N.A.A.A.P. Perspective

Fall 1996—Vol. III, No. 4

THE CONTINUING ENIGMA OF PROGRESS AND POVERTY

"...And how the retrogression of civilization, following a period of advance, may be so gradual as to attract no attention at the time; nay, how that decline must necessarily, by the great majority of men, be mistaken for advance, is easily seen..." Henry George, Progress and Poverty

As we all know, if we do not heed the lessons of history, we're destined to repeat the mistakes of the past. And repeat them we shall. Economics is equally important, and perhaps even more immediately relevant to the lives of the vast majority of the people than the comparatively abstract concepts of the lessons of history. Yet public perceptions seem to be reversed, with most people completely ignoring the subject of economics beyond the sphere of their own family circle. History and economics are as intimately intertwined as economics and politics, for economic issues drive and define historical trends. Most politicians, however, seem as ignorant of economics as they are of the lessons of history.

What good are the supposed lessons of history, however, if they are routinely distorted in an effort to "control" the present and mold the future? Distorted history lessons are dangerous to national and international health. Many of our history books ought to be required to carry warning labels, ("WARNING: This work does not contain the whole truth.") and all of our made-for-TV so-called historical docu-dramas should have warnings too. ("WARNING: This work is 25% history and 75% dramatized fiction.") Artistic license can enhance public interest without the need for gross distortions, but distortions to accommodate contemporary ideas of political correctness and sensitivity awareness do nothing but invalidate the historical merit of many features.

Our K-12 public education system is almost totally silent on the subject of economics, (home-ec, excepted) while it often tends to twist history for the purposes of sensitivity training and selective "feel-goodery." Meanwhile, those great public educators, (the ones that really educate our youth — television and Hollywood — which make our children appear cosmopolitan and knowledgeable, even as many mature into functional illiteracy) provide the people with their cake and circuses, serving as the new universal opiate that keeps them perpetually entertained, confused, ignorant, and almost, but not quite, believing they are happy.

Now enter the personal computer and the Internet to supplement the dastardly job Hollywood and the networks have been doing. They are, of course, extraordinarily valuable and useful tools if responsibly and constructively employed, but are actually merely more layers on the cake and rings in the circus to the overwhelming majority of those destined to be "hooked" on them.

In spite of the mind-boggling technological advances of the past century, today's troubled times have many close parallels to those of a century ago — and two centuries ago. It would appear that we are again poised for revolutionary changes of the magnitude experienced in this country soon after the turn of this century, and after the great stock market crash of 1929 — brought on by the failure to learn and heed the lessons of the past. Progress and Poverty by Henry George, a classic and revolutionary work on economics, first published in 1879, makes obvious many of the parallels between Henry George's time and ours. His insights, along with the most important lessons he imparted, have of course been largely ignored or forgotten. If Henry George were to return today, however, he would be amazed to be confronted with the very same problems of Progress and Poverty he wrestled with in his own time, only in a much more complex world. Yet most people are blithely unaware of these parallels of history.

While Henry George was not a socialist, he was at least partially under the spell of socialist ideology of the time, (along with many other social thinkers and progressives of his day, due to the abuses of monopolistic, predatory capital). His insights ought to be required reading for all Americans today. Of course, we can thank our lucky stars that his solution to the problems of progress and poverty, the draconian "Single Tax," was not adopted, but his insights and observations are still poignantly valid.

George did not foresee the positive turn capitalism would soon take when, assisted by the industrial assembly line, mass production, and progressive industrial visionaries such as Henry Ford, labor would be elevated to become increasingly affluent consumers of the products of capital, and thus the de facto partner and beneficiary of corporate capitalism — when labor would be transformed from wage slaves into a new middle-class. Had he been around during the mid-twentieth century, however, I'm sure he would have seen in its positive aspects a true measure of progress. There was a time when it appeared that the perennial hounds of poverty, which have nipped at the heels of the working classes throughout history, would at last be defeated and relegated to the primitive past. We had a brief historical moment, spanning half a century or so, that may go down in history as the "Golden Age of American capital and labor" — an era of true industrial and material progress for the masses. Certainly he would recognize the current trend toward a return of capital depredation and the degradation of labor as a regression toward the circumstances which he most deplored and sought to remedy.

