Obama Sets Record With Biggest Deficit In History

The left told us that Obama’s was a historic presidency.  And they were right: he just smashed his own record for massive and totally unsustainable deficits.

Budget deficit sets record in February
By MARTIN CRUTSINGER (AP)

WASHINGTON — The government ran up the largest monthly deficit in history in February, keeping the flood of red ink on track to top last year’s record for the full year.

The Treasury Department said Wednesday that the February deficit totaled $220.9 billion, 14 percent higher than the previous record set in February of last year.

The deficit through the first five months of this budget year totals $651.6 billion, 10.5 percent higher than a year ago.

The Obama administration is projecting that the deficit for the 2010 budget year will hit an all-time high of $1.56 trillion, surpassing last year’s $1.4 trillion total. The administration is forecasting that the deficit will remain above $1 trillion in 2011, giving the country three straight years of $1 trillion-plus deficits.

The administration says the huge deficits are necessary to get the country out of the deepest recession since the 1930s. But Republicans have attacked the stimulus spending as wasteful and a failure at the primary objective of lowering unemployment.  [Editorial note: The Republicans are right, and the American people know it.  The stimulus is a gigantic porker which was recently upgraded as costing a massive $862 billion from the previous estimate of $787 billion.  But the real cost is actually $3.27 TRILLION!!! And contrary to Obama’s utterly false claims, only SIX PERCENT of Americans believe that the stimulus has created any jobs at all].

The administration defends the economic stimulus bill that Congress passed in February 2009 with a pricetag at the time of $787 billion as the right medicine to get the economy back on its feet. President Barack Obama has said even more is needed to battle an unemployment rate that remained stuck in February at 9.7 percent.  [Editorial note: When Obama was elected, unemployment was at 6.6%.  He promised that his stimulus would prevent unemployment from reaching 8%.  The stimulus failed by Obama’s own standard.  To try to explain away the failure of his policy, Obama created the nonexistent category of “saved jobs.”  But economists point out the following: “One can search economic textbooks forever without finding a concept called `jobs saved.’ It doesn’t exist…”]

The White House says that job creation will remain a top priority, hoping to convince voters that Obama did not spend too much time during his first year in office trying to get Congress to pass health care reform.  [Allow me to editorially interrupt this spin to point out that ObamaCare is the top priority, with Obama hoping to convince liberals that they need to pass this incredibly unpopular bill no matter how many Democrats lose their seats in order to “maintain a strong presidency.”  And in point of fact, they have done little else this entire year].

The government’s monthly budget report showed the record $220.9 billion deficit for February reflected outlays of $328.4 billion and revenues of $107.5 billion. The February receipts marked the first time that revenues are up compared with the same month a year ago since April 2008. Revenues had fallen for 21 straight months as the recession cut into both individual and corporate income tax payments.  [Editorials note: And yet Obama is selling his healthcare takeover as “deficit neutral” on the incredibly risky assumption that tax revenues will miraculously massively increase.  So Obama is explaining away his deficits by pointing to the frighteningly low revenues even as he bases his health care on the assumption that those same revenues will massively increase.  And if Obama is wrong, the trillions of dollars of new spending will implode our economy].

Deficits normally shoot up in February because it is a month when the government makes large refund payments to individuals and corporations as part of the tax filing process. Those payments were boosted this year by various tax credits that were expanded or added as part of the government’s stimulus efforts including the “Making Work Pay” tax credit and the first-time home buyers tax credit. [Editorial note: Which doesn’t in any way change the fact that this February’s frighteningly low revenues continues a 21-consecutive month trend.  That in addition to the fact that the stimulus is contributing to our deficit crisis].

Through the first five months of the budget year, government revenues totaled $800.5 billion, down 7 percent from a year ago, while outlays totaled $1.45 trillion, up a slight 0.1 percent from a year ago.

The deficit of $651.6 billion through February is up by 10.5 percent from the $589.8 billion deficit run up during the first five months of the 2009 budget year. The government’s budget year begins on Oct. 1.

