The Debt Crisis Debate - A Call for Courage [Opinion]

The debt ceiling crisis continues to confound the USA's politicians. News shows are in a 24-hour spin cycle as the two parties in Washington play a deadly game of chicken with each other. What is certain (to me) is that whether it is within the next week or the next year, American will face a financial reckoning because of its incredible debt load. The politicians continue to scratch at any option they can in an effort to try and find one more free lunch. Sooner or later, however, we will all realize there are no more freebies.

What is at the center of the current crisis is the inability to compromise. Both sides are going to have to agree to some unpopular budget cuts and tax increases in order to begin the slow process of correcting American's financial imbalance. Therein lies the problem: our political leaders have one eye on the problem and another eye on re-election. Could it be that the greater financial problems cannot be solved without jeopardizing their political futures? If so, this reflects a much deeper issue for the American citizen.

On the July 24 edition of Meet the Press, former Sen. Chuck Hagel (R-NE) made this point well:

... politics just reflects society. And what we are seeing today, I believe, is a new emerging governing coalition being built in this country, a new political center of gravity.... We are living at a time when society is the most complicated, interconnected, immediate we've ever seen. That also reflects on a world order that is being rebuilt. We haven't seen a world order being rebuilt since World War II. So, obviously, what's happening in Washington is going to reflect what's happening across this country and the world. The emergence of the tea party, for example, whatever that is, a philosophy about government, that was born out of frustration, disappointment, high expectations in your leaders. To Doris' point, you're supposed to come to Washington to help govern, find solutions, solve problems. We're not seeing that. This just didn't start, by the way, with this president. I saw this in the Senate emerging over the last 12 years. Both parties are to blame. We have, I think, a vacuum of some leadership, some courage. Courage has never been an abundant commodity in Washington. And the last point I'd make, look at the last three elections in this country. We're not a republic that swings wildly. Last three elections, back to back, threw parties out of power in those elections. What does that tell you? That tells you that the board of directors, the people who own the country, the citizen, the voter is going to take action.

Question: are we seeing a new world order being built, or are we still witnessing the destruction of the old world order that began at the end of World War II? I think the latter. Look at what happened between 1914 and 1945 - the center of gravity shifted in the world from Western Europe with Great Britain, Germany, France, and Italy the former great powers, to the United States and the Soviet Union as the new super powers. By 1945, the sun was setting on the British Empire, Germany lie in ruins and divided, France was defeated by Germany in the war and had lost its international prestige, and Italy was defeated. A generation later, the Soviet Union is gone and the United States is under the heavy weight of trillions of dollars in debt.

What do you think? Are we witnessing the passing of an American-dominated world order or will the United States find a way to regain its financial foundation and begin rebuilding its economic strength?

Related articles

• Policy mistakes of historical magnitude (business.financialpost.com)
• Pawlenty: Obama not showing courage in debt crisis (seattletimes.nwsource.com)

1934

by Jack Kinsella | Omega Letter | Source Document

“History doesn’t repeat itself, but it does rhymes” – Mark Twain

In 1933, Adolf Hitler was elected Chancellor of Germany. He took office in January, with Fritz Von Papen as vice-Chancellor to keep him in check. Only twenty years earlier the German Kaiser led his people into a disastrous war with the West.

Germans had had enough of the monarchy and the absolute power it had, and demanded the Kaiser's abdication. Having gotten rid of the Emperor, the new German Republic carefully separated powers between the presidency and the chancellery.

Paul Von Hindenburg

But President Von Hindenburg was 86 years old when Hitler assumed the title of Chancellor of Germany. The timing was perfect.

Hitler's ascendancy was meteoric. In the early 1920's, he was little more than a neighborhood organizer. Over time, as hyper-inflation and catastrophic unemployment hit Germany, Hitler's movement, dubbed 'national socialism' grew into a fringe party.

In 1923, leading what he hoped would be a violent overthrow of the Weimar Republic, Hitler leapt to a table in a beer hall in Bavaria and called on a gathering of officials to support him in the march on Munich.

