Bankruptcy 1995: The Coming Collapse of America & How to Stop It. by Harry E. Figgie, Jr. with Gerald J. Swanson, Ph.D. Synopsis/Review by Brian F. Redman (bfrg9732@uxa.cso.uiuc.edu) About the authors: -- Harry E. Figgie, Jr. is the CEO of Figgie International Inc., a diversified *Fortune 500* operating company. He was co-chairman of President Reagan's Private Sector Survey on Cost Control, also known as the Grace Commission. -- Dr. Gerald J. Swanson is an Associate Professor of Economics at the University of Arizona. "Any profits from this book have long since been assigned to charity. We make no profit whatsoever from it." (p. 25). $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ * * * The United States has a problem that is easy to understand, * * but whose effects are difficult to comprehend. Its solution * * is simple to prescribe, but hard to implement. This problem * * is more insidious than drug addiction, more pressing than * * recession; it is crueler than poverty and illness and more * * hazardous than a hole in the ozone. * * * * This problem, which is of our own making, will precipitate * * an economic nightmare that will dwarf the Great Depression * * and turn the history of America into one of history's * * closed chapters. This problem has a name. It is *government * * debt.* * * * $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ The book begins with a Foreward by U.S. Senator Warren B. Rudman. The senator begins by pointing out that we are currently at war: "We are at war economically." While war is usually thought of in the traditional sense of soldiers and battles, such now is not the case. "Our nation's wealth is being drained drop by drop, because our government continues to mount record deficits and, in order to finance its obligations, puts us at the mercy of foreign lenders." Rudman thinks that this problem has developed due to a "conspiracy of silence among presidential candidates and most members of Congress." Because these people are politicians, they are reluctant to inform their constituency for fear that this will cost them votes and hurt their chances for re-election. So, nothing much has been said and the problem has continued to grow over the years. Rudman is alarmed that the future of the United States "will consist of economic disaster unless we take immediate remedial action." "We are about to enter an era of $400 billion to $500 billion annual deficits... We are simply mortgaging the future for the present... The money we have worked so hard to save all our lives will be worthless." And, he adds, "Time is running out." The senator closes by imploring us to wake up to the urgency of this situation: "Nothing is more important to the future of our country than getting this problem under control. We must treat it for the war it is..." Mr. Figgie begins by declaring that "In 1995, the United States of America, as we know it today, will cease to exist. That year, the country will have spent itself into a bankruptcy from which there will be no return." Figgie thinks that in the year 1995 the U.S. national debt will "...have grown beyond our ability to control it through taxation. In other words, even if the government that year dedicated every penny it collected in personal income taxes to paying just *interest* on the debt, it wouldn't be enough." We Americans all have a vague sense that something is very wrong. The general population "...senses and is worried about the disaster our politicians are about to drop us into." And, according to Figgie, a fiscal Armageddon *will* soon be upon us unless we act immediately to prevent it. "This is our last chance. We're out of time." -- How it Happened -- They are killing our country, but who are "they?" According to the authors, there are "...536 of them, and they have hired about twenty thousand bright and energetic people to act as their accomplices and assistants... At the head of the list of the people who are killing our country is the president of the United States [Bush]." Who are "they?" They are the 435 members of the House of Representatives, the 100 members of the Senate, and the president. Our so-called leaders in Washington have been bleeding this country to death. They "...are doing to us what George III, Adolph Hitler, Emperor Hirohito, and Nikita Krushchev tried to do but failed." And it is *our fault* because we have let it happen! "[We] let them, you and I. We've not only let them, we've encouraged them, because we wanted to keep hearing the lies they told us." And because in the final analysis it is *us* who have let the current fiscal crisis develop, it is up to *us* to try to keep it from going over the brink. And we "...don't have much time -- two to three years at the most -- to save ourselves. Save *ourselves*... not ask someone to save us. No one will. Certainly not the lobbyists for foreign governments and foreign corporations who range free in the power corridors of Washington." Even our leaders won't do it for us, unless we force them to. Mr. Figgie is convinced "...that our so-called leaders have in fact sold us out." "The present debacle had its beginnings during Lyndon Johnson's presidency." Normally, up until the time of Johnson's presidency, the United States had routinely gone into debt in order to finance its wars. Throughout its history, the U.S. had always repaid these debts when the particular war had ended. But Johnson tried to run two wars simultaneously: the war in Viet Nam *and* another war against poverty in America. "The government had never financed a war *and* launched expensive social spending programs simultaneously. The resulting deficits were huge by historic standards." One of the results of the war against poverty was the creation and expansion of entitlement programs. Because these programs, once created, are not subject to annual review (in the words of the authors, "they are subject to neither vote nor veto") they have a tendency to grow. Entitlement programs "...now consume 65 percent of all government spending on everything except interest on the national debt." Total Deficit Grouped According to Presidency ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ President Total Deficit ========= =============== Lyndon Johnson (5 years)...............$ 44.8 Billion Richard Nixon (6 years)................$ 67.0 Billion Gerald Ford (2 years)..................$ 126.9 Billion Jimmy Carter (4 years).................$ 226.9 Billion Ronald Reagan (8 years)................$1034.0 Billion George Bush (4 years)..................$1004.0 Billion Total Deficit Grouped by Year ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Year Total Deficit ==== ============= 1964...................................$ 5.9 Billion 1965...................................$ 1.4 Billion 1966...................................$ 3.7 Billion 1967...................................$ 8.6 Billion 1968...................................$ 25.2 Billion 1969...................................$ (see below [1]) 1970...................................$ 2.8 Billion 1971...................................$ 23.0 Billion 1972...................................$ 23.4 Billion 1973...................................$ 14.9 Billion 1974...................................$ 6.1 Billion 1975...................................$ 53.2 Billion 1976...................................$ 73.7 Billion 1977...................................$ 53.7 Billion 1978...................................$ 59.2 Billion 1979...................................$ 40.2 Billion 1980...................................$ 73.8 Billion 1981...................................$ 79.0 Billion 1982...................................$ 128.0 Billion 1983...................................$ 207.8 Billion 1984...................................$ 185.4 Billion 1985...................................$ 212.3 Billion 1986...................................$ 221.2 Billion 1987...................................$ 149.8 Billion 1988...................................$ 155.2 Billion 1989...................................$ 153.5 Billion 1990...................................$ 220.5 Billion 1991...................................$ 268.7 Billion 1992 (estimated).......................$ 399.7 Billion [1] In 1969 the government ran a surplus of $ 3.2 Billion. [The authors make note of a phenomena which I have noticed, the so-called "liberation" of women caused a vast number of them to enter the work force and compete with their male counterparts for jobs -- especially in areas where before there had been little or no male/female competition. ==> Please Note <== I am *not* saying this was wrong. I am just saying that there was a sudden increase in the supply of labor. B.R.] The authors contend that once the various entitlement programs were in place, most politicians did not dare touch them or to call for a cutback in their funding. [Don't agree *entirely*... politicians are often calling for so-called "welfare reform"... still, by and large I agree. B.R.] In fact these programs (such as Medicare and Medicaid, Aid to Families with Dependent Children) tended to grow. [Note: The authors are not saying that these programs are necessarily wrong, they are just saying that they are costly. The authors also fail to mention (in this chapter) so-called "welfare for the rich," "corporate welfare," etcetera, as examples of enormous budget costs. B.R.] The authors point to the massive arms buildup during the Reagan years as a further drain on the budget. "Reagan, like Johnson, tried to supply both guns and butter." The result was a further erosion of our economic strength. "Ronald Reagan ran the country's credit cards *almost* up to their limits. George Bush is finishing the job that Reagan began. No wonder the American people are angry and *know* that something is terribly wrong." Besides the presidency, the Congress has also contributed to the current crisis. Elected representatives and their staffs "...have also become captive to the most well-financed and effective lobbying groups that ever brought influence to bear on any legislative