He also pointed out that the social and economic equality for women in the workplace would inevitably lead to the time when two incomes would be required to support a family rather than one. This, of course, is happening. He noted the general moral decline in society of his day, and lamented the decline of orthodox religious faith. He foresaw that the decline of fundamentalism and superstition would not be followed by a general commensurate rise in wisdom and character but the opposite — a rise in new superstitions. This, too, seems to be prophecy fulfilled. And, as for politics... well, we would recognize politics of the 1890's as politics as usual of the 1990's, but we tend to think of the corruption of the political arena as being a relatively recent phenomenon.

"The most ominous political sign in the United States is the growth of a sentiment which either doubts the existence of an honest man in public office or looks on him as a fool for not seizing his opportunities. That is to say, the people themselves are becoming corrupted. Thus the United States to-day is republican government running the course it must inevitably follow under conditions which cause the unequal distribution of wealth.
"Where that course leads is clear to whoever will think. As corruption becomes chronic; as public spirit is lost; as traditions of honor, virtue, and patriotism are weakened; as law is brought into contempt and reforms become hopeless; then in the festering mass will be generated volcanic forces, which shatter and rend when seeming accident gives them vent...
"...civilization has begun to wane when, in proportion to population, we must build more and more prisons... it is not from top to bottom that societies die; it is from bottom to top.
"And so, too, of religion; the superstitions which a superstitious people will add to it will be regarded by them as improvements. While, as the decline goes on, the return to barbarism, where it is not in itself regarded as an advance, will seem necessary to meet the exigencies of the times... ...In every civilized country pauperism, crime, insanity, and suicides are increasing..."
"...There is a vague but general feeling of disappointment; an increased bitterness among the working classes; a widespread feeling of unrest and brooding revolution. If this were accompanied by a definite idea of how relief is to be obtained, it would be a hopeful sign; but it is not. ...For what is going on is not a change in the form of religion, but the negation and destruction of the ideas from which religion springs. ...Christianity is not simply clearing itself of superstitions, but in the popular mind it is dying at the root... And nothing arises to take its place... Unless human nature has suddenly altered in what the universal history of the race shows to be its deepest characteristics, the mightiest action and reaction are thus preparing... such a state of thought preceded the French Revolution... The civilized world is trembling on the verge of a great movement. Either it must be a leap upward, which will open the way to advances yet undreamed of, or it must be a plunge downward which will carry us back toward barbarism."

Those passages from Progress and Poverty, written a century ago, fit our national circumstances today — perhaps even better than they did then. The problems of Mr. George's day culminated in revolutionary changes — the Federal Reserve Act, the federal income tax, two world wars, and a cold war — a chain-like progression wherein each was, to a more or less degree, the result of the former. There were periods of progress and general prosperity following the two wars, but we are now once again, near the end of a century, where we stood near the end of the last — but the problems today are even more acute than could possibly have then been imagined a century ago. The only real major difference is that now, after many decades of material progress, we are largely a nation of wasteful, over-fed, self-indulgent people who have learned to depend on the federal government for solutions to our increasing socio-economic problems. Additionally, we are hostage to a new global vision and global markets — a circumstance allegedly contrived to work our salvation, but which in actuality discounts the individual and nation economically while purporting to empower mankind and create a global Utopia.

We all know about the big stock market crash of 1929 that led to the Great Depression, and of the hardships that followed for many people. Our parents or grandparents experienced those hard times. Yet the hard-learned lessons of that era have been forgotten or mis-construed, by 99% of the current generation. Unfortunately, that apparently includes the high gurus of finance, as well as the political leadership and plutocrats that pull their strings. We're in a period of unprecedented prosperity and the stock market is booming. Yet much doubt and anxiety exits, and potential disaster looms large on the horizon, casting a darkening shadow over the richest, most promising nation on earth. Apparently unstoppable machinery is in place and in motion to snatch defeat from the very jaws of victory — failure from national success. Our national fortune has been so bountiful that we have weathered every crises of the intervening decades and still enjoy unprecedented prosperity as a nation. But we have squandered too much of our national capital, and there are limits to good fortune — and chickens do tend to come home to roost.

