Florida Brings the Hammer Down on Would-Be Rowdy Spring Breakers
You’ve Come A Long Way, (Trans)Baby!
A Quick Bible Study, Vol. 158: Hebrew Bible – Miraculous Story How...
We Need to Be More Judgmental
Why So Much Anti-Jewish Hatred?
DeSantis and Trump Both Dismiss the Idea of Being Each Other's 2024 Running...
MTG, Democrats Offer Two Different Views After Touring DC Jail Where J6 Defendants...
Pentagon Diversity Officer Won't Face Discipline for Anti-White Tweets
Jordan, Comer Respond to Woke DA Alvin Bragg, Accuse Him of Creating Danger...
Biden Is Unhappy With Kamala Harris's Performance as VP
Republicans Criticize Biden’s Response to Airstrikes In Iran: 'Too Little, Too Late'
These Schools Removed Cops to Appease BLM—It Didn't End Well
Greta Thunberg Sees a Great Capitalist Conspiracy Against the Climate
Xi and Vlad, a Wake-Up Call for America and the West
Bullies Rule Under Woke Discipline Policies

America's Titanic Moment

The opinions expressed by columnists are their own and do not necessarily represent the views of Townhall.com.

There's a classic sequence near the end of the 1997 movie Titanic that depicts the ship's sinking.

As the bow of the ship takes on water and slides beneath the ocean, the stern of the ship rises out of the water and ends up vertical. There's a pause as the stern just bobs there in the middle of the ocean leaving the remaining passengers afraid and confused. Then, after a brief pause, the ship quickly sinks.

As I watch economic and political news unfold, I get the distinct impression that in 2008 the liberal ship Titanic hit an economic iceberg (known as reality) and our economy is now on the stern of that ship, just bobbing around in a dark ocean waiting for what comes next... and many are in denial of what comes next.

It's difficult to imagine an economic situation more dangerous than the one in which we find ourselves.

The collapse of the housing market has exceeded that of the Great Depression because we have too many houses and not enough demand, housing prices may yet fall another 25%,  and there are still millions of houses in foreclosure.  All the debt problems that caused the crisis in 2008 haven't gone away, they've just been transferred to the Federal Reserve or continue to lurk on the balance sheets of banks. Sovereign debt bailouts in Greece, Ireland, and Portugal are exploding.
In addition to out of control federal spending, we have states such as California and Illinois that may go bankrupt or seek a bailout--and both of those states are far larger than Greece. 

In addition to our huge national debt, we have overwhelming unfunded liabilities of anywhere from $61.6 trillion to $100+ trillion.  We continue to bailout other countries via the IMF.  And even as our country is collapsing under the weight of debt, we are told that the solution is to increase the amount of debt by raising the debt ceilings.

There won't be tax increases because taxes can't be raised enough to solve the problem, they'd damage the already weak economy, and Republicans aren't suicidal (probably). 

Printing money hasn't worked, and we can't continue down the dangerous path of printing money without destroying the dollar.

Economic recovery--were it to materialize--would only succeed at postponing the day of reckoning. But a strong economy is no longer sufficient to overcome the structural spending problems we have.

Fiscal stimulus has failed. Monetary stimulus has failed. Everything Obama has tried has failed.

Pain Now or More Pain Later

The truth is that we have a tough decision to make: We can either kick the can down the road as long as we can, or we can confront reality and deal with it before the problem gets even worse.

The reality of what we're facing is:

  • Our spending and debt problems are not imaginary and they're no longer theoretical problems that we can deal with decades in the future. Countries are collapsing under their sovereign debt now. It will be our turn sooner than we think.
  • We haven't actually dealt with the problems that caused the 2008 crisis. All the debt and toxic assets that caused the original crisis are still with us.
  • Fiscal stimulus has failed and monetary stimulus has failed. There are no more "magic bullets" left (even if we assume there were any "magic" options in the first place).
  • No realistic tax increase and/or economic recovery can adequately resolve our fiscal course over the long-term.

So we really have a simple choice to make: We can either cut spending now or we can cut spending after the economy collapses.

We Can't Continue In Denial

We simply cannot continue to act like nothing is wrong. We have very big problems--most of them structural--that have formed over the course of decades and, unfortunately, we no longer have the luxury of fixing them with small adjustments over decades. We have just years to fix them, maybe less. The co-chairs of Obama's deficit commission back then stated we probably have less than two years.

These outcomes aren't just possible, they're inevitable if we continue on our current course. The precise way in which it plays out is, of course, impossible to predict. But what's not impossible to predict is that our current course of action will conclude with a much-reduced, much-weakened, and much-impoverished United States.

While it's true that Americans as a people--and America as a country--have a history of overcoming daunting odds, we dare not cling to a misguided "hope" that we can never fail. We must not delude ourselves into a dangerous belief that the laws of economics do not apply to us. The laws of economics do apply to us, and we ignore them at our own peril. We have an increasingly small opportunity to correct our course by cutting spending.

2008 was the tip of an iceberg, and liberal economics hit it. Printing money, government stimulus, homeowner bailouts, cash for clunkers, etc. have been liberal attempts to use pumps to get ahead of the flooding. But, in the words of Titanic's character Thomas Andrews, "The pumps buy you time, but minutes only. From this moment, no matter what we do, Titanic will founder. It's a mathematical certainty."

So now we and our economy are on the stern of the liberal ship Titanic, bobbing around in the middle of the ocean. We know what happens next.

The question is whether an economic Carpathia  will arrive in time to save America's economy with conservative fiscal policies, or if we're going to go down with the liberal ship and sink beneath the sea of economic collapse.

John Ransom | Create Your Badge

See more top stories from Townhall Finance. New Homepage, more content. Be the best informed fiscal conservative:

Mike Shedlock Coming Soon to a Country Near You: Greek Interst Rates Hit 60 Percent
John Ransom Time for the Timid President
Craig Steiner America's Titanic Moment
Political Calculations New Deflationary Expectations Take Hold
Crista Huff Does Pfizer's and Bristol-Myers' new Eliquis drug compel us to buy their stocks?
Bill Tatro Gold Just a South Sea Bubble
Jeff Carter Big Government Kills the Family Farm
Email Ransom thfinance@mail.com
Twitter http://twitter.com/#!/bamransom

Join the conversation as a VIP Member


Trending on Townhall Video