While growing up in Johnstown, the stock line used to be that we were 10 years or so behind the times on most societal issues.
This was not necessarily a bad thing when the issues were burgeoning crime rates, violent protests or the cost of living– particularly real estate prices.
But it could be argued that Johnstown circa 2023 is the tip of the spear, a microcosm of how the begging bowl economy must end badly both on a local and national level.
To paraphrase the Margaret Thatcher quote, socialism works only until you run out of somebody else’s money to spend.
The City of Johnstown, and our area in general, has been a quintessential example of spending other people’s money– seldom wisely. Government handouts from the federal and state levels came to be an integral part of the economy.
The recent death of former Congressman Bud Shuster was a reminder of how it could have been done better here. Shuster used his influence in the U.S. House of Representatives to bring upgraded roads to Blair, Bedford and Centre Counties and helped turn Altoona into a transportation hub.
So what? So this. It’s a reason Amazon is locating a new warehouse delivery center in Altoona, not in Johnstown, which still relies on cowpaths to main interstates.
All the area tourism proponents might consider how better access to the area might help that cause.
As Shuster was leaving permanent infrastructure as his legacy, Johnstown’s pork brought home by the late Congressman John Murtha went largely to bringing in government operations that have left, or are leaving, now that he’s gone. Anyone recall the Drug Intelligence Center, among others?
But Shuster’s roads stayed open for travel even after he departed and provided critical infrastructure to spur economic development.
If only Johnstown had back all the money wasted thought the years on empowerment and raising awareness programs, money that produced nothing of permanence.
And the handout money is in the process of disappearing. When Johnstown shakes the begging bowl, it finds itself competing with the likes of Zelenskyy, always seeking more money to fight NATO’s proxy war with Russia.
Somehow, despite the U.S. bumping against the federal borrowing limit, billions can be found to funnel to Zelenskyy with little if any oversight. This lack of control somehow fails to recognize Ukraine’s well-earned reputation for corruption.
The U.S. has admitted debt of $31.4 trillion, which ignores future obligations to Social Security and Medicare. According to the Peterson Foundation, we spend more than $1.3 billion A DAY to pay interest on this debt.
If the $31.4-trillion debt was stacks of one dollar bills, it would be nearly equivalent to eight copies of the 110-story Willis Tower of Chicago.
The COVID stimulus payments gave consumers temporary liquidity reprieves even as it added to the national debt, big-time. That stimulus money, coupled with many being stuck at home and unable to spend, led to a historic bump in savings.
Those savings now are all but exhausted, leaving a demand-fueled price inflation that lasts long after the money has been spent. Despite depleted savings, consumers continue to spend at their accelerated rate. That has led to a rise in credit card borrowing and an explosion in separate buy now, pay later programs from retailers.
A Bloomberg report cited 70 percent of consumers in some degree of financial stress. That’s significant since the consumer is roughly 70 percent of the domestic economy.
Cracks in the economy are becoming evident.
We had some bank failures last month, due to poor management in dealing with rising interest rates.
Bankruptcy rates are rising throughout the economy.
Layoffs are mounting and commercial real estate, hit by the double whammy of less demand due to stay-at-home workers and rising costs due to higher interest rates, is in dire straits.
Tax revenue is falling and so debt must increase to fund spending. It’s a fatal fiscal Catch-22.
And when the Feds and state governments have less money on hand, there is less to dispense to the Begging Bowl economies such as Johnstown’s.
We’re not necessarily at the end of this bastardized economic system, but you can see the end from here.
Sam Ross Jr's site 