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The Obama Watch
America’s Ticking Bankruptcy Bomb
Throwing the book — a new book — at Obamanomics.
My new book, America’s Ticking Bankruptcy Bomb, published by HarperCollins, went on sale this week. The book begins by explaining the overwhelming tidal of wave of government spending, taxes, deficits and debt swamping our economy and threatening ultimate bankruptcy for America. But this book is not just about the problems, but also about the solutions.
Defusing the ticking bankruptcy bomb that is threatening to explode American prosperity will require first creating another economic boom to restore traditional American prosperity. Only surging economic growth will produce the booming revenue base essential to avoiding national bankruptcy, and reduce dependency sufficiently to enable the necessary slashing of government spending. The book explains exactly all the specifics of how to create another generation-long, 25-year economic boom, drawing on my background working for President Reagan in the White House Office of Policy Development.
If you want smaller government, then this is the book for you. It provides a thoroughly detailed, specific roadmap for ultimately cutting federal spending in half, or more, over time, drawing on my experience working for virtually every major free market think tank for the last 30 years. That is all accomplished with politically seaworthy reforms. I don’t believe in kamikaze missions.
The top federal income tax rate in this booming future America is 15%. The payroll tax is eventually replaced entirely by personal savings, investment, and insurance accounts ultimately financing all of the benefits financed by the payroll tax today. State income taxes in the 41 states still suffering from that barbarous relic are phased out completely through a Taxpayer Bill of Rights limiting the growth of state spending to the rate of population growth plus inflation. The federal budget is eventually balanced permanently.
Essential to achieving this vision of smaller government is fundamental entitlement reform, also explained in thorough detail in the book. By modernizing our old-fashioned, tax and redistribution entitlement programs to rely on 21st century capital, labor, and insurance markets instead, we can achieve all of the social goals of these entitlement programs far more effectively, serving seniors and the poor far better, at just a fraction of the current cost of those programs. Such reforms would involve powerful market incentives driving the programs to contribute further to booming economic growth and prosperity, rather than detracting from it.
Lighting the Fuse
During George Bush’s eight years as President, the federal government grew by one-seventh relative to the economy, after Republican Congressional majorities had so promisingly reduced it by that amount from 1994 to 2000. But when President Obama got behind the steering wheel in 2009, he accelerated into hyperdrive even more so in all the wrong directions, doggedly pursuing the opposite of Reaganomics in every detail.
Federal spending under President Obama has already soared by another fourth relative to the economy, to the highest in history except during World War II. His own 2012 budget proposes to increase it by another 57% by 2021. That budget projected the federal deficit for 2011 at $1.645 trillion, the highest in world history by far. Already this year, for every dollar of federal spending, 43 cents will be borrowed. Spending for Social Security, Medicare, Medicaid, and the income security programs (mostly welfare) will consume 95% of all federal revenues. What is left will not even be enough to pay interest on the national debt, equal to 10% of federal revenues. All the money for everything else the federal government does, including all of national defense, law enforcement, transportation, agriculture, indeed, for every cabinet department outside of spending for the above entitlements, all will have to be borrowed.
The national debt, now rocketing towards $20 trillion by 2020, is already the highest in history relative to GDP except for World War II, and on its current course will soar well past that record. Indeed, the national debt has been rocketing upwards so fast that under current policies that more debt will be run up in one term under President Obama than under all other Presidents in history — from George Washington to George Bush — combined, according to President Obama’s own 2012 budget.
On our current course, indeed, our national debt as a percent of GDP will soar past the level that triggered bankruptcy for Greece, when the financial markets refused to lend the government enough to cover its enormous annual deficit. The European Union tried to end that crisis with a trillion dollar bailout financed by its taxpayers. But who will bail out America? Who even could?
Even worse, the national debt does not nearly encompass everything the government owes, or on which it is subject to liability. The best estimate of the unfunded liabilities for Social Security and Medicare is over $100 trillion. Usually overlooked as well are the unfunded liabilities for federal military pensions ($3.7 trillion), veterans benefits ($1.5 trillion), and federal civil service pensions ($2.1 trillion). Then there are the FDIC’s guarantees for $5.4 trillion in bank deposits, the FHA’s guarantees for $1 trillion in home mortgages, and trillions more in mortgage backed securities and federal guarantees of those securities held by the Federal Reserve, Fannie Mae, Freddie Mac, and the FHA. None of this is counted in the national debt.
For context, our entire economy only produces $15 trillion a year.
