Americanly Yours

If you are a regular reader, you will remember that I wrote earlier that the total amount committed to the bailouts by the government equaled $8,800,000,000,000 [$8.8 trillion].

Thats a ton of money–to put it lightly.  But, unfortunately for your wallet, it didnt end there.

Bloomberg recently reported that “[t]he U.S. government and the Federal Reserve have spent, lent or committed $12.8 trillion” over the past 20 months.  “The money works out to $42,105 for every man, woman and child in the U.S. and 14 times the $899.8 billion of currency in circulation. The nation’s gross domestic product was $14.2 trillion in 2008.”

This means that in the past 20 months, the government has committed about 90% of our country’s GDP to bailouts and “stimulus.”  [emphasis added by me] Roughly 1/3 of this money has already been spent, while the remaining 2/3 has been committed but not yet spent.

The article breaks the spending by category.  This is pretty scary stuff.  Please pass this along to your friends and family.  Also, get involved.  There are Tea Parties coming up across the country on April 15th.  The Facebook group representing the Tea Parties has over 24,000 members.  We are expecting between 5,000 and 10,000 protesters in Atlanta for next weeks event.  These protests are being held in cities, both large and small all across the country.  Here is a map listing the locations of many of them.  Join the struggle before they spend another $42,105 of your money!

Americanly Yours,

Phred Barnet

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The nonpartisan CBO made a disturbing announcement in regards to our future budget deficits yesterday.

“President Barack Obama’s budget would produce $9.3 trillion in deficits over the next decade, more than four times the deficits of Republican George W. Bush’s presidency.” Remember that Mr. Obama criticized President Bush for sharply increasing the deficit which Mr. Obama inherited.  Well, Mr. Obama’s ambitious plans will leave his successor with a much much larger debt to inherit.

President Obama inherited a deficit of about $1,000,000,000,000 [$1 trillion] from President Bush’s administration–and the Democratic Congress.  He then added another $800,000,000,000 [$800 billion] to the budget by passing his gargantuan “stimulus” plan.

Mr. Obama did inherit a large annual deficit from the Bush administration, however, trillion dollar deficits were by no means emblematic of the Bush administration’s record.  President Bush’s deficits peaked at $412,700,000,000 [$417 billion] in 2004, but dropped down to $162,000,000,000 [$162 billion] by 2007– a drop of over 60% from its peak.  In 2008, the deficit did soar to record heights, however this was mainly due to the massive stimulus bill that sent every working American a check and was championed by President Bush and the Democratic Congress.  However 2008’s record deficit is still 1/4 of the size of this year’s deficit and less than half of the projected average annual deficit for the next decade!

And, the $9,300,000,000,000 [$9.3 trillion] in deficits projected by the CBO is $2,300,000,000,000 [$2.3 trillion] higher than the total deficits projected by President Obama back in February.  As you may recall, I previously wrote about Mr. Obama’s plans to “cut the deficit in half” by 2013 and criticized that statement as a distortion of the facts.  However, the CBO is now projecting that Mr. Obama’s deficit for that year will be $139,000,000,000 [$139 billion] higher than the numbers that he announced in February!  “Obama’s budget promises to cut the deficit to $533 billion in five years. The CBO says the red ink for that year will total $672 billion.” And, following that year, the deficits will begin to climb again, ageraging just under $1,000,000,000,000 [$1 trillion] each year for the next ten years!!!

The avergae deficit for the next ten years will be as large or larger than the one that President Obama criticized President Bush for leaving behind.

The large increases in spending in 2008 and 2009 have been justified by Presidents Bush and Obama and Congress as temporary measures that are “necessary to end the recession and stabilize the economy.”  But economists, the Foderal Reserve, and the CBO are all saying that the recession will end in late 2009 or early 2010.  Why then is the President proposing budgets that continue to promote reckless deficit spending after the crisis has ended?

Americanly Yours,

Phred Barnet

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Yesterday, Wal-Mart announced a massive $2 billion employee bonus plan which “include[s] $933.6 million in bonuses that the retailer is handing out Thursday.  There is another $788.8 million in profit sharing and 401(k) contributions, and hundreds of millions of dollars in merchandise discounts and contributions to the employees’ stock purchase plan.”

This is quite an amazing plan, especially for a retailer that is derided by critics for under compensating its employees.  Despite the recession, this bonus is over 10% higher than last year’s employee bonus.

This is not an executive bonus plan; these bonuses will benefit Wal-Mart’s (literally) blue collar employees–the cashiers, customer service representatives, and stockers.  Wal-Mart’s generous bonus will hand these employees an average of $933.60 per person, with over half of that paid out to employees yesterday!

Now, lets contrast this bonus with Mr. Obama’s “stimulus” plan:

Mr. Obama’s “stimulus” plan pays each worker $400 through a “tax cut.”

Wal-Mart is paying each worker an average of $933.60.

