Barack Obama’s Budget-Busting Whoppers

A friend of mine asked a question last month that stopped me cold in my tracks. I’ve been thinking about it and the implications of the choices he posed ever since. I thought I’d share it with you today.

Imagine that you’re sitting in your doctor’s office, waiting for him to return with the results of the extensive exam you’ve just completed. You’re glad it’s over, because they poked and prodded every body part they could reach — and took numerous images of those they couldn’t.

When the doctor enters the room, you can tell by his expression that the news won’t be good. And it isn’t.

“Cancer has spread so far throughout your body that there is nothing medical science can do,” he tells you. “I’m afraid you have less than six months to live. You’d better get your affairs in order.”

You’re stunned. For a moment you can’t think of anything to say. Finally, you blurt out, “But doctor, isn’t there anything — I mean anything, no matter how experimental — we can try?”

The doctor pauses for a moment and then says, “Well, yes, there is one thing we could do. I hesitate mentioning it, because the consequences can be pretty awful. But it will save your life.”

“What is it? What is it?” you shout. By now you’re desperate.

“Not many people know about this,” he says, “but there is a revolutionary new procedure that will actually transfer the cancer out of you. You’ll be 100 percent cured. Unfortunately, the cancer will instead attack your 8-year-old grandson. I’m sorry to tell you but he’ll be dead in two months.”

Here was my friend’s question: Given that choice, what would you do?

And then he asked a second one: But isn’t that exactly what we’re doing with our national debt? Instead of you paying it, haven’t you agreed to have it transferred to your children and your children’s children?

Under the arrangements your government has made, haven’t you saddled your offspring with debts that they will never be able to pay, even if they live a dozen lifetimes?

Thank you, Addison, for such a simple and stark way of describing the choices in front of us. As I said, I’ve been thinking about the gripping way you presented this ever since you sent it to me. It’s sure a lot more powerful than the analogy I used three weeks ago in my article about raising the debt ceiling.

The dilemma my friend presented is especially appropriate now, since just a few days ago President Barack Obama sent Congress his budget for the next fiscal year. Despite all the baloney you’ve heard in the media about how the White House has slashed Federal spending, don’t believe a word of it. That is — how can I be polite about it? — a bunch of balderdash. Here are the facts.

Our President has proposed total spending for the coming year of $3.73 trillion. Of that astronomical sum, he says taxes will raise a little over half; your government will borrow the other $1.6 trillion. If Obama gets his way — or anything even close to it — it will mean that our 44th President will have saddled this country with more debt than all 43 presidents who preceded him.

I’ve heard a lot of rumors about Obama’s “secret objectives.” Most of them I dismiss as utter bunk. But if one of them is bankrupting the country that has been so good to him, he has a chance to be the first President in our history to do it.

Let me state the facts another way: The President of the United States is asking his country to let him spend more than $300 billion a month. And to borrow $120 billion of that amount so he can dole it out to his favorite causes and constituencies.

What about the $10 trillion in debt he will have racked up by the time he leaves office? He’ll pass that on to your children’s children… and if necessary, their children, too.

And yet the lead story on about Obama’s budget was headlined “Painful cuts in budget.” Somebody’s got a lot of gall here.

Oh, to be sure, there were some proposed reductions in Obama’s budget. And for some strange reason they were all designed to either sock it to the wealthy or to outrage the poor.

Programs to help the low-income people heat their homes in the winter? Gone. Funds to help local communities fix their failing water and sewage systems? Decimated. Deductions for the interest you pay on your mortgage? Wiped out. Deductions for gifts you give your favorite charities? Cut drastically.

I can just hear Obama telling his staff, “Those blasted voters want cuts? I’ll give them cuts. What else can we do that will make them mad as h**l?” But that’s probably unfair. I’m told that the man hardly ever curses, even when his wife tells him he’s not allowed to eat something or to put out that cigarette.

Looking ahead, Obama proposes total Federal spending of $46 trillion over the next decade, with tax collections paying for $39 trillion of it. Borrowing will account for the rest, with the debt ceiling having to be raised from its present limit of $14.3 trillion to a mind-numbing $26 trillion. Imagine what the interest alone will be on that obligation?

