Posted by VanWagner on April 13, 2009, 4:29 pm, in reply to "Re: G-20 Summit: "Give the this guy a chance"."
66.215.57.194
John:
Good to meet you, there is nothing wrong with a good on-line debate. I promise to keep my bold letters to a minimum. The overspending is going to bankrupt us all and cause massive inflation.
I was not in favor of the overspending ways of George Bush. I am always amused when I hear people complain about how George Bush spent too much and had too high of a deficit but then they say that Obama is not bad for overspending because he is only overspending like Bush did. HUHHHHHHHH!!!
My big question is where is all of the money going to come from?
If in one year it is good to spend $1.8 Trillion more than you take in or $10 Trillion more than what you take in over what… five years, then why not have a deficit of $2.3 Trillion in one year, or why not a $3 Trillion deficit in one year? Hey, while we are at it, why not spend $30 Trillion more than you take in. Not to be ridiculous, but at some point most people would agree that there is some annual deficit amount that is too much. Just pick your number. I for one think that the $1.8 Trillion deficit (in just one year) that the democrats in congress (how do you spell Pelosi?)want to incur (with Obama’s support), will have disastrous effects down the road on the country as a whole and on us individually. As you know, government always spend more than what is
initially projected.
Predictions of future events in order:
1. In the next 6 to 12 months there will initially be good economic good news as some of the massive amounts of borrowed and printed money floods in to various sectors of the economy. We will read scores of news reports on how the Obama economic miracle is working. Hmmmmm. This is kind of like having $250,000.00 of personal credit lines that are tapped out and then you suddenly are given a brand new $100K credit line. Hey money is no problem again….right?
2. Although I am sure most of you fully understand this next point, let me state: Most economists would tell you that when the money supply is tremendously expanded (i.e. doubled) relative to the supply of goods produced, inflation is the result, if there is massive overspending, the big risk is of hyper inflation. Too much extra money chasing close to the same amount of economic goods.
3. Now here is where it gets dicey. Where is all this money coming from? Some of the money comes from taxes, some from printing money, and some from borrowing. As inflation increases anybody who lends money to anybody is going to want an inflation adjusted higher return on their investment. As lenders of every type, including foreigners who are buying T-Bills, demand ever higher inflation adjusted returns, the federal government will have to pay higher and higher interest costs to finance the national debt. As time goes on, the federal government will print ever greater amounts of money to compensate for the fact the dollar won’t buy as much. The federal government will fuel even higher inflation as it continually expands the money supply. As I heard it called recently, the government is creating a generational ponzi scheme.
4. The price of oil will go way back up. Oil is priced in dollars, so a much much weaker dollar relative to other currencies will cause the price of gasoline to once again go through the roof.
If you have any kind of dollar denominated assets, in 5 to 6 years they will buy only half the same amount of goods as they would have bought today.
Conclusion: Think back to the early 1970s. 37 years ago you could buy a reasonable home for $30,000.00. Can you imagine telling somebody back then that homes would cost 30 times as much in 2008 as in 1972. In a few years prices on everything are going to go through the roof. Good luck to your kids. Most won’t afford to be able to buy a house.
With super high debt, the borrower will become the slave of the lender. America will progressively lose its sovereignty as its drug like addiction for more and more money will have disastrous effects on our freedom. Imagine 15 years down the road where your combined tax obligation is approaching 90%, but then you can get new types of tax deductions to effectively lower your tax bill. These will be deductions based on driving a politically correct “green” car, living in “green” housing (how do you spell tiny?), and by following all the myriad of new rules designed to make life “perfect” and eco-friendly. Refuse to follow all the green edicts and other new rules and you will find yourself economically stripped (through mega taxation) of any wealth you have.
42
