By Max Rugemer | Saturday, November 6th, 2010 at 6:44 am
The Democrats are trying the Weimar Republic approach of the 1930s to solve their destruction of the US economy. The Federal Reserve announced plans to buy $600 billion in United States treasuries this week. This strategy, under the current buzzwords of quantitative easing, is risky:
…. starting in 2009, the Fed embarked on what it called quantitative easing — a fancy term for creating money out of thin air. Over a little more than a year, it bought more than $1.7 trillion in assets, mainly U.S. Treasury and agency debt.
Today, U.S. bank reserves are close to $1 trillion — an enormous amount compared with the normal $4 billion to $8 billion.
On Tuesday, with the economy struggling and many Fed officials still worried about the specter of deflation, the Fed embarked on a second round of quantitative easing, dubbed QE2. The plan is to spend $600 billion to buy even more government debt….
Another term for the shell game that the Fed is playing with our collective worth is monetizing the debt:
The shell game that the Fed is currently playing does not change the basic equation: Money is being printed out of thin air so that it can be used to buy US government debt.
Finance Minister Schaeuble sharply criticizes US Federal Reserve move
….The US plan, called quantitative easing, aims to put more money into the pockets of companies, consumers and homeowners but some financial analysts have expressed fears that it could lead to excessive inflation and an intensification of currency imbalances.
Schaeuble said he would not let Germany’s opposition to the Fed’s action get pushed to the back burner and that the issue would be addressed during the G20 summit in South Korea next week.
“I wish the Americans every success in dealing with their big problems effectively and swiftly,” he said. “But if they look at the successes that Germany has had they will see that more and more deficits is not the way to do it.”
Europe’s largest economy, Germany is enjoying a strong recovery from the global economic crisis and has resisted calls for scaling back its austerity measures and lowering taxes….
Unbridled printing of dollars is the biggest risk to the global economy, an adviser to the Chinese central bank said in comments published on Thursday, a day after the Federal Reserve unveiled a new round of monetary easing.
China must set up a firewall via currency policy and capital controls to cushion itself from external shocks, Xia Bin said in a commentary piece in the Financial News, a Chinese-language newspaper managed by the central bank.
“As long as the world exercises no restraint in issuing global currencies such as the dollar — and this is not easy — then the occurrence of another crisis is inevitable, as quite a few wise Westerners lament,” he said….
The Federal Reserve launched a fresh effort on Wednesday to support the struggling U.S. economy, committing to buy $600 billion in government bonds despite concerns the programme could do more harm than good….
The bursting of the real estate bubble and the ensuing recession have hurt jobs, home prices and now Social Security.
This year, the system will pay out more in benefits than it receives in payroll taxes, an important threshold it was not expected to cross until at least 2016, according to the Congressional Budget Office.
Stephen C. Goss, chief actuary of the Social Security Administration, said that while the Congressional projection would probably be borne out, the change would have no effect on benefits in 2010 and retirees would keep receiving their checks as usual.
The problem, he said, is that payments have risen more than expected during the downturn, because jobs disappeared and people applied for benefits sooner than they had planned. At the same time, the program’s revenue has fallen sharply, because there are fewer paychecks to tax.
Analysts have long tried to predict the year when Social Security would pay out more than it took in because they view it as a tipping point — the first step of a long, slow march to insolvency….
Now, add the cost of Obamacare. Bad, bad decision!
By Don Rowan | Saturday, February 6th, 2010 at 11:17 pm
Interesting: The Obama Recession now has cost more jobs than any other in modern times. Obama and the Democrats have spent a massive amount of borrowed money promising to produce some 3 Million new jobs — but have produced less than 100,000. Is that performance, Mr. Democrat Politician? The Obama Administration does not have one senior person that has ever run a business or had to make payroll — no wonder they know nothing about business and finance or how to get out of their recession. Is that performance, Mr. Democrat Politician? And, then the Obama Administration wants to give a $3,000 tax credit to those firms that hire people — a bit stupid inasmuch as business hiring decisions are not made on the basis of tax credits but on business needs.
