Posted on 09/03/2009 4:27:35 AM PDT by IbJensen
`We just can't afford it!''
Not long ago, every America child heard that, at one time or another, in the home in which he or she was raised. ``We just can't afford it!'' It may have been a new car, or two weeks at the beach, or the new flat-panel TV screen. Every family knew there were times you had to do without. Every father and mother has had to disappoint their kids with those words. Why is it that what parents do many times a year politicians seem incapable of doing: saying no.
How many times in the last decade have the political leaders of either party stood up and declared, ``No, we cannot afford this.''
The White House has conceded that the deficits over the next 10 years will total $2 trillion more than they had reported just months ago. Instead of $7.1 trillion, we will run $9 trillion in deficits.
Dollar might collapse
Meanwhile, the White House demands a new entitlement -- healthcare coverage for 47 million uninsured who can't afford it or refuse to buy it -- that will cost at least $1 trillion over 10 years. Can we afford this -- now?
``We can't afford not to,'' comes the retort. This is ``a core ethical and moral obligation,'' says President Obama.
But is it not a core ethical and moral obligation not to debauch the currency in which most of the hard-earned wealth of the American people is invested? Yet, as Warren Buffett writes in The New York Times, collapse of the dollar and the end of its days as the world's reserve currency is what we are risking.
Government expenditures are running at 185 percent of revenue, which is like the lone family breadwinner earning $50,000 a year, while the family spends $92,500 a year. With families that do that, it is not too long before the credit cards are cut off, the mortgage is called in and the family Chevy is repossessed.
According to those same White House figures, this year's deficit will be closer to $1.6 trillion than the $1.8 trillion previously projected. Now, there are only three basic ways to finance that deficit.
• The first is by borrowing the savings of one's own citizens, thus consuming the seed corn of the private economy.
• The second is by borrowing from abroad.
• The third is by having the Fed, ``through a roundabout process,'' writes Buffett, ``printing money.''
Assume the Treasury borrows most of the savings of the American people this year, say, $500 billion. Then Uncle Sam is able to persuade Beijing to buy another $500 billion in Treasury bonds. The Fed must still run the printing presses to create another $600 billion.
How long before our Chinese, Japanese and OPEC creditors conclude that the Americans are depreciating their currency and dump their U.S. Treasury bonds -- or demand a higher rate of interest to cover the risks of their dollar-denominated assets sinking in value?
But how do we cut spending when the five largest items in the budget -- Social Security, Medicare, Medicaid, interest on the debt and national defense -- are untouchables and growing faster then the 3 percent to 4 percent a year a full-employment economy can manage?
Are we going to cut veterans benefits, spending on our crumbling infrastructure or education, when Obama is promising every kid a college degree? Are we going to cut funds for Afghanistan and Iraq, and risk losing both wars? Are we going to cut foreign aid after Secretary of State Hillary Clinton has been touring Africa telling one and all that America is here to stay?
No plan to cut spending
How about cutting funds for food stamps and the Earned Income Tax Credit? Good luck. How about PBS and the National Endowment for the Arts? Just try it.
Does either party have any plan to cut federal spending from today's near 28 percent of GDP to the more traditional 21 percent? George W. Bush didn't even try, and Obama is making that Great Society Republican president look like Ron Paul.
When a democracy reaches a point where the politicians cannot say no to the people, and both parties are competing for votes by promising even more spending or even lower taxes, or both, the experiment is about over.
``Remember,'' said John Adams, ``democracy never lasts long. It soon wastes, exhausts and murders itself. There never was a democracy yet that did not commit suicide.''
yep - the treasury has been looted.
Hey that is the best plan ever. Cancel all the lame ass agencies like Education..Epa..etc. the economy would BOOM! With no welfare the jobs Americans won’t do would become the jobs they are begging for.
It’s time for a balanced budget amdendment and term limits for Congress.
Bump Pat gets it.
It takes a lot more than that to save a democracy.
Nothing to worry, we are coming out of the recession. Every thing is fine. We don’t have a care in the world. /sarcasm
Pat does get it.
However, the average American family cannot print money and sell bonds. Uncle Sam can do that.
Perhaps we should abolish the Bureau of Priting and Engraving!
Obama “We cant afford NOT to do it”
You’re not suggesting the State Run Media / Democrat Party Establishment would lie to us, are you? I just refuse to accept that premise. They’ve never done it before.
Yes and I’m the Easter Bunny.
How many here don't believe that stimulus money has not be funneled into off shore banks by O-hole's Acorn Buddies?
There shouldn’t be anyone who don’t believe that, it was in the news after all./s
Why don’t we just fix it the way our ancestors did?
Invade a country, take over its national resources and expand the market base.
Russia is about to, China has already my dominating the mass production of cheap crap markets.
All other countries in history have stolen gold and resources for centuries but America for the most have not, we have if for sake of argument gone to war for oil but to actively invade another country to expand?
Maybe its time to consider it, what else to do?
more taxation?
You, my friend, see the truth. If anyone here thinks that almost a trillion dollars is accounted for, then that person is an idiot. Billions up billions went into pockets, and continues to flow into the pockets of politicians and the cronies of politicians, in the name of “fighting for liberty”
Plus Americans, still, are too humane to administer a colony with the kind of ruthlessness needed to turn a profit.
Hi kids, today we are going to learn about the term “bond market dislocation” and what happens after it by watching a video. Has anyone ever seen the movie “Mad Max”? Mmmkay.
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