body anywhere at any time." These lobbyists who are buying votes so as to control legislation by *no* means represent only domestic groups. "Foreign countries and foreign corporations... have spent millions of dollars to hire ex-government officials at huge salaries to represent their own special interests. They've done so very effectively, and these lobbyists and their bosses don't give a damn about the United States." We are right on the edge of a cliff. By 1995, "...the rest of the world will have figured out that the United States is going to default on its debt. That's when and why our country and lives will come apart." "We are tight up against a fiscal Armageddon." Year Debt Interest on debt ==== ============== ================ 1964 $ 316 billion $ 10.7 billion 1988 $2,600 billion $214.2 billion "This year [1992]... interest charges on the debt are expected to total $293 billion. Paying that amount alone would eat up nearly 52 percent of personal and corporate income taxes." Here are some other ways to look at it: *** In 1991, interest on the national debt cost us more than any other single budget item, including defense. *** In 1991, interest on the national debt was more than the combined expenses of the departments of Agriculture, Education, Energy, Housing and Urban Development, Interior, Justice, Labor, State, Transportation, and Veteran's Affairs. *** In 1991, the combined costs of interest on the debt, national defense, and Social Security were more than the amount collected in individual income taxes. The day will soon come when Germany, Saudi Arabia, Japan, etcetera, will come to demand their money back. "A government's ability to guarantee certain freedoms and liberties rests on that government's independence, which our government is close to giving totally away, if it hasn't already." "We could be spending our public funds on projects that would help make our industry more competitive in world markets, our people healthier and better educated, and our environment safer and cleaner. But we're not. We can't, until and unless we get the federal budget deficit under control. We can't afford to throw more dollars at any program, no matter how worthy it sounds. We are in deep, deep fiscal trouble." If the U.S. government were a corporation it would be forced, here and now, to either 1) take drastic action to save itself, or 2) file for bankruptcy. "If we wait much longer to fix our debt problem, the solutions that desperate politicians will propose and that creditors will impose will be so painful that we'll wish we could just close up shop and move somewhere else. But a whole country can't do that." "Remember the once mighty Soviet Union and how quickly it disintegrated. The same can -- and will -- happen to us, unless we get our act together, and soon." -- Death by Debt -- "Unless the people's government in Washington, D.C., makes drastic changes in its fiscal policies now, the typical American family will be fortunate in 1995 if it can feed and house itself..." The authors forecast the following conditions which we are likely to be facing within the next two-and-a-half years: * As many as 20 percent of American jobs gone. * Personal savings obliterated by inflation. * Pension and Social Security payments cut or eliminated because of inflation and mismanagement. * The American dollar "a joke." The authors emphasize that "It's going to be awful." The authors predict that the fiscal collapse will predominantly take one of two forms: 1) panic or 2) hyperinflation. All this is going to happen unless we wake up *now*, according to the authors. They warn that once the crisis begins it will be virtually impossible to reverse its course. "Americans have the attitude that they can get out of any crisis *after* it's occurred. This time they are wrong. You can't recover from cancer once you've died." The authors paint the following picture showing their view of each of the likely scenarios: -- Scenario 1: Death by Panic -- "In 1992, the Bush administration will rack up a nearly $400 billion budget deficit, the largest gap between revenue and spending ever recorded by any nation in the history of humankind... The American national debt at the end of 1992 climbs to $4 *trillion* [my emphasis], and the interest on that debt rises to some $300 billion -- more than the country spends on education, justice, housing, and the environment combined." Continuing with this scenario, the 1993 deficit goes to $640 billion. This is partly due to higher interest rates on Treasury bonds brought on by a growing lack of confidence regarding the national debt. Government debt climbs to $4.98 trillion. The world's investors are getting edgy. By 1994, interest rates have risen quite a lot. Because of high interest rates, new mortgages decline and the housing industry collapses. Businesses stop borrowing and reduce or eliminate expansion and/or modernization projects. The interest charge on the national debt reaches $517 billion. Bank failures become epidemic. In February of 1995, foreign bankers