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XMFSinchiruna (27.47)

A Timeline of Broken Promises and Utter Fiscal Insanity

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March 19, 2011 – Comments (4)

Mitchell E. Daniels Jr., director of the Office of Management and Budget, December 31, 2002, as reported in the NYTimes: "The administration's top budget official estimated today that the cost of a war with Iraq could be in the range of $50 billion to $60 billion, a figure that is well below earlier estimates from White House officials."

Vice President Dick Cheney, March 16, 2003, "every analysis said this war itself would cost about $80 billion, recovery of Baghdad, perhaps of Iraq, about $10 billion per year. We should expect as American citizens that this would cost at least $100 billion for a two-year involvement."

Senator Barack Obama, December 20, 2007, “The President does not have power under the Constitution to unilaterally authorize a military attack in a situation that does not involve stopping an actual or imminent threat to the nation.”

President Barack Obama, May 23, 2009:  "We are out of money".

For FY2011, Obama administration's Defense Department proposes $159.3 billion budget for the Iraq and Afghanistan wars, as part of an all-time record $708 billion defense budget request.

For FY2012, Obama administration's Defense Department proposes $117.8 billion budget for the Iraq and Afghanistan wars, as part of a $671 billion defense budget request.

Through September 2010, total direct U.S. spending for the Iraq war alone reached $900 billion. That takes no account of future liabilities stemming therefrom. 4,420 US Soldiers Killed, 31,926 Seriously Wounded. Iraqi casualties unknown, though well over 100,000 dead (with estimates of civilian deaths ranging from 66,000, 107,000, and higher.)

President Barack Obama, March 18, 2011:  Let me close by saying that there is no decision I face as your Commander in Chief that I consider as carefully as the decision to ask our men and women to use military force.  Particularly at a time when our military is fighting in Afghanistan and winding down our activities in Iraq, that decision is only made more difficult.  But the United States of America will not stand idly by in the face of actions that undermine global peace and security."

Saturday, March 19, 2011: US Navy vessels lunch 110-112 Tomahawk Cruise missiles at air defense targets in Libya. At a unit cost that has varied over the years between $570,000 and $1.4 million each, that amounts to $63m to $157m expended on ordnance alone during the first 12 hours of the eerily named Operation Odyssey Dawn. I don't know what sort of Odyssey we're embarking on here, but it's not the direction I want to see my country traveling in.

"The National Debt stood at $10.626 trillion the day Mr. Obama was inaugurated. The Bureau of Public Debt reported today that the National Debt had hit an all time high of $13.665 trillion. The Debt increased $4.9 trillion during President Bush's two terms. The Administration has projected the National Debt will soar in Mr. Obama's fourth year in office to nearly $16.5-trillion in 2012. That's more than 100 percent of the value of the nation's economy and $5.9-trillion above what it was his first day on the job." Source. [Debt is presently $14.2 Trillion]

"In a 1789 letter to his friend James Madison, Thomas Jefferson raised the philosophical and moral question of whether 'one generation of men has a right to bind another.' He believed the answer was no, 'that the earth belongs in usufruct to the living.' He believed it a principle of 'very extensive application and consequence, in every country.' Applying it to government borrowing, he argued that it was unjust and unrepublican for one generation of a nation to encumber the next with the obligation to discharge the debts of the first. After all, the following generation cannot have given their consent to decisions made by their fathers, nor will have they have necessarily benefited from the deficit expenditures." Source.

“Whopper budget deficits for so many years will mean that the cumulative debt will creep up as a percentage of the nation's gross domestic product (GDP). How much debt the country can handle is debatable. The problem is that, if investors believe the United States isn't fiscally responsible, they could start demanding much higher interest rates when they bid on Treasury securities. The feedback loop could get ugly. The nation could have to borrow hundreds of billions just to pay interest. This has been touted as a classic path to irreversible national decline.” Source.

The fiscal madness has to end somewhere, and fast! Call or write to your Congressional representatives, and let them know how you feel.

4 Comments – Post Your Own

#1) On March 20, 2011 at 10:32 AM, dbjella (< 20) wrote:

I saw Mr Obama in Rio with a t-shirt the read "WWBD"  :)

I read some blogs and posts on this site that insinuate that currency manipulation and debt is a game of cat and mouse between world nations.  Gov'ts versus Gov'ts and central banks helping along the way.  All the US needs to do is this or that.  Debt is not too bad as long as it is manageable...... It all seems so illogical to me.  Why should my kids be slaves to our nation's inability to act responsibly?

Then, I look at Japan which news sources say is running a deficit which I presume means they have debt.  Along comes a major tragedy and they need to rebuild.  My heart goes out to them and I will help donate.  But what are they using to rebuild their nation with?  Future earnings?  Aren't future earnings going to pay down debt?  More debt?  

I guess this world will keep trying this path of using debt to service debt.  It doesn't make sense to me, but I can't articulate to anyone why this path is dangerous.  It just feels dangerous...that is the best I can do. 

Frustrated... 

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#2) On March 20, 2011 at 11:20 AM, silverminer (30.69) wrote:

dbjella

Your instincts are correct. Debts of these magnitudes are certainly very dangerous to the welfare of a people.

Japan's debt prior to the disaster was already enormous, and yes, this will compound their long-term debt crisis substantially.

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#3) On March 20, 2011 at 12:00 PM, silverminer (30.69) wrote:

And let's not forget Europe remains sqaurely in the crosshairs of a full-fledged debt crisis as well:

On an "ultimate risk" basis that includes the potential loss on derivatives and credit guarantees of different kinds, the figure rises to $2.51 trillion as of September 2010, well above the headline figure of $1.76 trillion in cross-border loans. The sheer scale highlights the systemic dangers if the EU fails to stabilize the debt crisis.  Source.

Might we be headed down a path toward some sort of co-ordinated semi-global sovereign debt default by the U.S., UK, Europe, and Japan? If we are, and quite possibly even if we are not, then that which people presently understand as the "financial crisis" will prove to have been merely a preliminary phase of a generational, immensely dangerous, and future-altering global economic event.

No doubt the inventors and propagators of financial derivatives thought they were very clever. It is time for people to understand full well the enormity of the financial plague that they and their ilk have unleashed upon us. QE to infinity is the course that central banks will take in their effort to forestall the inevitable.The only potential outcomes that I can perceive from such a ridiculous policy response are some form of sovereign debt default, cost-push hyperinflation, military conflict, or a combination thereof. A "successful" scenario, whereby a full-fledged return to U.S. consumerism with a resurgent reliance upon leveraged debt (invoking an ill-conceived financial paradigm that targets perpetual growth) somehow reverses the tide of a rapidly deterioratring fiscal outlook, has in this Fool's view long-since raced past the realm of the unlikely (into one of vitual impossibility). As I have always stipulated: I hope that I am wrong, but I fear that I am not.

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#4) On March 22, 2011 at 1:06 PM, jesusfreakinco (28.88) wrote:

Pres. Jimmy Carter Declares End on Foreign Oil Dependence

Sound familiar?  I wish I could find the You Tube video that goes through all the President's of the past 30 years saying the same crap...  Single party system are we...

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