William Larsen

Obama Administration criticizes Bush Administration

Today the soon to be Obama Administration has come out saying the Bush Administration has left the economy in ruins. In many ways this is correct. The objection I have is that they continue to say the 2008 deficit was $470 billion when in reality it was over $700 Billion before any bailouts. Again our elected representatives have brain washed the media and many of Americans into using the Unified Budget Number. In 1983 Congress passed legislation making it illegal for government agencies to report a unified budget. The reason was it masked the true size of deficits and uses surpluses from dedicated tax sources such as Social Security, Medicare (no surplus for the past three years), and government agency trust fund interest to offset the interest paid. However, the national debt is the true barometer of the national debt.

How much debt can the U.S. economy support? I think we are at its limit now. 52 years of continual deficits and the next couple years look like a minimum of $1 trillion + each. Obama criticizes others for increasing the debt; I wonder how he is planning to do all he says he will without doubling it.

I hate to even suggest it, but it may be the best thing for the U.S. Economy could be high inflation. High inflation will allow us to pay off current debt with inflated dollars. The bad thing is we would have to pay it all off before it comes due or we would be unable to fund any new debt while at the same time seeing the value of our wages drop.

posted by William Larsen @ 11:01 PM