There are many important issues just begging to be discussed, from Healthcare "Reform" to the wars in Iraq and Afghanistan - and the Jihadist movement which underlie everything in the Middle-East - to Peak Oil and our looming energy problems to huge numbers of Adjustable Rate Mortgages which still have to reset their interest rates, and on and on.

It's great to have so many issues, but it's a double edged sword. Discussing too many issues tends to reduce your credibility on any individual topic. So, how do you narrow it down? How do you choose what to discuss?

One question I've asked myself recently is, "Is there an issue whose outcome might imminently threaten the survival of our great country, the US of A?

How about the Jihadist movement? Does it imminently threaten the US? Threaten? Yes, very possibly. They call us a Satan. They swear their hate for us. They've attacked us on our own soil. Muslim populations are becoming large minorities within the borders of many of our European allies. But imminent? Within a year or two or three? I have to say no.

How about Global Warming? Even if I'm 100% wrong about my near-total skepticism of the crisis mongers' lack of scientific support, and even if the globe is going to get 0.7o C warmer per decade, the soonest any threat could possibly be on this front is 50 to 100 years.

How about Illegal Immigration? The obvious fact of illegal immigration shows that our borders are porous, and as such they create a national security issue, which must be fixed. Illegal immigrants using public services certainly put a serious strain on many local governments' budgets. They take jobs which in most cases American citizens don't want anyway (like picking lettuce I'm told). In many ways, in the grand scheme of things, this is less a problem than an annoyance. This hardly seems a survivability threat to our country, much less an imminent one.

And you could go through other issues important to large numbers of Americans, and they would not pose an imminent threat to the survivability of the US - except one!

As I consider that one issue, I say to myself, paraphrasing a former President, "It's still the economy, stupid." Our economy is in poor shape, and worse if you use the real numbers, ala www.shadowstats.com for the CPI the way it was calculated 30 years ago, for unemployment numbers prepared the old way, and for GDP as defined in 1980.

Our private economy is being crowded out of existence by our central government. And yet, it is the private economy which is the basis of all the improvements in the standard of living, for even our poor people, who today would be considered well off in countries such as India. Our federal government keeps growing and growing and growing. In the last year, federal spending increased by about 1/3 - from $3 Trillion to $4 Trillion.

The deficit, at an intolerable $450 Billion last year, has metastasized into a one and a half trillion dollar deficit this year... and next year... and the year after that. Some lunatic once said that the deficit isn't a problem because we owe it to ourselves. Well, today we certainly don't owe it to ourselves.

China holds a reported $1.3 Trillion of our debt. Until Greece and the eurozone's problems began, the dollar was falling continuously for several years, which meant that China's dollar "investment" was losing value. And, since their US Treasuries earn almost nothing, their huge dollar holdings are a poor reserve holding.

China's reserves once were referred to as a Nuclear Weapon, because if China chose to, it could sell off its Treasuries, sell off its dollars, and cause US interest rates to soar, bringing on recession - or depression conditions. China used to be the largest holder of dollars overseas, but now Japan holds that "honor." China has used the current strong euro period not only to stop buying Treasuries, but to sell off a lot of its dollars.

So, the FED has had to be the major buyer of Treasuries to fund our deficit and the huge additional spending which causes the deficit. The FED has "monetized" much of the debt, which can be seen by the more than doubling of the monetary base (euphemistically called Quantitative Easing).

As this great increase in the monetary base finally works its way into increased credit and lending, which some will hail as a great success, prices will start to soar. Another way of saying that prices in dollar terms are rising, is to say that the dollar is losing value.

Rising prices threaten to reduce our creditors willingness to hold the ink spattered paper which we call our currency. If our creditors stampede out of the dollar, could this be really, really bad for our economy? You bet it could!

A stampede out of the dollar, caused by rapidly rising prices, caused by FED monetization of Uncle Sam's deficits, caused by irresponsible overspending, would shove interest rates sky high, and cause today's unemployment to look like the good-old-days.

So, is the economy an imminent threat to the survivability of the US? Absolutely. Is it definitely going to happen? Not necessarily. If we can put the Genie of government spending gone wild back into the bottle, we may be able to avert disaster, although there still would be a hangover from the current drunkenness going on in our nation's capitol, to suffer through.

I mentioned to someone recently that we need a rule that says, "No Bill in Congress may be longer than 100 pages." ("If they can't describe what they want in 100 pages, then they don't know what they want," I said) Simple solutions like this are likely to face strong resistance, but they are what's needed today,

Bob Shapiro
Andover, MA
Robert.Shapiro@comcast.net
978-688-5306