no longer have confidence that the U.S. will ever pay back, dollar for dollar, its colossal debt. Financial markets all over the world shut down under an onslaught of sell orders. The value of Treasury securities plunges. "The next day, the sun is bright but millions of Americans find they have no jobs, no prospects, and no savings. They have no savings because the banks have no cash, only IOUs, such as mortgages and government bonds -- and those have now become worthless." An economic depression begins. "Within the week, the government announces plans to cut the armed forces by half. The other half will be kept on... to quell the uprisings that have begun in cities and suburbs alike. Riots become commonplace throughout the country." -- Scenario 2: Death by Hyperinflation -- Hyperinflation can be defined as inflation that is severe enough to cause people to lose faith in the U.S. dollar. Hyperinflation would occur if, instead of selling government securities to outside investors, the Treasury instead sells its securities to the Federal Reserve (i.e. "monetizing" the debt). By following this policy of "monetizing" the debt, new money is created. This is problematic in that "Creating new money without any accompanying economic growth breeds inflation, since it just adds money to the economy without increasing the amount of goods or services to spend it on." In this scenario, the financial markets notice that the Treasury is selling its securities to the "Fed" and they react by raising *their* interest rates. They do this because they anticipate that this policy of monetizing the debt is going to be inflationary. "After all, what's the use of charging 4 percent interest on a loan if the inflation rate will climb to 10 percent... So, if lenders think inflation will rise to 10 percent, and they want to earn 4 percent *real* interest, they'll raise their *nominal* interest rate to 14 percent." Higher rates in turn mean that the interest on the national debt grows. This increases the deficit even more. The value of securities purchased in the 1980s plunges. This is because they were issued at low (pre-inflation) rates of interest and now nobody wants to hang on to them. Instead, because steady inflation causes a steady drop in the value of the dollar, people purchase durable goods. But this new demand for durable goods causes the prices to rise even more. "By late 1994, the annual inflation rate has climbed to 22 percent and is rising by a point or more a month. Interest rates are running at 30 percent and more... profits vanish, submerged by inflation, and no individuals or companies are able to borrow. The home construction industry dies... [manufacturing] plants deteriorate." "As time goes on, banks cancel consumer credit cards... Accounting systems break down... Hyperinflation is pushing the economy, along with public morale, into a hopeless and major depression." -- Early Warning Signs -- The authors do not think that either of these two scenarios will be played out exclusively but rather that some mixture of the two will occur. But "...that it's going to happen somehow in the absence of quick and dramatic remedial action by the federal government I am absolutely certain. We have frittered away a decade when we could have done something about our problem without too much pain." [Sorry to butt in, but I wish to stress "Pain for whom?" While it is laudable that the authors have pointed out the mess we are in, I am concerned that they are turning this issue into a new "red scare" which may wind up being used as a tool to benefit the already rich and powerful. Beware of calls for "shared" sacrifice. Yes, we are in a mess but how about having the rich and powerful lead *by example* in their calls for sacrifice?] The authors close this chapter by giving three "warning signs" which they say will be an alert that U.S. government securities are no longer "rock-solid safe." 1) The government can no longer service its debt. In 1992, the annual debt service (i.e. interest charges) on the debt "...is expected to reach 44 percent of the total revenue the government collects." In 1993, this annual debt service is expected to reach 61 percent. At some point, if this rate of service on the debt continues to rise, "...investors will begin reevaluating the safety and security of U.S. government debt securities... You'll see this warning sign in news reports comparing the deficit with the government's interest expenses, but you may have to read closely to find the numbers." 2) The federal reserve begins to buy substantial amounts of the government's debt. "To keep an eye out for this warning sign, watch the newspapers again. You'll begin to see stories about... the expanding money supply." 