Tag Archives: balanced budget

The Petro Currency System

The reserve currency issue is an issue that should transcend partisan politics, as leaders of both parties have ignored this issue over the years to our country’s possible peril.  I want everyone to really think about this issue, because the financial storm that would ensue following the end of our reserve currency status and the eventual collapse of the dollar would make the 2008 housing crisis look like a spring shower. Here’s an excerpt from a 2011 article from CNBC warning of the prospects of losing reserve currency status:

“I think you could see a 25 percent reduction in the standard of living in this country if the US dollar was no longer the world’s reserve currency. That’s how valuable it is.”

That was a comment made back in 2011, and since then we have added a few more trillion dollars of debt, and printed a few more trillion dollars of QE (quantitative easing), “stimulus” money. For those of you unfamiliar with QE – this is a policy that started in 2009 wherein the federal reserve is literally printing and pumping into the economy approximately $80 billion a month, and the mere mention from Bernanke that he was going to slow down the printing presses made the DOW tumble a few hundred points. He quickly backed off that statement. QE is not only used to prime the DOW but it is also used to keep inflation and interest rates in check. In the article, it is mentioned that if the CPI were adjusted for actual economic realities, we would see 5% – 7% inflation on food and energy prices.

Fast forward to 2013. Recent international economic signals do not bode well for the continuance of our reserve currency status:

- China’s subtle dumping of the dollar — using bilateral trade agreements with other developing nations and, more recently, major economic powers like Germany and Japan

- The massive gold-buying spree undertaken by China and Russia — even in the face of extreme market manipulation by JPMorgan Chase and Co. and CME Group Inc.

- The dumping of long-term U.S. Treasuries by foreign creditors in exchange for short-term Treasuries that can be liquidated at a moment’s notice.

- The fact that bonds now are supported almost entirely by Fed stimulus. When the stimulus ends, America’s ability to honor foreign debts will end and faith in the dollar will crumble.

-  Blatant statements by the International Monetary Fund calling for the end of the dollar’s world reserve status and the institution of special drawing rights (SDRs) as a replacement.

These bullet points were taken from another excellent article on this issue found here, (hat tip to Spook for sending me this article) and it is a must read. Why the loss of faith in the US dollar? The fact that our government spends approx. $1 trillion more than it brings in, the fact that our government does not work within a defined budget and funds the government from continuing resolution to continuing resolution (CR’s), the fact that our debt to GDP ratio is now 101%, and the fact that there are no imminent signs of financial discipline or restraint by our federal government. This year our federal government is expected to bring in approx. $2.5 trillion in revenue, which would equal an historical high, yet they are spending $3.6 trillion and they say they need more. So the next time you hear a politician say that we need more money for education, and/or more “investment” in infrastructure, know that they are pushing us closer to the brink of financial collapse.

In spite of all of this, I remain the eternal optimist. We can avoid the loss of reserve currency status and the eventual collapse of the dollar but it will require that our elected officials define our nations priorities, put in place a budget that reflects those priorities and operate within it. It will also require that we aggressively act upon the impending economic boom of the 21st century and that is – energy. We must tap into our domestic crude oil and natural gas reserves to not only fuel our current society, but also to become a net exporter of these resources. That will generate the money necessary to put our country back on sound financial footing, but will also fuel the eventual transition to a new, greener, more sustainable energy platform.

The Obama Plan: Raise Taxes and Fake Spending Cuts

From the AP:

…The president on Monday will announce a proposal that includes repeal of Bush-era tax cuts for the wealthiest taxpayers, nearly $250 billion in reductions in Medicare spending, $330 billion in cuts in other mandatory benefit programs, and savings of $1 trillion from the withdrawal of troops from Iraq and Afghanistan, the officials said…

…Key features of the proposal:

–$1.5 trillion in new revenue, which would include about $800 billion realized over 10 years from repealing the Bush-era tax rates for couples making more than $250,000. It also would place limits on deductions for wealthy filers and end certain corporate loopholes and subsidies for oil and gas companies.

