Vic Socotra

23 November 2009

Fool’s Gold

I was going to get to the cornbread stuffing recipe this morning, I swear it, and thought about it when I turned off the paved road at the abandoned Rapidan Mill and plunged across ten miles of bad gravel road in the farm country of north central Virginia.

The single lane was no challenge for the Bluesmobile, and it gave me an appreciation for what it must of have like for large groups of armed people to forage and march through these lovely low hills.

No having any more than a general notion of where I was going, it has a certain amount of adreniline, since there would be no exit except on Shank’s Mare if the car broke down, or if I ran it into one of the imposing ditches.

I intersected Rt. 15 just north of Orange, Virginia, and followed the nice road north to a place I will have to tell you about later this week, if we get to it.

I have the cornbread right here by the computer, and the pictures of the car on the old Culpeper Road where General Winder was killed, and the strange interlude at the Dulles Expo Center, but I started off on the news this morning, and thing fell apart.

Whether it was right or wrong, we did it. We enabled our leaders, Bush in the waning days of his presidency and Obama at the beginning of his, to spread around nearly two trillion dollars. It was a sort of bipartisan “gotcha,” as the house of cards those risk-taking fools on Wall Street brought us.

We got through the crisis de jour by borrowing a lot of money at low, short-term interest rates. If that sounds like what we fools in the private sector were doing in the housing bubble that was the immediate precipitant of the disaster, you would be right.

The Nation essentially bought into “recovery” as an “adjustable rate mortgage.” The question, unasked at the time, is what happens when the interest rates re-set. The Federal Reserve is not, at present, in the position to stop mowing the lawn and move out.

On the whole, I think most of us agree it was the right thing to do. Arguably, the Bush cash may have been decisive in avoiding a complete meltdown of the system, but the continuity into the new world of Change lent a confidence that enabled the Nation, and the West, to lurch into something that looks like recovery, even if it is sadly without the restoration of many jobs.

Our elected idiots have placed the restructuring of twenty percent of the rest of the economy as the number one priority for action before the end of the year.

Call me what you want, but I think the priority is probably a good one, even if it is being discussed by an aggregation of fools unwilling to discuss the real issues. The massive restructuring does not address the major issue that will bring us low, which is end-of-life care.

I had to think about that when I stumbled from an NFL game into 60 minutes, and Steve Croft talked to a dying man, 68 ripe years of age, who insisted that a liver and heart transplant were the right way to go for him.

I admired his spunk, but he didn’t have the money to cover it. The tab for that was estimated at $400,000, give or take a band-aid or two.

So here were are. Interest rates will have to come back up, once we have gone a few quarters with growth in the GDP; if they don’t, there will be no reason for anyone to hold US Treasury paper when there are more attractive options overseas, including real gold.

Debt service on the $12 trillion dollar obligation will soar from around two hundred billion this year to something over seven hundred by the end of the coming decade. That isn’t even real gold. It is simply making the minimum payment- like living with a maxed-out national Visa card.

That is the equivalent of transferring the entire defense budget for 2010- $663 billion, counting the Overseas Contingency accounts- plus the Department of Homeland security ($43 billion).

That probably isn’t going to happen, though one does wonder where all the money is supposed to come from. Since all politics is local, and I am the smallest indivisible unit in my locale, I’m stuck with the personal consequences of what is going to happen.

First, on the health care thing, we aren’t going to be able to fund $400,000 transplants for dying people. Who will decide who gets what, particularly at the end-of-life, is going to be up to someone in the Government, since that is where the money used to be.

That means disconnecting Grandma, and I don’t see anyway around it. Do you? Oh, and by the time we get this sorted out, that means that “Grandma” is you and me.

The Republican’s deep opposition to the whole reform issue essentially means they are standing for the current system, which is utterly unsustainable, and so breathtakingly cynical that it boggles the mind.

The Bill the Democrats are going to jam through has the same sort of unsustainable provisions, but deliberately expansive. It is likely to be unsustainable, too, though God only knows what is in it.

I don’t know what is in it, precisely, any more than the Senators, except in the broadest of brushes, and that will mean little until it is passed and then emerges from behind the closed doors of the Conference with the fools from the House.

There are those out there who are enamored of the concept of “Peak Oil,” a theory that holds we have located and exploited most of the petroleum in the world, and production will only decline, even as demand continues to soar.

I am not sure about that, but I am coming around to the theory of “Peak Income,” which holds that this was the last best year for making any money, and from here out, the resources will be depleted.

The deferred bill that must be paid by the government is not going to actually come due until next year, when the short-term notes mature and must be paid. Accordingly, there is a lot of lunacy that will happen in the next few months that will only make the situation worse.

That is what happens when you live in a paradise run by fools.

I ran into another set of fools late yesterday. They share many delusions with the rest of us, but none include full faith and confidence in the Congress and the Executive Branch. They are preparing to go their own way, if necessary, and putting up their own gold to do it.

I’ll have to get to that tomorrow. It was pretty weird.

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