"Things that cannot go on have a tendency to stop."
-- Herbert Stein
101 Thoughts on America's Economy
By Gary North
1. The crucial objective factor promoting economic growth in a private property social order is per capita investment.
2. Americans save less than 5% of household income.
3. The Federal Reserve System runs the show economically; Congress doesn't.
4. Here is the supreme symbol of the chain of command: Congress will not audit the Federal Reserve.
5. The politics of delay is the supreme mark of today's political order.
6. The Medicare budget is the single most important source of the Federal deficit, long-term.
7. Social Security is in second place.
8. Congress will eventually have to cut the benefits promised to oldsters in order to delay outright bankruptcy.
9. Congress will not cut the budgets of Social Security and Medicare in one fell swoop.
10. Oldsters vote at a higher percentage than any other age group.
11. The oldsters' lobbies are greatly feared on Capitol Hill – probably more feared than any other.
12. The oldsters vote as a monolithic bloc on the twin issues of Social Security and Medicare.
13. Congress knows that these twin issues are the third rail of American politics. He who touches it dies.
14. Oldsters are the dominant bloc within the Tea Party.
15. The Tea Party movement will not challenge Social Security and Medicare.
16. The Tea Party movement is therefore impotent to reverse the march to Federal bankruptcy.
17. There is no voting bloc that will make the balanced budget a non-negotiable demand.
18. Congress will therefore not balance the budget.
19. A Federal deficit in the range of $1.5 trillion was accepted by the public in 2009 and 2010.
20. The Federal budget deficit will remain close to $1 trillion a year for another decade, according to the government.
21. Both Social Security and Medicare are running deficits, and will continue to.
22. The FICA tax revenues long generated by Social Security in excess of Social Security expenditures will no longer be available to mask the on-budget deficit.
23. Most voters are unaware of this.
24. Most Congressmen pay no attention to this.
25. Most Congressmen will continue to pay no public attention to this.
26. Most Congressmen vote to kick the can down the road for another year.
27. Most voters believe that they, as taxpayers, will never be required to pay the debts of the government.
28. Most Keynesian economists teach that Federal deficits don't matter, except when the deficits are not large enough to stimulate the economy.
29. Most non-Keynesian economists teach that Federal deficits don't matter today, although deficits will matter eventually – somewhere, over the rainbow, way up high.
30. Most economists believe that economic growth will enable all Federal debts to be rolled over at relatively low interest rates.
Read the whole thing here: 101 Thoughts on America's Economy
