I regret I have not been posting any articles lately. I have been trying to catch up with legal work and some articles subject to prior commitments. It’s a deflating feeling to not have completed assignments that have been promised.
Also, I have been reading a lot about the events in Egypt. For whatever it’s worth, I see no good outcomes no matter what the United States does. And I see the world becoming a more dangerous place at an exponential rate.
However, moments ago I read this article by Victor David Hanson in National Review Online. (nationalreview.com) and I felt compelled to share it because, although the topic is a bit tangential to what I write about on this blog, the situation will affect every reader and its children and perhaps children for generations down the line.
I quote a few key paragraphs.
Bubbles, Bubbles Everywhere
America must get back to producing real, rather than imaginary, riches.
Victor Davis Hanson
The 2008 financial crash originated with a housing bubble. Not long ago, the cheap-money policies of the Federal Reserve, the infusion of trillions of dollars in new foreign investment, and the misguided policies of Freddie Mac and Fannie Mae all conspired to extend to millions of Americans lots of easy credit for houses whose inflated prices they could hardly afford. Owning a house was seen as a “right” rather than the just rewards of household sacrifice, delayed gratification, and budgetary discipline.
A similar situation — more a vacuum than a bubble — is unfolding with pensions. There is perhaps as much as $6 trillion owed in retirement pledges to Americans, $500 billion in California alone. That tab under present conditions simply cannot be met.
There may already be a $1 trillion shortfall in meeting what is owed current retirees. Pensioners on the receiving end are becoming more numerous, older, and more affluent, while the younger workers on the paying end are becoming less numerous and poorer. At some point, a city, a state, or perhaps the Social Security system itself is going to announce there is no more money.
Then there is the higher-education bubble, as collective student debt nears $1 trillion with no guarantee that it will be paid back. Lots of poor college students and their strapped parents are floating huge government-subsidized student loans to pay for ever-more-costly bachelor’s degrees that no longer ensure that the recipients are well educated, will find a job upon graduation, or, if they do become employed, will be better paid than the vocationally trained.
Going to college has somehow become seen as a national right rather than a privilege predicated on superior academic achievement, financial sacrifice, and continued academic discipline.
There are disturbing commonalities between these situations — and others like the recently enacted health-care entitlement on the way. The rich and connected seem exempt from the impending reckoning, and the poor assume government will offer them debt relief. Those in between are on their own and will have to pay more for receiving less.
America is not creating enough wealth to justify the notion that everyone should go to college, get a higher-paying job than their parents, buy a nice, affordable house, and retire earlier and with more money than did prior generations.
We have forgotten what wealth is — and how tenuous our grip on the good life is. Riches are created by educated and skilled workers who directly translate natural resources into commodities that make life easier. The nonproductive sectors of government, law, and banking must facilitate that process with efficient and transparent financial and political systems.
Instead, we are failing to provide our college graduates with unique skills that make them rare assets in the global competitive arena. Meanwhile, our more talented and better-trained workers are suing, subsidizing, and regulating more than ever — instead of searching for more oil and gas, supplying more water to productive farmland, fast-tracking nuclear power plants, manufacturing machines and consumer goods, or devising new and more efficient ways to help others to produce such food, fuel, and products. In other words, we are living the good life in the abstract that we have not quite earned in the concrete.
America must get back to producing real, rather than imaginary, riches and ignore pleasing rhetoric that masks unpleasant reality — the faster the better.”