Somehow, President Obama insisted that it was a good idea to add all of the entitlement promises of Obamacare on top of these obligations. Obamacare added a costly new entitlement program to provide federal welfare subsidies for health insurance for families making as much as $88,000 per year, soon climbing to over $100,000. Woefully overpromised Medicaid, the health care program for the poor, was sharply expanded to cover nearly 100 million Americans by 2021 according to CBO. While President Obama won enactment of Obamacare promising it would reduce deficits, it will actually add another $4 to $6 trillion to the nation’s deficits and debt over the first 20 years alone, as explained in the book.
State and local governments add even further to the problem. People use the term “failed state” to refer to Somalia, with its disintegrated government. But that term may increasingly be applied to California, New York, Michigan and Illinois, with their out of control state budgets and deficits, runaway government pensions, dysfunctional education bureaucracies, and increasingly belligerent public sector unions.
These states already resemble Greece, with our federal government already bailing them out at taxpayer expense, which started in President Obama’s first stimulus bill in 2009. State and local government debt has soared toward a projected $4 trillion, or another 24% of GDP, by 2012. The unfunded liabilities of state and local pensions total $3.8 trillion, with state and local promises to pay retired employee health benefits adding further unfunded liabilities of $1.4 trillion. None of this is counted in the national debt either.
About the Author
Peter Ferrara is Director of Entitlement and Budget Policy at the Heartland Institute, General Counsel of the American Civil Rights Union, Senior Fellow at the National Center for Policy Analysis, and Senior Policy Advisor on Entitlements and Budget Policy at the National Tax Limitation Foundation. He served in the White House Office of Policy Development under President Reagan, and as Associate Deputy Attorney General of the United States under President George H.W. Bush.
Letter to the Editor View all comments (70) | Leave a comment
More Articles by Peter Ferrara
More Articles From The Obama Watch
http://spectator.org/archives/2011/06/15/americas-ticking-bankruptcy-bo
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drudge ette obama| 6.15.11 @ 7:00AM
Everyone knows how to get out of this mess. Obama knows. But he runs the opposite way. He is killing us and he knows it. True believers are so dangerous, but they don't last forever...realists take the sinking helm away. Dear god, not soon enough.
My heart deeply cries for the people who are losing their jobs, their companies, their clients, their homes and their futures. The Obama Legacy is a cruel one.
SonOfSam| 6.15.11 @ 7:55AM
I agree. Obama is not "no drama": he's a heartless vampire who doesn't give a rat's rear end about the average American. Like every narcissist commissar since time began, he sees people as just various little interchangeable cogs to plug in wherever HE sees fit.
Alan Brooks| 6.15.11 @ 1:18PM
America is as ancient Rome, a large nation devoid of virtue.
Alan Brooks| 6.15.11 @ 1:22PM
... and you can't blame THAT on Obama.
Shamus| 6.15.11 @ 7:40AM
Bush and Obama are the Beavis and Butthead of American politics.
Alan Brooks| 6.15.11 @ 3:50PM
Obama cares more about America than dynasticists such as the Bushes and Kennedys ever did.
The Adamses-- and I don't mean Morticia and Gomez-- were different: in the early 19th century people were straight shooters, in more ways than one.
carnot| 6.15.11 @ 8:57PM
we'll take your word for it!!
after all...the results of Obama's policies certainly stand as testament to your didactic clarity!
tsd| 6.15.11 @ 7:42AM
It is time our country once again encourages and protects the real people who do the work, create the jobs, create the real wealth and pull the rug out from under the moochers, thieves and freeloaders. Until we find and elect the right people who will do the hard work and take us back towards a fair and logical path to prosperity we travel at our own peril. The liberals, rhino's have to go. Excess Government and BS bureaucracy at all levels have to go.
Handy| 6.15.11 @ 1:35PM
Too late. The real producers are already in defilade, and they won't come out anytime soon.
We don't need to protect them; we need to destroy the destroyers. Put those fat-cat bureaucrats on a 200 calorie per day diet and watch them blow away. They can't fend for themselves anyway.
Bob From District 9| 6.23.11 @ 5:36PM
Tax the rich. The real producers are losing their jobs to Bushonomics.
I doubt many who agree with The American Spectator are real producers. I'd bet money those who support it with any significant amount of money aren't.
Mutch Moore| 6.19.11 @ 3:55PM
Now THAT (your proposal) is "didactic" ref: carnot above). Expositor exquisite !
aj| 6.15.11 @ 7:43AM
Judgement upon nations does not always come dramatically. More often it is the simply the ripened fruit of the reprobate tree (mind)....see Rom 1:28.
Handy| 6.15.11 @ 8:14AM
It would be great if Obama choked on one of his chili dogs.
Dan Hirsch| 6.15.11 @ 9:09AM
No, it wouldn't. It'd leave us with President Biden who would win a sympathy election in 2012. Ref. Lyndon Baines Johnson's election in 1964 after the Kennedy assassination in late 1963.
