Liberals and their allies in the media spend a lot of time and energy these days trying to convince Americans that all is right with the world despite a panic that has now turned into a recession and threatens to morph into a depression. All this under their direction of course but do not dare bring up how their harebrained schemes to put people in houses they could not afford or give them loans they could not pay back lead to the credit panic that started all this.
These days, when the stock markets are up you hear them tout how it is all because of Barack Obama's great spending plans but never how those plans permanently enslaves our posterity to the federal government through debt. And, typically, when the markets are down they turn the other way and find something else to talk about. They will tell you that the day to day gyrations are not all that important in that case and fail to remind everyone that profits and dividends are down. Sure, companies are beating expectations, but only because expectations have been lowered to levels deeper than the Marianas Trench.
They will find anything they can think they can positively spin in their favor but they do not point out the serious problems that are unavoidable and that are signs of troubling times ahead. That, it would seem, would require too much effort and a need to give up the talking points.
Right now, and you probably did not know this, we are in the midst of a bond holder revolt where those people that the United States relies on to buy up its debt are not in a very buying mood. For people to not be willing to put their money into what has long been considered the most politically free system in the world by buying our bonds something must be seriously wrong. In fact, in order to encourage even a lukewarm response to piles of our children's and grandchildren's money being spent, interest rates have been going up on Treasury notes. This is of course very troubling to the central planners in Washington who thought that they could rely on people just continuing to gobble up insane commitments to keep spending more and more money that we simply do not have.
As is typical, the bureaucrats and Washingtonians have guessed wrong and hoped that people would continue to make unwise investments. Now they are really worried. If no one is buying our debt, then that means that they do not have the money to spend. Well, unless they just kick it up a notch in the room where they keep the printing presses and ignore the lack of demand for government bonds.
This leads to a vicious cycle that anyone with a credit card understands. As fewer and fewer people are willing to essentially loan money to the government to pay for unconstitutional social spending, the rates have to be raised to a point where enough people can be coaxed into buying. But as the rates go up, that means that we go deeper into debt as our commitments to pay interest on these loans increases steadily on top of the loan itself and we owe more and more. Demand for U.S. debt has been so weak that the yields have been forced up sharply for long term notes since the beginning of the year. So here we have government promising even more of our money, because that money comes from you and I as citizens, to pay for other money they are spending of ours but do not have.
All economists worth their salt are worried about this. Some politicians are too but only the few that have a brain inside their head. Most others are not and you can spot these politicians by looking for those who have Velcro strapped shoes because shoelaces are just too complicated for them.
However do not worry. I am sure that Congress and our President have everything well in hand. They will simply do what they always do and create a brand new spending program to take care of this problem. Perhaps it will be called the Paying for Preferred Persons to Purchase Funds Trust. It will be known by the acronym of PPPPFT and will enable the poor to purchase all these great government backed bonds at no cost to them.
The way this will presumably work, based on the way our government always seems to work, is the federal government will earmark billions of phantom dollars under PPPPFT to be spent sending checks to low income persons. These checks will be valid only for the purchase of Treasury bonds, however, and will be then sent back in by those receiving them in order to be exchanged. Why not just send them the bonds directly you ask? Why cut a check and mail it twice and then the bond certificates on top of that? Well, because the guy that runs the printing presses needs to be kept employed and the United States Post Office needs some help staying afloat, that's why.
Problem solved! The poor get some "free" money to fund their retirement and liberals get guaranteed loyalty for many elections to come. Plus the government will also now be able to sell its debt and keep on spending like liberals love to do. Do not bother them with the fact that by doing such they would essentially be destroying the American economy and making the dollar (and these bonds) completely worthless regardless of any numbers printed on them. And if this were to be proposed, do not count on most of those pretty faced media types to point out the problems with this either; since they cannot do anything other than read that teleprompter before them and regurgitate what they are told to say. Besides, don't you know they have better things to worry about?
You know, important things like convincing Americans that people like the Holocaust Museum shooter James Wenneker Von Brunn, a self professed white supremacist, Jew hating socialist right in line with the beliefs of Hitler, was actually by some leap of insane logic a freedom loving, Constitution supporting, right wing extremist.
Copyright ©2009 J.J. Jackson