Dear family and friends,
Today, we look at our government and ask ourselves, "What is happening?" Our nation was founded by those who believed in their country and the rights of the people it governed. They stood strong and stood together to declare independence. They created a declaration and a constitution for the people-- A government based on liberty,(Yes! Freedom). All Americans today should learn from our past. We all should stand proud with our heads up high. We should look upon our founding fathers and salute all who began this beautiful nation UNDER GOD.
It is said, "That the worst failure of government is caused from excessive concentration of power,consolidating the branches and depriving people of its own liberty or withdrawing the protection of the laws from the people. This constitutes tyranny or anarchy and this sometimes should be resisted, even to the point of a rebellion as our founding fathers have declared."(Declaration Principles/Renew America)
Today we need to look at our nation and act together to declare these principles of self-government. Obama continously rejects these basic principles in which our nation was founded.
Sandra B.
Saturday, February 28, 2009
Thursday, February 26, 2009
The 'Chattering Class' is Tired, Broke, and Pissed
Here it comes. Obama is asking Congress to increase taxes on the very people who spur economic and job growth. He’s proposing to increase the top marginal rate to 39.6% from the current 35%. To add insult to injury, he also wants to reduce the amount of eligible tax deductions for the same payers who would be affected by the tax increase. This is nothing more than tax and spend Socialism and you should be outraged. Margaret Thatcher said, "The problem with socialism is that eventually you run out of other people's money."
First, consider this. If you or your family earn more than $92,000 per year, (and many do, but would scoff at being called affluent especially in the Northeast), then congratulations. You belong to a select group of taxpayers in the top 20% of all wage earners. You also have the blessed distinction of paying 80% of all taxes collected. The top 20% pay 80% of ALL the tax. Nice, huh? Moreover, the top 50% wage earners pay a staggering 97% of all taxes. This means that the bottom 50% of all tax filers pay only 3% of all taxes collected. Put another way, 5 of every 10 people pay only $3 out of every $100 in tax collected. Sounds like a deal to me. For them.
To make matters worse, the Tax foundation verified that 32% of all tax returns filed were from people who paid no federal income tax at all. How is this possible? This is possible because of tax exemptions and earned income tax credits which reduce some filer's tax liability to zero, so 32 % pay nothing. And now Obama wants the people who do all the heavy lifting to lift even more. The fact is, the Dems essentially want to REDUCE taxes on those who already pay a disproportionately small amount and provide more handouts to those who already pay nothing or next to nothing in an effort and build support, and yes, dependency in the Democratic voting base, many of whom are here illegally. And this is being done at the expense of responsible tax payers and business owners who have been and continue to be the source of the vast majority of tax revenue and are the very people who make it possible to grow the economy through private sector investment and job creation.
Obama plans on taking more money from the heavy lifters by not extending the Bush tax cuts enacted in 2000. I’m not a Bush apologist. He abandoned core conservative principles and all fiscal responsibility early on, was a failure in many ways, and is largely responsible for Dems having so much power today. However, the Dems have repeatedly slammed the Bush Administration saying that his tax cuts were only for the corporations and the wealthy. This is simply not true. According to IRS income statistics, in 2000 before the Bush tax cuts, the top 10% wage earners paid 67% of all tax. Last year this number was close to 71%. So during a period of time when Bush was supposedly taking care of his buddies in big oil, the highest earners actually paid more tax than before. How could this be possible if the tax cuts were for the privileged few? I never saw this announced on MSNBC or Meet the Press. What Obama and the liberal Dems seem to miss is that when you lower taxes, people tend to put more effort into earning income since less of it is taxable. When you raise taxes, people tend to put less effort into earning income since more of it is taxable, and more effort into finding ways to avoid paying tax. And the latter is not good for anyone. Try explaining that to a liberal.
It’s clear how to stimulate the economy, it’s been proven. The Dems want to ignore that even Kennedy in the ‘60s achieved this by using methods unheard of by some in his party. He cut marginal tax rates, capital gains, and inheritance taxes, and by 1968 that increased our revenues by more than 60 percent.
