Its been a while for me putting pen to paper, in fact it will be seven months & days days from now between posts and a lot has changed since. Nothing has changed in the grand scheme of things thou, not with having re-elected President Obama. Had it been Mitt Romney would it have been much different? I don't think so, but it couldn't have gotten much worse either. For full disclosure I'm not an anti-Obama guy. I think hes grossly under-qualified for the position and has gotten in way over his head. With that said, as i have stated many times on this blog, i think too much disinformation has been put out in efforts to soil the President and many of them are gross exaggerations - like this obsession with him raising taxes & running up the debt at a record pace.
Plain and simple, Obama has not raised taxes across the board like most think he has, in fact hes been a tax cutter (if you dont count the tax on tattoos parlors and tanning bed companies). Now with that now being said, that will dramatically change over the next few years as the Bush Tax cuts are set to expire and he has stated taxes will go up for the wealthy. Then factor in Patient Protection and Affordable Care Act (Obama Care) and you are now talking about sweeping tax hikes, but to this point the narrative of him being a greedy socialist tax whore has been blatantly false.
The Debt? Hes run up the credit card at an alarming rate, but not much more than his predecessor George W Bush did in his eight years before Obama's election. When President Bush took office the National Debt stood at 5.7 Trillion, when he left it was 10.6. So when Obama took office he entered with the 10.6 Trillion, as of this morning it stands at 16.2 (bear in mind that 3/4 of Obama's first year of office was under a GWB budget). So nominally, Obama will easily be the biggest debtor in our nations history but he will will probably "only" double the debt, just as his predecessor did before him.
So, where does that leave us? I think we are in for another recession. The President will have the veto pen and i think if everything is left in place, economically its going to be a long and harsh recovery of virtually no growth. Jobs will not be plentiful and incomes will continue to be slashed through a combination of: lack of work, inflation and debt at every level, public and privately. If his broaden agenda is brought into focus and realized things will be worse. Cataclysmic economic meltdown filled with bread lines and riots in the streets? No. But stagflation circa mid 1970's? Yes.
Hopefully, the administration understands the situation we are in and does its best to curb the rising tides that are on the horizon. If not, Obama's legacy will be nothing short of a an economic dead zone. A presidency that inherited an economic crisis that was undoubtedly dire but after a stabilization, this was a regime that failed to turn the momentum around and instead kicked out its arms every-time it tried to get up off the floor. An 8 year window of high unemployment, economic decline via the continued assault on the dollar through currency manipulation and reckless spending. "Hope" and "Change" were the buzz words of '08 and they were empty words based on the results of the last four years. Lets hope for some change in the next four.
There has been a lot of talk of late centering around President Obama and the gas price hike we have seen in the US. Many people blame his policies, pushing alternative green energy over conventional energy (like Nat gas, coal and Crude). There has been people in the administration that have actually gone on record admitting as much. Dr Stephen Chu actually said in an interview with the Wall Street Journalin late 2008 (before he became part of the cabinet):
"Somehow we have to figure out how to boost the price of gasoline to the levels in Europe,"
According to the WSJ, Dr Chu would do this by quote: "raising gasoline taxes gradually over 15 years
to coax consumers into buying fuel-efficient cars and discouraging
sprawl".
Now, we haven't seen that happen as of yet. We already have seen however that the Administration does play favorites when it comes to the agenda or promotions of industries they see fit. We have seen that with Solyndra and GM. While that does point to an obvious flaw or at least a blurred line in the relationship between private industry and the state; it is something that isn't unique to the Obama Administration alone. It is also not he reason gas prices have gone up either these last few years.
Just like playing favorites when it comes to energy sources, the Obama Administration is guilty of a double standard in handling or at least blaming the source for fluctuations in gasoline prices. This was a stump speech in Indiana from 2008, one in which President elect Obama was campaigning on the high oil prices pushing blame on the Bush Administration and the oil companies, staying true to his populist ideals:
There have been examples of President Obama deflecting when it comes to what is happening with the price of gas, blaming everyone from speculators to people driving SUV's. So its pretty clear, the Obama Administration has favored alternative energy over conventional and he has also used double standard logic to defend the rise in oil prices.
Again, these are not reasons why gas prices have went up. As i pointed out earlier this year, we here in the US are now actually a net exporter of fuel for the first time since the 1940's, yet prices in gasoline have only went up. The reason is very simple. Its a global economy and oil is the heart of the global economy, there is very little one country can do to offset the global price that is measured in US inflationary dollars.
Now, with that said, the biggest reasons we are seeing rises in fuel prices specifically at the pump is also simplistic. The world is consuming more oil, the supply has remain unchanged, thus the law of supply and demand have driven the price up. Just look at the demand.
As we can see the emerging markets and growing economies are consuming more and more oil and we are consuming less. We are seeing now the fruits of their labor that comes from producing our cheap goods. The emerging economies are showing the world what it means when people say "a rising tide lifts all boats". And to the contrary, ours are staying stagnate or sinking. That's just cause and effect. Now what about supply?
oilprice.com
As we can see here and pointed out by Gail Tverberg:
"Since 2005, world crude oil supply has bumped up against what seems to be a limit of 75 million barrels of oil a day.
No matter how hard companies try to extract more crude oil, and no
matter how high world oil prices rise, they seem unable to extract more
than 75 million barrels a day (MBD)."
So again, supply has stayed level, while demand has risen and while some look at the price of gas and the recession and rise in prices during the recession as proof of something to use as an excuse for blaming the administration its clearly not based on fact. Here is the graph that really tells what is happening.
As you can see above, the demand in oil has increased with the price, nothing fishy or speculative about that. Its just simple mathematics. What we seen in the march from 2002-2008 is what we are seeing now. 2008 wasn't some anomaly; it is reality. That is where the economic equilibrium now lies, but the more reckless spending and the more we rely on credit that dilute savings; the equilibrium will only rise in terms of dollars.
This idea that we can spend and borrow our way to prosperity is going to have some consequences; cheap oil is one of them. And when you factor in the emerging economies, it only speeds the rise in prices that much quicker. Call it cause and effect, call it 2+2= 4.... whatever you do call it, just call it what it really is, not what you want it to be. Stop pretending this is some partisan issue when clearly, this long term, cannot be a political football. Now if you want talk about getting Nat-Gas powered cars... that's a different issue. Natural gas is really where our ultimate prize lies.
There has been a media firestorm surrounding the death of Trayvon
Martin, the 17 year old tragically killed in Florida
last month. Martin, who was unarmed and black, was returning home from a 7-Eleven
when he was gunned down by George Zimmerman, a neighborhood watchman, who is half Spanish and half white, had a permit
to carry a concealed weapon.
Photo from: AP
The tragic death of Martin is undeniable. A young man cut down before even reaching the age of
adulthood by the hand of an adult, is a tragedy that has a unique sting to
it. Anytime a child or teenager is raped or murdered by an adult; it always
cuts deeper and this is no exception.