Instead, they arrested him, put him in prison and outlawed the Nazi party. After his release, Hitler set about reorganizing the national socialists as a movement. In 1927, when the government lifted the ban on national socialism, it became a political party. In 1928, the Nazis managed only 3% of the vote.

It wasn't until 1931 that Hitler began to made inroads within the vast German center-right political monolith still controlled by traditional conservatives like von Hindenburg.

In the 1932 election, thanks to such tactics as voter intimidation, voter registration fraud, voter fraud at the polls, etc. the national socialists managed a solid majority in Parliament.

In January, 1933 and only days after Hitler assumed the chancellorship, there was an explosion followed by a fire in the Parliament building. Hitler declared an emergency and rammed home the 1933 Enabling Act that allowed an emergency suspension of civil rights.

Desperate times call for desperate measures.

President von Hindenburg died in August, 1934. Within hours of his death, the German parliament issued the following press release:

"The Reich Government has enacted the following law which is hereby promulgated.

Section 1. The office of Reich President will be combined with that of Reich Chancellor. The existing authority of the Reich President will consequently be transferred to the Führer and Reich Chancellor, Adolf Hitler. He will select his deputy.

Section 2. This law is effective as of the time of the death of Reich President von Hindenburg."
The law was technically illegal since it violated provisions of the German constitution concerning presidential succession as well as the Enabling Act of 1933 which forbade Hitler from altering the presidency.

But whether or not he was legally eligible to serve didn't matter much anymore.

Hitler declared himself Fuhrer and ordered a referendum to retroactively confirm it.

So on August 19, Germany, still grieving its beloved war hero and president, went to the polls and confirmed Adolf Hitler as their Fuhrer, an action that only four years earlier would have been unthinkable.
Desperate times called for desperate measures.

In 1933, Germany was one of the most cultured and honorable nations on earth. German honor was legendary, particularly among German military officers who would rather die than dishonor themselves or their sacred oath of service.

The German culture at the time was such that, despite the World War and its excesses, Germany was THE place for foreign exchange students and was a favored diplomatic posting.

Hitler was widely respected at first for his governing ability. He nationalized much of Germany's banking system and began pouring money into the German infrastructure.

The first interstate highway system in the world was Adolf Hitler's Autobahn. The 'People's Car' (Volkswagen in German) was introduced at Hitler's insistence.

Hitler's political popularity morphed into a kind of cult worship in which he was styled as the German messiah. (The word 'fuhrer' is generally translated 'leader' but it is actually closer to the English word 'lord'.)

Britain's King Edward had so fallen under Hitler's spell that it was necessary to force his abdication to prevent England from being ruled by a Nazi sympathizer. (Edward died in exile in 1972)

In 1934, when Adolf Hitler became the supreme leader of Germany, Germany had both a free press and a legally elected parliament.

The German Republic was a functioning, western-style representative democracy. Germany was known for, and disliked because of its excesses, but it was also known for being one of the world's most honorable countries.

The demands of national socialism required rounding up certain classes of people. Experiments began on efficient ways to euthanize those deemed to be a drain on the German economy or damaging to its culture.

At first, it was baby steps, nationalizing the banks, rounding up firearms, demonizing certain classes of people, etc.

But desperate times call for desperate measures.

The trick to making it all work is making sure the times are desperate enough to justify the measures being advanced.

Here's the point. When von Hindenburg died in August, 1934, Germany was still one of the most honorable and cultured nations in Europe and everybody from King Edward of England to FDR thought Hitler was the greatest thing since sliced bread.

FDR's biggest worry abut Germany in 1934 was that competition posed by growing German industrial power might further damage America's depressed economy.

Only four years later, German Jews were being beaten and killed and their property either destroyed or confiscated during Kristallnacht (The Night of the Broken Glass).

Adolf Hitler: Time Magazine’s Man of the Year, 1938

What is the point I am trying to make here? There is no period in history that more perfectly mirrors the current global situation that that of the 1930s -- and on almost every scale of measurement; economic, political and spiritual.

