When You're Neck-Deep in a Hole You Should Probably Stop Digging

Yep.  We're kind of boned.  I suspect we'll be well and truly boned shortly.

The dollar's in the crapper.  Oil is flirting with $150 a barrel.  We're fighting two wars at the moment and either we or a close ally will probably strike Iran by the end of the year.  We have entitlement spending spiralling out of control (and both parties are to blame for that, thank you very much Medicare prescription drug "addition").  We are long on demand for mass transit but short on infrastructure.

We're really in some trouble here.  I think we need to soberly assess what we need, what we want, and what we can afford.

Look, we're liberals.  We're (usually) the big spenders.  While we historically tax enough to pay for most/all of it, we do tend to support more and larger programs.  I'm the first to admit that the Republicans have really been on a deranged bender for the last seven years.

I think we may be a little too hopeful about Universal Health Care and some other programs.  I absolutely support UHC and I look forward to its implementation.  However, I think we're at or near the precipice economically speaking.  Our energy needs aren't ballooning as quickly as those in India and China, but their hunger will starve us just as well as it starves them.

I have a sinking suspicion that we're about to hit a wall.  If things do really get bad quickly and serious economic austerity is needed to get us through it, will we have the strength to accept it?  I emphatically do not want this to happen, but we've been spending money we don't have to buy crap we don't need and fight wars that are either unnecessary (Iraq) or allowed to run far too long (Afghanistan).

We can list all of the things we want and expect from our government.  My list is pretty similar to most anyone else's here.  However, I think we may have to accept that the monetary freebies (civil rights and so forth) will be far easier to attain than the big spenders.  It will take some time to right the ship of state.

I think we're in for an incredibly painful correction, and if I'm right then we will not be able to afford a lot of the things we want.  This isn't about Obama, nor is it about McCain.  The very nature of our society, the underpinnings that fuel it and sustain it, well, they're being stretched to the breaking point.  Things like UHC could tomorrow be yesterdays fantasies.  I dunno.  I certainly hope that this isn't so, but we'll have to work through it.

What would the Democratic Party look like in a hypothetical period of forced-austerity?  Could it survive?  Could we be the economic adults?  I'm for all the good government we can afford.  After the damage this Administration has wreaked (with the help of a mostly Republican-run Congress) and some bigger issues that are beyond them, I'm afraid we're about to find out.

For example, if Israel hits Iran then oil will absolutely go through the roof.  Insurance is void in a warzone.  If Iran closes the Straights of Hormuz or even just tries to, then no oil tanker captain will attempt to pass them.  Lloyds of London will declare the area a warzone and the oil will stop flowing.  That's nearly a third of the world's supply going through there.

In sum, I kinda think we're arguing over a bunch of costly programs (many of which I earnestly support) that are probably never going to happen because the bottom's about to drop out.  Obama (and the rest of us) are gonna be left holding the bag, and possibly judged by history for the disaster on our watch.

What can we do?

Tags: Debt, Economy, wars (all tags)

Comments

35 Comments

Tips?

I may need them to pay the rent at this rate.

by Reaper0Bot0 2008-07-14 06:31AM | 0 recs
Re: Tips?

Such a great diary. I really dig the way you bring a different viewpoint to the table without antagonizing fellow Democrats. Lot's of things stuck out for me on this one but this line was especially revealing :

.... we've been spending money we don't have to buy crap we don't need and fight wars that are either unnecessary (Iraq) or allowed to run far too long (Afghanistan).

It seems the current goverment is spending like they are dealing with Monopoly money. I really hope the rumors that Bush will strike Iran are just that, rumors, because I don't think this country can take the curren strain any longer. WHEN Obama wins he'll surely have to a mess on his hands and it's imperative he talks to the American people like adults and does what he needs to do to "fix them books" first.

Although a nightmare scenario I would agree that Barack Hussein has small wiggle room in his first term as President.

I could go on about this but I got to jet.

Thanks for the read Reaper, I'm beginning to really look forward to your work (love the new bike by the way).

Mojo'd and rec'd.

I hope this diary doesn't turn into another flame war.

by spacemanspiff 2008-07-14 06:57AM | 0 recs
Re: Tips?

