Frank Aquila's Blog

February 10, 2010

Democrats Create Perfect Economic Storm

Filed under: Uncategorized — frankaquila @ 10:14 pm

President Obama has announced the recession is over, but he and his fellow Democrats fail to recognize the economic storm that is forming to create an even bigger financial crisis.

Democrats also failed to recognize how their policies to force banks to relax rules to unqualified lenders created the sub-prime mortgage crisis which led to the original economic crisis. When Republicans questioned the policies and attempted new regulations, Democrat Chris Dodd successfully threatened a filibuster to prevent any reform.

While the American family and private businesses struggled to cut expenses, President Obama and the Democrat party has expanded the government and the federal budget by one trillion dollars and increased the national debt over 12 trillion dollars. With this government expansion and government take overs of our financial institutions, General Motor, and now health care, the government has grown while the private sector has shrunk.

President Obama demanded congress rush through a $787 billion Stimulus Bill without allowing the American people to see the Bill. He said in a January 3, 2009 radio address, that if Congress did not act “swiftly and boldly” to stimulate the economy it could “lead to double digit unemployment”. Well, in eight month the unemployment rate exceeded 10% and when the underemployed are counted, it is 17-18%.

Instead of using tax cuts to provide relief for families and business, which would have immediately boosted the economy and allowed businesses to begin hiring workers in the private sector, Obama and the Democrats used the $787 billion stimulus bill to payback liberal organizations who supported the Obama campaign and other Democrat organizations like ACORN. Two studies of the $787 billion from the American Reinvestment and Recovery Act that was suppose to “create or save 3.5 million jobs over the next two years” reports that the money failed to deliver as promised; but has been disproportionately to those district represented by Democrats.

Billions of tax payer dollars have been spent on political paybacks through over 14,000 earmarks of wasted government spending in one year. Much of the “stimulus” money is still scheduled to be released in 2010 and 2011 so that it will assist the Democrat party and President Obama’s reelection. As a result, the economy was artificially boosted with government monopoly money creating a new financial storm of a devalued dollar, higher taxes, looming inflation, and enormous U.S. debt.

With all this fake money throw into the economy, the dollar has become devalued along with our credit rating throughout the world with many investors becoming less willing to invest in U.S. assets. There are enormous twin deficits causing the duress of the dollar. The federal government is running a budget deficit of more than $400 billion annually while each year we buy roughly $500 billion more in goods and services from foreigners than we sell overseas. Basically, we are consuming more than we are producing which undermines confidence in the dollar.

Therefore, if there is a real rush on the dollar, this could cause a 10% loss to the stock market in a single day or a longer trend to set us back into a double dip recession. When there is an increased money supply, this is followed by a general rise in the level of prices for goods and services, which will create “monetary inflation”. As a result to control inflation, the government will need to raise interest rates, which will cause a slowing in the all ready struggling housing sector of the economy. Further, due to a congress that has restrained many of our stuggling businesses, these business will also declare bankrupcy resulting in foreclosures in commercial properties.

To make matters worse, the Bush tax cuts expire in 2010, which will result in further economic problems for the American families and businesses with the numerous taxes they already pay.

Other Obama policies such as Cap and Trade, the inability to expand energy independence through the hoax of global warming of Climategate, which has been used to scam the American people to push forward the environmentalist liberal agenda as well as the failure to recognize those who want to distroy America as “terrorist” or even that we are engaged in a “War on Terror” will cause further potential harm to our economy. When you combine this financial storm with a bankrupted Social Security and a bankrupt medicare program, the future of America looks bleak.

As a result of government interference, this domino affects one sector of the economy to the next. No matter how large and powerful a government is, it has no control over the economic repercussions that will result from its intervention. The more the government interferers, the worst it is for the economy. No stimulus bill guarantees creating, saving any jobs or the ecomony. The only guarantee is that it will create additional debt and that is exactly what has happened.

According to the National Debt Clock, the U.S. national debt is over 12 trillion dollars; but how much is a trillion dollars? If our congress saved one million dollars a day, it would take 2,740 years to pay off one trillion dollars and 32,880 years to save to pay off 12 trillion dollars. This does not include interest or the four trillion dollars of unfunded liabilities from Social Security that the Democrats loaned to the federal government when they controlled congress to pay for other liberal programs.

It is now projected the national debt will be over 23 trillion dollars in ten years and if our government takes over health care with the retirement of the baby boomers, the Government Accountability Office projects a stunning 53 trillion in “unfunded liabilities” over the next several decades with no money for Social Security, Medicare, and Medicaid by 2040.

To overcome these potential disasterous dominoes from falling, America needs to take real action to prevent the next financial meltdown and protect the American people. We need to cut government spending and cut taxes to trust the American people and the American business. All businesses that are American only and have not outsourced jobs oversees should have their taxes cut in half. This will expand many American only businesses and assist other small businesses. We need to become energy independent, use our own resources to keep oil cost low, pay down our national debt and return the money back to Social Security so it will be there for those American workers who earned it.

The recession may be officially over; but history tells us the real financial winds are creating the perfect economic storm heading directly toward America.

Frank Aquila is a Manteca resident and president of the South San Joaquin Republicans. He can be emailed at mantecarepublicans@yahoo.com

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