Dear President elect Obama,
Before you charge head long into this:
Or this:
You may want to read, and seriously consider the implications of this:
And this:
Sincerely,
Concerned Taxpayer
Here’s the boil down folks:
As of the end of October, before the really BIG debt sales, the US had increased it’s borrowings from foreign countries by 32% or $743B. Of that increase, China took 26%, The United Kingdom took 28%, Caribbean banking centers took 14% and the remainder was spread throughout the world including $46 B to countries noted as “oil exporting countries.”
Do you see anyone in the current list of buyers that looks like their economy is doing well?
Do you see anyone in the current list that you would expect to be able to not only maintain their current debt purchases, but with softening economies, double or triple their purchases of US debt?
If China, who currently buys 26% of our debt, decides to cut back, do you see anyone ready, willing and able to not only increase their current purchases but pick up China’s part?
Obama and his administration have become solely focused on “stimulating the economy” and have gone so far as to say that they are not concerned about the consequences. Somehow they would have us believe that they will find a magic pill to deal with those consequences when they come up. The problem with this thinking is that it is the exact thinking that got us into this situation.
When Alan Greenspan and Ben Bernanke kept interest rates abnormally low from a historical to fuel growth for the past 10 years they didn’t worry about consequences. Frankly, they didn’t think there were consequences. Turns out they were wrong. Now we know there will be consequences and we’re choosing to ignore them.
Fool me once shame on you, fool me twice….
Where were you when Republicans were decrying US treasury bonds as “worthless IOUs”? That was back when they were trying to privatize social security. Remember?
Well, not blogging for one. But, to your specific point.
Not all debt is bad…that goes for households and govts. However, Obama (yes and Bush) are taking us down the path that looks just like the subprime debacle. They want to overleverage the debt side and do it with debt that will likely (unless Treasury gets good at something they’ve never been able to do previously, taking their foot off the gas at JUST the right time) have significantly increasing interest rates. They’re basically signing up for a no money down, teaser rated, variable mortgage.
I’ve consistently been a “cut the spending” guy….I’ve been that way through Bush and will continue with Obama. No economy has ever spent their way to prosperity but many have failed attempting to do so.
One wonders if Ayn Rand’s philosophy has taken its final poison at the hand of Al Greenspan, Rand-ite disciple….
That would be the good news!