We are beginning to learn that $12.8 trillion doesn’t last very long when it is being spent by corrupt politicians and idiot bureaucrats. It doesn’t seem to matter how much Obama has already spent or committed; he just has to keep spending more and more and more.
WASHINGTON – The Treasury Department said Monday it will need to borrow $361 billion in the current April-June quarter, a record amount for that period.
It’s the third straight quarter the government’s borrowing needs have set records for those periods.
Treasury also estimated it will need to borrow $515 billion in the July-September quarter, down slightly from the $530 billion borrowed during the year-ago period. The all-time high of $569 billion was set in the October-December period.
The huge borrowing needs reflect the soaring costs of the $700 billion financial rescue program and the recession, which is nearing a record as the longest in the post World War II period.
The slump has cut sharply into tax revenue and boosted government spending for benefit programs such as unemployment insurance and food stamps.
The administration is projecting the federal deficit for the entire budget year ending Sept. 30, will total a record $1.75 trillion. A deficit at that level would nearly quadruple the previous record of $454.8 billion set last year.
To cover the government’s heavy borrowing needs, Congress in February boosted the limit for the national debt to $12.1 trillion as part of the legislation that enacted President Barack Obama‘s $787 billion economic stimulus program. The national debt now stands at $11.1 trillion.
Not the first time we’ve seen insane spending, as a 1934 Chicago Tribune cartoon would illustrate:
But FDR never dreamed of the MEGO numbers (“My Eyes Glaze Over”) that we are facing today.
What is it those little notes on the out-of-control wagon say?
“Depleting the resources of the soundest government in the world.”
“Spend! Spend! Spend – Under the guise of recovery. Bust the government – blame the capitalists for the failure – junk the Constitution and decree a dictatorship. “
And the figure of Stalin says, “How red the sunrise is getting,” to denote the communist mindset that such levels of government spending and control over the economy entails.
Which is EXACTLY the Obama mindset today – right down to the “Young Punkies from Colombia and Harvard” Brain Trust. And even the Russians and the Chinese have been urging us to stop this insane government spending binge.
The Tribune cartoon was drawn in 1934. The Great Depression – in testament to the folly the artist was pointing out – would continue to drag on for years afterward. FDR’s “solutions” didn’t solve the crisis; they prolonged the suffering.
Michael Boskin described the radical extent of the Obama socialist spending in The Wall Street Journal (the newspaper people are actually willing to buy):
It’s hard not to see the continued sell-off on Wall Street and the growing fear on Main Street as a product, at least in part, of the realization that our new president’s policies are designed to radically re-engineer the market-based U.S. economy, not just mitigate the recession and financial crisis.
The illusion that Barack Obama will lead from the economic center has quickly come to an end. Instead of combining the best policies of past Democratic presidents — John Kennedy on taxes, Bill Clinton on welfare reform and a balanced budget, for instance — President Obama is returning to Jimmy Carter’s higher taxes and Mr. Clinton’s draconian defense drawdown.
Mr. Obama’s $3.6 trillion budget blueprint, by his own admission, redefines the role of government in our economy and society. The budget more than doubles the national debt held by the public, adding more to the debt than all previous presidents — from George Washington to George W. Bush — combined. It reduces defense spending to a level not sustained since the dangerous days before World War II, while increasing nondefense spending (relative to GDP) to the highest level in U.S. history. And it would raise taxes to historically high levels (again, relative to GDP). And all of this before addressing the impending explosion in Social Security and Medicare costs.
The argument that we need either massive government spending as a bulwark against a depression during periods of grave economic distress presents an entirely false dilemma. Reagan proved that positively, and FDR – who substantially prolonged the Great Depression with failed policies (and see here and here for more) – proved it negatively.
Many liberals stubbornly cling to the thesis that FDR’s policies brought America out of the Great Depression. And they can cite a boatload of leftist historians who have come to precisely that conclusion.
But I would submit that anyone taking that position must refute Franklin Delano Roosevelt’s VERY OWN TREASURY SECRETARY.
“We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong… somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises… I say after eight years of this Administration we have just as much unemployment as when we started… And an enormous debt to boot!” – Henry Morgenthau, FDR’s Treasury Secretary, May 9, 1939
The unemployment rate for April of 1939 – the full month before Morgenthau spoke these words before the House Ways and Means Committee – was at 20.7% And while other nations had similarly gone through severe economic depressions during the 1930s, they recovered in less than half the time of the U.S. under FDR. “In most countries of the world recovery from the Great Depression began between late 1931 and early 1933.” But the American depression dragged on and on.
We are spending FAR TOO MUCH MONEY, and we’re spending it on the wrong things. We are repeating the worst mistakes of the Great Depression, and are very likely doomed to repeat the consequences of our failure to learn the lessons of history.
Michael Boskin speaks of Obama’s shocking abandonment of defense spending. I shall say this:
The fact of the matter is that ignoring defense spending was a hallmark of FDR, too. In spite of the growing and building threat of both the Nazis and the Japanese Imperialists for YEARS, FDR spent massively on virtually everything BUT defense spending. Which is why we were so woefully unprepared for hostilities following the Pearl Harbor sneak attack that inexcusably caught us completely off guard.
Getting back to Reagan, one is forced to only imagine how many American lives would have been saved if we’d had a Reagan rather than a socialist-spending FDR serving as President; and we’d gone into World War II with the mightiest military machine in the world rather than with the 2nd rate joke we were forced to begin with.
And thanks to Obama’s massive defense cuts one may be forced to wonder about how many lives we could have saved all over again as he slashes our military rather
In many ways, FDR and BHO are images of one another. Both men were skilled politicians with great oratorical skills (providing Obama has a teleprompter, anyway). Both men had never had a single success of their own in business. And both had the completely wrong idea of what was wrong with the national economy, and what needed to be done to get it back on track.
The one difference is this: FDR foolishly caused America to REMAIN in the Great Depression by zealously pursuing failed policies; BHO will foolishly force America INTO the next Great Depression by zealously pursuing the SAME failed policies that never worked for FDR.