Now, much of this case is still pending but it appears this
was a murder and if it was race motivated or not, is anyone’s
guess at this point. The only person that could answer that for certain is
Zimmerman and Zimmerman only. If it is in fact a hate crime, then Zimmerman wouldn’t be the first
or the last white man to kill a black male. Just as there will be black males
who kill white males.
The motives for individuals involving any violent act have
to be taken at a case by case basis. There is crime and murder everyday involving
all races in a variety of ways and this will continue happening everyday, until
the day every man exists this earth. In fact, the more the population grows, the more
tragedies there will be, it's just simple math.
What is interesting to this author, is the relevance of this
situation in terms of race and the charge of racism. How often do we look and say that these events
that take place so often daily are racially motivated? And if they were, then
it would be a racist committing a murder. There is nothing you can do to stop these
events from happening; it’s up to each of us individually to do so.
Racism and terrorism is the necessary evils of a free and
open society, it's consequences we have to live with. We don’t have to like it, but
it's individual responsibility that will keep them at a minimum, not exclusion
and division; they only fuel the fires of the very same things they are
against.
However, don’t tell that to those people who make a living
off division, collectivism and race baiting that bit; it wouldn’t fit their
agenda. And wouldn’t you know it, as soon as this tragedy started to simmer towards a boiling
point across the country, the usual suspects had arrived (well at least half anyway) all feasting
on this tragedy like pigs at a trough. Under a guise of racial justice, you can’t
help but notice the stench of wicked self promotion, racism and cynicism trailing their
every move, like freshly flattened skunk; beneath a tire on the road to collectivism.
Al Sharpton and Jesse Jackson Sr have become synonymous, if
not the face of every national crime, injustice, slandering etc etc involving a
black victim and a white perpetrator or instigator, for the last forty years. Both of their
entire careers and livelihood, have been made possible by racism, and the dividing
of people based on race and creed. But above all, the creation of national
headlines based on isolated incidents, is where their pockets get lined in
emerald.
I could understand the national outcry if we were seeing an influx of
murders like this happening everywhere but that isn't the case. We live in a
country of 300+ million; it’s statistically unavoidable to not have incidents
like this happen. Even if this case was involving the grand wizard/master of
the KKK, it’s still an isolated incident. One person killing another person isn’t
indicative of anything broad or sweeping.
In this case, we have a potential racist who uses self defense
and felt his life was in danger even though the kid was unarmed while Zimmerman
was. Zimmerman felt fear for his life even as he was following the young man. Pretty
damning to me and he should be tried and/or punished accordingly. You also have
the police department who didn’t arrest Zimmerman or at the very least detain
him for questioning. This is also worth an investigation from local or state
authorities. But how this is a national story is beyond me.
Even our own President’s Press Secretary, Carney said as much
earlier this week:
“Our thoughts and prayers go out to Trayvon Martin’s family
but obviously, we’re not going to wade into a local law-enforcement matter.”
But that didn’t last long, as we all know by now. The
president, true to his populist DNA, flipped the script and appeased to those
calling for justice when the media began to run with this story. By doing so he
did the exact opposite of what he said (and it was the right thing to do then
and now) just days earlier, he waded into it. And why wouldn’t he? A populist running
for re-election following the breeze of the assembling masses? Surprise…surprise.
Titus Livius said it best:
The populace is like the sea motionless in itself, but
stirred by every wind, even the lightest breeze.
Mr. Livius, I would like you to meet our President of the United
States, Barack Obama; he is the Pacific
Ocean in terms of populace seas. Our President however isn’t a
race baiter, he isn’t out to divide anyone more so than any politician is by
political nature. Al Sharpton however does not share that trait with our
President. These were his quotes this week concerning this tragedy speaking at a rally in Sanford, Florida.
Notice the vast amounts of pronouns and the context and which how they are used.
“Violence is killing Tray Martin, on’t act like we are the ones [who are] violent. We didn’t
shoot nobody.”
“I
want our people to understand that how you behave is going to be a reflection
on this case”
“[No matter] how angry we get, don’t let them make you act in a way that
they will say, ‘see, that’s what to think with Trayvon.’”
“We are going to act intelligent, we going to act dignified. And, we’re
going to be determined. We may be angry, but we’re not mad dogs. We’re too
smart to fall for [that].”
This is deliberate, divisive language. This is man who’s made a career of divisiveness.
Outside of working as James Brown’s manager (that must have been pretty cool to
be honest) for a brief stint, what has he done to create anything or provide a
service before getting his own show on MSNBC? He’s been a preacher at some point just like
Jesse Jackson was and just like Jesse Jackson, he has only made a living
creating movements and rallying around isolated incidents to gain national
exposure for his own personal gains.
Al Sharpton has appeared on numerous television shows, has tax fines from the IRS and leans, been fined by the FEC for breaking campaign finance rules –
the man is opportunist, and a hot mess of greed, corruption and exploitation. I
would call him the biggest leech and scourge on the black community but that distinction belongs to Jesse Jackson. Jesse Jackson hasn’t made the trip to Florida
from what I have heard as of yet, but he did offer up this tidbit:
"Blacks are under attack."
From whom you might ask? “Big Business” is according to Jackson.
Blacks are under attack, indeed. But the attacks are coming from within,
under a masquerade of outrage while concealing the truth that is self promotion via division and sensationalism. After all, if we eliminate racism what would that do in terms of job security for these
two? Jesse's on a roll, apparently it is big business that is responsible. Exploitation is big business (just ask MSNBC and Al Sharpton) because it's always turning profits; to bad that there is a victim and family in mourning to make this happen.
When I was working on my last entry concerning FEMA and Ron Paul, I started to get into a bit of a tirade concerning the debt. This, in this writers opinion, is the United States greatest threat, not some foreign enemy. With most people showing no interest or regard for it, its up to those of us who do hold these truths to be evident, to keep putting that word out there... and that word is debt (specifically insurmountable debt) is slavery and nothing more then a transfer of wealth; from the many to the few.
In this article I want to tackle two situations that I see problematic and the key cogs to insurmountable debt. First, there is the federal government and our elected "leaders" role in this failure to be reasponsible. Secondly, is the Federal Reserve and its banks, that have been culpable in allowing (through the manipulation of interest rates) this economy to take a path that will see it fall off a cliff. What the recoil will be from QE 2,3,4,5,6,7 bailouts and stimulus remains to be seen, but there can be only one thing we know for sure.
That is, we are accumulating debt. And vast amounts of it. The implication of compound interest makes these actions basically treasonous by our elected leaders and criminal by the FED. How can Congress and the executive branch both complicity push the cost of running the government so far out of the realm of practicality? How is it legal for the FED to lend huge sums at what amounts to no interest to those banks that were all considered "too big to fail" who then take that liquidity and invest in T-Bills that will actually yield a 2-3% interest? These practices destroy existing savings and the incentive to save; thus creating only one desired effect - consumption.