We really, really want our little President to walk out of the White House in January 2013 hale and hearty. So we can laugh at his hubris!
skip| 6.15.11 @ 11:36AM
Heres to 60 more years on this mortal coil for the thin skinned narcissist that he may be acutely aware of unprecedented ridicule every minute of it.
Bob From District 9| 6.23.11 @ 5:38PM
Don't worry, any of the current crop of potential republican replacements will make Obama look so good by comparison he will be a candidate for sainthood.
Handy| 6.15.11 @ 1:49PM
You are a kick, Dan. Have read many of your posts, and am in your camp.
Not long ago, I wrote in the WSJ that I hoped Obama would not be executed for precisely the reason you cite. Despite my despair at our current circumstances, I retain a certain sense of humor, I hope.
Remember Jesse (From the outhouse to the Whitehouse) Jackson?
I think even Biden would be an improvement. He could be the first "From the dog house to the White House" president.
Will Michelle pick up after Barack, or will she leave it to her daughters?
Mutch Moore| 6.19.11 @ 3:58PM
Yikes! President Biden?...what a horrendous prospect. OK, Dan, you're the man. Great post!
Mimi| 6.15.11 @ 8:16AM
Are there ANY Democrat Senators, That will help the GOP pass legislation....Like 2/3 to over-ride a veto to stop this, before Jan.2013 ???
My fear is even if we vote "O" out the damage will be done. In 2013 the new administration (GOP) will endure a horrible recession.....can the suffering get worse???
This nation is taking one heck of a beating....We got a punch in with the Nov. 2010 elections....some good strong people were sent to help....If the Senate was in our control now....We could start the repair job . If only some Dem Senators could WAKE-UP and be AMERICAN enough and " DO THE RIGHT THINGS" and bravely choose the COUNTRY over PARTY.
Pelligrino| 6.15.11 @ 2:09PM
Mimi, I am not disagreeing with you. But which of the newly elected in November 2010 are actually punching?
I don't even think they are using tickle feathers.
I've seen political parties (in other countries) in the minority -- small parties with never a real hope of carrying any legislative victories -- lambasting, kicking, undermining, lampooning, ridiculing, screaming....daily. Small parties with verve and innovation, kicking the stuffing out of the establishment almost on a daily basis (and the man on the street loves this).
In year 2011 this is so easy with modern, easy to use tech equipment that lets you talk to millions in the same day with just 1 YouTube video. Or one Twitter message that gets passed to millions in a week. One e-mail. One photograph with a well-worded caption.
So how are our November 2010 elected officials doing? (What are they doing?) What have they accomplished for the Tea Party American conservatives?
I saw an interview with Rubio recently. What a putz! He's all mindless hot air, too!!! And it only took him 5 months to become a wet noodle.
Why don't they see it or understand it? I mean, is there or will there ever be a more readily available punching bag than Harry Reid? Biden? Yes, even Obama? Obama's a dunce who walks with hoodlum basketball player's pimp. Pelosi still leads her party in the House!!!! (after the worst vote drubbing in modern history)
A mildly smart Congressman or Senator could daily do a sane, on-topic, real and biting satire of all elected officials, D.C. Federal Government dweebs, and all D.C. officialdom. Don't need the media to participate at all. Just use simple technology tools that a college junior could orchestrate for you.
Why not?
Conservatives, Tea Party faithful, those who donate time & money....all of the good citizenry in the electorate are being played.
What do you hear from GOP types? "Just two more years and then you'll really see what we're going to do...." Uh-huh. Right. Check's in the mail....
Handy| 6.15.11 @ 5:41PM
The Tea Party has turned out to be weak stuff. We need coffee, or better yet, whiskey and rifles.
Joseph Gause| 6.15.11 @ 9:40PM
Yes! Moonshine and rifles! Let's get those revenuers!
Bob From District 9| 6.23.11 @ 5:40PM
If some republicans would wake up, and be American enough,"Do THE RIGHT THINGS," and bravely chose country over Tea Party,.
bluecollarbytes| 6.15.11 @ 9:10AM
This is what Obama's transformation looks like. Obama's ideology trumps all, in service to his dream of a socialist America.
But after many years of warnings of the path we're on, there's no guarantee that our politicians have finally seen the light. In fact, healthy skepticism is needed because there seems to be something about the breed that keeps them focused on nothing but the next election.
Bob From District 9| 6.23.11 @ 5:41PM
The Tea Party is proof that is true of republicans.
Stan Redmond| 6.15.11 @ 9:21AM
All I can hope for is that so many people realize what an absolute disaster liberalism is for themselves that they will never vote for a democrat or liberal republican again.
