False promises, false recovery

The Obama administration keeps saying that the economy is better; that they are losing fewer and fewer jobs every month. My father in law quips that if you get a terminal cut it will eventually stop bleeding: Seems that we may be at that point with jobs too.


The Stimulus that they like to tout has done nothing positive for the private sector. All it does is preserve local, state, and federal government jobs;. Congress is passing ‘emergency’ unemployment for up to 72 months and the Lame Stream media says nothing. These folks are not going to be filing any “first time unemployment” claims again anytime soon, so I guess the jobs situation must be as good as Harry Reid says it is. Bunk!

What is happening is that every level of government is experiencing absolutely brutal loss of tax revenue from every source imaginable. The state of Georgia has announced 20 consecutive months of ever-expanding declining revenue: projecting revenue shortfalls 7%, 11%, and 21% for last year, this year, and next. It would be worse if not for the artificial relief due to Stimulus payments that keep paychecks coming to government employees even as tax revenue evaporates. Local governments are in even worse shape than state governments since they are unable to mitigate losses over a larger, economically diverse geography. The fact is, these chickens are going to come home to roost sooner rather than later.

To add insult to injury, the Stimulus is not even being funded with borrowed money; it is being funded by monetized debt. The Fed prints worthless script which it “lends” to the banks at 0% interest; that in turn “buy” Treasury Bills (to avoid federal penalties for ‘risky’ lending [to small business for operating loans for example]). This artificially simulates that there still is acceptance of US debt in the money markets. Not only does this deny operating capital to the rapidly diminishing private sector, but it will create crippling inflation as the money supply more than doubles.

As the private sector continues to dwindle, tax revenues continue to evaporate while the capital that might help grow the private sector is consumed maintaining the appearance of stabilization of the economy by unsustainably propping up government jobs.

Not only are the policies of this administration not restoring the economy, they are destroying the foundation on which it might be reconstructed as they continue to spend for programs and entitlements that we neither need nor can afford