The budget that Obama sent to Congress in February projects that the deficits over the next decade will total $8.53 trillion. But the Congressional Budget Office last week put the 10-year total even higher at $9.8 trillion. Part of the reason for the $1.2 trillion difference is that the CBO is projecting slower economic growth and thus less tax revenues than the administration over the next decade.  [Editorial note: Number one, this proves we can’t trust the Obama administration or the government’s cost estimates to do anything other than be lowball figures.  Number two, passing trillions in new spending via ObamaCare is hardly the thing to do given the fact that we will have LOWER revenues rather than higher ones].

The administration has maintained that the country must run large budget deficits until the economy has begun to grow at a sustainable pace that is bringing the unemployment rate down. Only then, the administration says, should the government focus on getting control of the deficits.  [Editorial note: So I’m flat broke and deeply in debt.  Clearly the thing I need to do is go on a massive spending spree on my credit card in order to get out of debt!!!].

Obama has created by executive order an 18-member fiscal reform commission that has been charged with coming up with a plan to shrink the deficit to 3 percent of the economy within five years. The plan is scheduled to be unveiled in December, after the midterm congressional elections.  [Editorial note: What Obama has in fact created is a tool to weasel out of his repeated campaign promise not to raise taxes on “95% of Americans” by so much “as one dime”].

With the economy so weak, the interest rates that the government has to finance the flood of red ink have remained low. However, economists are worried that the favorable outlook on interest rates could change quickly if investors, including foreign investors, start to worry about the government’s commitment to restraining future deficits. China is the largest foreign holder of U.S. Treasury securities.  [Editorial note: First of all, the Associated Press is factually wrong: Japan is now our largest holder, as China is jumping off the proverbial sinking ship.  And to make things even worse, China is preparing to abandon the dollar altogether.  Second, just to clarify, what this paragraph means is that the moment our interest rates go up – which they have to do in order to deal with our debt/deficits – we will have a double-dip recession.  And the second dip may well be worst than the first].

Through the first five months of this budget year, net interest payments totaled $86.5 billion, up 15.3 percent from a year ago.  [Editorial note: this is exactly what happened to Greece; and we are not far away from the same sort of implosion occurring here.  Obama’s “solution” is to borrow more money in more unsustainable spending which will ultimately push our interest payments rates up and up].

In its report last week, the CBO predicted that the government debt held by investors would climb from $7.5 trillion at the end of last year to $20.3 trillion in 2020. CBO forecast that interest payments would more than quadruple from a projected $209 billion this year to $916 billion annually by the end of the decade.  [Editorial note: So let’s just keep spending and spending and spending until we fly off a cliff to our deaths].

Congratulations on your historic presidency, Mr. Obama.  Congratulations on your new record as the biggest spender in the history of the human race.

Obama promised hope and change.  And he’s delivering.

A second Great Depression will be “change.”  And there are plenty on the left – who embrace the Cloward-Piven strategy – who are “hoping” for it.

66% of Independents Say Obama A Leftist – And What That Means

By a two-to-one margin, independents are saying that Obama is a leftist.  And only 14% of unaffiliated voters say they are more liberal than Obama.  And for those independents who have strongly made up their mind one way or the other, the margin dramatically increases to a six-to-one margin believing that Obama is a leftist.

For a story like this, we need to go back a little further, when we found out that Barry Hussein was THE most polarizing president in history:

In his first two months in office, President Barack Obama has succeeded in widening the political gulf among Americans more than any other president in modern history, according to a new poll. The “partisan gap” between Republicans and Democrats is 10 points larger than it was under George W. Bush.

The gulf – between Democrats and Republicans who say President Obama is succeeding – is also showing signs of further widening, according to a new Pew Research poll.

And widen it did.  It’s not just Republicans who overwhelmingly disapprove of Obama; it’s independents.  It’s the unaffiliated voters who now understand that Barack Obama misrepresented himself when he claimed he was a centrist who wanted what they wanted.

66% Of Independents Say Obama Is To Their Left
By Ed Carson
Tue., March 09, ’10

Supporters like to portray President Obama and his agenda as centrist. But those actually in the political center beg to differ. In fact, 66% of independents say their ideology is to the right of Obama, according to the latest IBD/TIPP poll. Just 14% say they’re more liberal.

Independents:

• Oppose Obama’s handling of the economy by 2-to-1. Among those with strong opinions, disapproval soars to 6-to-1 — 30% vs. 5%.
• On health care, 53% disapprove vs. 23% who approve. 35% say Obama’s doing an unacceptable job vs. just 9% who give him an A.
• 55% have a dim view of Obama on the budget. Just 17% who like his work. They strongly disapprove 34%-6%.