I’ve read several commentaries that question all of the rosy assumptions behind the President’s numbers. Coming anywhere close to Obama’s budget numbers would require no inflation, no recession, no new wars, much lower unemployment and much higher tax collections. Anyone (besides the White House) want to bet on that optimistic set of events? The President’s number-crunchers are counting on a much more robust economy than seems reasonable to many people.

I say, forget about who’s right. It doesn’t matter whether the gross domestic product grows by 2.5 percent or 4.4 percent. It doesn’t matter whether inflation stays around 2 percent or more than doubles from here (which I think is almost a certainty). Because the truth is, there is no way on God’s green earth that the House of Representatives will approve that much spending. Not a chance. It ain’t gonna happen. As the kids like to say, “Put a fork in it; it’s done.”

Oh, I’ll grant you, the House might approve a higher debt ceiling next month. Even some of the young Turks from the Tea Party might succumb to all the dastardly threats of what will happen if they don’t. Debt default! Economic collapse! Utter catastrophe!

I don’t believe a word of it. But more of them read The Washington Post and The New York Times than Straight Talk. So even the best and the brightest of them can be badly misinformed.

And something hardly anyone ever mentions: A Congressman is only as staunch as his staff. And unfortunately, there just aren’t enough smart, tough, battle-hardened conservatives looking for jobs on Capitol Hill. Many groups are trying to fill the gap — one of my all-time favorites is the Leadership Institute, which has done an almost miraculous job with its training programs. But there are a lot more compromisers than Constitutionalists on the payrolls of the new House members. Sad.

Mitch McConnell, the ranking Republican in the Senate, referred to the Obama budget as “an unserious document.” That’s a pretty mealy-mouthed way of saying it, sir. Readers of this column expect to hear it a lot straighter than that. So let me be as blunt as I can.

Obama’s proposed budget is a fraud. It’s a deceit. It’s a sham.

The President and his team know there is not a chance in a trillion this monstrosity will win Congressional approval. What they’re doing is playing a high-stakes game of chicken. “C’mon, Republicans, tell us what you propose. We dare ya. No, we double-dare ya.”

We’re about to find out, ladies and gentlemen, if the people who were elected this past November stick to their promises. I hope you’ll do your part to make sure your representative won’t knuckle under to the pressure, the lies and the media smears he or she is about to face. And if he needs a backbone, lend him yours.

Until next time, keep some powder dry.

–Chip Wood

Human Rights Group Pans U.S. For Weak Policies On Paid Parental Leave

Human Rights Group Pans U.S. For Weak Policies On Paid Parental LeaveThe advocacy group Human Rights Watch has released a report that criticizes the United States for its weak or nonexistent laws on paid leave for new parents.

The study, which is called Failing its Families: Lack of Paid Leave and Work-Family Support in the U.S., is based on a series of interviews with parents throughout America. The 90-page report revealed that parents who had little or no paid family leave after childbirth or adoption faced a variety of obstacles, including postpartum depression, health problems and a delay in baby immunizations.

Furthermore, some new parents who were not granted paid leave were forced to seek public assistance, while many families fell into debt. Several women told researchers that employer bias against working mothers derailed their careers.

"The U.S. is actually missing out by failing to ensure that all workers have access to paid family leave," said Janet Walsh, deputy women's rights director at Human Rights Watch. "Countries that have these programs show productivity gains, reduced turnover costs, and healthcare savings."

The report states that more than 178 counties have national laws guaranteeing paid leave for new mothers. America, Swaziland and Papua New Guinea were among a handful of exceptions. 

Why The Debt Situation Is Worse Than You Even Imagined

There are few things about which history is unanimous. Land wars in Asia, for example… always a bad idea.

Paper money falls into this category. Paper money always fails and wipes out the people who depend on it.

Or as our friend Rick Rule likes to say, paper money’s track record is unblemished by success. The return of paper money to its intrinsic value (nothing) is guaranteed. All we need is time (though politics certainly help move things along).

We would not argue that organizing a system of sound money based on paper receipts is impossible. We would merely point out that keeping such systems sound and reliable has proven elusive to this point in human history.

Paper money is like many other types of idealized virtue humans cannot attain. It’s simply beyond human nature to avoid perdition. Sin, as they say, is part of man.