Because, without people borrowing and spending the whole thing blows up. Money = debt, debt = money. The biggest problem is that the American population are over saturated in debt thus why the sub-prime in housing was needed. Like its population, the US government, is over saturated as well. They, unlike you and I, have no limits and that defies logic. Lets look at the executive's role.
The Interest payment is the only debt payment required by
the Constitution that must be accounted for in the budget each year to be paid.
With that said, every President hopeful on the Republican
side and President Obama have all released a budget or a proposed budget.
Not one of them have a plan to balance the budget next year,
neither will any one of them do so in four years either (with the exception of
Ron Paul). We will without a doubt have continuous mounting
deficits that will probably be in the 1-2 Trillion mark annually regardless of
who is in office (with the exception of Ron Paul). Starting to notice a trend here?
Mitt Romney wants to increase defense spending by putting 100k
more troops on the ground and rebuild parts of the Navy and Air Force. He would not have left Iraq,
appears to have an itch to scratch in Iran
and will not leave Afghanistan
until its won (the forever war) or at least until his generals say to leave??? His budget has the wealthiest Americans (who
pay the most income taxes) getting a significant tax cut on top of the existing
tax cuts that are already in place.
Romney has no plans to offset the lost revenue that will
surly happen when these cuts take place, nor does he have any plans to make any
significant cuts in existing outlays to recoup the ramped up defense spending. This
defines logic. Mitt Romney's plans are contrary to anything sane in regards to
the federal government living within its means. He’s fiscal policy’s will be train-wreck
like.
That however, is not how Romney sees it. He thinks if he
cuts taxes the gains in receipts will pay for this increase in spending. The
problem with that is that the FED doesn’t think the economy is going to grow by
all that much… and they control the money supply. This leads us into the second part of the equation: the insurmountable tag team.
The FED’s long term forecast is a relatively weak one going
forward with long term GDP growth outlook being in the 2.3 to 2.6 percent ranges.
The FED has also said it will not look to raise interest rates until, at the earliest, 2014. Here you have the economy just barley keeping its head above
water for the foreseeable future, the FED continuing its non-stop intravenous liquidity
therapy into bank’s reserves creating a soon to be inflation tsunami all the
while our elected representatives continue to show no regard for the situation.
I want to take a look at two charts that really speak
volumes for what is going on and what we will being seeing soon enough in our
own backyards. Lets start at 2006, when the FED stopped tracking M3. As you can
see below, when Shadowstats picked up the tab of tracking M3, the growth in
money supply was steadily rising until early 2008. As the recession came, the
Fed lowered interest rates to avoid the fire of deflation but banks weren’t loaning,
so the money supply dropped with it.
A curious situation started occurring by the middle of 2010.
M3 started to rise and its rising still as of now. Meanwhile, Interest rates from 2009 on have stayed basically at zero and as we’ve already heard from the FED,
they will remain that way for years. This does not bode well for the dollar or
anything equity wise going forward in my opinion. If the economy continues its "recovery” like so many in the media says it is, the eventual outcome will be a
pretty substantial increase in inflation. This would, by default, put relatively
the majority of commodities into buy, buy and buy more mode. Most specifically gold and silver.
Equally alarming will be the federal governments penchant
for debt as we have also seen, they will not live within our means, thus piling
more debt on to the insurmountable existing amount. What happens when the FED
has to raise interest rates? If we are seeing 450 Billion interest payments
already (Intragovernmental and Public) imagine what will happen to those when
interest rates go up? They could look something like this:
Just for a little perspective. In 1988, the national Debt
was 2.6 Trillion. The interest payment on that in the budget was 214 Billion. The
interest payment in 2011 was 450 Billion, roughly double. The principal, as we
know, was 14+ Trillion.
The US
government will not cut spending and we will continue to finance the
welfare/warfare system. What happens in 10 years from now will be interesting
thou. Can the FED really raise rates, without completely tanking the economy?
And if they did, what would happen to the interest payment on the debt
outstanding (besides sky rocketing into the trillion dollar mark). If the FED does
not raise rates out of the fear of deflation, isn’t massive inflation the only
alternative?
George Carlin said it best:
When you're born you get a ticket to the
freak show. When you're born in America,
you get a front row seat.
It’s been well documented, Obama owns this economy. The DNC Chair Wasserman-Shultz has said as much, VP Joe Biden has also said it and a vast majority of Republicans all say Obama owns the
economy as well. With piling, Trillion
dollar deficits and unemployment having maintained historic levels for extended
periods of time; the economic malaise Obama reigns over, is one that no
President can tout.
Remember, Clinton's
sign on his desk when he was in the oval office? Contrary to popular belief, it
was not: “The filing cabinet is under the desk, Interns” it was actually: “It’s
about the economy, stupid”.If it is
truly about the economic outlook of this nation; then President Obama is in
trouble come November.
Now personally, I believe the sheer size of the US
economy is so vast and lumbering, that the President gets too much credit when
“his” economy is running on all cylinders just as much he is unfairly ridiculed,
when it’s in the toilet. That however, is not the majority of how Americans
feel or think thou. If they can’t find work, it must be the Presidents fault. The truth of the matter is that the
average American does not have time to research what really are the driving
economic factors behind our economy good or bad; so the person sitting in the oval office is seen as a
personification of the whole economy.
Now, since we are going to use this embodiment to signal a "nay or ya"
regarding the economy, I would like to use this simplistic strategy to point
out something that doesn’t get talked about enough.
President Obama is the first President in 20+ years to see our nation’s top export
be Fuel. He is also the first President since Harry Truman (1949) to oversee
the US being a
net exporter of oil-based fuels. The US
has imported 11% less crude then it did in 2005. Ten years ago, fuel wasn’t or
barley made it in the Top 25 for US exports, but now it stands at #1?
Regardless of how or why, it doesn’t matter. He was the guy in office when
this happened, thus he owns this fast break to energy independence. Never mind
the new developments and discoveries in shale oil/gas or the fact that Obama
inherited the worst economic situation since the Great Depression. Let’s, not
let things like mitigating facts get in the way of our thinking. Mr Obama is
set to become one of the greatest achievers in modern presidential history in
our quest for energy independence and for that he will be looked back on as a
rousing success. Its all about perception isn’t it, or is it context?
Its been a rather hot
item this week. People have been picking apart Mitt Romney's latest budget
proposal and it isnt pretty. The lates offering (or borrowing might fit better)
of a Romney proposed budget would actually result in equal or larger deficits
then we already have under the current administration. I find that odd,
considering Romney has
said recently that it is: "immoral to pass burdens on the next
generation like that" meaning deficits and in turn the national debt.
This is the same Mittens who also said how he "can’t wait to get my
hands on Washington". I had
to ask myself; get your hands on it for what? Clearly, by his own admission in
his proposed budget, he would actually increase the deficit not shrink it, let
alone not balance the budget.
Romney's proposed budget got me thinking... is he seriously supposed to be
the candidate with business experience? You can't argue with the wealth he
built up. Hell, paying only 13% of your income in taxes can have that effect on
a multimillionaire, no? You can't argue with his education background or the
fact that he saved the Olympics, so why is it he has a problem balancing a
budget?
Surely, he had to do so in his business dealings, haggle with budgets. We
know he had to do so as governor, so why is trimming the existing deficit so
hard to do, let alone balance our nations budget? The short answer? He wants to
appeal to everyone. That
why he is flip-flop Mitt. Period.
With that said, I want to focus on one particular part of Romney's budget
and that is defense. Mittens recently said he would not only not cut defense,
he would commission a bump from building "nine per year to fifteen" new ships for the Navy as well as new
aircraft for the Air Force. Apparently, Mittens was feeling the love from the
USS Yorktown and maybe a little patriotic and nostalgic in the World War sense,
because he then dropped this bomb saying (as you can see below) he would
"add at least 100,000 troops to the boots on the ground capability".
The problem with that is first of all, we are not entering a world war. So where could we use this 100k influx? Iraq? We just withdrew (but lest not mention the 15K people left behind to defend the city-like embassy) our combat troops. Afghanistan? It was said two years ago that Al-Qaeda is 75-100 strong in country. That was out of the mouth of then CIA director and now Department of Defense chairman Leon Panetta. I'm guessing Panetta has no advantage of actually underselling our enemy now does he.
These are also the same terrorists who are "on our side" in the uprising that is taking place in Syria. Hmmm, we are going to be supplying and siding up with terrorists to defeat a nation that we do not like today, but will tomorrow in efforts to stop the terrorists that we now all of a sudden hate who once used to help us.... stop me if I am wrong, but have we not seen this movie before; in Afghanistan no less, circa 1979? Oh, never-mind, this movie is titled the "forever war" (thanks Clearwater) thus we never know how it ends and the perpetual boogy man? He just keeps a comin', he just gets a new face (and accent) every now and then, ala Herbert West.
So, why do we need 100,000 additional troops for? To invade Iran? To combat terrorism? Doesn't seem plausible. Seems like using a sledgehammer to swat flies. I would assume the troop levels we have now are more than enough to defend our nation but Mitt doesn't agree:
“We all recognize that America needs to economize, but I don’t believe
that we can economize on securing our nation and protecting our citizens
and ensuring that the world remains safe and free for us and for our
children,”
In fact, if you compare our spending on defense to the rest of the world as I pointed out in an earlier article this year; it's not even close in how much we outspend the rest of the top 17 nations who spend the most on defense combined.
National
defense spending has increased 38% since 2001. This idea that we are going
to spend more on defense and drastically increase its scope and sheer size,
leads me to the answer to my original question. So why do we need 100,000
additional troops for? And the answer is quite obvious. Just look at Romney's quote
when he says:
"ensuring that the
world remains safe and free for us"
There it is. And that is the shared mentality from most of Washington
not just Romney. Kind of reminds me of the newest Navy slogan "A global
force for good". The problem with that? The word "Good" is
awfully ambiguous. How "good" are we, if you're an innocent bystander
whose lost their life or a loved one(s) in Iraq
or Afghanistan.
Is that "good" worth a son who was put into a battle field without
even a deceleration of war from Congress?
"Good", just like the words "safe" and "free"
in Romney's quote are equally indistinct. I thought we already were pretty
safe. Apparently, Romney does not agree and that is why he is touting a pretty
substantial face lift for the DOD. The phrase "free for us"? How can
the world be free for us? Chew on that one, I know i still am.
Which leads me to my final point. Romney is proposing not only an agenda
that is completely out of whack compared to what the rest of the world is
spending on defense, it is also an agenda that is mathematically infeasible in
an environment where we should be embracing austerity measures to live within
our means. Here is a recent quote
from of all people, Valdimir Putin, on the past, current and future US
foreign policy outlook:
"the United States, have
developed a peculiar interpretation of security that is different from ours.
The Americans have become obsessed with the idea of becoming absolutely
invulnerable. This utopian concept is unfeasible both technologically and
geopolitically, but it is the root of the problem. By definition, absolute
invulnerability for one country would in theory require absolute vulnerability
for all others"
I know some of you out there are thinking "why do we care what the
future President of Russia has to say about us" and I understand that
sentiment; however, it's awfully sobering to have the Russians more in line
with reality than a hopeful for the
Presidency of the United States.
To be fair, Romney is not alone on the campaign trail in this insanity, and it
clear the Oval office shares this paranoia as well.
With that, I leave you with a quote, that in today's Republican Party would
be considered a Liberal stance on foreign policy. From the same man who shed
the initial light on the Congressional Military Industrial Complex (how
apropos), former President, Dwight D. Eisenhower:
"We will bankrupt
ourselves in the vain search for absolute security"
Remember the movie Dumb & Dumber? When Lloyd and Harry "found" a suitcase with a few million dollars and they spent it on anything and everything and then replaced each item they bought with a piece of paper... an IOU?
Now, Harry and Lloyd have no money, they, like our government, are broke losers (I was referring to the movie actors as losers but this will play here as well). How do you suppose they pay it back? They would borrow it? But from whom? What if they borrowed from the people that now hold the IOU's, you know, the people whom they "borrowed from" initially? Lets keep this scenario for an exercise later, bare with me until then.
With the stroke of a pen, President Obama extended the
payroll tax cut this past Wednesday, putting between $20-$2000 dollars back
into the pockets of working Americans each week. While I firmly believe cutting taxes is
always a good measure, I have to question this particular measure, as how to pay
for it; just doesn’t make sense.
It was the same logic of George Bush Jr who cut taxes,
slashing revenue and dramatically expanded government. Sure, it’s more money
back in peoples pocket but it’s going to be much more expensive down the road
in the form of interest payments on the accumulation of budget deficits that
end up making the public debt liability in the national debt.
When you cut taxes, it has to come from somewhere. So,
anytime you cut taxes and do not make cuts in existing programs or services to
pay for them its not really a tax cut, it’s a loan at interest with dollars that are becoming worthless by the day. To call it a tax cut, while
already in a 1.3 Trillion projected hole without cutting a single thing from even
the deficit, further expanding the budget deficit is counterintuitive if not
just flat out a lie. Unlike the Bush and the Republican favored (and flawed theory)
of supply side economics, coupled with increase spending, the means to pay for
this tax cut comes right out of the coffers of… Social Security.
"Obama believes that the first place to look for ways to strengthen
Social Security is the payroll tax system. Currently, the Social
Security payroll tax applies to only the first $97,500 a worker makes.
Obama supports increasing the maximum amount of earnings covered by
Social Security and he will work with Congress and the American people
to choose a payroll tax reform package that will keep Social Security
solvent for at least the next half century"
The reason we had a surplus in Social Security was a payrolltax
raise (the opposite of what’s going on here with Obama’s tax cut) by
Ronald Regan. I’m not a big fan of “the Gipper” like so many are, that call themselves
a fiscal conservative (because he wasn’t one). However, he knew baby boomers
where going to retire and need to collect from a diminished population numeric wise;
thus a surplus was needed. He then, proceeded to raid it in 1987 as did George Bush Sr following him and lest not forget Bill Clinton. Hell, this goes back to LBJ in the sixties if you want to see who is culpable for raiding social security.
According to the Social Security Administration, as of 2010, Social Security should have had a 2.6 Trillion dollar surplus, but I find that odd? How can the federal government put into its budget each year a bill for Social Security when the FICA tax is already being removed from your paycheck to pay for Social Security? Is this not the essence of double taxation? So, where is this surplus? It’s been raided and spent and
replaced with IOU’s (bonds) with things like wars in Afghanistan/Iraq and
other toys that politicians want - but don’t want to pay for… like this tax
cut. In other words, it's a gigantic slush fund used by politicians to keep their feet from the fire.
(Image by MIT OpenCourseWare.)
In 2005 George W even had the chutzpah to admit it... while raiding it!!!
“There is no trust fund, just IOUs that I saw firsthand that
future generations will pay—will pay for either in higher taxes, or reduced
benefits, or cuts to other critical government programs.”
It’s rather humorous to me that this is the only measure
where you will find bi-partisan support in such a partisan political scheme
that is Washington these days. Its also why I write my blog, to show this type of fraudulent partisan logic, as if there was really a difference on the important issues. Why the bi-partisan support? Because
its politically expedient for both parties.
The Democrats can say they are
helping out Joe-six pack with more money in his pocket, while the Republicans
can hold up their oath to Grover Norquist. The best part of this tax cut is it
comes out of an existing program that so many people & elected leaders from both “sides”
rail on for not being solvent. We have heard about the entitlement tsunami that
is coming… I wonder why?
Now, both parties can appease to their constituents so that they
can be reelected; totally disregarding what the cost/benefit factor is. The "rich" (anyone over 110K), who won’t
collect social security anyway, can get some of their money back. Joe-six pack
can break even now, to make up for the rising gas prices and other commodities and maybe even save spend a few dollars (literally a few) at Wal-Mart buying Chinese
trinkets or Snuggies (never mind, they are via China as well). It’s a win-win. I
guess.
But don’t tell that to Tom Harkin (D-Iowa).
“I never thought I would have to see the day when a Democratic president of
the United States
and a Democratic vice president would agree to put Social Security in this kind
of jeopardy. Never did I ever imagine a Democratic president would be the beginning of
the unraveling of Social Security.”
Now think back to the beginning with the movie exercise. We, are the person that the suitcase belongs to. Harry and Lloyd are your local congressman and President and Senator... not only do they borrow the money, but they do so at interest or whats called the coupon, through bonds (IOU's). How can we have an outlay (and subsequent budget deficit and then subsequent accumulating national debt) for social security in the budget each year with FICA coming out of our checks to pay for it?
Because of this budget deficit you will also incur a bill that will be an interest payment on the principal of the national debt, which again, is an accumulation of every budget deficit in our history. This is simply because you are spending more then you're collecting in revenue. So, unlike Harry and Lloyd, we are not just going to borrow from the suitcase owner to payback the IOU's we replaced the initial money with. No, the government takes it one step further and promises to pay back those IOU's with future obligations, ie taxes and the circular logic continues. This will go on forever if drastic measures are not taken to stop this, but without strict terms limits, I cant see that happening. After-all, intergovernmental debt doesn't have to be paid back, right? In the words of Lloyd Christmas:
Its as good as money sir, those are IOU's... go ahead and count it, every cent is accounted for.
Cox, a veteran of the Iraq War, told Examiner that one of the
highlights for him was the ceremony that took place outside of the White
House. The 500 troops stood in formation in front of the White House
and then did an "about face" and turned their backs to the White House
in a symbolic gesture that displayed their disdain for President Obama
breaking his oath of office, which is the same oath all servicemen take,
to preserve, protect, and defend the Constitution of the United
States.
The veterans were told to render a salute and hold it for as many
seconds as there have been active duty soldiers that have committed
suicide while Obama has been in office. The salute lasted nearly 10
minutes, Cox said. They then bowed their heads in silent prayer for as
many seconds as members of the military have died overseas while Obama
has been Commander-in-Chief, which Cox said was almost 30 minutes.
During the ceremony (as seen in the video to the left), a pair of
soldiers held a flag with words Martin Luther King spake in opposition
to the Vietnam War, warning against America's arrogance overseas. King said:
I call on the young men of America who must make a choice today to take a
stand on this issue. Tomorrow may be too late. The book may close. And
don't let anybody make you think that God chose America as his divine,
messianic force to be a sort of policeman of the whole world. God has a
way of standing before the nations with judgment, and it seems that I
can hear God saying to America, "You're too arrogant! And if you don't
change your ways, I will rise up and break the backbone of your power,
and I'll place it in the hands of a nation that doesn't even know my
name. Be still and know that I'm God."
Maybe it’s just my imagination or has our fine nation become
that hypersensitive that we have started looking for hidden messages because
those actual messages in plain English don’t exist? Seems rather self-serving, doesn’t
it? It also seems self promotion through divisions, such as race, are circling
the drain as pundits scramble through sentences of ideological opponents for
“subliminal racist” messages.
That’s the latest word from the chair of the Congressional Black
Caucus, Emanuel Cleaver (D) of Missouri.
Mr Cleaver is the super sleuth who decoded two recent Presidentialcandidates sentences that appear to be dog whistle words to the Republican red-neck base that President Obama is in fact (gasp) a
black (50%) man.
Yes, it appears that the racist voters who are on the fence
of reelecting a black man need to be reminded that in fact Mr Obama is well…
black, you know… in case they forgot.
I am going to go out on a limb and predict racist’s who vote
based on color or would have their vote’s at least weighted in such nonsense
would not need a reminding; but I’m also not equipped with the: Racist Code Detector
Version 7.5 who can spot such subliminal messages.
See, to a typical person, phrases like Gingrich’s “food
stamp president” and Mitt Romney’s comments on “the very poor” would think:
Poor. However, if equipped with: Racist Code Detector Version 7.5 you would in
fact see the real meaning: “damn the black-man and do no reelect him because he
is only helping blacks”!
So, if racists will vote against whom they despise anyway
without a subliminal message; why the need for the racist code detector version
7.5? The answer is simple. It’s nothing more then a power grab. First, this is the
Webster definition of a Caucus:
: a closed meeting of a
group of persons belonging to the same political party or faction usually to
select candidates or to decide on policy; also: a group of people
united to promote an agreed-upon cause
That seems to be a simple premise, is closed meeting of
persons united to promote an agreed upon cause. Forty years ago the Congressional Black Caucus was founded“to positively influence the course of
events pertinent to African Americans and others of similar experience and
situation.” So, its a closed meeting of like minded people who want to help
black people. Now, this is where it gets interesting…
In a piece done in 2007, Politico’s Josephine Hearn told the story about Stephen I. Cohen, a Liberal Democrat who was rejected for
membership to the caucus because he was white. Despite the fact that 60% of his
constituents were black not to mention the majority of his staff was African
American including his chief of staff. Seems rather confusing considering that
a caucus is “a group of people united to promote an
agreed-upon cause” and being its black, meaning race – Mr Cohen fits, his
policies (Liberal Democrat) and his constituents fit that mission.
It was William Clay Jr (D) from Missouri who had
the courage (or audacity) to lay it out in black and white (pardon the pun) for
why Mr Cohen was not allowed directly from a state from his office:
Quite simply, Rep. Cohen will have to accept what the rest
of the country will have to accept—there has been an unofficial Congressional
White Caucus for over 200 years, and now it's our turn to say who can join 'the
club.' He does not, and cannot, meet the membership criteria, unless he can
change his skin color. Primarily, we are concerned with the needs and concerns
of the black population, and we will not allow white America
to infringe on those objectives.
Now we have the answer. Its not about “the needs and
concerns of the black population” because if it was you wouldn’t reject a man
applying to your “club” who wants to do exactly what your statement above says –
help blacks (you know the people who elected him). This seems like the complete
opposite of representation. And let me remind you again, its not about
representation, its about power – this is just one of many clear examples.
In that same article was also the story of how Al Green (D)
from Texas (now a member of the Black Caucus) got elected despite running
against an incumbent Chris Bell, D-Texas who was also a Democrat but white. Hearn
stated that:
Although House tradition discourages members of the same
party from working against each other, about a dozen black lawmakers
contributed to Bell's opponent, Rep. Al Green, D-Texas, the eventual victor.
Even Bell's Houston neighbor, Rep. Sheila Jackson Lee (Black Caucus member), D-Texas, campaigned against him.
That is another example of those in the Black Caucus of favoring
skin color over policy. It would be “subliminal” if it was a Republican but to
be doing this to those in your own party? This is another example of how the
two party system is nothing but a sham, a fraud used to promote division across
many lines and race being one of them and one of the easiest to promote at that.
Last but not least, we have the Chairman – Mr Cleaver, the
guy with the Racist Code Detector Version 7.5. I will let his quotes on the
subliminal messages paint the picture:
“In the last few days, both Gov. Romney and Speaker Gingrich
have been guilty of saying things that are not helpful to a society begging for racial inclusion.
Whether they are intentional or not, I’m not 100 percent certain; I do
know that it doesn't matter in many cases.It’s just unfortunate and it tends to divide.”
Cleaver went on to chide Congress for being “nasty” rather
than “inclusive.”
Is there anything left to say? Do I have to point out the hypocrisy
of the Congressional Black Caucus or do these quotes of double talk do the job?
If not, let these words sink in by J.C. Watts (who is black) was elected to
Congress from Oklahoma in 1994 on his views of the Congressional Black Caucus:
They said that I had sold out and (called me) Uncle Tom. But
I have my thoughts. And I think they're race-hustling poverty pimps"
Is there a difference between Romney and Obama? I have been critical of both Mr Romney and President Obama for various reasons but both being so different in terms of background, surly they cant be that similar, right? When the
subject comes up of differentiating between the two I find myself scratching my head. The same head scratching can be said for those folks who ask me my support for either two, and when I reveal my support of Ron Paul regardless if he’s third
party or not, it’s often met with the same rebuttal: “it’s a waste of a vote,
its better to pick the lesser of two evils”. However, I just can’t seem to
grasp the difference between the two men as far as policy is concerned.
Sure, Romney has the business experience, that is
unquestionable a difference and he has balanced the budget as Governor in Massachusetts.
Both of those are very big props for Romney in my book… but other than that, I looked
and I can’t find a difference between the eventual nominee for the Republicans
(Mittens) and the incumbent, President Obama (at least not in the pivotal positions).
- Obama has continued to support even more of an assault on
our personal liberty’s extending the Patriot Act and signing NDAA, wouldn’t you
know it - Romney supports both. Liberty trampled on again.
- Obama passed Universal Healthcare as did Romney. Romney even is proud of his healthcare bill, (‘I’m very proud of my health-care plan and
think it should be a model for other states to adopt’) or at least he was
before he was against it again.
What do we have left? Taxes. Yes, taxes, death and Mittens oh boy! This is the same guy who didn’t release his taxes because he didn’t wantto show he paid at or under the 15 percentile reserved for Capital gains (between 13.9-15%) on over 40 Million dollars of
income. That would show he is using loopholes (although legal) just like
many of our corporations do.
Romney said recently that Obama passed 19 tax increases
under his terms as POTUS. Most people on the right would believe that to be
true, he is said to be the most polarizing president in our history isn’t he? Although
the validity to those tax hikes in question has been shaky and even a few of
the 19 suspected raises have been actually proved false, Mitt continues his
assault. For the record, the Obama tax increases were minimal in nominal terms considering
(the large deficit) and directed at very specific small targets; not wide wielding
swaths of people and demographics as Romney would have you believe.
The truth of the matter is Obama has cut taxes too. He did so
in his 700+ Billion dollar stimulus (American Recovery and Reinvestment Act) he
then cut taxes in the ‘December 2010 tax deal’ that extended the Bush tax cuts.
Those tax cuts were worth $654 Billion and if you factor in the 250+ Billion from
the ARRA cuts in his 2009 Stimulus act, we are talking 900 Billion in Tax cuts
through his administration. I think its safe to say he has cut more taxes than
he has increased taxes by a large sum.
Look at the revenue or receipts our government is pulling in. If we were seeing tax increases, wouldn’t we also being seeing soaring
revenue? We aren’t. We are in a massive economic quagmire and tax cuts will not
get us out of it. And if we continue to cut taxes and keep the budget as is or
increase it, we will only cause even more damage down the road. And that seems
like the message from Newt, Obama or Mitt.
While I agree with the Republican field running for the oval
office about the over-regulation that we are seeing under this administration; it’s
not what ails us either. What we have is a political atmosphere where nobody
wants to make the touch decision and cut major aspects off our budget or raise
taxes to pay for the bills we have. Obama or Romney will never do it; they lack the
thick skin and willingness to lead by example despite the consequences. responsible debt is one thing, what these kooks are proposing is simply not feasible long term.
Romney has no plan to cut government just spend an equal
amount or more and lower taxes for the richest Americans. Obama seems to have
no plan at all and while he lowered taxes he increased regulation and didn't do anything to make cuts. Gingrich? He thinks we can save 500 Billion annually on modernization,
he’s also the same guy who said Fannie and Freddie hired him as a historian... not
a lobbyist. He won’t be the nominee but it further drives home the point. The
900 lb gorilla in the room remains Keynesian economics. Until we face the
reality of the magnitude that beast has in terms of influence and destruction we will be here every four years with the same logical
outcome: vote for a Paul (Ron or Rand).
There is something about a true free market that is romantic
and optimistic, so much so that it arouses the deepest emotions in all of us if
we imagine the boundless possibilities. The simplicity and beauty of a true
free market is that way because it’s derived from nature itself. Its self
correcting, rewards hard work and due diligence but also poetically enough; punishes
and discards the losers and Mal-investment. You could call it Darwinian, and it
can be cruel but more than anything it you have to call it fair.
Now comes what we have – crony capitalism. American
capitalism today and for over a century has been anything but free. The system
we have in place today is corrupt and has been completely hijacked by the
collusion between big business and legislators on the take. I’m not talking about the overt sleazy ones either; im
talking about almost every single one of them outside of maybe a Ron Paul.
Capitalism today is being destroyed by itself. We are eating our own.
Corporations are collectively smarter than politicians. Politicians also need
money. Corporations need favorable legislation and thus what we have today is a
shell of a free market.
The overt transparency of fraud became evident in the Obama
administrations predecessor (the Bush Administration) who used the wars in Iraq and Afghanistan and
disasters like Katrina to facilitate no bid contracts and cost plus contracts with huge corporations
like Bechtel and Dick Cheney’s former company Halliburton (do i really need a cite or link here). There was also Treasury's Hank Paulson (former Goldman CEO) giving his former cohorts on Wall Street inside information as to governments plans weeks and months before things happened during the financial crisis of 2008. Not nearly as talked about but equally suspect was the 1 Trillion dollar (and counting) Medicare
prescription-drug benefit that facilitated a giant subsidy to thepharmaceutical industry. Maybe it’s the rise of the information age, maybe its
our system finally coming undone; either way this type of corruption is
something I have never seen or read about since the days of the industrial
revolution.
This current administration is no stranger to this
corruption either (just look at his past contributors). In fact, what we are seeing under this administration is
unprecedented on the subject of crony capitalism and that's saying alot considering Bush's track record. .
One of the most notorious cases has been the solar company
out of California, Solyndra. This
was a company that received a 535 Million dollar loan from the federalgovernment in 2009 - spent 1 Million dollars in lobbying in 2010 – then went bankrupt
in 2011. This put US
taxpayer’s on the hook for the 535 Million dollar loan. Solyndra was also influential in the Presidents (who toured
Solyndra in 2010 and tabbed it a success) election as its board contributed
large sums of money from their own accounts. We also learned via the Tribune
Washington Bureau that the Department of Energy employee who helped monitor the Solyndra loan guarantee was one of Obama's top fundraisers.
Solyndra however doesn’t touch the GM scandal. As I pointed
out before, the US
buying a stake in a company and having it competing with other company’s in the
same industry who is not back by the federal government is not supposed to
happen. Talk about an UN-leveled playing field? But it did.
GM saw what the Prius was doing a decade ago and for years wanted
to get into the hybrid market but never could gain traction. So it concentrates
on the next big thing, the electric car. This drive towards the electric car
breeds the conception of the Chevy Volt. In September in 2008, the Volt was
unveiled. By this time, GM is failing and on its death bed. Nine months later
enters Obama and his blank check.
So here the President sits with a gigantic stake in GM. It’s
actually us, the taxpayer with the giant stake, but for the sake of the
argument, it is Mr President since he has our check book…we just pay the bills
(but only some as we have annual trillion dollar deficits). This could go on
forever.
Let’s reset. It’s 2009 and with the US
tax payers on the hook for GM, and the economy in the tank, Obama puts together
the: Presidents Economic Recovery Board. On that board he appoints several giants across the
commerce spectrum; one of them is GE Chairman and CEO Jeffery Immelt. GE is known for many things and being a conglomerate, it is
obviously diversified. One of the technologies GE is bullish on is Wind
Turbines (read green energy) so it makes sense when you take into account this
administrations feverish green outlook. GE is also smart, they havent grown to their size and scope being naive; so they do not take risks
that aren’t highly calculated.
So what happens in 2010 is pretty interesting. Remember Jeff
Immelt? He cuts a deal with GM to have GE buy 12,000 Chevy Volts by 2015. This is the same Chevy
Volt that there is no demand for, the same vehicle that has serious questions about
its reliability and its safety. Yet, one of the richest, most diverse corporations
in the world decides to replace half of its fleet with a car that is still much
in question? How does Obama show his gratitude, for buying into this
boondoggle? He gives Immelt a promotion. One might start to ask themselves, how
does a Chairman and CEO of GE…receive a promotion? Simple, President Obama Gave
him another chair, and made him Chairman of the: Council on Jobs and
Competitiveness on January 21, 2011.
My Congressional representative (3rd district of PA)
Mike Kelly, who is a car dealer himself, had this to say recently about the Volt and Administration:
“This is a halo car, not so much for General Motors , but for this administration,” Mr Kelly Said. “If GM thought this was such a good investment, they would have
launched it themselves many years ago. If these cars are so great and so
marketable, why do we have to subsidize them so heavily?”
Here you have a sitting President with a green agenda buying
with US taxpayers a stake in an American company GM who sells cars in the US
against other US car manufacturers with no federal coffers to dip into. That is
the first strike. Then you have said President in a cozy relationship with a
CEO of a company like GE (who also has green interest) buying an enormous
amount of cars off of GM, who is backed by the federal government. I mean, why
not the Ford Fusion Hybrid? They are an American automaker as well and the Fusion Hybrid is actually a better car, according to many industry experts. Strike Two.
Last but not least is ethics. How can a President (who came in loaded with a cabinet of Wall Street insiders) so stuck in a jobs rut
side with a company that has been shipping some of its businesses and jobs
offshore all the while using tax loopholes to escape paying taxes while using
the Volt as another tax win with its tax credits? Or how can we cut joint venture deals with the Chinese to sell the Volt; then to only have the Chinese steal the technology to turn around and use it against us like they have on so many other occasions across multitudes of industry. It’s pretty obvious that the end game is this: GM must
succeed for the President to succeed, regardless of how it’s done. The ends
justify the means. The government picking and choosing winners, betting on what
technology they think is the best option instead of the market place is why
Obama strikes out on this matter.
There have been numerous examples of crony capitalism over
the years but we are seeing some pretty alarming examples at the height of our elected representatives over the
last decade, and the corruption starts at the doorstep of 1600 Pennsylvania Ave. This isn’t a partisan problem; this is a national, state and local
problem; as this affects all of us and at every level of our government. If
it happens there and is so visible, imagine what we don’t know about? We can call
it crony capitalism or call it a plutocracy or a plutarchy but whatever you do; do not call it capitalism and never under
these conditions dare call this market free.
