Economics

Discerning What Is Best
With Dr Rex Rogers

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Details: Written by Rex M. Rogers; Published: 01 November 2011

During the Cold War in the 50s and 60s, we thought the end of the world might someday come from what we then called “thermo-nuclear war.”

I remember the same concerns when I was in graduate school during the late 70s, early 80s, studying for advanced degrees in political science. We talked about nuclear arms, MAD or Mutually Assured Destruction, ICBMs, and a few other scenarios involving “nukes.” It almost seems quaint now.

Whether you drew end of the world scenarios from international geo-politics, vast armies, even space age weaponry like “Star Wars,” or whether you drew them from biblical prophecy, most of us didn’t think about debt.

Yet national debt, deficit spending, and unbalanced budgets are now the greatest threats to future wellbeing in the West.

The United States is now $15 Trillion in debt. For the first time, our national debt equals about 100% of our annual GDP. Add to this the ill advised Bush Administration unfunded increases in Medicare prescription programs (when unfunded wars are included, Bush doubled national debt in less than five years) and the 2008 Obama Administration bailouts.

And it’s not just us. European countries are in a debt mess, “led” by Greece, and followed by Portugal, Spain, and more. Greece’s debt (until European Union nations and banks decided to “forgive” some of it) stands at 150% of its struggling GDP. Still, even with this, Greece is scheduling a referendum this week to determine whether Greeks will accept required “austerity” measures. Honestly, who do Greeks think should pay for their lifestyle choices?

Too many European countries still want a welfare state they can’t afford. They want to retire early, like age 57 in Greece or Italy. They want no increases in generous tuition. They want someone else to foot the bill. The U.S. isn’t far behind. It’s all quite scary.

Yet we’re not beyond fixing the problem. The American people's ingenuity and the potential strength of this economy remain phenomenal. But do we as a people, as a culture, do we have the political will and resolve to fix the problem? As they say, it’s not rocket science. It’s just common sense financial wisdom based on centuries of verifiable experience.

More, do we have the political leadership on either side of the aisle, do we have the moral strength to lead, tell the truth, bite the bullet, and stick to it? At the moment, I can’t see it, and that’s scarier still.

*This blog may be reproduced in whole or in part with a full attribution statement. Contact Rex or read more commentary on current issues and events at www.rexmrogers.com or follow him at www.twitter.com/RexMRogers.

Details: Written by Rex M. Rogers; Published: 21 June 2011

Unless Congress acts to raise the debt ceiling by August 2, the U.S. could default on its bills for the first time in history. The debt ceiling is an oddly named term meaning the amount the US can borrow to pay its bills.

This is not a conspiracy theory. It’s not doom and gloom and howl at the moon film noir. It’s not Dooms Day. This isn’t “Repent, For the End Is Near,” though a case might be made for this point of view. This is real economics, real politics, and real morality all in one.

The United States holds a $14.4 Trillion debt, which climbs by the moment. In fact, if I wrote the number to the last dollar it would be out of date before I finished this paragraph, let alone posted text or checked my website tomorrow morning for comments. It increases, meaning deepens, at mind-boggling speed.

The U.S. Treasury borrows $4 Billion, that’s with a B, per day to pay American debts. This in a country with the world’s largest economy yielding an annual GDP of $14.7 Trillion (2010). Yet we’re also enduring a 9.1% unemployment rate.

Since 1981, the national debt has gone from $1 Trillion to $14.4 Trillion, most under Republican Presidents. The debt ceiling has been raised 78 times in the past fifty years, 10 times since 2001. Almost one-half of American public debt is held by China and Japan. The US pays $225 Billion per year in interest.

To say that the US economy, perhaps even culture or country, is in trouble understates the problem. There’s nothing about America’s economics or its political culture that suggests we cannot experience the violence recently witnessed in Greece in response to so-called “austerity measures” and resulting lower standards of living—all traceable to Greece’s own profligate spending, economic denial, live for today culture.

The issue at hand is not simply the need for Congress to act to raise the debt ceiling by August 2 so the country will not default on its bill payments. That comes first, but the real issue is whether congressional leaders and the President can work together, which is to say can Republicans and Democrats work together, to identify the hard decisions and solutions to bring the country’s budget into line, reduce the national debt, and reinvest in our children’s future. To date no political party has risen to the task.

