Obama Preaches Totalitarian Economic Policy

Government the New Entreprenure

Based on ideology and Marxist-fascist principals Comrade President Obama has bet his presidency on government.  President Reagan the most successful president of the twentieth century unshackled government from the backs of Americans, and the people were rewarded with a successful economy and peace in the World.  Whatever the theories are about government and higher taxes providing an incentive to grow the economy, there have been no examples except in the growth of totalitarian regimes.  As we saw with Comrade Obama embracing Castro, Chavez, and Ortega it is obvious that he does not disfavor totalitarianism. And those see him as weak, naive, and ideologically sympathetic.

There are less than 20% of economists today who indicate that there will be a depression in the United States, the other 80% must receive their paycheck from the government.  Government is such an ineffective vehicle for participating in the private sector that socialist countries have fallen far behind the USA of old in terms of productivity. Debt is nothing but a drag on an economy when real unemployment is at 18%, wealth has evaporated for those who could invest and taxes are the only force driving the economy, any recovery cannot last.  The foundation of a recovery as President Reagan proved was to unleash the American people’s potential by limiting governments intervention and productivity and economic investment will blossom.

How can governments priorities and new ideology force consumers to purchase what governments wants instead of what they want?  The capitalist economy is built upon business providing what consumers want not what government wants consumers to buy. Besides when nationalized businesses begin to fail, Banks, Auto, insurance, health care, manufacturing the government will continue to subsidize these failing industries as England did all to build a bigger debt to pay off with taxes!  If government is the new business with growing employment, higher wages and retirement packages, along with the funding of Social Security, medicare, medicaid and prescription drugs the new proposed government health care all when the economy is in a spiraling trend downward, government programs will only benefit those who live off the taxpayer.

The taxpayer is unemployed, and those with retirement investments have seen their wealth disappear, so the Obama plan is to tax the wealthy, shackle business with more taxes via cap and trade and borrow from future generations of Americans.  Does this sound sustainable? Yes Comrade President Obama, only in Cuba, Venezuela and Nicaragua!

Obama Gambles that Reagan’s Economic Policy was Wrong

As he approaches his 100th day in office, Obama is rolling back the Reagan Revolution and restoring government to a central role in the economy. He has passed the biggest budget stimulus ever, prepared the way for an overhaul of the U.S. automobile and banking industries and proposed a $634 billion government- funded expansion of health-care benefits.

The ultimate consequences of rebalancing the roles of government and capital are far from clear. In the short run, though, Obama has managed to dissipate some of the doom-and- gloom talk that the U.S. was headed for a depression.

“In a financial crisis, the biggest mistake that a government can make is to do too little, not too much,” Treasury Secretary Timothy Geithner said in an interview April 21.

In the longer run Obama has proposed a 10-year budget plan, including $3.55 trillion for 2010 alone, to pay for his proposals to expand government’s role in such areas as health care and education.

Obama’s long-term plan extends the shift in priorities that started with the stimulus program’s focus on middle-class tax cuts and government-assisted job creation in selected industries such as renewable energy. The 10-year plan lays the groundwork for universal health care and redistributes income from the rich to those less well-off. It also boosts spending on education and infrastructure and proposes a so-called cap-and-trade system to help limit carbon dioxide emissions by U.S. businesses.

“We laid out a broad redirection of priorities for the country by making critical investments in basic public goods,” Geithner said.

Obama has defended the deficit, saying massive government spending is necessary to combat the financial crisis. He has pledged to cut the shortfall in half by 2012. That would still leave the government $581 billion in the hole for that year.

And budget experts are skeptical even that can be achieved. “We’re not going to be able to turn off the spigot completely when this downturn ends,” says Isabel Sawhill, who’s at the Brookings Institution in Washington.

The cost of hedging against losses on U.S. Treasuries using credit-default swaps rose to a record on Feb. 23, the week after Obama signed the stimulus bill. While the cost has since come down, it remains about seven times the level of a year ago.

“You cannot finance this without an increase in real interest rates,” Greenspan said. “They’ve got to stretch out their timetable.”

Some economists also argue that Obama’s plans to intervene more forcefully in the economy will lead to slower, not faster, productivity growth.

The Big D

If one asked a roomful of economists two years ago to put odds on a repeat of the Great Depression, nearly all would have said zero. In early March, The Wall Street Journal posed the question to about 50 forecasters — defining depression as a decline in output per person of more than 10%, four times worse than the decline the IMF anticipates. On average, they put odds at one in seven; several put them above one in four.

“This is a Depression-sized event,” says economic historian Barry Eichengreen of the University of California at Berkeley, citing the global decline in industrial production and world trade. The big difference: In 1929, governments dithered, or worse. In 2009, they’ve rushed to the rescue.

To go from today’s deep recession to a depression something would have to go wrong. It could be a financial catastrophe on the scale of last fall’s bankruptcy by Lehman Brothers or another panic-inducing event. Or a crash in the dollar, one that forces interest rates up at just the wrong moment. Or it could be political gridlock that stops governments in the U.S. or Europe from spending enough to fix the banks before a big one fails, or keeps them for doing more on the fiscal or monetary fronts as the economy deteriorates.

Or it could be virulent deflation that pulls down prices and incomes, making debts, which don’t fall when prices do, a heavier burden. The textbook remedy is easy money and big government deficits. But so much of that has been tried it’s easy to question its efficacy or to imagine resistance around the world to doing.

The odds of the big D: 20%.