3) The government shows complete unwillingness to address the deficit problem. Forget what the politicos *say* about the deficit and instead watch what they *do* about it. If they do nothing, look out. "Sooner or later, every country that has spent beyond its means has collided with disaster. The crash that we are about to experience has been experienced many times before." One example of this is the ancient Roman empire. The emperors Caligula, Claudius, and Nero successively emptied their treasuries "...to pay for lavish ceremonial feasts, luxurious villas, elaborate temples, no-show civil servants, and bribes to the army and Praetorian Guard to ensure their loyalty." When they ran out of cash they raised taxes, seized assets of wealthy citizens, or expanded the money supply "...by reminting old coins using more base metal and less gold and silver." These policies brought them severe inflation. "By the time Rome collapsed, high taxes had already destroyed Roman commerce. Cities and towns were reduced to ruin by lack of investment in their maintenance, the population was impoverished and dwindling, and riots and rebellion were commonplace." Another example of how history repeats itself can be found in 16th century Spain. In that era, Spain began "...running huge deficits to pay for wars, a bloated civil service, and endemic corruption. By the end of the sixteenth century, revenues covered only half the state's spending... Repeated currency devaluations, growing inflation, and a murderous tax burden killed off Spanish industry and agriculture." What happened then? Spain's global influence shrank drastically and it began to close itself off from the rest of the world. We Americans used to laugh at what we called "the banana republics." Well, we're "...not laughing now, and we ought to be studying their experience." In the 1980s, Bolivia, Argentina, and Brazil suffered hyperinflation which was "...preceded by a period of deflation... the deflation in each of these countries began with plunging real estate values and then spread, a scenario similar to the one that we in the United States are experiencing today." In the first part of this century, Argentina was a major global economic power. Now, however, its worldwide position has sank sharply and (up until very recently) it has "...done little that had proved effective in cutting its own spending. Its bureaucracy was still bloated, its taxes so high they were uncollectable, and its corruption widespread and endemic." "Some economists think that if the United States is very, very lucky, it can fix its debt/deficit problems and suffer no more in the process than Great Britain has in the last dozen years. Great Britain's economy a little more than a decade ago didn't so much crash as run aground. In 1976, the British government had to ask the International Monetary Fund (IMF) for help in servicing its debt." The authors contend that thanks to the stern leadership of the "Iron Lady," Margaret Thatcher, the Brits were able to get back on track. [Well, what opinion would you expect from the CEO of a *Fortune 500* company? B.R.] "Like any stern and demanding captain, Thatcher was not loved by all the officers and crew, who were reminded that they had to live within the limits of their resources." The authors claim that Thatcher "...got England moving forward once again." [I don't know much about Great Britain, but I seem to recall that there was quite an uproar over there quite recently (Fall 1992) over the state of the economy. It is my impression that they are by no means "out of the woods" yet. B.R.] [It is my opinion that the authors of this book are generally correct when they talk about our perilous economic situation. However, my impression is that when they talk about "sacrifice," said sacrifice does not include wealthy capitalists. B.R.] "A man in the prime of his life is lying on an operating table, bleeding from open wounds. A team of surgeons is busily clipping his toenails." "The United States desperately needs fiscal surgery to staunch the dollars bleeding from its deficit wounds." Instead, the government quibbles over "...which of the country's toenails to clip." According to the authors, it is almost too late. The middle class is about to go under. The money is about to inflate. By 1995, if not sooner, the United States will have an economic collapse. Then, like the former Soviet Union, we will be "...vulnerable to exploitation, dependent on the kindness of foreign strangers, and, in a word, pathetic -- the hulk of a once-great nation." "The odds of American survival as a proud, independent nation have already grown terribly slim." The citizens of the U.S. are going to have to insist of our government that "...we won't stand for more delay and infighting." According to the authors, here is what the government must do: 1) Re-establish Credibility. The government must start telling the truth. "The slick gimmickry and shameful deceit now practiced by the executive and the legislative branches have to end. Our leaders must, for one, stop masking the size and the seriousness of the deficit situation." 2) Put a General in Charge of the Fiscal War. [The authors have great faith in the use of war symbolism as part of the solution. B.R.] The authors call for "...an army of highly trained and experienced cost-cutters." They believe we will need a "general," several "colonels," and a mass of "foot soldiers." This army "...would be divided into battalions, each assigned to tackle overspending in a particular sector of the government." 