Saturday, January 23, 2010

The Bill Comes Due for Socialism in America

By Alan Caruba

"The problem with socialism is that you eventually run out of other people's money." -- Margaret Thatcher, former British Prime Minister

It began as a beautiful cruise to a land of “hope and change”, but it has become a nightmare in which the ship of state is being deliberately steered toward a whirlpool of debt from which, if Obama is successful, the nation cannot escape.

One of the primary reasons the U.S. economy has grown over the years has been the confidence in its innovation and productivity. It has generated investment from around the world from those who wanted to profit from our success story. There was a time when U.S. securities were the safest in the world, but that is no longer the case.

On December 24, 2009, the U.S. Senate voted to raise the ceiling of the government debt to $12.4 trillion, described by an Associated Press reporter as “a massive increase over the current limit and a political problem that President Barack Obama has promised to address next year.”

On January 20, 2010, barely a month later, Senate Democrats “proposed allowing the federal government to borrow an additional $1.9 trillion to pay bills, a record increase that would permit the national debt to reach $14.3 trillion.”

This is the reason, by virtue of the Massachusetts special election; the United States has dodged the bullet of a “reformed” healthcare system which would have slashed a half trillion dollars from Medicare coffers while adding millions more people to its rolls.

It would have turned the health insurance industry into a public utility. They would have ceased to be private enterprises of competing companies. It would have driven physicians out of practice. It would have bankrupted the nation and reduced a widely acknowledged excellent health system to that of a third world nation.

The proposed “Cap-and-Trade” bill, a huge tax on all energy use—the lifeblood of any economy, must be defeated. This will come most likely from a lack of votes as Senate Democrats are finally scared enough of the electorate to act with some degree of rationality.

In a recent commentary, Jerome R. Corsi, the author of “America for Sale: Fighting the New World Order, Surviving the Global Depression, and Preserving USA Sovereignty”, wrote “With the recession and the huge stimulus package added to the beginning of the baby boomers retiring, United States debt is already at 50 percent of gross domestic product (GDP) by 2019, according to the Congressional Budget Office estimates of the Obama administration plans as they currently stand.”

In other words, the U.S. government is committed through various “entitlement” programs like Social Security, Medicare and Medicaid, along with other expenditures, to spend more than it takes in via taxes. The other major expense is for defense. These three factors represent half of the annual U.S. budget.

The situation is so grave that, on January 18, The Washington Times editorialized that “Obama is killing the economy.”

The bill has finally come due for decades of socialism that began in the 1930s.

“The 2009 budget deficit tripled over 2008. The deficit as a percentage of gross domestic product (GDP) went from 3.1 percent in 2008 to 9.9 percent in 2009. The deficit for the first month of fiscal year 2010 was $176 billion, which was greater than the $161 billion deficit for the entire 2007 fiscal year.”

At present rates, the public debt of the United States will reach 85 percent of GDP by 2018, just eight years from now, and 100 percent by 2022. It would be 200 percent by 2038 unless some brakes on spending are not applied before the ship of state gets sucked down beneath an ocean of debt.

What does President Obama propose? He wants to apply an unconstitutional special tax on banks! And not all banks, but just those banks on “Wall Street” whom he blames for the current recession.

His most recent proposal to regulate the banking system drove down the Dow Jones Average signaling further fears of his intention to micro-manage the economy. It is a recipe for disaster and shares of the big Wall Street banks in particular fell. He is deliberately attacking the great engine of the nation’s economy.

Wall Street is not the problem. The government is the problem.

Obama made no mention of the real culprits for the housing market meltdown, the reckless spending of Fannie Mae, Freddie Mac, and the Community Reinvestment Act that underwrote a program that put $12 trillion of mortgage loans, half of all such loans, in the hands of the federal government!

As John Berlau of the Competitive Enterprise Institute points out, “President Obama’s proposal (would) bring back 1930s-like separation of commercial and investment banks, dubbed Glass-Steagall II or Glass-Steagall 2.0, (and) would do little to prevent the problem of financial institutions being too big to fail. What it would do is hurt economic recovery, reduce types of financing available to businesses big and small, and give European and Asian financial services firm a huge competitive advantage over their U.S. counterparts.”

The billions still unspent in the so-called “Stimulus” bill should be returned to the Treasury. Plans to expand Medicare and Medicaid need to be scrapped. Taxes on greenhouse gas emissions, mostly carbon dioxide, must be avoided if for no other reason that CO2 has nothing to do with a non-existent global warming.

The capacity of the United States to recover calls for an end or at least a cap on the mindless spending of taxpayer millions on the pet projects and crony deals of Representatives and Senators.