–$580 billion in cuts in mandatory benefit programs, including $248 billion in Medicare and $72 billion in Medicaid and other health programs. Other mandatory benefit programs include farm subsidies.

–$430 billion in savings from lower interest payment on the national debt…

According to the linked article, 90% of the Medicare cuts will be in the form of reduced payments to providers – and while beneficiaries are expected to pay more, they won’t pay until 2017…in other words, not until after Obama finishes his putative 2nd term.  How much you want to bet that once the providers scream – and/or start refusing Medicare cases – that the cuts never materialize?

A trillion dollars of the “cuts” are from not fighting in Afghanistan…in other words, not money already appropriated and now cut, but a mythical figure placed on the table bearing no relation to what might actually happen in Afghanistan.

Lower interest payments on the national debt?  Fine – that’ll work until we hit 16 or 17 trillion in debt and our bond prices go “Greek” on us.

This proposal is nothing but a crock of political horse manure.  For cynicism it is hard to beat. We’re on the brink of economic and fiscal disaster and Obama comes up with a plan which doesn’t fix the budget and doesn’t help the economy.  All it does is provide him with some MSM/DNC talking points in his effort to make the 2012 campaign about Congress rather than himself (the tax hikes won’t fly and the spending cuts will be resisted by his own party…so when the plan fails to pass, Obama can say, “I tried to do it, but those dratted  Republicans stopped me!”).  The United States can go drop off a cliff…Obama has more important things to do, like getting re-elected!

2012 really can’t get here fast enough…and it won’t work, Barry.  We’re all on to the scam.  Twist things as much as you like – go ahead and go through your motions.  We’re still going to crush you and liberalism next year.  We’ve all had enough of this garbage.

HAT TIPMish’s

Liberalism’s Pervasive Racism

They just can’t stop gnawing that bone – from the Washington Post:

With House Minority Leader Nancy Pelosi’s (D-Calif.) announcement Thursday of her three appointees to the bipartisan debt “supercommittee,” the panel’s 12-member roster is complete. It represents a broad range of ideological views, from House Republican Conference Chairman Jeb Hensarling (Tex.) on the right to Sen. John F. Kerry (D-Mass.) on the left.

But the group’s membership is marked by a problem that has plagued Congress — a lack of gender and racial diversity…

This just gets so tiresome – it doesn’t matter what a person’s sex or skin color is – all that matters is what they believe and what they do.  I wouldn’t care if the entire panel was made up of differently-abled trans-gendered persons of color…as long as they were patriots who had America’s best interests at heart.  The problem is not a lack of sex and skin color differences, but the fact that the liberal members of the panel – black, while, male and female – are rigid, left wing ideologues who only care about getting Obama and the rest of the Democrats re-elected.

This liberal racism just goes too far these days…everything is based upon skin color or sexual identity.  No one is allowed to broaden their mind and look at things from a different point of view.  We’re to have the “black view” or the “woman view” or the whatever view…no way that I, as a white man, can look with sympathy upon a black man, no way that he can do the same for me.

Utter rot – complete racist nonsense.  Way past time to end this sort of garbage.  America no longer has any place for people to play racial politics…and that is another thing we’re going to have to fight to end through the 2012 campaign.

Who is Bankrupting America?

Tino over at Super-Economy has the chart:

 

There is simply no arguing with this – Obama has massively increased spending since he took office.  It isn’t just a slight difference, it is night and day.  He’s gone on a binge of spending – and that means that if we want to get our deficit under control, the only rational thing to do is at least return it to the average.

The reason Obama and his Democrats won’t do this is because when they finally gained full control of the government in January of 2009 – for the first time since 1994 – they were determined to pump up all the spending they couldn’t get when all or part of the government was under GOP control.  They pined away for this…for years they dreamed of the day when the Treasury and the printing press would be entirely theirs and they could spend to their heart’s content.  They aren’t about to give it up.  First off because a reduction in spending would reduce their immediate power (they ability to buy votes with taxpayer money), secondly because they have vastly enriched their cronies and don’t dare take it away.