I'd only add 'eventually the crdit card becomes due at some point".

by Dog Chains 2008-07-14 07:01AM | 0 recs
plus interest n/t

by annatopia 2008-07-14 09:15AM | 0 recs
Re: plus interest n/t

hey, why would we want to give children health care and the like when we can send all that money in interest payments to Sauds and China?

by Dog Chains 2008-07-14 11:19AM | 0 recs
Re: Tips?

Let's save money and only tap communications with judicial oversight!

by redwagon 2008-07-14 12:41PM | 0 recs
Re: When You're Neck-Deep in a Hole You Should Pro

I am by nature an optimist, so I don't see it this negatively. Yes, we have lots of problems, but none of them are unsolvable.

The price of oil will come down eventually. Demand has not really outstripped supply, yet. Much of the increase in the cost of oil can be laid on speculators. I expect the loopholes that allow that to happen will be closed sometime in the next year. The price of oil will drop some. This will take some of the pressure off of the economy. That in turn will improve people's outlook. Add in a new president and a continued downturn in violence in Iraq and consumer confidence should rise.

While the I expect the price of oil to drop, it will stay high enough to keep the focus on finding solutions. This won't be like the 1970's when a drop in the price of oil killed alternative fuel research. This time, everyone realizes something must be done. That's a positive.

An added benefit from alternative energy research will be a drop in greenhouse gas emissions. Another plus.

As far as health care goes, they will have to find a way to shift the burden for the costs. Right now, that burden falls heavily on employers. We need to move away from this model so our employers can be more competitive on the world market. At the same time, we need to limit the amount of money the insurance companies are skimming off the top. This shift of costs and reduction will make UHC possible.

The one thing in your scenario that could cause us to be well and truly f*cked is some kind of war with Iran. This would absolutely throw the whole world into an economic nightmare. Everyone realizes this danger. That's why I don't think it will come to that. No one, not even the Israelis are prepared to face the consequences of such an action. Hopefully, this is all simply posturing to force the Iranians to make concessions.

One thing I've learned in my 60+ years is that things are seldom as bad as they seem. That's why I am an optimist.

by MS01 Indie 2008-07-14 07:02AM | 0 recs
Agree with your basic outlook, but...

I would differ a bit regarding the price of oil..maybe after it goes up to $4.50/gal it will come back down to $4.00 or hover in between, but I think our best-case-scenario would involve the price stabilizing rather than dropping much...the problem is that demand is going up, production is staying the same, and the dollar is in the crapper (which is, IMO, a much bigger factor than "speculation".

But as you say, things are seldom as bad as they seem, and they're never as bad as bloggers say they are, because bloggers go bats*** at the drop of a hat.

Nonetheless, we are probably in for serious and prolonged recession (the old euphemism--I guess "correction" is the new euphemism). However, rather than falling for the Republican "austerity" program, we should consider that the best program for bad times may be more social spending, not less--the best way to kick start the economy may in fact be putting money in the hands of poor and working people rather than the wealthy...and improving healthcare could create a lot of jobs.

by Alice in Florida 2008-07-14 07:36AM | 0 recs
Re: When You're Neck-Deep in a Hole You Should Pro

I'm optimistic and feel much as you do. Maybe we'll be branded Pollyannas but I really think things will improve.

It's interesting that you bring up speculators and the price of oil. This is one reason that I am all for drilling (along with a host of alternative energy possibilities as part of a comprehensive package). Since oil is traded by speculators just the knowledge that more oil will be coming in (and it's debated whether it will be in as few as three years to as many as ten) -- that will help drive the price down. As will other things.

I also agree that the one real wrench in the works would be hostilities with Iran (doesn't even have to be an all out war).

by cuppajoe 2008-07-14 12:48PM | 0 recs
Speculation is only a small, short-term influence

Look at the production curves from existing fields, the demand curve from emerging economies, etc... it paints a stark picture.  We are at peak oil NOW.  Other than very short term fluctuations, the price is not going down.  Fear that Bush or Israel will bomb Iran is probably adding 15-30 dollars per barrel right now, and a major political change might get rid of that premium, but overall the trend is up up and more up.

The Oil Drum is a good blog to read if you want to keep up on the inner workings and economics of the oil industry.

by protothad 2008-07-14 12:59PM | 0 recs
One way to look at this is to

consider that the Neo-cons have won the war, regardless of who is elected the next President.

Their goal has always been explicit - bankrupt the nation so that the only solution is to "starve the beast" - that is, to eliminate all those "entitlement" programs you're speaking of.

