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Letters from Downunder

Follow the money

Submitted by Lindsay, Melbourne Australia!

Let us all be happy, and live within our means,
Even if we have to borrer the money to do it with
                    - Artemus Ward, 1867

(9/11) Not very many Australians knew of the ceiling for American borrowing, nor how it had to be raised for the nation to stay solvent. It's a strange concept to our ears, this idea of a government borrowing money just to pay its workers. It's even stranger that the amount owed is way beyond any possibility of paying it back, at least in the medium term.

What's even stranger is that most Americans didn't seem to know much about it either. Some certainly knew about it and were justifiably horrified at its size, and determined that it had to stop. But if ever the ostrich syndrome was shown in stark relief, it is those same people who have no idea of the consequences of their determination, nor how it can be realistically achieved. I speak, of course, of that strangest of all phenomena, the Tea Party.

I grew up during the great depression of '39, remember my parents shaking their heads in despair at the powerlessness of our government to do anything about it, and I also learnt the value of community spirit. One way or another, we helped each other so that no one went hungry, froze to death, or gave up in despair. But the Tea party? It isn't tea they're offering, it's cyanide.

So, how did it get to this state? Do you know? I surely don't, but sheer stupidity is the most benign of possible reasons. Connivance, cynicism, cronyism all must have had a hand in it, but I suspect the underlying reason was, and still is, arrogance. The biggest economy, the best policeman, the greatest world leader, and money was just the thing to keep it that way. Borrow and the world is yours, keep your populace happy with illusions and a sense of accomplishment, and you can do pretty much what you please. The rich get richer, the poor get poorer, and the conservatives in general don't give a damn. Especially the ultra conservatives, the far right wing, those whose idea of balancing the budget is to keep the money for themselves, that example being set for them by the worst politician you have ever suffered, their hero G. W. Bush.

But let me ask you this: What IS the function of government in a democracy today? Surely, number one is to see that all the citizens of the country are cared for, educated, have at least sustenance, and live within the rules of harmony. That, after all, was the foundation of our society. Not just one little elite bit, but all of it. Is that what you have? I seem to remember that the last line of your national anthem goes 'The land of the free.' Is that still true for many brave citizens? With unemployment staying around 10%, poverty-line queues, euphoria when a few thousand folk are hired, walled enclaves of the rich and ghetto-like cities - this is the American way? This is the image to tout around the world?

If you are a business and went to your bank to ask them for a loan to pay your workers, they would first be astonished, then derisive. Sure, to expand your business, after showing how you will make a bigger profit by doing so, that's fine - but to pay the staff? Forget it. You're broke. So how come the American Government has been able to do it for decades? Your income used to be more than enough to cover the bills, you used to lend money to other emerging nations - but as your spending grew way beyond that you began resort to borrowing rather than economising. I sympathise with the tea party's desire to bring the debt level down, but their idea of how to do it seems hazy and unrealistic at best. The only real, long-lasting and humane way to do it is to stop nearly all military and overseas aid, reduce the gap between rich and poor by ensuring the top 10 % of the wealthiest people pay their share of taxation, and ensure the ideal of egalitarianism is put back in place.

But I have to ask: Where has the money gone? That's the question every whodunit poses, and it is a mind boggler. OK, you owe China, japan and the UK about five trillion - they're the biggest creditors. Say another couple to others. That's seven - where's the other seven? Stocks and shares? Deep pockets? Offshore havens? And, for that matter, what exactly is a trillion dollars? A lot, for sure, but really it's just a number, and the whole thing is played as a game, and it turns out to be our lives they are playing with. Oops, I mean gambling with.

The really funny thing is that your creditors are not going to pull the plug, because they have too much to lose. China does not yet have a domestic economy sufficient to purchase a lot of its output, so they need America. As in the past it will be the ordinary citizen who pays the bills. Honest, hardworking folk who love their country. People like you.

Here's the nub: The government of the biggest economy in the world (apologies, WAS the biggest) has allowed traders aka gamblers to play with its income, fortunes, and welfare of its citizens. And when that has become too big an embarrassment to live with, they have hamstrung the chief from taking any steps to rectify it. Loony right? Loony wrong, loony crazy for sure.

Look, if I find any odd trillion stashes I'll forward them back to you. We have to look after our friends. Because Australia, 25 million strong, is better placed than most to throw the party. Or drown our sorrows.

Hang on, interest rates just went up again. Got to run, work calls.

Read Past Down Under Columns by Lindsay Coker