BFFECONOMICS

It’s an Emergency!

By: M. James Freeman Ph.D.

BFF Economics: It’s an Emergency!

by M. James Freeman Ph.D.

Copyright 2012 M. James Freeman Ph.D.All rights reserved

Published in eBook format by eBookIt.comhttp://www.eBookIt.com

Physical copies can be obtained at WWW.BFFeconomics.com

Email the Author at: BFFeconomics@gmail.com

ISBN-13: 978-1-4566-1054-8

No part of this book may be reproduced in any form or by any electronic or mechanical means including information storage and retrieval systems, without permission in writing from the author. The only exception is by a reviewer, who may quote short excerpts in a review.

ABOUT THE AUTHOR

Professor M. James Freeman Ph.D. has written a nonpartisan analysis of the two presidential candidates (and their party philosophies) that cuts through all the fluff you read about and hear on TV and radio. He concludes that “BFF Economics” (which he explains later in the book) is the only power that can turn America’s economy around, avert true disaster, make you wealthier, and get Americans re-employed. Read this before you vote for anyone, anytime. You won’t be sorry.

Dr. Freeman has a Ph.D. in Business Administration with a specialty in Corporate Behavioral Science and Macroeconomics. He knows the power of BFF Economics from the top down (as a consultant) and the bottom up (as an entrepreneur). Dr. Freeman is uniquely qualified to understand the economic problems facing America and why BFF economics is the only force to rely upon. He deals in facts, analysis, and statistics, and the results are quite different from what you think you know.

When Dr. Freeman appeared on the Larry King show, Larry referred to him (on-air) as “one of America’s top-reigning geniuses” and “a delightful guest” (since he makes very few media appearances). Larry referred to his show the first night Dr. Freeman was on as “a fascinating evening.” He was invited back by Larry many times and accepted.

You need to read what this man has to say today. He is like nobody else!

CONTENTS

INTRODUCTION

Chapter 1: The Problem

Chapter 2: The Solution

Chapter 3: Roe v. Wade vs. Undocumented Aliens vs. Gay Rights

Chapter 4: Statistical Silly Putty

Chapter 5: Unique Election Coming Up

Chapter 6: Governmental Behavioral Smarts (and lack thereof)

Chapter 7: The QE3 (Isn’t this a Ship?)

Chapter 8: Loaf Around or Work That Is the Question

Chapter 9: Personal Expertise

Chapter 10: The FDIC, Its Promise Is As Good As Gold (if you live to be 130 years old)

Chapter 11: We Need to Stop Thinking Like a Rich Nation

Chapter 12: Everyone Brings Joy to My Office

Chapter 13: The American Gift No Student of Mine Could Ever Name

Chapter 14: The Cost of Not Doing Something

Chapter 15: Is a Wealthy Politician a Bad Thing?

Chapter 16: You Did What In College?

INTRODUCTION

I am neither a Mitt Romney fan nor a Barack Obama fan. I am a scientist and academician who goes where the facts and trends take me. I analyze data from a standpoint of economics, sociology, motivation, and finance, and I do this outside the political arena.

I have worked and served as a consultant in many industries. I understand business and how it “thinks.” Nobody has influenced me in writing this book or making conclusions, nor has anyone altered my thinking. Nobody has paid me. I work for nobody but myself. I am practical and a realist. What I have proposed as a solution to our economic woes I believe to be valid, nonpartisan, and accurate. In fact, I see this as the ONLY solution possible.

Make no mistake: Our economy is in terrible shape. It is so bad, in fact, that immigration north across our border with Mexico has slowed to a trickle for the first time in 50 years because there are no more jobs available here. Compared with just four years ago, almost 15 million more people are on food stamps; food banks have seen explosive demand by as much as 1000%; 500,000 more people are unemployed; and the average wages of jobs that replaced existing jobs are lower. The percentage of people in poverty in America has gone up each year, not down. Our debt rating has been reduced, there are more student loan defaults than ever before, and there are tens more indicators that all point down. But there is one thing, however, that can make a difference and turn this economy and nation around, one thing that can make you wealthier and feel more secure. This is the one thing discussed in this book: the only successful solution to reverse the current negative trends.

