Aug 27, 2007

America in Economic Throws while Media Distracts the Sheep


Several loud warnings have come in the last 6 months about America's economy and financial markets, and all important Fed policy, but the prophets could scarcely be heard over the clamor of celebrity news (American idolatry indeed), sports and entertainment, and of course the mischief, as always, in Washington. Among our posts recently (see tag "economy") dire warnings and unprecedented actions have taken place that affect Americans every day lives, that should have made front page headlines. Finally today Drudge Report posted the article that ex-U.S. Treasury Secretary Summers is warning of recession, in the most serious terms.

This falls on the heels of earlier loud cries from the present U.S. Comptroller General:

Jul 11, 2007

U.S. Comptroller General: "Greatest Threat to America is Fiscal Irresponsibility"

(CBS) This segment was originally broadcast on March 4, 2007. It was updated on July 8, 2007.

When the stock market soars or plunges, everyone pays attention. But short term results aren't that important to the man you're about to meet. David Walker thinks the biggest economic peril facing the nation is being ignored, and for nearly two years now he has been traveling the country like an Old Testament prophet, urging people to wake up before its too late. Who is David Walker and why should we care?

As correspondent Steve Kroft first reported earlier this year, he is the nation's top accountant, the comptroller general of the United States. He's totaled up our government's income, liabilities, and future obligations and concluded that our current standard of living is unsustainable unless some drastic action is taken. And he's not alone. It's been called the "dirty little secret everyone in Washington knows" – a set of financial truths so inconvenient that most elected officials don't even want to talk about them, which is exactly why David Walker does.
"I would argue that the most serious threat to the United States is not someone hiding in a cave in Afghanistan or Pakistan but our own fiscal irresponsibility," Walker tells Kroft.

So, actually, credit CBS for airing this article on 60 Minutes, yet it went unheeded.

Earlier warnings than this went without much notice or attention, though published in major newspapers:

Greatest threat to U.S. is economic

Last month, the Organization for Economic Cooperation and Development released figures showing that last year for the first time, China supplanted the United States as the No. 1 destination for foreign direct investment worldwide - that is, money that goes into factories, equipment, real estate or existing companies. And in a blow to fans of ``freedom fries,'' No. 2 was France. Though other major economies also suffered a drop-off in this category, no nation fell as far in percentage terms as the United States.

One Congressman and now Presidential candidate stands today justified in all of his warnings, such as these:

Government Debt- The Greatest Threat to National Security

October 25, 2004

Once again the federal government has reached its “debt ceiling,” and once again Congress is poised to authorize an increase in government borrowing. Between its ever-growing bureaucracies, expanding entitlements, and overseas military entanglements, the federal government is borrowing roughly one billion dollars every day to pay its bills.

Federal law limits the amount of debt the U.S. Treasury may carry, and the current amount-- a whopping $7.4 trillion-- has been reached once again by a spendthrift federal government. Total federal spending, which now exceeds $2 trillion annually, once took more than 100 years to double. Today it doubles in less than a decade, and the rate is accelerating. When President Reagan entered office in 1981 facing a federal debt of $1 trillion that had piled up over the decades, he declared that figure “incomprehensible.” At its present rate of spending, the federal government will soon amass $1 trillion of new debt in just one year.

Government debt carries absolutely no stigma for politicians in Washington. The original idea behind the debt limit law was to shine a light on government spending, by forcing lawmakers to vote publicly for debt increases. Over time, however, the increases have become so commonplace that the media scarcely reports them-- and there are no political consequences for those who vote for more red ink. It’s far more risky for politicians to vote against special interest spending

In a FOX interview in May, before the first debate, Ron Paul accurately predicted (while being impugned for such) a major cash crisis, housing bubble break (subprime market), and economic downturn that would be severe. Why have the other republicans and democrats not said a word? Because 1) they are ignorant of the entire economic system and Fed, and 2) their policies all involve the maintenance or expansion of big government, and not tax reductions (Bush's tax cut was a piece of lint). LISTEN TO RON PAUL'S PREDICTION HERE, WHICH HAS BEEN CONFIRMED IN THE LAST WEEK BY THE FED'S ACTIONS, AND THIS NEWS:

The Solution?
Get someone who understands economic policy, government debt and spending, financial markets, and the FED, who is willing to take the "drastic action" called for (major tax reductions, limited government) into office now! Listen to this media consultant and investment counselor, Peter Schiff, in this 2 minute clip.