As in the days prior to the 1929 crash, we are given to believe we are in a "new era" where the rules of the past no longer apply. To a discomfiting degree, this is actually true. Certainly more so today than in the 1920's. We are, in fact, in a new era, but it is an illusory new era. One where many of the old rules no longer seem to apply. But that should be far from comforting, because, after all, as in the 1920's, it is but an illusion. Our current situation, in fact, is much scarier than anything that has developed before. This is the era of "voodoo economics" and moral decay, where a still allegedly religious people have come to replace "love thy neighbor" with "sue thy neighbor" (the American "Sue-age System"); where the value of our currency is based on little more than public faith; where literally everything else is based on that currency; and where public faith is withering into a desperate but waning hope that the doomsayers and conspiracy theorists are wrong — that the New World Order really will deliver up the Wonderful New World as promised.

In the late 1920's we were poised on an economic precipice. Investments in the markets were highly leveraged. It was a bubble market. A crash was almost inevitable. Today we seem poised beyond the edge of a huge overhang — perhaps suspended in mid-air. Investments are not only highly leveraged, but the levers themselves are often highly leveraged. Derivatives, sma't money, and super-funds are now added to the financial mix — all backed by cleaver and intricate layers of illusions sustained by hot air. Everything is precipitated on financial markets and very little of substance buoys up those markets. It is a proverbial house of cards. In the familiar cartoon scenario, any moment we should look down and realize we are no longer standing on terra firma. But in the era of voodoo economics, we may be able to tread air for an unlikely period of time. But certain laws of physics, if not economics, will eventually take hold. In the mean time, we dare not look down. Cozy up to the nightly news and daytime talk shows folks, "Don't worry, be happy." And most of all, "Don't look down!"

In the 1920's the nation itself stood on a sound economic footing, even if the financial and stock markets did not. There was no huge national debt over the heads of the citizens — and a third of the population was comprised of comparatively self-reliant farmers. At least they could take in some of their unemployed city relatives when times got tough. When the prosperity of the twenties dissolved into the Great Depression of the thirties, many people at least had a home to go to, (to parents or grandparents back on the family farm) and thus relieve, to a great degree, the pressures unemployment and hunger presented. A well-founded traditional agricultural economy was still firmly in place. The infrastructure was sound, and there was no great dependence on foreign consumer goods or energy sources.

Today none of that is true. A five trillion dollar national debt, (to the tune of $20,000.00 per man, woman, and child in the nation) has the nation in a straight-jacket even as we enjoy an unprecedented, though highly selective, national prosperity. Private debt of an equal magnitude compounds the problem. Worse still, more than ninety percent of the population resides in crowded urban areas, and depend on agricultural production provided by a mere two percent of the population, not to mention imported food and energy. Additionally, that two percent of the population is heavily dependent on imported oil and the smooth functioning of highly complicated transportation systems and commodities markets, not to mention the smooth functioning of the stock and futures markets. Now few people have a home to go back to. The old farmstead has likely been paved over or belongs to Archer Daniels Midland, "Supermarket to the world," or some other global conglomerate. If not that, a remnant farm family eking out a living on a couple thousand mortgaged or rented acres. Upset the apple-cart today, and the apple-cart will really be upset!

The Great Depression and Franklin D. Roosevelt's national economic emergency of 1933 will pale in comparison to what we could have next time around. While history repeats itself, the details of the script will be changed dramatically. Let's hope the "next time around" can still be avoided. Will ADM, "supermarket to the world" and the other moguls of the marketplace pull our chestnuts out of the fire when things get tough? Personally, I've got serious doubts. It's high time we start sorting things out and making ourselves less vulnerable to market bubble bursts, as a nation and as individuals. But the political machinery for accomplishing this in time is pretty hopeless. All we can do is try to keep the pressure on our representatives to wake up and smell the roses before it's too late. We the People have very little voice and little chance, at least in the short term, against the experts and special interests who have the ear of Congress and the administration, and who are almost to a man on the other side — the side of voodoo economics, doodoo politics, and the illusory "Wonderful New World."

Don't take my word for it when I express the gut feeling that the stock-market is on shaky ground. Many non-establishment financial gurus, and even a few establishment types, are saying the same thing. For one example, let me take the liberty of quoting the advice of a non-establishment expert, from a borrowed copy of The McAlvany Intelligence Advisor, Spring, 1996 special edition, ($115.00 per year, P.O. Box 84904, Phoenix, AR 85071):

"IT IS TIME TO SELL ALL STOCKS AND ALL BONDS IMMEDIATELY! Switch to cash, cash equivalents, precious metals, precious metal stocks or stock funds, Swiss annuities, or short-term foreign government bond funds now!"

