Years of big spending by politicians at all levels have left the nation vulnerable to economic turmoil. While at the federal level this is masked to a degree by manipulation and inflation of the money supply, among other factors, local and state governments have no such luxury, and many are struggling to find ways to pay increasingly high expenses. Increasingly, the onus is falling on taxpayers in the form of increased and burdensome taxes, and on public-sector employees who face reductions in benefits, and possibly layoffs.
“I smell a rat,” says Robert Wenzel, editor and publisher of EconomicPolicyJournal.com.
The rodent whose odor Wenzel detects is the International Monetary Fund (IMF), which just issued a pair of reports assessing the U.S. economy and its financial sector. The Washington Post lists the major recommendations of the reports: “Cut Social Security. Ditch the deduction for interest on home mortgages. Tax gasoline.”
The rich as well as the poor are losing their homes to foreclosures. That fact helps demonstrate the vast silliness of the federal government helping those low-income Americans who are not creditworthy to get home loans. The poor and middle class in America have long had the ability to save up for a modest down payment and then to make equally modest mortgage payments. Older Americans, many of whom purchased three-bedroom, one-bath homes in pleasant but unassuming neighborhoods, have enjoyed all the benefits of homeownership without the federal government demanding that the rules of financial soundness be met.
Since the introduction of the European single currency, 23 different regional currencies have started circulating in Germany as people aim to revitalize local economies, lessen dependence on the euro, and challenge the established global monetary system. At least 40 more are in development.