Goodbye, America

America, as we know it, ended late Friday night, February 13, 2009. When the Senate passed the American Recovery and Reinvestment Act of 2009, it plunged the knife up to the hilt into the heart of American capitalism. For all intents and purposes, our financial system and economy have been nationalized.

When President Barack Obama signs this so-called stimulus package into law on Tuesday in Denver, America will become officially a socialist or, more accurately, a fascist nation. Even if businesses remain in private ownership, the federal government will control their operations. In many cases, the government itself will take over majority ownership.

Of course, it is no surprise. Socialists and communists have mentored Obama since his teens. Nor can he bear total blame for this end of American capitalism and financial freedom. We have been on this road for a long time, since President Lyndon Johnson’s War on Poverty and President Franklin Roosevelt’s New Deal. Republicans, too, share blame. Never in my wildest dreams [or nightmares] would I have believed that a Republican President, George W. Bush, would nationalize the banks like he did by signing the first “stimulus” package that was rushed through Congress last Fall.

All sides acknowledge, now, that package did not work. Did Congress learn from that hasty mistake? Obviously, it did not. Most Democrats and a few Republicans stubbornly believe, despite all historical evidence to the contrary, that it is possible to spend our way out of recession. They often cite the example of FDR’s New Deal, forgetting that World War II, not the New Deal, lifted this country out of the Great Depression.

Analysis of this legislation has just begun. The Act, which spends $787 billion, is 1,071 pages long. Legislators had only fifteen hours to digest it before the vote. It is safe to say not one single Congressman or Senator read this bill before voting on it. They would have to have read 71 pages per hour or just over one page per minute, without any breaks during those fifteen hours. Previously, Speaker Nancy Pelosi had promised they would have at least 48 hours between release of the bill’s text and the vote being taken. And, it was only released in printed form. Normally, bills are published digitally, which allows Congressional staffers to do computer keyword searches to evaluate the worthiness of any piece of legislation.

The devil will be in the details. Supporters claim this act will create 3.5 million new jobs. Most economists put the number lower, at 2.5 million. But, let’s give the Democrats the benefit of the doubt and go with the 3.5 million number. That means it will cost $224,857 in government spending for each one of those jobs. Let me say that again so its truth can sink in: every single new job created by this stimulus act will cost taxpayers $224,857!

The press, both left and right, is finding all kinds of funky features buried in this bill. Some are silly, like the millions to save some endangered mouse in Speaker Pelosi’s district. Although maddening, voters should not let themselves be diverted by these trifles. This bill is too dangerous at the macro-level for us to be consumed by such micro-details.

The most alarming fact about this stimulus act is how much it raises the statutory limit on the national debt. It allows the national debt to increase from its current limit of $789 billion to $12.1 trillion. Think about it. We have never had a national debt over $1 trillion, yet the Democrats and three “Republicrats”voted for our nation’s credit line to go to a mind-boggling $12.1 trillion.

So far, the media has barely noticed this all-important detail. Yet, it is perhaps the most dangerous provision. What does it mean to allow such an increase in our national debt limit? It tells us just how much spending the Democrats are planning to do. This $787 billion must be just a down payment.

If the Democrats under Obama pass the kind of spending a $12.1 trillion national debt limit allows, it means hyperinflation. Even the U.S. with its sterling international credit rating cannot borrow that kind of money. There simply is not that much investment money in the entire world to support that kind of spending. And, some international bankers are expected to lower our nation’s bond ratings. That means higher interest rates on what we are able to borrow. If we cannot borrow the money to support our spending at reasonable rates, the government has one other option and that is to print money. It monetarizes the debt, lowering the value of the dollar so that high value dollars borrowed are repaid with lower value dollars.

This is what President Carter did in the early eighties when we had the worst recession since the Great Depression. We had double-digit inflation in a stagnant economy. If we come even close to a $12.1 trillion debt, we will have triple-digit inflation. We will be like the Germans during the Weimar Republic before Hitler. Then, it took a wheelbarrow of cash to buy a loaf of bread. That is what Americans will soon face unless the Democrats are held in check, and I am not at all optimistic that we can or will do that.

President James Madison warned, "If our nation is ever taken over, it will be taken over from within." The Socialists have taken possession of the land. Goodbye, America.