Most news programs, financial forecasters, and politicians talk in terms of when our economy will recover, not IF it will recover. And certainly not HOW it will recover. I don't believe that recovery to our former borrow and spend lifestyles is in our future. "Transform" is far more accurate description than recovery.

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Let’s talk about a couple of different things today. What’s going wrong and what we can do about it.

Those who read this column on a regular basis know that I believe we are near to the end of sustainability for our present economic structure; actually, well past sustainability and now past the artificial means that have been employed to cover up that fact.

Viewing America’s current record deficit spending from a different slant may help in visualizing the severity of our decline. To assist in doing so, let’s look at it with Mikeronomics.

Deficit spending puts money that was borrowed on credit into our economy; billions and billions of dollars. Some would say that it’s the war that has created the need for these record deficits and therefore the war is destroying our economy. That is not technically true.

Hundreds of thousands of Americans are actually employed as a direct result of our wars. I personally don’t support these wars, but the historical economics of supporting a war effort have always dictated higher employment and production. The current wars are no different.

So the real question is; Why isn’t the massive deficit spending creating the desired effect of raising our employment and living standards? Why have Americans lost jobs each and every month for the past seven months when deficit spending is at all time highs?

The answer in my opinion is that we have reached the mathematical zenith for the premise of exponential growth in both our physical and monetary systems. The study of our society applying macroeconomics bears this out. That being said, macroeconomics is a difficult subject to comprehend. I don’t expect everyone to grasp such a specialized study, much the same as I don’t personally understand brain surgery.

Even those of us who are emerged in this discipline on a daily basis, find the total understanding of the connectivity that each and every element of our economy and society has, to be a difficult undertaking. In other words, some days it gives me such a headache that I just go fishing.

That is why I do my best to produce living examples such as the one above to help all of us to understand the consequences of our current path. Not the Republican or Democratic path, but the path that attempts to maintain our accepted and expected American way of life.

The tax rebates, the deficit spending, the continual hiring by government while the private sector struggles; why isn’t our economy getting better? That is the question that I would like for you to consider. Lay down your campaign signs and consider the question on a pure unbiased mathematical basis.

The fact that our banking and general monetary systems are in trouble is certainly not news. Just how much trouble, may well be the most under-reported news in the U.S.

Banks secure collateral to back up their loans. We know that housing has proven to have been significantly under-collateralized and has cost lending institutions untold billions in write downs (more commonly referred to as losses). No news there, but what about consumer debt collateral? What is the real value of the collateral that the banks have loaned against consumer debt in comparison to the values posted on the banks balance sheets?

A Denver Dodge dealer is currently offering new Dodge trucks at 50% off. You read that correctly. So then, what is a used Dodge truck worth? What amount does the bank have on their books for truck loans that they are carrying? What about the thousands of SUV’s or diesel motor-homes? What is the underlying collateral for credit card debt? How do the legions of unemployed repay any debt? We will soon find out.

Can our government pull us out of our current decline by distributing truck loads of newly printed money that is backed by foreign loans? In other words, can we borrow our way out of this? Of course not, we may well have reached the physical limits of growth necessary to balance our system.

If you in fact believe what I’ve written, that we have reached the predictable mathematical end of our flawed economic basis, then the obvious question is, “What can our government do differently?” But more importantly, in the short term, what can we do as individuals?

When an irresistible force is about to meet an immovable object, I suggest not standing between them. Debt is the immovable object, incurring unnecessary debt is the irresistible force. We must totally rethink our current personal lifestyles, while government must rethink our complete monetary and economic basis. This will take a colossal paradigm shift; one that will not come easily.

In the aviation world a common phrase is, “Every pilot knows how to execute a 180 degree turn; the good pilots know when.” The time has come to make that 180 degree turn before we enter the eye of the storm.

America remains the best place on earth. Our problems were not created by this wonderful land that has provided so well for us. Our problems lie in our leadership heading in the wrong direction over the past 60 years. The good news is that we don’t need to follow that lead.

I will continue this thread throughout the week. In the mean time, go on a picnic and enjoy all that we take for granted. Live Simple, Live Well.

Authors Website: www.kingofsimple.com

Authors Bio:
Mike Folkerth is the author of "The Biggest Lie Ever Believed" and is not your run-of-the-mill author of finance and economics.

The former real estate broker, developer, private real estate fund manager, auctioneer, Alaskan bush pilot, restaurateur, U.S. Navy veteran, heavy equipment operator, taxi cab driver, fishing guide, horse packer and few jobs too embarrassing to mention, writes from experience and plain common sense.

Mike’s humorous systems of “Mikeronomics” and “Mikemathics” drastically simplify the economic and mathematic formulas commonly used by very smart, but terribly sheltered individuals.