Every government that has used paper money has succumbed to a fatal level of borrowing. Rather than a restructuring of these debts, paper money systems allow for the rapid expansion of the monetary base to facilitate paying off debts in devalued money.

This is no different than stealing. And yet… that is what happens every time, resulting in a massive crisis and a breakdown of social norms.

It normally happens faster in democracies, where no strong interest group votes for living within the country’s means and repaying its creditors in sound money. No, people vote for more spending and more debt. And they always expect someone else to pay. Case in point… Greece.

Researching problems in the Greek economy is like reading a financial comic book. All the players are clowns.

For example, the national railroad has annual revenues of €100 million… against a wage bill of €400 million and another €300 million in expenses. The Ministry of Agriculture hired 270 people to digitize photographs of Greek public lands… with one digital camera.

In 2001, the Greek government borrowed $1 billion from Goldman Sachs to help balance the budget. The deal relinquished future receipts from the national lottery, national highway tolls, airport landing fees, and even funds promised to Greece in the future from the European Union.

The government was burning the family furniture to pay current expenses. And now, they’re out of furniture. It’s all been burned.

In total, the Greek government owes €1.2 trillion. That’s €250,000 for every adult.

Obviously, Greece cannot repay this money in sound currency. The only way out is for the Greeks to inflate the debt away — effectively stealing from their creditors with a printing press. That they haven’t done so yet is only because they no longer have their own currency, the drachma.

Instead, they are part of Europe’s common currency, the euro. And Europe is making every effort to maintain the mirage of a united economy. Unfortunately, no such thing exists. It’s merely a matter of time before the Greeks default.

The exact same thing is true about the United States — except the numbers are even worse.


Porter Stansberry

–Porter Stansberry with Braden Copeland


PS: The United State’s debt situation continues to grow evident. To learn more about it and how to protect yourself from it, please click here.

Investors Turn To Gold Amid Unrest In Libya

Investors turn to gold amid unrest in LibyaThe growing political chaos in Libya has caused oil prices to spike and has raised concerns about further inflation in the United States.

On Feb. 23, West Texas Intermediate crude oil — which is the major benchmark for crude oil prices — rose to $100 per barrel for the first time since September 2008, according to media reports. The increase comes as protesters in Libya have clashed with supporters of dictator Moammar Gadhafi, causing oil companies in the north African nation to evacuate workers and cease production.

According to The New York Times, oil experts predict that the crisis in Libya will cause European refineries to purchase sweet crude oil from Algeria and Nigeria, which are two major providers for the U.S. As a result, this would likely raise American gasoline prices, which have already increased by 6 cents per gallon over the last week.

As commodity prices and interest rates continue to inflate throughout the world, many people have turned to gold as an alternative investment to protect their hard-earned assets. According to Bloomberg, gold futures prices hit a seven-week high on Feb. 23, increasing as much as $4.50 to $1,418.50 an ounce.

"Escalating unrest in Libya and rising oil prices have encouraged gold safe-haven buying and fueled concerns over inflation, which also benefits gold," wrote Mark Pervan, senior analyst with ANZ Banking Group, quoted by the media outlet.

Arizona Lawmakers Advance Immigration Bill That Targets Birthright Citizenship

Arizona Lawmakers Advance Immigration Bill That Targets Birthright CitizenshipA sweeping immigration reform bill in Arizona has passed a critical procedural vote and will move to the Senate floor.

According to media reports, an Arizona Senate committee approved a sweeping bill on Feb. 22 that would deny automatic citizenship to children of illegal immigrants. The legislation would also require employers to check residency status of new workers, and schools to verify citizenship of their students. In addition, illegal immigrants who are caught driving in the state would face a minimum 30-day jail sentence if the measure is approved by lawmakers.

The bill was approved 7-6 and will now be considered by the full Senate. Supporters of the law hope that their action will prompt a judicial re-interpretation of the 14th Amendment, which guarantees legal status to people who are born in the United States. They believe that automatic citizenship for children of illegal immigrants burdens American taxpayers.

"If you're in the country illegally, you don't have a right to public benefits, period," said State Senator Russell Pearce (R-Mesa), quoted by FOX News.

Several States have proposed tougher immigration laws in recent months in an effort to curb steep budget deficits. For example, The Atlanta Journal-Constitution reported that Georgia lawmakers recently proposed legislation that would require healthcare providers and schools to keep a running tally of the illegal immigrants that they serve. The information, which would be made public, aims to give an accurate projection of what illegal immigration is costing State taxpayers.

