Monday 18 May 2009
The inimitable Adam Smith once quipped that "there is a great deal of ruination in a country". But then Mr Smith had never met President Obama whose idea of financial responsibility would make the feckless and cynical Louis XIV look like a nineteenth British treasurer. This ideologue has set the United States on a spending and borrowing binge that is unprecedented in its history and which is impossible to sustain.
This joker is borrowing about 50 cents for every dollar he is spending. To be honest, he's not actually borrowing it. No one in his right mind would lend this irresponsible spendthrift a dime. No, it's the US citizenry, many millions of whom were sufficiently deluded to vote for this clown, who are being made to borrow not billions of dollars but trillions. Thanks to Obama and his fellow congressional villains the US is facing a tidal wave of red ink and it has yet to sink in to the public mind what this means for future living standards. Yet this political charlatan has the gall to publically warn his fellow Americans that their reckless extravagance will have to be severely curbed. Last week the Poseur in Chief stated:
We can't keep on just borrowing from China. We have to pay interest on that debt, and that means we are mortgaging our children’s future with more and more debt.' Holders of US debt will eventually 'get tired' of buying it, causing interest rates on everything from auto loans to home mortgages to increase, Obama said. 'It will have a dampening effect on our economy.
This character makes a debauched Bible-punching fraud look like John the Baptist. He gave the country a deficit heading for $2 trillion dollars and trillions more as far as the horizon and beyond, he goes on a spending spree that would embarrass Champagne Charlie, he takes out a mortgage on the country that could break it financially and he then lectures the citizens for being irresponsible. This is like a rapist accusing his victim of being a slut who had it coming to her. The man is ideologically driven and criminally irresponsible.
And behind his thoroughly iniquitous behaviour there stands that rotting edifice called the Democratic Party, the most corrupt organisation in America. (The only difference between congressional Democrats and the Mafia is that the Mafia has a code of honour). Standing behind this suppurating mob of bandits is the so-called mainstream media, a group so mendacious, so contemptuous of the truth that their duplicity would embarrass even Goebbels.
So while Obama lectures the country on fiscal responsibility he and his merry band of economic trolls are scheming to impose on America a phony universal health plan the expense of which is so monstrous that it could be the final financial nail in American prosperity and military power. And I stress military power for a reason. If Obama's spending is not halted the American military will have to be savagely cut.
There is no doubt in my mind that the destruction of US military power is one of the driving forces behind Obama's manic rush to try and impose irreversible levels of spending and debt on the US economy of such proportions that the push to virtually demilitarise the country in an effort to curb spending and check rising taxes might become irresistible.
But there is one thing that eventually brings the Obama's of this world undone: economic laws. Bernanke is doing his best to promote Obama's agenda by trying to flood the country with money. And I do mean flood. Never before has the Fed acted so recklessly with the money supply. However, Bernanke knows that this must lead to surging inflation and if not halted a collapsing dollar and rocketing interest rates. But to apply the monetary brakes means raising interest rates. That would cause share markets to dive along with bond prices.
America is not a banana republic. Obama cannot call out a horde of redshirts to do his bidding. He cannot order the military to close down radio stations and harass and arrest opponents. What he can do — and has — is instruct his media groupies to assassinate the character of his critics. He can also stack the bureaucracy and the courts with politically corrupt leftists (is there any other kind?) which he and the congressional Democrats are intent on doing.
Nevertheless, his arrogant speech on the economy has revealed that he has at least a glimmering of where the economy is heading if something is not done to change economic course. But being a Dem his solution will be higher taxes. And that is probably what lay behind the speech. Having foisted on Americans an unsustainable financial burden in a mere 100 days he is now preparing them for tax increases. And make no mistake, under these circumstance only the super rich — the ones who supported him — will be able to avoid the burden, everyone else will pay through the nose. There will be no escape for the great mass of Americans.
It is interesting though that Democrats are so dense that they believe additional regulations, more taxes and greater spending are the solution to every problem — particularly the ones they create. Taxes will hit savings and investments and they will strike at productivity. Regulations will greatly restrict energy production and raise prices. This in turn will curb production and raise unemployment and savage industry.
It should be obvious to any reasonably intelligent person that if these policies are not abandoned or simply dramatically restrained the next four years could make the Carter presidency look like an economic Elysium.
Gerard Jackson is Brookesnews' economics editor