In 1980, the last year of the Carter Administration, inflation rose to 13.5%. The top individual tax payer rate was 70%, unemployment was 7.4%, and the federal government grew while enacting huge new spending programs. We’re heading down the same path today. During that period, the US economy was the worst it has ever been since the Great Depression.
When Reagan took office, he wiped out price controls that were preventing oil companies from profitably drilling for and refining oil, drilling rigs started running and oil began to flow again. Even though there was a recession in 1982 brought on by the Fed increasing interest rates and reducing the money supply to combat the sky-high inflation in Carter’s final year in office, by the end of 1982 inflation was less than 4% and well under control. By 1986, the top marginal tax rate was down to 28% and oil was down to $20 per barrel. The economy was prospering and booming. The tax cuts combined with other initiatives created the largest sustained economic growth in our history. Our economy grew by more than a third in size and there was a $15 trillion increase in American wealth during the Reagan years. Capitalism and prosperity were forever joined.
Memo to President Obama and Congressional Democrats: We do not approve of Socialism.
We approve of the following:
· Cut individual and corporate income taxes
· Cut government spending
· Cut useless and expensive programs
· Avoid protectionist legislation
· Maintain low interest rates
· Control the money supply
· Incent businesses to expand, jobs and wealth will follow
· Crack down on employers of illegal aliens
· Protect and defend our borders
· Arrest and deport those here illegally
· Encourage people to have self-respect and be self-sufficient, instead of encouraging dependency on the government
We’ve all talked with those from prior generations who scoffed at the notion of accepting a government handout or welfare check. If welfare was used, it was temporary in nature until work could be found. There was something called pride and self-respect. Today, welfare has become a way of life. Self-respect has become self-disgrace. Pride has been overpowered by apathy. Our liberal Democratic leadership continues to promote government dependency because it serves a clear purpose: it secures a constituent base. They are metaphorical pimps feeding and controlling needy prostitutes. They are the Lords to their voting serfs.
Do liberal Dems know better, or do they have another agenda? Do Republicans have the backbone to stand on principle and fight? Is a third party needed? While the unanimous House Republican vote against the spending bill was promising, I suspect that we could take 535 average everyday citizens, replace the entire Senate and House, and do a better job than our elected 'leaders.'
But then, they have not set the bar very high. Most have forgotten why they have been elected. When Chuck Schumer made a comment about the American people not caring, it showed just how far out of touch with reality he is, and is also an indictment of those who continue to vote him and others like him into office. Maybe this will change. I sincerely hope that Congress finds the collective common sense and courage to realize that this is not about party politics or special interests; it’s not about lobbying which is nothing more than legalized bribery. They need to stop the greed and arrogance; and for a moment stop being a Democrat or Republican and start thinking like and being an American. Our children deserve it.
Call your Senator and Congressman.
First, consider this. If you or your family earn more than $92,000 per year, (and many do, but would scoff at being called affluent especially in the Northeast), then congratulations. You belong to a select group of taxpayers in the top 20% of all wage earners. You also have the blessed distinction of paying 80% of all taxes collected. The top 20% pay 80% of ALL the tax. Nice, huh? Moreover, the top 50% wage earners pay a staggering 97% of all taxes. This means that the bottom 50% of all tax filers pay only 3% of all taxes collected. Put another way, 5 of every 10 people pay only $3 out of every $100 in tax collected. Sounds like a deal to me. For them.
To make matters worse, the Tax foundation verified that 32% of all tax returns filed were from people who paid no federal income tax at all. How is this possible? This is possible because of tax exemptions and earned income tax credits which reduce some filer's tax liability to zero, so 32 % pay nothing. And now Obama wants the people who do all the heavy lifting to lift even more. The fact is, the Dems essentially want to REDUCE taxes on those who already pay a disproportionately small amount and provide more handouts to those who already pay nothing or next to nothing in an effort and build support, and yes, dependency in the Democratic voting base, many of whom are here illegally. And this is being done at the expense of responsible tax payers and business owners who have been and continue to be the source of the vast majority of tax revenue and are the very people who make it possible to grow the economy through private sector investment and job creation.