There is much more to economic success than economics. There is another factor—a behavioral factor—that is the essential ingredient for a strong American economy, and this needs to be considered every time you enter the voting booth. Whether Republican or Democrat, our president and congressional leaders need to be or become a BFF to American business. This book explains why.

I have tried to simplify complex concepts while maintaining accurate and relevant conclusions. I rounded a few numbers for the sake of clarity. I hope you find it enlightening, interesting, and thought provoking.

Sincerely,

M. James Freeman Ph.D.

Chapter 1: The Problem

FACT 1: Over the past four years, the poor have gotten poorer and the rich have gotten richer. Salary inequality has also gotten worse.

SIMPLE TRUTH: If John McCain had been elected instead of President Obama, those who voted for Mr. Obama would now be saying: “McCain has been the worst president we ever had. Dump him!” “Barack Obama would have helped us, the poor and middle class.” “At least Obama is not in bed with big oil like the Republicans are, and that’s why gasoline prices have soared more than 100% under that John McCain.” “I bet if a Democrat had been elected, he would have created jobs for us, the working folk.”1 “I guarantee that more than 27 million Americans (this number varies based on how it is calculated) would not be looking for jobs under an Obama Administration.” “Our guy promised to halve the U.S. national debt, and that’s what he would have done, not increased it by 50%.” “Under our guy, the rich would have gotten poorer and the poor would have gotten richer.” But wait …

FACT 2: Over the past four years, the national debt has increased by approximately 50%, from around $10 trillion to where it stands now at $16 trillion. If you are a U.S. taxpayer, your government has put each of you $140,000 into debt.

SIMPLE TRUTH: Because U.S. taxpayers have to pay this money back, in essence this guarantees that you and the young people of today, especially the middle class and the poor,2 will become poorer. The burden of paying this money back is so great that, after you pay your share (which will make you poorer), the lion’s share of this debt will fall upon your descendants. This is immoral and as you will soon see bad economic policy. Future generations of middle-class and lower-income people will be poorer also. National debt hurts the poor and the middle class the most. Every dollar we owe is a dollar that we cannot use to help the poor, the middle class, the elderly, or the disabled. That is $16 trillion which cannot be used to help our citizens or our economy: to build a bridge, to fund a job for a teenager, or to teach a five-year-old how to read. Nor can this money be used for any other purpose, because it is no longer available to us! $16 trillion is gone!

To put $16 trillion in perspective, I have listed a few countries and their Gross Domestic Products (GDPs), which is the fair value of all officially recognized final goods and services produced within that country within a given year. This is basically the yearly value of their entire economy: Russia, $2.5 trillion; Canada, Mexico, and Iran, $1.5 trillion each; Saudi Arabia, $620 billion; Egypt and Pakistan, $500 billion each; Israel, $250 billion; Syria, slightly over $100 billion; and Afghanistan, $29 billion. We blew $16 trillion! $16,000,000,000,000. Sixteen million million.

FACT 3: In addition to the $16 trillion in existing debt, our government currently spends approximately $1.2 trillion more than it takes in each year. This puts you further in debt, further weakens your buying power, and further makes all Americans poorer. This harms the poor and the middle class the most.

SIMPLE TRUTH: This makes matters worse. Our government is putting each taxpayer into further hock at the rate of about $12,000 more each year. It does this by spending $3.5 billion more than it takes in per day! The only way you can spend more than you take in each day is by borrowing. China is our primary lender so in actuality when our government spends money each day, in the name of full disclosure it should be using Yen, not dollars! But I digress. So, in addition to the $140,000 each taxpayer already owes, you are being put deeper in debt at the rate of approximately $1,000 more per month. The average family has about $5,000 in cash savings. If all Americans gave the government their entire bank savings, this would alleviate but a tiny fraction of the problem. Further aggravating the situation is the fact that every additional dollar that the government wishes to spend that it cannot directly earn back via fees and/or taxes must also be borrowed. At the prevailing and very low interest rates (which may go up, making the situation worse), for every dollar the government spends in the future in order to help its citizens, only 57 cents is actually utilized. The other 43 cents will be wasted on interest payments due from the past. If the interest rate goes up, then more of each dollar will be wasted and the 57 cents that can presently buy something or do something will be reduced even further. If this trend continues for every dollar the government spends, that dollar will only produce half of its buying power in goods and services. The other half will go to our creditors, including much of it to China.

