America’s debt is ballooning with little end in sight. The Federal Reserve has signaled that it anticipates a huge deficit for years to come and President-elect Obama just covered his reputation over the bailout.
The charts? Legit.
Either work hard or you might as well quit
That’s word because you know
You can’t touch this, you can’t touch this
Break it down
Stop, Hammer time!
-Can’t Touch This, by MC Hammer.
MC Hammer’s time may be over, but Obama’s is soon to begin and before he takes office he wants to make sure that the financial and popularity charts of his first 100 days are legit. In order to do so, he needs to get rid of the messiest and potentially most disastrous element of the economic crisis. The last $350 billion of the Troubled Asset Relief Program.
Seeking to somehow duck responsibility of one of the worst economic decisions in the history of US legislation, Obama ordered… uhm, I mean urged President Bush to formally request the second half of the epically mismanaged TARP.
Yes, Obama managed to convince Bush that since the president’s approval rating could hardly get any lower, he might as well push through the final part of this fiscal monstrosity that (as you can see above) is larger than the inflation-adjusted costs of most of America’s largest government projects combined.
After the last $350 billion was spent, supposedly to keep banks afloat, some people got understandably upset when they found out that the banks and the Treasury were failing to keep track of the tax-payer money that was gifted to them. Now of course, the banks are just failing in general.
Mr. Obama stated that the allocation of addition $350 billion would be critical to his attempts to bring the economy back into order. However, with his backing, the allocation request will likely get through Congress even without some of the important measures that such a large sum of money should require.
Here’s the reality of the situation: Obama can’t touch that bailout, to do so would associate him with one of the biggest government mistakes this century. He knows that his stimulus package will increase the national deficit by leaps and bounds, and many people are starting to suspect that even that might not be enough. Chief among them is Fed Chairman Ben Bernanke, who told Londoners that the $800 billion stimulus package proposed by Obama will likely not be enough to stabilize the economy. He then preceded to tell his crowd of non-US citizens that we’d need to bailout more banks.
In case you were wondering why he would unveil this crucial news in another country, the reason is likely because if he said that here, he might start a riot. Also, if there is one thing the Brits are used to (no offence guys) it’s soul-crushing national debt.
It should come as little surprise that most people who are not bank CEOs are against the allocation of the second half of TARP. The best quote has to come from the National Taxpayers Union.
The hits keep coming from the citizen protection group.
“In the span of a few months, the Federal Reserve, Treasury Department, and Congress have pursued policies that, by fault or design, laid waste to traditional American notions of government.”
Of course, it seems that we’ve managed to completely forget about things like how the deficit and national debt will change future government spending. Bernanke tried to compare the bailout to putting out a fire, but with our ever increasing debt forcing the Fed to print larger and larger sums of money, a more apt comparison might be building a wooden bridge over an active volcano. Considering the recent rate cuts, there are few tools left in Bernanke’s box, so it’ll be a pretty rickety bridge at that.
To give you a better sense of what the U.S.’s national debt is like, Credit Loan Blog calculated what the nation’s FICO score would be if Uncle Sam was just one of us. The answer is 645. That means that the best the U.S. could get is (pause for irony) a subprime loan. If our country tried to buy a car, a 60 month loan would have an interest rate of almost 12 percent.
It seems that Obama is pushing a very old strategy, throwing money at your problems and praying that they all go away. We need change, but Obama has yet to play hand we haven’t already seen. What happens when we can no longer print money to stave off the U.S.’s creditors? To pay off the nation’s debt, it’s going to be this generation’s young voters who will have to work hard long after Obama has quit.