The Obama Presence

The Obama Presence
Hot air and the smell of fresh crap

3/1/10

A Case for Smaller Government

Rasmussen Reports released a survey on February 5, 2010 indicating that 58% of the American public supports cutting the size and scope of government. Over half, 51%, of the American public support cutting the salaries of non-military government employees. In the face of this overwhelming evidence there are politicians claiming that Georgians want government services. Nathan Deal (R) candidate for Georgia governor made this statement at the January 19, 2010 Republican candidates debate at the University of Georgia; John Oxendine (R) candidate for Georgia governor made the same statement at the Cherokee Womens GOP Forum on February 17, 2010. There is a simple reason these men make such a claim – those who sit at the top of big government are able to grab more power. This power enables them to reward their friends and political cronies. I can prove my claim with a simple explanation of the Chart below.

Figure 1

Figure 1 above is an illustration of the true health of our economy. An unhealthy economy erodes our purchasing power and destroys the value of our savings. The blue line tracks the performance of the 10 year Treasury Note Yield and the yellow line Gold spot prices. Treasury Yields are a barometer of the health of the United States economy; Gold measures the future outlook for money. A lower Yield indicates high demand for the United States dollar; higher Yields means the government must offer higher Yields to attract buyers of our debt. Gold prices rising mean people would rather hold this commodity than dollar based investments.

The two troughs in the Yield curve illustrate an economy healing. By November 2004 the impact of the dot.com bust, 9/11, and Iraq War caused people to save and spend less. Likewise, starting in 2007 Yields began to fall due to the credit crunch and a slowing economy. Yields fell to 2.32% by December 2008 because people and government stopped spending and increased savings. Savings are good. It is required to provide investment capital for businesses to grow and create jobs.

The peaks in the Yield curve indicate periods of rapid growth in spending (debt) by government. Yields started up shortly after the Medicare Prescription Drug Act (2003)
1 and the Homeland Security Act came into law. Both bills increased spending and grew government faster and larger than any other previous Congress in United States history. The Medicare Prescription Drug Act is a $16.1 trillion unfunded mandate and The Department of Homeland Security costs US taxpayers ~$58.0 billion per year -- massive spending and bureaucracy. You think rational people would have stopped at this juncture. Not true!

In October 2008 the Bush Administration, Hank Paulsen and Ben Bernanke, presented to the nation the Emergency Economic Stabilization Act of 2008 or Troubled Asset Relief Program (TARP)
2 and insisted without passage world economies would collapse. Nothing could be further from the truth. TARP was a pay-off to political cronies at the expense of the American people.

Ben Bernanke funded TARP by going to a Bond broker and writing a check for ~$700 billion. Ben Bernanke created $700 billion dollars out of thin air and Hank Paulsen turned this newly created money over to Goldman Sachs. Goldman Sachs did not stash this cash in a vault, they turned it over, continued lending, cleared counter party trades, and generally used the non-inflated value of this currency to boost its profits. By the time this money filtered down into the economy, inflation destroyed its original value. The only people that benefited were the politically connected. The election of Barack Hussein Obama changed nothing.

On February 17, 2009 The American Recovery and Reinvestment Act 2009, better known as “Stimulus”, was signed into law. Ben Bernanke for the second time in six months went to a Bond broker and wrote another check for $789 billion. Ben Bernanke created $789 billion out of thin air. This money is flowing down to the states to fund public union constituencies. $1.5 trillion … that is $1,500,000,000,000 of savings/capital that was transformed into debt that could otherwise been used to invest in plant, capital, and equipment to create jobs. The result is rising 10 year Note Yields.

Treasury Yields are creeping up precisely because government is spending/creating money thereby causing inflation and destroying the dollar. From January 2009 to September 2010 (fcst.) the dollar has fallen 54.69%. The value of your savings, retirement accounts, 401K's, etc, has fallen 54.69%.

The proof is the value of Gold. Gold is up 322% since the election of G.W. Bush as President and his decade of massive government spending. There is no end in site with the election of Barack Hussein Obama as President. It is not going to stop as more-and-more Americans are purposely forced on to welfare rolls by Federal government policies that impoverish our nation. Both Democrats and Republicans are to blame at the State and Federal level.

The only way we can combat the impoverishment of our families is to elect a Governor, State Representatives, and State Senators that will slash state government and put up as many roadblocks as possible in front of the Federal government. Georgia State government must be slashed, spending on welfare, Medicaid, SCHIP, and Medicare must be reconciled; salaries of state workers cut, state union pension plans renegotiated, and as much money as possible returned to the citizens of this state to be saved and invested.

If we fail to elect the right people in Georgia, we will continue to be impoverished by corrupt politicians and a Federal government that is destroying the dollar and the economy.


1. Nathan Deal (R-9th) and Senators Johnny Isakson and Chambliss of Georgia voted YEA.


2. Senators Johnny Isakson and Chambliss of Georgia voted YEA.

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