The economy is like a multi engine aircraft run by a great big rubber band, like the balsa wood model airplanes they used to make for kids. When the economy is booming interest rates gradually increase, giving the Federal Reserve the ability to let go the coiled up rubber band when the economy slows to get it growing again. The government uses taxes for the same purpose – lowering taxes to give people more money that they can spend to prop up a sagging economy. The only problem is that lower taxes means a higher deficit, a less efficient government, and long term a government trapped into higher debt payments. To think that it takes a veritable army of Ph.D. economists to run this exceedingly simple economic system… The only thing that makes it possible for them to do so effectively is because everybody behaves just exactly the same (rollover the image), so by definition we are Borg.
Consumer sentiment is what has kept the U.S. economy afloat for years now – people being hopeful in the face of war, political negligence, wall street thefts, and sundry other transgressions by virtually every institution in the land. Now we are losing faith.
Technology has been our champion – but there is absolutely nothing really new in sight. The space effort is worse than a B-rated movie. New gizmos are more flim than flam. Why? Because everything in the whole technological lexicon is either classified by one government or another, or kept a corporate secret by thousands of Fortune 500 multinationals who use this power to maintain their market share. Microsoft’s monopoly is the rule, not the exception.
The standard response by Washington to excessive economic growth is raising interest rates. Why not do something more productive to slow the economy than pump money into financial institutions, which are already making record profits? A much more productive way to slow the economy would be to phase in energy conservation standards. That makes businesses more efficient, and locks in energy savings long term. Every large business could be required to pass a regular energy audit. With each new business cycle the conservation standards can be increased, so that eventually America would be as energy efficient as our global competition – Japan, Europe, and Asia.