Obama plans on taking more money from the heavy lifters by not extending the Bush tax cuts enacted in 2000. I’m not a Bush apologist. He abandoned core conservative principles and all fiscal responsibility early on, was a failure in many ways, and is largely responsible for Dems having so much power today. However, the Dems have repeatedly slammed the Bush Administration saying that his tax cuts were only for the corporations and the wealthy. This is simply not true. According to IRS income statistics, in 2000 before the Bush tax cuts, the top 10% wage earners paid 67% of all tax. Last year this number was close to 71%. So during a period of time when Bush was supposedly taking care of his buddies in big oil, the highest earners actually paid more tax than before. How could this be possible if the tax cuts were for the privileged few? I never saw this announced on MSNBC or Meet the Press. What Obama and the liberal Dems seem to miss is that when you lower taxes, people tend to put more effort into earning income since less of it is taxable. When you raise taxes, people tend to put less effort into earning income since more of it is taxable, and more effort into finding ways to avoid paying tax. And the latter is not good for anyone. Try explaining that to a liberal.
It’s clear how to stimulate the economy, it’s been proven. The Dems want to ignore that even Kennedy in the ‘60s achieved this by using methods unheard of by some in his party. He cut marginal tax rates, capital gains, and inheritance taxes, and by 1968 that increased our revenues by more than 60 percent.
In 1980, the last year of the Carter Administration, inflation rose to 13.5%. The top individual tax payer rate was 70%, unemployment was 7.4%, and the federal government grew while enacting huge new spending programs. We’re heading down the same path today. During that period, the US economy was the worst it has ever been since the Great Depression.
When Reagan took office, he wiped out price controls that were preventing oil companies from profitably drilling for and refining oil, drilling rigs started running and oil began to flow again. Even though there was a recession in 1982 brought on by the Fed increasing interest rates and reducing the money supply to combat the sky-high inflation in Carter’s final year in office, by the end of 1982 inflation was less than 4% and well under control. By 1986, the top marginal tax rate was down to 28% and oil was down to $20 per barrel. The economy was prospering and booming. The tax cuts combined with other initiatives created the largest sustained economic growth in our history. Our economy grew by more than a third in size and there was a $15 trillion increase in American wealth during the Reagan years. Capitalism and prosperity were forever joined.
Memo to President Obama and Congressional Democrats: We do not approve of Socialism.
We approve of the following:
· Cut individual and corporate income taxes
· Cut government spending
· Cut useless and expensive programs
· Avoid protectionist legislation
· Maintain low interest rates
· Control the money supply
· Incent businesses to expand, jobs and wealth will follow
· Crack down on employers of illegal aliens
· Protect and defend our borders
· Arrest and deport those here illegally
· Encourage people to have self-respect and be self-sufficient, instead of encouraging dependency on the government
We’ve all talked with those from prior generations who scoffed at the notion of accepting a government handout or welfare check. If welfare was used, it was temporary in nature until work could be found. There was something called pride and self-respect. Today, welfare has become a way of life. Self-respect has become self-disgrace. Pride has been overpowered by apathy. Our liberal Democratic leadership continues to promote government dependency because it serves a clear purpose: it secures a constituent base. They are metaphorical pimps feeding and controlling needy prostitutes. They are the Lords to their voting serfs.
Do liberal Dems know better, or do they have another agenda? Do Republicans have the backbone to stand on principle and fight? Is a third party needed? While the unanimous House Republican vote against the spending bill was promising, I suspect that we could take 535 average everyday citizens, replace the entire Senate and House, and do a better job than our elected 'leaders.'
But then, they have not set the bar very high. Most have forgotten why they have been elected. When Chuck Schumer made a comment about the American people not caring, it showed just how far out of touch with reality he is, and is also an indictment of those who continue to vote him and others like him into office. Maybe this will change. I sincerely hope that Congress finds the collective common sense and courage to realize that this is not about party politics or special interests; it’s not about lobbying which is nothing more than legalized bribery. They need to stop the greed and arrogance; and for a moment stop being a Democrat or Republican and start thinking like and being an American. Our children deserve it.
