The American Century Dictionary defines Bankrupt as “Legally declared insolvent.” Insolvent is defined as “Unable to pay one’s debts.”
The majority of Democrats, and a surprising number of Republicans, believe that the Obama Administration is on the right course to save the nation’s financial system. The same Democrats that screamed bloody-murder over George W. Bush’s spending habits, spending sprees that I also was in grave disagreement with, are now proclaiming that not only will President Barack Obama’s massive budget proposal not bankrupt the country, but that deficit spending into the trillions of dollars is what is necessary to save us from a looming sequel of The Great Depression.
Republican House Representative John A. Boehner, the House minority leader, said recently in defense of his idea to freeze government spending that, “We simply cannot afford to mortgage our children and grandchildren’s future to pay for this big government spending spree.”
Imagine, if you will, and I will use myself as a hypothetical example, that I had hit some hard times. Investments were going sour, logging and construction downturns placed a burden on my financial well-being, and my wife and I were no longer able to go out to fine places to eat, or attend entertainment venues that we would normally frequent. Cooking at home takes work, after all, and tightening our belts and curbing our spending habits would take away from our ability to participate in a lifestyle we have been enjoying for years.
So, one night I sit down with my wife and say, “You know, the way to help our economic situation is to create in influx of cash so that we can get things moving again. That way, with all of that extra cash, we can go out and buy the things we feel we need to buy, and not have to spend so much time worried about trying to juggle the bills.”
She decides to agree in this world of fantasy, and so we max out our credit cards and get more of those little plastic devils so that we can use them for whatever we desire. After all, we need to fix the infrastructure of our lives by buying new cars, adding on to the house, building an additional structure on our property on the Oregon Coast, and pulling out our driveway and replacing it with new concrete – oh, heck, its free money, we might as well lay interlocking bricks. That way, it is more appealing to guest that visit too.
Eventually, the credit cards become too much for us to manage. But, hey, no problem, the 80 acre place in Oregon is paid off, and even with the slow down in real estate it is worth more than one can shake a stick at, so we can just borrow against the property. We’ll set up an account that allows us to write checks, that way the equity is fully available, and always at our fingertips.
During the time period of all this money flowing in we go out, buy new cars, and live it up. Those around us proclaim, “Gosh, even with the economic difficulties this nation is facing, the Gibbs’ family is doing well. I wonder how they do it?”
What is that you say? Eventually I will have to pay back all of that money I created by financing myself up to my eyeballs? No problem, the creditors will stay off my back just long enough for me to die of old age, and then my kids can worry about it. No worry. They’ll figure something out.
Obviously, the high deficit world I created in the above scenario would be a foolish way to run my household. As a business owner, trying to fix an ailing business by going into deeper debt would be foolish as well. So I ask this: If it is the wrong thing to go deeper into debt to create an influx of funds, and if it is wrong to just leave the worries of it to my children and grandchildren, as an individual or business owner, then why would it be the right thing to for the United States Government?
Historically, raising taxes and increasing government spending creates more harm than it helps. Lyndon B. Johnson and Jimmy Carter are great examples of that. And don’t give me this “Obama is cutting taxes” bull, either. Taxes are being raised in ways that we don’t even recognize them as such. Fees and licenses and fines for regulatory disobedience are all taxes, in my book. Even the simple little Business License is a city business tax, even though the word tax is not present. While quacking like a duck, even though the animal has a name tag that says hyena, does not make a duck suddenly a hyena. Eventually, the Democrat’s spending, led by Barack Obama, is going to get so massive, and it is already beyond the abilities of the top 5% to shoulder the full burden, that Obama will tax as Democrats always tax – massively along all points of the economic spectrum. Uh, that means you, too. You will all feel the pain of an Obama Administration frantically trying to gather more funds after everything begins to collapse further.
