We the United States are already far past the proverbial rabbit hole of no return on debt. Yet Obama told Americans last week: regardless of what you, the American People, want; regardless of what virtually all economic experts say; against all common sense; and in defiance of proof that there is no manmade Global Warming and that ObamaCare is a fraud… not a fix of any of the problems with healthcare, and that both are job killers, cost and tax hikes and the biggest government power grabs in US history, he is pushing forward with his progressive agenda.
Well… now both China and Japan have announced that we have to ‘guarantee’ every penny of what they’ve loaned us to bail out Fannie Mae and Freddie Mac. And insiders have leaked that Obama has now given the word to lay off of security observation of China. Hmmm?? Connection?? Just like when they poisoned our pet’s food and our kids with lead paint on toys a few years ago; we just had to roll with it because they own us… What comes next?
Our National Debt, China, and What We Must Do – Video
Checkout the Debt Clock: The U.S. Debt Clock
'>Our Debt Continued… JP Morgan Chase - Video
BEHIND OBAMA'S PHONY DEFICIT NUMBERS
Just released by Dick Morris, former advisor to former (Progressive) President Bill Clinton and author of: C
President Obama is being disingenuous when he says that the budget deficit he faced "when I walked in the door" of the White House was $1.3 trillion. He went on to say that he only increased it to $1.4 trillion in 2009 and was raising it to $1.6 trillion in 2010.
Congressman Joe Wilson might have said "you lie," but we'll settle for "you distort."
(As Mark Twain once said, there are three kinds of lies: "lies, damn lies, and statistics.")
Here are the facts:
In 2008, Bush ran a deficit of $485 billion. By the time the fiscal year started on October 1, 2008, it had gone up by another $100 billion due to increased recession-related spending and depressed revenues. So it was about $600 billion at the start of the fiscal crisis. That was the real Bush deficit.
But when the fiscal crisis hit, Bush had to pass TARP in the final months of his presidency which cost $700 billion. Under the federal budget rules, a loan and a grant are treated the same. So the $700 billion pushed the deficit -- officially -- up to $1.3 trillion. But not really. The $700 billion was a short term loan. $500 billion of it has already been repaid.
So what was the real deficit Obama inherited? The $600 billion deficit Bush was running plus the $200 billion of TARP money that probably won't be repaid (mainly AIG and Fannie Mae and Freddie Mac). That totals $800 billion. That was the real deficit Obama inherited.
Then...he added $300 billion in his stimulus package, bringing the deficit to $1.1 trillion. This $300 billion was, of course, totally qualitatively different from the TARP money in that it was spending not lending. It would never be paid back. Once it was out the door, it was gone. Other spending and falling revenues due to the recession pushed the final numbers for Obama's 2009 deficit up to $1.4 trillion.
So, effectively, Obama came close to doubling the deficit.
Obama seems not to understand that the deficit is the jobs problem. To add to the deficit in the hope of creating more jobs is an oxymoron. Additional deficit spending just crowds out small businesses trying to borrow money to create jobs and consumers seeking credit to buy cars and homes.
Soon, when the Fed stops printing money and we have to borrow real funds from real lenders, the high deficit will send interest rates soaring, further retarding growth and creating a cost-push inflation.
The interest rate we are now paying for the debt -- about 3.5% -- is totally artificial and based on the massive injection of money supply created by the purchase of mortgage backed securities by an obliging Federal Reserve. Once these injections of currency/heroin stop, the rate will more than double, sending our debt service spending into the stratosphere. Once we had to choose between guns and butter. Now we will have to choose between guns and butter on the one hand and paying our debt service on the other.
Obama's program of fiscal austerity in this new budget is a joke. He freezes very selected budget items while he shovels out new spending in his stimulus packages. If he wanted to lower the deficit, here's what he could do:
1. Cancel the remaining $500 billion of stimulus spending and
2. Cancel the $300 billion of spending in stimulus II.
Those are the real numbers. Or, as Al Gore would have it, "the inconvenient truth."
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