Our Nation, Torn Asunder, Hollowed Be Thine Future Part 1

Background—
236 years ago, a great experiment was established. Blood and tears were shed, but by 1789 the task was completed. Our country has seen trials and tribulations. Errors and wins. Defeats and victories. But now the time is coming when multiple societal shifts are fast approaching.

Today and Near Future–
Over the last month, events have taken place over a wide array of societal arenas. From the SCOTUS overturning of portions of the Arizona Immg. Law and then the ObamaCare ‘taxation’ legality loophole.
We then had the LOST (Land of the Sea Treaty) that barely was stalled in the Senate. Thankfully, just enough Senators opposed this measure.
Then we have the ATT UN Gun Treaty coming up for a vote, and low and behold a mass murder involving small arms takes place 2 weeks prior to this all important vote.
We also have what is called the ‘Financial Cliff’ coming up January 1st 2013. The Bush Tax Cuts (in effect for 10-12 yrs.. so really aren’t they then ‘The Norm”?) are due to expire, the social security payroll tax cuts, as well as the activation of the Congressionally-mandated $1.2 trillion in spending cuts and the kicking in of a whole new set of fees and taxes related to Obamacare. In 2013 we’re talking about a 4% decrease in GDP just with the OCare and tax hikes,and thats not what we need.
During 2008 40% of America’s wealth evaporated. Mortgages went ‘underwater’.

Did that alter the BANKS behavior?? Heck no. They used the same tactics that caused the mortgage crisis on gov’t student loans!!!! And now 11 Global banks have are being investigated for rigging the LIBOR (which is a tool that sets the international interest rates) and manipulating it. While those were GLOBAL banks (like Barclays and UBS). Barclays CEO Bob Diamond quit after testiying before Congress… What’s scary is that almost FIVE years ago (Aug.07) another Barclays Officeer quit, a collateralised debt obligations (CDOs) officer, Edward Cahill quit after Barclays was exposed during the ’07 sub=prime mortgage debacle. So, we have 2 instances of Barclays that shows poor decisions and risky business ventures that resulted in people resigning and saying, “it’ll never happen again, we promise.”

Credit, once easy, became ridiculously difficult as the banks ‘recapitalised’. That, in common english is, “They went so broke that they had to collect fees on top of fees and incur zero risk and deny most new loans.”
Now we’re hearing that Jan 1 2013 will mark a yr that holds far worse possibilities. Europe, especially Spain and Italy, is reeling from a monetary and lazyFair (yeah Lazy-Fair) mentality of entitlement culture. Last week CNBC programs mentioned “Spanish bank runs”, and other articles mentioned Spanish Businesses railing at the 56% tax levy instituted by Finance Minister Cristobol Montoro.

PENSIONS–
Then we add the cities and municipalities that have gone bankrupt in the past 6 months just in California (Compton, Stockton, Vallego, and Mammoth Lakes) there is a common denomiator. Pensions. It was that way with the Auto companies, and now Municipalities. 30% or more of their expenses are reserved for PENSIONS. The Golden Goose has died people. Now cities, once loathe to ruin their credt and bond ratings, see the value in the Chapter 9 bankruptcy filing. Now as pension obligations escalate, they hide behind Ch9 and escape from under that crippling weight.

Employment Future—
Kids, those that are High school age to 21, used to be able to get minimum wage jobs pretty easily and use that to learn how the ‘work force’ operates. Now, they are competing against older people , freshly laid off from higher jobs, or also older people looking to supplement income that may have cut due to wage freezes. Now they are not given the opportunity to learn to contribute to society like the past 3 or 4 generations and they are aimless. If the 2013 Perfect Storm truly emerges, we’re looking at an entire generation that will be truly lost.
If the Perfect Storm happens, I also see more and more hostility (and rightfully so) towards Illegals, the businesses that hire them and Unions that hide them. There will be thrusts to deport all illegals and the normal workforce in America ahould, by then, be willing to take up the slack, even if its temporary.

The Election—
Coming up in November is a referendum on 2 Americas. We’re asked to choose between one guy who is the Evil we know and the evil that promises to be better. We are asked to choose between a closet Communist that has recently shown a love for ignoring Congress, Committees and the Constitution, and a guy that is so squeaky clean that the opponent has to dig up a hair pulling incident from 1968.
In either case, the President will inherit an economy that is on a decline that will be drastic. By inauguration day, the implosion will have been almost 3 weeks old. Companies will have set up their future funding the day after the final election votes were tallied. If ‘Business friendly’ Romney is elected, hiring may bounce up quickly.
Conclusion
The short term future for America is dim. We’ll pay the price for O’s Socialistic love affair. Well into Romney’s tenure, perhaps 18 months, the economy will be sour and the lead weights around America’s Economic Engine. In the next post I’ll list the litany of challenges that we’ll face in the next year.
As always, our nation is in flux and it will come down to the American people to respond.

Sources: http://seascapecapital.com/a-massive-financial-cliff/
http://www.businessinsider.com/spain-nears-implosion-finance-minister-proposes-huge-tax-businesses-threaten-to-leave-2012-7

Road to Serfdom
steven horwitz