Will There Be A Double-Dip Recession?

There is an interesting (but depressing) editorial by Mortimer Zuckerman in U.S. News & World Report regarding the sad state of the Western European and US economies.  In his article, Mr. Zuckerman paints a particularly bleak picture of the US's debt burden because our children are not being educated - despite the US spending nearly twice what other countries spend - and will not be ready to take on the ever increasing debt that our and previous generations have left them through our irresponsible spending habits.

The author makes his point by way of the forecasts made by a German mathematician and philosopher of the early 20th century, Oswald Spengler.  Mr. Spengler had an intersting view of the rise and decline of western civilization and it closely mirrors what I have been thinking for a long time - I shall have to delve into Mr. Spengler's works to see what else he has to say.

Anyway, the article is highly interesting.  I recommend it highly.

Government Employment - The New Welfare

Government is the fastest growing employer in the US - no small feat, given that it's already the largest employer (counting both federal and local government). It makes you wonder what all these employees actually do! Well, even years ago, when government was a lot smaller than it is today, most people believed: not too much! So, as people are drowning in debt, losing their jobs, their home's value is decreasing along with their salaries, it is not surprising that they don't take too kindly to the ever increasing cost of government.

The fact that government employ is a safe haven from the crumbling economy has not gone unnoticed by the masses: more and more people are flocking to Uncle Sam's warm employment embrace. Why not? They're hiring. Government workers are still getting pay increases. People working for Uncle Sam (or for the State) don't have to worry about health-care costs! The government doesn't have to live on a budget - it can either increase taxes on its citizens or borrow money (which will eventually increase taxes on a future generation).

Since most government workers don't do much at all, it can be described as an extremely lucrative form of Welfare. It's extremely nice for the people on it, but not so nice for the people having to pay for it. And it can't go on forever. Before this great recession, the parasites growing within government went unnoticed - the population was relatively upbeat about the future - salaries were increasing faster than inflation and they people's prime asset - their home - appeared to be increasing in value even faster than that! But now, things have changed. Citizens in financial straits do tend to notice when their disappearing wealth goes even faster thanks to the unrestrained spending in government.

I am amazed that US citizens are not up in arms over their government's lack of financial restraint. Although I'm an Obama supporter, I'm beginning to doubt even he can restructure this growing house of cards. Think about it: if 1/3 of the US population works for the government and they all vote NO on legislation that would cause them to lose benefits, what chance does such legislation have of passing? Voter turnout in the US is too low to compete with such an enormous "special interest group".