Call your Senator and Congressman.
Monday, February 23, 2009
Hillary Begs China to buy more U.S. Treasuries
Well, we knew this was coming. If China is smart, they'll say no, but we'll be happy to continue buying up U.S. Companies.
Hillary:
"To boost the economy, the U.S has to incur more debt, she said, shortly before departing for Washington. "It would not be in China's interest if we were unable to get our economy moving," Clinton said. "So by continuing to support American Treasury instruments, the Chinese are recognizing our interconnection. We are truly going to rise or fall together. We are in the same boat and, thankfully, we are rowing in the same direction."
Translation:
We're bankrupt and need China's help. They have a lot invested in us, and stand to lose if we fail. So they really need to help fund our Socialist programs.
Hillary Pleads with China: Buy Our Debt
Hillary:
"To boost the economy, the U.S has to incur more debt, she said, shortly before departing for Washington. "It would not be in China's interest if we were unable to get our economy moving," Clinton said. "So by continuing to support American Treasury instruments, the Chinese are recognizing our interconnection. We are truly going to rise or fall together. We are in the same boat and, thankfully, we are rowing in the same direction."
Translation:
We're bankrupt and need China's help. They have a lot invested in us, and stand to lose if we fail. So they really need to help fund our Socialist programs.
Hillary Pleads with China: Buy Our Debt
ACORN: Squatters Have Right to Stay in Homes, Housing is a Right
Stuart Varney of FOX Business grills Bertha Lewis, Executive Director of the New York branch of ACORN. Varney is tenacious and exposes one of the goals of ACORN.
Life, Liberty, the Pursuit of Happiness... and... Housing??
Stuart Varney vs. ACORN
Life, Liberty, the Pursuit of Happiness... and... Housing??
Stuart Varney vs. ACORN
Tuesday, February 10, 2009
Congress Carpe Diem
In 55 B.C. Cicero said: “The budget should be balanced, the treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed lest Rome become bankrupt. People must again learn to work, instead of living on public assistance."
Apparently no one listened. Now in 2009, we are forming the United Socialist States of America (U.S.S.A). Far fetched? It has happened to Europe and we are heading down the same path. Now, I agree that there should be some spending in targeted areas (infrastructure, alternative energy, education. We have a Congress who does not miss an opportunity to chastise and ridicule (and rightfully so) the Bush administration for spending like drunken sailors and abandoning all fiscal conservatism. So what is Congress’ response? Borrow and spend even more, so what if we don’t have it? It will be repaid some day, (wink-wink) by future generations. Last fall, Henry Paulson scared Congress into hastily approving TARP funds for banks to lend in order to give the economy a desperately needed kick start. The dark alternatives discussed in those closed-door sessions have since been identified as complete economic collapse, catastrophe, chaos and national panic. Thing is, the banks who received the funds have lent little, if any of the money, choosing instead to hoard the cash because they still did not have a good handle on the value of the assets they had secured with prior loans. So, the kick start has not happened, and the last time I checked we have not gone under Martial Law due to the inevitable collapse that was sure to happen if Congress did not listen to Henry Paulson.
The liberals in Congress are seizing this opportunity to grow government and increase our dependency on it for years to come. As a catalyst, they’re using a chief executive whose credentials include college professor and community organizer. Well, he was in the Senate as well, but while there he never authored even one piece of legislation. But he’s eloquent, speaks of change and describes air force one as ‘spiffy’. Congress is also preying on the fear of the American people who are being sold a bill of goods. But people are wising up. People realize that we are bankrupt as country, dependent on other nations to support us by purchasing our treasury securities; that we send out $70 billion each month more than we bring in; and we’re now borrowing even more to try to solve the problem. People realize that if you’ve maxed out your credit card and you go into further debt to pay off the first one, what problem have you solved? People realize that our own Congressional Budget Office concluded that the spending package will actually hurt the economy more in the long run than if we were to do nothing, because the massive government debt would crowd out private investment, actually leading to a lower Gross Domestic Product over the next 10 years. People realize that the way to increase GDP and grow the economy is through private sector investment fueled by tax reductions, not by bloated government controlled spending.