The Obama Administration is quietly hoping the housing market gets better before the citizens figure our how and why the problem came into being. Senator Dodd, Senator Kennedy, and other democrats in Congress rammed through a bill changing the actuarial base for lending — then forced financial institutions to make risky loans which stood a good chance of going into default, which is what happened. The Democrats were hoping to buy votes. Senator Dodd is calling it quits — before the citizens of Connecticut tar & feather him and run him out of town on a rail. Senator Kennedy has been sober now for almost six months. Is that performance, Mr. Democrat Politician?
The Obama Administration is now wanting to raise taxes on all portions of the economy. How stupid — but keep it up Mr. President and you will have a Republican majority to deal with. Why don’t the Democrats adopt a few Republican ideas and get the country our of the Obama Recession? From The Washington Times — Obama, GOP sparring over job creation proposals:
….Obama pushed Congress to use $30 billion that had been set aside to bail out Wall Street to start a new program that provides loans to small businesses, which the White House calls the engine for job growth. Republicans, meanwhile, taunted Obama with a familiar refrain: Where are the jobs the president promised in exchange for the billions of dollars already spent?….
To help the recovery, Obama asked Congress to use leftover money from the Troubled Asset Relief Program, or TARP, to provide to small banks so they can make more loans to small businesses. Republicans have criticized the move, arguing any money leftover from the bailout should be used to reduce the budget deficit.
In the weekly GOP address, Rep. Jeb Hensarling of Texas chided Obama for proposing a  budget last week that would increase spending, taxes and the national debt….
Hensarling … said the stimulus package and the growing government debt have added to the country’s economic problems.
“Democrats chose to go it alone and jam through their stimulus,” Hensarling said. “What did the American people get? A bill for $1.2 trillion and 3 million more jobs lost.”
When Congress passed, without reading, the $787 billion Porkulus Bill back in February, Brother O and the Bread and Circuses Salvation Sideshow Administration promised it would create jobs and boost the economy.
Frankly, the largest spending bill in American history was nothing more than a gift of taxpayer money to Democrats for their pet projects and special interest groups. Touted for saving both jobs and country by propagandists in the mainstream media, the bill has done little to stimulate job or economic growth, but it did increase the national debt, escalate unemployment rates, and produce dubious projects.
According to clueless Joe Biden, “Every dollar being spent from Recovery Act [Porkulus] is helping put someone back to work.”
Flash floods of stimulus spending have put workers on the following projects:
$300,000 for a GPS-equipped helicopter to hunt for radioactive rabbit droppings at the Hanford nuclear reservation in Washington state.
$30 million for a spring training baseball complex for the Arizona Diamondbacks and Colorado Rockies.
$11 million to build a bridge connecting Microsoft’s two headquarter campuses, which are separated by a highway, in Redmond, Washington.
$430,000 to repair a bridge, which carries 10 or fewer cars a day, in Iowa County, Wisconsin.
$800,000 to build a backup runway, which serves about 20 passengers a day, for the John Murtha Airport in Johnstown, Pennsylvania.
$219,000 for Syracuse University to study the sex lives of freshmen women.
$2.3 million for the U.S. Forest Service to rear large numbers of arthropods, including the Asian longhorned beetle, the nun moth, and the woolly adelgid.
$3.4 million for a 13-foot tunnel for turtles and other wildlife attempting to cross U.S. 27 in Lake Jackson, Florida.
$1.15 million to install a guardrail for a persistently dry lake bed in Guymon, Oklahoma.
$9.38 million to renovate a hundred year-old train depot, which has not been used for three decades, in Lancaster County, Pennsylvania.
$2.5 million in stimulus checks sent to the deceased.
$6 million for a snow-making facility in Duluth, Minnesota.