At this present rate of debt increase, the Obama administration’s projections show the amount of debt increasing to approximately $25 trillion within 10 years. At that point your present 12-year-old will officially owe almost $200,000 once he or she starts paying taxes. This enormous amount of debt will become the tax obligation of each U.S. taxpayer. It will be very hard for tomorrow’s workers to get ahead with that kind of debt burden around their necks. Since it is unlikely that one generation will be able to pay off such a staggering amount of money, their kids and grandkids will have to help pay this off as well. Of course, this (immoral) concept of generational theft has already begun on a much lesser scale, and it affects you directly. Today the median income of American workers is back to the levels of many years ago. This is why your 23-year-old has moved back home and is sleeping on your couch! Few 20-year-olds can make it on their own anymore. They earn fewer dollars, and the buying power of those dollars is also less. You are wealthier than they are, and you will probably stay that way for generations to come, all because of the national debt. Remember that the debt I speak of is above and beyond your personal debt, including mortgages, car loans, student loans, and credit card debt.

To see a reduced “family-sized” version of the U.S. debt and budget problem, take a look at the next page.

FACT 4: Politicians love to ask the question: “Are you better off than you were four years ago, or even one year ago?” Based on numbers, facts, and statistics, for the vast majority of Americans the answer is NO (whether they realize this or not).

SIMPLE TRUTH: The real question should not be whether you are better off than you were in the past. That is looking backwards in time. The questions (and you will see why in a moment) should be: “Do you feel your job is secure?” “Do you feel your income will increase next year?” “Do you feel your pension plan will be in existence when you need it?” “Do you feel Social Security will remain solvent?” “Do you feel like buying that new car or taking a vacation?” “Do you feel anxious and stressed about your finances?” “Do you feel you have enough money to send your kids to college?” If you are a business owner: “Do you feel like expanding?” “Do you feel confident that demand for your product or service will rise?” “Do you foresee hiring more employees in the near future?” “Do you feel that government regulations obstruct your business too much?” If you are an investor: “Do you feel that businesses will grow and thrive in the future?” Do you feel that the government is helping business grow?”

FACT 5: The main touts of president Obama’s health care reform3 are:

1. No pre-existing conditions for children in all new insurance plans, and providing immediate access for uninsured Americans;2. Children can stay on their parents’ policies longer (till age 26); and3. Eliminating lifetime limits and restrictive annual limits.

SIMPLE TRUTH: All three are praiseworthy improvements that few reasonable people can argue with. However, like COBRA,4 these three things could have been enacted via law and/or regulatory changes. There was really no need to overhaul our entire health care system to accomplish these straightforward, helpful, and practical goals! As to whether more people are being covered by affordable insurance, this has yet to be determined because the cost of the plan began four years before full implementation of the benefits. So far, most of the people who became eligible to receive benefits were able to obtain coverage through the above rule changes, not by the overhaul. In addition, Congress made a “telling move.” When Congress finally passed the president’s health care reform initiative, Congress exempted itself from the plan. How weird is that for confidence building? Passing a plan that basically applies to all Americans except themselves! Isn’t this a little like a chef who insists his food is clean but refuses to eat in his own kitchen? With a strategy like this, who wouldn’t get suspicious? And they wonder why more than half of all Americans are not in favor of the plan.

But what the plan really does that is the most damaging to the economy is that it confuses business owners as to what it means financially today and what it will cost them tomorrow. It throws a monkey wrench into their projections and cost of labor (often their biggest expense), and it adds regulations they are not sure how to comply

with. Finally, we just learned that approximately six million mostly middle-class Americans may be penalty-taxed for not participating as the government requires. This tax makes these people poorer. Giving businesses 2,300 more pages to comply with makes it harder to do business. It makes it harder to plan. It makes it harder to hire. This makes you less likely to get a job.