Ken in Tyler| 6.15.11 @ 9:26AM
The author of the article makes many good points. Unfortunately his approach did not mention that because we have dug ourselves such a deep hole, no matter how the corrective action is applied, the pain will be protracted and severe. The free market has been so distorted by malinvestment and tax code dodges that recovery will be difficult. At the very least, hundreds of thousands of government workers will have to be placed on the unemployment rolls.
Then there's the matter of the Constitution which was conveniently ignored. The author speaks only of policies. And policies can be changed and likely will when the real discomfort becomes apparent to the entitlement class who will never vote to diminish their own government benefits.
Only if we build on unchanging principles the Constitution expresses- specifically that each citizen's success or failure is his own responsibility and the government's only duty is to protect the God-given Liberty of its citizens will we have any hope of true recovery.
Pelligrino| 6.15.11 @ 2:12PM
Ken in T., please add: Until we see upwards of 85% unemployment for lawyers within our borders, until then, we will not have started any meaningful turn toward national or local improvements.
Thank you.
Handy| 6.15.11 @ 9:38AM
God bless your optimism Mr. Ferrara, but there will be no economic boom, no matter your prescriptions. The types of people who could make that happen have already learned that they will be punished for their virtues. They will no longer participate in any meaningful way. Once their basic needs are met, they will simply shut down. Some would call that "Going Galt."
The quality of Med school applicants has been declining for decades. Try recruiting soldiers into an emasculated military. There aren't enough qualified americans to do basic jobs, so those jobs must be exported. No one, except the looters, will embrace enthusiastically any form of economic activity. Looters do not create wealth; they sap it.
People will telecommute. They will grow their own vegetables, teach their own kids, buy their own generators, guns and ammo, and make their own booze. They will even repair their own potholes, but grass will grow on the expressways. Barter will replace currency. We are fast becoming an insular society, and this trend will only accelerate.
The USA will not become as socialist Europe, because there is no one to fall back on. The Europeans could afford the illusion of prosperity so long as the USA had their backs, but there is no one to reinforce us. Instead, we will become a nation of armed camps, trading reluctantly with those outside our own communities and only for life's necessities.
Governments will become ever more demanding and authoritarian, of course. There will be more and more "jobs" for police officers and bureaucrats, but with fewer transactions to regulate and punish they too will languish.
Big and even small cities will become combat zones. (They are well on their way, ala Detroit.) No neighborhood will be safe. As residents flee, they will not be welcomed by suburbanites and rural folks. Many will perish from lack of food and shelter, if not outright violence. At least the dogs will eat well for awhile.
No sir. We are long past the point of peaceful, orderly economic recovery. The old models no longer apply. A little tweak here and a pinch over there will not work anymore. Citizens have finally awakened to the fact that government is at war with them.
This realization will guide us through many decades to come. We trusted too much, but once lost, trust is difficult to regain. It won't happen soon, if ever.
Pecos Pete| 6.15.11 @ 9:58AM
Handy: Hammer square on nail. Wish it weren't so, but it is. The best we can do is delay the inevitable. Trillions of debt ain't going away. Trillions! Unfunded liabilities will either be paid off or, like Chrysler's bondholders, will be thrown under the bus. It surely will not be pretty.
henry| 6.15.11 @ 12:02PM
I agree with every word. Western civilization has entered a looting phase: declining natural resources make the the next step inevitable. Brace yourselves for the next step: the circle is about to close, as we regress to a hunter-gatherer society.
Seek| 6.15.11 @ 1:15PM
Race is the great unspoken reality. A predominantly white city is not going to be a wasteland.
Handy| 6.15.11 @ 2:29PM
I hope you are wrong. In my experience, I have met many evil whites and blacks, but both are overwhelmingly (99%) good people.
Government is evil (100%). Just like the Druids who set women's breasts beating against each other.
Thomas Sowell, Walter Williams, and any other person who could keep the generator running or help me muck the stalls and put on the feed bags would be welcome in my home.
Hell, the door is always open. Even to those "Soprano" type guys. But, they areawfully fat. Would have to put them on diets. No feed bags for them!!!
Bob From District 9| 6.23.11 @ 5:45PM
"Thomas Sowell, Walter Williams, and any other person who could keep the generator running or help me muck the stalls and put on the feed bags would be welcome in my home."
Hell, do you really believe Thomas Sowell or Walter Williams are capable of doing anything in the real world?
BackToBasics| 6.16.11 @ 2:31AM
I think we have too many enemies to complete a hunter-gatherer transformation. Before we get to that point we will be tested probably both internally but also externally by a stronger force. If we fall then I think we will be slaves of one sort or another, not hunter-gatherers.
mmercier| 6.15.11 @ 2:11PM
Sad, but fairly accurate post.
Pelligrino| 6.15.11 @ 2:21PM
Handy, let me single-out one line that sums it all up.