That doesn't sound very reassuring. Personally, being rather old-fashioned, or conservative, I'd perhaps stick with the cash, cash equivalents, and precious metals, and forget about the stocks, annuities, and short-term foreign government bonds. In other words, the only paper I have any faith in are those detestable old Federal Reserve Notes — and I don't have very much faith in them. FRN's may be funny money, but they are our funny money, and our only "legal tender." Most importantly, they are the only currency that presently work at the corner store and gas station. The Federal Reserve and international banking powers will do everything within their waning abilities to preserve the integrity of our legal tender — simply because it is the major international reserve currency in which most debts, private and public, domestic and international, and their commensurate interest payments, are denominated. National economic and monetary systems literally stand upon the continued viability of our Federal Reserve's monetary instruments. Entire nations, both large and small, denominate a great deal of their national wealth in terms of "our debt" and the Federal Reserve Notes they hold in their treasuries. There's really nothing to take their place in the marketplace short of hard money, and hard money is in short supply. While the Japanese yen and German mark may seem like attractive alternatives to FRNs, try taking some down to Wiggly Piggly or the local farmers' market to spend. The result will be the same with a Swiss annuity or a stack of short-term foreign government bonds. On the other hand, a silver dollar, quarter, or dime, will spend, at least at the farmers' market, even if all paper has been wiped from the face of the earth and you find yourself with a pile of canceled credit cards. In such case Wiggly Piggly will probably be closed down and boarded up, and if you don't happen to have a garden and maybe a few chickens pacing around your yard, or some hard money or trade goods to exchange for the necessities of life, you might be forced onto a crash weight reduction diet in spite of yourself.

Long term savings, in my opinion, should be in hard money, (i.e., precious metals, both coin and bullion) usable or consumable commodities, (including storable foodstuffs) and tools and other useful items. "Spending cash savings" on the other hand, can still be confidently stored and utilized in the form of Federal Reserve Notes — at least for the foreseeable future. Other paper instruments, both foreign and domestic, are subject to too many circumstance changes to be dependable. When and if a global economic melt-down occurs, only FRN's, and U.S. coins, can be depended upon to remain spendable legal tender in this country. All nature of other instruments may be "locked out of circulation" or deemed "temporarily un-redeemable." Foreign-based or denominated assets may no longer be available to Americans. International boundaries may once again become sacrosanct, as individual nations and central banks pause to assess their economic positions. All nature of mega-funds, including money market funds, etc., may be "temporarily" frozen and permanently devalued. I think increased inflation will be a certainty. A thirty's-like deflation of currency is unlikely, in my opinion, simply because it would make debt service untenable — and debt is the overriding factor in the current economic malaise. Much debt will inevitably have to be canceled or converted into cyber-junk bonds and fired off into solar orbit for future redemption. Many financial houses will fall.

Since Federal Reserve Notes are debt instruments, and their mere issue incurs public debt, and since debt is the core problem leading us toward economic melt-down, such a melt-down may revive the issue of "greenbacks" (in the form of U.S. Notes) as legal tender as an emergency measure. This, of course, would be inflationary, (for Congress has yet to learn the science of money creation, and established private banking interests will influence every aspect of any "national or international emergency economic rescue package"). Such a scenario, ironically, could possibly restore some degree of economic sanity — but only after a period of utter economic chaos, along with numerous suicides and other anomalies. But then again, maybe not. Maybe the "Universal Cyber-Credit Card," (UCCC) will be issued to everybody willing to "chip in." (Honest, having the chip put in won't hurt at all.)