One of the truisms of history, which has been observed by everyone from philosopher Georges Santayana to George Bernard Shaw is this: "Those who fail to learn the lessons of history are doomed to repeat it."
George Bernard Shaw put it this way. "One thing we learn from history is that we learn nothing from history."

So, what does history teach us? I'm not going to spell it out in words -- and that, by itself, should be instructive. Free speech is only free under certain circumstances in this brave, new 21st century world -- and my sense of history tells me this isn't one of them, even in a private letter to subscribing members.
But I can still safely make a few observations. We're hearing a lot about nationalism and socialism, national emergencies and desperate times. And I think I can still safely observe the following about the lessons of history.

A lot can happen in four years.

Great Depression Remix

by Robert Morley | From the Nov/Dec 2009 Trumpet Print Edition »

The lyrics are different in 2009 than 1929—but it’s still the same song.

The 1929 financial crash unfolded in just such a way as to inflict punishment. Every time stock investors thought it was safe to get back in the dance, they just lost more money. Every time consumers thought it was safe to start spending again, the job scene hit another low note. Businesses couldn’t hold a tune—they went bankrupt by the thousands.

Eight decades later, the question facing the world is this: Is the worst really over, or is it just the opening note of a very familiar hymn?

History repeats itself. Even if the lyrics are not exactly the same, this verse certainly rhymes with the first. Unfortunately, most people don’t know history.

Whistle a Happy Tune

Ask the average guy on the street. He is almost sure to tell you he has heard or read that the crisis is over.

The New York Times trumpeted: “Fed Chief Says Recession Is Very Likely Over” (September 15). Newsweek’s Daniel Gross confirmed: “I’m prepared to declare that the recession is really, most probably over” (July 14). Bloomberg and Forbes are whistling their own happy tunes proclaiming the end of the recession too.

The good times are back. Stocks will keep going up until 2010, said money manager John Dorfman. “On balance … I think the evidence favors continued gains.”

Sadly, it is all too familiar.

In 1930, the average person was singing that the worst was over too, as were many of the so-called experts.

“Green Lights Ahead,” cheered National Bank of the Republic (Chicago) Chairman G. Woodruff. “The red lights, through which our people last year drove, have changed” (Aug. 5, 1930).

Actually, the worst was only beginning.

Sucker Rallies

From 1921 to 1929, the Dow Jones hummed from 60 to a high note of almost 400! The Great Crash of 1929 changed that. It swallowed 48 percent of stock market value in just a few days. But over the ensuing months, the market bounced back, reclaiming around half of its losses. Investors breathed a collective sigh of relief, and money managers loaded up the stocks again.

Then the stock market abruptly crashed again, sending both share prices and bankers into funeral dirges.

Over the next three years, the market would “sucker rally” a total of five times—only to plunge to new lows on each occasion. Yet with each new rally, the professionals invariably belted out that the crisis was over.

On Aug. 23, 1930, Moody’s Investors Service wrote regarding its prosperity index: “We are, therefore, inclined to regard the present level of business activity as the approximate level from which recovery will begin” (emphasis mine).

And the market plunged.

On Nov. 15, 1930, the Harvard Economic Review predicted: “We are now near the end of the declining phase of the Depression.”

And the market plunged again.

It would take more than three years of ups followed by dramatic downs before the Dow Jones would hit a real bottom—all the way back to around 50.

For the general economy, it took a decade of hopeful high notes and octave-dropping lows and finally a literal worldwide bloodbath to end the Depression.

Here is the point. Whether you look at the stock market, world industrial output or trade, the tune matches 1930. By some measures, things are even more discordant.

The Next Stanza

By March of this year, the Dow Jones Industrial Average had crashed by 53 percent from its highs. The corresponding fall in 1929 was 48 percent. The Dow has now subsequently rallied by 50 percent—just as it did 79 years ago. Where to next?

The stock market’s lengthy slump has ended at last, says popular Goldman Sachs soothsayer Abby Joseph Cohen. “We do think that the new bull market has begun.”

