Saturday, February 16, 2013

Ignorant Americans?

There are many things worthy of comment this week.  Obama's most recent propaganda attempt in the State of the Union, the shameful treatment by our government of the un-named Navy Seal "shooter" who took down Osama bin Laden, the continuing lies by the pro-gun control crowd and the ongoing travesty that is the debate over our financial situation and budget (which, by the way, the Senate has still failed to produce).

What struck me the most this week, however, wasn't in the national news.  It wasn't on talk radio.  It was a one on one conversation I had with a fellow employee.  As we talked about current events, the economy, how hard it's getting just to get by sometimes, etc.,  you know, the usual things people talk/complain about, it struck me that I was seeing the real root cause of the decline of our country:

People really don't have any knowledge or understanding of how government works (or should) and the basics of the economy.

This person I was talking to wasn't some young 20-something OWSer.  They were a peer of mine, actually, maybe even a few years my senior.  Yet they were convinced that the government had an obligation to provide for everyone.  They even believed it was in the Constitution!  When I gently challenged them on their mistaken belief, they tossed out the template response of "the general welfare clause".  Even after I showed this person that there was no such clause in the Constitution and that the term "general welfare" was nothing more than a phrase appropriated by the left to legitimize governmental growth, increases in taxation and regulation of our private lives and rights, they continued to deny reality and insisted that it was government's job to distribute to the poor what they couldn't/wouldn't produce for themselves.

After going back and forth for several minutes I finally came to the realization that this person had given up their personal sovereignty to the government in return for what they perceived as security.  I attempted to explain that government has no money of it's own.  That it can't give a dollar to anyone until it takes a couple of bucks from someone else first, and that what they believe to be security is nothing more than an illusion. 

When I told them that even Social Security wasn't guaranteed, that government had determined that people did not have any individual right to the money taken out of their paychecks and deposited into the "lock box", even going so far as to show them the Supreme Court decision that confirmed the government's right to change, reduce, or even eliminate the Social Security program at any time at it's own discretion, I was met with a disbelieving blank stare.  They said, "Well, they can't do that!  It'd be illegal."  Really?  I pointed out that we were $16.5T in debt.  They didn't believe it was that high until I Googled the national debt clock and showed it to them.

They had a solution, though.  They asked me, "How many people are in living in the country?"

"About 310 million."  I told them.

"Why can't everyone just send in a check for their part and pay it all off?"  They asked.  I pointed out that the current debt would  equal a little more than $50,000 for every man, woman, and child in the United States.  They didn't get the math at first.  When they did, their eyes got a little wide, and I began to think I was making headway.  Then, they hit me with this:

"Who do we owe all of this money to?"  I explained that we owed some of it to ourselves, oddly enough, but that the majority of the debt was owed to other countries in the form of Treasury Bonds and other instruments (I didn't try to get into the explanation of the Fed monetizing our debt).  Their eyes lighted up with (I thought) understanding.  "It's simple!  Why can't the government just print the money it needs and pay the debts off?"

At this point, I begin to feel a little like Glenn Beck (my eyes are bleeding and I need to wrap my head in duct tape to keep it from exploding).  Does this person really not understand?  Or am I being punked?

I told them that the government can't do this because "government money" doesn't exist.  Our fiat dollars are nothing more than an illusion of value that (for now) everyone has agreed to believe in, but that if the government did what they suggest, no one would accept the dollars as payment because they'd be worthless.  I got another, even more incredulous blank stare.  As if they couldn't believe that I could be so stupid!

I tried to explain in very basic terms the monetary system and how it's all interlinked in a worldwide economy.  The national currencies only have value to the extent that the other countries have faith in the issuing country.  Fiat currency is no more "money" than the checks in your checkbook.  Those checks only have value as long as someone is willing to accept them.  If/When other countries lose faith in the value of any currency, it doesn't matter how many federal reserve notes you have.  They're not worth anything.  We, the United States, are broke.  Printing more money is nothing more than counterfeiting.  No different than you laying a bunch of $100 bills on your printer and making as many as you want, except for the fact that businesses and countries are still willing (for now) to accept the U.S. counterfeiting scheme based on a promise of future solvency. 

They didn't get it.

I used an analogy of apples to explain the concept of supply & demand and how it plays a role in determining the relative value of things, including money:  When people are hungry, and food is scarce, if you have one apple, that is a very valuable apple.  When food in plentiful, and you have a truckload of apples, any one apple isn't worth so very much.  In the same way, if you limit the number of dollar bills in circulation, each dollar retains a certain value.  However, if you print an unlimited amount of dollar bills, they aren't worth much.  Each additional fiat dollar created lessens the value of the dollars that already exist.

They understood why the value of the apple changed, but couldn't grasp that the value of the U.S. dollar changed just the same way, for the same reasons.  They stubbornly insisted that "money" had value just because it was "money" and that a dollar was a dollar was a dollar, no matter what.

I tried again. 

"What makes gold and silver so valuable?" I asked. 

"Because they're rare." They said. 

I just looked at them and waited for them to make the connection between what they just said and their earlier argument that creating trillions in new dollars wouldn't reduce the value of the currency. 


I tried pointing out that since the early 1900's the U.S. dollar has lost nearly 95% of it's purchasing power, due to inflation of the currency and it's decoupling from the gold standard.

Still nothing.

This was an exquisitely painful  illustration of the real reason why we're in the situation we're in.  People, in general, have no appreciation of the true value of things (or the lack thereof).  Our schools no longer teach critical thinking, having discarded that rigorous discipline in favor of indoctrination into Progressive theories of economics and government.  U.S. History and Civics have been subject to populist revision for decades, where they haven't been eliminated altogether.  It wasn't this person's fault that they didn't understand.  They weren't necessarily stupid or unintelligent, but they were ignorant of even the basic facts underlining our system of government and how our capitalistic economy was intended to work by providing opportunity (not a guaranteed result) for all.

Sadly, I failed to completely get through to this person during our conversation.  I did manage to get them to agree to consider what I said and to think about it, the next time they were inclined to say that "the government should do/pay for/give me something". 

Maybe getting them to think was enough.  Maybe, once they open their eyes and see for themselves the economic realities involved in the promised Utopia we, as a country, can begin to retreat from the brink.  Time is growing short.


No comments:

Post a Comment