Op-Ed: The Other Side of Wealth Destruction
Ways to rebuild value, nation as a whole.
The false prosperity we've been experiencing for the last 30 years has come to an abrupt end. Household net worth has declined by $12 trillion in a matter of months. It will take years for average Americans to restore their wealth to 2007 levels. If your investment portfolio has declined by 50%, it will need to increase by 100% to break even.
According to the Wall Street shills, it should take at least 3 months. An honest financial advisor would tell you10 to 15 years. Americans have no choice but to substantially increase their rate of savings. In 1981, the savings rate was 12%. The increase in debt and drop in savings came from the delusional belief that we could borrow and spend today, and real-estate wealth would fund our retirements.
The very fabric of our nation is in danger of tearing. I believe Washington's actions over the last year have marked a point of no return. I'm irate at the government for choosing to bail out excessive risk-takers at my expense. Millions of other Americans feel the same way.
When Iraq invaded Kuwait in 1991, President George Bush decided it was America's responsibility to protect Saudi Arabia's oil fields and liberate Kuwait from the clutches of the dictator we had previously supported. The American military crushed Saddam Hussein's Republican Guard and liberated Kuwait. After the Gulf War, the US left 4,000 American troops in Saudi Arabia; that number eventually grew to 7,000. These troops became a rallying point for Muslim fundamentalists, who charged the US with trying to increase its influence over the nation's oil reserves.
The US has spent $7 trillion on defense since 1991. Most of these funds were used to develop offensive, not defensive, weapons.
Could that $7 trillion have been spent more intelligently? The military launched approximately 1,000 cruise missiles during the Iraq War at a cost of $1 million per missile. This was a choice to spend $1 billion blowing up bridges, water plants, and electrical facilities in Iraq, rather than repairing our own 156,000 structurally deficient bridges, replacing our decaying water pipes, and upgrading our electrical grid.
Could that $7 trillion have been better spent by private individuals? Could it have been better spent jumpstarting efforts to wean ourselves off Middle Eastern oil? I don't know the answer. But, I do know that the vast majority of the $7 trillion was borrowed from China, Japan and my grandchildren.
There are approximately 308 million people living in the United States. Seventy-five million of these people are under 18 years old; 40 million are over 65. They're generally off the hook regarding the current financial crisis. That leaves 195 million people. The 80 million baby boomers (the pig in the python) are at the root of most of our problems.
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