“Free at last! Free at last! Thank God Almighty, we are free at last!” — Martin Luther King Jr., at the conclusion of his march on Washington, D.C., Aug. 28, 1963
President Barack Obama has a dream, and he made it clear to the Nation a week ago during his State of the Union address. In it, he laid out how it will be manifested in his last term. Obama has four more years to be free at last, four years to dictate his economic and energy visions to the United States.
We are at the cusp of a revolutionary period — a time for Obama to right a ship that he, with his Ivy League idealism, never believed was properly upright. The President will use these years to cement what he believes is his rightful place in history.
But these next four years will reap an economic crisis, planted by the President and from which the only harvest can be the destruction of the U.S. dollar.
Obama’s audacious plans for America’s future were laid out plainly during his State of the Union speech last week.
“Deficit reduction alone is not an economic plan,” he said.
I know the President said this because I was watching Obama’s address with my wife. I asked, “Did he just say what I think he said?” She looked as surprised as me and gave me an affirmative nod.
With the power of the Internet, I understood that evening that indeed neither of us had been dreaming. Instead, the President had been on television sharing his dream for America’s future.
Then, this past weekend, the President gave his weekly radio and Internet address to reaffirm his position that deficits do not matter.
According to Obama, no American who works full-time should live in poverty. He was asking Americans to support his proposals to raise the minimum wage, pass comprehensive immigration reform and incentivize companies to create jobs in the United States. The President clearly believes that the long-term solution to America’s economic problems is more short-term debt. What Obama doesn’t realize is that we are already late in the game.
When I started out writing about the Federal government more than 30 years ago, the Federal debt was just more than $900 billion. I remember my father, who was my publisher at the time, fretting about what $1 trillion in Federal debt would mean for the economy. As it turned out, it meant very little. We blew past that total, then many other milestone numbers. The biggest debt accumulator of all time is Obama.
Continued deficit spending is part of Obama’s dream; but it is a dream I very much doubt that King would endorse, given the increase in poverty to American minorities.
Earlier this month, The Washington Informer stated:
There is nothing wrong with Blacks “having Obama’s back” if we were all enjoying high levels of economic success, but continuing to applaud ineptness is dishonest. Suppose you spend more money this month than your income. To keep going you borrow. The amount you now owe is “debt.” You have to pay interest on your debt. If next month you spend more than your income, you must borrow more and still have to pay the interest on your now larger debt. If you keep borrowing eventually you will reach a point where all you can do is pay the interest and not have money left for anything else. This is known as “bankruptcy.”
… It’s time Black Americans ask themselves: “Can these practices go on forever and can we pretend that what has been occurring is “good governance?” Talk about a “racial divide”: Polls show that Blacks and mainstream America view this economic imperative differently. While 96 percent of Black Americans support Obama and his policies, 85 percent of Americans worry that growing deficit spending will hurt their children and grandchildren, and 56 percent think that within the next decade the red ink will spark a major economic crisis.
Since Obama took office, the Federal debt has increased to $16.5 trillion, up from $10.6 trillion when George W. Bush left office.
Yet, according to the President, education, job training and benefits to the elderly should not be sacrificed to reduce the deficit.
So where then is the sacrifice? It seems Obama wants to have his cake and eat it, too: He wants to bankrupt America.
One thing college did not teach Obama is that deficits will matter in the long run. (In fact, we are rapidly approaching the time when they will matter.) Deficits matter because the Federal government is borrowing $5 billion per day to pay its operating expenses, and many of the Treasury auctions are being attended by foreign investors. The last data on a full month was for December; foreigners bought almost $30 billion in Treasury debt. Currently, China and Japan are sitting on $2.3 trillion in U.S. Treasury debt. And for Obama and the United States to continue to meet its spending plans, it needs these two countries and many others to keep bidding at Treasury auctions.
What happens if investors in Beijing and Tokyo lose confidence in the ability of the U.S. government to deliver back dollars that have “not” lost their worth because of inflation?
The first thing that would happen is that the U.S. bond market would begin to snap, since the United States would be forced to pay higher interest rates to sell its lifeline of debt. Higher interest rates would impact not only the bond market, but the stock market, real estate market and every component of the U.S. economy. In a matter of days or even hours, we could have an economic bust that would make the Crash of 2008 a footnote in history books.
Yet I believe that Obama remains unfazed by the size of the exploding Federal deficit and the resulting whirlwind that will drive interest rates higher and implode the U.S. economy. Either Obama is willfully unaware of the risks facing the Nation or he simply does not care about them. His ultimate economic and political endgame may be known only to him and a few insiders, but I believe he is the most dangerous President America has elected in the past 100 years.
While King revealed his dream for America half a century ago, Obama is just beginning to fully disclose his vision. It is the antithesis of King’s dream. It will not strengthen nor unite a Nation; it will weaken and rip us apart, both blacks and whites. The President’s dream will become the Nation’s nightmare.
Yours in good times and bad,
Editor, Myers’ Energy & Gold Report