Hounding Obama Nation – Part 2

Peter Namtvedt's picture

“You never want a serious crisis to go to waste. And what I mean by that is an opportunity to do things you think you could not do before.” –Rahm Emanuel, White House Chief of Staff – reported in The Telegraph

And for just what agenda did we wait for an opportunity like this?

In his published agenda on The Economy, Obama posted this:

“Our country faces its most serious economic crisis since the great depression. Working families, who saw their incomes decline by $2,000 in the economic "expansion" from 2000 to 2007, now face even deeper income losses. Retirement savings accounts have lost $2 trillion. Markets have fallen 40% in less than a year. Millions of homeowners who played by the rules can't meet their mortgage payments and face foreclosure as the value of their homes have plummeted. With credit markets nearly frozen, businesses large and small cannot access the credit they need to meet payroll and create jobs.

“Barack Obama and Joe Biden have a plan to revitalize the economy.

•  Immediate Action to Create Good Jobs in America

•  Immediate Relief for Struggling Families

•  Direct, Immediate Assistance for Homeowners, Not a Bailout for Irresponsible Mortgage Lenders

•  A Rapid, Aggressive Response to Our Financial Crisis, Using All the Tools We Have”

The question of how to pay for all of this.

The agenda for the Economy goes on for many page-lengths, with more spending numbers, but with no clue as to from where the money is coming.

The numbers are staggering. There are loans, there are gifts, there are tax breaks and deductions. There is no clue that these reduced taxes are matched with reduced government spending. No mention is made of the borrowing that this will cause.

However, we all know the federal budget deficit resulting from this agenda will be between 1.5 and 2 trillion dollars. New Treasury bonds will need to be sold to cover this. Will there be buyers to soak up these bonds? There are already signs that China and other foreign investors are reducing their U.S. Treasury bond purchases.

Will the Federal Reserve take up the slack? At the start of 2008 the Fed had a few hundred billion “reserves” with which to back up the nation's banks. Today, these “real” reserves are gone and in their place the Fed has up to a trillion dollars worth of questionable paper. If the banks that were helped by the Fed buying up these toxic assets had trouble selling them or even determining their market value, will not the Fed eventually have to mark them to market (if there is no buyer, this value must be zero!)?

How will the Fed come up with funds to buy up to $2 trillion? In the same way it came up with the hundreds of billions to have bought the questionable paper from the banks: by electronically posting an amount in the credit column of the Treasury's account. The actual printing comes later, when it is withdrawn and spent by the government.

When this much money is finally printed, it will be a huge increase to the country's money supply, and it will multiphy up to ten times ($20 trillion). This is inflation. The nation will have a huge increase in the number of dollars chasing scarce products.

The next thing you will see is, by 2010, prices of everything will rapidly begin to rise, price inflation. If a loaf of bread costs five dollars today, in one to two years the above creation of new money will result in ten dollar bread. A gallon of gasoline will be over six dollars.

Will that be the end of it or will it continue, as the government will clearly have trouble paying the interest on this addition to the national debt? Will government spending continue to rise or fall back miraculously to the level of tax revenues? Do not hold your breath waiting for the national debt to fall, for deficit spending to end. The creation of more money out of thin air is likely to escalate. The Financial Times has warmed that hyper-inflation is a real possibility.

A question of what is unseen

What happens to all the plans that we all had as individuals and small-business owners? What happens to our plans to use our savings and borrowed money for our projects? How does Obama's agenda take into account the diverse knowledge that our hundred thousand households have? It is ignored. Instead, the traditional agenda of the Democrat Party is read into our minds.

Our ability to run our lives or small businesses is barely mentioned in passing, and the emphasis is put on how it requires, above all, to have “wise leadership in Washington.”

One member of Obama's staff put it succinctly when he urged the administration to take full advantage of the opportunity of our financial collapse to rebuild the welfare state.

“You never want a serious crisis to go to waste. And what I mean by that is an opportunity to do things you think you could not do before.” –Rahm Emanuel, White House Chief of Staff – reported at http://fee.org/

Other Promises

Marijuana Reform Is Part of the Progressive Agenda, So Why Are Obama's Drug Cops Already Making Pot Raids? That is what we read at Alternet .

In Democratic legal circles, no attorney has been more pilloried than former Bush Justice Department official John Yoo, chief author of the so-called torture memos that Barack Obama last week sought to nullify.

But now President Obama's incoming crew of lawyers has a new and somewhat awkward job: defending Yoo in federal court. That is what we read at Politico.

Last of all for this installment: the oath of office. Obama swore to uphold the U.S. Constitution, all of it. That should mean he would only support welfare that is general, not for special interests, for specific places and persons. The Recovery act, however, is full of pet projects. That should mean he will work for regulating commerce with foreign nations and between the states, not within any state . However, he and his financial whiz kids just cannot keep their hands off banks and local labor and materials for pet recovery projects.

His oath should also mean he will uphold the entire Bill of Rights, not cherry picking as if was a cafeteria line (sorry for the metaphor mix). Instead, he does pick and choose, ignoring the Second, Ninth and Tenth amendments, and favoring the civil rights in the style of footnote four.

Obama should know better, not only for having studied law, but above all because he taught Constitutional Law.

He clearly does not see that job one of government is to protect individual rights, which includes the right to honest money. Furthermore, he does not want to limit government to its legitimate functions, police, courts and national defense.

Instead of this, and even in spite of his published agenda, the true agenda is re-establishing the Welfare State. So much for our Rights and the Constitution.


The previous Bush Admin. said that President Reagan proved that deficits don't matter. It's not surprising to me at all that after 12 years of trying to balance the budget, and then 8 years of not even attempting to do so, with the nation in the red so much that in reality, another couple trillion isn't going to do any more damage than what has already been done, so why not try and spend our way out of this again, It has worked before for W.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.

Peter says:

The road to hell is paved with good intentions...

Peter also writes for Ada Byron's Blog.