Monday, November 12, 2012
A people who allow a tyrant to tell them how much they can eat and drink are beneath contempt.
A people who allow a tyrant to tell them how much they can eat and drink are beneath contempt.
Sunday, November 11, 2012
The Democratic versus the Republican Future
The American future will materialize in one, five, 10, or 20 years, once the federal government's 14- or 15-digit indebtedness becomes unsustainable. When private and foreign financing sources disappear, money printing will fund the federal deficit. That will increase domestic money supply, and a currency collapse coupled with hyperinflation will follow, depending on the sustainability of the debt market and the willingness of foreign governments to purchase treasury debt that yields less than two percent while American inflation is above four percent. The Fed may already be directly purchasing federal debt. When direct monetization of federal debt becomes routine, hyperinflation and a dollar collapse will not be far behind. The reason is that the total money supply is a small fraction of total US indebtedness. In 1995 the total US money supply was under $1.2 trillion; today it is about $2.4 trillion, with virtually all of the increase having occurred since 2009. In contrast, the federal deficit is $1.1 trillion for 2012 alone.
During the Bush years, the federal deficit, which President Clinton had eliminated for four years between 1998 and 2001, rose from $171 billion to $422 billion. His final budget, which Obama inherited, included a $1.3 trillion deficit. The spin masters at The New York Times and Obama's publicity site, Factcheck.org, now crow that Obama has "reduced" the deficit to $1.1 trillion, but when you get your news from liars like The New York Times and Factcheck.org you get a distorted view of the world. Obama made no effort to rescind the 2009 budget, a power that the Democrats took away from the president during the Nixon years. Moreover, Obama's subsequent budgets have been as bloated as the final Bush budget. According to the US Treasury outstanding federal debt in 2010 was $10.6 trillion, and in November 2012 it was $16.2 trillion. Obama has added trillions to federal debt; George W. Bush invented a policy that Barack Obama perfected. Mitt Romney, a bailout supporter and a military hawk, was likely to maintain Obama-and-Bush levels of spending.
Looking more closely at the publicly held-versus-total debt numbers from TreasuryDirect.com, the Fed may have directly monetized as much as $300 billion of federal debt since Obama took office:
Publicly held federal debt, January 2009: $6.3 trillion
Publicly held federal debt, August 2012: $10.6 trillion
Difference: $4.3 trillion
Total federal debt January 2009: $10.0 trillion
Total federal debt August 2012: $14.6 trillion
Difference: $ 4.6 trillion
The $4.6 trillion growth in total debt during the Obama years, a 46% growth in the total debt outstanding from all prior presidents in just four years, is $300 billion more than the $4.3 trillion growth in publicly held debt. That $0.3 trillion difference is one eighth of the total money supply.
If interest rates rise, then the federal government's deficit and borrowing costs will also rise, and it will need to de-fund programs. The political results of de-funding welfare programs like Social Security will be similar to hyperinflation. There may be intense pressure on the Federal Reserve Bank to simply monetize the federal debt.
The results will differ between Republicans and Democrats. With Democrats in office, there will be a decline in American standards of living as money printing reduces the ability of the federal government to borrow further and as legitimate sources of capital flee a socialistic America bent on stealing to subsidize the Democrats' key beneficiaries: Wall Street, welfare cheats, and do-nothing government employees. However, you will not be allowed to drink soft drinks in excess of eight ounces. With Republicans in office there will be a similar economic scenario, but you will not be allowed to use birth control pills. The Republicans will subsidize Wall Street, defense contractors, pharmaceutical firms, agribusiness, and defense contractors.
Both parties offer a totalitarian future run by ego-maniacal ignoramuses.The only thing more embarrassing than America's two-party system is the American people.
During the Bush years, the federal deficit, which President Clinton had eliminated for four years between 1998 and 2001, rose from $171 billion to $422 billion. His final budget, which Obama inherited, included a $1.3 trillion deficit. The spin masters at The New York Times and Obama's publicity site, Factcheck.org, now crow that Obama has "reduced" the deficit to $1.1 trillion, but when you get your news from liars like The New York Times and Factcheck.org you get a distorted view of the world. Obama made no effort to rescind the 2009 budget, a power that the Democrats took away from the president during the Nixon years. Moreover, Obama's subsequent budgets have been as bloated as the final Bush budget. According to the US Treasury outstanding federal debt in 2010 was $10.6 trillion, and in November 2012 it was $16.2 trillion. Obama has added trillions to federal debt; George W. Bush invented a policy that Barack Obama perfected. Mitt Romney, a bailout supporter and a military hawk, was likely to maintain Obama-and-Bush levels of spending.
Looking more closely at the publicly held-versus-total debt numbers from TreasuryDirect.com, the Fed may have directly monetized as much as $300 billion of federal debt since Obama took office:
Publicly held federal debt, January 2009: $6.3 trillion
Publicly held federal debt, August 2012: $10.6 trillion
Difference: $4.3 trillion
Total federal debt January 2009: $10.0 trillion
Total federal debt August 2012: $14.6 trillion
Difference: $ 4.6 trillion
The $4.6 trillion growth in total debt during the Obama years, a 46% growth in the total debt outstanding from all prior presidents in just four years, is $300 billion more than the $4.3 trillion growth in publicly held debt. That $0.3 trillion difference is one eighth of the total money supply.
If interest rates rise, then the federal government's deficit and borrowing costs will also rise, and it will need to de-fund programs. The political results of de-funding welfare programs like Social Security will be similar to hyperinflation. There may be intense pressure on the Federal Reserve Bank to simply monetize the federal debt.
The results will differ between Republicans and Democrats. With Democrats in office, there will be a decline in American standards of living as money printing reduces the ability of the federal government to borrow further and as legitimate sources of capital flee a socialistic America bent on stealing to subsidize the Democrats' key beneficiaries: Wall Street, welfare cheats, and do-nothing government employees. However, you will not be allowed to drink soft drinks in excess of eight ounces. With Republicans in office there will be a similar economic scenario, but you will not be allowed to use birth control pills. The Republicans will subsidize Wall Street, defense contractors, pharmaceutical firms, agribusiness, and defense contractors.
Both parties offer a totalitarian future run by ego-maniacal ignoramuses.The only thing more embarrassing than America's two-party system is the American people.
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