You wrote, "Citizens have finally awakened to the fact that government [I'll add bureacrats of every stripe and 80% of the lawyer-class] is at war with them."
True.
True.
True.
Government at every level (local, state, national) in singular activities and most surely in its collective works for the destruction and oppression of the individual man and his family -- daily.
Returning to this my homeland several years ago after many years away, I saw and see this very clearly.
Handy| 6.15.11 @ 3:15PM
Pelligrino,
You have been a consistent and reliable defender of freedom since I have been reading these threads. But, you have been too shy with your experiences. Share your knowledge of other places. Let us know how a gallon of gasoline only costs 25 cents in foreign lands and a pack of smokes is only 15 cents.
I have new term for you: "Assistant Bureaucrat." These are the people who are the "enablers" of our official bureaucrats. Ostensibly private. they could not exist without their governmental slavemasters. Every clerk in a law firm, every payroll bookkeeper and bank teller belongs in this class.
Come back, big buddy. 10-4 and all of that.
Peppermint Tea| 6.15.11 @ 10:05AM
What if the president were to see that the ideology he has been fed is garbage? What if he were to lobby Congress to enact Ferrara's recipes beginning July 1 when QE2 ends? Lay off fed workers, cut, slice, chainsaw spending. Start on tax holidays. Dump Obamacare.
Then we would have a brief deep re-ordering and by July 2012 with wars over and business on the rebound the President could rejoice and relax.
What a shame this will not happen.
Peppermint Tea| 6.15.11 @ 10:07AM
I'm putting my money on Handy's futuristic scenario.
Question: which of the candidates would enact Ferrara's plan? Is Bachman the best bet?
Energy Man | 6.15.11 @ 12:41PM
Gingich will probably be most likely to incorporate these principals, with Bachman and Cain coming up right behind.
Energy Man | 6.15.11 @ 12:41PM
Gingich will probably be most likely to incorporate these principals, with Bachman and Cain coming up right behind.
Handy| 6.15.11 @ 3:25PM
I have a couple of mules and some acres. Wanna elope? Assuming you are a girl, of course.
Mike Gabel| 6.15.11 @ 10:28AM
This article and the book will obviously resonate with the thoughtful readers of The American Spectator.
The real challenge for conservatives, however, will be to articulate these points to the masses. There are many good Americans out there who don't read material like this.
Conservatives must change the message delivery system so that the main stream is educated regarding the dire consequences of government profligacy, and the benefits of limited government, self-reliance, private property and free markets.
Liberals, while deceptive in their application, have perfected this skill.
Spike| 6.15.11 @ 11:39AM
Concur. Right on the money.
Mutch Moore| 6.19.11 @ 4:08PM
You make good sense Mike Gabel. Though the message delivery system you allude may be changed by necessity and reality, rather than by any quest to win an election.
Aquanomics| 6.15.11 @ 10:51AM
There exist close to 80,000 (city/county/regional/state/federal) governments in the USA. What *really* happens if one of them, Uncle Sugar, goes broke?
Granny doesn't get her check? Take her in as in the old days.
Janet Incompetano and millions like her get laid off? How is this a bad thing?
DEA can't continue its war on the Constitution?
I could continue.
Now air traffic and military would need sorting out, but at least one country has privatized its ATC without issue meaning so could we. And if the rest of the free world suddenly found itself needing to defend itself, at the very least our decades of self-sacrifice would finally be recognized.
True, life in some cities would be bad. Guess what? It's already bad in these cities after decades of liberal mayors and councilman drove the productive residents away leaving the Looter class. I strongly suspect if these dirtbags tried to leave their urban utopias a hail of gunfire would drive them back home.
Yes, this is a (somewhat) silly oversimplification. But we all have to understand that government, any government, creates NOTHING. Government consists of takers, not makers and the less of it the better.
Gov does not create food, but screws up our food supply with crop and ethanol subsidies.
Gov does not create steel but screws up that industry with pro-union laws and OSHA extremes.
Al Gore did not create the internet, but is trying very hard to screw it up with net neutrality rules.
The more I reads the papers the more I am convinced that if aliens teleported every politician, bureaucrat and contractor to some other dimension, America and the world would (eventually) be a much better place.
mmercier| 6.15.11 @ 2:24PM
Aside... Read Arthur Clarks "Songs of Distant Earth" to get an understanding of the mentality of those who seek to govern the lives of others. He presents a mechanism devised to segregate those who desire power into safe position for those who desire to survive.
Fiction of corse... We in the real world do it the hard way, after total colapse.
rendite| 6.15.11 @ 3:14PM
How many of the "those who seek to govern the lives of others" is comprised of lawyers? A rather high percentage, no?