Robert Hall from MIT and Susan Woodward from UCLA, both PhD economists undertook a study to determine the effects of government spending on GDP going back to WWII. They concluded that spending multipliers result in GDP growth of about 1; that is for every dollar of ours spent by the government, roughly $1 is returned in additional growth; basically break-even. Christina Romer, Obama’s Economic Advisory chair, authored a paper in 2007 ‘THE MACROECONOMIC EFFECTS OF TAX CHANGES’ studying the effects of tax reductions on GDP. It’s important to note that Romer is considered by her peers to be one of the world’s foremost experts on the Great Depression; and generally one of the most respected economists anywhere.
Among the findings were:
‘A Tax increase of one percent of GDP lowers real GDP by roughly three percent’
‘Investment falls sharply in response to tax increases’
‘Tax cuts have very large and persistent positive output effects’
So even Obama’s own advisors have argued the merits of tax cuts for stimulating economic growth. This is supported by many economists around the country. But Congress knows better. Oh they’ll throw some tax cuts in there, right next to the cash for illegal aliens in the form of tax rebates; billions for ACORN; 850 million for Amtrak who has never shown a profit; and this very disturbing plan –
James C. Capretta wrote on National review:
“There’s now $20 billion in new discretionary appropriations for HHS in the bill.
What’s just as troubling is the large number of far-reaching policy changes tucked away in the bill.
For instance, the Democratic majority is laying the foundation for government rationing of health care—and the public has heard virtually nothing about it.
The bill provides $1.1 billion for a new program of comparative effectiveness research. The idea is to study medical practice patterns, new products, and new technology to determine what is ‘cost effective.’ In the UK, a similar program run by the National Institute for Clinical Evidence (NICE) is used to deny payment by the government for certain drugs and procedures that are said to be ‘cost ineffective.’
Democratic lawmakers will deny that rationing is their intent, but that is not credible. Why create a government program to study what’s cost effective if not to use the information to inform payment and coverage decisions? The problem is that this kind of research inevitably includes value judgments (how much is an extra year of life worth?)”
James C. Capretta is a fellow at the Ethics and Public Policy Center and a health policy and research consultant.
Cost for Amtrak who has never shown a profit – $850 Million
Cost to fund ACORN – $4 Billion
Cost of tax ‘rebates’ to illegal aliens – Lord knows
Cost of an inept and corrupt government – Priceless.
Apparently no one listened. Now in 2009, we are forming the United Socialist States of America (U.S.S.A). Far fetched? It has happened to Europe and we are heading down the same path. Now, I agree that there should be some spending in targeted areas (infrastructure, alternative energy, education. We have a Congress who does not miss an opportunity to chastise and ridicule (and rightfully so) the Bush administration for spending like drunken sailors and abandoning all fiscal conservatism. So what is Congress’ response? Borrow and spend even more, so what if we don’t have it? It will be repaid some day, (wink-wink) by future generations. Last fall, Henry Paulson scared Congress into hastily approving TARP funds for banks to lend in order to give the economy a desperately needed kick start. The dark alternatives discussed in those closed-door sessions have since been identified as complete economic collapse, catastrophe, chaos and national panic. Thing is, the banks who received the funds have lent little, if any of the money, choosing instead to hoard the cash because they still did not have a good handle on the value of the assets they had secured with prior loans. So, the kick start has not happened, and the last time I checked we have not gone under Martial Law due to the inevitable collapse that was sure to happen if Congress did not listen to Henry Paulson.
The liberals in Congress are seizing this opportunity to grow government and increase our dependency on it for years to come. As a catalyst, they’re using a chief executive whose credentials include college professor and community organizer. Well, he was in the Senate as well, but while there he never authored even one piece of legislation. But he’s eloquent, speaks of change and describes air force one as ‘spiffy’. Congress is also preying on the fear of the American people who are being sold a bill of goods. But people are wising up. People realize that we are bankrupt as country, dependent on other nations to support us by purchasing our treasury securities; that we send out $70 billion each month more than we bring in; and we’re now borrowing even more to try to solve the problem. People realize that if you’ve maxed out your credit card and you go into further debt to pay off the first one, what problem have you solved? People realize that our own Congressional Budget Office concluded that the spending package will actually hurt the economy more in the long run than if we were to do nothing, because the massive government debt would crowd out private investment, actually leading to a lower Gross Domestic Product over the next 10 years. People realize that the way to increase GDP and grow the economy is through private sector investment fueled by tax reductions, not by bloated government controlled spending.