The president’s health care law is seen as too large and too unpredictable, and creates too much responsibility and uncertainty for businesses. It is central government-driven, not private sector-driven, nor locally-driven by states. This book you are reading contains about 15,000 words. By contrast, the new health care law contains over one million words and makes reference to hundreds of other laws, making it so complex that there is really no way anyone (including top attorneys) can fully understand it. In addition, it includes the phrase “the Secretary Determines” well over one hundred times, so nobody will ever know in advance what “the secretary” will actually “determine” in the future! Although other laws use the same terms, no other bill directly affects your life (and death) like the health care bill! Who really cares what the “secretary determines” in a highway bill or an EPA law? Additionally, the president’s health care reform mandates what businesses must do instead of giving options. It may help people get health insurance if they are presently without it, but I believe the “dampening effect” on business and our economy may very well turn out to be too great a price to pay. As an example, take a look at the last pages of this book. I have re-printed 2 small sections from the actual (Obamacare) law. One-million words of befuddlement and perplexity. How can any business large or small even come close to figuring this out? Take a look at this near the end of the book. Notice the highlights of the “Secretary will determine” etc. I promise you will enjoy reading it… for about 12 seconds.

FACT 6: The government must pay back its debt. But there seems to be no clear way, no budget, or even a plan for how the U.S. government will pay back this massive amount of $16 trillion. Then, in addition, you have the yearly deficit of $1.2 trillion that the government creates each year, swelling the national debt to around $25 trillion within the next ten years. This amount grows to almost $60 trillion (the total U.S. debt) if you take into consideration what are called “unfunded mandates.” An unfunded mandate is something the federal government makes the states (or others) comply with but provides no money with which to do so. If these government promises were to be kept, U.S. taxpayers would owe more than half a million dollars each! So, as you can see, government promises are very unlikely to be kept.

SIMPLE TRUTH: THERE ARE ONLY FOUR SIMPLE OPTIONS AVAILABLE TO REVERSE THIS VERY DANGEROUS TREND IN ORDER TO SAVE OUR ECONOMY AND OURSELVES:

Option 1: Default. Technically, the U.S. government could become unable to pay back its enormous debt at some time in the future and therefore default. This, however, would be disastrous for the U.S. and the world economy on many levels, including the

fact that the world’s economy is based in U.S. dollars. Just about any country in the world can technically default without causing too much pain outside its borders. But if America defaults—the one country whose currency is traded as the standard for all other currencies around the world—this would create worldwide economic chaos, and the lowest- and middle- income groups would suffer the most within the U.S. and overseas. Plus, a large portion of our national debt is owned by U.S. citizens in the form of savings, retirement plans, and various types of bonds. These people will not only be affected by being citizens but will also lose additional wealth by being holders of these bonds. So this is a very bad option. Let’s hope this never happens; but it could if things do not turn around quickly. Let’s move on …

Option 2: The government could spend much less. It could spend so much less, in fact, that it would stop additional debt from accumulating and start paying back the existing debt. For example, if the government cut $2 trillion in expenditures per year, this would reduce the debt to almost zero in about 12-16 years! However, this cut would be so drastic that, in addition to other things, it would radically curtail just about all programs that help the middle class and the poor: Social Security, unemployment insurance, food stamps, and Medicare. Additionally, the federal government would be forced to slash almost all of the funding it gives to the states, thus further hurting education, Medicaid, state worker employment, and various local public works projects. The unemployment rate would rise much higher than it is today, and states and municipalities would go into bankruptcy, forcing them to cut basic services including fire, ambulance, sanitation, and even the police.5 This would decimate municipal unions and hurt the middle class the most, as well as push lower-income individuals and families down even further. The national economy would be greatly inhibited, and people would see little reason for optimism. This option is unrealistic. It would cause too much pain. Let’s keep looking for a better option …

Option 3: The government could simply continue to print money, spend, and borrow in an attempt to put this problem off to future generations. This is principally what the government has done for the last decade and is continuing to do now! In fact this idea does work. The only drawback, however, is that this fundamentally guarantees that all legal (and non-legal, for that matter) members of the U.S. populace will continue to become poorer. Yes—for the first time in generations, you are, in fact, getting poorer—as much as 8% to 10% poorer over the last four years. Your children will be poorer than you are, and your children’s children will be poorer still. This “generational theft” literally steals money from people not yet born. This is also counter-intuitive to the American dream of future generations being better off than previous ones, and a strong argument can be made that stealing from defenseless young and unborn people is immoral. In fact, until the debt is paid down substantially and the government stops printing money, future generations will become progressively poorer—much poorer. America, once the land of opportunity, will soon be called America, the land of disappointment. Although this is the current basic policy of the U.S. government, it too solves no problem but only puts off inevitable bankruptcy and is tantamount to putting one’s head in the sand. The hope of this strategy is that the U.S. economy somehow magically recovers. I doubt it will magically recover, so let’s keep moving …

