Thomas R. Eddlem
The non-partisan Congressional Budget Office released its most dire warning yet of a looming U.S. debt crisis, openly comparing the U.S. budget situation to the Greek, Irish, and Argentinian debt crises and calling for a 20 percent cut in the size of the federal government. The July 27 report, “Federal Debt and the Risk of a Fiscal Crisis,” comes just days after the Obama administration revised upward its deficit projections for fiscal 2010-11 to a two-year total of $2.89 trillion. The CBO had labeled the federal spending path “unsustainable” in a June report.
The non-partisan U.S. Congressional Budget Office declared that the U.S. government is on an “unsustainable” path of accumulating debt in a new analysis entitled The Long-Term Budget Outlook.
“Peter, you have been mocked on all of these financial shows going back to 2005. Going back to 2005! Not only did you predict problems, you actually explained what was going to happen. Why didn’t anybody listen? You were Cassandra!”
Top Washington Democrats are planning another round of "stimulus" spending legislation to create jobs, according to the Los Angeles Times for November 27. “The renewed push to create jobs is driven by a recognition that the $787-billion stimulus program enacted in February is not a sufficient remedy for an unemployment rate that stands at 10.2%,” the Times reported, adding that “Congressional aides said the new program could cost tens of billions of dollars. Democratic House members who had wanted a larger stimulus said they would press for a substantial spending plan this time.”
President Barack Obama on August 25 renominated current Federal Reserve Chairman Ben Bernanke to another four-year term as Chairman of the Federal Reserve Board of Governors, but free-market economists have concluded that Bernanke's policies are creating the seeds of another economic crash.
The House Financial Services Committee witnessed a classic confrontation July 21 where the redefinition of a word was finalized. The confrontation happened between free market Congressman Ron Paul (R-Texas) and Keynesian Federal Reserve Bank Chairman Ben Bernanke over the definition of inflation. Congressman Paul noted that “inflation is an increase in the money supply,” as indeed the term had classically been understood.
Our politicians in Washington (especially the Obama administration) are following the economic policies of Federal Reserve Chairman Ben Bernanke, who made these economic predictions over the past four years (YouTube Video):
“Consumer prices shot up in June by the largest amount in 11 months,” the Washington Post reported June 15, “reflecting the biggest jump in gasoline prices in nearly five years.” The 0.7 percent June increase in the Consumer Price Index represents an annual rate of more than eight percent as well as the first consumer symptom of the hyper-inflation the Federal Reserve created over the past year.
The Ludwig von Mises Institute’s Howard S. Katz has revealed that the Federal Reserve Bank has inflated the U.S. currency to unprecedented levels since September 2008 and that it is hiding the fact. Katz cited a Federal Reserve letter he received in response to an inquiry where the Fed admitted that its Open Market Committee stated it “has increased the Fed balance sheet to levels never before seen.”