They also failed to recognize how their policies to force banks to relax rules to unqualified lenders created the subprime mortgage crisis, which led to the original economic crisis. When Republicans questioned the policies and attempted new regulations, Democrat Sen. Chris Dodd successfully threatened a filibuster to prevent any reform.
While the American family and private businesses struggled to cut expenses, President Obama and the Democrat party has expanded the government and the federal budget by $1 trillion and increased the national debt more than $12 trillion. With this government expansion and government takeover of our financial institutions, General Motors and now possibly health care, the government has grown while the private sector has shrunk.
President Obama demanded Congress rush through a $787 billion stimulus bill without allowing the American people to see the bill. He said in a Jan, 3, 2009, radio address that if Congress did not act “swiftly and boldly” to stimulate the economy, it could “lead to double-digit unemployment." Well, in eight months the unemployment rate exceeded 10 percent, and when the underemployed are counted, it is 17 or 18 percent.
Instead of using tax cuts to provide relief for families and businesses, which would have immediately boosted the economy and allowed businesses to begin hiring workers in the private sector, Obama and the Democrats used the $787 billion stimulus bill to pay back liberal organizations who supported the Obama campaign and other Democrat organizations.
Two studies of the $787 billion from the American Reinvestment and Recovery Act, which was supposed to "create or save 3.5 million jobs over the next two years," reports that the money failed to deliver as promised. But that money has been disproportionately given to those districts represented by Democrats. Billions of taxpayer dollars have been spent on political paybacks through over 14,000 earmarks of wasted government spending in one year.
Much of the "stimulus" money is still scheduled to be released in 2010 and 2011 so that it will assist the Democrats and President Obama's re-election. As a result, the economy was artificially boosted with government “Monopoly money,” creating a new financial storm of a devalued dollar, higher taxes, looming inflation and enormous U.S. debt.
With all this fake money thrown into the economy, the dollar has become devalued, along with our credit rating throughout the world, with many investors becoming less willing to invest in U.S. assets.
The federal government is running a budget deficit of more than $400 billion annually, while each year we buy roughly $500 billion more in goods and services from foreigners than we sell overseas. Basically, we are consuming more than we are producing, which undermines confidence in the dollar. Therefore, if there is a real rush on the dollar, this could cause a 10 percent loss to the stock market in a single day, or a longer trend that could set us back into a double-dip recession.
When there is an increased money supply, this is followed by a general rise in the level of prices for goods and services, which will create monetary inflation. To control inflation, the government will need to raise interest rates, which will cause a slowing in the already struggling housing sector. Further, due to a Congress that has restrained many of our struggling businesses, these business will also declare bankruptcy, resulting in foreclosures in commercial properties.
To make matters worse, the Bush tax cuts expire this year, which will result in further economic problems for the American families and businesses, with the numerous taxes they pay already.
Other Obama policies — such as cap and trade on carbon and the inability to expand energy independence through the hoax of global warming, which has been used to scam the American people to push forward the environmentalist-liberal agenda, as well as the failure to recognize those who want to destroy America as terrorists or even the failure to recognize that we are engaged in a War on Terror — will cause further potential harm to our economy. When you combine this financial storm with a bankrupted Social Security and a bankrupted Medicare program, the future of America looks bleak.
No matter how large and powerful a government is, it has no control over the economic repercussions that will result from its intervention. The more the government interferes, the worse it is for the economy.
No stimulus bill guarantees creating or saving any jobs or the economy. The only guarantee is that it will create additional debt, and that is exactly what has happened. According to USdebtclock.org, our national debt is over $12 trillion.
How much is a trillion dollars? If our Congress saved $1 million a day, it would take 2,740 years to pay off $1 trillion dollars, and 32,880 years to save to pay off $12 trillion. This does not include interest or the $4 trillion dollars of unfunded liabilities from Social Security that the Democrats loaned to the federal government when they controlled Congress to pay for other liberal programs.
It is now projected the national debt will be over $23 trillion in 10 years — and if our government takes over health care with the retirement of the baby boomers, the Government Accountability Office projects a stunning $53 trillion in "unfunded liabilities" over the next several decades, with no money for Social Security, Medicare, and Medicaid by 2040.
To overcome these potential disastrous dominoes from falling, America needs to take real action to prevent the next financial meltdown and protect the American people. We need to cut government spending and cut taxes — we need to trust the American people and American businesses.
All businesses that are American only and have not outsourced jobs overseas should have their taxes cut in half. This will expand many American-only businesses and assist other small businesses.
We need to become energy independent, use our own resources to keep oil costs low, pay down our national debt and return the money to Social Security, so it will be there for those American workers who earned it.
The recession may be officially over, but history tells us the real financial winds are creating the perfect economic storm, and it is heading directly toward America.
• Frank Aquila is a Manteca resident and president of the South San Joaquin Republicans. He can be e-mailed at email@example.com.