Most Americans Agree Our Debt to China is the Biggest Threat to the US, While Politicians Keep Running Up More Debt

While lefty politicians and unions continue to use scare tactics and sob stories to expand the government and increase the national debt, more and more Americans are alarmed by the national debt and see it as a threat.

CNS News: According to a Zogby International poll, 58 percent said the debt was a greater concern, versus just 27 percent who chose terrorism perpetrated by “radical Islamists.”

The polling firm asked respondents: “When you think about the long-term security and well-being of the U.S., which of these do you believe is a more serious threat?”

Political ideology did not change the results significantly, the pollster pointed out.

“Interestingly, there was little variation by party identification with a majority of Democrats, Republicans and independents all agreeing that the debt owed by the United States to China poses the greater threat,” the Zogby report said. “Opinion was consistent across all other major demographic and politics sub-groups.”

I’d like to see a poll that asks if people are willing to go through a little extra economic pain now to ensure future generations have the same opportunities as past generations. Either way, like it or not, more economic pain is on its way.

But, to many people, life looks increasingly desperate. Official U.S. figures admit to some 15 million unemployed. Despite the massive stimulus packages, American consumers are still in shock and not spending as they once did. Already, the fall in consumer demand is larger than that of the early 1930′s. The authorities now face a moment of truth: admit that they don’t have the power to bring the consumer back to life or redouble their efforts, consequences be damned.

The whole world awaits the decision, which could indicate a wild inflation, a major recession or the worst of both.

Should the Administration accept, or even be forced to accept, an ultimately healthy deleveraging, a deep recession would ensue. Entitlements would have to be dramatically reduced while taxes remain unreasonably high. Otherwise, the federal government could face outright default. Barring a popular revolt, this course would lead to a sustainable recovery.

On the other hand, if the government continues to run the printing presses, as seems far more likely, hyperinflation will become a distinct possibility. While this may create the appearance of recovery, with rising stocks and less short-term unemployment, average citizens will notice a sharp decline in their standard of living. It will get harder and harder to ‘make ends meet’ as wages increase less than the cost of everyday goods.

The hyperinflation scenario will likely buy the Administration a little more time, but would eventually give way to the worst of all possible worlds: hyperinflationary depression. Here, America would feel a deep recession concurrent with rising prices – similar to what we’re seeing right now with gold. This is truly a devastating outcome and should be avoided at all costs.

America is at a crossroads. It is important in these times to have leaders we can trust to make the right decisions, even if they are unpopular. Obama, Bernanke, Reid, Dodd, Pelosi, Frank… These are not names that are trusted to make wise choices over expedient ones. The markets know it.

The markets know it, and the American people know it too. Since the article excerpted above was written, there’s been no indication that the government is going to stop borrowing and spending. No matter how they try to package it, the people aren’t buying what they’re selling. Professor Glenn Reynolds compares the federal government to Schlitz beer. There was a time that Schlitz was a top selling national beer. But, to save costs they used cheap ingredients and eventually people realized Schlitz was awful. At least with Schlitz people had choices. Not so with the federal government.

The federal government, alas, finds itself in much the same position. The political class sold its legitimacy off in drips and drabs. As “smart politics” has come over the past decades to mean not persuasion but the practice of legerdemain, the use of political deals, cover from a friendly press apparat and taking advantage of voters’ rational ignorance, the governing classes have managed to achieve things that would surely have failed had the people known what was going on.

But though each little trick may have slipped by the voters, the voters have nonetheless noticed that the ultimate product isn’t what it used to be. The end result, as with Schlitz, is a tarnished brand. And rescuing tarnished brands is hard.

It gets worse. Not long ago, the federal government enjoyed a stellar reputation for honesty and competence. Now, according to a recent CNN poll, three-quarters of Americans think federal officials aren’t honest . (There’s no separate survey here on what the “political class” thinks, but I suspect that its numbers would be sunnier, but still appalling, as above). So what do we do with a federal government that many voters think is illegitimate and dishonest?

Well, the Declaration of Independence allows for the prospect of altering or abolishing the government we have in order to get a government that’s closer to what we want. That needn’t involve anything as violent as the American Revolution or the Civil War, but the need for change — real, structural change as opposed to campaign-slogan “change” — is becoming more obvious.

In the past, America has managed to reinvent itself without transformations as wrenching as the Civil War or the Revolution. As the legitimacy of our current arrangements becomes increasingly threadbare, it is perhaps worth thinking about how this might be accomplished again. Because when a great beer dies, it’s sad. But when a great nation dies, it’s tragic.

It’s doubtful any prominent Democrats are going to come out and be honest with the American people. As for the Republicans, it remains to be seen.  But if the Republicans don’t get their act together, Ed Morrissey warns, things could get even worse.

If the market is responsive, one party will start providing that choice, or else consumers will create a product to meet the demand.  A third party would damage the GOP almost irrevocably, while benefiting Democrats in the short run.  With that in mind, the Republican Party and its politicians had better consider some rapid product improvements or find itself becoming the Schlitz Beer of political parties.

We’ll find out soon enough whether or not the Republican Party got the message.

Via memeorandum

This entry was posted on Sunday, March 7th, 2010 at 3:38 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed.