'WE'RE OUT OF MONEY' (Breaking on Drudge)

Drudge Report ^ | 05/23/2009 | Matt Drudge

[autumnraine]

'WE'RE OUT OF MONEY'
Sat May 23 2009 10:32:18 ET

In a sobering holiday interview with C-SPAN, President Obama boldly told Americans: "We are out of money."

C-SPAN host Steve Scully broke from a meek Washington press corps with probing questions for the new president.

SCULLY: You know the numbers, $1.7 trillion debt, a national deficit of $11 trillion. At what point do we run out of money?

OBAMA: Well, we are out of money now. We are operating in deep deficits, not caused by any decisions we've made on health care so far. This is a consequence of the crisis that we've seen and in fact our failure to make some good decisions on health care over the last several decades.

So we've got a short-term problem, which is we had to spend a lot of money to salvage our financial system, we had to deal with the auto companies, a huge recession which drains tax revenue at the same time it's putting more pressure on governments to provide unemployment insurance or make sure that food stamps are available for people who have been laid off.

So we have a short-term problem and we also have a long-term problem. The short-term problem is dwarfed by the long-term problem. And the long-term problem is Medicaid and Medicare. If we don't reduce long-term health care inflation substantially, we can't get control of the deficit.

So, one option is just to do nothing. We say, well, it's too expensive for us to make some short-term investments in health care. We can't afford it. We've got this big deficit. Let's just keep the health care system that we've got now.

Along that trajectory, we will see health care cost as an overall share of our federal spending grow and grow and grow and grow until essentially it consumes everything...

SCULLY: When you see GM though as “Government Motors,” you're reaction?

OBAMA: Well, you know – look we are trying to help an auto industry that is going through a combination of bad decision making over many years and an unprecedented crisis or at least a crisis we haven't seen since the 1930's. And you know the economy is going to bounce back and we want to get out of the business of helping auto companies as quickly as we can. I have got more enough to do without that. In the same way that I want to get out of the business of helping banks, but we have to make some strategic decisions about strategic industries...

SCULLY: States like California in desperate financial situation, will you be forced to bail out the states?

OBAMA: No. I think that what you're seeing in states is that anytime you got a severe recession like this, as I said before, their demands on services are higher. So, they are sending more money out. At the same time, they're bringing less tax revenue in. And that's a painful adjustment, what we're going end up seeing is lot of states making very difficult choices there...

SCULLY: William Howard Taft served on the court after his presidency, would you have any interest in being on the Supreme Court?

OBAMA: You know, I am not sure that I could get through Senate confirmation...

Developing...

[mojitojoe]

He still has 3 years 8 months to “accomplish” a whole lot more destruction.

_______________
Or be destroyed or self destruct. I think he will do the latter.

[mojitojoe]

I say to celebrate this announcement we all increase our W-4 witholdings to 9.
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Most people I know already have.

[TheThinker]

China is actually hedging its bets with gold. They bought tons of it from the IMF.

[TheThinker]

Wait, are we going to skip a depression and go to total collapse? First things first.

[Chgogal]

Obama, you are soooooo very full of horse manure.

Obama, you proposed a $3.5 TRILLION Budget, about 20-30% of GDP. Pelosie and Ried got it passed.

Obama, YOU OWN THIS!

Pelosie, YOU OWN THIS!

Ried, YOU OWN THIS!

Obama, you signed a NON-Stimulus bill of approximately $800 Billion that YOU DID NOT READ. INSTEAD YOU WENT ON A DATE WITH YOUR WIFE ON VALENTINE’S DAY.

Obama, you are full of bull manure.

Obama, YOU OWN THIS!

Pelosie, YOU OWN THIS!

Ried, YOU OWN THIS!

[Aroostook25]

Geithner will unveil a “NEW U.S. DOLLAR”. It’s equal to 500 old dollars. There, problem solved.

That would wipe the US debt to China and other countries. It would also wipe out the savings or investments which Americans have in US government paper. And THAT would wipe out the savings which people have in cash. Maybe shares in companies with physical assets would still be the same percentage of those companies.

