If you don’t think this can happen here, think again. The spending policies of this administration are unprecedented in nature. The collapse of the U.S. dollar, a reduced bond rating, or any number of other trigger events could touch off a snowball effect with hyperinflation a real possibility. While someone can bailout Greece, nobody – not even China – is big enough to bailout this country. Greece’s debt to GDP ratio hit 115% before its house of socialist cards came tumbling down. Our own Congressional Budget Office predicts our debt to GDP ration to hit 90% by 2020 at that does not include cap-and-trade, new updates from the CBO on the cost of ObamaCare – not surprisingly it turns out ObamaCare will bend the health care cost curve up and not down – or any other spending planned by the administration. The IMF – a more trustworthy source than the CBO given its track record with ObamaCare and the fact the CBO director met with Obama during the ObamaCare saga (something unprecedented for what is supposed to be a non-partisan organization) – puts the date 8 years earlier in 2012. Want an idea of how fast Obama and this Congress can burn through your money?:
“An additional $1.2 trillion in debt dumped on [GDP] to our children makes a huge difference,” said Brian Riedl, a budget analyst at the conservative Heritage Foundation. “That represents an additional debt of $10,000 per household above and beyond the federal debt they are already carrying.”
The federal public debt, which was $6.3 trillion ($56,000 per household) when Mr. Obama entered office amid an economic crisis, totals $8.2 trillion ($72,000 per household) today, and it’s headed toward $20.3 trillion (more than $170,000 per household) in 2020, according to CBO’s deficit estimates.
It does appear as if Unsustainable is the new normal:
National Review’s Jim Geraghty sums up Obama’s America thus: “Unsustainable is the new normal.” Indeed. The other day, Douglas Elmendorf, director of the Congressional Budget Office, described current deficits as “unsustainable.” So let’s make them even more so. The president tells us, with a straight face, that his grossly irresponsible profligate wastrel of a predecessor took the federal budget on an eight-year joyride, so the only way his sober, fiscally prudent successor can get things under control is to grab the throttle and crank it up to what Mel Brooks in Spaceballs (which seems the appropriate comparison) called “Ludicrous Speed.”
Obama’s spending proposes to take the average Bush deficit for the years 2001–2008, and double it, all the way to 2020. To get out of the Bush hole, we need to dig a hole twice as deep for one-and-a-half times as long. And that’s according to the official projections of his Economics Czar, Ms. Rose Colored-Glasses. By 2015, the actual hole may be so deep that even if you toss every Obama speech down it on double-spaced paper you still won’t be able to fill it up. In the spendthrift Bush days, federal spending as a proportion of GDP average 19.6 percent. Obama proposes to crank it up to 25 percent as a permanent feature of life.
But, if they’re “unsustainable,” what happens when they can no longer be sustained? A failure of bond auctions? A downgraded government debt rating? Reduced GDP growth? Total societal collapse? Mad Max on the New Jersey Turnpike?
Testifying to the House Budget Committee, Director Elmendorf attempted to pull back from the wilder shores of “unsustainable”: “I think most observers expect that the government will act, that the unsustainability will be resolved through action, not through witnessing some collapse down the road,” he said. “If literally nothing is done, then eventually something very, very bad happens. But I think the widespread view is that you and your colleagues will take action.”
Dream on, you kinky fantasist. The one thing that can be guaranteed is that a political class led by Harry Reid, Nancy Pelosi, Barney Frank, a handful of reach-across-the-aisle Republican accommodationists, and an economically illiterate narcissist in the Oval Office is never going to rein in unsustainable spending in any meaningful sense. That leaves Director Elmendorf’s alternative scenario. What was it again? Oh, yeah: “Some collapse down the road.”
I don’t think Douglas Elmendorf understands the simple law of Congress that doing nothing to stop fiscal madness is a form of art they’ve perfected . If you Congress to do something, convince them it will lead to a deficit increase and they’ll dust off the legislative machinery faster than you can sneeze.
Now the EU chief if warning of a nightmare scenario. The type of scenario that anyone with half a brain could have seen coming a mile – or a couple of decades – away (emphasis mine):
Democracy could ‘collapse’ in Greece, Spain and Portugal unless urgent action is taken to tackle the debt crisis, the head of the European Commission has warned.
In an extraordinary briefing to trade union chiefs last week, Commission President Jose Manuel Barroso set out an ‘apocalyptic’ vision in which crisis-hit countries in southern Europe could fall victim to military coups or popular uprisings as interest rates soar and public services collapse because their governments run out of money.
The stark warning came as it emerged that EU chiefs have begun work on an emergency bailout package for Spain which is likely to run into hundreds of billions of pounds.
A £650 billion bailout for Greece has already been agreed.
John Monks, former head of the TUC, said he had been ‘shocked’ by the severity of the warning from Mr Barroso, who is a former prime minister of Portugal.
