“THE ROAD AHEAD”

August 1, 2012: In 1995, Bill Gates, the founder of Microsoft, Inc. published a book with the title “The Road Ahead”. When I read it I became fascinated with the prospect of living in a world with the extraordinary ability to manipulate information electronically using software that made it possible to not only organize data efficiently but to create electronic images that could be impressed upon documents and printed for ease of reading and understanding. It was an exciting period. I believe it was that book that launched new thinking about how to create value in the business world and help solve complex problems for both individuals and governments. The Internet platform was becoming a primary means of developing world commerce and many creative engineers were to develop the software to exploit this growing communication vehicle and make it possible for people to enjoy a better life.

Now, seventeen years later, we are in the final months of 2012 and in spite of people enjoying the benefits of all this modern technology enhancing every manner of our lives, we are coming closer and closer to an economic reality brought about by the pursuit of unrealistic expectations by our government for providing services and entitlements to all its citizens. Most of these programs were designed and passed as legislation many years ago for political purposes with little thought as to the consequences of changing demographics and the longer life spans of the individual. Receiving financial aid in retirement or assured low cost health care or financial subsidies during unemployment all sounded like good ideas but as the cost of providing these mandated benefits began to exceed the revenue from taxation, the government was obligated to borrow more and more to pay for its appropriated discretionary spending, the cost of running the government and the cost of the Defense Department, CIA, FBI, etc.. As of 2011, the deficit in revenue from taxation, fees and health premiums reached $1.6 Trillion and the accumulated debt has risen to $16 Trillion or slightly in excess of the U.S. Gross Domestic Product. With abnormally low interest rates due to the flight to safety occurring because of the problems with the Euro Nations of Greece, Spain, Italy and Portugal, the cost of interest is currently below projected cost over the next ten years. Each 1% rise in average interest rates would add $160 billion to the deficit and that will rise proportionately to the total amount of deficit each year.

Some say that this progression will certainly lead to the United States becoming just like Greece but 30 times as big. Greece has sovereign debt of $500 Billion compared with our $16 Trillion and yet has only $320 Billion of GDP, mostly in the Service sector (85%). The country is experiencing riots in the streets as they try to implement austerity by cutting entitlements. We will have to solve this problem with a combination of reduced entitlements and higher taxation with everyone feeling their share of the pain. It will take courage by elected representatives to admit the problem, embrace the solution and show courage as our nation faces reality. What I am afraid of is that both the Presidential candidates and those serving in Congress and running for election or re-election just cannot or will not accept the reality of this approaching disaster. All entitlements must be reduced! All income must be taxed and progressiveness must be aggressive, all discretionary expenses must be reduced including military, education and even a sharp reduction in the budget for the White House, the Administration’s Secretarial departments and the Congressional staffs must be downsized. All this must be achieved while promoting private sector growth and without stunting the incentives for investors to invest in new business and for consumers to continue to spend reasonably. The dilemma is that when people become used to receiving entitlement benefits, they begin to believe that they have earned the right to have them continue no matter what. They will resist and even threaten to revolt against such government edicts.

We are in for a difficult period and need to have leaders in our government who understand what is necessary and work at promoting the change in attitude that will be necessary to emerge from this traumatic period. We can do it but it will require a strong conservative leadership from the next President and complete disavowal of the liberal Democrat’s social agenda. There is no escape from this that I can see folks yet when you listen to the candidates make their pitch for election or re-election, it is clear that they are trying to sell snake oil. All this invest in the middle class or raise taxes on the rich is deceitful hyperbola. We are at the point where those espouusing class warfare or formulas for redistributing wealth, reducing regulation, repealing “Obama Care” leveling the playing field, fairness, etc.,etc., are perpetuating the lies that there is a simple solution to this problem. There is not a simple solution and there may not be any solution that is within the realm of the average citizen’s understanding. Take a hard look at the people we, the public, elect to manage our government. Here in Nevada we have or have had Harry “Burn the Olympic Uniforms” Reid, Shelley “something for nothing” Berkely, and John “Let’s have a party” Ensign. Some others with warped perspectives of reality are Representatives Debbie Wasserman Schultz (Florida) and Maxine Waters (California), Senators Charles Schumer(New York), and Dick Durben(Illinois) These are but a few of the individuals that have high profile in the Media and spew lies about what needs to be done to rebuild the American Dream. The primary objective of all but a few of those we send to Washington is to keep their lush job. Doing the right thing is secondary and therefore they seek the support of members of the electorate who are influenced prinarily by what the government is going to give them. The incentive isn’t to do what is right or necessary. The incentive is to promote dishonesty and promise anything to receive a vote. There are a few in Congress like Senator Tom Colburn, M.D. or Senator Bob Corker from Tennessee who are honest and are trying to provide leadership out of this morass but even they are unable to detach themselves from the mandates of their party leadership or suffer the consequences, loss of committee appointments among others for example.

Here is a link to a brief video that will show you what the fiscal problem is and just how serious it is.

www.youtube-nocookie.com/embed/EW5IdwltaAc?rel=0

One Man’s Opinion- Bud Brewer