This isn’t about tossing granny over the cliff – cutting spending is about taking Democrat special interest groups and crony-capitalists off the government teat.  That is what the whole debate really comes down to – will we reduce the spending, save our economy and rebuild our nation?  Or will we continue to lavish money on Democrats and their hangers-on until America is destroyed?

The fight is on – 2012 will decide it; but as we fight it, don’t for a minute let Democrats tell you they are helping granny…they are just helping themselves and greedily and senselessly want to keep doing it no matter what happens.

Sen. Toomey to the Debt Committee

From NRO’s The Corner:

Sen. Pat Toomey (R., Pa.), who found out this morning that Senate Minority Leader Mitch McConnell (R., Ky.) had selected him to serve on the congressional “super-committee,” said he “very strongly hopes” the panel can reach an agreement to avoid triggering the fallback measure that includes deep cuts to defense spending. In order for that to happen, Toomey told reporters on a conference call Wednesday, both parties will have to compromise. “If this committee is going to be successful, it absolutely has to have bipartisan support,” he said. “That’s how it was set up. This has to be done in a cooperative fashion.”

The freshman senator and former Club for Growth president said his “guiding principles” on the committee will be “the twin goals of reducing the deficit and continuing to promote economic growth.” To that end, he hopes to reform the tax code in order to broaden the base while lowering rates and growing the economy. “That will also generate more revenue,” he said. “A stronger economy always does.”…

Toomey is an excellent choice and, also, a pledge to the TEA Party and conservatism in general that they have a voice in this committee.  Do read the whole linked article as Toomey lays out an excellent vision of what this committee can and should accomplish.  If good will and public spirit can accomplish anything, then Toomey will do it.

On the other hand, the purpose of the committee – as far as Democrats are concerned – is to cut defense and ratify tax hikes (especially on those “millionaires and billionaires” who make $200,000.00 a year).  Failing that, the Democrats’ hope that a smash up of the committee can be blamed on the Republicans and be used as part of the overall “smear and fear” campaign they are planning for 2012 (very telling is Reid’s selection of Sen. Murray for the committee – she is chair of the Democrat Senatorial Campaign Committee…in other words, the Democrat Senator with the most vested interest in playing pure politics on the committee).  In short, while Toomey wants to do what is right, Democrats want to claw on to power…it’ll make for an interesting battle.

At the end of it, either Toomey’s spirit of patriotic compromise will prevail, or the whole thing will blow up…but if the Republicans on the committee hang tough on core principals (genuine spending reduction and tax reform which doesn’t punish the middle class nor destroy wealth creation), then the blow up will be right in the Democrats’ face.  Fundamentally, the American people are on the side of reasonable compromise to reduce spending and grow the economy…that is what they want, and that is what the GOP must stand for.  If Democrats sabotage it then the people will see right through that…and only if the GOP caves in and goes along will we be blamed for any failure.

We are at a crossroads for our nation – between now and November of 2012 we will decide if we remain a great, free and prosperous nation, or if we are to sink in to decline and eventual destruction.  Each step we take must be informed by a genuinely patriotic desire to do what is best for America…in this, there is a time to fight it out in the trenches, and a time to seek reasonable compromise.  The opening of the debt committee is the time for reasonable compromise.  The Democrats will, I am certain, reject this course…but let them do it, first…then we’ll have the approval of the American people to get down and dirty with them.

Sarah Palin Proves She’d be a Better President

A long article on her Facebook page says all that needs to be said – do read the whole thing.  Here’s the crux of the matter regarding our debt:

