Obama’s campaign speeches regularly contain the claims that:
- Bush’s tax cuts and de-regulation caused the recession,
- Obama stopped the second Great Depression,
- His policies are working,
- A very slow recovery was inevitable, and
- No one could have done any better.
Investor’s Business Daily columnist, John Merline, shows that these claims are false. The chart below is from the column.
The housing bubble, created primarily by government mandated easy loans for people who had little prospect of making payments, created the collapse. Actually, a community agitator in Chicago, named Obama, had worked to increase the number of these loans. Banks were threatened. Later, regulators for President Bush, made many attempts to rein in the insane lending practices, warning of the disaster ahead. They were rebuffed and even ridiculed by Democrats like Barney Frank. The party who now blames lack of regulation, actually fought the regulators.
Yes, they are shameless. And with the help of a media that never holds them to account, Mr. Frank and Mr. Dodd went on to create more economic damage with Dodd-Frank.
I wish Mr. Merline’s column had address one more big economic lie that is a regular part of Obama’s repertoire of lies. That is the lie that wealthy people have paid an ever-decreasing share of government, while the burden has been shifted by evil Republicans onto the backs of the poor. The facts clearly refute this absurd claim.
At a deeper level, there is a way that big spending politicians are increasing the burden on the poor and middle class. It’s just not very visible ….yet. Romney and Ryan should be talking about this hidden tax.
There are two parts to government spending, that which is paid for and that which is borrowed. The borrowed portion is more massive than the world has ever seen, and is growing fast. The debt problem is so enormous, and politicians are so unwilling to face it, that there are probably only two possible outcomes, both bad. One is to default on the debt and one is to pay the debt with inflated, relatively worthless money.
In the past, big-spending governments have chosen the inflationary route. They do pay their debts, but with worthless money. Think of this as the inflation tax. Your savings accounts, your investments, all of your dollar denominated assets will be worth less. You didn’t write the government a check for the inflation tax; they just took the value of your money. You may have a hundred-dollar bill in your pocket, but you may only be able to buy a loaf of bread with it. People with limited means will be harmed the most.
In September, the Federal Reserve, the European Central Bank and the Bank of Japan all announced plans to inflate their currencies. We should see this as a big announcement of the coming inflation tax. It’s full speed ahead on irresponsible printing of paper money. It is unavoidable that the money will be worth less. The Fed plans to expand our money supply by at least 85 billion per month, and they explicitly stated that they could do this indefinitely. They are kicking the can down the road. We know where the road leads, and so do they.