Brother, can you spare a dime?

A government that robs Peter to pay Paul can always depend on the support of Paul.
  - George Bernard Shaw

Our new Administration has set a record:  it’s railroaded legislation through Congress that confers the mandate on Government to spend more in it’s first month of office than the previous Administration spent on all of the Iraq war since 2003.

Not a single House Republican voted for this legislation. Most all Senate Republicans held this line. I’m glad to read that Republicans seem to be sticking to their “small government” principles. It’s too bad that they waited until Mr. Obama got elected to have their epiphany —and suddenly find them again! Not only was the last Administration rampant with runaway spending and printing of money by government on both sides of the aisle, you can bet that the Obama-Pelosi cartel will expand this premise in the months ahead. This represents the biggest increase in the size of our Government’s reach in over 60 years, possibly the biggest in the history of our nation.

Yes, some of this money will indeed create jobs. But most all of the rest is PORK that just amplifies BIG GOVERNMENT. We didn’t need it, period. If our Forefathers had any inkling that the new nation they created would eventually engage in this kind of chicanery, they would be HAVING CONVULSIONS!

Deficit Spending and History

Deficit spending occurs when a government, business, or individual's spending exceeds income. The practice also is called a deficit, or budget deficit, the opposite of a budget surplus.

Government, companies and households sometimes indulge in deficit spending, but with a plan to repay the debt, plus interest charges, over time. This technique is a standard government and business practice, but personal finances managed this way often end up forcing an individual into bankruptcy and poverty. Rules for repayment are different for individuals, business and government.

What happens when a government creates money without a fiscally responsible plan to repay it – as we’re doing now – is that the “credit score” of that government begins to decline on the world stage. When that happens, it become more and more difficult to monetize that debt by having other entities (China, for example) be willing to invest in the debt (US Treasury securities, primarily).  At some point in the future, things become so bad that nobody will buy this debt anymore and you will have financial collapse. Take a look at Zimbabwe (currently) for a recent example. Inflation is so high there as to be virtually incomprehensible to the human mind.

We got ourselves into a very bad situation here in the US through a combination of the Fed being “asleep at the switch”, and plain old unchecked greed in the financial sector. It’s not really about partisan politics at all, because spending our way out of the mess we’ve created with artificial manufactured money (government debt) simply may not work any longer.

I read a lot of Liberal friends’ comments (such as on Twitter and other places) that the Bush Administration is to blame for our current problems. Not true! You had a Congress where for the past eight or more years, both Democrats and Republicans were all too willing to spend money they knew full well that they didn’t have, not follow simple common sense in regulating the financial and related markets, and generally turn a blind eye toward clear economic signs that we were headed for a disaster.  Well, guess what? Now we have it!

Larger Forces At Work

Individual Presidential Administrations are much less responsible for the long term economic cycles that mature economies such as ours undergo than most people think. If you study the very long term climatic record, we’re at the beginning of a new Little Ice Age – which will mean colder winters, lower crop yields, famines, and other socio-economic disruptions in the next ten to twenty years. You can forget about Al Gore and his global warming alarmist theories – in the next decades, you’ll be reading headlines about global COOLING!  If we don’t learn to get our economic house in order, and start to understand these long term economic cycles better – and soon – we run the risk of our own economic collapse taking the rest of the world’s economies down the tubes along with us.

The bottom line

One thing is for sure. SOMEBODY is going to have to figure out how to pay the Piper. And the Piper will come – sooner or later. There is no such thing as a free lunch – not in capitalism, not in government, and certainly not  for my kids and potential grandchildren – who’ll be saddled with the bill for this moronic bullshit spending for decades to come. I’m not talking Greek – think about it.