construction, and capital markets (combined publicly and privately-held ownership). How long will it be before sanity returns and the hot air is all let out? And will America return to an economic “normalcy” of sorts?

It’s anyone’s guess. It could take less than a year if American politicians take a hands-off approach and let the free market forces prevail; but that’s not the way our short-term self-serving politicians operate. Chances are that half of those 6 trillion will be eroded away in some visible form, with the other half diluted, or mixed, into the inflation factor so it won’t seem as punishing, although the effect on purchasing power for most will be the same; yes, inflation, that court jester serving the rich that allows the few assets held by the poor and middle class to be purloined from them . . . while at the same time their earning power diminishes -- as wage increases in a country with a very weak labor movement, such as the United States, always trail the rate of inflation.

We seem to be a nation of “short-termers,” who don’t seem to care about consequences beyond today and it stands to reason that our leaders and politicians would act the very same way. For years, many of my friends have equated our “superior” standard of living in a simplistic way . . . stating that Europeans were paying two to three times as much for gas at the pump than we were, shrugging their shoulders when I told them that the difference was in taxes that would help keep those nations’ infrastructure in repair, as well as maintain a vastly superior system in healthcare, education and social welfare.

This recession, its existence still not acknowledged by some, will not end with a return to normalcy, not the way normalcy has been defined up to now. Not for Americans! Regardless of how we like to describe ourselves, we are no longer mighty Americans, not in economic terms, not when it would take an investment in excess of $50,000 per resident of this nation to give us all a fresh start.

Meantime our misery continues as we see wealth melt away from the phony values we thought we had in our real estate holdings, stocks and bonds, 401-Ks and pension funds; all while we continue to watch our almighty dollar shrivel before other currencies of the world. Only 6 trillion dollars to go, keep the faith!

© 2008 Ben Tanosborn