Robert Hall from MIT and Susan Woodward from UCLA, both PhD economists undertook a study to determine the effects of government spending on GDP going back to WWII. They concluded that spending multipliers result in GDP growth of about 1; that is for every dollar of ours spent by the government, roughly $1 is returned in additional growth; basically break-even. Christina Romer, Obama’s Economic Advisory chair, authored a paper in 2007 ‘THE MACROECONOMIC EFFECTS OF TAX CHANGES’ studying the effects of tax reductions on GDP. It’s important to note that Romer is considered by her peers to be one of the world’s foremost experts on the Great Depression; and generally one of the most respected economists anywhere.
Among the findings were:
‘A Tax increase of one percent of GDP lowers real GDP by roughly three percent’
‘Investment falls sharply in response to tax increases’
‘Tax cuts have very large and persistent positive output effects’
So even Obama’s own advisors have argued the merits of tax cuts for stimulating economic growth. This is supported by many economists around the country. But Congress knows better. Oh they’ll throw some tax cuts in there, right next to the cash for illegal aliens in the form of tax rebates; billions for ACORN; 850 million for Amtrak who has never shown a profit; and this very disturbing plan –
James C. Capretta wrote on National review:
“There’s now $20 billion in new discretionary appropriations for HHS in the bill.
What’s just as troubling is the large number of far-reaching policy changes tucked away in the bill.
For instance, the Democratic majority is laying the foundation for government rationing of health care—and the public has heard virtually nothing about it.
The bill provides $1.1 billion for a new program of comparative effectiveness research. The idea is to study medical practice patterns, new products, and new technology to determine what is ‘cost effective.’ In the UK, a similar program run by the National Institute for Clinical Evidence (NICE) is used to deny payment by the government for certain drugs and procedures that are said to be ‘cost ineffective.’
Democratic lawmakers will deny that rationing is their intent, but that is not credible. Why create a government program to study what’s cost effective if not to use the information to inform payment and coverage decisions? The problem is that this kind of research inevitably includes value judgments (how much is an extra year of life worth?)”
James C. Capretta is a fellow at the Ethics and Public Policy Center and a health policy and research consultant.
Cost for Amtrak who has never shown a profit – $850 Million
Cost to fund ACORN – $4 Billion
Cost of tax ‘rebates’ to illegal aliens – Lord knows
Cost of an inept and corrupt government – Priceless.
Monday, February 2, 2009
Dick Morris' Political Insider
This is from NewsMax today written by Dick Morris:
Stimulus Could Trigger Rampant Inflation
Monday, February 2, 2009 2:13 PM
By: Dick Morris & Eileen McGann Article Font Size
The central economic crisis of the next five years may not be the greed-induced worldwide recession we're now mired in - but the rampant global inflation that the politicians' response to that recession could trigger. Recessions, and even depressions, come and go. But inflation has the potential to stick around for decades.
Look at what the TARP bailout has done to the money supply. From 2000 through 2007, the money supply rose on average by $351 billion a year, with annual growth only once exceeding $400 billion. In 2008, the money supply grew by $691 billion. And that includes only the first half of the TARP package and none of the coming "stimulus" package.
In the short term, this increase in the money supply won't cause inflation, but only counteracts the deflationary effect of all the money that vanished in the meltdown, or went into hiding since. But when confidence returns and that cash comes back into circulation, we'll have much too much money chasing too few goods and services - a prescription for rampant inflation.
Today's woes were induced by a combination of a political willingness to let businesses make money by making loans they shouldn't have and of businesses' alacrity in walking through that open door in search of mind-numbing profits. But we seem to be collectively blind to the likelihood that the same political tendency to give out goodies and spare us pain is now leading the government to borrow so much and so increase the money supply that inflation will be the consequence.