Under those circumstances, they've won.  When progressives are talking about our social compact as "entitlement" programs, and admitting that we may have to cut/eliminate them and give up on our heart's desire - universal health care - then they've managed the conversation, they've dictated the parameters and they've won.

I'm not criticizing you, mind - you may well be right.

But they've won.

by aggieric 2008-07-14 07:08AM | 0 recs
Re: When You're Neck-Deep in a Hole You Should Pro

I'm not an economist, so I don't know how the public would react to a push for UHC (or at least something close to it; only Edwards had a truly universal plan). But I don't think a bad economy pre-empts the creation or expansion of a government program. If so, we wouldn't have Social Security, FDIC, the FHA, etc., etc.

Given how many people are being wiped out by unexpected medical bills, or can't afford health insurance in the first place, I don't see why a push for UHC wouldn't be of huge comfort to them, assuming it's not paid for with George W.-style "voodoo" math.

by Johnny Gentle Famous Crooner 2008-07-14 07:10AM | 0 recs
Re: When You're Neck-Deep in a Hole You Should Pro

You know that Clinton had a truly universal plan just like Edwards did. But it would pain you to admit anything positive about Clinton. Hopefully you'll get over that affliction some day.

by LakersFan 2008-07-14 02:04PM | 0 recs
Not to have been totally

negative in my first comment - I agree with Indie that there are things that can be done to address this - the real question is whether or not enough Democrats will bite the bullet.

1) return the tax codes to some semblance of sanity, including  taxing the wealthy and the corporate world at their truly fair levels;

2) punish those corporations that have set up fake off-shore headquarters to avoid taxes;

3) pass legislation that sets reasonable limits on corporate profiteering/greed;

4) re-establish genuine but reasonable regulatory processes over the financial world and US stock and commodities markets;

5) re-think the most extremely generous cases of free-trade;

6) create a credible, logical and achievable energy policy which is not dictated by big oil, big auto, big sugar, big corn;

6) recognize the importance of our allies and return to an era of international political negotiation and collaboration;

7) deal with China and Russia in the above ways (negotiation, collaboration and fair, but firm trade policies;

8) recognize that we don't really need to be the world's police force and our military doesn't need to be spread all over the world; in conjunction with this, demand that our allies begin to fund more of their own national defense needs, and stop the US subsidization of their defense.

For starters.

by aggieric 2008-07-14 07:21AM | 0 recs
Re: Not to have been totally

Mojo'd. I've never given a more deserving one.

by MS01 Indie 2008-07-14 07:24AM | 0 recs
Re: Not to have been totally

This could be a really great diary.

by spacemanspiff 2008-07-14 07:33AM | 0 recs
I don't diary much here -

feel free to take it and run, so long as you give me the h/t.

;-)

by aggieric 2008-07-14 08:16AM | 0 recs
Re: Not to have been totally

So where do I sign up?

Seriously, I would add a full scale review of the no-bid contracting system, with an eye towards prosecution for war profiteering that would include huge fines as well as jail time for the guilty.

by Susan from 29 2008-07-14 01:01PM | 0 recs
You tapped into something Reap

that I've been aching to hear acknowledged by the remaining candidates.

And the Democratic party is still in need of a thread, an over-arching philosophy.

by catfish2 2008-07-14 07:42AM | 0 recs
With this perspective we can kill the GOP

"tax and spend liberals" slam.

It has been the Right who have been (in theory) the Responsible Adults and the Democrats have by and large allowed themselves to be painted into the Dreamy Hippie corner for a long time.  Leaving the benevolent emotions aside, we should all want a healthy and educated population so that they can be productive, pay taxes and reduce government spending.  The fact that words like these are often read as "Right Wing" just shows how "Wrong Wing" the left has often gotten it.  When people can work and pay taxes they usually don't have many of the social problems that Liberalism aims to fix.  It also allows us to spend more money on the remaining issues while spending less in total out of a larger pot.

It is just this sort of pragmatic liberalism that attracted this wobbling-centrist back to the left via Sen. Obama, and the more the Dem party as a whole embodies it the more small-c conservatives we fight for us.

Great diary.