$173,834 to weatherize eight pickup trucks in Madison County, Illinois.
$20,000 for a fish sperm freezer at the Gavins Point National Fish Hatchery in South Dakota.
$380,000 to spay and neuter pets in Wichita, Kansas.
$300 apiece for thousands of signs at road construction sites across the country announcing that the projects are funded by stimulus money.
$1.5 million for a fence to block would-be jumpers from leaping off the All-American Bridge in Akron, Ohio.
$1 million to study the health effects of environmentally friendly public housing on 300 people in Chicago.
$356,000 for Indiana University to study childhood comprehension of foreign accents compared with native speech.
$983,952 for street beautification in Ann Arbor, Michigan, including decorative lighting, trees, benches and bike paths.
$148,438 for Washington State University to analyze the use of marijuana in conjunction with medications like morphine.
$462,000 to purchase 22 concrete toilets for use in the Mark Twain National Forest in Missouri.
$3.1 million to transform a canal barge into a floating museum that will travel the Erie Canal in New York state.
$1.3 million on government arts jobs in Maine, including $30,000 for basket makers, $20,000 for storytelling and $12,500 for a music festival.
$71,000 for a hybrid car to be used by student drivers in Colchester, Vermont, as well as a plug-in hybrid for town workers decked out with a sign touting the vehicle’s energy efficiency.
The clowns in the Bread and Circuses Administration say that $159 billion from Porkulus has created or saved more than 640,000 jobs. Even though more than half the jobs were in education and not in the private sector as promised, that economists say it’s impossible to calculate jobs that are saved, and that ABC News calculated the cost to taxpayers as $160,000 per job, clueless Joe obstinately insists, “we’re on track.”
Come November 2010, clueless Joe, Brother O, and his clowns in the Salvation Sideshow will discover just how well that track and the Porkulus Act has worked out for them.
In ten years, postage stamps will cost $1.34, if you believe Barack Hussein Obama. The hand-written letter, a social grace of bygone years, will be forgotten. Hallmark will fold, as everyone sends e-cards. You will pay all your bills online. And aren’t you glad you have email to keep in touch with your friends?
The Competitive Enterprise Institute obtained internal Treasury Department documents under the Freedom of Information Act (FOIA) discussing the cost of “cap and trade.” These documents, which your own government would have preferred that you did not see, estimate that “cap and trade” will siphon “on the order of $100 to $200 billion annually” from the United States productivity into the federal coffers. The government has blacked out the text describing the actual cost.
If you believe the $100 billion estimate, based on the population at the time of this post, that is $325 per person annually. Even if it does not come out of your pocket directly, it WILL come out of your pocket, as higher utility bills and as increased cost of fabrication for everything made in the United States. (Of course, one of those “unintended consequences” will be to drive more jobs outside our country.)
If you believe the $200 billion estimate, that is $650 per person annually, or $1761 per household at 2.71 persons per household. Government estimates are usually low by a factor of about 300%, but for the sake of argument let’s split the difference between these two on-paper estimates and say that the cost will be $488 per person annually. That comes out to $1.34 per day per person.
Now here’s a clip of Barack Hussein Obama from a June 25, 2009 press conference addressing the Waxman-Markey energy tax, aka “Cap and Trade” bill — Waxman-Markey to cost Americans only “a postage stamp per day”…
Unfortunately, the cost will not be borne by “all Americans.” The ones who are working will pay the bill. As of August 2009, that is 139,649,000 workers. That comes out to $1074 per worker annually, using today’s unemployment rate. And for that hefty price, our hapless worker gets to admire all the new wind farms (decimating the song bird population) and solar panel arrays.
Democrats are making their classic mistake here. They always enact legislation assuming that all the other variables in the mix will stay the same. But they won’t. The higher cost of energy will drive jobs out of the United States, reducing the labor pool and the income tax revenues gleaned from the workers. That will force the government to raise tax rates to pay for their stupidity, and more jobs will be lost, creating a downward spiral in the economy.
