R.A. Geise: The handwriting on the wall
British blues rocker and “the fastest guitar in the west” Alvin Lee toured America throughout the early ’70s with his band Ten Years After prophesying how we would “tax the rich (to) feed the poor, ’till there are no rich no more” (“I’d Love To Change The World”).According to the recent figures published by Forbes magazine, the total assets of all the world’s billionaires are about $3.6 trillion. Coincidentally, that sum is equal to the US government’s projected spending for this year. Are you listening? I’ll say it again: If we were to confiscate the entire wealth of all of the “ten-figure titans” on the planet (good luck with that, by the way), it would only be enough to meet our government’s “projected” spending for a single year.Actually, that is not entirely correct because the 2010 budget did not include: the addition of the largest entitlement increase in the history of mankind (i.e. health care reform), any “immigration reform,” further escalation in the “war on terrorism,” or any of a myriad of other unexpected and “off-budget” expenses that you can think of. Also, the balance of the Social Security “Trust” fund and any surplus contributions used to mitigate the red ink in the past have been exhausted.Yes, the previous administration was a disaster leaving us with a record deficit of $459 billion in 2008. The current administration; however, has taken us from the frying pan into the fire – tripling that figure in its first year ($1.414 trillion in 2009).The budget Obama submitted for 2010 was titled “A New Era of Responsibility: Renewing America’s Promise.” Despite the fact that last year’s record deficit included the $700+ billion TARP bailout of the largest criminal financial institutions, we’re easily on pace to set another new record this year with first quarter results ahead of the same period last year by 16 percent. Our government must now “borrow” $4-6 billion each day just to keep the lights on. Folks, may I remind you that figure is thought to be the age of the earth? As the current US debt clock approaches $13 trillion, the annual interest we must pay on this amount approaches $500 billion- now the third-largest budget item. What happens when interest rates begin to move up from their historic lows … and no less than $2 trillion is added to that total by the end of this year?As astronomical as these numbers are, they do not include the massively under-funded state and local budgets or any household debt. Actually, they don’t even accurately represent the total cost of all of the “progressive” policies instituted since “enlightened” big government first promised Americans “a chicken in every pot” in 1928. According to the General Accounting Office (GAO) our federal government’s total unfunded liabilities increased $14 trillion last year from $62-76 trillion)!Foreign investors have lost confidence in “the full faith and credit of the United States Government” and are no longer showing up at the debt auctions which finance this enormous debt. Last year the Keynesian bankers “monetized” as much as 80 percent of the shortfall. If you don’t understand these terms, you had better look them up in your Funk & Wagnall’s because from an Austrian economic point-of-view, it’s time to begin digging your financial foxhole.If you think that US government bonds are still AAA financial instruments, remember that in the summer of 2008 Standard & Poor’s, Moody’s, and Fitch were still giving the leveraged toxic sub-prime mortgage debt an ‘AAA’ investment rating.
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