Alcohol May Protect The Heart – But Don’t Get Carried Away

Alcohol may protect the heart but don't get carried awayResearchers from the University of Calgary have recently published a paper in the British Medical Journal which supports previous advice that drinking alcoholic beverages in moderation may be good for heart health.

After reviewing earlier studies, the team of scientists concluded that having one drink per day may lead to a 14 percent to 25 percent reduced risk of cardiovascular disease, since moderate alcohol consumption has been shown to increase levels of healthy HDL cholesterol in the blood.

However, authors of the study want to remind the public that the findings do not suggest that heavy drinking is healthy in any way.

The Centers for Disease Control and Prevention (CDC) has reported that an estimated 37,500 people die each year from alcohol-related causes, excluding accidents and homicides.

Study authors said that there was no indication that one type of alcohol — whether beer, wine or liquor — had additional benefits over the others.

They also noted that there is a need for public health campaigns which specifically communicate that the health benefits of alcohol are completely outweighed when drinking becomes excessive. The CDC defines binge drinking as consuming more than five drinks in a two-hour period for men, and four drinks in the same time for women.  

Give Us Enough Rope

Believe it or not, the partisan style of American politics is a blessing. Granted, we all have moments when we yearn for a more civilized discourse; or at least, one that doesn’t involve Lawrence O’Donnell trying to convince viewers that he’s earnest. (I thought he had a weird facial tic.) But even a casual glance at the madness which has spread across the parts of the world which most Americans can’t find with a map and a copy of Fodor’s should serve to remind you that you’re pretty damned lucky you don’t live in Jihadistan; or one of the growing roster of countries which shoot people with an affinity for jasmine (the Chinese are going to have to stop pirating DVD’s of Disney’s Aladdin).

In the wake of lunatic Jared Loughner’s attempted assassination of Representative Gabrielle Giffords (D-Ariz.), President Barack Obama issued a call for “civility.” Americans heeded that call for about the same length of time it took the Democrats to formulate “Sarah Palin did it” talking points for the corporate media. By the time Obama delivered his annual “it’s STILL Bush’s fault” address, the interaction between Left and Right was back from somewhat muted rumblings to full-throated cacophony.

Now Americans are witnessing the Democrat Party/Big Labor Operation Sour Milk (author’s note: The DNC is free to use that one, with proper citation) in the Cheesehead State. Union thugs, perhaps emboldened by their recent victories in rumbles with the patients at Shady Acres Senior Stop, are roaring in unison with everyone from the actual Communist Party to House Minority leader Nancy Pelosi to Obama himself.

There are the usual — and becoming somewhat clichéd — depictions of Governor Scott Walker as… well, I’m guessing Hitler; but possibly Charlie Chaplin. Either some of these protestors received their artistic instruction from one of those late-night television “drawing schools,” or the Service Employees International Union has a huge number of fans of the Little Tramp.

Last weekend, I posted a link on Facebook to a report in The Washington Post about the Wisconsin Democrats’ cowardly — and enormously unproductive — bail jump to a bar in Illinois. The attendant discussion started in the usual manner: Fun and friendly digs at Democrats, followed by comical and calm-headed retorts to Republicans.

And then all hell broke loose. Again.

Around 50 remarks into to the thread, two of my friends were planning to meet up and — as one put it: “Beat the sh*t” out of each other. I actually know both of these cats, and they’re both pretty good guys, even though one of them is a hardcore liberal, and therefore has his head politically crammed into his posterior. Their war of words — and almost more — got me thinking:

“In ‘Jihadistan,’ we’d all be shot.”

Then, I mused upon the fact that I have quite a few friends who have it completely wrong about politics. Some of these pals are rather open-mouthed about their liberalism. Some of them are even funny — on purpose; which in no way diminishes their wrongheadedness.

I have never wished to shoot, stab, garrote, or throat-punch any of them; although I freely admit that I’ve considered the old backhand upside the head on occasion. But they’re all like brothers and sisters to me and I would happily lay the proverbial smackdown on anyone who tried to step into them. I’d like to think they’d do the same on my behalf. (That’s a presumption. Some questions are better left unanswered, and all that.)