Option 4: The U.S. government could attempt to bring in more revenue. This can be accomplished in three basic ways: a) higher taxes, b) a new government stimulus package, or c) a “BFF.”

a. HIGHER TAXES: The government could raise taxes to bring in more revenue from the current economy. Increasing the tax rate (and fees) tends not to work because approximately 10% of the population already pays 70% of the tax burden. The top 1% pays well over one third (some studies show as high as 40% of the tax burden). If you increase this tax burden even further, this group will seek tax shelters, move money to other countries, or more likely move their companies (or various divisions) overseas. Taxing the super-wealthy was tried in Maryland. Taxes were raised on billionaires, which caused them to move themselves or their businesses out of the state and even out of the country. As a result, Maryland’s tax revenues actually went down. History has taught us that as the tax rate goes up, the amount of money the government takes in is counter-proportional. The law of diminishing returns takes effect. This solution can help a little, but it is still far from solving the fundamental problems of debt and a stagnant economy. By the way, the top 1% of earners are not all millionaires and billionaires. This group of “elite one-percenters,” of which there are about 1.5 million families in America, make $360,000 or more per year. The ten-percenters make over $120,000 per year. If you are a ten-percenter family, do you consider yourself rich? Do you think families with annual incomes of $360,000 per year should be considered millionaires? If we upped the federal income tax rate on one-percenters and ten-percenters by a whopping 20%, for example, it would only help the county’s economic problems by a mere one or two percent at best. But this one or two percent is not all good news since the counter-point is that it would create the negative effect of restraining growth. The argument therefore for raising taxes on both these groups to solve the debt and overspending problem is a ruse. Never believe it. Let’s move on …

b. ANOTHER GOVERNMENT STIMULUS PACKAGE: The government could attempt to stimulate private sector growth through the use of another government stimulus plan. However, government stimulus packages tend to fail because the economy runs on perceptions and optimism, not dollars! One or even two trillion government dollars pumped into the economy will only get gobbled up with no sustained growth. No natural or permanent wealth is created, so the effect is short-lived. To make matters worse, the government is now in greater debt. Plus, savvy people and informed investors consider a government stimulus to be a sure sign of economic weakness, not strength. It lowers their expectations. Stimulus to them is a precursor of economic stagnation and uncertainty. It means that the economy is in trouble. This solution has been tried and has failed (although a new one has just been proposed called QE3). Such stimulus plans are not natural in that they try to artificially create private sector growth via government money.

The private sector economy must grow naturally to be successful. Sustained growth does not emanate from artificial stimulus packages. I call them artificial because they operate by either borrowing more money (which creates more debt) or by printing more money (which dilutes existing money). Dilution results in less buying power for

the dollars you already have and those you will earn in the future. Both borrowing and printing creates phony money. This makes you poorer. Doing either of these two things creates no wealth, just money. And, to make matters worse, over the past ten years the government has done both of these damaging things hundreds of times! We still have no solution. Let’s move on to our final option.

c. WE NEED A BFF: THIS WILL RAISE PERCEPTIONS, ALLAY FEARS, AND CREATE STIMULUS NATURALLY: If Wall Street (the investors of much of American and worldwide wealth), plus small, medium, and large business owners, entrepreneurs, investment bankers, people with disposable income, and banks, saw the government as an ally, then they would have a less apprehensive and more optimistic outlook for the future. They would feel more certain about the future. This occurs when the business sector sees the government as being supportive, helpful, cooperative, and in sync with their goals and needs. They need to see their government as a partner. Having a true partner in the White House (and in Congress) would make businesspeople feel more confident, and this is the key. Trillions of dollars in new wealth could be created. Here is why.

As mentioned, an economy is driven by perceptions, not money. There is plenty of money, trillions in fact, just sitting on U.S. corporate balance sheets (more than ever before) and in the hands of U.S. and foreign investors, foreign governments, and wealthy individuals with disposable income.6 Such groups will not risk their cash on domestic investments until they perceive that the U.S. administration is simpatico with American business. Money does not spend itself. People have to spend it. People, and the people who run companies, must feel more positive, more optimistic, and more certain about the future before they spend more, grow more, invest more, and take more chances; but this will occur if, and only if, they believe the government is there to help them, not hinder them. More businesses will be started, and every business was started by an entrepreneur! This is worth repeating: Every business was started by an entrepreneur!