Mutch Moore| 6.19.11 @ 4:14PM
Aquanomics! I gotta study this. Is is a variation of Reaganomics? In the midst of economic hardship and turmoil it would be blissful if "Janet Incompetano and millions like her" would really get laid off Wow! what a great good thing to emerge.
cicero| 6.15.11 @ 11:41AM
May I suggest the obvious? In order to correct the horrible inbalances looming, there are a few common sense things that can be done:
1. Government employees can retire as soon as they are eligible, but they cannot begin to collect the pensions until at least age 67.
2. Any government medical payment plan shall be secondary to any private plan in place.
3. Eliminate several entire government departments; Energy, Education, Veterans Affairs (put in Dept. of Def.), Hud, Labor, Commerce, and any others that anyone can think of.
4. Sunset all laws and regulations passed by Congress or any remaining regulatory agencies.
That should be a good start. At that point, a 15% income tax, with the other tax reforms mentioned in the article will be more than enough to run whatever is left.
Handy| 6.15.11 @ 1:13PM
I love your suggestions - as far as they go. Let me quibble a bit, however. We should not do away with the Commerce Department, but the Department of Labor should be subsumed under it. The whole thing should be made up of near-sighted bean counters, collecting and collating data, but with no power whatsoever.
Let's spin off Alcohol, Tobacco and Firearms to the 7-11 chain. Sounds like a one-stop shopping store to me.
The Post Office? I still have unused 22 cent stamps. Those letter carriers could get just as much exercise delivering coupons for local discount car washes.
Agriculture? That department employs more people than there are farmers. Not one has any callouses on their hands, either.
Fish and Wildife? Let them sleep with the fishes, or set them free on ice floes with their beloved polar bears.
FEMA? Puhleez. All that bunch does is call in the military. Like Benny Hill, we should cut out the middle man.
C'mon folks. Join in. You can think up a few more. Do we really need the National Institutes of Health? Freddie and Fannie? Can't we sell off all those wilderness areas and do away with the Forestry Service? It's fun, and you can do it.
On a more serious note. There is a tried and true organizational principle: No individual can oversee more than six subordinates. How many cabinet-level officers does the president have? 22? Even if Obama were as brilliant as he thinks he is, he can't control a runaway bureaucracy.
So, how to deal with these folks who would run (ruin) your lives? Well, in less "enlightened" cultures, there was a practice called "Shunning." Government employees should be shunned. If you live next door to one of them, do not acknowledge them. Don't let your kids hang out with them, and never let them borrow your lawn mower.
An interesting experiment would be to herd all these leeches into their own conclaves and watch them feed upon each other. Like the rats that they are, they would soon be eating their offspring.
So, OK, I am a bit opinionated.
martin j smith| 6.15.11 @ 12:07PM
Mr Ferrara: Given what you are saying it is really rediculous that we have candidates running for the Presidency who do not take you seriously. The debate most recetly sounded like a friendly sparring match. There needs to be a much more open debate on this situation and other matters.
I do not have a sense that the Republican Party is
doing enough to show they are serious about having candidates that can lead us out of this mess.
Specifically those who would like Romney,Newt Gingrich,to name just a few whose records are not sufficiently effective in presenting a coherent alternative. There is a lot criticism or fear of Ryan's proposal but lets see a candidate with a better one and put it out there.
LMajito| 6.15.11 @ 12:17PM
many simple minded folks know how to fix this...it's simple not complicated...america needs to become an island to itself until the harm done by since the inception of the fed.
many things need to be cut, deleted, obsoleted and whatever ed...forget about too big to fail...let them fail...we need to start new again...like The Bible wisely put it: 'new wine needs new wineskins'...foreign debt...really?? let's bring back 1790 and 1933 back when the us reneged in all of its financial obligations...yep first it was GW (the first) and later FDR...the ones hurt by this action will be the crooks that brought this nation to where it is today...let them count their wealth with obsolete currency...second stop any foreign aid...third close all of the pentagon bases around the globe...stop the navy from protecting the crude that flows from the gulf...let the sheiks pay for their transport...fourth implement fair trade and abolish 'free trade' agreements...fifth let gold be the standard of us currency...sixth open the energy fields in the us to exploration with environmental controls...build nuke plants...convert diesel trucks to use natural gas (most metropolitan areas have buses that once burnt diesel now are burning natural gas)...all that money given to corporations to build their factories outside the us, be given to local enterpreneurs that want to build and manufacture in the us...and lastly never, ever let a politican stay in office longer than two terms...and if a any politician wants to be part of a lobbying firm, he must wait 10 years before being able to do so.
these are easy to do but it does take some cojones and the only cojones one see from dc nowdays are the pencil diked pictures of that nyc clown.
tj| 6.15.11 @ 1:00PM
These Ba..ards ALL Need to go! VOTE EM ALL OUT 2012.