THE PUBLIC DEBT

There is no better way to illustrate the perversity of our current monetary and economic system than by pointing out the correlation between that system and the public debt. Most people are of the impression that the federal debt and current deficit are solely the result of the government spending more money than it collects in taxes. This is true, of course, but it is not the whole truth. While the government habitually engages in deficit spending, accelerating debt growth is built into the system whether or not the government spends wisely. This is simply because we have a debt money system. Our Federal Reserve Notes are not really money at all in the classical contexts. They are evidence of indebtedness upon which interest is perpetually owed and paid. Interest on the public debt is the only really non-discretionary item in the federal budget. Interest on the debt "must be paid" even before Congressmen get paid. It is the holiest, most sacred "entitlement" of all. Interest is continually accruing on every Federal Reserve dollar in circulation, whether in actual physical currency outstanding, or entries in account books, and the taxpayer is expected to be able to pay it in perpetuity, whether he's able to make a living wage or not. This is an impossible sort of merry-go-round, and a ponzi scheme which will catch up with us in the course of time. This point in time will occur whenever all the numerous tricks and nuances available to voodoo economists have been worn out or otherwise expended. But in these days of cyber-think such tricks and nuances can be extensive indeed. There may be no limit to the creativity of cyber-think when applied to the science of voodoo economics. Yes, there could actually be a creative solution out there somewhere, a "magic missile," and we might live happily ever after in spite of the doomsayers. But don't hold your breath.

It isn't surprising that Congress fell for and passed the Federal Reserve Act of 1913. Bankers do know how to manage money and turn a profit while doing it. It seemed reasonable to economically illiterate legislators that bankers ought to manage the nation's money supply in order to cure the boom and bust cycles and periodic financial panics and depressions that had plagued the nation. Perhaps so — but that doesn't mean that Congress had the right to abrogate its most solemn responsibility to the people by turning our money issue over to private interests. Apparently it didn't occur to our legislators that those booms, busts, and depressions were almost always the result of manipulation by the very people who sought, and would be empowered by the Federal Reserve Act. The "Eastern banking establishment" had already been in a de facto position of power for decades. The term "money power" was in popular currency during the latter part of the nineteenth century. What the money power wanted in a central bank was not to solve our "money and banking problems" but to consolidate their already considerable power with "complete and total control" over the issue of credit through a debt money system they controlled absolutely. Actually, most of our legislators probably knew it was a bad deal but didn't have the guts to stand up and make themselves heard. (A notable exception was Charles A. Lindbergh, Sr.) Most of them voted for the Federal Reserve Act by failing to show up for the vote — a common practice in Congress. (Don't ask me what happened to the quorum idea. I don't know.)

One would think, as most people do, that a nation's "central bank" would be the property of the people. But, lamentably, this is not so. Our representatives might have made the Federal Reserve a true servant of the people, and truly federal, (in fact rather than merely in name) but while "The Board" itself is only quasi-federal, the system's banks are totally private. Had Congress made the whole system an independent branch of the Treasury, answerable to the representatives of the people, they might have accomplished their alleged purpose. But instead they set the foxes to guard the hen house.

Congress literally intrusted our money issuing authority to predators. Not that bankers are bad people. It's just that there is a serious conflict of interest. Still, the Federal Reserve System worked, after a fashion, and might have worked well enough to be sustainable had Congress not finally abandoned all pretense at fiscal responsibility. Perpetual debt can be sustained in a healthy, perpetually expanding economy. As long as profits and income stay well ahead of interest costs plus the costs of government, and labor is rewarded with at least a living wage, the scheme could theoretically go on until all the earth's resources are depleted or the sun burns out.

The system worked passably well as long as legal tender, (whether greenbacks, gold or silver certificates, or FRN's) was at least nominally strapped to the constraints and disciplines of a gold or silver standard. Once the dollar was cut free from the restraints of the gold standard in 1971, however, Congress commenced acting like a bunch of kids turned loose in Toys-R-Us with a stack of credit cards. No system can survive such irresponsibility as successive Congresses have since displayed. Their most significant accomplishment has been in their uncanny ability to continually raise the debt ceiling as if there would be no tomorrow. So our Federal Reserve System as we know it today appears to be doomed — ruined by a lack of responsibility on the part of Congress — rather than any evil intent or activities on the part of the money power. The money power, of course, would save it, for it is truly a gilded gosling. (Which feeds on the golden goose.)

Under the circumstances, the Federal Reserve has, and continues, to managed remarkably well. Though inherently flawed, inept politicians have habitually undermined the system. The sooner the system is meaningfully reformed the better. It may be too late to avoid economic chaos however. Meaningful monetary reform isn't even currently in the national debate. The evils of smoking and our preoccupation with Bosnia and Saddam are the important issues at the moment. (Oh yes, drugs and crime are getting a little replay, and there's some feeble rhetoric about family values with the First Family standing forth as the nation's shining example.)