Such people, companies, and groups need to see something they currently do not see if economic growth is to take place naturally. Natural economic growth is real growth and, as such, creates sustained wealth without simply redistributing existing wealth. Real growth creates more money for everyone. A larger pizza pie, so to speak, is the only way to stop the squabbling over the pieces that remain. Real growth creates more pizza, and along with that come millions of new and higher-paying jobs, opportunities for poorer people to enter the work force, and many more options for employee advancement. Poorer people become richer, and middle-class people become wealthier as well. Everybody wins.

I believe what I am about to propose will spur investment bankers to invest in new ideas, expand ideas that have proven to be viable, facilitate capital markets, increase available capital, and support entrepreneurs who want to start new companies. Large companies will invest in expansion because they feel encouraged about future potential sales. Banks will offer new loans and mortgages if they feel convinced that the future value of the collateral that secures those loans will increase (or at least not

decrease). All of the above will create wealth, jobs, and greater economic activity. Unlike an artificial government stimulus plan—one that uses phony money (meaning printed or borrowed)—a natural stimulus plan creates real and sustained growth that feeds back on itself. Like the spiral of debt but in reverse, it creates a spiral of wealth. Additionally, the government must cut some serious fat out of its enormous spending habits (actually overspending since it spends more than it brings in). This combination of reduced government spending and the BFF is an unbeatable strategy for economic health. In fact, the BFF is the ONLY strategy that can work.

Another major advantage of my proposal is that the government does not spend a nickel of its own money, which of course is really your money. Increased economic activity raises the tax base so that new money flows into the government. This is how Bill Clinton was able to balance the U.S. budget and left no debt on the table. It was government stimulus in reverse! Private sector growth stimulated government revenue through the collection of government taxes and fees. So why is this particularly helpful to poorer people and the middle class? Because, in addition to the multitude of opportunities (jobs, growth, and wealth creation) that become available through private sector expansion, the government takes in more tax money and can more fully support social programs, begin to pay down its (your) debt, and keep its promises to Social Security and Medicare. Programs for the poor can be reinstated and even expanded. States can be helped. A rich American government creating wealth, instead of debt, can do much more of what its people want. It can help its own citizens and will have more influence in foreign affairs, enabling it to help stabilize other “hot spots” on the planet if it so wishes. Money speaks many languages, including the language of diplomacy. It takes money (backed up with real wealth) to have geopolitical influence.

Economic wealth and stability give diplomacy its backbone. This is what America did before becoming overwhelmed with debt. The power of political persuasion stems from strong economics. It is easier for diplomats of the U.S. government to keep a lid on political problem areas and even prevent wars if they have the monetary influence to do so by giving small, large, or zero sums of money. Although a strong military is important, the days of a major U.S. war with another country are diminished in our generation. These days conflict seems to be focused more on groups than on countries, so a conventional military is less effective than it used to be. Economic tools are more effective than military tools at this time in history; at least they should be the forerunner tools. However, as the tools of economics become reduced, which unfortunately is the sign of our times, it becomes more likely that we will need the tools of the military. When greenbacks fail to resolve a situation, military fatigues usually have to take their place. When you hear that the U.S. government may hold back $2 billion from Egypt if the government does not quiet things down or exert pressure on terrorists, this equates to a nice healthy portion of Egypt’s overall economy. Such sums of money give us some (not total) influence. Money in fact buys influence worldwide. The backbone of diplomacy is either money or the threat of military force. What else convinces?

Here is an interesting question: Are we still politically influential and wealthy, or are we a debtor nation? Well, our GDP (Gross Domestic Product) is over $15 trillion, but our debt is over $16 trillion. Are we still economically and politically influential? Here is a true story. Years ago, when Donald Trump was going through his own financial hard times, he commented to then-wife Marla Maples, “You see that homeless man over there? He is wealthier than I am.” “How could that be?” she asked. He replied, “Because he is worth zero and I am in debt.” So you decide. Are we still what we once were geopolitically? Are we still a wealthy and powerful nation? Do we still command enough respect to influence the world?