The Republicans do poorly or do irrationally. The Democrats do nothing at all. President Barack Obama’s record on the budget deficit and national debt is simply to add to both—through extending the Bush tax cuts, tiptoeing around Social Security, Medicare, and Medicaid, fighting not two, as Bush did, but three foreign wars, and offering Stimulus bailouts that put the country ever more deeply in arrears—all while talking about “bumps” in the road.

Neither party is impressive, nor are its leaders. So we keep going deeper in debt. Meanwhile, we put up with the likes of Rep. Anthony Weiner.

Don’t let partisan pundits fool you. Neither side of the aisle is in league with the Devil. Neither party has God on its side. Don’t believe politicians or pundits who opine there is no solution.

Economics may be the dismal science, but it’s not rocket science. There are solutions to the national debt crisis.

The question remains: do we have leaders with enough creativity and courage to identify solutions, help the American public understand them, and resolve to see them through to enactment and outcome? Canada did in the 1990s. But at the moment, I have my doubts we have leaders who can rise to the level of statesmanship required.

Details: Written by Rex M. Rogers; Published: 27 May 2011

Why oh why do we mow grass growing in the medians of the nation’s interstates? But for a rare safety consideration this expenditure of time, money, and man-hours seems unnecessary, even extravagant, in these economically stressful times.

Think about this. This is not just a budgetary issue, though a big one. It’s a conservation issue. We’re burning hundreds of gallons of gasoline, sending comparable toxic emissions into the air, and cutting grasses and small bushes that might otherwise serve as shelter for small animals.

If safety, as in line of sight, is an issue, than brush hog away. But this can’t be the only reason because in some areas miles of interstate medians are allowed to grow into small woodlands. If we must always maintain full line of sight than why are these woods permitted to grow?

If aesthetics is the issue, than plant—as some areas do—the medians and sidebars with wildflowers, perennials, wheat, or small decorative native bushes. Turn the medians and sidebars into attractive self-maintaining natural spaces.

If jobs for mower men and women are the issue, than take the money not expended on gasoline and mowers and instead spend it on flora. Send these men and women out in their orange jackets to plant, plant, plant.

Why do we feel compelled to cut, cut, cut just so we can look at the “lawn” in the middle of the roadway? Is it a leftover trend from the suburbanization of America that began in the 1950s? Is it a habit carried forward from the 1960s when the interstate system was first built—a kind of borrowed sensibility from the German autobahns? Is it we think being able to see farther down the highway somehow makes us safer in our need for speed?

Whatever the motivation we continue to mow like there’s mow tomorrow.

Details: Written by Rex M. Rogers; Published: 18 February 2011

We shook our heads when Greeks rioted in the streets last year protesting government budget actions. Now it’s our turn. Thousands gathered at the capitol in Madison, Wisconsin this week to demonstrate their opposition to a Governor-led move to address the state’s budgetary woes.

In Washington, D.C. things aren’t any better—budget deficit, $14 trillion national debt, runaway entitlements. Instead of steady, courageous leadership, we get mostly partisan infighting.

The Greatest Generation became the greatest in part because of how it—or should we say they—weathered world war, but before that, how they weathered the Great Depression of their youth. They stepped up, stood tall, sacrificed, and walked through their troubles with a strength we still benefit from today.

Since 2008, our economic problems have been called the Great Recession. Whatever name we give it, it’s real, extensive, and not going away soon or without sacrifice. We’ve made our bed and now we have to sleep in it.

But the jury’s out on whether our generation will rise to the occasion. And that’s the point: do we have the necessary resolve to deal with our self-generated budget woes?

We’ve lived way beyond our means, mortgaging our children’s future and our culture, and maybe our country. Yet so far, we’ve heard more talk than seen action. Everyone wants someone else’s ox to be gored. There’s yet no spirit of self-sacrifice or “We’re all in this together.” Not to pick unfairly upon the good government workers of Wisconsin, but it is difficult to take some of their ire seriously when what they’ve been offered is still substantially better than the average and must be paid for by the rest of the citizens of that beautiful state.

I don’t like to think that what we’ve seen in Greece, Great Britain, and France in response to budget cuts—volatile and at times violent demonstrations—will happen here. But I am afraid that they will because our culture isn’t as strong as it appears. We’re not our grandparents. Yet I hope that I’m wrong.

We need statesmen and women strong enough to lead the way even as they endure the inevitable bile. It remains to be seen if they emerge and it remains to be seen whether we will both produce and support them.

Details: Written by Rex M. Rogers; Published: 09 February 2011

We’re living in a time when both Democrats and Republicans bemoan both our increasing budget deficits and expanding, astronomic national debt even while they do nothing about them. Leave it to the next politician. Who wants to take responsibility for cutting budgets, which is to say cutting programs? Not most of our partisan leaders.

