National Commentary

Finding Economic Solutions

The Republicans have tough solutions to meet the nation’s financial crisis. The GOP leaders at first targeted their favorite nemesis – Medicare, Medicaid, food stamps and Social Security. But then reality set in, and they retreated from major hopes of serving those programs at the altar of fiscal reform. Then, too, they may have been influenced by the national election in 2012.

The Republicans have tough solutions to meet the nation’s financial crisis. The GOP leaders at first targeted their favorite nemesis – Medicare, Medicaid, food stamps and Social Security. But then reality set in, and they retreated from major hopes of serving those programs at the altar of fiscal reform. Then, too, they may have been influenced by the national election in 2012.

There is also the obvious input of the Tea Partiers who became incensed when the GOP appeared to be backing away from slashing social programs that help the poor and sick. Social Security, dating back to 1935, a product of the Great Depression, and Medicare in the 1960s, and millions depend on these programs especially today. They have been rightfully sacrosanct in society for years. House Speaker John Boehner, took a different stance and is now demanding President Obama cut $2 trillion from the budget for starters.

Boehner said the $2 trillion would take care of the nation’s bills for next year. “We are not talking about billions,” Boehner told the New York Economic Club last Monday. “We should be talking about trillions if we are serious,” he said in addressing our fiscal problems. “Without support regarding cuts and changes,” Boehner added, “the way we may spend the American people’s money, there will be no debt limit increase.” The debt ceiling is currently $14.3 trillion.

The chips are down now on financial reform and the test for both parties is at hand.

My accountant, Frank Ward, who wrote The Truth About the World, maintains that “as long as the U.S. Treasury retains the right to issue its own currency, the U.S. government will not default on its debt. All the Treasury Department has to do is print more money, but this will create so much inflation that the value of the U.S. Treasury obligations will be greatly devalued.” Accordingly, Ward warns that the real and present danger to the American people is that creditors will no longer accept the debased and devalued dollar as payment for goods and services.

We own less, now owe more, and our net worth is much less.

Another danger is that by selling our assets, no new jobs are being created. Unemployment is currently 9 percent – far too high.

Paul Craig Roberts, the father of Reaganomics, said depressingly, “there is no economy left to recover.” He referred to what we have lost to off shoring and the “free trade ideology. Recent predictions of faster growth have not been fulfilled.

Even more vividly, John H. Cobb Jr., of the Business and Industry Council, has “criticized ‘free trade’ as a false economic dogma that does not work.”

All my education, and especially since World War II, has taught me to believe in free trade as a means of reaching out to the rest of the world. That means that U.S. businesses may have to come home, and stop relying on China and other Asian countries to provide us with the necessities of life. As a result of our economic downfall, there are some who believe our national sovereignty has been seriously compromised and we risk possible loss of our independence.

Now the solution, according to some economists, is that we need to reform our monetary and credit system as a public utility, and not as the private property of the world’s financial elites. We also need to restore the longtime manufacturing and industrial base of the American economy.

Gerald Celente of the Trends Research Institute, who has a super reputation, predicted the housing meltdown, our current economic crisis, as well as the 1997 Asian financial collapse. Celente is forecasting the devaluation of the U.S. dollar by as much as a shocking 90 percent.

All of which is unfortunately leading to a possible return of this country to the much maligned protective tariffs. Such back tracking would be a debacle, and possibly deny us the leadership role we have always played in the world economy since the industrial revolution.

After the U.S. Constitution was ratified, the first law that Congress passed was the Tariff Act of 1789. Surely there is a better solution to the economic problems besetting the nations.