Obama's Impending "Raw Deal"

>> Wednesday, March 17, 2010

He may have been a constitutional professor, but realistically, did he actually know the subject matter he taught? or was it some post he was assigned to or awarded, to which he thought, 'cool! this'll help me out when i run fo prez!' Thus far he's not shown us any adroitness in his preserving or defending the Constitution. Quite the contrary, actually. Instead he appears hell bent to shake it to its very foundations, and give us something wholly new-- a raw deal.

So, his grasp on the constitution is tenuous, okay. But there's another issue wherein he's doing this country another grave disservice-- our economy, and how best to manage its present intricacies-- and the present cold hard realities to which he seems completely oblivious.

Here's a man sworn to preserve and defend the Constitution. The man whom America is asked to trust in his leadership. And yet he can't even grasp simple economics. On top of which he's seemingly incapable of telling the truth. Prime example: on Monday Obama spoke in Ohio to a tiny crowd and said this:

"How many people are getting' insurance through their jobs right now? Raise your hands? A'right. Well, a lot of those folks, your employer, it's estimated, would see premiums fall by as much as 3,000%, which means they could give you a RAISE!"

If Obama genuinely believes this he is a fool. A grand spectacle of a fool. If he doesn't he's a liar. And, of course, anyone with a modicum of common sense knows that passing the healthcare bill will not allow premiums to go down 'as much as 3000%'. As I said, anyone who believes this is a fool. The man who repeats this tripe is a liar. Don't believe me? Ask Dick Durban (D), Illinois:

"Anyone who would stand before you and say, "Well, if you pass health care reform next year's health care premiums are going down," I don't think is telling the truth."

Ergo, Obama is a liar.

Here's the truth. Our economy cannot sustain the debt this healthcare bill will incur. In 2008 the CBO predicted the Social Security surplus would peter out in 2017, but when has the CBO EVER been right in their scoring? (They have always (with the exception of one program) been horribly off base. What they score virtually ALWAYS comes in WAY beneath what the program actually ends up costing. So why should we believe their scoring on healthcare.) At Brietbart's BigGovernment.com:

Time to Pay the IOUs out of the ‘Lock Box’
by Greg Knapp

All the lies about the Social Security “lock box” are now on full display. This is the year we will start paying out more from the SS program than we took in. We’ve gotten here even earlier than predicted. This wasn’t supposed to happen until 2017. Whoops…

Sounds like a good time to start tapping the nest egg. Too bad the federal government already spent that money over the years on other programs, preferring to borrow from Social Security rather than foreign creditors. In return, the Treasury Department issued a stack of IOUs — in the form of Treasury bonds— which are kept in a nondescript office building just down the street from Parkersburg’s municipal offices.

Now the government will have to borrow even more money, much of it abroad, to start paying back the IOUs, and the timing couldn’t be worse. The government is projected to post a record $1.5 trillion budget deficit this year, followed by trillion dollar deficits for years to come.

But, wait! We have $2.5 trillion in there and it’s earning interest. It’s real money. We’re fine, right? Right. Pull this leg and it plays “Jingle Bells.” This is the mess conservatives have warned about for so long. The lock box hoax is nothing but a promise from the government (us) to pay us. Yes, the bonds will be paid, but that shouldn’t ease your anxiety. The money has to come from somewhere. Government only has two choices to get it:

1) Taxes.

2) Borrowing.

That’s it.

We are required to raise that money through borrowing or taxing until all those bonds are paid out. Say, "hello" to even more debt.


Now, add what you've just read to this excerpt from a piece at Whiskey & Gunpowder dot com:

The Big Dead-Cat Bounce
By Doug Hornig, Whiskey & Gunpowder
March 17, 2010


...The federal debt. How bad is it? Well, the Bank for International Settlements recently released a very frightening figure. In order just to stabilize debt at pre-crisis levels, the BIS says the U.S. government must run a budget surplus of 4.3% of GDP. Every year. For ten years.

For an in-depth look, try Harvard economist Kenneth Rogoff’s new book, This Time is Different: Eight Centuries of Financial Folly (co-authored with Carmen Reinhart of the University of Maryland), the first comprehensive survey of past financial crises around the world.

Dr. Rogoff, who may be the country’s leading expert on the historical record, concludes that a banking crisis often leads a country into default, because government’s response is usually to try to prop up the financial system with yet more debt.