Federal Reserve Notes are loaned into existence. Thus, the public pays "rent" on its outstanding money supply, and the public debt is bound to forever increase unless there is some spectacular real growth in the economy. A balanced federal budget is well nigh impossible under such a system, and the law of diminishing returns has already set in with a vengeance, and the prospects for real growth are waning. Speaking in business terms, debt must be serviced through profits or income. Real profit and income are the fruits of productive labor and wealth creation, not credit and debt expansion. The national government, now by far the nation's largest employer, doesn't produce a thing nor make a profit, (never has, and never will) it can only tax the profits of industry and wages of labor. The economy as a whole must perpetually expand in order for the public debt to be serviced. But perpetual expansion is a physical impossibility in a finite world. All the more so when the largest employer pays its help from the pockets of increasingly disenfranchised labor and an increasingly weak, cannibalistic tax base.

The government is forced to perpetually borrow to make up for an increasing shortfall in revenues. That increasing debt burden perpetually begets more and more debt until we reach a parabolic rise in debt which becomes untenable. We have reached that point. The debt curve is now at the "up-right spike" stage. Even a return to fiscal responsibility on the part of government will be insufficient to alter the trend significantly and save the system from calamity. It is mathematically impossible to retire the public debt in a debt money system, for the money owed must always be in excess of what is in existence. With a debt money system the nation literally lives on credit even before the first overt act of borrowing for worthy purpose takes place.

Camden

THE ILLOGICAL BOND MARKET

Take a look at the bond market. Government issued bonds are its means of financing its debt, and the bond market has developed into a global investment market parallel to the stock market. But there is a big difference. When one invests in the stock market, he is at least theoretically investing his money in business assets, (Capital) with the hope of sharing in future profits. When one invests in government bonds he is trading in pure government debt with the hope of being repaid by future taxpayers. Lacking sufficient revenue from the taxpayer, more debt is piled on to redeem the bonds. And, of course, interest is always compounding.

It was once a common and favorite claim of economists that the national debt was actually a good thing because "we owed it to ourselves." But it doesn't take an economist or rocket scientist to see the inherent fallacy of borrowing money at interest from one's self. It makes no sense at all. Yet this is how the national government has come to operate. But it doesn't borrow from itself, but from you and I and Japan and Germany, and anybody else it can sell bonds to. Since the government has long ago fallen behind the debt curve, the interest paid on bonds issued must be paid for by further bond issues and ever-larger indebtedness. The debt is owed to bond-holders, whether individual, institutions, domestic or foreign, and the taxpayer has to service this debt through his sweat and toil.

Increasingly, our government depends on foreign investors, (the largest of which are foreign governments, i.e., Japan and Germany, etc.) making the idea of "owing it to ourselves" somewhat archaic. About a third of our debt is now owned by foreign interests, and those interests are, by definition, of course, not American interests. But they have clout and influence policy. But the American public, including individuals and institutional investors, still own the largest slice of the public debt. So, to that extent, we do owe it to ourselves — but We the People have a much smaller voice in the formulation of public policy than do "others," i.e., institutional investors and foreign governments — special interests that do not consider our interests in the least relevant. The situation is a very illogical one when you think about it, and one that is increasingly untenable. Even if the debt was 100% American owned, it still wouldn't be good economics.

During former times, before Congress abandoned all fiscal restraints and economic sanity, government incurred large debts only on a more or less temporary basis for specific, sometimes worthy, purposes. As in individual economics, the general rule of government finance was to "pay as you go" and avoid obligating the taxpayer and future generations to huge debt burdens. But sometimes large borrowing was necessary. War has always been such a time. Better to borrow the money from the people than from banks or foreign nations. Buying War bonds was a patriotic duty whereby ordinary people could help the government through times of national crises. Such crises, however, were very expensive, so the issue of emergency bonds was never intended to be anything but a temporary measure. Under normal circumstances, such emergencies would be infrequent, allowing the indebtedness to be repaid during the hopefully longer periods of national normalcy and prosperity.

The bond market as we now know it is a permanent and growing institution. Few people think of it as a permanent, ongoing, national emergency, but that's exactly what it has become. The emergency that actually launched it was declared by FDR, and World War II and the Cold War were used to make it permanent. Today it is a monster out of control, but we trade in bonds as if they were merely another stock market, and we consider bonds as normal an investment medium as common stocks.

