Tuesday, June 26, 2012

US & Europe - Living On Credit Cards

The United States and Europe are living on credit cards, rolling over their National Debt each month as if they were a person using one credit card to pay off another credit card never actually dealing with paying off the debt.   Once politicians figured out that they could borrow to pay for unsustainable, promised entitlements to buy elections and wars around the world, it has been non stop borrowing and deficit spending.   Socialist President Obama has added $5 Trillion to our $16 Trillion National Debt in just his first term in office, with no end in sight, more than any other President in American history.  European countries are facing the cliff as Ireland, Portugal, Spain, Italy and Greece each have entitlements, promised as part of their nanny state and a National Debt that is imploding on them. 

Politicians that have been borrowing and deficit spending for years, including President Obama, are calling for more borrowing.   We see the end result.  Spain is facing interest rates of 7% in a 2% market, which is impossible. Greece will run out of money in July and not be able to borrow in the market at all.  The European Central Bank will have to give Greece billions of Euros more to prevent financial chaos and riots in Greece, which will happen anyway.  It appears that Ireland will need more money too after they already received more than hundred billion Euros several months ago.  Spain, with 25% unemployment, will be back at the trough after receiving more than 120 billion Euros to save their banks.  Italy, where they still make shoes, will be the next shoe to drop because their National Debt exceeds 125% of their Gross Domestic Product. 

Greece will be thrown out of the Euro, even if it remains in the Euro Zone because it represents such a small percentage of the European economy that at some point it will make no sense to throw good money after bad.  Greece will then go back to using the drachma, their original currency and then they will default on their debt, which impact mostly European banks in Germany, France and Britain, all of which will require government bail outs.  Germany will attempt to contain the contagion to save Italy and Spain,  the third and fourth largest economies in Western Europe; but that will be tough.  Ireland and Portugal, again much smaller economies, may be forced to abandon the Euro, going back to their original currencies, only to default on their debt, as well.  

The fact is that it will be impossible to keep using a credit card to roll over all this debt.  This is no different than any person, mired in debt, that eventually must file bankruptcy because the balloon just bursts.   The day of reckoning is coming in Europe, as well.  The Germans will have to pick winners and losers to save their economy and what is left of the Euro Zone and the Euro.  As the saying goes, if we don't act to prevent the same scenario from happening in the United States and soon, there go us. 

Socialist President Obama wants to double down and continue adding to our National Debt.  Obama is pushing for more deficit spending SwindleUS Plans to support government workers.   We are now borrowing 40 cents on every dollar spent by the federal government.  This borrowing amounts to $4 Billion a day that is being added to our $16 Trillion National Debt.   Since Obama can't run for reelection on his failed record, Obama is telling the American people that Republicans support dirty air and water, starving poor kids and throwing granny over a cliff when we push for responsible spending cuts and entitlement reform.   Obama is a real drama queen and President Pinnochio, that's for sure. 

The reality is that we must cut federal government spending by a common sense elimination of redundant programs, agencies, departments and 500,000 civilian employees through normal attrition not lay off's.  We must bring total compensation, benefits and pensions for government employees in line with what is common in the private sector.  Doing these things alone will save Billions of dollars each year.  Next, we must reform entitlements.  Retirement age for full benefits for those under 55 years old, must go up to 68 years old because people are living so much longer.  Even though the rich have paid for Medicare many times over,  in order to protect the poor, Medicare must be means tested so that those that can afford to pay more are paying for at least 50% of their Medicare benefits.   And, we must secure our border.   We cannot continue being Mexico's Welfare Program.

We have to squeeze the rampant fraud out of Disability Benefits, Food Stamps, Welfare.   Those that can work should be cut off these programs.  And Medicaid should be block granted to the states, not based on an endless supply of money; but rather what we can afford.   Finally, ObamaCare which is now projected to cost about double what was originally estimated must be repealed in it entirely because we cannot afford another new entitlement that will bankrupt the federal and state governments.  

If we don't do these things and soon, the United States is destined to become another Greece, which will result in civil strife on our streets and a loss of our national sovereignty.   We can't let that happen.  The Ryan Budget is a good starting point to begin this process; but it is only the beginning.   We will have to go further to bring back sound fiscal management to our country.   Of course, none of this will happen as long as Socialists remain in government, which is the reason we must sweep them all out of office, including President Obama, in 2012 and 2014.  

We must do this to prevent the bankruptcy of the United States.   We must do this to preserve our freedom, our nation and way of life for the sake of our children and grandchildren.   We cannot allow the United States to turn into Greece.   We have to drain the swamp in Washington DC and many state capitals to take back our country.   So put your hip boots on and get your check books out to support Conservatives across the country to get the job done. 

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