We are a debtor nation

I am afraid for my country. It is on track to becoming a second rate nation at least in terms of economic measures. An article in the Omaha World Herald by The San Francisco Chronicle stated that we may lose our triple A bond rating. That would be a very bad development since we need foreign investors like China to buy our bonds. Within hours of the plan to sell 162 billion of debt to help finance the 1.8 trillion dollar deficit the interest rates shot up.



The Chronicle states that 787 billion dollar stimulus and the 700 billion dollar bank rescue package is not enough to bring us to fiscal mediocrity but if this trend continues and it looks like there are more bailouts and more red ink in the offing, we will be hurt badly. For example what is going to happen with large capitol losing banks, AIG, California and any other state that can’t pay their bills. Uncle sam will take care of them.
We are currently at debt levels of 40% of GDP and scheduled to go to 80% at this rate.
That is higher than our debt levels after wwII.

Last year some prominent financial experts gathered together to try to warn the American public of possible dire consequences of our debt situation. They made a movie called IOUSA and this was slightly before the crash and all the bailouts started. As far as anyone knew, especially Barney Frank, none of our big financial organizations were going to fail and we were going to have a soft landing of the possible on coming recession.

Mr. Frank who is the house financial services committee chairman and, one would expect, should know something about all things financial. But, in 2008 he was qouted as saying Fannie Mae and Freddie Mac are financially sound. This statement was expressed as a counter to the proposed audit and regulation of these organizations.

I quote from the write up about the movie IOUSA: “Burdened with an ever-expanding government and military, increased international competition, overextended entitlement programs, and debts to foreign countries that are becoming impossible to honor, America must mend its spendthrift ways or face an economic disaster of epic proportions.” To show how bad our situation is becoming we do not even meet the requirements for entry into the European Union.

I don’t get it. Why can’t the administration/congress see the problem? Oh, I know what it is. The legislator’s only worry is getting and keeping their jobs. Since their constituents voted for them they are going to make sure to earmark as much federal money for their constituent’s pet projects as possible to get votes, whether or not the projects are useful. This concept applies to local as well as federal leaders As we get more and more minorities and groups like the auto workers and teachers and government unions we get more and more organizations or elected officials which kow tow to their supposed needs.. I would guess that our large, and getting larger, latino population is pushing for any legislation which would make life easier for illegals even if the ones voting are legal.

These demographics and the groups which support them are liberal They are very good at getting out the vote, e.g. ACORN. In other words our government is becoming just one big dole and the more that people are catered to the more they will vote for the liberal candidate who will in turn make sure they are taken care of. I’m not referring only to welfare but things like making sure the teachers union has the appropriate legislation passed; like no to school vouchers, and no to pay based on learning improvement . The auto workers were big supporters of Obama so he is going to make sure that workers get ownership of the company leaving the shareholders with nothing..

A great example of lack of integrity which is rampant in local and federal legislators is the situation in Omaha Ne. The outgoing mayor is the cause of the current police and firemen pension problems. When he ran for office some years ago he got the Police and firemen unions to vote for him by campaigning to give attention to the pension account and work with the unions to make the pension plan more agreeable to the rank and file.. Early retirement, more substantial pay outs and the eventual ability to abuse the rules to elicit a bigger pay out. Now the city is faced with a pension account that will go negative in several years unless the plan is changed or taxes are increased. Fat chance of changing the rules for retirement.

This handing out of perks to large constituent groups for votes is the same context that got us into the subprime mess. The legislators wanted to give a house to anyone who wanted one whether they could pay for or not. Thanks Barney Frank and rest of you liberals.

Like I said in the beginning the US is on track to becoming a second rate nation.