After all, it was the political desire to bring good news to voters that led government to make it possible for people to buy homes they couldn't afford and kids to go to colleges they couldn't pay for and families to buy cars that were too costly and businesses to survive off debt long after they ceased to turn a profit.
Now, the same desire to get re-elected is leading politicians to offer a trillion-dollar stimulus package to benefit (some) voters, along with a bailout to banks, insurers, car companies and (soon enough, no doubt) countless other failing firms.
Eventually, we will all feel the pain when inflation sets in. Then, government will have no choice but to induce a deep recession akin to the one Paul Volker triggered in the late '70s and early '80s to cure the "stagflation" left us by the policies of Presidents Lyndon Johnson, Richard Nixon and Jimmy Carter.
President Obama and the Democrats in Congress are selling soothing syrup to their political base at a price of massive inflation and agony for the future. What Franklin Delano Roosevelt said in his first inaugural address holds doubly true today: "Faced by failure of credit, they have proposed only the lending of more money."
Democrats have, of course, always been willing to tolerate a certain level of inflation in an effort to hold down joblessness. But the lengths to which they are now going to spare us immediate pain and the implications of a doubling of the money supply in one year are beyond rational calculus.
It's hard to believe that any administration, set of economists or political party could be this irresponsible or so focused on the next election that they are literally willing to mortgage much of the next decade to win it.
Stimulus Could Trigger Rampant Inflation
Monday, February 2, 2009 2:13 PM
By: Dick Morris & Eileen McGann Article Font Size
The central economic crisis of the next five years may not be the greed-induced worldwide recession we're now mired in - but the rampant global inflation that the politicians' response to that recession could trigger. Recessions, and even depressions, come and go. But inflation has the potential to stick around for decades.
Look at what the TARP bailout has done to the money supply. From 2000 through 2007, the money supply rose on average by $351 billion a year, with annual growth only once exceeding $400 billion. In 2008, the money supply grew by $691 billion. And that includes only the first half of the TARP package and none of the coming "stimulus" package.
In the short term, this increase in the money supply won't cause inflation, but only counteracts the deflationary effect of all the money that vanished in the meltdown, or went into hiding since. But when confidence returns and that cash comes back into circulation, we'll have much too much money chasing too few goods and services - a prescription for rampant inflation.
Today's woes were induced by a combination of a political willingness to let businesses make money by making loans they shouldn't have and of businesses' alacrity in walking through that open door in search of mind-numbing profits. But we seem to be collectively blind to the likelihood that the same political tendency to give out goodies and spare us pain is now leading the government to borrow so much and so increase the money supply that inflation will be the consequence.
After all, it was the political desire to bring good news to voters that led government to make it possible for people to buy homes they couldn't afford and kids to go to colleges they couldn't pay for and families to buy cars that were too costly and businesses to survive off debt long after they ceased to turn a profit.
Now, the same desire to get re-elected is leading politicians to offer a trillion-dollar stimulus package to benefit (some) voters, along with a bailout to banks, insurers, car companies and (soon enough, no doubt) countless other failing firms.
Eventually, we will all feel the pain when inflation sets in. Then, government will have no choice but to induce a deep recession akin to the one Paul Volker triggered in the late '70s and early '80s to cure the "stagflation" left us by the policies of Presidents Lyndon Johnson, Richard Nixon and Jimmy Carter.
President Obama and the Democrats in Congress are selling soothing syrup to their political base at a price of massive inflation and agony for the future. What Franklin Delano Roosevelt said in his first inaugural address holds doubly true today: "Faced by failure of credit, they have proposed only the lending of more money."
Democrats have, of course, always been willing to tolerate a certain level of inflation in an effort to hold down joblessness. But the lengths to which they are now going to spare us immediate pain and the implications of a doubling of the money supply in one year are beyond rational calculus.
It's hard to believe that any administration, set of economists or political party could be this irresponsible or so focused on the next election that they are literally willing to mortgage much of the next decade to win it.
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