Two Obama IOU’s

July/02/2009 17:59PM
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President Obama has an IOU to the planet. He must take steps to curb global warming. He plans to pay that off with your tax dollars. Or, with your energy bills. He wants to attend the next world-wide environmental conference with that IOU paid. He is indifferent to what it does to the US economy or your standard of living or your freedom. Ego is the big thing here. President Obama knows in his heart that the cap and trade will do little to help the environment, but it will add to his prestige in Europe and here at home with the environmental zealots who contribute millions to the election coffers. If cap and trade goes through the senate, mark that bill paid.

The next IOU is a little bigger and might take longer to mark paid. It’s the $11.4 trillion the government owes the world. It will go up by a minimum of $1.8 trillion this year. I believe that’s a low estimate. Before the $1.8 trillion, that means the government needs to borrow $15 billion each and every day. The only alternatives to reduce this is to raise taxes or reduce expenses. Since reducing expenses means putting useless union organized government workers on the street or cutting pork projects, you can guess the choice.

If investors don’t like our interest rates, we could raise interest rates to sell debt. Or, we could print more money and buy our own debt. Both mean inflation. One quickly and directly and the other by reducing the value of the dollar and Inflation may look pretty good to Obama, since it could pay back debts to the world with fewer dollars. Might not make China and our other creditors happy.

Does this deter President Obama? Not in the least. He wants to heap a $1.2 trillion health insurance program on the pile. How will he pay for that? Let’s see: raise taxes, cut expenses, or increase debt. What’s your bet?

Marc Faber, editor of the Gloom Boom & Doom Report predicts that U.S. inflation will someday match Zimbabwe’s–236 percent a year.

Is that too radical? Probably. But, it does get your attention. Living far beyond your means usually has a bad ending. Is our President a deadbeat who can’t pay his debts to the world? Is he a spendthrift who can’t stop spending?

I know one thing, based on his short track record, I wouldn’t lend him a dime. Maybe the rest of the world is thinking the same thing. This last IOU may be more than he can handle. It was far easier to save face with the environmentalists than to keep our credit rating with the world.

If you had a vote, which one would you ask him to fix first? Both?

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