U.S. Economy The Biggest Ponzi Scheme

All this 20-20 hindsight about the economy and what could have been done to save us from the debacle in which we find ourselves today, gives me a migraine. We all knew the boat was going down, and we all did what we could to save ourselves, to make hay while the sun shone. No one who was ever without was going to turn their back on the opportunity to profit, to benefit, from the flow of excess provided by cheap housing, cheap goods from abroad, cheap gas, cheap land and cheap credit. The guys on top didn’t give a damn, because what they are – or were -- running is actually a gargantuan Ponzi scheme that makes Victor Madoff’s look like the Dead End Kids playing for marbles in the alley behind Times Square. And what’s really sad is that we’re talking about the “greatest economic minds of our generation” here, the financial and political leaders of nations.

You’d think after the next decade or so of recovery the world will recognize the US cannot be trusted to pay back its debts in the same way any lender expects to be repaid, that is, with interest on a currency unit that is relatively the same value as the one that was lent to begin with. The Americans did the same thing to investors in the ‘90s when the banking collapse led to paying back and paying off at a dime on the dollar (if that), as if bankruptcy rules applied across the board. Today we’re doing the same thing in virtually all other markets, from manufacturing (as with the automotive industry), to power generation (oil, gas, copper and steel) to consumer goods and agricultural items. We can’t keep up with the negative cash flow any better than Victor Madoff did, so we bend the rules a bit until they finally break and we’re exposed for what we are, mercilessly penniless.

Every nation in the world tried to climb on the gravy train. No one, really, was exempt, from our friendly competitors in the European Union, to our newfound friends in the former Soviet Bloc, to the Asians with whom we allied to provide the ballast that kept the ship afloat so long as we navigated carefully through the shoals. Now the ship of our state is resting on the reef, exposed well below the water line, and we’re still bailing – as if it should – or could -- make a difference to our trading partners, or to us.

We talk about a global economy, but what, really, does that mean? That the continents should be divided up into areas of production like a vertically integrated factory floor? Where the US is the research and development center, China is the manufacturing site, Russia and the Mid-East are providers of fossil fuels and solar energy? Not only is that impractical, but in human terms, impossible. As a planet, we are at the point in our social evolution where nations must again look within, re-evaluate their needs and wants, resources and capabilities, and act according to the rules of self preservation. If necessity is indeed the mother of invention, this self-searching should lead to societies and civilizations that are again self-sufficient, and in some cases, capable even of helping other nations reach sustainable levels of self-sufficiency.
Imagine, a world of neutral nations living and working together for mutual viability, family units, in a manner of speaking, where we take care of ourselves so we are able to take care of one another. Where lending as we know it is no longer a tool or a policy, where loans are given not to be paid back in kind, but in the fruits of social and economic stability and technological progress. This kind of world requires a dedicated parentage and a reoriented educational system devoted in large part to weaving positive moral and ethical values into the national fiber. An eye-for-an-eye will not get us where we want and need to go. I am my brother’s keeper just might. If this nation, among others, is to survive, it’s time to review and revise what we’re doing to ourselves, and what we’ve done to others. Until America is properly chastened, we will remain in denial. While we’re rethinking how to save ourselves, we need also to think how we can bring our brother and sister nations into the boat with us.