Saturday, September 26, 2009

The Federal Government - The Real "Crisis"

President Obama has elevated every issue to the Healthcare "Crisis", the Financial "Crisis" the Global Climate "Crisis" using the word "crisis" in order to justify the greatest expansion of the federal government in the history of the United States. The fact is that most people have health insurance in the United States. While stabilizing the banking system was important, and some additional regulation may be warranted; we have moved beyond the "crisis". And, though there may be global warming, it is probable that we are experiencing cyclical climatic change as has occurred many times in the earth's history and long before there were carbon omissions. So, the CAP and TAX legislation proposed by Obama to deal with the "crisis" will have little impact on climatic change that may happen with our without carbon omissions.

Obama says he is believer in Capitalism and free markets as he acts to take over the banks, major car companies and the largest insurance company in the world. Obama acts to distort markets with the Cash for Clunkers program. The SwindleUS Package was just another way to grow the federal government and divert money from the private sector to the public sector. Obama's HealthScare Plan amounts to the federal take over of 1/6 of the US economy. The regulations Obama plans to govern financial institutions amounts to further nationalization of the banks and mortgage companies. President Obama is clearly no Capitalist that's for sure. Actions speak much louder than phony words. President Obama's actions and his Socialist and even Communists appointments tell us that he is a raging Socialist plain and simple.

But, let's get back to the word "crisis". The real "crisis" that is coming is the bankruptcy of the United States because Obama's trillions of dollars in deficit spending are not sustainable. And, I am beginning to believe that Obama and the Democrat Socialists that control Congress intentionally want to bankrupt our nation to establish a command economy and big government based on a Socialist or even Communist model. What other conclusion is feasible? Otherwise, how can any rational politician of either political party vote for trillion dollar deficits that make President Bush II look like a skin flint.

Vladimir Lenin, the first Communist Dictator of the Soviet Union once said "if you want to destroy a country, just destroy its money". If the trillions of dollars in deficit spending continue, it will cause the collapse of the dollar and our national credit rating. We are already seeing ominous signs. The Federal Reserve is buying back Treasury Bonds, shortly after they are sold, presumably at a discount, by printing money. This is telling us that the markets are not willing to provide the United States all the credit that we need today let alone a few years from now. Projections show the national debt rising from $5.8 Trillion last year to 14.3 Trillion in 2019 and from 40.8% of GDP in 2008 to 67.8% in 2019. These numbers are staggering and do not include the Trillions of dollars in unfunded liability for Social Security, Medicare, Medicaid and federal pensions. The International Monetary Fund states that governments reach a critical point when a government has to borrow just to pay the interest on the debt. This amounts to using one credit card to pay off another credit card; but with higher interest rates.

The Congressional Budget Office states that the US will reach this point in 2019, when the US is expected to borrow $722 Billion just to pay the net interest on the debt. Financial markets have not yet priced in the possibility that politicians would rather default on the debt, as happens in Banana Republics, or substantially raise taxes. As such, President Obama and the Democrat Socialists that control Congress are playing Russian Roulette with our nation. The odds are pretty good that this will all occur before 2019 because government spending is simply out of control. As such, default on the national debt is a real possibility. Now that is a real "crisis" not one fabricated by President Obama.

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