(Among all respondents, results were generally slightly less negative due to strong Democratic support for the president.)

These issues feed off each other. Obama and the Democratic Congress have spent vast sums on bailouts and a mammoth stimulus that are driving deficits to truly unsustainable levels. Ordinary Americans haven’t seen much benefit because job losses continue and unemployment remains near 10%.

But Democrats still haven’t made the economy their top issue. Instead, they spend their time and political capital on health care, even though voters have signaled they don’t like Democrats’ health plans.

That’s inspired and fueled the fast-growing Tea Party movement. A February IBD/TIPP poll showed 75% of independents favor that movement.

41% of Americans say they are more likely to oppose a candidate that supports the current health care bill, according to the IBD/TIPP poll. Just 27% say they would be more apt to vote for that person. Among independents, the ratio is 2-to-1 against.

These are all chilling results for Democrats facing re-election. How many from moderate districts will lash themselves to Speaker Nancy Pelosi’s mast?

As for Obama’s overall approval rating, the IBD/TIPP Presidential Leadership Index dipped 0.2 point in March to 50, split between approval and disapproval. That’s down from 71 in February 2009, just after he took office.

Meanwhile, the IBD/TIPP Economic Optimism Index fell 3% in March to 45.4, the lowest in a year.

IBD/TIPP conducted the national telephone poll of 903 adults from March 1 to March 7.

And what’s the result of all of this?

A substantial majority of Americans now believe that the massive government this leftist president is trying to create represents a threat to their rights:

CNN Poll: Majority says government a threat to citizens’ rights
Posted: February 26th, 2010 09:00 AM ET

From CNN Deputy Political Director Paul Steinhauser

Washington (CNN) – A majority of Americans think the federal government poses a threat to rights of Americans, according to a new national poll.

Fifty-six percent of people questioned in a CNN/Opinion Research Corporation survey released Friday say they think the federal government’s become so large and powerful that it poses an immediate threat to the rights and freedoms of ordinary citizens. Forty-four percent of those polled disagree.

The survey indicates a partisan divide on the question: only 37 percent of Democrats, 63 percent of Independents and nearly 7 in 10 Republicans say the federal government poses a threat to the rights of Americans.

According to CNN poll numbers released Sunday, Americans overwhelmingly think that the U.S. government is broken – though the public overwhelmingly holds out hope that what’s broken can be fixed.

So we find that 66% of independents believe that Obama is to their left, and 63% of independents believe that the government Obama is presiding over is a threat to their rights.  See the near perfect dovetailing?

What we are seeing is one of the most cynical and disingenuous presidents in American history attempt to establish himself as transcending political divides while simultaneously demagoguing and demonizing his opposition in a manner this generation has never seen.  And the mainstream media have broadcast his political narrative in a way very reminiscent of Joseph Goebbels broadcasting the narrative of his party.

Fortunately, this fascist technique hasn’t worked.  Mainstream media news outlets such as ABC, NBC and CBS are imploding:

The American mainstream media has been on a collision course with reality for several years.  It appears the day of reckoning has arrived as both ABC News and CBS News make announcements today that indicate deep financial woes.  In short, the mainstream media is going down as the big news giants begin to implode.

For quite some time now it has been widely known that NBC News and its sister networks MSNBC and CNBC are in dire financial straits.  That news was confirmed with the sale of the entity a few months ago.

Today, however, ABC News announced that it is cutting its news correspondent staff by half and that it will close all of its ‘brick and mortar’ news bureaus, except for its Washington hub.

In addition, CBS News is reportedly talking with CNN’s Anderson Cooper concerning an anchor position with the network. CBS has already been forced to cut Katie Couric’s salary, and Couric’s contract is set to expire in a little over a year.

The crash of big mainstream media is not confined to television, however.  Liberal, mainstream newspapers, such as the New York Times, continue to operate under heavy financial pressure as subscriptions tank and advertising revenues fall to historic lows.

Meanwhile Fox News, The Wall Street Journal, and Rush Limbaugh are thriving.  After a year of unrelenting Obama demagoguing, Fox News is now THE most trusted name in news.