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Mr. Obama’s tax cut comes in the form of a payroll tax deduction, averaging $13 per week for the rest of the year.

Wal-Mart’s bonus includes more money per worker up front than the total paid out by Mr. Obama’s plan.  It also includes various other benefits to be paid out in the future, including discounts, contributions to retirement funds, and increased ownership for workers in the company.

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Mr. Obama’s “tax cut”/”stimulus” is being financed with debt, and workers will have to pay back their “tax cuts” in the future.

Wal-Mart’s bonuses are being paid for with cash, coming from the company’s profits.  The workers get to keep their bonuses, and will not have to pay back the money in the future.

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Which do you think is more generous benefit?  Mr. Obama’s “tax cut” that will have to be paid back in the future, or Wal-Mart’s cash payment and investment in their workers future livelihoods.  I know which I would prefer.

Americanly Yours,

Phred Barnet

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A few weeks back, several of my friends and I exchanged arguments over email.  I wanted to pull a quote from a response of one of my friends and use it to talk about interest rates.

“. . . TBILLS at the lowest rates ever!  We can print money for nearly no intrest [sic]. . .”

I think that this is a common misconception among people.  Yes, the FED has a target rate of 0-1/4% for the Federal Funds Rate, but this rate is only the rate that banks charge each other for overnight loans.  This is not the rate for US Government bonds which are issued to fund government debt.  In fact, US government bonds have a much higher interest rate than the overnight fed funds rate.  Government bonds are largely traded on the open market which means that they are priced through supply and demand.  The current rate on a 10 year bond (about 3%) can be found here.

We have a large national debt that is growing every day.  Of the money that we owe, our debt to China is over $1,000,000,000,000 [$1 trillion].  To continue to fund ambitious “stimulus” bills, government bailouts, and large social welfare programs like medicare and the coming socialized health care scheme, we will have to continue to borrow funds from American citizens and foreign nations.

As we increase our money supply, our money becomes worth less.  As we increase our borrowing, we have to pay higher interest rates in order to entice countries and private citizens to loan money to us.  Both of these things are happening at the same time, and happening during a global recession.  This leads me to believe that interest rates on government bonds will be rising (if no one wants to loan us money and we want to keep running a deficit, we have to raise interest rates).

We have more than doubled our money supply in the last year!  If you dont believe me, see the chart below, or click here.

But, things dont end there.  China’s Premier, Wen Jiabao recently expressed worry about the value of the dollar.  He said “Of course we are concerned about the safety of our assets. To be honest, I’m a little bit worried.”  Apparently, there is even debate within China about whether or not to continue to invest so heavily in American bonds. And of course, this is coming at a time when China is dealing with their own economic problems.  China needs to have high levels of annual economic growth in order to pacify their increasingly restless (and violent) rural populations.

China just announced a stimulus of their own totaling over $500 billion.  The money being spent on that stimulus is money that cannot be loaned to the American government.

One thing that very few people are aware of is that President Obama’s anticipated budgets for his 8 years as president (assuming that he wins a second term) have the national debt doubling to over $20,000,000,000,000 [$20 trillion]!  In order to finance these massive budget deficits, we have to borrow this money from someone.  If China turns off the loans, it is going to be very hard to find the money to continue to fund massive national programs, while fighting two wars and bailing out American industries.  China has us right where they want us… and they know it.

Americanly Yours,

Phred Barnet

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I found this chart at the New York Times.  It totals up all of the money already committed to bailouts by the United States Government.  It also shows the total amount of this money that has already been spent on bailouts of private sector industries by the government.

According to this chart, the US Government has committed $8,800,000,000,000 [$8.8 trillion] to these bailouts.  Of this, the government has already spent about $2,000,000,000,000 [$2 trillion].

This is insane.  The $2,000,000,000,000 [$2 trillion] equals $6,666.66 per American.  $8,800,000,000,000 [$8.8 trillion] in total bailouts adds up to a total of $29,333 per citizen of this country!

But, this money doesnt even include the $152,000,000,000 [$152 billion] “stimulus” last year or the $787,000,000,000 [$787 billion] bailout recently passed.  If you add those two bills to the total, the total swells to $9,739,000,000,000 [$9.739 trillion].

This equals $32,463.33 per American!!!

This amounts to about 3/4 of the annual US GDP and is nearly enough to double the national debt.  And, as Mr. Obama and others have reminded us, there is no guarantee that this will work.

The government just cannot justify spending this much of its citizens’ money on bailouts and “stimulus” that has no guarantee of working.

This is money that has to be paid back.  It will be paid back by Americans in the future.  Including the current national debt and the money that will be added to the debt due to these new bailouts and “stimulus” bills, a child being born today is born saddled with approximately $65,000 in debt.

We are selling our children into slavery for bailouts and “stimulus” bills that may not even work.

Americanly Yours,

Phred Barnet

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