Pellligrino| 6.15.11 @ 2:54PM
tj, I am not against voting someone "out." Yes, I am with you: Let's do it!
The problem is: Someone wins/enters/occupies the office.
The choices we have at the ballot stations on primary and election days are seldom good ones.
I know that it is so antiquity to use the word "virtuous." But is there such thing as a virtuous politician?
Bill Sundling| 6.15.11 @ 1:11PM
It's too late for America. America lacks the political will necessary to make the tough choices to prevent bankruptcy. The Federal Reserve is already monetizing the debt. It's only a matter of time before we have hyperinflation and a complete collapse of our economy.
Handy| 6.15.11 @ 1:26PM
Dear Bill, et.al,
Please pop over to National Review Online and read Jim Lacey's article, "Entitlement Overstretch." He posits a rosy scenario after a disastrous default. I don't see it happening, do you?
Oldefarte| 6.15.11 @ 1:32PM
Peter's article is outstanding TRUTH and his upcoming book no doubt will be more of same! Concerning the truth told by him and many others, my amazement is not of its existence but rather the stupidity and ignorance of those who either do not understand same, or who do understand but refuse to acknowledge it. The SHOULD BE COMMON SENSE of these facts are so brazenly ignored by the liberals of Hollywood, academia, labor unions, the Jewish community,etc, why? Don't they understand the consequences to all of us [and to themselves individually] of this approaching destruction of this country [and the world]? Do they enjoy/revel in the idea of our demise, and if so WHY? Did they not understand the consequences of this bullexcrement of HOPE and CHANGE from an extremely inept and inexperienced presidential candidate in 2008? Occassionally, ignorance and stupidity can explain away certain actions, opinions, etc; but no one in their right mind could IMO possibly not be able to comprehend a broad outline of what has been occurring generally in my entire adult lifetime and certainly within the last two years. The only possible explanation to me is that a certain percentage of these people WANT THE DESTRUCTION OF THIS COUNTRY TO OCCUR, and if anyone one of you has a plausable explanation other than this, I'd sure welcome the opportunity to be informed of same!!!!!!!
tj| 6.15.11 @ 2:10PM
This is what everyone should go to DC and drag them out in the street for:
Just did Chumba! I sent the following to the Federal Reserve Board "Contact Us" page. I recommend that EVERYBODY on this site and as many sites as we can muster send in a very critical comment on it and like I did, make the point they ALL NEED TO RESIGN!
http://www.federalreserve.gov/feedback.cfm
I just found where the $600 billion of the last POMO went via the FOIA request. I have seen the excel spreadsheet of the so called "Primary Dealers" of which 12 of the 20 are all Foreign Banking institutions that the ECB should be "bailing out" not the Federal Reserve. I have seen how much money these Foreign Banks have received in comparison to the United States Banks. YOU WORK FOR US you assholes. Why did you send money to the EU and not use it to capitalize AMERICAN banks????
http://www.zerohedge.com/artic.....th-bail...
The Jig is up, and the word is out. It is crossing BB, listserv's, MB's, and forwarded to congressional people( for all the good that will do with those corrupt assholes), and news organizations (but the MSM does not do investigative reporting anymore), but THE PEOPLE NOW KNOW!!! When the STHTF this time people will want your heads collectively, and you ALL deserve to have your heads separated from your body for your actions, and corruption. You are quite obviously, not looking out for this country or the people of it. Ben you asshole, RESIGN and the rest of you should quit as well. I hope somebody is REALLY, REALLY pissed at you enough to do serious harm to YOU! I will applaud it when and if it happens. I am not that angry person though, prison does not look good, and I would not threaten a federal official (peons), but your futures do not look good now. This is the biggest FINANCIAL SCANDAL EVER!!! AND YOU HAVE BEEN CAUGHT AND OUTED!!!!
POMO is no longer needed as is QE. They were both stupid ideas that only serve the elite that is politically collected, and has NOTHING to do with SOUND ECONOMIC PRINCIPALS!!! It has been an exercise in futility and bad judgements from mental midgets like YOU PRICKS, and are unmitigated financial and economic disasters. You think you are so damn smart and you have just shattered the economy, blew it up, and now you are out of bullets and TOTALLY IMPOTENT!!!
ALL of you should resign immediately. You need to go and the Federal Reserve needs to close it's corrupt and decrepit doors. It is an anachronism and no longer needed, especially if the actions over the last two years is any indication of you capability with "economic tools" and the proper judgement to use them. If POMO and QE are any indication of "level of knowledge and judgement" at the Federal Reserve, then we no longer need the institution or the idiots like you pricks that run the show. You are corrupted, arrogant, and isolated. Again, YOU MUST GO!