Shockingly (and I actually say that without irony), Americans still don’t want to be indoctrinated when they have a choice.

Obama has gone way, WAAAAYYYY downhill from the days when journalists and other passionate Obama supporters literally breathlessly compared him favorably to the divine Son of God.  I think of the Newsweek editor saying, “I mean in a way Obama’s standing above the country, above – above the world, he’s sort of God.”  I think of Chris Matthews saying he felt this thrill going up his leg as Obama spoke.  Here’s where “the One” stands after a year of gracing an undeserving wolrd with his exalted magnificence, according to Rasmussen:

Tuesday, March 09, 2010

The Rasmussen Reports daily Presidential Tracking Poll for Tuesday shows that 22% of the nation’s voters Strongly Approve of the way that Barack Obama is performing his role as President.  Forty-one percent (41%) Strongly Disapprove giving Obama a Presidential Approval Index rating of -19 (see trends). […]

Overall, 44% of voters say they at least somewhat approve of the President’s performance. Fifty-four percent (54%) disapprove.

And Democrats are swirling the drain for a massive defeat that might not only reach 1994-levels, but even make 1994 look like a good year for Democrats.  From Rasmussen:

Tuesday, March 09, 2010

Republican candidates lead Democrats by seven points in the latest edition of the Generic Congressional Ballot.

The new Rasmussen Reports national telephone survey shows that 44% would vote for their district’s Republican congressional candidate while 37% would opt for his or her Democratic opponent. Voter support for GOP congressional candidates held steady from last week, while support for Democrats is up a point.

Voters not affiliated with either major party continue to favor the GOP by a 42% to 22% margin, showing little change for several months now. In February, the number of unaffiliated voters increased by half a percentage point as both Republicans and Democrats lost further ground.

Republicans started 2010 ahead by nine points — their largest lead in several years — while support for Democrats fell to its lowest level over the same period. Towards the end of 2009, GOP candidates enjoyed a more modest lead over Democrats, with the gap between the two down to four points in early December. Since the beginning of the year, however, the Republican lead hasn’t dipped below seven points.

The latest numbers continue to highlight a remarkable change in the political environment over the past year. This time last year, Democrats led Republicans 42% to 38%.

On January 18, 2009, Democrats led Republicans 42% to 35%.  How the tables have turned.  That’s a 14-point swing since Obama started ruining the country.  And the trend has been going steadily down-the-drain-ward for Democrats.

Even Democrat polling shows Democrats are in big, big trouble:

The national mood continues to sour, with the share who see the country headed in the wrong direction moving up 4 points since mid-January, up to 62 percent, the highest mark in a year

The also left-leaning Washington Post, reporting on the Democrat organization’s polling, wrote in an article entitled, “Poll shows Obama, Dems losing ground,” that:

“The erosion since May is especially strong among women, and among independents, who now favor Republicans on this question by a 56 to 20 percent margin,” the pollsters said in their findings.

That’s really bad, considering that women have always been primary voters for Democrats, and it was independents’ votes that brought both Obama and Democrat over the top in 2008.

And what are Barry Hussein and Democrats going to do?  Prove every nasty thing that people now believe right.  Thus Democrats are pursuing a strategy that they themselves have said is immoral and unAmerican to pass a bill that Americans overwhelmingly do not want.

Why should Americans trust Democrats, given that they are now doing the very thing they themselves said was a terrible thing to do, and given all the Louisiana Purchases, all the Cornhusker Kickbacks, all the Gator-aids, and all the other illegitimate and even illegal acts of political sleazy backroom deals?

These same people promised us that unemployment would stay under 8% if we supported their now $862 billion stimulus.  And that was so false that only 6% of Americans believe it has created any jobs at all, according to a poll by the New York Times and CBS.

Why should we want that kind of massively expensive failure with our health care system?

Look at the numbers demonstrating how Americans think about health care:

Fifty-seven percent (57%) of voters say the health care reform plan now working its way through Congress will hurt the U.S. economy.

A new Rasmussen Reports national telephone survey finds that just 25% think the plan will help the economy. But only seven percent (7%) say it will have no impact. Twelve percent (12%) aren’t sure.

