Creature From Jekyll Island by G. Edward полностью

private credit. The result is that the productive side of the nation is handicapped by unfair competition for investment capital. To obtain new money for growth, private companies must pay higher interest rates. These are passed on to the consumer in the form of higher prices. Many companies are forced to curtail their plans for expansion, and potentially new jobs are never created. Some companies are forced out of business altogether, and their employees are put out of work. The economy is always retarded by government debt. The larger the debt, the greater the damage.

The 27% portion of the national debt held by foreign investors may not seem like a large percentage, but it represents a huge amount of money nevertheless. A trillion dollars cannot be ignored.

These bonds could become a great problem down the line as they mature. So far, they have been a partial blessing because they were purchased with money that already existed. Therefore, they were not inflationary. But it is not difficult to imagine future conditions under which the bond holders would decide not to renew. In order to pay off those bonds on maturity, the Treasury would have to issue new ones. The Federal Reserve then would have to purchase the new bonds with fiat money. Therefore, foreign-held federal debt is a ticking time bomb. If it should ever have to be picked up by the Fed, the inflationary impact on our country would be staggering.

WHAT DIFFERENCE DOES IT MAKE?

There is a tendency to read about these trends with a kind of detached fascination: Isn't that interesting! But where is the relevance? Why get excited over such technicalities and abstractions?

So what if the government is mired in debt? Who cares if the interest will never be paid? What of it if we have a world currency or a world government? What difference will any of it make to me?

The first step toward answering those questions is to see what difference it already has made. Our upcoming trip into the future will merely extend those lines.

DOOMSDAY MECHANISMS

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As illustrated in previous sections of this book, there has been a long-term policy at the highest levels of government to shift economic resources away from the United States. That policy has been successful. Based on doomsday predictions of environmental disaster, government has saddled private companies with such burdensome expenses for eliminating waste products that heavy industry, once the mainstay of American prosperity, has fled our shores. Because of concern over the natural habitat of the spotted owl and the desert kangaroo rat, millions of acres of timber and agricultural land have been taken out of production. High taxes, rules beyond reason for safety devices in the work place, so-called fair-employment practices, and mandatory health insurance are rapidly destroying what is left of America's private industry. The result is unemployment and dislocation for millions of American workers.

Federal taxes, including social-security, now take more than 40% of our private incomes. State, county, and local taxes are on top of that. Inflation feeds on what is left. We spend half of each year working for the government.

A study by the AFL-CIO in 1977 revealed that, in spite of wage increases in terms of dollars, the real wages of the average American—in terms of what he can buy with those dollars—were going down. That trend was confirmed in 1980 by the U.S. Census Bureau. In 1992, the Consumers' Union analyzed how many hours one had to work to buy common items compared to thirty years previously. Some low-priced items—such as long-distance phone calls, gasoline, food products, and wrist-watches—were cheaper in 1992 in terms of hours worked to acquire them. But the higher-priced items—such as housing, college educations, and health care—were far more costly than ever. The report concludes: The average U.S. household has maintained its living standard largely because families are working more hours. Millions of women entered the work force in the past 25 years. In 1970, about 21 million women worked full time. Now that figure is over 36 million. That has helped to keep family buying power fairly stable. But for many families, it now represents the labor of two earners rather than one.

The message here is that real wages in America have declined.

Young couples with a single income now have a lower standard of 1. "Has Our Living Standard Stalled?" Consumer Reports, June, 1992, p. 392.

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