Apparently Peter Schiff is of the same mind I am: we are going to default on the debt:
I have a question for America: if we have a president and a congressional progressive caucus who are hellbent on upending capitalism and driving America’s economy toward total and complete collapse, is that not treason? If it is not, why not?
How can the purposeful destruction of the private sector and free enterprise not be a criminal offense according to the Constitution? An act of deliberate sabotage that threatens the general welfare of the nation and throws it into mortal peril seems as criminal as it can get, if you ask me. What say you, America?
I have predicted since Barack Obama has taken office that he was a Marxist at heart. Why? Because he grew up with it. He sought mentors as a young man who were fervent Marxists. He took to Saul Alinsky’s community organizing tactics like a fish to water. And religiously embraced Alinsky’s methods of power for power’s sake alone, because that was what Saul Alinksy was all about—power.
Now, Barack Hussein Obama is in power for a second term—set to rule from day one. He has decided to seek revenge; it is us against them; and they will pay their fair share, sayeth Barack. For this is not about our president pledging to serve the people of the United States—far from it; this about the people serving Barack, thus his emphasis on “service,” i.e. “shared sacrifice.”
Observing Obama and his minions led me to make some predictions early on his first term. One of those predictions was Obama would do nothing to stop spending—quite the contrary: he would accelerate spending at every level of government possible—full-on Cloward-Piven, overwhelm the system, pedal-t0-the-medal zeal. The president has not let me down.
In Obama’s first term, he managed to spend more money than all previous presidents combined. He’s racked up over $6 trillion in new debt. He also proposed budgets to the Congress that have been rejected outright by members of both parties. They were not serious budgets—utopian nonsense that not even congressional democrats could support. So, the president has been at the head of a Congress that has had no budget for the past four years and runs on continuing resolutions.
Congress has been running $1 trillion-plus deficits in federal discretionary spending for the past three years.
To add insult to injury, Obama becomes livid when the matter of spending is even brought up. He cloaks his evil intent by referring to massive unrestrained spending as “investment in America’s future.” Honestly, Mr. President … what future?
And why, in the name of G-d, would the president spend an entire, tumultuous first year in office to ram through the biggest entitlement in U.S. history (Obamacare) during an economic fiasco brought about by the subprime mortgage fiasco? We were promised the $787 million stimulus—not to mention TARP—would bring unemployment down and create “shovel-ready jobs”—none of which happened.
Additionally, public compensation is far outpacing the private sector, which is unsustainable at current levels. It is breaking the back of the Middle Class, yet all we hear from the president and his minions is that they are fighting for the Middle Class.
Another prediction I made early on was that our perfect AAA credit rating would be downgraded on Obama’s watch due to massive government spending. Not only was I correct about the downgrade, but the rating houses cited spending as the primary culprit.
Not only has Obama spent more money than damn near any leader in the history of the world (not an exaggeration), he has spent more on regulations than any other previous president. Billions of dollars have spent to create a torrent of new regulations that is swamping and sinking small businesses across the land.
The Federal Reserve has answered with QE3. The Fed is literally printing money in perpetuity like the Weimar Republic. The fact that inflation will occur as a result of this insane monetary policy is a given. But this sort of printing money non-stop is going to lead to hyper-inflation the likes this nation has never seen before, when couple with the skyrocketing debt and deficit spending.
And yet, Barack says we don’t have a spending problem. He, and the Democrats in Congress, insist we must tax the rich ever more—like a passage straight out of the Communist Manifesto. But even if we taxed everybody at rate of 100%, we are still going to default on our debt, regardless, since nothing is being done to restrain massive federal spending.
Back in 2011, when the matter of the debt ceiling was in the news, I became very concerned that Obama was purposefully driving the events toward a default on the national debt, while claiming it is all the fault of the Republicans in Congress. At that time, I wrote a letter to my representatives and media outlets expressing my concerns. When I reread the letter, I realized Obama is following a script. He has an end-game in mind, but he dare not reveal it in all its ugly glory to the American people or they would revolt, and rightfully so.