Two-out-of-three voters (66%) also believe the health care plan proposed by President Obama and congressional Democrats is likely to increase the federal deficit. That’s up six points from late November and comparable to findings just after the contentious August congressional recess. Ten percent (10%) say the plan is more likely to reduce the deficit and 14% say it will have no impact on the deficit.

Underlying this concern is a lack of trust in the government numbers. Eighty-one percent (81%) believe it is at least somewhat likely that the health care reform plan will cost more than official estimates. That number includes 66% who say it is very likely that the official projections understate the true cost of the plan.

Just 10% have confidence in the official estimates and say the actual costs are unlikely to be higher.

Seventy-eight percent (78%) also believe it is at least somewhat likely that taxes will have to be raised on the middle class to cover the cost of health care reform. This includes 65% who say middle-class tax hikes are very likely, a six-point increase from late November.

Do you really believe that the government will reduce the cost of anything?  This is something that can very quickly begin to explode out of control.  And by the time it does, it will be too late to do anything about it.

Obama keeps assuring us that his plan will lower the deficit, but we can’t even trust him on his own budget figures: the CBO recently reported that the Obama budget deficit will be a massive $1.2 trillion more than Obama said it would.

You can’t trust Obama on keeping his promises, and you certainly can’t trust him on bringing down costs.  On energy prices, Obama said the following:

“Under my plan of a cap and trade system, electricity rates would necessarily skyrocket.”

He doesn’t care about keeping his word, and he certainly doesn’t care about making vital services cost less.  The man is an ideologue – and he only cares about imposing his statist ideology.

The American people, including independents, don’t want statism, but they know they’ve got exactly that in Barack Obama.  They clearly don’t want a big government takeover of their health care, but the Democrats are apparently determined to impose it anyway.

China has had enough of the Democrats and their reckless spending: they are now preparing to sever the historic tie between their currency and that of the U.S. dollar.

Democrats are counting on the fact that the American people are simply too stupid to remember what Democrats did eight months before the election.  The question is, is that true?

Speaker of the House Nancy Pelosi thinks the American people are dumb enough to buy anything, saying:

“We have to pass the bill so that you can find out what is in it.”

Let’s make a deal: give me trillions of dollars, and I’ll show you what’s in the bag I’m holding.

And pretty soon America is going to open their door in surprise to see a flaming bag filled with dog crap.  Try to stomp out the flames at your peril.

The United States of America is more vulnerable than it has ever been, due to deficits and spending that are simply out of control.

You independents – who are now beginning to at least understand the risk the president and party you voted for in 2008 presents to this country – had now better get off your butts and join Republicans in screaming this ObamaCare boondoggle down.  Because this incredibly partisan health care bill will very likely be the anvil that breaks this nation’s back if it is passed.

ObamaCare Will Increase Insurance Premiums

One of the fundamental promises of Democrats is that their massive takeover of health care would deliver lower costs, delivering an economy of scale.

The problem is that government has never been very good at lowering the cost of anything.  Quite the contrary.

And what has always been true before turns out to be true again.

Let’s get right to the nitty gritty of the CBO report:

“CBO and JCT estimate that the average premium per person covered (including dependents) for new nongroup policies would be about 10 percent to 13 percent higher in 2016 than the average premium for nongroup coverage in that same year under current law. About half of those enrollees would receive government subsidies that would reduce their costs well below the premiums that would be charged for such policies under current law,” the report says.

Now, Democrats are trying to argue that about the “about half of those enrollees” who would have lower premiums due to receiving government subsidies.  But understand: the costs are objectively higher by 10-13% than they would have been had we done absolutely nothing at all.  The mere fact that some people are getting transfer (i.e., welfare) payments from the government (i.e., from still more government taxing and borrowing) doesn’t in any way change that fact.

Stop and think about it: it would be a lot cheaper for the government to provide people with subsidies based on the lower costs of doing nothing else to mess with the health care system.  It is an outright fraud for Democrats to say they will lower costs.

I like the way Mitch McConnell put it:

“The bottom line is this: After 2,074 pages and trillions more in government spending, massive new taxes and a half-trillion dollars in cuts to Medicare for seniors, most people, according to the Congressional Budget Office, will end up paying more or seeing no significant savings,” Senate Minority Leader Mitch McConnell (R-Ky.) said in a statement. The health insurance industry’s lobbying arms also proclaimed that the report confirmed their similar warnings.