-chris

by chrisblask 2008-07-14 08:07AM | 0 recs
I think confidence will return

Part of the problem is that our consumer confidence is terrible.  I know it's impossible to prove, but the stock market started tanking in 2000 right after we elected Bush because people knew that he was A) an idiot, and B) pretty much stole the election and damaged American credibility.

I am an optimist.  I believe that Obama will help the economy by the mere fact that we'll be proud to be Americans again.

Call it voodoo if you want, it's my belief.

by Dracomicron 2008-07-14 08:12AM | 0 recs
This is an argument I try not to make

too often because it sounds hokey, but I agree with you strongly.

I hated Reagan when he was in office, but since then have had to admit that one thing he did that made a huge difference was to allow us to feel good again.  America had embraced the "We so suck!  Bwahhhh!!" attitude and - surprise surprise - it was self-fulfilling.

My own fault-plagued leadership roles in life have proved the same thing over and over.  By and large I don't do any real work, so that makes it fairly simple to see that what has helped turn around despondent losing teams has been saying: "Damnit you kick ass!"; "We rock this much!"; "I'm so glad to be here, because you folks make the competition look like the Keystone Cops!".

When you feel like a million bucks there is almost nothing you cannot do.  When you feel like a worthless loser you can't do anything right.

-chris

by chrisblask 2008-07-14 08:30AM | 0 recs
Just have to see

Like I said, it's impossible to prove, but if you think about the last few presidents, Clinton made us feel good about ourselves and so did Reagan.  Both Bushes were kinda downers, and both ended up with problematic economies.  I really doubt that W. would have even won a second term if not for the war.

by Dracomicron 2008-07-14 09:36AM | 0 recs
Remember one thing...

The New Deal (Social Security, welfare, union protection, etc.) wasn't put out when everything was hunky-dory. Those programs were put out in the darkest times when people really needed them and the government couldn't really afford them.

When people are out of work, that's when they need UHC. When the economy's bad, that's when we need the government to step in and help the people who have been thrown under the wheels of the machine.

The problem that we have is that, in good times, the Republicans have been spending like drunken sailors. And, now when times are tough... They're spending like drunken sailors and cutting income (taxes). We need a government that will balance the budget and put away money in good times (like Clinton did) and spend it in bad times (like FDR did), not the other way around.

by TCQuad 2008-07-14 08:34AM | 0 recs
Re: Remember one thing...

The Republican party became the tool of the corporations after Teddy Roosevelt left office. Ever since then, they have run the country into a hole that the Democrats have had to fix. Once the country is righted, the voters decide that maybe the Republicans aren't really as bad as they seem or a new generation is fooled by their rhetoric and it starts all over again. Time to right the ship once more.

by MS01 Indie 2008-07-14 08:46AM | 0 recs
Re: Remember one thing...

I'd like to see trusts and monopolies broken up again. They just reassemble like mercury.

Can we start with the media?

by ellend818 2008-07-14 12:09PM | 0 recs
Re: Remember one thing...

That would be an excellent place to start. It seems insane to me that we have thrown away all of the restrictions on ownership of the media that were put in place to prevent the mishaps that occur when the press is in the hands of a few owners. Those restrictions were there for a purpose and what is happening today shows they were valid concerns.

Another thing we need to make our government change is its favoritism for capital over labor. This has been going on ever since Reagan. It has weakened the middle class considerably. Part of that can be blamed on the media for perpetuating anti-union myths.

by MS01 Indie 2008-07-14 12:15PM | 0 recs
UHC is not a "want."

Not for the millions of uninsured or underinsured people in this country.

For many, it's literally a life-or-death necessity.

by ZombieRoboNinja 2008-07-14 09:07AM | 0 recs
Exactly - UHC will actually save us money

I don't buy the idea that we can't afford UHC.  If countries like Cuba can afford it, than I'm pretty darn sure we can too.  

We already are spending the money, we just need to do it correctly.  Medicare, Medicaid, and health insurance for government employees already account for a huge slice of tax-payer funded medical spending.  State programs account for even more.  We start with that foundation and expand, increasing medicare/medicaid taxes to cover the cost.  Yes, your taxes go up, but not as much as you might expect, and your insurance premiums go away (or at least become a much smaller supplimental policy).

To make the plan easier to sell to conservatives, we let people opt out and instead take a voucher toward buying private insurance.