But to give them a break, our politicians are not a cause but a symptom, or perhaps an extension—of us. We voted them in and they keep spending more because we keep asking for more. We are living off our children, mortgaging their future and maybe the future of our culture and country as well.

We’re addicted to spend, spend, more, more. Without resorting to doomsaying for the sake of the dramatic I can say, without fear of exaggeration, we are living on borrowed money. Soon, if we do not change course, we will be living on borrowed time.

In a recent article I wrote about our money madness I noted this: “American culture has lost confidence in hard work, ingenuity, and a better tomorrow. And neither political party is addressing the deeper moral crisis of this age.

We need to rediscover the purpose of life and redefine our view of money. Yes, money is useful. It’s a tool placed for a time under our stewardship. Money can help resolve some problems.

However, money cannot resolve all our problems and certainly cannot resolve our most important problems. The first step toward treading a different path than the one we’re on is recognizing this.”

There is possibility and hope, but our political leaders on both sides of the aisle need to act with vision, resolve, and optimism. One can only hope they will act soon.

Details: Written by Rex M. Rogers; Published: 26 November 2010

It’s Black Friday again, the day when Americans (Canadians, and I guess others coming along like the British and Australians) seem to go shopping-silly in a mad frenzy to buy Christmas presents before all-the-good-stuff is gone.

Against my better judgment I ventured out, but only because my number one wife’s car needed a blown tire replaced so she’d once again have a spare. I survived two hours “out among ‘em,” got the tire, and came home asap.

Black Friday is the Friday after Thanksgiving, generally considered the busiest shopping day of the year. Last year and this, in the midst and, one hopes, the nadir of a recession, people chased off to the mall as early as they could. Our oldest son in Florida works in management with Target Stores, Inc. He worked all day and evening on Thanksgiving, then went into the store at 3:00 am this morning to be ready for his store’s 4:00 am opening. Several other discount stores did the same. Sure am glad to know I could have shopped at 4:01 am.

Black Friday is now joined by its youthful cousin Cyber Monday. This is next Monday. The term and apparently the practice have been around since 2005. Cyber Monday is ostensibly the day online retailers experience their biggest, busiest shopping day. People surf the Internet, pick and click, PayPal, and Confirm. It gives new meaning to “Shop Till You Drop.”

I have no problem with people shopping. Unlike how a majority of men feel about shopping if folklore and anecdote are guides, I like to shop. At least I like to go malls and walk retail space looking at the sights. I don’t buy much, if anything, but especially at Christmas time I like to experience the Christmas lights and wonder.

When I go shopping with Sarah she usually works maybe 3 stores, thoroughly and purposefully, while I case the entire mall. This has been our pattern since our dating years. Even B.C.P., Before Cell Phones, she knew where to find me. When she’s ready to do something else she looks for the Barnes and Noble or other bookstore, knowing I’ll be in one of the aisles or sitting in the bookstore coffee shop (Starbucks at B&N) enjoying a java and reading whatever I’ve gleaned—great way to wrap a shop-walk workout.

Yet I get weary when media outlets offer running reports on how worried retailers are and how far we’re likely to be behind financial projections in the year’s final quarter. This is not this year’s report. The moaning and groaning sound the same every year no matter what the economy is doing, because we’re always spending less than retailers wish we’d spend in their stores.

This is understandable, but what concerns me more is when media equate our happiness and even our general wellbeing with how much we spend. Spend more and be happier is the underlying mantra of economic news reports.

This spending equals happiness philosophy is more bothersome when it’s attached to Christmas. The spirit of the season, a truly special time of year affecting people of no-faith as much as people of faith, is co-opted, transposed, and reissued. Spending rather than the babe in the manger becomes our savior. If we’d just spend more in the Christmas season it will all be a better season.

I don’t think I overstate this feeling, nor do I think I’m turning into Ebenezer Scrooge. Far from it. I’ve already said I like the time of year and shopping, and I like to spend money on nice things for loved ones as much as anyone.

What I’m saying is that how much we have to spend has nothing to do with our happiness and certainly not our wellbeing. Discerning this truth is one of the great messages of Christmas.

*This blog may be reproduced in whole or in part with a full attribution statement. Contact Dr. Rogers or read more commentary on current issues and events at www.rexmrogers.com or follow Dr. Rogers at www.twitter.com/RexMRogers.