So, what’s the problem again? The problem is that most investors, entrepreneurs, business owners, and purveyors of great wealth in the world have a predicament. Mr. Obama is not seen as being “friendly” to this community. In fact, many consider him a full-blown adversary. There are many examples of this but one example in point is “etched in the minds” of the business community. Remember when president Obama’s administration said it will “keep the boot on the neck of BP” after the gulf oil spill? In my personal experience, few business executives in any industry will ever forget that phrase (but few will admit that in public). The BP disaster was a serious industrial accident. Drilling miles under the Gulf floor is a risk. A risk we all want them (and all the other oil companies) to take if we plan on filling up our cars with gas and keeping our homes warm in the winter. No BP executive (although a middle level ex-employee engineer was arrested for deleting text messages) was ever arrested or faced charges. However, the “boot” statement sent a very memorable and “unfriendly” message to all businesses. Businesspeople do not believe the Obama administration (as well as the Democratic party) shares their ideals, goals, and ideologies. They believe he leans more toward socialism, and that makes them nervous and uncomfortable. Yes, you can find a number of anecdotal examples where this is not the case, especially from those with lucrative government contracts or those not paying federal taxes. But for the vast majority of the private sector, it is true. Mr. Obama has not turned out to be the friend they were hoping for when they helped elect him in 2008.

Perception is reality to businesspeople and investors. If they do not like what they see come election night, I am willing to bet that the four-year economic malaise that has infected this country will continue for another four years. I believe that worldwide investors, whether they be people or institutions, are sitting on their collective hands (and their money) until the election is over waiting to see who wins. Tens of trillions of dollars are just waiting on the sidelines for the chance to be invested into the U.S. economy.

I believe Mr. Obama has tried very hard to help as many people and groups as he could. I feel, however, after four years of clear empirical evidence, his approach is wrong for this time in history. We hear so often these days that the debt is “unsustainable.” The word “unsustainable” has lost its real meaning. So has the word “fiscal cliff,” which is readily bantered around as well.

I am here to tell you that both mean disaster, bankruptcy, and the instant loss of immense wealth and comfort for all Americans, whether they have little or a lot. Trust me—these are terms you do not want to live through. Everybody gets instantly poorer, and of course the poor and the middle class will bear the biggest brunt. This will happen in America and then domino worldwide if we keep going in the direction we are going.

Many countries around the world, in this century and centuries past, have woken up and found their country to be “in a different place” basically overnight. Here is just one example: the Iranian currency recently crashed. A precursor of bankruptcy is currency plummeting in value. Average Iranian citizens basically overnight can no longer afford chicken and for some, even bread. Do you think this will result in the Iranian people gaining wealth and the country becoming more stable? Of course not -- just the opposite will happen. Do not fool yourself; that could happen here, too. We will never be defeated from outside our borders. But internal debt can rot out our core faster than you can flip a dime! Now is the time to deal with this enormous problem and change course quickly away from the iceberg. We are not as unsinkable as you think. $16 thousand billion in debt, and growing by a hundred thousand million dollars per month, is a very heavy load to bear—probably too heavy even for the United States. My opinion as an academic, business consultant, analyst, and citizen is that this already has us half-sunk. What we do NOW will determine which way we go. This is not an opinion. This is a fact. This is an emergency! We need the solution now!

1 Under Democratic President Obama, 4.5 million new jobs have been created. But during the same period 5 million jobs have been lost. So the net is 500,000 jobs lost since the president took office in January 2011.

2 About one in seven Americans is considered poor.

3 The official title of the law is: The Patient Protection and Affordable Care Act (PPACA).

4 The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) requires by law that most employers with group health plans offer employees the opportunity to temporarily continue their group health care coverage under their employer’s plan if their coverage otherwise would cease due to termination, layoff, or other change in employment status (referred to as “qualifying events”).

5 This already is happening. In August 2012, Camden, N.J., known for its high violent crime rate, had to eliminate its entire 270-member police force in order to save money. Instead they hope to rely on the state police to do the job.

6 There are more billionaires on the planet in 2012 than there were in 2011, and they alone are worth, cumulatively, about $5 trillion. There are more millionaires on the planet in 2012 than there were in 2011, and they alone are worth, cumulatively, about $40 trillion. Change their perspective, and you change the world.