This is just a terrible bill, and a terrible philosophy.

Democrats have done absolutely NOTHING that will reduce the costs of healthcare.  They are diametrically opposed to tort reform, which would lower the costs of premiums by lowering doctors’ exposure to risks, simply because the sharks – I mean lawyers – who sue everything that walks, crawls, swims or flies are a major Democrat special interest group.

In the same way, Democrats talk about “increasing competition,” and yet they are fundamentally opposed to actually doing anything of the sort.  A primary reason healthcare costs have increased so much is due to the fact that insurance companies are specifically forbidden from being allowed to compete across state lines.  Republicans want competition; Democrats do not.  Rather, Democrats want to continue to mandate special interests-based coverage by dictating to insurance companies what coverage they must offer.

The other thing is that Democrats talk about the fraud they are offering is “deficit neutral.”  It is no such thing.  They played budget gimmicks, taxing for four years before having to pay out any benefits.  If you look at the costs of the NEXT ten years – when benefits will actually be paid out for all ten years – the cost will be $2.5 trillion, rather than the $848 billion that the Demcorats talk about in their tax-for-ten-year-spend-for-six plan.

Taxes will be raised by over $500 billion.  Medicare will be cut by $500 billion.  $500 billion is another way of saying half a trillion dollars.  That’s how the Democrats get their “savings”: they bleed it from taxpayers, and they steal it from their previous commitments to senior citizens.

The Democrats’ bill raises taxes, guts Medicare, and raises premiums.  You can start to understand why the Dean of the Harvard School of Medicine gave the bill a failing grade.

Why We Should Be Seriously Contemplating The Great Depression

Revelation 6:6 – “And I heard a voice in the midst of the four beasts say, A measure of wheat for a penny, and three measures of barley for a penny; and see thou hurt not the oil and the wine.”

There are plenty of financial experts out there assuring us that any comparison between our current economic situation and the Great Depression are utterly baseless.  The problem is that most of these experts are either demonstrated hypocrites who have themselves compared our economy to the Great Depression, or they are employing extremely flawed logic in their dismissals that may well even cross the line into outright deception.

Nathan Burchfiel takes CNBC‘s Jim Cramer to task for the sort of blatant hypocrisy that we’ve seen from all to many other media analysts:

CNBC “Mad Money” host Jim Cramer said on NBC’s “Today” show Dec. 2 that comparisons between the current economy and the Great Depression are “scare tactics.” Maybe he forgot about his own reliance on the juxtaposition….

But Cramer has been among the most vocal scaremongers when it comes to throwing around Great Depression warnings.

Criticizing economists who opposed the $700 billion taxpayer bailout of the financial industry on the “Today” show Oct. 1, Cramer warned the country was “on the precipice of Great Depression II.”

He made a similar claim about the financial bailout in September, arguing that if Treasury Secretary Henry Paulson didn’t find a way to get a rescue package passed, “we are going to have The Great Depression II on our hands.”

On Nov. 11, Cramer supported another proposed bailout – this time for the U.S. auto industry by saying it would prevent another depression. “It’s like look – we got to bail them out,” Cramer told CNBC “Street Signs” host Erin Burnett. “We have to. We have to keep the Great Depression off the table.”

In other words, the “Great Depression” basically becomes a shell game, where you see the shell when the shysters want you to look at it, and then you don’t see the shell when they want to keep it out of sight.  It’s a bogeyman that some journalist, or some academic, or some government official can trot out to frighten us into doing what s/he wants to advance an agenda, and then put it away until they want to frighten us again.

Now, there was a time when a story like this one would have completely discredited a media personality such as Jim Cramer.  But in these Bizarro World days, being discredited seems to be to a journalist’s career what having a tawdry sexual affair does to a movie star’s career.

Then we’ve got the philosophical dismissal of any comparison to the Great Depression, as exemplified by government academics such as Ben Bernanke:

WASHINGTON (AFP) — Federal Reserve chairman Ben Bernanke said Monday the current economic situation bears “no comparison” to the much deeper crisis of the 1930s Great Depression.

“Well, you hear a lot of loose talk, but let me just … say, as a scholar of the Great Depression — and I’ve written books about the Depression and been very interested in this since I was in graduate school, there’s no comparison,” Bernanke said in a question period after an address in Austin, Texas.

