The Thanksgiving holiday is a wonderful time to reflect on the many things we have always had reason to be grateful for as Americans. One of those things was, of course, the enduring strength of the American economy.
But when it comes to the economy, are Americans reflecting on past glories, not today's reality?
One thing Americans take for granted is that they will always be the richest, most successful people on the planet. Most Americans think that because that is all they have ever known.
And Americans had just what it took to become the richest people on the face of the earth.
They worked hard. They saved their money. They had little government interference. They had the industrial revolution at their backs. And they had a US dollar that was 'as good as gold.'
Free enterprise 'guaranteed' new wealth which was generated from new innovations. And our political system always adapted to the needs of an evolving global economy.
By the time the baby boomers were born, the United States had such a big lead over the rest of the world that it seemed nothing could stop America.
But nothing lasts forever.....
As it matured, the US economy and its political system became more and more rigid and more and more costly.
Look at the US economy today - there are handouts and bailouts everywhere.
Large companies are protected - especially the financial industry which is dipped in honey (taxpayer money).
And the whole population is encouraged to spend, not to save.....
Why save for retirement...there's Social Security!
Why save for Health care emergencies...we'll soon have national health care!
Why bother to save at all...when the Federal Reserve has pushed interest rates to near zero!
All of these government programs are massively inflating our debt which in turn is weakening our dollar...
Just in the past 6 years, the government's unfunded obligations (Social Security, Medicare, etc.) have increased by almost 50% from $79 trillion to about $115 trillion!
During this same time frame, government revenues have increased by only 12%...the numbers just do not add up for the long term.
At some point, the foreign capital which is so necessary currently to keep the country afloat will question whether the US ever intends to pay back its debt.
If that that foreign capital flees, the US dollar will plunge.
And there are already questions being asked by our creditors.....
Ever since the Federal Reserve began 'quantitative easing' (printing money out thin air) earlier this year, the US dollar has already dropped by nearly 15% in value. And the price of gold has shot higher.
If the United States does not get its economic house in order soon, there may be little to be thankful for when future Thanksgiving days come around.