Prepare for Inflation
Well, as Mr. Obama and Speaker Pelosi have repeatedly said, while thumbing their noses at the taxpayers, “We won.” The corollary to this fact is “The taxpayers lost.” And this mighty duo is on a mission to prove it.
In just twenty-eight days they have passed and approved legislation:
1) To begin the nationalization of healthcare, 2) to reward organizations that stuff ballot boxes and blackmail lenders, 3) to encourage illegal immigration, 4) to stifle Christian expression, 5) to create over 200 new government programs, manned by 600,000 new bureaucrats, and for good measure, 5) they added nearly a trillion dollars of stagnant debt to the national deficit.
And they and their fellow Democrats have publicly confirmed their intentions:
1) To weaken the nation’s security by gutting the Pentagon budget, 2) to end the secret ballot in union votes, 3) to crush the voices of dissension by implementing the Fairness Doctrine, 4) to pad the outcome of the 2010 national census, 5) to paint a happy face on terrorism, and 6) to raise taxes.
In less than a month this duo, according to the Wall Street Journal, has the major bond raters (those who evaluate credit worthiness) discussing the reduction of the nation’s AAA credit rating. It should be noted that Pelosi’s homeland, California, where she received her economic training, is on the brink of having its credit rating reduced.
Lose one A and add hundreds of billions of dollars in interest payments to the federal budget. Loose two A’s and foreign investment will completely dry up and the stock market and the dollar will collapse. Lose a third A and join the ranks of the Third World Countries.
The entire nation should pray that the stimulus package works, while simultaneously preparing for the consequences of failure. The stock market’s funk indicates the international and domestic money managers aren’t pleased with the direction Obama and Pelosi are leading the nation.
Economists, who aren’t on the White House payroll or hoping for federal grants, fall into two categories, the skeptical and those who are scared out of their minds. Runaway inflation is the most common prediction among these realists.
The federal government traditionally slows the ravages of inflation by increasing interest rates. Of course, increased interest rates reduce businesses’ incentive to expand. This results in unemployment figures eventually falling off the top of the charts. In turn, reduced productivity and consumer purchasing shrinks the tax receipts of the government (local, state and federal).
The liberal knee-jerk reaction to this scenario is to raise taxes to feed the bureaucracy and entitlement hounds. This solution further bleeds the economy of investment capital. Once this downward spiral begins, it moves exponentially. Please note that Pelosi is screaming for higher taxes.
There is a term for this fiscal nightmare: stagflation. President Jimmy Carter mastered the ability to create stagflation. By comparison, President Franklin Roosevelt’s New Deal only added six additional years to the economic depression by raising taxes, strengthening unions and increasing government spending. World War II bailed out his reputation. Ronald Reagan bailed out Jimmy Carter.
The Obama/Pelosi duo just shoved the US economy to the edge of this whirlpool. And in so doing they burned the last of the nation’s reserves and put its economic good will (trust in the dollar) in limbo.
In just twenty-eight days they have passed and approved legislation:
1) To begin the nationalization of healthcare, 2) to reward organizations that stuff ballot boxes and blackmail lenders, 3) to encourage illegal immigration, 4) to stifle Christian expression, 5) to create over 200 new government programs, manned by 600,000 new bureaucrats, and for good measure, 5) they added nearly a trillion dollars of stagnant debt to the national deficit.
And they and their fellow Democrats have publicly confirmed their intentions:
1) To weaken the nation’s security by gutting the Pentagon budget, 2) to end the secret ballot in union votes, 3) to crush the voices of dissension by implementing the Fairness Doctrine, 4) to pad the outcome of the 2010 national census, 5) to paint a happy face on terrorism, and 6) to raise taxes.
In less than a month this duo, according to the Wall Street Journal, has the major bond raters (those who evaluate credit worthiness) discussing the reduction of the nation’s AAA credit rating. It should be noted that Pelosi’s homeland, California, where she received her economic training, is on the brink of having its credit rating reduced.
Lose one A and add hundreds of billions of dollars in interest payments to the federal budget. Loose two A’s and foreign investment will completely dry up and the stock market and the dollar will collapse. Lose a third A and join the ranks of the Third World Countries.
The entire nation should pray that the stimulus package works, while simultaneously preparing for the consequences of failure. The stock market’s funk indicates the international and domestic money managers aren’t pleased with the direction Obama and Pelosi are leading the nation.
Economists, who aren’t on the White House payroll or hoping for federal grants, fall into two categories, the skeptical and those who are scared out of their minds. Runaway inflation is the most common prediction among these realists.
The federal government traditionally slows the ravages of inflation by increasing interest rates. Of course, increased interest rates reduce businesses’ incentive to expand. This results in unemployment figures eventually falling off the top of the charts. In turn, reduced productivity and consumer purchasing shrinks the tax receipts of the government (local, state and federal).
The liberal knee-jerk reaction to this scenario is to raise taxes to feed the bureaucracy and entitlement hounds. This solution further bleeds the economy of investment capital. Once this downward spiral begins, it moves exponentially. Please note that Pelosi is screaming for higher taxes.
There is a term for this fiscal nightmare: stagflation. President Jimmy Carter mastered the ability to create stagflation. By comparison, President Franklin Roosevelt’s New Deal only added six additional years to the economic depression by raising taxes, strengthening unions and increasing government spending. World War II bailed out his reputation. Ronald Reagan bailed out Jimmy Carter.
The Obama/Pelosi duo just shoved the US economy to the edge of this whirlpool. And in so doing they burned the last of the nation’s reserves and put its economic good will (trust in the dollar) in limbo.
posted by David at
5:24 AM
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