How about a ten to one revaluation first.
A loaf of bread would be a dime -- we would hope.

[AdmSmith]

Where Will the Money Come From?

And now let’s look at what is bumping in my worry closet. The world is going to have to fund multiple trillions in debt over the next several years. Pick a number. I think $5 trillion sounds about right. $3 trillion is in the cards for the US alone, if current projections are right.

Just exactly where is that money going to come from? The US trade deficit is now down to under $350 billion a year. The Fed can monetize a trillion. Maybe. Look at the yield curve on US government debt below (Bloomberg). US savings are going to go up, but where is the incentive to buy ten-year debt at 3.5%? Four-year debt under 2% doesn’t do much for your savings growth. Even with monetization and the Chinese buying our debt with the dollars we send them, that still leaves the bond market about $1.5 trillion short, give or take $100 billion.
http://www.investorsinsight.com/blogs/thoughts_from_the_frontline/archive/2009/05/23/the-paradox-of-deficits.aspx

[wiggen]

checks are 2 houses that are his mates so we lose.

[Lonesome in Massachussets]

We actually ran a budget surplus during the mid nineties, in part due to the "peace dividend", including severe cuts in military spending and in part due to increased tax revenues during the dot-com bubble.

0bama is proposing unprecedented levels of peace time deficit spending that will make us poorer in the future. I am calling this peace time, economcally at least, because we are spending about 1% of our GDP on the wars in Iraq and Afghanistan, combined. In 1943, we spent about 45% of GDP on the War (more than Germany, another belligerent.) Even with the wars in Afghanistan and Iraq military spending as a percent of GDP is lower than it was during the Carter Misadministration.

[autumnraine]

The keep artificially inflating to pass the buck on down the line and I’m afraid at this point, since it IS a global depression we are in, and every currency is dependant upon another, it is going to take a worldwide crash to reset itself.

And having Der Kommissar in power during something as volotile as this does not make me comfortable. At all.

[PA-RIVER]

You are probably right that SS will be used for general funds as our currency collapses.

What will be interesting is the fallout. When the dollar loses half its value and a Burger and Fries meal costs 20 dollars, Will Acorn protest McDonalds? Will Obama call them greedy bastards? Yes.

Soon, every producer will be a target for class warfare. The sooner this happens, the better.

[servantboy777]

>>Obama seems hellbent on destroying this country.<<

The president, congress and the supreme court is hell bent on destroying this country.

[mvpel]

SCULLY: When you see GM though as “Government Motors,” you're reaction?

Call it "Twentieth Century Motors" instead, considering the majority union ownership stake they're constructing.

[metmom]

We’ve been out of money for a while now and he’s just realizing this?

And why is he irresponsibly spending more?

[metmom]

I think you nailed it.

Instead of doing something responsible, like hacking, slashing, and burning the budget, we (working citizens) are all going to be screwed.

Of course, the welfare deadbeats and illegals will not be affected.

[metmom]

ping

[metmom]

However, we must always remember that God is in control of events on earth. I know this is a scary time to be a Christian conservative, but we must trust in God that he will protect us and our nation.

You are right.

My hope is he is setting Obama up for a fall so great the dems may never recover. I believe that day is coming, but it can’t be fast enough for me.

Considering how close it seems that we are living in the end times, though, I have my doubts about it getting any better.

I think that it's setting the anti-Christ up for a power grab when some worldwide catastrophe happens. If I read Scripture right, the anti-Christ even doesn't appear to be evil at first so there's some way he manages to take control.

[romanesq]

Watching it as people are incredulously asleep makes it even worse. I know a few who are wakening to it, but the rest are like zombies. Utterly clueless.

Chalk some of it up to a falsely place optimism but this country has a problem remembering and they are about to see it first hand. When it happens the finger pointing and blame game will be rampant.

The media will be absolutely desperate to blame anyone but Obama.

[Blood of Tyrants]

You are correct. Stupid? No. Evil? Yes.

[sickoflibs]

Peter Schiff Vlog Report 22 May 2009(2009 (US should negotiate to restructure National Debt)