Highway to hell
I have been thinking for a while that the other shoe is about to drop on the US economy. Seems some other folks have too. Meredith Whitney seems to think the same thing. You remember her, she was sounding the alarm about t imminent collapse of the housing bubble in the US as far back as 2007.
State and local governments have been limping along on funds from, according to responsible economists, the far too small stimulus package passed at the beginning of the Obama Administration. Well, those funds are about to run out. And while states have the federal governemnt to fall back on, local governments have no cushion, as many of them depend on state funding for a third, or more, of their annual budgets. And as the stimulus dollars dry up, state funding to local governments is drying up as well. This loss of state funding, as well as shrinking tax revenues will likely force a significant number of local governments into default. And you thought the recession was over. The fear of this already has financial markets, where huge amounts of muni bonds are held, nervous. The fear alone could be enough to tip the US economy into a tailspin which made the collapse of the housing bubble look mild in comparison.
During the economic turmoil and devastation of the Great Depression, America managed to avoid sliding into full blown fascism, as much through dumb luck as anything else. After all, you had industrialists...like Henry Ford...and politicians and financiers...like Prescott Bush...making nice with Hitler and Mussolini. Oh, and in 1934, a group of American industrialists approached retired Marine Corps General, Smedley Butler with the hopes that he would help them overthrow FDR.
Given the recent economic turmoil and the lingering after effects of 9/11 on the American psyche, it won't take much more to push America down the particular highway to hell known as fascism. Thanks to the Bush administration, and now the Obama administration in its failure to roll back the worst excesses of the Bush administration, we're already half way there. Another serious economic downturn could provide just the impetus needed to push an already nervous citizenry the rest of the way there.
We were lucky we dodged that bullet during the Great Depression. We're not likely to be so lucky again. Especially given the number of lunatic fringe right wingers about to flood into Congress. Incidentally, these lunatic fringers were mainstreamed by wealthy industrialists and financiers who can, now anonymously, funnel millions of dollars of untraceable money into groups like the US Chamber of Commerce, American Crossroads, Crossroads GPS and other right wing political money laundering operations. Money which, in this last election cycle went overwhelmingly to right leaning GOP candidates. The further right the better, as we saw with so many Tea Party candidates.
Every thing is pointing to us being in for a long, rough ride. Tell ya what. If you're living within your means, pay off whatever debt you have and start living below your means. When the crash comes you'll be acclimated. If you're living beyond your means, get ready to take it in the shorts. We're on the highway to hell boys and girls.
I hope I'm wrong.
