Friday, November 11, 2011

2012 Election: Romney Vs. Obama

I spent two hours on Wednesday night watching the Republican debates, and I felt, as I'm assuming most Americans felt, embarrassed for our country.

The Perry moment was the highlight of the night in terms of shame, but at all times I thought I was watching a Saturday Night Live sketch screening.

The exception of course is Ron Paul, who is a poor speaker and gets too excited when trying to put thoughts together, but has a firm understanding of the global economy and what is in store for America this decade.

He is the only candidate, democrat or republican, who would make tough decisions that America desperately needs.  If Ron Paul was elected and his spending restrictions were imposed it would send our country into a deep depression.  It would be very similar to what we experienced in the 1930's, although some society safety nets would blunt the blow to the poor and middle class.

We would live through a few terrible years where our standard of living would fall tremendously, and the debts would be allowed to liquidate throughout the system.  Housing prices would fall, large investments banks would collapse, inefficient businesses would fail, and many government workers would have their exorbitant pay cut and their pensions lowered.

What happens then?  We hit bottom, and with the system cleansed of the toxic debt our country begins to rebuild on a solid foundation.  Unimaginable you say?  This blueprint was used the past three years by another country so we have a first hand account of what the outcome looks like.

During the financial crisis of 2008 every nation around the world took the toxic debt on their bank's balance sheets and placed them on the backs of their tax payers.  They nationalized the debts, and they nationalized many industries that were formally private (auto, mortgage).  Only one country decided not to go this route.

Iceland.

Iceland decided to let their banks fail.  The debt was liquidated and the country itself declared a semi-national bankruptcy sending it into a deep depression.  All other countries looked at Iceland during 2009, the peak of their pain, and laughed at their stupidity.  Our stock market came roaring back and a temporary artificial floor under home prices was created using trillions in printed dollars and additional government debt.  America cheered incumbent Obama and his bank, auto, and mortgage nationalizations that had saved us.  He poured it on with an additional $800 billion in stimulus to the roaring ovation.  Iceland's politicians were scorned.

Then something happened.  Iceland hit bottom in late 2009 and early 2010 and started to grow with their new foundation in place.  Unemployment begin to fall.  Trust was back in the banking system.  Loans were made to businesses and real estate owners at prices the banks knew were free market levels.

Now Iceland is booming.  The rest of the world is stuck at high unemployment with an entire banking system that is underwater with toxic loans.  The banks will not lend money to small businesses or home owners because they can't.  The governments have stepped in and piled more toxic loans on their own balance sheets to try and artificially stimulate the economies.

This can be seen in Europe, Japan (who began this process in 1990 and is still stuck in malaise), the UK, and the United States.  All  nations who need their systems to cleanse, but who have politicians who refuse to ever tell their people that there will be anything but sunshine.  They only promise more.

18 months ago Greece woke up and found that the bond market would no longer lend to them.  3 weeks ago Italians woke up and found out the same thing.  It happens like a flick of a light switch and when it comes it is over. 

So here we are again.  It appears clearly now that it will be Romney vs. Obama.  Both men are the same.  No changes will be made.  I will drive to the polls and write Ron Paul's name on the ballot for the same reason someone throws a penny into a fountain thinking it may help their life.

I will go home to watch the results of the Romney/Obama election and begin to make serious considerations about whether America is the country I want my children to grow up in, a thought I believe will cross the minds of many people my age who have a clear understanding of what is coming.

But that is all looking forward.  The future tense.  America is a time of now.  Now and today we have our comedic republican candidates who can best be summarized by Jon Stewart.

The Daily Show With Jon StewartMon - Thurs 11p / 10c
Indecision 2012 - Mercy Rule Edition
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