The only people who 'lose' in this plan are the really rich, as they will be paying a larger slice of tax than what private insurance would cost them, but that tends to always be the case with social tax/spending policy.  I personally don't have a problem with that, despite working hard to be 'rich' someday myself.

by protothad 2008-07-14 01:20PM | 0 recs
Re: When You're Neck-Deep

I think you are right - the bottom is about to drop out.  And for most people it won't matter who is to blame for it.  Things like not having a job, not having a place to live, food to eat, health care for your family.. these things trump political discussion for most Americans.  The only people who will endlessly discuss it when  it happens will be people like us on these boards and the knuckleheads on TV.  Most people will be too busy trying to figure out how they are going to survive.  

 

by JustJennifer 2008-07-14 09:39AM | 0 recs
Re: When You're Neck-Deep in a Hole You Should

No, we don't concede on our issues. We're Democrats and we keep moving our agenda no matter how bad the GOP screwed up this country.  

The New Deal didn't happen because FDR was too scared to make bold moves when our economy was in the crapper. It happened because he knew we had to invest in the USA in order to save our economy and improve the lives of Americans. That's what the Democratic party stands for.

If you run scared every time the economy sours and have trouble supporting these principles when we most need to be committed to them, you need to stop calling yourself a "progressive" or "liberal". Real progressives do not cave on their commitment to Democratic principles because they're scared. Sounds like you've been suckered into supporting the conservative talking points with just a couple of their scare tactics.

by LakersFan 2008-07-14 10:54AM | 0 recs
Re: When You're Neck-

Might I suggest you re-read my diary?

If we actually go broke I don't see many programs being enacted, and some perhaps not even being continued.  I'm not happy about this hypothetical, but I want to be clear here:

If we bottom out then we're in for an insanely rough ride.  Our options will become limited no matter how much we'd prefer otherwise.  

You fundamentally misunderstood my premise.

by Reaper0Bot0 2008-07-14 11:09AM | 0 recs
Re: When You're Neck-

I did not misunderstand your premise, I fundamentally disagree with it. Might I suggest you re-read my post (and a history book)?

You wrote:

The very nature of our society, the underpinnings that fuel it and sustain it, well, they're being stretched to the breaking point.  Things like UHC could tomorrow be yesterdays fantasies....

...What would the Democratic Party look like in a hypothetical period of forced-austerity?  Could it survive?  Could we be the economic adults?  I'm for all the good government we can afford.

I'll repeat me point and be a little clearer. You sound like a Republican. The very nature of our society was at a breaking point during the depression, and the Democratic Party looks the way it does because we chose not to be scared and not to be "forced" into austerity. We were in way worse financial situation then and yet FDR managed to start Social Security -- the most successful social program our nation has ever embarked on.

I believe your entire premise is based on very conservative thinking. You need to break free from accepting the GOP talking point that the current economy limits what we should try to achieve in order to improve our nation and the lives of the people. That's exactly what the GOP wants you to believe. Don't fall for it.

by LakersFan 2008-07-14 01:09PM | 0 recs
Re: When You're Neck-

The problem is some programs are needed in order to have a positive impact. UHC is one that I feel we require, and will ultimately boost the economy.  Healthcare has become a burder to employers and employees, and dependance on employer healthcare has curtailed entrepreneurship.  We need to avoid falling into the Republican trap that all programs or big government is bad.  But be capable of reform and government investment that adds to society.  Cutting back on infrastructure, regulation, and alot of "good" big government is what created this problem for us.  Fear of being too broke to start new programs isn't responsibility, its suicide.  We have tremendous resources and did not need the rest of the world in the past,  we will be able to solve any crisis, with the right leadership, we just need to move forward and not allow ourselves to be pushed back.  The current "crisis" was engineered by a failure of government, scaling back government is not going to be the solution.

by Tumult 2008-07-14 01:32PM | 0 recs
Re: When You're Neck-Deep

What we are facing in this election is pretty simple.
Do we continue to allocate to imperial dreams and corporate greed(there may not be a difference)...
or do we work to rebuild...
Perhaps only in an America of $5 gas...low wages..inferior education..foreclosures and no health care can the programs necessary for rebuilding take place..
When folks come to Denver in Aug they can be a part of one of the Driest Denver's ever recorded...
so yeah we are looking at global warming too...

tap yer toes..
http://www.youtube.com/watch?v=ENXhShuof 1I

by nogo postal 2008-07-14 01:35PM | 0 recs

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