Tom Kawczynski - Off the Record

I haven't written in a while and I apologize for that.  Several things have been keeping me busy, but I have been watching many events and want to comment upon them.

I feel somewhat uneasy about the future.  When you look at what is happening both domestically and internationally, the financial framework that has basically been used globally since WWII has never looked so shaky.  For instance, the European Union is facing a serious challenge in how it handles the question of Greece, running now with rampant debt and inflation.  Struggles like this could lead to dissolution of many structures, such as how nations are talking about reclaiming their sovereignty and leaving the Eurozone.

I wonder what America will do as we approach a similar crisis.  The problem, in its simplest form, is we spend much more than we collect.  While politicians are presently talking about a spending freeze, a good idea, that will hardly solve the larger issue.  Between entitlements, medical care costs, and other commitments, non-discretionary spending, alone could account for more than the revenue gathered.  When you couple that with a national debt where interest payments are becoming a larger and larger chunk of the budget, it becomes clear that the crisis will soon be upon us.

Our government must do three things:  cut spending, control costs, and increase revenues.  This means there will be bitter medicine, and we need to understand this.  It means that we have to make sure we can afford whatever programs we have, that we need to try to do less, and that we will have to pay something to get back to even.  It may mean taxes for that purpose.  I don't know, but I do know this:  What the government has been doing to this point, issuing additional debt through the Treasury will stop working as other nations (such as China today, selling another $45 billion in US Notes) will refuse to buy bad debt.

We live in what will be a difficult time, but it is also one of opportunity where we can and should explore new ways to handle things.  I'm not writing any solutions because I don't have any; but I do think everyone should be aware of these things.  When you feel the pain with interest rates rising next year, inflation continuing to grow, and unpopular tax increases on the table, at least you'll have some idea why.