From Brett Pawlowski, president of DeHavilland Associates in Charlotte:
Candidates of both political parties, from aspirants to the office of president on down to dog catcher, are trying to convince you that a vote for them is a vote for prosperity, a vote for a return to a time when jobs were plentiful, wages were good and prices were low.
But the truth is, neither party can fix what ails us. They havent even admitted whats wrong.
To understand why it seems like were standing in the economic equivalent of quicksand, sinking more quickly the more that we struggle, you need look no further than a single chart, published and updated regularly by the Federal Reserve: the change in Total Credit Market Debt Owed over time.
This chart (go to research.stlouisfed.org for a better look) shows the entire amount of debt of every kind coursing through the veins of our country, from student loans and household credit cards to corporate and government debt. Since 1950, the amount of debt in this country has doubled seven times, rising from $425 billion in 1950 to $55.03 trillion in April.
Our economic growth over the past 60 years was fueled by this debt, and the party kept going as long as we could issue more and more IOUs. But weve hit a wall. To keep things moving ahead at the same rate, wed need to double our debt yet again, this time to $109 trillion over the next 10 or so years. And thats not going to happen.
If you wonder why we cant shake our economic troubles, thats the reason. If you wonder why the Fed is now pouring billions in new money into the economy each month, and holding interest rates close to zero so we can all borrow more, thats the reason. And if you wonder why none of the solutions our political leaders are willing to offer are ultimately going to work, thats the reason.
Politicians wont tell you this because they cant. They think we dont want to hear it, and if theyre right then raising this issue is a one-way ticket out of office. No politician wants to be Don Quixote, riding alone and tilting at windmills.
If we, the voting public, are serious about wanting solutions, we need to lead this charge. We need to acknowledge the source of our troubles, and we need to educate others. And we need to start talking about a real fix, not just papering things over with yet more IOUs.
If we can do that, we can find a way forward. It may not be pretty in the short term, but its the only hope of a return to real prosperity. If we cant, then a solution will be imposed upon us one that we almost certainly would not have chosen for ourselves. Its our choice.