So there was a downturn of the DOW yesterday. According to reports, it followed a setback in China. Things are looking grim in China, so investors don't want to spend their money there. My take is that for the past few years China has been good for producing most anything inexpensively. But it has been foreign manufacturers driving that train, large companies from anywhere but China setting them up for production amid the cheap labor. Most everything leaves the country though, because Chinese neither want, need or can't afford the goods produced. Somebody has to buy all those Ipods though, so the goods leave the country, leaving little for the Chinese. But what happens when the rest of the world can't keep up consumption to match the Chinese output? Simple, those companies driving production leave, or cut back production. They withdraw the funds necessary to continue the production of goods. The rest of the world couldn't keep up the consumption for long, the US is not the only country riding a huge deficit. Like the consumer, our government has been spending like there is no tomorrow. When it comes payback time, we will have to pay for it somehow, and our government will have to raise taxes. There is no way around it.

Large corporations driven by people pushing for more profits tend to suck the wealth out of any environment. With the Chinese it is the cheap labor force. Here it is the detached government, Congress and the Administration, unconcerned for the taxpayer that is going to have to pay the bills. Congress is spending money like crazy on projects that are in part designed to soak the money supply coming out of Congress.

Concerning our deficit situation, just who will pay the bills? Businesses won't, because it's the larger more powerful driving everything, and they are also the source of funds that drive our legislation to the situation we are currently faced with. They give money for perks and campaigning to our lawmakers, those that generate the legislation that has been forking over money for everything under the sun. Sure, that bridge in Alaska didn't make it, but that is only because it was extreme even for Senator Stevens. You can bet there are many more equally wasteful projects that have made it through on riders. This is why Clinton wanted the line-item veto, he could see how much harm Congress could do without it. So our boys and girls in Congress aren't going to call on them to give back a little, at least for the taxpayer's benefit. Taxes are going to have to go up, and the draining of one of our resources, American earning power, will commence.

I liken it to the resource hemorrhaging that went on when Britain went into Iran to deplete their oil before Mossadegh took it away from them. With Iran and a few other countries it was oil, with China it is labor, here it is our lust for material goods.

Shit, I didn't mean to go on like that. Anyway, in the headlines today there is all kinds of optimism concerning the markets. At CNN they are 'set for a rebound'. We will see. Not that I'm being pessimistic, but let's get real. Any sensible person knows you can't spend more money that you have, or can work for in a reasonable amount of time. I'm not really sure how it will work, but the only way to pay off our huge deficit will be to raise taxes. Cutting spending now won't work, because we are too far in the hole for recent routine to prevail. We will have to pay more taxes. This will be detracting from one of the things sustaining the problem, larger corporations taking advantage of our material fervor. We pay more taxes, we have less to spend to appease the insatiable appetite, and the less we have to support those driving the situation.