If the Democrats’ plans for universal health insurance are enacted, the punitive costs of that socialism will hit simultaneously with the “cap and trade” plan for global redistribution of wealth, further trashing America’s prospects for prosperity. The whole world would be better served by establishing the United States as a model for successful economy, rather than bringing it down to the average level of the globe so that others “don’t resent us.”
Currently, we have a government run by university academics who have no concept of the real world. As some have pointed out, there is no one in Obama’s White House who has run so much as a candy store. And they are trashing the economy of our once great nation.
Clearly, a smart investment would be to stock up on Liberty Bell stamps. The “forever stamps” are currently selling for 41-cents per First-Class one-ounce letter. That would give you a 327% return on investment over a ten-year holding period.
Note that in most of the extant analyses, the $200 billion estimate was used. Therefore all of these results will be higher than our calculations in this post, because we used the average of the two government estimates, a cost of $150 billion per year.
Also, you will see the figure $1,761 per household used consistently. That figure is obtained by spreading the $200 billion cost over an estimated 113,571,834 US households, or by applying the $650 per person figure to a 2.71 average persons per household. These numbers come from projecting the population growth rate forward ten years.
All cost estimates prepared by our government, no matter which party is in power, are lies.
Walter E. Williams, Professor of Economics at George Mason University, has an article out today called — Washington’s Lies:
President Obama and congressional supporters estimate that his health care plan will cost between $50 and $65 billion a year. Such cost estimates are lies whether they come from a Democratic president and Congress, or a Republican president and Congress. You say, “Williams, you don’t show much trust in the White House and Congress.” Let’s check out their past dishonesty.
At its start, in 1966, Medicare cost $3 billion. The House Ways and Means Committee, along with President Johnson, estimated that Medicare would cost an inflation-adjusted $12 billion by 1990. In 1990, Medicare topped $107 billion. That’s nine times Congress’ prediction. Today’s Medicare tab comes to $420 billion with no signs of leveling off. How much confidence can we have in any cost estimates by the White House or Congress?….
Congress may confiscate every state pension fund into the bankrupt social security system. Indications that this strategy is being discussed in Washington have come in to us from several sources over the last few days.
Tonight, a correspondent who has just come home from a Tea Party Townhall Meeting in Salado, Texas with US Representative John Carter (R-Round Rock) issued the warning. She said, “Representative Carter informed the crowd that talk has been bandied about Congress to appropriate every state’s pension plans into the bankrupt Social Security System.” She is absolutely 100% sure that she understood him correctly.
Dear readers, please understand that we are bloggers, and not professional journalists. Our information comes from ordinary folk who do the best they can to understand the political scene. Ordinarily, this would seem so outrageous that we would wait to share the news until we could get more clarification. But the current administration has moved with such breathtaking swiftness to federalize private assets and plunge our country into socialism, that we feel the need to sound the alarm, just in case.
We’ll keep updating this post as we find out more.
A bipartisan government commission yesterday recommended to the Clinton administration that it launch an aggressive effort to tap the retirement funds of millions of Americans to help pay for rebuilding the nation’s roads, bridges and highways and give the economy a lift.
President Clinton has indicated past support for the concept, which would represent an unprecedented effort by the federal government to deal with its budget woes by turning to the more than $4 trillion in cash, stocks and other investments held by pension funds.
Some opponents in the pension industry, who worry about protecting retirees, said they fear Congress might revoke the generous tax treatment afforded pensions if they actively oppose the initiative.
The recommendations by the congressionally chartered Infrastructure Investment Commission, which has had the strong support of Senate Finance Committee Chairman Daniel Patrick Moynihan, D-N.Y., include establishing the National Infrastructure Corp. It would be a new government-sponsored corporation that would encourage at least $30 billion in investment by pension funds. Several billion dollars in seed money for the new corporation would come from a new energy tax now under consideration.