Bernanke cited “an order-of-magnitude difference” in the current situation compared to the 1930s.

“During the 1930s, there was a worldwide depression that lasted for about 12 years and was only ended by a world war,” he said.

“During that time, the unemployment rate went to 25 percent, at least, based on the data that we have. The real GDP (gross domestic product) fell by one-third. About a third of all of the banks failed. The stock market fell 90 percent.”

Bernanke said the situation at that time represented “very difficult circumstances,” because “we didn’t have the social safety net that we have today. So let’s put that out of our minds; there’s no — there’s comparison in terms of severity.”

Well, first of all the fact is that Bernanke – just like Cramer – has himself made the comparison between our economy and the Great Depression, as the bottom of the same article clearly demonstrates:

In a related matter, President George W. Bush said in an interview released Monday that Bernanke and Treasury Secretary Henry Paulson warned him weeks ago that bold action was needed to avert a new Great Depression.

“I can remember sitting in the Roosevelt Room with Hank Paulson and Ben Bernanke and others, and they said to me that if we don’t act boldly, Mr. President, we could be in a depression greater than the Great Depression,” Bush told ABC News.

Which clearly means that comparisons to the Great Depression clearly aren’t so silly after all – as evidenced by the very people who are most loudly telling us that such a comparison is silly.

Bernanke and others also imply that our social support structures and our financial expertise would prevent the worst effects of any so-called “Great Depression.”  But is that really so?

When the $852 billion Troubled Asset Relief Program (TARP) suddenly morphed into what one writer mocked as Capital Redistributed As Pork (CRAP), shouldn’t it bother you that an abandonment of such an enormous program’s expressed goal midstream amounts to a de facto declaration that our experts clearly don’t know for sure what they’re doing?

The notion that a Great Depression could never happen because we know so much more doesn’t hold much water for me in the light of our “Keystone Cops-approach” to all of our various bailouts and attempts at political legislation.  The fact is, after seeing our “experts” at work the last couple months, I have less confidence in them than I’ve ever had before.

But there’s another giant problem with Bernanke’s analysis, and it is difficult to imagine that he doesn’t himself recognize it.  The problem is that he’s comparing apples to oranges; he’s comparing an economy that may well be on the throes of a future Great Depression to a 1930s economy that was already well into the worst stages of a depression.  And he’s pointing out the obvious – but in fact completely irrelevant and actually completely absurd – fact that they don’t look alike.  Of course they don’t look alike – yet.

But what would have happened had Bernanke compared the economy as it was in 1929 with our economy today, rather than the worst period of the 1930s?  What would have happened had he looked at the economy just before the Black Tuesday crash of October 29, 1929, or even shortly after that crash?  The numbers would have hardly appeared anywhere near so dire, which means Bernanks’ comparison would have failed.

Let me quote Wikipedia to show you what I mean:

The Great Depression was not triggered by a sudden, total collapse in the stock market. The stock market turned upward in early 1930, returning to early 1929 levels by April, though still almost 30 percent below the peak of September 1929.^[7] Together, government and business actually spent more in the first half of 1930 than in the corresponding period of the previous year. But consumers, many of whom had suffered severe losses in the stock market the previous year, cut back their expenditures by ten percent, and a severe drought ravaged the agricultural heartland of the USA beginning in the summer of 1930.

In early 1930, credit was ample and available at low rates, but people were reluctant to add new debt by borrowing. By May 1930, auto sales had declined to below the levels of 1928. Prices in general began to decline, but wages held steady in 1930, then began to drop in 1931. Conditions were worst in farming areas, where commodity prices plunged, and in mining and logging areas, where unemployment was high and there were few other jobs. The decline in the American economy was the factor that pulled down most other countries at first, then internal weaknesses or strengths in each country made conditions worse or better. Frantic attempts to shore up the economies of individual nations through protectionist policies, such as the 1930 U.S. Smoot-Hawley Tariff Act and retaliatory tariffs in other countries, exacerbated the collapse in global trade. By late in 1930, a steady decline set in which reached bottom by March 1933.

Keep in mind that OUR stock market began to tank only a little over two months ago.  And if the exact same thing were to happen now that it did to the United States in the 1930s, we actually would expect our market to pick up significantly in the coming months – and our economy to even appear to be rebounding – shortly before a downward slope into collapse that would occur one to three years later.  It wasn’t until March 1933 – 3 years and 4 months after the Black Tuesday stock market crash – that the bottom really fell out of our economy.

