I just watched the President come out and state Washington was on the verge of $1 trillion in spending cuts over 10 years. I also heard him say it was the lowest level of spending since Eisenhower. I also heard him say things got done because of Americans whose voices Washington heard. HAHAHAHAHAHAHAH! Let me get this straight, since Obama became President, annual spending has gone up about $1 trillion/year…and now we are going to get cuts of $100 billion/year…and of course, a committee to form a committee to look at other cuts. Again…hahahaha!
Nothing has changed. The con game continues. As I told you, there will be no default as the debt “ceiling” is going to be raised again, averting the made-up default. Yippee…yeah…yeah. Before I talk about today’s nonsense, I must go backwards to show you how we got here. It was easy. Take a few pretend conservative Republicans, a crisis that brought TARP together, a Democratic House, Senate and Presidency and a dishonest mainstream media and you have a simple recipe’ for $16 trillion in debt. LET ME REPEAT THAT. THIS COUNTRY HAS INCURRED $16 TRILLION IN DEBT WITH NO END IN SIGHT. This has all been done on purpose. Federal Government outlays have almost doubled in 10 years…thus your deficits. I don’t want to hear it was because of Bush tax cuts. The fact…and let me repeat…THE FACT is that revenues soared from 2003-2007. It’s about the spending stupid and Bush was no angel! Under Bush, yearly deficits ran anywhere from $150 billion to $450 billion. That was bad enough. The Republicans could have done something about those deficits but did nothing. Back then, Republicans were ok with deficits. They did nothing. Enter Barack Obama.
And I quote:
“When I’m president, I will go line by line to make sure we are not spending money unwisely!”
The President immediately rammed through an $800 billion stimulus and if I recall correctly, a $400 billion supplemental spending bill.
And I quote:
“We Can’t Treat Tax Dollars Like “Monopoly Money”
And I quote:
White House budget director Peter Orszag : “The President strongly believes that as the recovery strengthens and job growth returns, we will have to take the tough steps necessary to return our nation to a fiscally disciplined and sustainable path.”
Of course, all lies. This President has taken the deficits into the stratosphere. Accrued debt was $6.3 trillion upon the Obama inauguration. At the end of fiscal 2009, accrued debt was $7.5 trillion. You know where it is now. This from a new President that said he was going to be fiscally responsible. This also does not include his healthcare bill in which we are told will cost $1 trillion…just multiply by 5-10 times.
Deficits happen on purpose. This President promised to unwind the massive deficits but didn’t. This President said one thing and did the exact opposite. He could not have done it alone. The mainstream media, as usual, fell on their swords. No longer were they watchdogs, they were lapdogs. Many who excoriated George Bush over his deficits now said deficits were not only needed but were too small. I get a kick out of every time I see Paul Krugman call for higher spending. These people don’t even care that they are on the record from years before. And I quote:
“We have a world-class budget deficit,not just as in absolute terms, of course — it’s the biggest budget deficit in the history of the world — but it’s a budget deficit that, as a share of GDP, is right up there…comparable to the worst we’ve ever seen in this country…. The only time postwar that the United States has had anything like these deficits is the middle Reagan years, and that was with unemployment close to 10 percent.”
The deficit at that time in 2004, $417 billion. Fast forward to the last year…and I quote:
“These days it’s hard to pick up a newspaper or turn on a news program without encountering stern warnings about the federal budget deficit. The deficit threatens economic recovery, we’re told; it puts American economic stability at risk; it will undermine our influence in the world. These claims generally aren’t stated as opinions, as views held by some analysts but disputed by others. Instead, they’re reported as if they were facts, plain and simple.”And I quote:
“And fear-mongering on the deficit may end up doing as much harm as the fear-mongering on weapons of mass destruction.
Deficits now…a measly $1.5 trillion. Yup…$417 billion is a horror show…$1.5 trillion is not a problem and just fear mongering.
Enter the tea party:
While the massive spending occurred, many became angry. Out of this anger, a new “party” was born…the Tea Party. Their words and their thoughts started to gain traction…so much so that they affected the elections in a major way. Republicans took back the house and almost the Senate. How did the media react? Did the media embrace these ordinary Americans they cared so much about? Nope…they tried to turn these people into racists and extremists. I will not bother you with some of the quotes. They are nauseating. The amazing thing is that these quotes didn’t just come from non-events like a Bill Maher but they were parroted on a daily basis by numerous hosts on a cable station owned by NBC. They were trumpeted by journalists from important newspapers like the NY Times. Imagine, people who care about the fact that this country will never ever be able to pay back these debts that have been incurred over the past decade…and have gone into hyperdrive in the past few years..and you are a racist and the extremist.
THE DEBT CEILING
There isn’t any debt ceiling. There is only debt and no ceiling. The debt ceiling is going to be raised again and again and again. There wasn’t any deadline. It was purely conjured up out of thin air…nothing more than a scare tactic. That’s what these people do. There was a very good chance to use some leverage and all that was done is a measly $1 trillion cut OVER 10 YEARS and some sort of a committee on more cutting. Don’t p—s on me and tell me it is raining.
I have watched this year at the State of the Union, Obama said “now is the time to act” on the debt. Instead, he produced another debt-laden budget. Think 97-0 voted down.
I have watched incredible scare tactics against the elderly by the President himself. The media said nothing. What do you think they would have done if that was George Bush scaring the crap out of the elderly?
I have watched the word “compromise” used hundreds of times. The mainstream media has been blaming the Tea Party all week for not wanting to compromise. How was the compromising when the Dems had the White House, Senate and the House? Does anyone remember, “we won…get over it?” I judge a politician by what he or she does with unfettered power. You saw what this man did when he had such power.
I have watched journalists call ordinary Americans terrorists. One called a good woman a slut. Why? All to protect an administration that has run amok with taxpayer dollars. This President just does not care. When he had the ultimate power, he could have done wonderful things. He was loved by many. Those that were skeptical, were hopeful. He could have got anything done. He sure did! Instead of using the bully pulpit to put this country on better footing, he has ripped the taxpayer apart for years to come. But we could not get here without the Republicans. There is no victory here. As I told you last week, there would be no default. I am telling you now there will be no cuts. They will just be replaced with more spending.
The only hope at this point is that there are 300 million people in this country. Somehow, some way, we need to find almost 535 people out of that 300 million that will actually do something about what we are seeing…and that is the destruction of future taxpayer earnings.
This remains nothing more than a con game where they tell you to watch the right hand but they rip you off with the left. The con artists continue to treat you like you are idiots. The ceiling is lifted once again with many taking victory laps. Washington is again acting like they did something good for the people. Washington only does good for Washington. Amazingly, I am reading that the left is mad at Obama for supposedly giving in. I have news for the anyone on the left who loves massive government spending. You should be doing cartwheels and lighting cigars at this deal.
The markets will react well just to the fact that the fake default will not occur. Just don’t blink. If they do not stop…and it looks like they will not…the market will eventually stop them!
Gary Kaltbaum owns Kaltbaum Capital Management, LLC (“KCM”), an investment adviser registered with the U.S. Securities and Exchange Commission. The opinions expressed herein are those of Mr. Kaltbaum and may not reflect those of KCM. The information offered in this publication is general information that does not take into account the individual circumstances, financial situation or individual needs of an investor. The information herein has been obtained from sources believed to be reliable, but we cannot assure its accuracy or completeness. Neither the information nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Any reference to past performance is not to be implied or construed as a guarantee of future results.