This book is a wakeup call to all Americans that our economy’s foundation has serious cracks that are getting wider every day, our government’s finances are on the path to bankruptcy, and our political leaders are promoting policies that avoid dealing with the real issues and will only make matters worse in the long run.
By examining our economy’s long–term trends and how its key parts interact, Thin Ice - and Melting exposes government lies, explodes some popular myths, explains how our economy works and reaches sound, but sobering, conclusions about we must do to build a solid economic future for ourselves and our children.
Thin Ice - and Melting shows the financial crisis of 2008 is only the tip of a large iceberg of economic and political problems we must overcome. Our economic future is at stake, but our government is pretending all is well (it isn’t) and our economy will somehow fix itself if we apply a band–aid and wait a few months (it won’t).
We have the time and resources to reverse our economic meltdown, but we need aggressive action that will only take place with strong political leaders that have the courage to tell the truth and make the hard decisions that are best for our country.
Contents
Introduction
Chapter 1: How Strong is Our Economy?
Chapter 2: Where is the Money We’re Spending Coming From?
Chapter 3: What’s Happening to Employment and Wages?
Chapter 4: Where is Your Government Spending Your Money?
Chapter 5: Where is Our Government Getting the Money it’s Spending?
Chapter 6: What is Our Trade Deficit Telling Us?
Chapter 7: What is the Real State of Our Economy?
Chapter 8: How Do We Stop Our Economic Meltdown?
Chapter 9: We Need a Revolution!
Preface
July 4, 2024, 9:40 pm
From: To: chrisg@finance_advisors.com
Subject: Hello from North Carolina
Hi Chris,
How are things in Rio de Janeiro? From what I hear, Brazil’s economy is still growing reasonably well, so I guess everything is OK with you.
As you know, our economy is in its fifth year of suffering. Unemployment is 14%, but that doesn’t count those who have given up looking for work. It sure seems much higher here in Raleigh. Among my friends, unemployment is more like 25%. Many businesses have closed, with mainstream retailers, restaurants and financial institutions being particularly hard hit.
Everyone is hurting. Government spending, Social Security and Medicare benefits have been cut about 35% and more cuts are probably on the way. Federal, state, and local governments are providing essential services, but little more than that.
Crime is up sharply because many people are desperate and everyone is on edge. There were demonstrations in Atlanta, St. Louis, and Boston last week that almost turned into riots. Hopefully, the situation won’t blow up in our face.
My personal world has fallen apart in the last six months. The bank started to foreclose on my house, but so many foreclosures have taken place, the banks can’t sell the homes without taking heavy losses. I’m renting my house from the bank for less than my mortgage payment while we try to work out a deal. The government says it will probably step in to keep families from being evicted, because so many people are losing their homes and have no other place to go.
My parents’ retirement funds were nearly wiped out in the stock market collapse and they moved in with me two months ago because they couldn’t make it on their own with the big cuts in Social Security and Medicare. Even their private pension payments were slashed 40%.
My 40(k) is worth 20% of what it was five years ago and I recently lost my job, but I am still pretty lucky. I managed to find a good job that uses my talents, but the pay is only two–thirds of my former salary. This is still a lot better than nothing and with my wife’s part–time job we are making ends meet – but just barely.
One good side effect of this crisis is a new sense of community. Every charitable organization and government is providing food and shelter to those that need it, and the people that have something seem to be generously helping the have–nots. Almost everyone seems to be getting by, but life sure isn’t what it used to be. Except for the wealthy, everyone is scraping the bottom of the barrel and having a little positive cash flow is a big victory for most businesses.
Our economy didn’t get really ugly until 2019, just as the politicians were telling us it was going to turn around. For a while, it seemed like the world was going into total financial chaos, but cooler heads in the world’s larger economies stabilized the situation. However, stability came with heavy costs for most people.
Despite all the problems, life is going on. Our government says things will get better soon, but no one really believes anything the politicians say. Everyone remembers all the rosy predictions made during the past ten years as our economy went down the drain.
What really bugs me is why no one saw this coming and did anything to stop it. Where were our political leaders when all of this was developing? Did they not see it? Did they not know what to do? Or was it that no one wanted to face reality?