Among these “traveler” pals of mine:

  • A lawyer. A criminal defense lawyer, at that. But he knows good scotch and good cigars. He does suck at golf, but you have to love him for getting out there. At least he’s not one of those pansies over on the tennis courts.
  • A dyed-in-the-wool liberal who ran for office as a Democrat. He often talks about soccer as if it’s interesting. It isn’t — but he is. He does root for Notre Dame with the same eternal (and recently unrewarded optimism) with which I cheer on the Irish. He’s also about the coolest cat I have ever met, other than my own father. If I ever met someone who didn’t like him I wouldn’t want to meet that person twice.
  • A newspaper editor. Here’s a guy who once managed to work his hatred of George W. Bush into an editorial about a local homicide. I think his writing is hackneyed and whiny. He thinks my writing is… well… he doesn’t think it’s good. Meanwhile, his views on “looking for the union label” are not too different from mine. He’s also an avid gun guy and would stand shoulder-to-shoulder with many of us if the “time” came. When the stuff hits the fan, I suspect shooting straight is going to be a much more valuable piece of talent than writing political tracts, on either side.
  • An old school 60s retread-type who thinks all conservatives are GOP-Bots programmed by Roger Ailes. This guy actually once told me the United Nations is a WORTHWHILE organization. The UN is about as worthwhile as the Department of Education. UN-apologist though he might be, he has successfully hit a major league curveball, driven an actual race car over 200 mph and partied with some legendary rockstars and lived to tell some amazing stories about it.
  • A gay couple. They’re not even AMERICANS. However, they’re worldly, erudite, and incredibly interesting. A visit to their dining room table means a BIG step up from mac ‘n’ cheese. I only see them once a year, but I look forward to it throughout the rest of the calendar’s pages.

Not one of these guys is stupid. Each of them is worthwhile, in their own way. I debate with them, make fun of them, mock them and occasionally fight with them. I do NOT draw pictures of them made up as Hitler, nor do I Photoshop crosshairs over their faces.

Look, people: I’m not asking for some new-agey nonsense. Go ahead and drop the rhetorical hammer on those whom you deem deserving of a nail or two. I know I will continue to do so until Mr. Livingston decides he could fill my column inches with old “Family Circus” reprints. But there’s no reason for us all to behave like SEIU thugs, teachers’ union layabouts, and Nancy Pelosi.

There’s a big difference between:

Obama is a babbling, Alinsky-ite boob who is to the Presidency what the quarter pounder is to a kobe steak burger at Morton’s. He is grossly incompetent, elitist and appears to be almost pathologically mendacious.”


“Obama is a goose-stepping, modern-day Hitler.”

That’s a bad allegory, given how the goose-steppers in question would have taken a dim view of someone of Obama’s complexion in their ranks. Plus, Obama’s chicken-legged frame would look ludicrous in jodhpurs.

Fight on, my friends, my countrymen, my fellow Bob Livingstonians. But remember the sage advice attributed to Benjamin Franklin (who would doubtless be appalled by the goings-on of late):

“If we don’t hang together, we will surely hang separately.”

Emanuel To Become First Jewish Mayor Of Chicago

Emanuel To Become First Jewish Mayor Of ChicagoRahm Emanuel has been elected to succeed longtime Chicago Mayor Richard Daley, accruing enough votes on Feb. 22 to avoid a run-off election in April.

The former White House Chief of Staff under President Barack Obama won 55 percent of the vote to easily defeat runner-up Gery Chico. He will be inaugurated in May as Chicago's first Jewish mayor.

Emanuel, a Democrat, almost didn't get his name on the ballot after an Illinois Appeals Court ruled that he did not meet the residency requirements to run for office. However, the State's Supreme Court determined that Emanuel could remain on the ballot even though he spent most the previous year in Washington, D.C.

CBS News reported that Emanuel's victory celebration will be short-lived because he will soon inherit a city plagued by violent crime, a budget deficit and under-performing schools. Emanuel faces an uphill battle for support from certain union groups, including firefighters and police. According to The Huffington Post, one of Emanuel's campaigns ads earlier this month implied that some city employees work for personal gain rather than public service.