3) Create a Deficit-War Cabinet. "The deficit-war cabinet must keep driving home the message that there is a larger battle to be won, and that cutting costs doesn't necessarily result in fewer services or a reduction of their quality. We can reduce costs simply by doing the same jobs more efficiently." 4) Set Overall Strategic Goals. "Roughly $3 out of every $10 currently spent [by the government] must be eliminated. [Curiously, the authors do not call for a rise in the corporate tax rate as a possible "strategic goal." B.R.] 5) Establish Postwar Reform. The authors favor streamlining of government, with a reduction in the layers of management and elimination of bureaucratic fat. The debt must also be reduced or else "...we will remain vulnerable to attack by rising interest rates." The authors also suggest that we (a) examine possibilities of privatizing one or more areas of government and (b) contract out on a competitive basis many of the services it now provides. 6) Don't Raise Taxes. "Raising taxes does not eliminate deficit spending." 7) Don't Raid Savings to Pay for Current Expenditures. The government must stop borrowing money from Social Security and from trust funds. Even if it does this, however, "We need to face reality and tell some people that the generous Social Security benefits they are planning on when they retire won't be there." 8) Don't Allow Government Agencies to Create Debt. "Loans and loan guarantees [such as S&L, FHA, VA, etcetera]... are ticking time bombs that have to be defused." The authors feel that these federal guarantees just cause more expense for taxpayers. "The collapse of the thrift industry, for instance, has saddled taxpayers with as much as $500 billion in added obligations..." 9) Don't Monetize the Debt. In other words, don't reduce the debt by simply printing more money. 10) Don't Count on a Balanced-Budget Amendment. The idea that a balanced-budget amendment will solve the problem is a delusion. "It will take at least three years to get the required number of thirty-eight states to ratify the amendment. We can't wait that long... Moreover, any balanced-budget amendment could easily be evaded." The Congress would just invent new tricks to avoid fiscal responsibility. "Once we show the world that we have the will and discipline to face our toughest problem, the value of our debt instrument and our credit rating would rise immediately." There would be "...a resurgence of confidence in American industry." The authors insist that we are already late in launching this "war" on the deficit/debt and that we must begin now. Figgie and Swanson believe that "...ordinary citizens are the key to halting America's slide into economic oblivion. We're victims only if we let ourselves be victimized." The authors consider their book to be just a first step in the reform process and they plead the urgency of their case. "This book won't convince lawmakers that the American public wants action. Only you can do that. You *have* to, to assure your own, your parents', and your children's economic survival." "What you have to do is to get your message across to your fellow citizens and to Washington." To this end, the authors offer the following suggestions: 1) Vote. To those who think that their vote doesn't count, consider those cases where a candidate has won or lost by just a few votes. 2) Write or call your representative in Washington. "Members of Congress frequently base their decisions on how to vote on an issue directly on the number of positive or negative letters they receive from constituents." 3) Organize a letter-writing campaign. "Whether the letter writer is a child or an adult, ask each participant in the campaign to write his or her own original letters, perhaps using yours as a springboard." 4) Become involved in a Citizens' Action Group. One of the groups recommended by the author is the following: Citizens Against Government Waste 1301 Connecticut Avenue, N.W. Suite 400 Washington, D.C. 20036 Telephone: 1-800/BE-ANGRY or 202/467-5300 5) Learn how the Congressional budget process works -- and influence it. Find out who serves on the Senate and House budget committees then "...contact committee members when pertinent legislation is about to come before that committee." 6) Visit your representatives. If that is not possible, meet with one of their legislative assistants. If possible, prepare yourself with facts and figures in advance. 7) Ask the tough questions. Whether you write, phone, or visit your representatives, be tough. "They've nearly destroyed our country with their big-spending ways, and now's no time to tippytoe around the issues." 8) Use the news media to express your opinion. For example, a letter to the editor, an op-ed article, or trying to get a local television or radio station to do an editorial on the debt/deficit. 