No, Obama must keep pushing this insane spending in order to bring a total collapse of the U.S. dollar, at which time he will declare capitalism a failure, which means the U.S. Constitution and the Bill of Rights would be declared a failure.
I’ve been right so far. Maybe something has changed? We’ll see. I hope I’m wrong, but “hope” doesn’t seem to be taking us too far these days.
My Letter to the Reps and Senators (2011):
I, as an American, have never in my life been so concerned about the financial situation of our great nation as I am now. I’ve been following the recent debt ceiling debate with great interest. The recent comments by the president claiming that August 2, 2011 will be “Armageddon” if the debt ceiling is not raised are very concerning to me. The president also raised the specter of not paying Social Security, Medicare, Medicaid payments and military salaries. For the president and his party to play this type of political brinksmanship with our free market economy is unconscionable, in my opinion.
Here are the facts, as I understand them: The Social Security Trust Fund revenue keeps rolling in; it’s separately paid for by our F.I.C.A. payments. It’s a general fund. If the general fund cannot cover the payments, then it dips into the general treasury. We can avoid a downgrade of our bond rating if we pay the interest on the debt. The interest on the debt is between 6-10% of all revenue coming in. The federal government took in $2.2 trillion–more than enough money to pay the interest on the debt for the entire year ($215B?). Why would the president threaten not paying the interest on the debt if not for some nefarious ulterior motive? Besides, there’s a big difference between hitting the debt ceiling and technically defaulting on the national debt. The August 2 deadline is arbitrary and the president knows it!
Make no mistake! I want us to move heaven and earth to avoid a technical default, but I see no reason at this time that we should or would! If we do default on the national debt, it appears intentional to me. Let’s just look at the worst case scenario: The federal government doesn’t have enough revenue on hand to pay the interest on the debt. There are options, albeit not great options, but real options nonetheless: 1) The Treasury can stop putting money in the Federal Employee Pension Trust Fund; 2) The Federal Reserve can borrow money for the Treasury (doesn’t necessarily count against the debt ceiling); 3) The Treasury can prioritize its payment. It’s called a “budget.” Why not sell the TARP assets? The Treasury has non-restricted cash on hand ($113B) and gold. These are not great options, I realize, but it’s better than a technical default on the debt. It is what it is.
Any raising of the debt ceiling without significant–or at least proportional–spending cuts is only kicking the can down the road. I’ve watched the president blame his predecessor for all our economic woes; while the president and the Democratic Party enacted the biggest entitlement in human history (i.e. Healthcare Bill); added over $4.2 trillion to the national debt in the past three years; raised the deficit to $1.6 trillion; quadrupled the money supply; spent $815 billion on a failed stimulus package; spent over $26 billion in regulatory costs; increased public compensation to a point where it now far outpaces private sector compensation (unsustainable)–it goes on and on with the endless federal spending. Also, the president has failed to submit a working budget since he’s been in office.
The problem with our federal government is MASSIVE UNCONSTRAINED SPENDING, not a lack of revenue. Our government needs to take concrete steps that have teeth to rein in this wild, insane, out-of-control discretionary spending. I think a balanced budget amendment is a start. Although my concern with a balanced budget amendment is what happens if the government doesn’t have enough funds on hand to close the budget and the Congress just decides to raise taxes instead in order to comply with the law?
Bottomline for me: We are approaching a ratio of near 100% debt as a share of GDP. We are approaching uncharted waters. This why I am so concerned. If we lose our AAA bond rating, we will wipe out 235 years of perfect credit. We will then watch the interest payment on the debt skyrocket. What if interest rates rise on top of the downgrade? What if China has a recession or depression? The Chinese hold most of our T-bills, no? These are are all horrible scenarios that must not be allowed to occur by not making the interest on the national debt. If it does occur, I would trust that Congress will due its duty for the general welfare of the nation and begin impeachment proceedings immediately.
By the way, I try to stay well-informed about current events. I believe a good and moral representative government, like the republic our Founders gave us, requires a well-informed electorate, since it is they that freely elect their representatives and leaders. Rest assured that I will stay well-informed and vote for decent and moral leaders.