James Pethokoukis of Reuters is at it again, subversion-via-blog.

So in the little sit down with the President, the Chinese made clear they did not believe a word of the President’s promises about ObamaCare not adding to the deficit.

The Chinese asked uncomfortable questions about the cost of ObamaCare:

Guess what? It turns out the Chinese are kind of curious about how President Barack Obama’s healthcare reform plans would impact America’s huge fiscal deficit. Government officials are using his Asian trip as an opportunity to ask the White House questions. Detailed questions.

Boilerplate assurances that America won’t default on its debt or inflate the shortfall away are apparently not cutting it. Nor should they, when one owns nearly $2 trillion in assets denominated in the currency of a country about to double its national debt over the next decade.

Turns out that when you lie to everyone, no one believes you. Untrue claims that President Obama makes in the speeches to Joint Sessions of Congress about not adding to the deficit, making mystery cuts to Medicare, or not funding abortion, or not allowing illegal immigrants to gain access to his health care benefit, are actually listened to by other nations.

And the economic implications and the national security implications of a President who no one believes are profound, and none of them are good.

Sounds like the Chinese do not believe that a Democratic Congress and President Obama will do anything about the growing deficit. The only thing the Trillion-dollar President can do is spend more Trillions — first on the stimulus, then another trillion plus on health care. And because the world refuses to buy more of our debt, the Fed has printed (you guessed it) a trillion dollars in the last year to give to banks, with instructions to buy our T-Bills in our debt (rigged) “auctions.” This is how we are paying for our deficit, we are printing money. And our Trillion dollar President keeps spending.

The rational reaction of the Chinese (as opposed to the irrational action of spending a trillion dollars on health care) reminds me of a sign I saw at the 9/12 demonstration:

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While the cognoscenti of the Western financial world is attempting to spin the recent fall in the dollar as a stylish financial mystery play with a journalist based in the Middle East as its star, the Whodunit spin is a red herring: the facts are that the dollar is weak, and getting weaker.

The world is awash in dollars. There is a massive oversupply. We are electronically creating (printing in another era) hundreds of billions of dollars to buy our own T-Bills. Our deficit and spending has soared.

Kudlow, in his column, “Save the Greenback, Mr. President” explains that solution is to remove the excess dollars from the market and to stop “printing so much debt:”

for therapy, the Fed should begin moving excess cash from the economy….And they need to stop printing so much debt from Congress. All this massive spending and borrowing is killing us.

Instead, the Democrats in Congress and the White House are planning more spending: a second spending bill is on the table — ironically tagged as the second stimulus bill, which ought to stimulate the dollar tanking — and of course, President Obama’s $1 trillion health care spending boondoggle.

When town hall meetings are interrupted with shouts of “stop printing money” the jig is up. Note to the White House: in the age of the internet, you cannot hide printing $600 Billion a year from the world.

Until the Federal Reserve stops printing money to buy our own T-Bills, and the Democrats in Congress stop spending on new programs and we lower our deficit the dollar will continue to drop. End of story, no other outcome is possible.

Simply put, the Dems are killing the dollar.

A direct result of Barack Obama being elected President and the Democrats take over of Congress is that the U.S. the deficit has grown to a record $1.4 Trillion. From AP:

The federal budget deficit tripled to a record $1.4 trillion for the 2009 fiscal year that ended last week, congressional analysts said Wednesday.

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Who knew the U.S. government has $100 trillion in unfunded liabilities?

The Chinese government warned the global financial community that it is very concerned about our massive printing of U.S. dollars and that we are using the magically printed money to buy our own T-Bills. We use the money from the “investors” who bought to the T-Bills to cut U.S. government checks. (Think California with the power to print its own currency.) Printing these billions is not done at the mint, it is done via keystroke, into a spread sheet. Type in the numbers and voila, instant U.S. currency is created.

These two facts make for a reasonable question, “Is the U.S. Government Bankrupt?” which was asked by Pete Morin in his article published today in American Thinker.

Here are some exerpts:

Before we continue to debate the merits of any Obama health care plan, we need to consider a few important facts.

“By any rational means, we must consider the present condition of our Government’s financial situation. An honest look at those finances would have a prudent person conclude that our government is tacitly bankrupt. Our unfunded liabilities far exceed our assets. Adding up all unfunded liabilities for Social Security, Medicare, Medicaid and Government sponsored pension funds gives us a figure slightly in excess of $100 TRILLION dollars. That’s TRILLION with a ‘T’. The Federal budget deficit for fiscal 2009 will be approximately $1.84 TRILLION. That’s TRILLION with a ‘T’. Over the next ten years the projected deficit will be $9 TRILLION +. That’s TRILLION with a ‘T’. Of course, this projected deficit comes from the Congressional Budget Office and has to be considered a conservative estimate. In 1966 the feds estimated that the cost of the Medicare program by 1990 would be approximately $9 billion dollars/year; the actual cost was $67 billion dollars/year.

And,

“It’s time for Americans to realize that the good times have stopped rolling. There may be no return to a robust economy. Our future can take only one of two possible paths; either we accept our unsustainable debt and reduce government spending and taxation accordingly with a structured refinancing of the Federal debt, or face the prospect of a chaotic bankruptcy with a massive collapse of the dollar on the world market followed by a severely reduced standard of living. If it’s any indication of the way government has approached past difficulties, I’m betting on the chaotic. Stagflation on a large scale may well make the 1970’s look like high times. Job losses that will occur may well make the 1930’s look like a picnic.”

So, naturally the President of the United States is telling the nation that his health care plan will cost $1 Trillion and will not add one dime to the deficit. Seems like a completely rational statement in a world where we print our own money, to buy our own bonds, to pay our own bills.

And hey, it’s completely legal too.

Given the rational estimates that ObamaCare will, in fact, cost $2 Trillion and not $1 Trillion, then is it any wonder Americans simply no longer trust Congress and large segments of the population think the President is lying about ObamaCare not adding a dime to the deficit?

One of the central points in Senator Gregg’s op-ed about our debt is his warning about the Chinese government not buying our debt:

If the Chinese start to reduce their purchases of our government securities because of our need to borrow increasing amounts of money to finance all the spending that the president has proposed, we will have to start offering higher interest payments to potential lenders to make our securities more attractive.

As that interest on U.S. Treasuries goes up, so does the financial burden on taxpayers in the next generation. This would hit the next generation with a double whammy — unnecessary debt we’re already incurring, plus higher interest rates on our borrowing.

Actually, President Obama not only agrees with you Senator Gregg, but was more clear about what was going to happen than your statement above. Last week the President said there “is no doubt that at some point” the countries buying our debt will stop. Not may stop, but will stop.

Here is the President’s entire quote:

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