September 17, 2015
No Pain, No Gain
There is no coming to consciousness without pain.
– Carl Jung, 1875-1961
Swiss psychiatrist and psychotherapist
I’ve spent my entire life, all 44 years, living with alcoholics and drug addicts, their families and friends. As a child, I played with them in the neighborhood and later I partied with them on Friday nights. I went to school and to college with them. I even worked with them. As an addict, I grew up seeking the next big thrill while trying to avoid pain, at all cost. I’ve watched a few including myself find “sobriety” while some were incarcerated repeatedly and others went to their grave a bit too soon. Among the group was my own father, at the age of 53. This Vietnam Veteran, like many, died penniless and in debt. When I think about these addicts and alcoholics, the United States Government quickly comes to mind. The parallels between the life of the addict/alcoholic and the current State of the Union are many including a lack of integrity and self-discipline, as well as, immaturity for being over 200 years old.
However, one major difference that the federal government has over every alcoholic is the ability to print endless amounts of money that’s only backed up by our good word, but even this privilege comes with its own responsibilities and limits. To the disciplined mind, a fixed monthly budget may prove challenging and it may even require making self-sacrifices, but to the undisciplined mind a budget, of any size, however well-meaning often turns into a mountain of debt that requires a bailout from family or friends. Facing reality or the truth, which leads to humility and growth are replaced with denial and telling lies in order to cope with the growing emotional, financial, mental, physical, sexual and spiritual pain and suffering being inflicted upon oneself and/or onto others until its’ too late.
While an alcoholic can and usually does make a mess of his or her own life while digging a deep financial hole for themselves that they may or may not be able to dig out of, it’s nothing compared to what the federal government can do through bad policies that lead to wasteful spending to the point of insolvency. The government can make a much bigger mess while literally digging a hole for itself that’s halfway to China, if not stopped in time by members of the political class, its’ citizenry and/or its’ creditors. What happens if the political elite, our citizens and/or the government’s creditors by doing and saying nothing continue to enable the irresponsible behavior of our politicians? Who then will hold the system accountable? What are we waiting on – for the next financial crisis to hit our shores? Where are the police to pull over this drunken motorist and arrest them on the spot for operating the Government Under the Influence (GUI)?
Our money is only as good as the world that continues to accept it as payment or holds it as an IOU. Foreign governments may choose to hold it as an IOU, but the taxpayer and beneficiary have no choice. Living beyond one’s means is “par for the course” for most alcoholics and addicts with the rich being the exception. Even with a license to print money our government historically has lived beyond its means especially during times of war and struggle. The problem arises when our government lives beyond its means during the good times, for way too long, and it no longer has the discipline to repay the borrowed money much less come up with a plan. When mandatory sending programs like Social Security, Medicare and Medicaid and servicing the interest on the national debt outgrow the government’s income for the unforeseen future while making up a larger and larger portion of the government’s annual spending then you got a crisis. Here’s how former U.S. Secretary of Treasury Paul O’Neill puts it…
“It’s a lot like running up credit card debt: As long as you can pay the interest charges on your credit card debt, you can live way beyond your means. In fact, we as a nation are living way beyond our means, and for a period of time, there’s no doubt we’ve demonstrated you can get away with it. But I think we only need to look at the fate of other countries who’ve lived beyond their means for a long time to see you inevitably get into trouble…. The day you can no longer service your debt, you’re finished!” (2008)
– Paul O’Neill, 72nd U.S. Secretary of Treasury under President George W. Bush.
Secretary O’Neill warns of the day that the United States dies penniless and in deep debt just like my father and so many others have. In the case of my father, my immediate family understood that he was on a collision course with death, if he didn’t stop drinking. However, his death still came without warning in late November of 1998. This day of reckoning for our country will be no different. I don’t think many understand including Congress. It will happened sometime between now and some unknown day in the future and like most families of alcoholics and addicts we, Americans, won’t be prepared for its’ demise. With $18.3 trillion in debt and another $127 trillion in future obligations, all it takes is for the downgrading of our credit worthiness and then our ability to borrow more money will become harder as the interest rate grows into the triple digits. Who will lend to us then?
While addiction is treatable too often the prognosis for many is jail time, insanity and/or premature death. One common element shared by the alcoholics/addicts and their families and friends is being in total denial and thus having no ability to intervene by doing something or saying the right words to their trouble family member and/or friend that leads to them getting the necessary help. Too often, all are blind to their environment, to their own behavior and to the addict’s progressive disease. America is suffering from a spiritual crisis from the inability of Congress and the president to work together to solve our problems including this crisis to the breakdown of the family unit.
