Friday, April 10, 2009

Please listen to the WARNINGS!

Here's a message I just sent to many members of Congress:

Recently, an essay published by the governor of the People's Bank of China appeared to favor the creation of an IMF currency to replace the U.S. dollar as the world's reserve currency. This, of course, is a tragic sign as the U.S. has been the safe haven for investors from around the world for the greater part of the last century.

In Europe, the outgoing president of the European Union, the Czech Prime Minister Mirek Topolanek, described America's current plan to fight the widening global recession as the "road to hell." Then British Member of the European Parliament Daniel Hannan made worldwide news headlines by rebuking the UK's own inflationary and debt-focused policies.

Meanwhile, Pres'ent Obama's administration carried on an effective public relations campaign to convince the U.S. citizenry and the rest of the world that if the world just worked together, everything would be "okay" -- even if they worked together mostly doing the WRONG things. That seemed to pretty much put most everyone back to sleep.

The Washington drumbeat is that our economic woes result from a lack of consumer spending. Therefore, Pres'ent Obama and the Democrat-controlled Congress seem intent on making up for all the U.S. citizens by spending money the government does not have. It hardly seems reasonable that the cure for the sick man's disease is to drain blood from his leg while trying to inject it back in his arm.

To postpone inevitable (formal) tax increases, it seems the Obama administration is content with a strategy of printing money. Of course, printing money is just another form of taxation. Rather than taking money out of the citizens' pockets, the administration is satisfied with simply robbing the currency itself of its purchasing power.

The things that are lacking in the current worldwide recession are PRODUCTION and CAPITAL (trillions of dollars of capital having been destroyed in the bursting of the "bubble"). It is PRODUCTION, not spending, that will building capital and restore purchasing power -- not the printing of currency that is ever more diluted in value. Besides, if the government simply prints more money, it won't allow Americans to buy more things because the things. They will just be able to buy less stuff at higher prices.

Obama's economic advisers seem to have convinced themselves -- and Congress -- that more debt and government spending will restore growth and ultimately allow the repayment of the huge debt. However, when all of the entitlement obligations come due over the next decade (i.e., Social Security, Medicare and other welfare), these obligations will amount to TENS OF TRILLIONS OF DOLLARS and the federal government will have NO ALTERNATIVE but to repudiate much of the debt (perhaps through hyper-inflation as other nations have done).

But, even if that were not true, Pres'ent Obama's assumption that additional borrowing and spending will restore growth is wrong on the face of it. IN FACT, MORE CONSUMER DEBT AND GOVERNMENT SPENDING WILL UNDERMINE OUR ECONOMY AND KEEP IT FROM GROWING. We borrowed and spent ourselves INTO this current situation. We must now SAVE AND PRODUCE ourselves OUT of the recession.

However, as long as the Pres'ent Obama administration and Congress are intent on propping up the FALSE ECONOMY, rather than letting it COLLAPSE, their CAN BE NO REBUILDING of a GENUINE ECONOMY.

Calls from other nations that actually see things clearer than do we will simply get LOUDER AND LOUDER until we are willing to FACE THE UGLY TRUTH.
What are YOU going to tell them?

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