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Give Me Liberty Or Give Me Debt
August 8, 2013
When he's not on the golf course, you'll find our divot-and-pivot president staging yet another public appearance intended to draw attention away from the scandals that threaten his administration. These appearances are characterized by Obama's spewing lie after lie about how more government spending is the key to job growth and financial recovery in an attempt to distract the public from the economic reality more and more of us are living.
But while it's long been clear that the president's legislation and policies, from Obamacare to Quantitative Easing, are at the root of our worsening economy, what's finally becoming even clearer is that the Obama-engineered economic stagnation is intentional and not simply the result of his ideology-based economic ignorance.
In no small part because Obamacare is making the 40-hour workweek a distant memory through its redefinition of "full time" to mean "30 hours per week," Americans looking for a job are doomed to be underemployed in part-time work whose hourly pay is substantially less than half of a living wage. Increasingly, it is not only minorities living in America's inner cities who are affected; the worsening economic disaster cuts across racial and geographic lines.
Regarding Obama's public appearances, the Chattanooga Times Free Press put it eloquently with this headline addressed to the president prior to yet another speech: "Take Your Jobs Plan and Shove It."
The editorial explained clearly how Obama's economic strategy works: A 2009 Chattanooga "Smart Grid" project, partially funded with some $100 million in stimulus money and using fiber optics rather than more cost-effective wireless technology, looks as if it may never be completed. Four years behind schedule, the now-stalled project stands to cost federal taxpayers $158 million and Chattanoogans $391 million.
The blowback? The Obama administration leaned on the newspaper until editorial page editor Drew Johnson was fired for writing the piece and the headline, although not until the newspaper had let the story ride for several days as it became the most widely read article the paper had ever published.
Further, despite the fact that US GDP is stalled at an anemic 1.7% annual growth rate and first-quarter-2013 GDP growth has been revised down to 1.1% -- a number that would seem to fall within the range of "possible rounding error" -- a 2011 Senate Budget Committee report estimated that more than $1 trillion is spent annually by the federal government to fund "total means-tested welfare spending."
At the same time, the Fed is adding another trillion dollars to our deficit through printing new money ($540 billion annually) and spending money it doesn't have to buy mortgage-backed bonds ($480 billion) through the third round of Quantitative Easing.
In QE3, the Fed "buys" bonds, paying for its purchases by crediting the accounts of banks. The money sits in the banks' fed accounts, collecting interest at rates near zero percent. Normally the money might be lent to small and medium-sized businesses (SMEs), which represent a relatively high risk for the banks, and normally banks would offset that risk by lending funds to larger (and safer) corporate clients.
But with interest rates at or near zero, large corporations find it more lucrative to swap short-term commercial paper with other large businesses. The result is that, with no way to offset the risks of loans to SMEs, banks simply hoard the Fed's money. It never gets into circulation in the private economy where it might spur real economic growth.
While many still naively assume that the president wants to see economic growth and an increased number of Americans back at real jobs earning real pay, the fact is that his administration is purposely implementing policies that do exactly the opposite.
Obama's economic-failure strategy includes limiting Americans' access to full-time employment, funding projects that the administration knows are doomed to failure, and creating phantom capital -- read "debt" -- that is never intended to make it into the real economy.
If Barack Obama is allowed to continue along his current path without the most vehement and effective opposition, the results for Americans, for America itself, may well be financial disaster and existential peril equivalent to what Patrick Henry faced in 1775.
Making the choice for liberty and against debt has never been more urgent.