I keep saying…. We have to suffer through the next Jimmy Carter before we can appreciate the next Ronald Reagan
This kind of stuff should scare the pants off of us. Because it looks as if we’re doomed to repeat the “Jimmy Carter” economic past, but worse, under an Obama administration. From the Wall Street Journal:
Here we stand more than a year into a grave economic crisis with a projected budget deficit of 13% of GDP. That’s more than twice the size of the next largest deficit since World War II. And this projected deficit is the culmination of a year when the federal government, at taxpayers’ expense, acquired enormous stakes in the banking, auto, mortgage, health-care and insurance industries.
With the crisis, the ill-conceived government reactions, and the ensuing economic downturn, the unfunded liabilities of federal programs — such as Social Security, civil-service and military pensions, the Pension Benefit Guarantee Corporation, Medicare and Medicaid — are over the $100 trillion mark. With U.S. GDP and federal tax receipts at about $14 trillion and $2.4 trillion respectively, such a debt all but guarantees higher interest rates, massive tax increases, and partial default on government promises.
But as bad as the fiscal picture is, panic-driven monetary policies portend to have even more dire consequences. We can expect rapidly rising prices and much, much higher interest rates over the next four or five years, and a concomitant deleterious impact on output and employment not unlike the late 1970s.
About eight months ago, starting in early September 2008, the Bernanke Fed did an abrupt about-face and radically increased the monetary base — which is comprised of currency in circulation, member bank reserves held at the Fed, and vault cash — by a little less than $1 trillion. The Fed controls the monetary base 100% and does so by purchasing and selling assets in the open market. By such a radical move, the Fed signaled a 180-degree shift in its focus from an anti-inflation position to an anti-deflation position.
If you enjoyed this post, please consider to leave a comment or subscribe to the feed and get future articles delivered to your feed reader.
Comments
This president has gone so far beyond what power base he had that buyers remorse is starting to set in. I was at Granit City Brewery Saturday and the waitress (about 20) over heard my friend and I talking and commented that this isnt what she voted for and was almost apologizing for her vote. Another moderat democrat friend who is college educated and husband is in health care was having a major rethinking and is very upset about the health care issue. The tide I believe is starting to shift, the republicans just need to get there house in order and start practicing what they preach. Small government, strong defense, low taxes, you know, the American Dream.
feasant,
I fear much of the reason is simply that people really don’t want to think about it.
That’s beginning to change as the sheer speed and scope of the spending and debt that’s occurring begins to “seep in”, but will enough people be roused up enough to demand a halt to it?
I agree with ymous. A lot of people I know, regardless of their political leanings, are getting really worried about the massive spending and the direction the country is heading. I think the Federal government has severely overreached and the honeymoon for the new administration is ending.
Why don’t you talk about your hero Bush who got us in to this mess to begin with . you blame the Dems but your guy had the veto power,to stop the spending.Bush was only interested in the war period.Next Ronal Regan give me a break.
Carter left office leaving an $85 Billion debt.
Ronald Reagan left office leaving $283 Billion debt.
George H.W. Bush left office leaving $399 Billion debt.
Clinton left office having cut the debt to $18 Billion and leaving Bush a $250 Billion surplus.
George W. Bush left office leaving $661 Billion in debt and a deficit of $1.3 TRILLION.
Ronald Reagan tripled Carter’s debt.
(all of the above data is from the Bureau of the Public Debt, United States Department of the Treasury)
—But I agree with you!
We SHOULD return to the halcyon days of Ronald Reagan…
UNDER REAGAN THE MARGINAL TAX RATE WAS 50%
Moses, Bush didn’t take care of this problem when it was in his court. He didn’t get us in the mess. So we agree it’s a mess, why don’t you care Obama is making it much worse? Wow that sounds like something you claim Thune to be capable of!
Randall, At least we got programs from Reagan and Bush.
What did Clinton contribute? Do we need to evoke the accomplishments of Obama’s spending?
Pat,
Do you understand that the Federal Reserve is a seperate, politically independent entity?
Do you know that spending increased dramatically under George W Bush, including $12 billion a month or so in Iraq looking for Cheney’s WMD wet dream?
Your site keeps losing credibility because you’ve become a Rush imitator and are also working for a Gov candidate in a primary.
(Yawn. If you don’t like it, don’t read it. -PP)
How long can people keep saying Bush did it first so it is okay for Obama to make it worse. Come on. Doesn’t matter who did what in the past as that is done. Something has to change with the way government spending is escalating beyond our ability to maintain. Get Real, why don’t you do so?
