Nevertheless, I am going to take a stab at reading the tea leaves. Though I too see the future only dimly, there are some things of which we can be certain. One is that taxes will go up and another is that federal spending will rise as well.
Despite all the talk about getting the deficit under control, I see the national debt growing to nearly $18 trillion before we reach 2014. The reason is simple. Judging from the current evidence, the politicians seem intent on kicking the can down the road once again.
The Republicans have warned that the taxes Democrats are determined to impose will not raise sufficient revenue to lower the annual deficit substantially — and I agree. Yet there seems to be no stopping the liberal juggernaut. In addition to Obamacare’s hidden taxes, there will be rate increases, even on the middle class.
Adding these levies to those of states like California, there is good reason to believe the wealthy will seek to protect their assets. And if they do, revenues will not rise as quickly as projected; hence unfunded spending will grow more rapidly than projected.
Since Democrats also show no inclination to reign in entitlement spending, or discretionary expenditures other than for the military, the gap between government income and outgo should get larger. This may be exacerbated if the economy stalls — as many economists expect.
Under these conditions the need to borrow will continue to mount, as will the Federal Reserve’s policy of printing money. Where this will end is hard to say, but eventually there must be a roaring inflation. The only way this cannot happen is if the laws of economics are suspended.
The reason inflation seems not to have already occurred is that foreigners, whose economies are worse than our own, continue to perceive American bonds as safe. This, however, cannot go on forever. The question is when will the kicked-can explode? It may not be this next year, but it will be some year.
Then there is the international situation. The Middle East continues to boil and Iran keeps getting closer to producing nuclear weapons. Will Obama do anything to reverse this trend? Will Israel?
Again we do not know, but as of now I predict that Obama will maintain the policy he has in the past — that is, he will do nothing. As for Israel, I am not sure it has the strength to save the day without U.S. support.
Where does this leave us? I say in a pretty pickle. There is a very good chance that the economy will slide off the edge and that a host of Islamicized nations will join in an alliance against us. If so, far from achieving peace and prosperity, we will persist in decline and insecurity.
These predictions do not cheer me. They are certainly not intended as an “I told you so” directed at politicians I do, in fact, despise. This is not something I want to happen because, like it or not, we are all in the same boat. Liberals and conservatives, Democrats and Republicans, will all be hurt if my fears come to pass.
Of course, we could survive another year. Who knows when the horrors of inflation will arrive? It could be years from now. Also, it just might be that a nuclear-armed Iran will behave itself in the short run.
But what of the long run? When will we as a nation begin looking beyond the immediate future? When will the politicians — and the voters — begin to consider the fate of our children and grandchildren?
Melvyn L. Fein Ph.D., is professor of Sociology at Kennesaw State University.