“There is little evidence to be cautious,” composed Citigroup strategist Tobias Levkovich.

Can you hear the pickup note to the next stanza? And the market plunged again.

Yet the stock market is not the only indicator that is in hurtful harmony with 1930.

According to the most recent data presented by VoxEU.org, an economic policy research center, world industrial production is also in uneasy unison with the 1930s fall. A look at the charts reveals a déjà vu nightmare chorus. Both the United States and Canada have seen their industrial production fall parallel to the 1929 crisis, as have Germany and Britain. Italy and France and Japan are doing much worse.

In the area of trade, our world is also worse off than that of our predecessors. Trade levels have fallen off a cliff. There are, however, some major differences between now and the first Great Depression.

In 1930 America was a producer. During that year, the U.S. produced 70 percent of the world’s oil, 60 percent of its wheat and cotton, 50 percent of copper, 40 percent of coal. Additionally, America held half of the world’s monetary gold reserves. Today, America is a net consumer, relying on other nations for energy supplies and strategic minerals such as oil and copper to meet demand.

America also used to be a creditor nation. But it has gone from being the world’s greatest lender nation to its greatest debtor—a situation that is getting worse by the day. America is spending money like it is going out of style. It has paid out more money combating the current recession than it has on any other event in history, including World War ii.

All the money might buy a little time—it might make the faux recovery last a bit longer—but it doesn’t really change anything. A problem caused by too much spending and debt cannot be fixed by more of the same.

Unfortunately, America looks like it is getting set up for a refrain. The excesses of the past two-plus decades have not been rectified during the past few short months. More punishment is on the way.

History is repeating; you can feel the rhythm. The crescendo awaits.

FIAT EMPIRE - Why the Federal Reserve Violates the U.S. Constitution

[embed]https://youtu.be/zm2rF3rL34M[/embed]I watched this video via Google Video. It is an excellent historical look at the creation of the Federal Reserve. Much of the material is based on G. Edward Griffin's book, The Creature from Jekyll Island. The film is approximately one hour long, and worth watching.Here's the promo clip for the film:

Find out why some feel the Federal Reserve's practices are a violation of the U.S. Constitution and others feel it's simply "a bunch of organized crooks." Discover why experts agree the Fed is a banking cartel that benefits mainly bankers and their corporate clients as well as a Congress that would rather increase the National Debt to $9 trillion than raise taxes. Find out how the corporate media facilitates the partnership between the Fed and Congress and why it fails to disclose what's going on. Lastly, find out how the Federal Reserve Member Banks are owned and controlled by an elite group of insiders

This Telly Award-winning documentary features presidential candidate RON PAUL (R-Texas) and is inspired by The Creature from Jekyll Isalnd a book by well-known author and FREEDOM FORCE founder, G. Edward Griffin.

Also featured is Dr. Edwin Vieira, Ph.D., J.D. from Harvard (a foremost authority on the Constitution and the author of Pieces of Eight) who discusses the Fed and various long-term studies which indicate that the Federal Reserve System encourages war, destabilizes the economy, generates inflation (a hidden tax) and is the supreme instrument of unjust enrichment for a select group of insiders. Dr. Theodore Baehr (founder of MOVIEGUIDE^®) rounds out the show by discussing the relationship between the Media, the Fed and the Government and why you never see these issues discussed on network TV or in the mainstream media.

10 Reasons the GOP is Toast in 2008

In a recent post, Dan Burrell states, "a couple of years ago, when I was still a Pastor, I took a large step back from political activism and I’m more convinced today that doing so was a wise decision than I’ve ever been. That doesn’t mean I’m not still interested or don’t have opinions. It does mean that with a limited number of days in one’s life, I don’t think spending a significant portion of them on politics is a wise choice considering the needs of this life and the things that will still matter in 1,000 years."

I couldn't agree more. Far too many Christians place their hope for a restored American in a political candidate...usually a Republican candidate.

If you are interested in Dan's top ten list and why he believes Hillary Rodham-Clinton will be our next president, here's the post.