The bond market is nothing more than the instrument of permanent and growing public debt, whereby the public and foreign governments trade our debt for private gain. To perpetuate the market, and make it attractive to investors, our government must willfully perpetuate and expand its debt and/or inflate the money supply, whether or not there is commensurate national prosperity and income to justify such indebtedness or facilitate its service.

We are always encouraged to buy government savings bonds as a good way to save. And they are a good way to save under the current system, but take a moment to think about how it works. Say you pay $50.00 for a bond which will mature in a few years and pay you $100.00. Assuming inflation hasn't reduced $100.00 to the value of the $50.00 you paid, it would seem an exceptionally good deal. But what you have done in buying that bond is to obligate the taxpayer to pay you $100.00 for $50.00. And you or your children are that taxpayer! You give the government $50.00 so it can pay you $100.00 later on. Does that really make sense? By this noble effort you have effectively increased the national debt by $50.00, and you are made to feel that you've done the nation a service rather than a disservice in the transaction.

Actually, it is worse than that. Each $50.00 you loan the government (in our example) increases the debt by $100.00 rather than $50.00. The government spends the $50.00 you have loaned it, and there will be absolutely nothing to show for it in the end. (It isn't building infrastructure today, as was the case when the Interstate Highway system was being built.) Most of the money goes into a black hole. At best you've supported a welfare mother and child for a couple of days, or provided another automatic weapon to a ruthless dictator or "freedom fighter" in the Middle East, South America, Africa, or Asia. Perhaps you've financed a fraction of a day's congressional salary or even a few minutes of the president's time. But, whatever the case, the $50.00 is spent and there remains a $100.00 obligation that will have to be taxed or borrowed from people like you and I, or from Japan, in the future.

In order for the government to pay out $100.00 for every $50.00 that it borrows, of course, some wonderful things must happen. Otherwise it would clearly be impossible. Either the economy has to expand enough to allow the bond to be redeemed out of national income, (after being taxed from you or your children) or the currency must be artificially inflated to give the appearance of such expansion. In reality, of course, it is a combination of the two, combined with the capacity of Congress to perpetually increase the debt and throw the burden of repayment onto increasingly distant future taxpayers.

Yet in spite of this economic perversity — this literal impossibility — we have confidence in the economy and most particularly in the bond market. Literally, there is no safer investment. (And that in itself is scary when you think about it.) The government won't default on its obligations, (we hope) even if future generations are sold into virtual slavery to insure it. (But we don't think about that.) Thus we have the government bond market and out of control debt. This is the essence of Voodoo Economics. Isn't it wonderful?

THE ABORTION ISSUE

The abortion issue is one that will not go away from the national political scene. The moral dilemma is this: Either human life in the womb is sacred, (regardless of the debate as to when a fetus becomes officially "viable") or it is nothing but another form of bodily waste to be expelled at the whim of the mother.

When the Supreme Court ruled in favor of abortion on demand with Roe vs. Wade, it officially discounted the notion of the sanctity of human life in the womb, and made it impossible for state and local governments to pass laws based on the deeply held moral convictions of a majority of the voting population. Thus a literal Pandora's box was opened, and a moral dilemma forever unleashed.

How can this ruling stand in a nation where the overwhelmingly majority of the population still profess religion? The answer is simple. Human nature, being what it is, selfishness inevitably tends to rule whenever given the blessings of public policy. The average person is perfectly willing to make moral compromises in the interests of personal convenience whenever it is "legal" to do so.

At the very core of the abortion question, of course, is the matter of equal rights for women. The right to abortion on demand, and thus the wholesale discounting of human life in the womb, is a natural and necessary adjunct to political, social, and economic equality of the sexes. No woman can be considered the equal of any man if she can be forced by law, whether religious or secular, to carry a pregnancy to term or be bound to the nurturing of small children. Total equality demands that women be as free from the potential tethers and responsibilities of pregnancy, child-care, and domesticity as men. What good is a pregnant fighter pilot, infantry-person, or boatswain mate when a battle is in the offing? Some moms want to goes off to war, and die if need be, in the prime of their child-rearing years just like dad. The right to choose is paramount to such a person, no matter to what degree it may overshadow reason, and society must now accommodate them.

