Dear Citizens of Windsor County:

The single most important issue facing our nation and our state today is the issue of DEBT.

It is time to chart an entirely new legislative course in state and local politics. Our nation---and by extension our states and cities and towns---stands on the brink of fiscal disaster. If we continue on with business as usual, we will wake up one day to receding horizons from which we may not recover.

In four short decades, the U.S. has gone from being the world’s greatest producer and creditor nation to being the world’s most profligate consumer and debtor nation. How did this happen?

As we know, most of our recent economic “growth” was magically conjured through the trading and sales of fraudulently priced and marketed securities and derivatives. False growth was created through the adroit manipulation of unspeakable amounts of debt. And now the American consumer is saddled with trillions of dollars in credit card, student loan and home mortgage debt, and our banking and financial systems are virtually insolvent. Our political and financial leaders have chosen to borrow and spend trillions more in order to keep the ship from taking on too much water. Trillions of dollars in bank bailouts and stimulus have allowed the nation to “push the pause button” with regard to the arrival of profound and ongoing fiscal contraction. But arrive it must. To not prepare for the inevitability of economic contraction would be criminal. It is incumbent upon Vermont’s political leadership to focus all of their energies in developing and supporting local systems and programs that will help Vermonters weather this coming storm. If our legislators do not wake up to the coming peril caused by the tens of trillions of dollars in unserviceable debt that currently poison our economy, Vermonters will suffer. 

It is critical to understand that any claims of economic recovery that do not account for the amount of systemic debt that must either be serviced or defaulted upon are false. We have entered a period in time in which there is so much debt in the system, that we have become entirely dependent upon government spending and 0% interest rates in order to delay the arrival of steep economic contraction. But delay is the best we can do. We cannot avoid eventual contraction. At some point, our tens of trillions of dollars of public and private debt---and the exponentially increasing interest burden that accompanies this debt---must either be serviced or defaulted upon. And when that happens, economic contraction will result. There is simply no avoiding this reality.

The issue is debt. And until we confront that singular issue, and accept the fact that forty years of excess and fraud have left us mired in a terrible financial hole---a hole from which we will only emerge when we accept the need for massive deleveraging and accompanying contraction--- we will not experience the economic recovery that we all desire.

Vermonters must plan for the inevitability of economic contraction. It is up to our elected representatives in Montpelier to take the lead. It is time for the legislature to honestly face our ongoing financial crisis and to prepare the state for years, if not decades, of economic contraction.

Sincerely,

Dan Weintraub