You might suppose that a political book, appearing less than six months after Indiana Gov. Mitch Daniels indicated that he would not run for president, must have been written as a campaign prop. But that's not Daniels' style. "Keeping the Republic" is a deadly serious, though frequently witty, effort to lay before the American people the perilous state of the nation.
Be prepared -- the first few pages of Chapter 2 can turn your blood to ice. America's decline, Daniels writes, may not be a gradual slide, but instead a sudden plunge into chaos. Sketching what a financial collapse could look like if we fail to control our debt, he writes, "Monday, 6 a.m.-- a Chinese official issues a statement saying that China will no longer be buying Treasury securities because 'we see no evidence that the U.S. will take the steps necessary to grow its economy or limit its spending so it can afford to repay' . . . Monday 9:30 a.m. -- the dollar drops 10 percent . . . New York stock market opens in free fall . . . Monday afternoon -- . . . other nations' central banks begin to sell off U.S. Treasuries. . ."
It continues that way, with runs on banks, the dollar spiraling down, the Dow Jones crashing, Organization of Petroleum Exporting Countries, OPEC, denominating oil in something other than dollars, long gas lines, buying panics for necessities like food, shortages of consumer goods, and finally civil unrest and martial law.
It's a chilling nightmare scenario, but unfortunately, not far-fetched. The collapse might not happen exactly that way, but unless we are able to reduce our debt and take steps to get our economy growing rapidly, some form of financial crisis is inevitable. "This is not a matter of opinion based on a preference for limited government," writes Daniels. "It's a brutally objective fact of life . . .For today, can we agree that the arithmetic here does not work?"
In light of the fuss over Gov. Perry's use of the term "Ponzi scheme," it's instructive to see Daniels' description of the entitlement mess (which he too calls a Ponzi scheme): "For 70 years, Americans were misled to believe that they had been putting money aside for their own retirement, that there were actual assets being held somewhere that would provide for them in their golden years. This misrepresentation has been aptly named 'the noble lie' . . .(In fact), the proposed future benefits grotesquely outstrip the future taxes we are scheduled to pay by some $5.4 trillion for Social Security and as much as $46 trillion for Medicare."
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