All we heard from our so–called leaders in Washington then was that the other political party was the source of all our problems - and that’s all we’re hearing now.
We probably could have avoided this calamity if somebody told us we were heading for an economic meltdown. What would have told us we were heading for trouble?And why was no one ringing the alarm bells 10-15 years ago when we could have done something about it?
Since you work in finance and have an outsider’s perspective, please send me any of your thoughts about how we got into this mess and what we need to do to get out of it.
Regards,
Richard
Ringing the Alarm Bells
Well, I am ringing the alarm bells in time for us to do something about our deteriorating economy and increasingly shaky government finances.
The warning signs are clear if you look at the long–term trends of our economy and you dig beneath the surface to examine the forces that power our economic engine. It’s what’s beneath the surface that really matters, because what’s on top hides the erosion happening below.
I started investigating the state of our economy because I kept hearing so many conflicting statements from politicians, columnists, and economists. I knew some of the statements were true, some were politically motivated claims or lies, and some were just opinions based on few facts and little thought.
Much to my disappointment, my analysis revealed our economy is in far worse shape than any of our politicians are talking about. Despite the current financial crisis it looks reasonably sound on the surface, but most of its vital measures have unfavorable long–term trends and our economy’s foundation has ominous cracks that are getting wider every day.
I also discovered our government has been fiscally irresponsible for decades, misrepresents its finances, and has been far less than honest with the public about Social Security, taxes, trade and other important economic issues. The American public is being duped because no one in Washington has the backbone to tell the truth.
We will recover from the 2008 financial crisis, but our economy is far less secure than our political leaders would have you believe. A few public officials have mentioned some of the critical findings in this book, but the silence from Capitol Hill about the longer-term threat to our economy is deafening. For those who care about their economic future, this book explains why our economy is on thin ice and why the ice is melting.
We have the time and resources to strengthen our economy and repair our government’s finances, but little will happen without effective political leadership. Unfortunately, strong and capable leaders that want to do what’s best for our country are very hard to find in Congress and the White House – and I am talking about the Tweedledums as well as the Tweedledees.
This must change, but the only way it will change is if the public understands what’s happening to our economy and voters start thinking for themselves instead of letting political parties do their thinking for them.
Our chronic trade and budget deficits are serious problems, but our most important deficit is our leadership deficit. Americans must look beyond political party smoke screens to vote for candidates who have the courage to tell the truth and make the hard decisions necessary to rebuild our economy and reclaim our democracy by implementing the essence of this book’s recommendations.
Although our federal government must provide leadership and is the only source for addressing some issues, most of the effort to rebuild our economy will have to come from the business community and the public, with a little help from state and local governments. The private sector built our economy and it is the only force that can rebuild it.
We can do everything necessary to build a better future for ourselves and our children. The only question is whether or not we have the leadership and the will to do it. If we don’t, everyone will suffer the consequences.
About the Author
Will Kaydos does not claim to be an expert on economics, finance, government, or politics, but Thin Ice - and Melting is concerned only with the fundamentals of these subjects. What the book is all about is looking at the individual pieces of a complicated puzzle and putting them together to reach sound conclusions. Will has done this many times as a manager, executive and consultant in widely different situations.
Will’s professional experience has centered on developing measurement and management systems and using them to improve organizational performance. He is a Senior Associate with the Balanced Scorecard Institute and his books, Measuring, Managing, and Maximizing Performance and Operational Performance Measurement: Improving Total Productivity have been praised by prominent executives and managers from all over the world.
Will’s education includes a BSEE from Clarkson University and an MBA from the Wharton School of the University of Pennsylvania, but his primary qualification for writing this book is several years of research and analysis of our economy’s behavior and the financial, political, and social forces that affect it.
A key part of Will’s investigation was gathering opinions and thoughts from newspapers, magazines, books and web-based political, public-interest, and academic organizations. However, the different thoughts and opinions were not treated as facts, but as points to be investigated because the diversity of opinion about every aspect of our economy is extremely broad. Name a topic and you can find comments about it from “experts” that range from one extreme to the other.
But somewhere between the extremes lies the truth, and Will maintains that if you ask enough questions and accumulate enough facts, you can get to the truth about anything.
Thin Ice - and Melting achieves this goal.