Mr Monks, now head of the European TUC, said: ‘I had a discussion with Barroso last Friday about what can be done for Greece, Spain, Portugal and the rest and his message was blunt: “Look, if they do not carry out these austerity packages, these countries could virtually disappear in the way that we know them as democracies. They’ve got no choice, this is it.”
The road to Socialism is paved not with good intentions but with stones from the road to hell. This is what happens when unsustainable collides with a dependency so profound its victims are completely unable to function without the government telling them what to do, when to do it, and cuddling them like children until all liberty and the spirit of independence disappears into a sea of mediocrity. Try to take it away and watch grown adults take their mouths away from the government teat long enough to scream “Mine, mine, mine!”. Take it away and the children throw a fit and may just decide to replace a democracy with a dictator:
Greece has been rocked by a series of national strikes and riots this year following the announcement of swingeing cuts to public spending designed to curb Britain’s deficit.
Spain and Portugal have also announced austerity measures in recent weeks amid growing signs that the international markets are increasingly worried they could default on their debts.
Other EU countries seeing public protests over austerity plans include Hungary, Italy and Romania, where public sector pay is to be slashed by 25 per cent.
Deputy Prime Minister Nick Clegg, who visited Madrid last week, said the situation in Spain should serve as a warning to Britain of the perils of failing to tackle the deficit quickly.
He said the collapse of confidence in Spain had seen interest rates soar, adding: ‘As the nation with the highest deficit in Europe in 2010, we simply cannot afford to let that happen to us too.’
Mr Barroso’s warning lays bare the concern at the highest level in Brussels that the economic crisis could lead to the collapse of not only the beleaguered euro, but the EU itself, along with a string of fragile democracies…
…Mr Monks yesterday warned that the new austerity measures themselves could take the continent ‘back to the 1930s’.
In an interview with the Brussels-based magazine EU Observer he said: ‘This is extremely dangerous.
‘This is 1931, we’re heading back to the 1930s, with the Great Depression and we ended up with militarist dictatorship.
‘I’m not saying we’re there yet, but it’s potentially very serious, not just economically, but politically as well.’
Mr Monks said union barons across Europe were planning a co-ordinated ‘day of action’ against the cuts on 29 September, involving national strikes and protests…
…The looming bankruptcy of Spain, one of the foremost economies in Europe, poses far more of a threat to European unity and the euro project than Greece.
Greece contributes 2.5 percent of GDP to Europe, Spain nearly 12 percent.
Yesterday’s report quoted German government sources saying: ‘We will lead discussions this week in Brussels concerning the crisis. It has intensified to the point that the states do not want to wait until the EU summit on Thursday in Brussels.”’
At the end of last month the credit rating agency Fitch downgraded Spain, triggering sharp falls on stock markets.
The word civilization is shorthand for a social contract agreed upon by the participants. Take away the contract and man’s true nature is laid bare. For a taste of what Europe is quickly heading towards and where we will one day find ourselves unless we wrest control back from DC and place it back into the hands of the states and the people as intended by our founders read Civilization’s Thin Veneer – Precariously We Stand.
There is no use pretending anymore. We also have seen this coming a mile away and more than just a couple of decades. It’s time to do something about it and that something does not involve running and crying to your Senator or Representative. That something involves getting involved locally and wresting back control from the Statist’s in DC through your state officials in the legislature and the governor’s mansion. And make no mistake about it – BOTH parties are statist in nature. It is not the growth of government that is separates the parties, but rather the pace of the growth of government. The sooner we realize that, the sooner we can take effective action and kill the disease of socialism.
As Dr. Hunter, former policy advisor to President Ronald Reagan puts it:
The joke is on those Americans who actually believe a restoration of limited government, individual freedom and personal liberty are the objectives of either political party. The poor saps have spent their entire lives paying the full price of admission to cheer on the Washington Generals.
He sums it up well:
So, once you throw out the Democratic rascals and replace them with Republican scalawags, don’t expect things to change much. While every republican in Congress voted against ObamaCare, the Grand Old Party cannot now even muster the courage to run on a platform of repealing it.
Perhaps not in this election nor even in the presidential election to follow but soon the American people will come to understand a very sad and frightening fact about the United States today: Elections no longer work to divert the nation’s decent into the soft despotism of democratic fascism; they simply perpetuate the fraud of two parties, one Establishment, democratic in appearance, increasingly fascist in operation.
While 2010 is important and the opportunity to slow down the march towards socialism presents itself, it is more critical to grip that once that victory is realized it is time to put away childish things. Soon after or ever prior to one of the most important federal elections in my memory it will be time to pivot to the tools of nullification and remove the power of either party to force us on a death march that joins us with our European predecessors in their self-created hell. America will be the last and best hope for liberty and freedom left, but only if we chose to fight and make it so.
Ignore this at your peril. Ignore this at the peril of our Republic. Ignore this we will walk the heavily trodden path of the failed policies of socialism, with the corpses of its European victims piled along the way.