BEHIND THE EIGHT BALL
How did our country drift so far towards big government and socialism? It was never this way. Throughout my lifetime we kept moving leftward embracing one government program after another. In my family we listened to the national news every night at 5:30 P.M. Edward R. Murrow, Walter Kronkite, Huntley and Brinkley fed us a steady diet promoting big government and undermining capitalism. The major networks were all left-leaning and the newspaper and magazines were even more liberal. Big city dailies like the New York Times and Washington Post published the progressive agenda and magazines like Time and Newsweek became rabid advocates of government solutions. Unfortunately, none have ever confronted the massive failures they engineered.
For years the media fed us left wing prescriptions. It influenced a lot of people. They are still at it. They stump for liberal politicians and promote leftist personalities. Recently Warren Buffet has been getting a lot of ink. Why? He came out for raising taxes. That’s the way it works. You get your book reviewed if you are a liberal. You get your art praised if you are a socialist. Why is it that most high buck modern artists are leftists? The liberal media helped them succeed. I wonder if a right wing artist exists.
Over the years, every silly socialist scheme drew praise while practical market solutions were ignored. So we embraced all the big programs and now we’re going broke. There’s no way we can pay for our government’s wasteful spending. Costs are out of control because social programs are open-ended. They only grow. Unfortunately this runaway spending aggravates the problems they are supposed to cure thus requiring even more spending. Our trillion dollar deficits and our unfunded budget liabilities in the mega-trillions tell the whole story. We are ultimately facing national bankruptcy or total dollar debasement. Our shrinking economy means you can’t pay the bills by raising taxes and liberal social sympathy rules out any spending cuts.
Financial survival in the environment that big government liberals have created is more dicey than ever. In July of 2008 I wrote a newsletter article that tried to get across the peril that we all face by holding conventional investments. One paragraph stands out.
“Eighty years ago, in 1928, Babe Ruth, the greatest baseball player of all time, made $50,000 a year. Alex Rodriguez, a Yankee star of today, makes $28 million. The Babe made 1/5 of 1% of Rodriguez’s salary. That’s .002. In a way, you could say the money of 1928 has become virtually worthless.
“Let’s go back 40 years – half way to 1928. In 1968 Willie Mays was voted the most valuable player in the All-Star game. He made $120,000 that year. Do you ‘get it?’ $50,000 – $120,000 – $28,000,000. The rate of depreciation of the dollar is increasing exponentially (the bigger it gets, the faster it grows). Somewhere in America today (or in South America), a two year old kid tosses around a rubber ball. In less than 30 years he will earn one-billion dollars a year to play ball.”
Maybe it will be a trillion. You can’t look at the inflation rate month to month or even year to year. Look at it over five to ten year periods and you see how insidious it is. Wall Street and Washington have been telling us there’s low inflation for decades. It is getting tougher and tougher for young people to get married and raise a family because inflation is far worse than the government tells us. Wages can’t keep up. Millions of young people now turn to the government to subsidize their food or rent. Inflation leaves a country in financial ruin. Our government relies on blatant money creation and raw inflating to pay for the socialist monstrosity it has created. Protect yourself from the inevitable crisis ahead. We don’t know the timing of our future downfall but we do know that big government not only doesn’t work it brings a nation to its knees.
Here’s another paragraph from my July 2008 letter:
“The secret to financial survival now and in your retirement is to own tangible assets that will appreciate at a level that exceeds the rate of inflation. Convert depreciating paper assets into tangible assets. Make sure they are not in a bubble, and still promise appreciation. Don’t use leverage. Never try to make a killing. Be patient. Do not wind up on the financial scrap heap with the vast army of inflation-ravaged investors who didn’t ‘get it.’ Most investors are going to get killed. Be one of the select few who ‘gets it.’ Remember that in every big inflation those who listened to government spokesmen were ruined.”