In just 12 months between 2007 and 2008, Washington tripled the federal deficit from $161 billion to $459 billion, and the Bush administration, Congress and the Fed all swore that this was a one time event. They lied. Washington tripled the deficit again to $1.4 trillion in 2009, and solemnly promised that this too was a one time event. They lied. In 2010 the deficit was again $1.3 trillion. In 2011 the deficit was again more that $1.3 trillion and the running rate now for 2012 is $1.6 trillion. Now the Democrats and Republicans in Washington, and president Obama and presidential candidate Romney can’t agree on a mere 8% across the board cut in federal programs that will occur automatically in January, 2013, it is already law on the books, calling it a “fiscal cliff” as if the world was coming to an end.
On September 14, Federal Reserve chairman Bernanke announced a new round of hundreds of billions of dollars more in new money printing, QE3, supposedly to help the economy grow. This is more bank and Wall Street bailout as we have seen with the previous bailouts/stimulus. More fiat money is not needed by the economy, but rather it is a managed real time wind down to smaller and less intrusive government, simplified regulations and less uncertainty and only then lower taxes managed in line with lower federal expenses.
The official debt of the federal government is over $16 trillion, the largest government debt in the history of civilization, but that number does not include the debt the government took over from Fannie Mae and Freddie Mac or the money owed to seniors for Social Security and Medicare, or the pensions owed to veterans and government employees, or another unauthorized, secret (according to GAO’s audit) $16 trillion in loans by the Federal Reserve to a laundry list of U.S. and international banks considered “too big to fail.” Added together the debt of the U.S. federal government is over $120 trillion… ten times larger than the entire U.S. economy. Government (federal + state + local) is growing 4 X faster than the national income, according to the Bureau of Economic Analysis.
The federal government is growing its debt at a rate of more that $1 trillion per year. . There have been 4 straight years of federal deficits over $1 trillion and 4 straight years when a Democrat-controlled Senate has not passed a budget… the federal government has had no budget. Washington’s policies are failing. Americans are suffering. Nearly 23 million are unemployed, underemployed or have stopped looking for work. Median household income has declined by $4,300. CNN reports that the average net worth of Americans has “plummeted nearly 40%.” http://money.cnn.com/2012/06/11/news/economy/fed-family-net-worth/
Virtually none of those trillions of dollars has ended up in the accounts of American families, nor has it created new jobs. But American taxpayers must pay back those trillions in principle plus interest. Since 1993 when Bill Clinton reversed Reagan’s bill and put the Social Security/Medicare Trust Fund “on budget” in order to claim that he balanced the budget, Americans have been paying interest on their own lifetime contributions to the Social Security/Medicare Trust Fund. The government has been using these funds and letting the taxpayer pay interest on their own money. And, there are many more examples.
According to the Comptroller of the Currency, U.S. banks held $176 trillion in derivatives at the height of the debt crisis in 2008. Signed by Obama in July 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (http://www.gpo.gov/fdsys/pkg/PLAW-111publ203/content-detail.html) is subtitled
“An act to promote the financial stability of the United States by improving accountability and transparency in the financial system, to end “too big to fail”, to protect the American taxpayer by ending bailouts, to protect consumers from abusive financial services practices, and for other purposes.” “The Act implements financial regulatory reform sponsored by the Democratically controlled 111th United States Congress and the Obama administration.” http://en.wikipedia.org/wiki/Dodd%E2%80%93Frank_Wall_Street_Reform_and_Consumer_Protection_Act
However today, U.S. banks have received multiple bailout infusions and now hold more than $231 trillion in derivatives – 40% more than at the worst point of the 2008/2009 financial crisis when we were told that the economy could collapse. We were told The Dodd-Frank Act would fix such problems – it’s right there in the subtitle – yet now the problem is 40% worse. This derivatives risk alone places the U.S. in greater danger than any other country past or present. Federal money is being gambled by banks in high risk derivatives and taxpayers are on the hook.
Once again, Thomas Sowell is on target in his article about Obama, “Socialist or Fascist?” (1) The Obama administration is almost text book fascist, and only the exceptions are socialist. Obama has signed 900 Executive Orders, an indication of his fascism. If Congress and the courts don’t do what he wants, Obama just does it by Executive Order. Fascism means that government controls corporations, but does not own them, whereas a socialist government owns corporations. Fascist control is done with the purse strings and regulations. In a communist government, there are no corporations and no private property; products and services are supplied by the government itself. The fascist system gives politicians control without the nuisance of responsibility. Examples of the socialist exceptions in the Obama administration are the government’s acquisition bailouts of GM, AIG, Fannie Mae, and some banks. The problem for Americans is much bigger than Obama’s fascist administration.
Bottom Line: This is not about Democrats vs Republicans, or liberals versus conservatives, or fascist versus socialists. This is about Americans versus their government. Our government is out of control.
“What Washington needs is adult supervision.” ~ Barack Obama, fundraising letter, Oct. 2006
“The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies…Increasing America’s debt weakens us domestically and internationally. Leadership means that ‘the buck stops here.’ Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.” – Sen. Obama, Congressional Record, S.2237-8, 3/16/06
This essay borrows heavily from: American Apocalypse, by Martin D. Weiss, Ph.D.