The year 2008 will prove to be a unique spot in America's history. Looking forward, we are faced with some seemingly insurmountable obstacles. We have seen the housing market burst, rampant mortgage fraud, a sheepish stock market, a floundering dollar, and we are going into our 5th year of war with no formal declaration of war from Congress. What is going on?
It seems prudent and almost necessary to take a look at our current situation. I am by no means a politician, an economist, or an analyst of any kind, but I am an American citizen, and as such, I find it my right to know and understand the real state of our union and how it affects the average person. We are at a great crossroads with lots of decisions to make as to leadership, the war, and the economy.
The first place of concern is the economy. Home values and property values are dropping. The US Dollar is loosing value to inflation. Gas prices are averaging $3.25 per gallon. The culmination of all this means less expendable income for everyone since more money is being spent on the higher priced commodities. Less expendable income means less money being put back into the economy, which stifles growth. I, like many other middle class citizens, are feeling the pressure to not spend as much on what we normally would. Some of us are barely making ends meet, and others are being forced into foreclosures and repossessions.
The number of foreclosures in the housing market are driving down the fair market value of homes. Foreclosures sell for much less than fair market value, so they always sell first. This leaves higher priced homes on the market that are holding on to mortgages. With the average length of time to sell a home up to almost 9 months now, many homeowners can't afford to wait that long to sell, which can force them into foreclosure as well. Everyone loses over a foreclosure, except for investors who buy foreclosed properties. The lenders lose out on thousands of dollars in revenue, the homeowners lose their homes, and the value of homes around the foreclosure are forced downward.
What about gas prices? Last summer, prices spiked to around $3.39 in my area and over $4.00 in some areas. We are seeing a national average just shy of that right now, with no relief in sight. The demand for oil has steadily increased with sharp increases in India and China, while the main supply of oil comes from a very unstable area in Iraq, Iran, and the middle east. There are also many more restrictions on emissions, which means tighter restrictions on oil refining. All these factors continue to push prices upwards, and there doesn't seem to be a ceiling to stop it, unless the demand starts to shrink or we find new supplies of oil.
And the US Dollar? This is probably the biggest issue I can see in our economy. The dollar has lost value to inflation since its inception in 1913 under the Federal Reserve. The US dollar is a form of fiat money, which is not backed by anything. The original US currency was backed by gold, which is much more stable in price than a paper dollar due to controllable supply. As the supply of money increases, the value of the dollar will go down, but inflation is not the only cause for concern. We have an enormous amount of national debt from the war and other programs. The Federal Government is spending money we don't have, and the Federal Reserve is printing more and more and driving down the value. The dollar we have today is worth about $0.04 or less compared to the dollar when it first began circulation. A dollar that is losing value can buy less on the world market, which means everything we import (which is a LOT) will increase in price.
There is even more to say about the war we are in. It was a mistake going there and it is a mistake being there, but we do need to find a resolution. We have lost over 4000 soldiers overseas in the Iraqi war so far, and we have never even made a formal declaration of war. The role of the US Military as established in the constitution is not to police the world, but to defend our country. The mindset of late has been to defend by having a strong offensive front, but the result has been a military that is spread thin all over the world and a war based on the pretenses of Iraq having weapons of mass destruction. We never had solid proof and we went in anyway. We are now watching as Iran is enriching uranium for "peaceful purposes" but many believe that this nuclear program is for weapons and not energy. This is a difficult situation to be in. Are we bringing this hostility on ourselves by being so invasive in our foreign policy, or are we being proactive towards hostile nations? It seems like an argument can be made for either case, especially after the attacks on New York. We wouldn't approve of a foreign military base on our soil, but we expect to be able to have them all over the world. The U.S. Declaration of Independence had a section which informed the world that it was necessary to fight the war of Independence against Britain because King George III had "kept among us in times of peace" "Standing Armies". Such has essentially been the tale of what we have done around the world.
So what does America need? An administration dedicated to 1) cutting federal spending and reducing the national deficit, 2) creating a sound economic policy, 3) employing a less invasive foreign policy, and 4) more involvement from average citizens. The US has (generally speaking) become a society that has a big entitlement complex. We want everything done for us, and we want it done quickly and done right. Our parents and our forefathers worked their entire lives to be able to have the things we run out and put on a credit card. We need to take responsibility for our decisions and our actions, and not look for the next government bail out. If you want real "social security" then plan accordingly and save or invest. Work hard. Get an education. Seize opportunities. America is still the land of opportunity, we just need to be willing to get up off the couch and go get it.
About the Author:
Seoteric is an Athens Web Design company specializing in internet marketing, SEO, and web development.
2008 - A pivotal Point in US History
