If these entitlements really are a large part of the deficit, then one way to deal with it is to have a clawback of benefits if your income is above some level. Whether there is the political will for such a change is entirely another matter.

Failing that, there will be a strong temptation for the Federal Government to deal with the problem by greatly increasing the money supply which will cause inflation, rather than deflation. One analyst, namely Peter Schiff or Dr. Doom as he has been named, predicts that will happen. In such a scenario, you want a good hedge against inflation. It may be prudent, should the next wave of this predicted double dip recession and resulting asset value correction occur, to put some money into real estate (either a house or REITs with a good balance sheet), or commodity related funds like resource, precious metal, or energy funds.

There is probably a higher risk of runaway inflation in the United States than in Canada, where I live, but either or both countries could go this way if the economy gets worse. If that happens, I’ll be looking at investments that are a good hedge against inflation.

Rodney Johnson for President 2012

What about cutting military spending? Do we really need all those military bases around the world for example? Whose export business are we protecting, China’s?

RJ says to Adit that he has it exactly backwards, that it’s deflation which is likely, not inflation. Is there only two possibilities or is there a third? I’m thinking of a total collapse of the dollar, or would that just be considered extreme inflation? Price deflation arithmetically has some limit, so a gallon of milk could go from $3.00 down to say 10 cents in theory I suppose. But a gallon of milk could in an inflationary scenario theoretically go to a trillion dollars. I guess I’m saying that the super inflation scenario is not inflation but a third thing. Just thinking out loud.

Nobody likes big budget deficites but putting reductions solely on entitlements is grossly unfair and only compounds the problem of inequality without helping the economy. What? Now that the financial sector has made off with 14 Trillion we will get what little remains of the wealth from the middle and lower economic groups? Of course entitlements need to be cut, but don’t think that can be done without some sharing accross the board, including defense.

Speaking politically, here’s the problem. The voters, in an uproar in 2008 and still in an uproar, voted and will vote to have their pain taken away. So anybody who makes the necessary cuts will be voted out, along with anybody who doesn’t make the necessary cuts. I know you guys already know that, but where is this dreadful dynamic taking us? Looks to me like paralysis until natural forces (the market) takes us down. When the market stops buying USG securities, that will end the spending, won’t it? And it’s dreadful to think that we as a society can do nothing to voluntarily save ourselves and only wait till the ax falls from above. Shades of Jared Diamond’s book Collapse.

I find it ominous that constituencies are furiously resisting even the most obvious cuts: Medicare Advantage and subsidies to student loan providers–ominous how easy it was for Republicans to whip up the fears of senior citizens, ominious how shamlessly the student loan provider companies insist on their graft subsidies and the republic be dammed.

It’s obvious to me now the “change” people voted for with Obama was to bring us back to the good days of 2004. That’s why his budget is so high! He doesn’t want to be thrown out of office! Plus he doesn’t want to cut spending in a recession, plus he wants to invest in a transitional, future economy. I’m not defending Obama; I didn’t vote for the guy. I simply see that he’s in a trap, a real bad one.

The way I feel now is I’d be delighted to hand the whole horrendous mess over to the Republicans. Take it, it’s yours! Then they’ll be in the same trap Obama is in. Cause, see, I don’t suppose the public will like draconian cuts coming from the Republicans any better than they’d like them from Democrats. Did anyone hear the Tea Party national conference yesterday and Sarah Palin’s speech? She said she would lower taxes and call on God for the remainder of the solution. Thru the whole conference I heard not one proposed specific cut mentioned, even tho all called for “cuts!”

So what happens then? Two years after the voters threw the bum Democrats out they’ll throw the bum Republicans out. Either party that makes the cuts, or doesn’t make the cuts, will be thrown out. Then what? No government at all! We will have to put up a 5000 yard barbed wire perimiter around the White House and Congress, manned by the national guard.

This is a tragedy 50 years in the making.

Elaine Douglass
Moab, Utah