9) Use the news media to promote your cause. For example, a news release, a pitch letter, or a fact sheet. 10) Organize a petition drive. Once you have collected a respectable number of signatures, compile the copies of the petition and either mail them to your representative or deliver them in person. 11) Arrange public speaking engagements. "To find appropriate forums, start with your local chamber of commerce and public library reference desk. They can provide the names of civic, professional, religious, and other community organizations such as the Kiwanis, Rotary, and Lions clubs." It's also a good idea to be well prepared when you give your talk. 12) Stage public events and demonstrations. 13) Make the debt and deficit the subject of a town hall meeting. For example, "...your city council may have 'open meetings' on a regular basis, at which citizens can voice concerns on specific subjects." 14) Tap into political action committees (PACs). You can "...check into PACs representing trade unions, professions, cooperatives, and ideological groups. If you're interested in starting a PAC that is not [already] established... contact the Federal Election Commission for rules and regulations (800/ 4249530)." "You [now] understand how serious our plight is and that we have very little time -- a few months, a year at the most -- to mobilize the citizens and the leaders of our country to take up [this fight]." "Get it out of your mind that economic and political collapse can't happen in this country, or that we can deal with it once it happens. It can and... will happen here unless we move to stop it now." Neither "...we nor any other nation can continue the sin of deficit spending indefinitely. The laws of economics eventually exact their punishment, and we are dangerously close to getting ours." "By failing [as citizens] to use our voices, we've conceded the creation of a political caste system in America and given elected officials leave to assign to themselves the prerogatives of a collective monarchy. Politicians chide the wealthy but vote themselves salaries that place them in the top 5 percent of incomes in America." "By living in splendid isolation, this elected monarchy has lost touch with the concerns of its constituents and has even come to believe that it is exempt from the laws [e.g. check bouncing]..." The "...tragedy greater than failure would be for us not to act at all, for us not to try to save our country. America's decline would go on, accelerating so quickly that within a generation, younger Americans will not even know what they have lost. But we will know, and we will have to live with the knowledge of that loss for the rest of our days." Consider Russia today. "It's only the latest reminder of how fast a country can come apart... The United States will unravel just as quickly... [unless we] start acting to stop it now." # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # Appendix [What follows is *not* part of the book "Bankruptcy 1995." What follows are excerpts from an article which appeared in the November 29, 1992 Business section of the Chicago *Tribune*.] A Stern Lecture for U.S. (by R.C. Longworth [excerpts]) -- With rare unanimity and disgust, America's allies have concluded that the United States knows perfectly well how to fix its economy but lacks the guts to do it. While treating the Bush administration roughly, the organization's report [Organization for Economic Cooperation and Development, OECD], also says Bill Clinton's economic plans are [also] on the wrong track. The OECD report states that deficit-trimming is needed now. The allies' growing intolerance of America's unwillingness to pay for government spending broke through in the report's overall summation of the U.S. political-economic gridlock: "Solutions to the U.S. budget situation are readily found. What is required is the will to implement them." The OECD report amounted to the world's verdict on the U.S. government's stewardship of the economy. The OECD, based in Paris, has operated for 31 years as a clearinghouse for information from the major industrial nations and a forum for economic cooperation among them. One of its major tasks is an annual report on the economy of each member nation. This year's 130-page report on the U.S. economy was far more blunt than usual. OECD sources said it reflected the other 23 nations' [besides U.S.] condemnation of the Reagan and Bush administrations' mishandling of the economy, their fear that continued U.S. deficits will damage their economies and frustration that their kinder, gentler lectures in the past have been ignored. ------------------------------- end ----------------------------------- You can do a lot of good by taking this article and posting it to other areas besides "alt.activism." You can also post this or upload it as a file to a local BBS. This would help give the people of this nation an alternative to the "fluff" and propaganda posturing as hard news which they are currently getting from the major networks. Synopsis/Review by Brian Redman