Energy tax. Sound familiar?
And two people who watched the Democratic convention in 1996 said:
I was absolutely horrified to hear the Democrats propose at their convention that the government should take money out of private pension funds to sink into yet more federal programs.
The Democrats have already raided the Social Security fund to pay for their unending government spending. We do not need them ruining our pension funds the same way!
This is another Democrat scheme to take even more of our money without having to face public opposition to tax increases. We already have to work over four months a year just to pay the taxes on our wages – we should not have to sacrifice our pensions, too!
Vote against the Democrats and Clinton while you still have money in your pension fund, or you may not have any pension fund left when you retire.
Here is a warning to us all. The Argentine state is taking control of the country’s privately-managed pension funds in a drastic move to raise cash.
Should we worry about our pensions?
It is a foretaste of what may happen across the world as governments discover that tax revenue, and discover that the bond markets are unwilling to plug the gap. The G7 states are already acquiring an unhealthy taste for the arbitrary seizure of private property….
This rumor definitely caught my attention. After doing a little investigation, it looks like it’s entirely true. Last year, House Democrats were contemplating abolishing 401(k) tax breaks and redirecting those funds into a new system of government-controlled retirement accounts to which all workers would be forced to contribute. And more information about the Democrats’ immoral plans to ransack every American’s personal retirement has been reported on CNN, The Wall Street Journal, and Carolina Journal. Now that they control both houses of Congress and have a big-government socialist in the White House, it looks as though Democrats are ramping up their machinations.
A coalition of large US state pension funds has backed the private equity industry’s opposition to new rules on takeovers of troubled lenders, saying the plan would have a “chilling effect” on attempts to revive the country’s banking system.
The warning by funds from states including New York, New Jersey and Oregon, which manage billions of dollars on behalf of public workers and are big investors in private equity, will strengthen the buy-out industry’s lobbying against the proposed measures….
….when one mentions the idea of this government seizing your IRA and/or 401k and rolling it over into the bankrupt Social Security Administration, the usual reaction — even after all the evidence of the last six months — is scoffing. “They wouldn’t dare,” I heard from one individual. “There would be a revolt,” said another. Still someone else commented, “If you think there was outrage over this health care bill, let them try that!”
Well, maybe, but given the arrogance of these Statists, that is a natural next step. It is one that has been floated before, and don’t think that it has gone away. Consider that individual retirement accounts, be they private or corporate, have been accumulated tax free. In the eyes of Obama, Pelosi, Reid, et al, that translates into you getting away with something. Somehow you got “free” money. We’re talking about accounts totaling hundreds of billions (possibly trillions) of dollars! Believe me, they’re salivating….
After what we have witnessed so far this year, anything is possible today in America. And even if they don’t actually do it, imagine how much windfall revenue would accrue to the federal government if the American people only thought they were going to do it. An executive for a large Midwestern company told me: “I would pull every dime out of my 401k, pay the taxes and penalties and stick the cash in my mattress before I would let those (expletive deleted) have it!”
The government will have to borrow nearly 50 cents for every dollar it spends this year, exploding the record federal deficit past $1.8 trillion under new White House estimates.
Budget office figures released Monday would add $89 billion to the 2009 red ink — increasing it to more than four times last year’s all-time high as the government hands out billions more than expected for people who have lost jobs and takes in less tax revenue from people and companies making less money.
The unprecedented deficit figures flow from the deep recession, the Wall Street bailout and the cost of President Barack Obama’s economic stimulus bill — as well as a seemingly embedded structural imbalance between what the government spends and what it takes in….
In simple terms, the US government will borrow half of what it spends this year and the next! What’s wrong with that? We have never been here before. “Hope and change” is navigating in uncharted waters!