Congress lacks the political will to produce a balance budget and to come up with a plan to eliminate our national debt. We, the taxpayers, don’t know what to say or do or who to say it to and thus we say nothing while sitting in silence held captive to Washington’s insanity. Few of us take the time to write to our lawmakers or to the White House demanding answers to these problems. When I think about the Federal Reserve and its continued inaction on raising interest rates to natural levels for fear of upsetting the stock market and/or the economy, I see a Chair and her Board of Governors that are suffering codependents and enablers of our government’s bad behavior.
From what I’ve seen and read about the Federal Reserve – Janet Yellen, Chair, and her Board of Governors appear to live in a bubble while trying to please their wealthy friends and the stock market. The Fed suffers from wanting to be liked while not wanting to get their next decision wrong so they continue to do nothing. Yellen has stated that she wants more information to the point of “analysis is paralysis”. She would much rather play it safe and make Wall Street happy for another day with her inaction than get on with the business of cleaning up the damage from the 2008 stock market crash and the global credit crisis where corporate buyouts and government bailouts kept all from facing the consequences of their actions and the pain and suffering that comes with making lots of poor choices. Their inaction over the past eight years has led to another bull market courtesy of near-zero interest rates. The Fed now finds itself prisoners of their own “success” or its’ failure to take corrective action so many years ago.
Today, our latest captain and crew are too focused on avoiding any and all economic pitfalls that come with moving forward while ignoring the likelihood of sinking our country’s ship. The Federal Reserve Chair Janet Yellen and her Board of Governors are preoccupied with the stock market’s performance and the economy in the short run while failing to clean up the economy and its overuse of credit as our national debt continues to spiral out of control to the tune of $18.3 trillion. The health of the economy and the stock market are simply a mirage that’s being treated like an iceberg. The real iceberg and the seawater that surrounds it is our own personal and national debt, as well as, our government’s unfunded mandates of $127 trillion and that’s more than enough to drown all of us. Credit as a mechanism for buying things that we can’t otherwise afford has undermined our society’s discipline to save and invest. Both are critical for this nation to have a brighter tomorrow.
In 2008, our ship of state blew its’ top at the hands of our own doing. We refuse to face this truth while being so quick to blame others for our problems. The roof pealed back and the walls buckled. The Federal Reserve has put the ship in reverse rather than on a forward course in an attempt to buy time and to avoid any and all storms. Congress has been all, but silent in its fiscal role. They haven’t passed a budget since 2010, but they continue to receive a paycheck for doing their “job”. Both, Congress and the Federal Reserve have failed to take a leadership role in cleaning up our economy of all internal bleeding and any visible cuts and/or bruises. Politics and policies, in Washington, have made maintaining the world’s largest economy for today more important than having a healthy one that can grow. The values that drive our economy have led to an addiction at all levels of our society and to the detriment of our society. Our economy like our society is very sick. Where are the doctors?
The known attributes for producing healthy lives, families and societies based on economic, emotional, employment, financial, physical, sexual and spiritual health are greatly out of balance.
This has to change.
“We’re worried about that [the dot.com bubble] at the Federal Reserve and we talked about it a lot. Should we raise interest rates in an attempt to prick the bubble before it got too bad or not? We decided not.”
— Alice Rivlin, Vice Chair of the Federal Reserve (1996-1999).
During the run-up of the NASDAQ, the Federal Reserve had enough evidence to intervene, but out of fear did nothing.
From what I’ve seen and read about the Federal Reserve – Janet Yellen, Chair, and her Board of Governors appear to live in a bubble while trying to please their wealthy friends and the stock market.
Carl Jung, http://www.brainyquote.com/quotes/keywords/pain_2.html#JrIALvjWjcfS0lPT.99
Daily Reckoning – An interview with Paul O’Neill, http://dailyreckoning.com/an-interview-with-paul-oneill/
Money for Nothing: Inside the Federal Reserve. Copyright © 2013. All Rights Reserved. Director and Producer Jim Bruce. Music by Nora Kroll-Rosenbaum. Full-Length film — http://youtu.be/BnlYsYlfVJs
Copyright © 2015. All Rights Reserved. “No Pain, No Gain.” by Ted Burnett. This paper was reviewed by Michael J. Pereira, a financial adviser with Merrill Lynch.
My other essays and videos can be viewed at my website – http://www.tedburnett.com. I can be contacted via email at – email@example.com.