Whether the current leveling, (even reversing) of sex roles is good or bad depends strictly upon ones view of morality and what an ordered society ought to be. Today many would prefer to avoid the subject entirely. Democracy demands equality. Friedrich Nietzsche is undoubtedly guffawing in his grave shouting, "See! I told you so! You are reaping the rewards of democracy! Drift and decadence!" But perhaps there is truth in what Voltaire's professor Pangloss might have said, "It's all for the best." Perhaps the combined pressures of overpopulation, technological advance, over development, and the resultant environmental degradation, render apparently "negative" social changes "positive" and even "natural". Maybe heaven has become overcrowded, and effective means of closing the books invoked. Or, if traditional religions can finally be discounted, perhaps it is all for the best, and humanity is becoming self-limiting through the departure of women from traditional roles once, but no longer, dictated by nature. The demise of the patriarchal society of our ancestors, abortion on demand, and the rise of homosexuality as a "natural" and socially acceptable alternate life-style may be the new natural order. Men are regressing too in the face of the feminine onslaught, and (as Nietzsche predicted) are becoming more like women. Many, (certainly many more than in former times) are actually trying to become women, (as more women try to become like men) and others are re-adopting personal adornments that men long ago abandoned as frivolous, childish, or feminine.

Perhaps the next war will eliminate more women than men and further limit the potential for over-population to become the cause for death of mankind. Perhaps mankind is in a God-ordained self-destruct mode for the good of the planet as well as his own survival. God, it has often been said, works in strange ways.

For the religious traditionalist, of course, such things, along with the advent of such new diseases as AIDS, are merely the symptoms of man's fall from grace and the harbingers of the end times. I'm not too sure about the end times, (though all things probably end at some point) but I can certainly see troubled waters ahead. I will predict one thing. This generation, as many others before us, is destined to live in interesting times.

POSTSCRIPT

Though some senseless discrimination has been rightly eliminated, equality of the sexes, as in the case of equality of the races, is not really being achieved. Activists are merely being appeased while others are being irritated and society at large pays some heavy freight. There is a mixing and melding at the fringes, which tends to blur distinctions, temporarily bemuse, befuddle, and inflame, but not solve any problems. What is being achieved on both counts is further social division and thus more fodder for future conflict.

Unfortunately, it has been the history of mankind to resolve conflicts born of long-smoldering resentments through the most terrible means imaginable. Lamentably, the basic nature of man has not undergone one iota of change regardless of appearances and propaganda to the contrary. Progress, for all its wonders, has not included an increase in man's capacity for goodwill, nor increased his collective wisdom. Indeed, collective goodwill within a society is abridged as long established social forms which once provided cohesion and stability are discarded and moral bench-marks abandoned. Perhaps a human fetus is really nothing of concern. But the perception that it is, by so many, simply because it is human life and thus sacred, is, (or was) a major moral bench-mark of our society. Roe vs. Wade was a very significant moral watershed.

Perhaps our perception of the value of human life in the womb has changed, but some things never change. Mobs will still cause mayhem and massed troops will still deploy to kill their exact counterparts on command without so much as a tinge of conscience. The justness of the cause can always easily be manufactured, rationalized, and rapidly popularized. Lamentably, belief in "Never again!" is a dangerous dilution. Abortion on demand has been a decades long holocaust in the eyes of many. How far are we from a time when a poliferation of "Dr. Deaths" will rationalize draconian measures to solve the problems of global over-population in addition to relieving the pain and inconveninece of slow and lingering death in the aged and infirm?

WELFARE REFORM AT LAST!

Isn't it ironic that we are getting welfare reform now — at the time when we really don't need millions of new people cluttering up the unemployment lines? Welfare reform will probably cost more than welfare does now, given the way our government does business. It will require jobs, and lots of them, (and not just any old jobs) and the training and daycare facilities to go along with them. And, of course, more prisons. Many more prisons.

There will be a tremendous price to pay for having kept millions of our natural home-grown menial labor force on decades of paid vacation. To even suggest putting former welfare recipients to work as field hands or domestic servants would create great consternation and charges of cruel and unusual treatment. The inevitable displacement of many legal and illegal aliens in the labor market will cause problems too. Xenophobia will be charged by those who claim that we need more immigrants because of the labor shortage. As they say, "When it rains, it pours." Fear not — Clinton will fix it.

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