Peter Schiff Reacts to Obama's State of the Union (VIDEO)
Video: Peter Schiff delivers the minority response.
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In this week's much anticipated State of the Union address, President Obama again demonstrated his poor understanding of the fundamental problems that confront our nation. By following the advice of the same people who helped guide our economy to the precipice of total collapse, Obama now threatens to push it over the edge.
Notwithstanding his well crafted lip service regarding future spending restraint, the essence of his current program is for more government spending and larger deficits. For all his talk about job creation, his policies will further burden those who might otherwise create those jobs with higher taxes and more regulation. While he did call for tax cuts for the middle class and offered what amounts to bailouts for those struggling to repay student loans, such cuts do nothing to promote growth in the near term and will add to the deficits in the long term.
The President spoke optimistically about the future, but in reality there is little evidence to support such an upbeat outlook. He began his speech by assuring us that the worst of the storm had passed. General Custer may have said something similar when the first wave of Indian attacks ebbed at Little Big Horn.
While Obama did have some harsh words for Wall Street (not exactly a courageous political stance), he leveled no criticism at the Federal Reserve or other government agencies that had financed and guaranteed all the ridiculous real estate speculation that precipitated the crash. And while he at least conceded that the prosperity of the last decade was based on illusions, he continued to endorse the very policies that produced the mirage in the first place.
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To lead us back to brighter days, he articulated a vision of a centrally planned recovery, where clean energy and a Soviet style five-year plan to double our exports would make our economy preeminent once more. He fails to understand that the only reason our economy rose to the top in the first place is that the government left it alone.
In the words of the Spanish philosopher George Santayana, "Those who cannot learn from history are doomed to repeat it." Since our President cannot even learn from the mistakes of his immediate predecessor, to say nothing of those he made himself while in the Senate or during his first year as president, we are surely doomed to repeat them, perhaps more quickly than Santayana could have imagined.
Rather than tightening the reins on the reckless monetary policy that undermined our savings, diminished our industrial output, inflated asset bubbles, and led to reckless speculation on Wall Street and excess consumption on Main Street, we are loosing them further. Rather than repealing regulations that distort markets and create moral hazards, we are adding new ones that do more of the same. Rather than cutting government spending to reduce the burden it places on our economy, we are increasing both the amount of the spending and the size of the burden. Rather than making government smaller so that the private sector can grow, we are making government bigger and forcing the private sector to shrink. Rather than paying off our debts we are taking on even more. Rather than encouraging people to save we are enticing them to spend. Rather than creating jobs, we are merely creating unemployment benefits.
As a result, instead of seeding the soil for a real recovery we are setting the stage for a prolonged depression.
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Feb 1, 2010 at 10:00 AM
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The Precarious State of Our Union
G.W.F. Hegel
U.S. Dollar In Jeopardy Of Losing Its Value
The World is concerned that the dollar cannot play the role of the main reserve currency any longer after the financial crisis sparked by the collapse of the U.S. mortgage market led to the worst global recession since the 1930s. The Government’s stimulus packages, financial bailouts, the need to support liquidity in Treasuries, keeping interest rates at the lowest level under the circumstances of low economic growth, high unemployment and low tax collection make it print more dollars. This leads to a high risk of substantial inflation, or hyperinflation in a long-run.
With a $12.2 trillion national debt and $55 trillion in unfunded obligations for programs such as Social Security, Medicare and Medicaid, with total Federal Reserve and Treasury bailout commitments now at $11.8 trillion, of which $3.6 trillion has already been spent the U.S. need to take steps immediately to protect themselves from the potential loss of the purchasing power of their U.S. Dollars, inflation.us reports.
Although there is still no significant inflation data in the United States international stock and commodity markets grew abnormally within the last nine months. Analysts called it the “flight from the dollar” or “diversifying risks.”
There are many factors evidencing against the future of the dollar as a global reserve currency. In the present article futureofdollar.com pays attention to the crucial points of analysis after conducting an extensive research on the topic.
http://www.marketoracle.co.uk/Article16922.html
If we look at the history of European unity we see that, for example, the Spanish Empire was definitively displaced by the American Empire with the defeat of Mexico in 1845 and the annexation of the Western United States. After that, Spain never succeeded in becoming a truly unified empire. In the Spanish mainland, at least four language groups, including Spanish, exist along with their independent traditions. Until recently, after the Civil War of the Anarchists, the only force capable of holding anarchist Spain together was the military dictatorship of Franco.
Italy is also divided into incompatible regions and usually wavers between de facto dictatorship (Berlusconi) and anarchy (rule by family and mafia.)
Both Germany and Italy only became countries in the late 19th century and Germany, after a long history of a patchwork of dictators and republics, is still a patchwork of dialects and loosely connected regions and traditions which include Austria, Switzerland, East Germany and West Germany and the regions each country contains.
Compared with the United States, France has been in a state of anarchy since the defeat of Napoleon and has been described by one of its leading sociologists as a Blocked Society, constantly at war with itself and its own interests.
After factoring in Germany's disastrous early 20th century history, it is not easy to believe that the Euro will become a world currency because it is far from clear that Europe CAN unify, not to mention whether Germany, Italy, France and Spain can unify themselves.
America represents Anglo-Saxon civilization which has dominated the world in the form of the British Empire since the defeat of Napoleon. The American Revolution placed America in a position to exploit the massive resources of the North American continent and to surpass Britain itself in economic output by the beginning of the twentieth century.
World War I and II weakened Britain's colonial empire and, to Britain's shock and humiliation, gave America the opportunity to take over Britain's role as ruler of the world, which of course we did. After the defeat of communism, America has had no other rival or enemy on earth OTHER THAN HERSELF.
If the elites of powerful countries can't agree, we will fight in their wars, either economic or military, and if we refuse we'll end up in jail or sidelined in some other way.
At least in the past, reason and fair play have had little or nothing to do with world political and economic behavior.
Things might change in the future, of course, at which time reason will prevail and human irrationality will become a distant memory. But I don't like to bet on things like that.