By Jay Printz | Monday, March 23rd, 2009 at 5:52 pm
I think we are headed for a major problem, and after reading the article, I am more convinced than ever!!!! Hang onto your hats folks, it’s going to be a helluva rough ride. From EarthFrisk comes this warning:
Obama Just Created the Depression of 2009
Obama just put the nail in the economic coffin of the United States. He did it with sleight of hand once again using the big news of the day (AIG bonus ‘crisis) to hide his real move which was to absolutely 100% destroy the economy of the United States. This is that serious….
We are about to see massive inflation… Even Obama supporters can’t be so blind as to not see what he is doing? Surely even they can see that this path to marxism will not be a pretty one. Watch this and prepare.
We have been betrayed by the media. They put life altering and nation altering news on page 20, hiding the truth of what was just done to our nation….
I guarantee you we will now be descending more and more into the abyss of socialism and marxism. On March 19, 2009 Obama had the Treasury invest 1 trillion dollars that we do not have. The fed created this out of thin air in an imitation of Germany in the 1920s and 30s.
ALERT: Price of Gold up $80 almost immediately, everyone is abandoning he dollar and we are about to be slammed like a third world nation….
Glenn Beck tries to explain it here:
“This is the fall of America. The media is helping by hiding the fact that Obama just turned America into Weimar Germany in 1932.”
All across America on April 15, outraged American taxpayers will protest Barack Hussein Obama’s profligate waste of hundreds of billions of OUR MONEY. There will be marches on city halls, speeches in public forums, and wherever there is a river, a bay, or a harbor there will be a “tea party.” Also on April 15, individual taxpayers will mail bags of tea to the White House.
The idea only got started a month ago, when CNBC reporter Rick Santelli spoke from the floor of the Chicago Board of Trade on Thursday, February 19. Talking about the public wrath over the waste of the so-called “stimulus” money, he called for a “Chicago Tea Party” and the trading floor erupted in cheers (see video). Within days, cities around the country were holding impromptu tea parties.
In San Diego, political activist Chad Peace used MeetUp.com to organize a local group. His announcement quickly drew a large membership:
The Boston Tea Party was an act of direct protest by American Colonists demanding representation in the British Government. They became known as the original patriots.
The San Diego Tea Party of 2009 and Tea Parties all across America will reinvigorate that American and Patriotic spirit; one that demands respect for individual rights and property. As the bailouts spiral out of control, we are forced to fund failed banks. With foreclosures on the rise, we are made the collateral of reckless spending. And, when the bills come due, the IRS knocks on the door of “self-responsibility.”
America is the land of opportunity. To succeed AND to Fail. Without consequences, what is our incentive to learn? What is our incentive to produce? On July 4, 2009, those that ask nothing from the government but the protection of our inalienable right to succeed, will gather in Los Angeles, Chicago, Boston, and many other cities across this great nation in an historic act of direct protest.
But Chad did more than just organize San Diego. He formed a political action committee called Political Exploration and Awareness Committee PAC (PEAC PAC) and created a website to coordinate news of tea parties across the country. His website, ReTeaParty.com, is now grassroots central for the tea party movement. There is an interactive map of the United States — you can click on your state and find out what activism is available to you in your own area.
Recently Chad was interviewed by Griff Jenkins of Fox News Channel concerning the bailouts, stimulus and the tea parties popping up all over the country. Here’s a clip:
The organizer is Rus Thompson, a true blue conservative taxpayer advocate active in western New York politics whose ancestors came to America on the Mayflower. Here’s the harbor:
And here’s a map:
Hey, this sounds like a terrific Saturday outing. For our readers who live in western New York, leave an RSVP for Rus in the comments section and make plans to attend. If it is a brisk March day on the waterfront in Buffalo, we recommend that after the tea party you go to Santasiero’s Restaurant on Niagara Street for dinner. My husband used to go there with his parents when he was a kid, and twenty-some years later he and I used to take our kids there for a Saturday night out. That was over forty years ago, and I’m told that the place is still terrific. If you need some convincing, check out this dinner for under $10:
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