All the rhetoric about the fiscal cliff in January with the expiration of the Bush tax cuts and “horrific” cuts (not really) in spending are just the usual bullshit from politicians and the MSM designed to scare the public into thinking the politicians know best how to run our economy. Ron Paul obliterates their bullshit Keynesian claptrap. The bad debt must be liquidated from the system, government spending dramatically scaled back, military slashed, taxes reduced, and ridiculous regulations scrapped. None of this will happen because politicians of both parties, central bankers, big corporations, and the military industrial complex don’t want it to happen. They like having power and being enriched by the existing corrupt system.
| The CBO Sees the Economic Cliff Ahead
By: Ron Paul |
| Last week the Congressional Budget Office (CBO) issued its annual long-term budget outlook report, and the 2012 numbers are not promising. In fact, the CBO estimates that federal debt will rise to 70% of GDP by the end of the year– the highest percentage since World War II. The report also paints a stark picture of entitlement spending, as retiring Baby Boomers will cause government spending on health care, Social Security, and Medicare to explode as a percentage of GDP in coming years.While the mainstream media correctly characterized the CBO report as highly pessimistic, they also ignored longstanding errors of methodology in CBO estimates. And those errors tend to support arguments for higher taxes and government spending, when in fact America needs exactly the opposite.
As Paul Roderick Gregory explained in a recent Forbes column (http://tinyurl.com/cf746dl), CBO has always applied wrongheaded assumptions inherent in Keynesian economics when forecasting future deficits – no matter how many times both history and economic theory have proven such assumptions incorrect. In particular, CBO seems wedded to two enduring Keynesian myths: First, that higher taxes necessarily increase federal revenue and have no negative effect on the economy; and second, that lower government spending hurts the economy. Neither is true, of course. CBO also fails to factor in unexpected wars and expensive foreign entanglements, and we should not assign too much validity to predictive models based on peace. Judging from the actions and rhetoric coming from both parties in Washington, new military entanglements in Syria and Iran may well spike military spending in coming years. Despite these sobering budget realities, the CBO report suggests that a solution is possible with merely a few minor adjustments in the way Congress handles economic issues. But what we need are not minor adjustments, but rather a fundamental shift in our philosophy of government. If we could come to our senses about the proper role of government in America, and what level of government interference is appropriate in a free economy, we would quickly find that there is no reason for government to spend so much, borrow so much, and tax so much. If we simply allowed markets to work free of governmental or Federal Reserve interference, bad debt would be liquidated relatively quickly and malinvestment would be curtailed. Scaled-back regulations would encourage businesses to expand. Lower taxes would jump start investment and spur job creation. This is not rocket science, it is Economics 101. All it would take is for government to get out of the way. There would be some short term pain, of course, but only by allowing the bubble to burst and bad debt to liquidate can we ever hope to begin building a real economy again. The CBO report was alarming to most simply because they know neither party will take the steps necessary to avoid eventual fiscal calamity. Instead, despite their rhetoric, both parties want to maintain the fantasy that “deficits don’t matter.” But the CBO report, combined with what is happening in Greece and the European Union, should finally make the undeniable case that economic realities apply even to industrialized first world economies. We must take concrete steps today to avoid having America become the next Greece. |
GRGY says:
The chances of TPTB taking Ron Paul’s advice is pretty much ZERO, in the US, or Europe or anywhere else. And the sheeple aren’t even paying attention. What will it take?
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15th June 2012 at 9:55 am
Muck About says:
Tempest in a teapot.
Everything is going to be just peachy. The welfare rolls will continue to grow, T-Bill will flow, the Fed will blow and we are simply doomed. Most of us don’t have a clue that there is no way to escape the coming of the Greater Depression and continue to fiddle, fuck and fardle around while Washington DC burns up their future.
I have a new to-do list that includes starting the observation system to locate where the soup kitchens will be located. Make it easier to find later..
MA
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15th June 2012 at 10:32 am
AWD says:
“….paints a stark picture of entitlement spending, as retiring Baby Boomers will cause government spending on health care, Social Security, and Medicare to explode as a percentage of GDP in coming years”
There’s those damn words again: “entitlement spending” and “Baby Boomers”, used in the same sentence. Don’t they know Social Security and Medicare are ponzi schemes? Designed to collapse the second the last boomer croaks? The boomers have exploded everything else, especially their waistlines, why not explode a ponzi scheme?
Better call Bernake and the Federal Reserve, time to print a few more trillions to cover boomers (again).
The Fed’s Secret Phone Menu
Greetings. Please select one of the following options.
The Working Group for Global Domination does not exist. Members please press 1.
If you are a European leader seeking a secret bailout, please press 2.
If you are Chinese leader seeking assistance purchasing another Beverly Hills mansion with cash, please press 3.
If you are a domestic banker seeking another tranch of our $29 trillion in backstop funding, please press 4.
If you are an incumbent POTUS seeking re-election in a recessionary year, please press 5.
If you represent one of our proxy trading desks, please press 6 for your S&P 500 futures purchase instructions. As a reminder, please trade your own account via black pools.
If you would like today’s target for the S&P 500 and Treasuries to assist in trading your own individual account, please press 7.
For bulk purchases of Hopium and/or Delusionol, please press 8.
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15th June 2012 at 12:34 pm
ron says:
Legalize pot and prostitution and use the taxs for health care and the debt only.Shut down some agencys and close some military bases overseas.Actually deport people and close the border,i could do it.Theres all kinds of stuff that could be done,but with our congress?
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15th June 2012 at 2:01 pm
Buckhed says:
According to Bob D with a little change in the lyrics
“The answer my friend is revolution again “
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15th June 2012 at 6:10 pm
Hope@ZeroKelvin says:
@AWD:
Great phone menu but you forgot one.
“If you have completely abandoned all hope and wish to Embrace the Doom – press 9 land leave a message. One of our Doom Counselors will be with you shortly.”
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15th June 2012 at 7:56 pm
Administrator says:
“Silence in the face of evil is itself evil: God will not hold us guiltless. Not to speak is to speak. Not to act is to act.”
Dietrich Bonhoeffer
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15th June 2012 at 8:34 pm
John says:
I have always found inspiration from our nation’s history when many thought that everything was lost. Yet American leaders and citizens overcame all odds with courage, conviction and sacrifice. For what it’s worth, the links below are movies about the Battle of Trenton during December 1776 and the Cuban Missile Crisis during October 1962. Today (right now) is not first time that our country has been in “deep shit.”
“The Crossing” (Parts 1 thru 7) and “The Missiles of October” (CD1 and CD2) are linked below:
THE CROSSING
http://www.youtube.com/watch?v=Xz8j37IBwKw&feature=results_main&playnext=1&list=PLD03C0C19DC453024
http://www.youtube.com/watch?v=XoxDQgXu008&feature=relmfu
http://www.youtube.com/watch?v=PTXW6FlX2GU&feature=relmfu
http://www.youtube.com/watch?v=NTUsDukkGro&feature=relmfu
http://www.youtube.com/watch?v=kLs3Ubxt6WQ&feature=relmfu
http://www.youtube.com/watch?v=hJdu_ortw0k&feature=relmfu
http://www.youtube.com/watch?v=mTaMvO2j7Y0&feature=relmfu
THE MISSILES OF OCTOBER
http://www.youtube.com/watch?v=dmtp8XosVBE
http://www.youtube.com/watch?feature=endscreen&v=QiC9Eoe-dHI&NR=1
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15th June 2012 at 12:30 am