Guy so if Johnson and Herseth spend for the farm bill their Dems.So dems dont balance budget.So if Thune is a conservative (Fiscal joke)why does he keep voting for the farm bill 300 billion. Because he would get beat fiscal conservative give me a break.
Because Thune is in a Farming State!? I haven’t seen anyone balance or even come close to balancing the budget. Farmers are a good example of having great resources, but still spending more than they have. I know very few farmers who understand what a budget is.
How many social programs would you be willing to do without, moses? If you are attached to the government maybe it’s hard to see someone else getting money when yours is getting smaller.
Those who seek wealth will not be satisfied with their income.
Hi! I was surfing and found your blog post… nice! I love your blog. 
Cheers! Sandra. R.
GUY I WORK AND HAVE A FULL TIME JOB, ALSO HAVE A BUSINESS AND GET NO AID FROM ANYONE.SERVED DURING VIETNAM, AND GET NO HEALTH CARE FROM THE V.A..I DON’T CARE IF WERE A FARM STATE OR NOT IF YOUR FISCAL YOU DON’T VOTE FOR ANY PROGRAMS.THUNE WANT ED TO PRIVATIZE SOCIAL SECURITY , BUT WHERE IS HE NOW ON THE ISSUE. YOU PEOPLE ARE ALL ALIKE SAYING DEMS ARE BAD WHEN YOU CAN’T PULL THE SPIKE OUT OF YOUR OWN EYES.
Most of the time Thune has nothing to do with the topic. I’m not too thrilled about Thune falling for the ‘Our Economy will End’ pitch, however when all has settled Johnson and Herseth were useless in stopping the Rescue Bill also. And they were in the majority. So, if the Dems have nothing to do with the state of the economy…Thune doesn’t either. Stephanie and Tim convieniently vote the “correct” way but the bill doesn’t end up in the “correct” pile. That’s awful lucky!
By the way, what does fiscal mean to you? Because it doesn’t mean voting against your economy.
moses, I doubt you own your own business, because you would be so mad at the BS brought down on you from the Gov you would be a conservative.
The privatization of SS was so each person had their own account, with actual money in it. You better wake up there is not one dime in the SS fund, there are IOUs in there. If the people would actually pay attention to what DC is doing, there would be a lot more Conservatives.
12:14 pm: the Federal Reserve is not a political entity. It is the central bank of the United States: http://www.federalreserve.gov/pubs/frseries/frseri.htm
But I did enjoy your poke at pp.
no problem I pay my taxes and served my country, if ssn is broke why isnt your buddy Thune promoting ss privatization, because the seniors would vote him out. rocket science for you I bet.
anon 6:58 You need to do some reading. Maybe Creature From Jekyll Island for starters.
moses it is people like you that won’t allow the facts to mess up your thinking. Thune did bring up SS and the Liberal idiots like Johnson said it was not broke.
feasant-That mans wheels are just plain broke. I wouldnt waste your breath.
Randall- With the logic you used regarding Bush-to Obama transfer of debts/economy. How can you use the same logic from Carter-to-Reagan? Also side note, the transfer from Clinton (who I respect as a president, not as a husband)to Bush 2, Bush inherited a major stock slide from the internet bubble. Your comparissons are not consistent with all due respect. Especially Carter to Reagan the Bush to Obama. Carter left Reagan a bigger mess the Bush did. Obama is just using liberal policies (kensian sp) to get us out, and it wont work. No history will back this up!
I take it you have read the Creature From Jekyll Island and find it has no basis for comparison to the link sent?
Sign: uwfgv Hello!!! khctf and 6114xhbyfwwuus and 550 My Comments: I will try to recommend this post to my friends and family, cuz its really helpful.
Sign: pxyvz Hello!!! ybfyu and 707eazcuygvph and 9242 My Comments: Cool!
Sign: asygn Hello!!! rpbcv and 7957ubykfqmuka and 7428 : Hi! I was surfing and found your blog post! nice! I just came across your blog and wanted to say that Ive really enjoyed it.
If we get Cap and Tax, ObamaCare, plus the unfunded SS, this wonderful Country will be like Europe. It should scare every American. Why are we letting the Federal Government ruin our Nation? Why do people think that some clown in DC can figure out your health better than your Doctor? Why do people sit back and let the Government tax each Family $2000, the so called Cap and Trade?