By a recent survey, fully 74% of Americans feel we are presently in a recession. Many, many economists do as well. Few of either, however have yet begun to feel the jaws of the vise close hard. The investment bank, Bear-Stearns, was sold to JP Morgan/Chase. Last year Bear’s employees had approximately $200,000 in retirement funds in the company. This morning they had $2,300! And the word is out that most of them will be laid off. They will definitely feel the jaws clamping down real hard! To make matters even more excruciating, many, if not overwhelmingly most, of those who owned homes have seen their equity cushion vanish.
Put yourself in their place. What are they going to do? They can’t cover the deficit via partial liquidation of retirement savings that have been flushed down the toilet, and they can’t borrow against a home equity that doesn’t exist, and they may not be able to sell a home that is worth less than what they paid.
And now we get to how any of the preceding has anything to do with Iraq, and all the borrowing the Bush administration has done to finance that part of it we know for certain we’re on the hook to eventually belly up to the bar and pay. Not included are the huge downstream costs that were included in Professor Stiglitz study.
While we’ve giddily dismissed investing in our infrastructure (Whether deferring maintenance or to keep pace with our international competitors is irrelevant.), others around the globe have been investing heavily in theirs. Were you aware that the United States has not a single airport among the Top 20? Our air service is noncompetitive. Our rail lines are noncompetitive. Our highways, roads and streets and bridges are flirting against the apron of dysfunctional. Our elementary and secondary educational systems are near useless, as compared with those in China and India and Europe. We’ve underfunded our food inspection capacities; likewise inspection of all our imports. Pacific salmon fishing may have to be halted, if not terminated entirely. Our military equipment and personnel are burned out, leaving the country more exposed than at any time since the beginning of World War II. The lists of things we have not attended to, while we’ve been distracted by Iraq, is today near endless.
Just because we have not spent the money in no way translates as we’ll never have to. We will have to, if we can. It’s the “if we can” window of opportunity that is rapidly being closed, however. Think Bear. Think those whose home values have plummeted, leaving the owners with no wherewithal to extricate themselves from the pit.
Finally, think of all your associates and relatives who are going to support and vote for John McCain, the fellow who sees the mission in Iraq as only over when “we can leave with victory.” Then, look up the definition of Pyrrhic victory.
All I ask is that you print this, then present it to those you know who just cannot see either the cost of what McCain is insisting on, or what the hell we’re — as in you and me — going to do when all the costs hit us so in the face we can no longer ignore them, yet may not be able to cover the margin when the margin call is made. And you know that margin call will be made.
— Ed Tubbs
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