Sundown in America?

David Stockman, the former Director of the Office of Management and Budget (1981-85) during the Reagan Presidency and author of “The Great Deformation: The Corruption of Capitalism in America”, spoke at Harvard University in a speech he called “Sundown in America: The Keynesian State-Wreck Ahead.” Stockman spoke about the ill-effects of his party’s Republican Keynesianism and its responsibility for destroying the growth of wealth in American families over the past 25 years.

Golden Nuggets from the speech:

  • Stagnant Living Standards: The median U.S. household income in 2012 was $51,000- a figure reached in 1989. Living standards have not grown in 24 years.
  • Poorest Struggling More: Bottom quintile of households making $11,500, a 20 percent decrease from the $14,000 in constant dollar income in 1989.
  • Food Stamp Nation: The number of Americans on food stamps has risen from 18 million to 48 million since 1989.
  • Rich Getting Richer, Including Under Obama: The top 5 million U.S. households (top 5%) have enjoyed an income rise from an inflation-adjusted $240,000 in 1989 to $320,000 last year. The $40 trillion gain in the net worth of the top 5% is almost double the entire net worth of the other 95% of households.
    Writes Stockman, “So, no, Sean Hannity need not have fretted about the alleged left-wing disciple of Saul Alinsky and Bill Ayers who ascended to the oval office in early 2009. During Obama’s initial four years, in fact, 95 percent of the entire gain in household income in America was captured by the top 1 percent.
  • Pentagon Budget Grew $200 billion: From $450 billion per year in 89′ to $650 billion per year, a 40% increase despite the election of the Harvard peace candidate Barack Obama.
  • Income in DC Metro Has Climbed 40%: From $48,000 to $62,000 during the same time that wages have been stagnant for 25 years in America as a whole.
  • Debt as Percentage of GDP: The $3 trillion of national debt in 1989 was just 35% of GDP; today’s $17 trillion debt is 105% of GDP.
  • U.S. Credit Market is on Drugs: Has risen from $13 trillion (2.3X national income) in 1989 to $58 trillion (3.6X national income) today. This credit market debt figure includes the debt of households, financial institutions and businesses.
  • Fed Prints $4 Billion of Make-Believe Money Every Business Day: This is a solution?

Stockman’s picture of America over the last 25 years:

  1. The rich have done exceedingly well, doubling their fortunes. He blames this on the Central Bank’s policies which transfer wealth to the top 1%.
  2. The government has done very well, expanding its powers over people.
  3. Regular folk are paying more for the government and getting less in benefits.

The modern American State is failing to deliver on its promises: it is a “Savior State which can no longer save the economy and society because it has fallen victim to its own inherent short-comings and inefficacies.”stockmanreagan.banner.AP

Stockman got on a roll, calling out the State for totally failing to distinguish between public interest and private looting, “One week Washington proposes to bomb a nation that can’t possibly harm us and the next week its floods Wall Street speculators, who can’t possibly help us, with continued flows of maniacal monetary stimulus.”

Stockman predicted this depressing “Sundown in America” scenario because he believes the federal budget has become a “doomsday machine,” without any effective process of fiscal governance in sight. He concluded that the American State will destroy itself through its own economic debauchery.

Share Button

RSS feed for comments on this post. TrackBack URI

Leave a Reply