If that sounds familiar and disconcerting, it should. Even more so because Rogoff has identified a clear tipping point, beyond which there is little hope of recovery. When a government’s debt grows to equal annual GDP, the game is essentially over.

Where we are now: We have $12.5 trillion in gross debt, growing at $2 trillion per year, on a GDP of $14.3 trillion. Next year, it will be $12.5T + $2T = $14.5 trillion on a projected $14.5T of GDP. Or 100%. A level we cannot survive for long.

That means it’s likely, in the not-too-distant-future, that the government will be confronted with a very stark choice between defaulting on the debt or trying to inflate its way out. The former would kill off economic growth and likely launch a worldwide depression of epic proportions.

Disastrous as that would be, if the alternative is chosen and Washington’s printing presses beget hyperinflation, that would probably be worse. In a serious deflation, those who have saved for a rainy day can make it through okay. In hyperinflation, which unconstrained further spending could easily bring on, everyone loses.

The truly prudent prepare, as best they can, for either eventuality.

This is just the tail end of a much larger article, but here's the rub. We are not out of the woods. Whatever media or politicians tell you (and how often are they ever right?) the end is not anywhere near in sight. Think what's happening in Greece can't happen here? Why? Because this is America? Think again.

Obama, for all that he's a great orator, is charming this nation into second-world status. And every one of you fawning Obama sycophants? You'll suffer right along with everyone else. Obama, for all his 'brilliance,' has shown no real ability to lead, or manage. He is turning out to be WORSE than Jimmy Carter. He wants to be a new FDR, but the only deal he seems prepared to give is a Raw Deal.

The parting shot from Whiskey & Gunpowder to Doug Hornig's piece illustrates the hard choice America faces. And we face it not because of any individual choice we currently possess, but rather, because of the choice we made in seating Obama in the Oval Office...

The Scylla of default...

Or the Charybdis of hyperinflation.

Odysseus chose to sail closer to Scylla than Charybdis. That way he lost only a few men in the jaws of a monster instead of his entire ship to a whirlpool.

Do the Obamabots even understand the predicament this portends? Does Obama?

This is what I see, to quote a recent movie title: There Will Be Blood. This much is inevitable, assuming Obama is as shrewd as Odysseus. If not? It's the whirlpool for us all.

Talk about raw deals!

5 comments:

Marshall Art March 17, 2010 at 5:58 PM  

Still waiting for some evidence that Obama is as brilliant as advertised. Imagine the side-splitting laughter if he were to be made to explain how his policies get us from here to surplus and prosperity. As we know, some think higher taxes and union expansion will do the trick. And don't let "Pencil" Dick Durbin fool ya. He likely wasn't paying attention to Barry O or he never would have said that. He's just as stupid because he backs much, if not all of what Obama is looking to do. It's even more stupid to know the consequences, as Durbin seems to, but support it anyway.

Whether Barry is stupid, a liar or both (the safe money) really doesn't matter anymore. All that matters is stopping this buffoon from doing anything of signficance before the midterms.

Jim March 19, 2010 at 10:35 PM  

What they score ALWAYS comes in WAY beneath what the program actually ends up costing.

Actually, no. They overestimated the cost of Medicare Part D by 35%.

ELAshley March 20, 2010 at 8:52 AM  

What I said was:

"(They have always (with the exception of one program) been horribly off base. What they score ALWAYS comes in WAY beneath what the program actually ends up costing......)"

And all of within a set of parentheses; the same thought. Perhaps shouldn't have used "always" in the next sentence, and I'll fix that now. But you're right. Medicare part D is the ONLY estimate they've given that was under budget. Everything else has cost at least twice what they've estimated.

Jim March 20, 2010 at 11:39 AM  

Can you provide site references to back up your claim? Would love to read them. I don't mean "so and so says this". I mean, "here is a list of estimates and here are the actual numbers for comparison."

Thanks.

Jim March 26, 2010 at 6:45 PM  

Oh, and remember 2000 candidate Al Gore and his policy that the Social Security Trust Fund should be kept in a "lockbox" so that it wouldn't be spent and would be available when the SSA needed it?

He lost. And Bush spent the trust fund.

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Young Turk:
Date: 1908
Function: noun
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:an insurgent or a member of an insurgent group especially in a political party : radical; broadly
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