Obama and Ben Bernanke Have Us Facing the Abyss

October 7, 2010 09:09

Between the president’s economic power grabs and the Fed chairman’s “quantitative easing” schemes, the future continues to darken for our long-term economic prospects.

October 7, 2010 – by Tom Blumer at Pajamas Media


Only now is it beginning to dawn on many American just how deep our short-term and long-term holes really are. Many others, including politicians who appear to be on their way to key positions after the elections, still don’t seem to get it.

Despite claims to the contrary, true cash flow from federal government operations during fiscal 2010 was more negative than the previous year. It only looks better because of increased receipts from the Federal Reserve (more on that in a bit) and cleverly manipulated non-cash accounting entries that arbitrarily and artificially reduced this year’s reported outlays. Net tax collections are still about 20% below where they were two years ago, and are only showing bare signs of turning upward.

The trouble is that there hasn’t been a meaningful recovery. What little improvement has occurred appears to be stalling out or is at best barely progressing.

Ben Bernanke appears to have made the mistake of believing that he was dealing with a rational group of ruling class elites who would change course upon learning that what they had tried didn’t work. He clearly miscalculated.

The two remaining key players, Obama and Treasury Secretary Tim Geithner, seem intent on repeating what hasn’t worked, and won’t work.

At some point, and it may not be far away, this country’s citizens and the rest of the world — not necessarily in that order — are going to figure out that the habit is unsustainable. The aftermath could get very ugly.


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