And while “Great Depression” comparisons may be silly in terms of the actual economic numbers RIGHT NOW (the number of banks going under, the jobless rate, etc.), we actually face potential economic nuclear bombs that would very likely have made 1930s American financial experts faint with dread.

We are looking at $700 TRILLION in derivatives.  Compare this stupefying fact to the associated fact that global GDP is only about a lousy $50 trillion! Assets have been leveraged as much as a hundred and even two-hundredfold.  The Institute for Economic Democracy have an article titled, “Hedging and Derivative Risks Become Infinite Risks.”  The result is MASSIVE exposure such as the world has never seen lurking like some incredibly deadly plague in the form of financial vehicles that few even begin to understand and only advanced computers can calculate.  As these highly leveraged financial obligations result in losses – as has already begun to happen – the result is cataclysmic failure in financial markets beyond the power of any government to prevent.  And anyone but a fool should be able to recognize by now that such disasters can send the entire global economy crashing down very quickly, seemingly from out of nowhere.

None of the bailouts have done ANYTHING to fix the systemic structural problems with our financial system (the worst probably being the massive flow of capital out of production and into speculative markets due to the shift from being a manufacturing-based economy to a service-based economy).  And the fact that the $852 billion bailout package went from being used to buy bad mortgages to a completely different solution should kind of serve to tell you that no one really knows WHAT to do.

So our financial experts are throwing out our money the way out-of-control craps players throw dice.

ABC News had this:

The government’s financial bailout will be the most expensive single expenditure in American history, potentially costing around $7.5 trillion — or half the value of all the goods and services produced in the United States last year.

In comparison, the total U.S. cost of World War II adjusted for inflation was $3.6 trillion. The bailout will cost more than the total combined costs in today’s dollars of the Marshall Plan, the Louisiana Purchase, the Korean War, the Vietnam War and the entire historical budget of NASA, including the moon landing, according to data compiled by Bianco Research.

It remains to be seen whether the government’s multipronged approach to bail out banks, stimulate spending and buy up mortgages will revive the economy, but as the tab continues to grow so does concern over where the government will find the money.

One critical thing to understand is that the aforementioned historic massive expenditures – which combined still only amount to half of the expenditure we are talking about today – took place over many decades, such that the various costs to the economy were absorbed over many years.  What happens when we spend trillions of dollars in only a few months?  Who knows?  No one has ever tried it before! And unlike the what had been the greatest – now the second greatest – expenditure in history, the costs associated with World War II were spent producing, building, and developing, whereas frankly most of the costs associated with our current bailouts essentially amount to paying off Wall Street’s gambling debts.

Meanwhile – as we contemplate forking over still more billions to bail out our automakers – we need to realize that we’re entering a potentially insane realm where there’s simply no end to the companies and now even the states who are “too big to fail” and need bailouts of their own.  And what of the moral hazard incurred by giving money to people, corporations, and states simply because they were the biggest fools and failures?  What impact will this have not only on the economy, but on the hearts and minds of honest people who played by the rules and ended up with nothing to show for it while the failures and the gamblers walk away with money in their pockets?  How many previously stable people will begin to angrily demand, “Where’s my bailout?”

What’s going to happen as our financial system attempts to absorb absolutely mind boggling government debts that dwarf anything ever before seen in human history?

A lot of financial experts aren’t so much anxious about what happens in the next few months.  We might well be able to throw so much money at the economy that we can stimulate it again; rather, they are worried about 3-5 years down the road as our dollar devalues dramatically due to interest payments that can only be repaid by printing more and more money.  You don’t just double an already insanely-out-of-control national debt without severe consequences.

And given the very real probability that massive spending is going to be the cause of our undoing, the social safety net that Bernanke refers to as being a preventative would actually merely be one more causative factor in a pending economic collapse.  We won’t be able to hand out food stamps and welfare checks if our government itself goes bankrupt.

So while it’s obviously not accurate to describe our present situation as a “Great Depression,” the simple reality is that we might well – and in the very near future – experience an economic meltdown that would likely make the Great Depression look tame in comparison.