Economist Arthur Laffer has some gloomy tidings for us in the Wall Street Journal:
With the [economic] crisis, the ill-conceived government reactions, and the ensuing economic downturn, the unfunded liabilities of federal programs -- such as Social Security, civil-service and military pensions, the Pension Benefit Guarantee Corporation, Medicare and Medicaid -- are over the $100 trillion mark. With U.S. GDP and federal tax receipts at about $14 trillion and $2.4 trillion respectively, such a debt all but guarantees higher interest rates, massive tax increases, and partial default on government promises.
But as bad as the fiscal picture is, panic-driven monetary policies portend to have even more dire consequences. We can expect rapidly rising prices and much, much higher interest rates over the next four or five years, and a concomitant deleterious impact on output and employment not unlike the late 1970s.
What monetary policy is he talking about? The picture below is worth a thousand words. It shows the massive increase in the money supply undertaken by the Federal Reserve to pay on the enormous debt the current administration has buried us under.
The more you have of something the cheaper is its value. It's as true of money as it is of anything else, and the unprecedented infusion of cash into the economy means that the value of the dollar will inevitably sink which means we're headed for double digit inflation just like, or worse than, we had in the seventies.
Russian blogger Stanislav Mishin writing in the newspaper Pravda, of all places, offers(courtesy of the Washington Times)the following commentary on our current precarious economic condition:
It must be said that like the breaking of a great dam, the American descent into Marxism is happening with breathtaking speed, against the backdrop of a passive, hapless sheeple. Excuse me dear reader, I meant people.
True, the situation has been well-prepared on and off for the past century, especially the past 20 years. The initial testing grounds was conducted upon our Holy Russia, and a bloody test it was. But we Russians would not roll over and give up our freedoms and our souls no matter how much money Wall Street poured into the fists of the Marxists.
Those lessons were taken and used to properly prepare the American populace for the surrender of their freedoms and souls to the whims of their elites and betters.
The final collapse has come with the election of Barack Obama. His speed in the past three months has been truly impressive. His spending and money printing has been record setting, not just in America's short history but in the world. If this keeps up for more than another year, and there is no sign that it will not, America at best will resemble the Weimar Republic and at worst Zimbabwe.
In other words, President Obama's policies could well turn the U.S. into a third world country, but, hey, didn't he and Michelle look so cool together on their New York date night.
RLC