We have many crises the president and Congress should be addressing. But with our present no-show House of Representatives and general Republican obstructionism, it doesn’t look promising that our domestic problems will be resolved or our international standing maintained. Unresolved domestic issues include our lack of congressional response to climate change, illegal immigration, reducing poverty, improving education, reducing costs to students, preserving the environment, infrastructure repair and tax reform. Without resolution, these issues only will compound themselves. But there are 800-pound gorillas that also demand attention. Income inequality in the U.S. is worse than ever. This problem began under President Ronald Reagan and has increased ever since. Tax cuts for the wealthy and for corporations by Presidents Reagan and George Bush facilitated the disparity between the classes. Herein lies a ticking time bomb that could cause an economic implosion. With no changes in our governmental policies, such as tax reform, the working class, as a group, will have less and less to spend as prices rise. This will directly affect the very wealthy. Our economy depends on consumer spending. Those people whose wealth is based on business will have fewer and fewer consumers trading at their firms. With fewer consumers, fewer employees will be needed, so they will be laid off. People laid off will have less and less to spend - and downward we go. The second gorilla is the fact that Republican and Democrat administrations have continued the printing of paper money without anything near gold or silver as backing and the selling of treasury bonds. The huge printing of paper money can facilitate inflation; and, over time, interest payments on bonds increase dramatically. Increasing annual debt payments (around 9 percent of the annual federal budget now, according to answers.com) eats up our annual budgets. How can we continue to subsidize the wealthy and corporations when we need their increased participation in providing money for reducing the national debt (the national debt stands at $17.8 trillion, according to treasurydirect.gov) and the annual budget deficit? Such participation is in the wealthy’s long-term best interests. The third gorilla is Russia, China, India and other countries planning to cease using the American dollar as the international trade unit of exchange. The Chinese government already is insisting that many of its trade deals with other countries be based on the yuan and not the dollar. A new currency also is being considered. Russia has been selling U.S. bonds and along with China has been significantly building up its reserve in gold rather than dollars. For political purposes these countries will keep attacking the dollar’s international use until they are successful - unless whoever is president and in Congress develop a defensive plan. Certainly, China and Russia will do nothing to aid the U.S. With no international support, the dollar will plummet in value and savings and investments in dollars in the U.S. drastically will be impacted. Income inequality, increasing national debt, and the loss of the dollar as the international unit of exchange are three 800-pound gorillas in the room. The first and second are long-term while the third is short-term. Where are Congress’ and the administration’s plans to deal with these oncoming events? Donald E. Maypole of Lake Nebagamon was the first director of the department of social Wwork at the University of Minnesota Duluth and has taught in and extensively consulted universities overseas.
We have many crises the president and Congress should be addressing. But with our present no-show House of Representatives and general Republican obstructionism, it doesn’t look promising that our domestic problems will be resolved or our international standing maintained. Unresolved domestic issues include our lack of congressional response to climate change, illegal immigration, reducing poverty, improving education, reducing costs to students, preserving the environment, infrastructure repair and tax reform. Without resolution, these issues only will compound themselves.But there are 800-pound gorillas that also demand attention.Income inequality in the U.S. is worse than ever. This problem began under President Ronald Reagan and has increased ever since. Tax cuts for the wealthy and for corporations by Presidents Reagan and George Bush facilitated the disparity between the classes. Herein lies a ticking time bomb that could cause an economic implosion. With no changes in our governmental policies, such as tax reform, the working class, as a group, will have less and less to spend as prices rise. This will directly affect the very wealthy. Our economy depends on consumer spending. Those people whose wealth is based on business will have fewer and fewer consumers trading at their firms. With fewer consumers, fewer employees will be needed, so they will be laid off. People laid off will have less and less to spend - and downward we go.The second gorilla is the fact that Republican and Democrat administrations have continued the printing of paper money without anything near gold or silver as backing and the selling of treasury bonds. The huge printing of paper money can facilitate inflation; and, over time, interest payments on bonds increase dramatically. Increasing annual debt payments (around 9 percent of the annual federal budget now, according to answers.com) eats up our annual budgets. How can we continue to subsidize the wealthy and corporations when we need their increased participation in providing money for reducing the national debt (the national debt stands at $17.8 trillion, according to treasurydirect.gov) and the annual budget deficit? Such participation is in the wealthy’s long-term best interests.The third gorilla is Russia, China, India and other countries planning to cease using the American dollar as the international trade unit of exchange. The Chinese government already is insisting that many of its trade deals with other countries be based on the yuan and not the dollar. A new currency also is being considered. Russia has been selling U.S. bonds and along with China has been significantly building up its reserve in gold rather than dollars. For political purposes these countries will keep attacking the dollar’s international use until they are successful - unless whoever is president and in Congress develop a defensive plan. Certainly, China and Russia will do nothing to aid the U.S. With no international support, the dollar will plummet in value and savings and investments in dollars in the U.S. drastically will be impacted.Income inequality, increasing national debt, and the loss of the dollar as the international unit of exchange are three 800-pound gorillas in the room. The first and second are long-term while the third is short-term. Where are Congress’ and the administration’s plans to deal with these oncoming events?Donald E. Maypole of Lake Nebagamon was the first director of the department of social Wwork at the University of Minnesota Duluth and has taught in and extensively consulted universities overseas.
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