Federal Reserve Conjures Trillions In Coin Out Of Thin Air

Ilana Mercer, July 10, 2009

Vice President Joe Biden has been slightly more candid than his boss, confessing of late that he “and everyone else misread the economy.” For his “everyone else” refrain, or plain fib, Joe can be forgiven. Drawing comfort from “the warm smell of the herd” he surrounds himself with is slightly better than Obama’s way out. Beloved of the herd, Obama opts for sophistic statements ─ the kind that cannot be proved or disproved. To wit: sans stimulus, more jobs would have been lost.

Yes, jobs. Although Obama’s chief economic advisers promised that their “stim” would hold the unemployment rate below 8 percent, it has risen to 9.5 percent and is expected to exceed ten. This is the highest unemployment has been in almost 26 years, with employers cutting 467,000 jobs in June alone.

A few months back, when Obama passed his $787 billion of stimulus ─ consisting of politically directed projects that ballooned government at all levels ─ there was not a scintilla of uncertainly in the minds of his gurus and the pundits who service them. This infusion of borrowed and counterfeited funds, they asserted, would pick up the slack in the languishing economy, to use one crazy Keynesian concept. (Keynes was to economics as Hurricane Katrina was to New Orleans.)

Digging America out of the financial grave was a long-term goal, lectured the country’s illuminati. Leave that in their capable hands. For the short term, it was stimulus time, baby. Show me the phony money, shower me with costless credit; and send me sailing on a ship of fools.

At $11.5 trillion, the American government’s debt is just over 80 percent of the country’s gross domestic product. Never static, it is expanding by over $1 trillion each and every year. The deficit stands at $1.85 trillion. Toss the nation’s unfunded liabilities into this trillion-dollar toxic mix, and the full obligations the state has incurred stand at around $60 trillion. If Americans resolved ─ horrors! ─ to pay down this debt, each and every man, woman and child (illegals exempted) would have to cough-up roughly $184,000 (after which, the parasites would start spending afresh).

Led by Rep. Ron Paul, adherents of the Austrian school of economics (check), have always advocated the Do No Harm approach, which in the state’s case means this: if it can’t do something nice such as rein in reckless monetary policy, spend, consume and regulate less ─ do nothing at all. Allow the economy to contract and purge all those malinvestment poisons. Let Americans by necessity bring household debt under control. Permit unprofitable businesses that squander scarce resources to sink. Profitable enterprises will buy up the idle assets at bargain-basement prices and put them to good use. Once Fellini-style consumption gives way to Puritan-worthy production, jobs driven by sustainable market forces will germinate and grow.

Understand: government has no means to generate or create wealth. To sustain its projects and parasites it must feed off the private, productive economy. Contra Keynes the kook, government consumption is a zero-sum-game: the more plans and planners, czars and czarinas Obama adds to his ranks, the fewer you’ll be adding to yours.

Dr. Paul excepted, don’t look to the Republicans to shed light where darkness has descended. You’ll get clearer economic ─ as opposed political ─ thinking from the Congressional Budget Office than from Congressional Republicans. In whichever House of Ill-Repute they are serving, Republicans are incapable of articulating timeless economic truths: government consuming what it appropriates, prints or pirates from the nation’s dwindling savings cannot generate plenty; it can only destroy or crowd wealth out.

Republicans have never disavowed the impoverished principle of government deficit spending in the service of stimulating the economy. They’ve only ever carped that the funds were not timely, targeted or sufficiently stimulative. Had Obama managed to release, hitherto, more than a mere 14 percent of the stimulus money, we’d be good; had Barack’s bureaucracy better overseen this voracious consumption by state employees, we’d be better off; had Our Boy only funneled the money to “shovel-ready” projects, what is essentially a beastly bureaucratic feeding frenzy would have long since awakened the slumbering beauty that is the private economy.

That’s the Republikeynesians’ chant. And they’re sticking to it.

When asked for their plan, the same characters cite tax cuts. Reduction in tax rates ─ rather than once-off welfare checks for tax consumers à la Obamby ─ is good and necessary. These must, however, be accompanied by disfiguring slashes to the size of the state. But, as entrenched members of the leeching political fraternity, Republicans are vocal about the first (tax relief), and less so about the last (getting their ilk off the backs of our kind). So forget about these functionaries daring to expose Obama’s stimulus ─ and that of Bush before him ─ for the zero-sum shake-down that it is.

After all that spending, the men in charge of the money ─ who’ve staked their unblemished reputations on billions in bailouts and stimulus ─ are now warning that the country’s debt is unsustainable. You heard me. Count White House budget director Peter Orszag among the temporary turncoats, and counterfeiter-in-chief Ben Bernanke. “Unless we demonstrate a strong commitment to fiscal sustainability in the longer term,” the Federal Reserve Chairman roared just the other day at the numskulls in Congress, “we will have neither financial stability nor healthy economic growth.” The same sod turned his snout up at Rep. Paul, as the latter questioned the source of the Chairman’s authority and his sanity in conjuring trillions in coin out of thin air. (The Bernanke magic is to our money as Diprivan was to Michael Jackson’s mortality.)

Alas, the calls to cease the stupendous, stratospheric spending were as short lived as they were faint. The mavens have reverted to mindless form. In particular, Laura Tyson, eminent adviser to the president. The professor managed to make front-page news ─ vying with Jackson and the carrion beetles consuming his remains ─ by asserting that the February stimulus was “a bit too small.”

Not a great deal too small, mind you, just a wee bit small.

When issued, the lion’s share of this oh-so carefully calibrated loot ought to go toward hiring a few honorable Hondurans to depose of the D.C. bloodsuckers before they do more harm.

WorldNetDaliy.com & Taki’s Magazine
July 10, 2009

CATEGORIES: Barack Obama, Economy, Federal Reserve Bank, Inflation, Labor, Political Economy, Republicans, Ron Paul