Friday, January 9, 2009

It just doesn't pass the smell test

President-elect Barack Obama said Thursday the recession could last for years unless Congress infuses unprecedented sums from Washington into the economy.

Mr. Obama is proposing a huge infusion of taxpayer dollars to revive the critically ill national economy by borrowing money from the taxpayers he is trying to save.

"A bad situation could become dramatically worse," Mr. Obama said, painting a dire picture - including double-digit unemployment and $1 trillion in lost economic activity.

What is the source of these unprecedented sums from Washington with a federal budget deficit projected to reach an unprecedented $1.2 trillion ($1,200,000,000,000) this year, nearly three times last year's record. The answer is borrowed money and increases in the money supply not supported by real economic activities, because the federal government's bank coffers are broke and have been for a long time.

And how will the federal government repay this enormous debt? With higher taxes paid by the same taxpayers who will be "saved" with this misguided approach to fixing the economy. And with cheaper dollars from future inflation caused by fake increases in money from these fake economic rescue tactics. Cheaper dollars that will make our productivity and savings worth less tomorrow than what they are worth today.

It just doesn't pass the smell test.

Pax Domini sit semper vobiscum

1 comment:

Anonymous said...

It's called desperation. When you have B. Madoff stealing over $50 Billion (that's a LOT of money!)and not one agency stops him. But,as an actual producer of jobs and commerce, you don't file your payroll taxes exactly on time, they somehow can figure that out and fine you. Plus who knows what else is really going on.Guess what...Paulsen and the rest are SPOOKED! Once you lower interest rates to almost zero...the only thing you can do is inflate the money supply.They don't know what else to do. To quote Bob Dylan...."it's a hard rain gonna' fall"!