… we need to get serious about our deficit. No more accounting gimmicks. No more cuts in “out-years” that never materialize. The permanent political class in D.C. might be fooling themselves with these Enron-like accounting games, but they’re not fooling the world’s capital markets. And we don’t need any more happy talk from the White House about “investing” in solar shingles and really fast trains. The White House shouldn’t even bother floating these new spending programs. We can’t afford them. Period. We need to stop this deficit spending, balance our budget, repeal Obamacare, cancel all unused stimulus funds, and reform our entitlement programs. We have to have an adult conversation about our spending commitments; circumstances have changed, and we must adapt. I know none of this will be easy, but, “thick” or not, the average American outside the D.C. politico bubble knows that we no longer have a choice! We will have entitlement reform and a balanced budget; it’s just a matter of how. We can do it ourselves in a calm, methodical, and responsible manner, or we can wait for the world’s capital markets to ram it down on us. Let’s be responsible and do it ourselves. And let’s get serious about reducing the size of government across the board and rooting out waste. How many more reports (that today are destined to merely gather dust on the shelf) do we need about duplicative and unnecessary programs before we actually do something about government waste?…

The whole thing is clear and concise and lays out the problem – fearlessly stating truths that Obama turns away from.  Obama would prefer to carp about “millionaires and billionaires” and have his minions try to make “TEA Party downgrade” go viral…but a real President will face the facts and propose changes which will solve the problem.

I don’t know if Sarah Palin will run – but if she does and obtains the nomination she’ll beat Obama in a landslide for the simple fact that she tells the truth and Obama doesn’t.

Defending the TEA Party

From NRO’s The Corner:

Sen. John McCain defended the Tea Party against Sen. John Kerry’s “tea party downgrade” remark on Meet the Press this morning.

“We could have reached an agreement a lot earlier, but the members of the House of Representatives had a mandate last November, and it was jobs and the economy and it was spending. And for them to then agree to tax increases and spending increases was obviously a repudiation of the mandate they felt they had from last November,” McCain said.

He said that much of the “dysfunction” in the current political system could be attributed to “the failure of the president of the United States to lead.”…

Some times John McCain can be infuriating, other times he’s just so right.  And gutsy – right now, the MSM/DNC drumbeat is that the TEA Party caused the problem.  Here is a chance for “moderate” GOPers to flee and mumble their agreement.  Not for John McCain – he just told it like it is:  the TEA Party is about cutting government spending.  To have agreed to tax hikes in lieu of serious spending cuts (and what we got in the deal was no where near “serious” enough to warrant signing off on revenue increases) would have been a rank betrayal.

To be sure, Democrats are all about that – in fact, over the past 40 years Democrats have mostly managed to advance their cause by gift of GOPers betraying principle and go along with whatever liberal flapdoodle is the fashion of the moment.  Remember Arlen Specter – that was the sort of “Republican” who was forever cutting the GOP off at the knees.  And that is precisely the sort of Republican the TEA Party people will not be.

Ultimately, we may have to obtain higher revenues in order to get out of this mess – but the fact of the matter is that Democrats will just lie about the spending cuts and greedily spend any increased revenue on their special interests.  In a very real sense, the Democrat leadership in the United States doesn’t care about the United States.  If they did, they would have proposed a real cut in next year’s spending – even if it were a symbolic cut of 10 or 20 billion.  I mean, of course, real cuts – not reductions in the rate of growth, but an actual spending of less money next year than we did this year.  Until Democrats show a real change of heart – show that they care more about America than they do about their own power and wealth – then we simply cannot go along with them…and thus the TEA Party standing firm against any tax hikes was an act of sublime patriotism.  It took away from those who are destroying the United States part of their ability to keep doing it.

McCain sees it; I see it, too.  Eventually, the whole country will see it – and I do believe that this growing understanding of what is really happening will destroy liberalism in 2012.

UPDATE:  In Canada, Saskatchewan gets a “TEA Party upgrade” to it’s bond rating:

…Rather than quickly spending its newly-earned wealth, the provincial government has put its tax revenue toward paying the bills. S&P gave special credit to Saskatchewan for its “low-and-declining debt burden.” As of March 31, the province’s fiscal year-end, Saskatchewan’s debt totalled $4.6-billion, representing 38 per cent of this year’s projected operating revenues and only 8 per cent of its gross domestic product. Canada’s federal debt-to-GDP ratio sits at around 35 per cent…

Rational tax and regulatory policies, a pro-business environment, fiscal responsibility which puts a premium on living within means and paying debt.  This isn’t rocket science, people…