debt recently exceeded 13 trillion. This is more than 90
percent of the country's GDP. Public debts of more than
60 percent of GDP are considered unhealthy. Public debts
above 90 percent of GDP cause severe disruptions in the
country's financial framework and the economy at large.
According to the Obama administration, America's public
debt will exceed 100 percent of GDP in the next fiscal
year. History shows that most countries whose debt
exceeds this mark are rarely able to control it. This
level of indebtedness usually leads to currency
There are a few historical examples whereby
countries were able to contain debts of more than 100
percent of GDP. But in those instances, the debts were
almost always contracted as a result of extraordinary
one-time expenditures, usually war. America's debt, on
the other hand, is a result of decades of structural
deficits. This means that we have grown accustomed to
spending more than we can afford. If we want to solve
our debt problem, we must slash spending and start
running surpluses. The problem is that it may prove
impossible to break the spending habit.
is like a drug addict who cannot quit because the dope
is too easy to get. Bonds are the dope of the American
government. But the price of the dope will eventually
rise, since low bond yields will not persist forever.
When this happens, the addict will go into seizures. But
he will not lie down and sweat it out. He will go on a
rampage to get his fix. He will loot people's retirement
accounts; he will confiscate their gold. Things will
turn ugly. It has long been impossible to cut anything
in Washington. Every proposal for a reduction is met
with hysteria from some special interest. The hysteria
is then amplified by the media. There is wailing, there
The final appeal is always made for the
children. It always works. They will suffer, goes the
refrain. What can politicians do? They back out while
the rent-seekers lick their chops. In the meantime, the
debt just keeps growing. Many people thought Barack
Obama would save America from its troubles.
Unfortunately, they were wrong. When it comes to
America's finances, the president is doing exactly the
wrong thing. We are headed toward an abyss, and instead
of braking, he has slammed down the accelerator. He is
behaving like a perfect madman. And like Emperor Nero,
Barack fiddles while the Treasury burns.
does not seem to realize that one cannot borrow his way
out of debt. Not even the American federal government
can do that. The American government has more leeway
than the rest, because the dollar is the world's reserve
currency. But no one can defy the laws of finance
forever. When the day of reckoning finally arrives, the
dollar will collapse. It would be wrong to think that
America's debt problem has been caused Obama. Obama is
not the root cause. He is merely a symptom. He could not
do what he is doing if the ground had not been prepared
beforehand. This was done by the decades of fiscal
recklessness. Both parties are responsible.
Do you still
remember who started us down the never-ending road to bailoutville? That president even called himself a
conservative. He was a good man, but he left a mess
behind. He went about his saving work in the wrong way.
He should never have tried to save capitalism from
itself. Instead, he should have tried to save capitalism
from government. They thought Barack was a great leader,
and they said he would lead us toward better days. Those
prophets were wrong. Barack is leading us toward
disaster. John McCain, however, would not have done much
better; he would also be bailing out right and left.
have a problem in this country: Neither of the two major
parties is any good.
The founders' America had no
Department of Education or Department of Commerce or
Department of Labor or Department of Housing and Urban
Development. It had almost none of today's countless
federal departments, agencies, and boards that waste
money and make our lives miserable. The founders'
America had no income tax or corporate tax. The
founders' America had no central bank. In the founders'
America, the dollar was backed by precious metals. That
is what limited government looks like. The idea that we
should go back to this kind of government would
scandalize many present-day conservatives.
things have moved on, and we need more government now.
This is a lie straight from statism's darkest pit. Too
bad so many of us have fallen for it. Today we are
reaping the fruit of that error: an oppressive
government, debts that cannot be paid, a rapacious
political class, a disintegrating currency, and a smug
president who makes bad things worse.
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