It was learned this week that the US tax payers are still missing the repayment of 132 Billion dollars from TARP, which was launched in 2008. In a report issued Thursday by Christy Romero, who is the acting special inspector general for the Troubled Asset Relief Program. The Program, as we all recall, was to save the financial sector from themselves because of their addiction to the derivatives game (think World Series of Poker).
In 2009, the remaining cash in TARP was split between a variety of business (mostly banks) but there sat GM. Facing Chapter 11, GM was first rebuked then denied by the President. GM had to do what any failed business has to do, it had to file for bankruptcy and they did; wiping out all the stockholders who stocks were completely vaporized into worthless pieces of paper. Then after filing and less then a month off of the stock exchange; GM reemerged with an infusion of American taxpayers borrowed capital. With backing of the US and Canadian government; GM was now owned more by the state then it was private investors.
On the day I took office, our auto industry was on the verge of
collapse. Some even said we should let it die. With a million jobs at
stake, I refused to let that happen. In exchange for help, we demanded
responsibility. We got workers and automakers to settle their
differences. We got the industry to retool and restructure. Today,
General Motors is back on top as the world’s number one automaker. We bet on American workers. We bet on American ingenuity. And tonight, the American auto industry is back.
This is classic example of where politicians say things that are rather hallow but are not completely false, so in lies some grey area (wiggle room). Mr Obama actually did refuse to help GM at first. So therefore, President Obama only refused to let them fail, well... only after he first refused to help. He can say it was because he "demanded responsibility" but the truth of the matter is; he was weighing the political capital in letting it fail or saving it. Being one of the most anticipated Presidents in decades, he wasnt about to start out his presidency by backing a losing horse. Think about it, organized labor are as close to the Democratic hip as the Evangelicals are to the Right's, so for him to not having saved it from the jump means he was weary of the public's growing anger towards the bailouts.
As far as the 1 million jobs, it is including all the suppliers and they wouldnt have all lost work. There is many small businesses across the country that feed off the automotive industry but many of them would have survived because most of them are diversified enough to withstand the hit. Its also worth noting that even if GM did face liquidation, another automotive company would have stepped in and bought the brand. Thus many jobs would have been saved if not most; even without the bailout.
As far as GM being some kind of triumph or success story... you give me any business and dump 34 Billion dollars of outside investment money into it that costs said company nothing; Ill build you a success story too. Who couldnt, with that type of Capital/lottery/welfare? Now, about the American auto industry being back? In the words of the immortal Lee Corso: not so fast my friends. According to the US Treasury, US Taxpayers would need to sell its GM stocks at $53 per share to break even. Friday, January 27th it closed at $24 per share. How long do we have to wait to see if this investment at least breaks even? Being GM is the "worlds number #1 car-maker" now, don't ya know...lets hope its sooner rather then later.
Let me start out by saying, that feels weird uttering out that title to myself. For those that don’t know me... I’m not a
liberal, far from it. For those that do, know I would consider myself a Libertarian and Libertarianism
is rooted in logic. Freedom across the board seems to be the "fairest" premise one can have in such an unfair game that is politics. With that said, I see a lot of venom spit at the President in
terms of his economic approach that I don’t think is quite fair. Again, before you bitch slap your monitor - allow me to explain.
Much has been made recently about the Presidents accumulation debt. We have seen 5
Trillion added onto the 10 Trillion of national debt since he came into office in
January 2009, that's no cheap date. So let there be no doubt that the spending is spiraling out of control going
forward. However, the attempt to put this on one man and his quest to
outspend any president in history doesn't make him a Marxist as some would like
to believe he is; it makes him a loyal solider. First a very crude and broad history.
A curious thing happened during the early 80's... GDP started to escalate as
the country found itself in the midst of an economic growth period unlike
anything it has seen in decades. One could point to Nixon ending Bretton Woods
in the early 70's as a precursor to this expansion but that is another topic
for another day. The reality was the country was booming. However, with that
came enormous amounts of debt. So much so that the National debt ballooned from
1 Trillion in 1980 to 4 Trillion by 1988; so this explosion of growth came with
a price tag (on a credit card).
Even though the debt was piling up as long as the economy kept building and
building like it always has, there would be nothing to worry about. So the
federal outlays began to climb and so did the deficits. Bill Clinton had his
time to shine as being the only president in four decades to pass a balanced
budget, although that was much to do because of the tech boom and the validation and explosion of a new business and platform: the Internet. Then the subsequent NASDAQ
crash came in 2000, right when the economy was heading into recession.Ouch.
Then something changed. George Bush Jr was elected and began to rapidly
increase spending on new entries to the budget like the Prescription drug plan
(entitlements or votes) and Homeland Security (not sure what that still does to
this day) while cutting taxes in the midst of a recession. Then we added two
wars on two separate fronts and before you knew it we had doubled the debt from
roughly 5 to 10 trillion in his eight
years and oh yhea, the housing bubble bursts bringing on one of the worst financial calamities since the 30's. And if that wasn't enough, right before his leaving of office the great
recession came and wreaked havoc on our economy on all fronts (except for those
at the very top) causing us to pass TARP while most taxpayers getting what amounts to a
welfare check of 300-1200 Dollars from the Economic Stimulus Act.
Enter the "O" man. Right out of the gate, Mr Obama pushed through a 780+ Billion dollar stimulus bill which had much of the nation in an uproar based on the preconceived notions upon his entering of office. That stimulus act, like George Bush's before him, had large lump of tax credits worth 250 Billion, so it wasn't all spending parse. President Obama's budgets, although
record setting high nominally; were in-line with the last budget of President
Bush. The subsequent Obama budgets after his first were (and estimated) to be in the 3.5 to 3.7 Trillion dollar range. President Obama therefore is no bigger of a spender than President Bush if you account for the history seen below.
A large part of the deficit spending has to do with the walloping the middle class took as it affected the receipts. The last
three years (2009-2011) receipts were roughly 400 billion lower then they were
in all three years before (2006-2008). At the same time the outlays keep
increasing. This creates tremendous deficits. But, it wasn’t like Obama came in
with a blank check. In fact, Obama's first budget had actually less spending
than Bush's last year in office. Obama's final budget is actually only 200
billion more than Bush's final budget (and Bush's biggest to be fair).
So, if President Obama doubles the national debt, he will just be doing his
part to continue the legacy that was put in place before him started in the
early 80's by Ronald Regan. This is no disrespect to George Bush nor is this some
type of vindication for Mr Obama; its simply setting the record straight. If
anything, this points to a bigger problem, regardless of who sits in the oval office and its pretty straight forward. We have too many bills and not
enough income. How we bridge this gap, will be the most vital national issue of
the next decade. Keynesian economics appears to have reached its saturation point. We either slash spending or we dramatically raise taxes... or invent the
internet again.