I only hope REALLY BAD things happen to you via Karma, YOU ALL DESERVE IT. You all suck as people, economists, financial wizards, and all around in general you ALL SUCK!
BTW why would the "Federal Reserve Bank of the United States need a reporting page with ALL THE COUNTRIES LISTED? You idiots are supposed to be looking out for us instead of raping us.
DatsunMark| 6.15.11 @ 7:55PM
With the exception of the very few....congress will never have the courage to make changes required to rain in spending. The only solution is to make going into dept much more difficult for Government. Some of the Bond Rating firms are starting to wise up and threaten to down grade US Bonds (they should follow through). Republicans with courage should call for an Audit of the Fed Reserve and publish how they have been robbing the American People of their wealth via printing money at will. Possibly...with our bonds down and the Fed on the ropes for awhile. congress wont be able to sell bonds and therefore *have* to cut back spending?
weddingdresses | 6.16.11 @ 4:07AM
With the exception of the very few....congress will never have the courage to make changes required to rain in spending. The only solution is to make going into dept much more difficult for Government.
Allen Hanson| 6.16.11 @ 11:38AM
Bravo, Peter! Great job calling the upcoming (and present) financial crisis what it is, a bomb.
Think of it as a 10,000 megaton thermonuclear weapon. We know when it is going to start exploding (about 2019), and when it will reach maximum yield (about 2040). The trick for us is, how do we defuse it, and how much can we defuse it?
Answering the last question first, I don't think we can fully defuse it. It's too late for that. But I do think we can turn it from a 10,000 megaton device to a 1 megaton device. If we can whittle down the yield, we can survive the blast.
Changing metaphors, our first job, like all good trauma medical situations, is to stop the bleeding. That's where the Balanced Budget and Term Limits amendments come in. Eliminating the deficit and turning out the career politicians that created our mess will help both short-term and long-term.
Then we have some things to amputate. This going to be difficult, because the political class will have to admit it has been lying for about 80 years: The government can provide for the common defense, but it can't provide the security blanket it promised (welfare, Social Security, Medicare, Medicaid, Obamacare, etc). How to do the pruning can be negotiated; the fact that it needs to be done cannot. The good news is that the branches to be pruned are unnatural, weird branches that were weakening the tree anyway. They'll hurt, and they'll bleed a little, but they'll not be missed. They may even be transplantable once they are removed.
The wild card of all this is the American people. Will we vote out the politico-weasels who created the current situation? Will we take responsibility for ourselves instead of transferring that responsibility to government? Will we do what is right, for ourselves and our posterity, instead of what is easy?
Time will tell.
shipley130| 6.16.11 @ 8:07PM
There is no way the USA can continue being the police force of the world without countries paying for that police force. How in the **** did we get to the point where we are paying other countries so we can be their police force? Liberal brain damage, I suspect.
Tenn Slim| 6.16.11 @ 9:20PM
Folks, a word to the wise. THE CZARS and thier agency cohorts are running the Obama show. The POTUS is a front.
VP Biden is like a short fielder. Never called upon but always there.
The Agencies, the NGOs, the Czars have the real power, the REGULATIONs, the Structure that will remain in place after 2012.
That must be derailed.
end
Semper FI
Mutch Moore| 6.19.11 @ 10:35PM
In sum, what is one to make of this Peter Ferrara gloom & doom forecast? Should we stockpile non-perishable food, medicine, water and guns? When the U.S.S.R.'s ruble collapsed, those Soviets who hoarded U.S. and other viable foreign currency were not as impacted as those who did not. Have the tables been reversed -to the extent that now, Americans should get some easily redeemable currency or commodity? What can a person, who has never voted for a liberal Democrat, do to diminish the consequences of their profligate spending? Someone, please advise what to do.
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Bernie| 7.3.11 @ 8:47AM
Peter, I picked up your book at Border's yesterday and I cannot put it down. Fabulous!!! If I were President, Art Laffer, Tom Sowell and yourself would make up my economic team. You are an excellant writer. Keep up the good work!!!
Bernie Miltenberger - Frostburg, Maryland
weddingdress | 7.7.11 @ 5:23AM
Then we have some things to amputate. This going to be difficult, because the political class will have to admit it has been lying for about 80 years: The government can provide for the common defense, but it can't provide the security blanket it promised (welfare, Social Security, Medicare, Medicaid, Obamacare, etc). How to do the pruning can be negotiated; the fact that it needs to be done cannot. The good news is that the branches to be pruned are unnatural, weird branches that were weakening the tree anyway. They'll hurt, and they'll bleed a little, but they'll not be missed. They may even be transplantable once they are removed.