This morning, talk on Wall Street is all about the unveiling of President-elect Barack Obama’s economic team and yet another government bailout, this time of Citigroup (one of those well-capitalized banks deemed “too big to fail” by the powers-that-be) to the tune of $20+ billion. (Heck, what’s a billion when our national debt is now increasing by an estimated $3.5 billion EVERY DAY?)
But what’s also being discussed – not very loudly, mind you – is the next financial “stimulus” package in the works by your “friends” in Congress - a monstrosity of a boondoggle that looks to put the taxpayers of this country in hock to the tune of another staggering $700+ billion, while creating government-expanding “make-work” projects that would make FDR blush with envy.
Remember, this is in addition to the ill-advised and unconstitutional Troubled Assets Relief Program (TARP), in which Congress, in case you’ve forgotten, has already given “Czar” Hank Paulson the virtually unlimited authority to spend $700 billion of our tax dollars on basically anything he wants, without any meaningful Congressional oversight. (Remember when he wanted to use the TARP money to actually buy up troubled assets? Now, it’s being used to buy stakes in banks so that they can buy other banks – and, as of this past week, American Express and GM are being considered as “banks.”)
If Obama and his allies in Congress get what they want, additional “emergency” spending for 2008 alone will top an almost-inconceivable $1.687 TRILLION dollars (and that’s a conservative estimate, as we will probably never know exactly how much it’s going to cost to nationalize Fannie Mae and Freddie Mac). And, remember, none of this even includes the additional non-discretionary Social Security and Medicare/Medicaid outlays in coming decades that are expected to amount to over $400,000 for every man, woman, and child in the United States – money that that no one knows how we will possibly be able to come up with.
Self-proclaimed Depression “expert,” “Helicopter Ben” Bernanke once remarked in a famous speech in 2002 that “…the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost.” Obviously, by looking at the bailout numbers so far (below), we can see that Bernanke’s printing presses have been working overtime:
- Economic Stimulus Act of 2008: $152 Billion;
- Fannie Mae/Freddie Mac: at least $50 Billion*;
- AIG “Restructuring”: $150 Billion (and counting)**;
- TARP: $700 Billion;
- Proposed Economic Stimulus II: at least $700 Billion.
* – The potential final cost of Fannie and Freddie debt may end up being in excess of $1 trillion, according to experts.
** – The original AIG outlay was for $85 billion in loans; it has since ballooned to $150 billion, and the government does not know how much more will be required.
Who exactly is buying up all of this money? Right now, sovereign wealth funds and foreign central banks seem to be the primary recipients, with Japan, China and Saudi Arabia owning approximately 25% of our outstanding national debt. But signs recently seem to point to the start of a loss of appetite for United States-backed Treasury notes, as China just recently announced that they will be looking to “substantially increase” their gold reserves by paying for them with US currency reserves. As more central banks and sovereign wealth funds follow China’s lead in the coming months, expect this deflationary cycle to reverse itself – perhaps violenty – and be replaced with accelerating levels of inflation as people bail from the dollar like rats off of a sinking ship.
Thomas Jefferson said it best when he famously stated that
“If the American people ever allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all their property until their children will wake up homeless on the continent their fathers conquered.”
We are in real danger of seeing the past prosperity of the last 50 years, and any chance of any prosperity in the next 50, evaporate before our eyes, unless we as a people stand up and say “enough is enough.” We need to demand an END TO BAILOUTS until the people that did this pillaging can be held ACCOUNTABLE for their actions.
We also want to say “Thank you” to all of you who came out to the “End the Fed” Rally in Kansas City! The rally was a tremendous success – we had almost 200 people show up, and we received coverage in the Kansas City Star and Fox 4 News. Actions like this will open people’s eyes to the debt situation and will go a long way toward making a real difference in the future. Also, many many thanks to Bryon Huber from End the Fed KC and Catherine Bleish from the Liberty Restoration Project for their many hours of tireless effort bringing this event together.
We will be having many more of these events in the future, so be sure to stay tuned into the HFAC blog and check out our Calendar page.