Early during the last century a recession loomed on the horizon, and Presidents Harding and Coolidge were fiscal conservatives that adhered strictly to the U.S. Constitution. As the economic times were becoming more difficult, as they are now, Harding, and then Coolidge later, cut federal spending and cut taxes. As a result, people were able to do more with more, and their incomes rose, increasing revenue while stimulating the economy. The boom years of the 1920’s followed.
President Hoover, a fitting predecessor to the socialist stylings of Franklin Delano Roosevelt, was not anything like his fellow fiscally conservative Republicans. Hoover, as Roosevelt would later, piled up big deficits to support huge public-works projects. Federal spending soared during the final years of the roaring 20’s and into the early 1930’s. In fact, federal spending increased by more than 50%, the largest increase in federal spending ever recorded during peacetime.
Public projects Hoover decided to undertake included the San Francisco Bay Bridge, the Los Angeles Aqueduct, and the Hoover Dam. Yes, I know these are wonderful projects that we benefit from to this day, and the world is a better place with them, but was this the best thing to do as the nation was entering into The Great Depression? Sure, Hoover became very popular with the labor forces that participated in the projects who were convinced by government to refrain from cutting wages as the economy fell. But was it government’s responsibility to correct the market? Or was it the fault of central planning, protectionism (like the Smoot-Hawley tariff), and central banks like the Federal Reserve System controlling the economy (that became known as the New Deal later) that caused the economic upheaval, and extended it well into the 1940s?
Like with the Obama Administration, where the market seems on the surface to have failed, the government stepped in to protect the common citizen, increasing spending to do so, therefore creating debt – and in Obama’s case, writing checks on money that doesn’t even exist, and in turn devaluing the dollar.
I know that the Liberal anti-truth machine is even now rewriting history, proclaiming that Hoover, contrary to popular opinion and factual historical text, was actually trying to balance the budget by cutting spending, and it was those actions that caused The Great Depression. Robert H. Frank of the New York Times even goes so far to “lie,” I mean “say,” that Hoover not only actually cut spending, but that there is a consensus out there among economists that cutting spending is a huge mistake.
Do you hear that? Balancing the budget, cutting spending, and essentially being responsible with the American Citizen’s tax money is a bad thing? Putting less on the credit cards will harm us? Mortgaging America into bankruptcy so that our children and grandchildren in their lifetimes could never pay it back in full is the right thing to do to stimulate the economy? Are they insane?
Owing more than you have coming in, in other words, deficit spending, is a one way ticket to bankruptcy. It was wrong when George W. Bush did it, and it is wrong now. The Free Market is self-correcting. The people know best, not the government. The size of government has been steadily increasing over the last twenty years under the very moderate Bush Family, Bill Clinton, and now Obama (with a short spurt of a balanced budget that created a surplus that was engineered by the House Republicans led by Newt Gingrich during the nineties, of which The Left loves to give the credit to Bill Clinton on). If an increase in the size of government is such a good thing, and if deficit spending is what helps the economy grow, then tell me: After all of these years of deficit spending and a constant expansion of the federal government, why is it that we are in this financial mess? Could it possibly be that the seems of our economy are busting loose because of government intervention in the Free Market? Could it possibly be that the Free Market is trying to adjust after a decades of artificial manipulation by the United States Government? And since when is ever financing ourselves into oblivion a reasonable thing to do?
The Obama Administration, and the village idiots that populate the U.S. Congress, are bankrupting us. And what is most concerting about it is that a large segment of the U.S. population is actually greeting this destruction of the American financial system with thunderous applause, and mindless approval. Our founding fathers, President Harding, and President Coolidge would be disappointed. We have truly lost our way, and the Pied Pipers of Washington are leading us to a cliff. It is essential that we turn this around with fiscal conservatism, or else in the end, like the rats in the river, we will be drowning as a result of our own stupidity.
— Political Pistachio Conservative News and Commentary
Five Myths About the Great Depression by Andrew B. Wilson
When ‘Deficit’ Isn’t a Dirty Word by Robert H. Frank