It calls for an end to the restrictions on the exploration for and extraction of the nation’s vast coal, oil and natural gas reserves, including in ANWR and aggressively in the offshore continental shelf.

It calls for an end to huge multi-million dollar subsidies for “renewable energy” schemes such as solar and wind power.

It calls for an end to the ethanol mandates that dilute the mileage of every gallon of gasoline and actually increase CO2 emissions!

It calls for an end to congressional mandates on the auto industry that have, in part, driven two of its largest manufacturers, General Motors and Chrysler, into bankruptcy. The U.S. must divest its ownership in both companies.

It calls for reining in the rogue government agency, the Environment Protection Agency that is attempting to unilaterally impose control of CO2 emissions and has long engaged in practices that impede economic growth for business, industry, and the nation’s agricultural sector.

There are many reasonable and rational steps that can and should be taken, but it seems clear that the President, with the support of a Democrat controlled Congress, has no intention of taking any of these steps and, indeed, is intent on bankrupting the U.S. government and its people.


Suzie Q said...

Our children are being ENSLAVED. That is the BOTTOM LINE of these debt figures. They will have to labor JUST to PAY THE DEBTS accrued by promising social programs to previous generations AND this massive wealth transfer to bankster elites.

When the younger generation realizes they've been asked to become slaves - how long do you think this government will stand??

Adam A said...

You are hilarious. If Stephen Colbert ever throws in the towel, you and your up=down, right=wrong, warming=cooling humor would be a worthy replacement. Keep 'em coming!

Alan Caruba said...

What you find hilarios happens to be factual enough for those cited in the commentary to take note of is the way we got to this point and, yes, there is a right and wrong way for individuals and nations to behave. If you don't know that and if you can't see that, you will be laughing all the way to the poorhouse and/or the grave.

Adam A said...

Obama policies are "responsible for only a sliver of the deficits." According to a budget analysis done by the New York Times, "Mr. Obama's main contribution to the deficit is his extension of several Bush policies, like the Iraq war and tax cuts for households making less than $250,000. Such policies -- together with the Wall Street bailout, which was signed by Mr. Bush and supported by Mr. Obama -- account for 20 percent" of the increase between the FY2008 and FY2009 budget deficit estimates. The New York Times wrote that 70 percent of the increase is attributed to a combination of economic hardships, including "the fact that both the 2001 recession and the current one reduced tax revenue, required more spending on safety-net programs and changed economists' assumptions about how much in taxes the government would collect in future years" and "new legislation signed by Mr. Bush ... like his tax cuts and the Medicare prescription drug benefit."

Alan Caruba said...

Adam, quoting The New York Times is like quoting is a totally leftist newspaper whose bias would embarrass any journalist.

There is a laundry list of known remedies to get the economy going again, but Marxists are either unfamiliar with them or would not enact them.

Guy said...

Adam ... you need to get a clue.

Who is this Bush guy you mention repeatedly? Oh yeah, I remember, he's the guy that USED to be President, a long time ago....

As Alan correctly noted, you need to seriously examine your information sources. Quoting sources like the New York Times is laughable. The Times is a joke, and so is Colbert, who you make fun of, but are obviously watching as well.

Playing the blame is just another way the left tries to keep responsible people like us from focusing on the facts. The left prefers to live in a fantasy world, ignoring the facts and yearning for some sort of magical panacea that will never materialize.....

The FACTS are that this administration is fiscally IRRESPONSIBLE, Democrats in general, past, present, and future, are fiscally IRRESPONSIBLE, and fiscal responsibility is the ONLY solution to our problems. You can't spend more than you make without suffering the consequences, and the same is true for our government. The only difference is that WE suffer the consequences of THEIR irresponsibility. They just take their goodies and go home....

I'm not arguing that Bush was fiscally responsible ... he wasn't. But nothing he spent even compares to what this administration has spent, and plans to spend. He had nothing to do with the financial meltdown in the housing and banking industries, except for failing to STOP the Democrats from turning our lending institutions into giant ATM's for the irresponsible among us.

Quit trying to blame everything on the PAST administration, and start looking at what THIS administration is doing. Aside from the learning opportunity it provides, looking back is pointless. We need to focus on what is happening now, and stop it before it ruins our country for us and future generations....

goonxxi said...

It might help for those in power to take a gander at the Constitution. As it stands the socialist/marxist agenda, as well as much of what the federal government today attempts to accomplish, is none of their purview and they lack the authority to assume control of the people's affairs as they do. The theft of the public's wallet begins with good intent. It ends in failed outcomes and massive debt, and it is obvious that failing is what the federal government does best.