"We dedicate our lives to protecting and serving the citizens of this city," said Tom Ryan, president of Firefighters Union Local 2, quoted by the media outlet. "We run into burning buildings. We ride snowmobiles in the middle of blizzards to save lives. We don't [need] Emanuel to remind us that we are 'actually' public servants." 

State of Disunion

Franklin Delano Roosevelt was the 32nd President of the United States. During the depths of the Great Depression, Roosevelt’s New Deal, inaccurately credited with rescuing the nation’s economy, threw open the United States Treasury in an outpouring of feel-good, make-work programs which would have put even John Maynard Keynes (not to mention FDR’s pal Papa Joe Stalin) to shame.

Of course, students of mid-20th Century history are well aware that Roosevelt’s efforts to restore economic sanity to a nation reeling from the twin calamities of disasters man-made (the stock market crash and attendant economic fallout) and natural (the dust bowl) failed. The re-recession of 1937 proved that conclusively. FDR managed to hang on in office until World War II came along and a wartime economy ramped into full swing.

However, despite his socialistic — although not when it came to his own financial circumstances — attitudes, FDR did have a basic grasp of one theory: Government jobs. He certainly should have, since the New Deal put more than 15 million people on the government payroll. In a letter to Luther C. Steward, president of the National Federation of Federal Employees in 1937, FDR wrote:

"… the process of collective bargaining… cannot be transplanted into the public service. It has its distinct and insurmountable limitations when applied to public personnel management. The very nature and purposes of Government make it impossible for administrative officials to represent fully or to bind the employer in mutual discussions with Government employee organizations. The employer is the whole people…”

Translated from the “excessively verbose politico-babble”:

“People whose salaries are paid by the taxpayers should treat their employers with a little respect.”

I suspect a casual poll of the union thugs, Democrat Party operatives and “teachers” currently engaged in the President Barack Obama-approved Operation Sour Milk in Madison, Wis., would reveal an almost unanimously positive opinion of the Hero of Hyde Park. Given that most of them likely don’t know more about economics than whatever’s printed on the cocktail napkins at AFL-CIO conventions, I further suspect that none have ever heard FDR’s prescient condemnation of their current actions.

Whether it’s Madison Teachers, Inc., the National Education Association or the International Brotherhood of First Ladies’ Food Tasters, a government-employee union demanding collective bargaining rights is essentially asking for the right to demand perks without input from their employers.

Hence, FDR’s warning: Unlike companies in the private sector, a government-employee union collectively bargaining with our elected representatives leads to — at best, a standoff in which both sides are employed by the taxpayers; at worst, collusion between two of the three interested parties. The Democrat/Union attacks on the taxpayer (and schoolchildren of Madison) manage to be both.

In essence, we’re paying our employees to rail against us. We’re also paying the freight to bus in their communist compadres, the Democrats who decided they would bounce to Illinois, the prosecutions of the doctors who committed fraud by issuing fake sick-out notes, any substitutes who have to be called in so the kids don’t forget where Wisconsin is on a map of… Wisconsin, and — and this is my favorite part — the people who will have to clean up the mess from Operation Sour Milk.

Before some of our port-side participants begin panting about the union employees’ fair claim to representation, allow me to point out that union labor represents less than 12 percent of the workforce, with fewer than half of those unionized members of a government employee union. Nevertheless, Obama and the Democrats have sided with this admittedly noisy minority out of deference to their own political passions (not to mention their job security). They’ve taken an active physical, financial and rhetorical role in the Madison melee — an admission of their complicity. Our (the taxpayers’) interests have taken a backseat to those of the unions.

A look at the Democrats’ donnybrook in Madison tells the story: Democrat legislators are skipping the State and union thugs are skipping work (just imagine how many naps, snack breaks and beatings of senior citizens are being missed while the Democrat Party’s Service Employees International Union stormtroopers are kicking the tar out of the taxpayers in the Cheesehead State). And the whole thing has the Obama seal of approval.

In 1981, President Ronald Reagan warned the members of the Professional Air Traffic Controllers union not to strike. They did, and he fired them. Despite their mass termination, the airlines continued losing passenger baggage without interruption.

It’s time for Governor Scott Walker to take the handoff from the Gipper and spike the ball in the Democrats’ end zone. Come on, Governor Walker, win one for the Taxpayer!