Unhinged Spending Syndrome – by Vasko Kohlmayer

spending

“Yukio Hatoyama, the new Japanese Prime Minister, has stunned a nation already mired in huge public debt by unveiling the country’s biggest ever postwar budget,” reported the UK Times the other day. Hatoyama’s budget of 92.3 trillion yen – roughly $1 trillion – represents a jump of some 10 percent over last year’s figure.

It goes without saying that the Japanese government does not have enough cash to pay for this extravaganza. In order to cover its bills, it will have to borrow a record 44.3 trillion yen ($440 billion), which will push the country’s public debt to nearly 195 percent GDP. This figure represents the largest debt-to-GDP ratio by far of any developed country. This increase in indebtedness comes at a time when tax revenues are projected to fall to the lowest level since 1984. According to projections, the amount of Japan’s debt issuance next year will exceed the government’s tax intake. This will mark a historic milestone of sorts, as Japan has not experienced this level of imbalance since the end of World War II.

It is ironic that Hayotama was swept to power in August on the promise that he would end the era of wasteful public spending that marred the rule of the previous government.  Today Hatoyama says that the sharp increase in public outlays is necessary, because it is aimed at “saving people’s lives.” At the same time, he seeks to convince the Japanese public that fiscally things are still under control. “I believe that we have delivered all we can without compromising fiscal discipline,” said Hatoyama at a news conference last week. But with a debt of nearly double the country’s annual economic output his words hardly sound reassuring.

Unfortunately, Japanese politicians are not the only ones suffering from a bad case of the unhinged spending syndrome. Their American counterparts are also badly afflicted by this pernicious malady. In its latest outbreak, California’s Governor Arnold Schwarzenegger has petitioned the federal government for help in closing the California’s $21 billion budget gap. In other words, Schwarzenegger is seeking a bailout for his insolvent state. The governor has been hard at work cultivating the political soil to make D.C. receptive to his plea. This is a somewhat delicate undertaking for a republican these days, given that Washington’s financial strings are largely controlled by democrats. But Governor Schwarzenegger has apparently figured out what it takes to win the favor of those in charge. For months he has enthusiastically praised President Obama and last week even gave him an A for his performance so far.

Schwarzenegger and his cohorts claim that California’s financial woes are caused by a weak economy. But this is not so. Strictly speaking, California’s problems are not a result of a deteriorating economy, but of the irresponsibility of the state’s political class. By offering unsustainably generous social programs, keeping a highly-paid bureaucracy and financing a whole array of extravagant projects they have simply broken the bank. With the damage done, it is time for those responsible to bear the consequences of their actions. They must face the people of California standing on the ashes of their state’s burned fiscal house. To bail them out would truly be unforgivable. If the federal government grants them the funds they seek, they will not only not be punished for their recklessness, but they will cast themselves as California’s saviors. They will use their bailout loot to further entrench themselves in power and continue their destructive works. These people must not be rewarded; they need to face the music instead.

Sad to say, both parties bear responsibility for California’s present woes. Long gone are the days when Arnold Schwarzenegger excoriated his legislators for their fiscal excesses. Calling them “girly men” for lacking the courage to bring the state’s finances in order, he held them up to public scorn before the whole nation. But it did not take long for the governator to adopt the spending mindset of the very people he ridiculed and turn into a girly man himself. And today he comes to Washington begging the federal government for other people’s money so that he can get out of his pickle.

It is truly paradoxical that Schwarzenegger is asking for help from someone who is even more bankrupt than his own state. With a national debt of over $12 trillion and an entitlement burden in excess of over $100 trillion, the US government is saddled with obligations it cannot possibly meet. If it were not for the dollar’s status as the world’s reserve currency and the ability of the Federal Reserve to print it at will, our federal government would now be out of business.  In any case, its days as a financially viable entity are numbered. Even as we speak, the world is feverishly looking for an alternative to the dollar. Once it is found, our currency will disintegrate as governments and investors will refuse to finance our ever growing debt. It is also possible that they will not wait for an alternative to emerge, but that at some point will simply begin dumping dollars in an effort to cut their loses.

We must never lose sight of what has led to this predicament – excessive spending by the political class. As in the case of California, both parties are culpable. Although Republicans like to cast themselves as the party of fiscal sobriety, the fact is that whenever they hold power they grow both spending and deficits. It seems to be the defining feature of the Western political dynamic that whenever a party assumes power – regardless of whether it is ideologically right or left – it invariably increases government expenditures. Today many charge the Japanese prime minister – who heads a center-left party – with the socialist type of disregard for the basic laws of finance and common sense. The charge is true enough, but they forget that the road was paved by the previous governments, most of which were on the other side of the ideological divide.

The same holds truth for the United States. People fault President Obama for his lack of fiscal restraint. And deservedly so. They, however, overlook the fact that the ground was prepared by the previous administration. That administration, among other things, broke previous spending records, implemented a costly entitlement program and set us on the road to endless bailouts. It is true that republicans are somewhat more restrained than their counterparts across the aisle, but that is not good enough when we are headed for financial disaster.

What we desperately need are adults who realize that we cannot indefinitely go on spending more than we have. Unfortunately, neither side of the Western political mainstream appears to harbor such politicians. Whether you look at Japan, California  or the United States, the unhinged spending syndrome does not discriminate. An equal opportunity affliction, it affects both sides regardless of their stated ideological orientation.

  • USMCSniper

    Civilization on Terra is currently retrogressing into a primative tribal top down command and control phase due to a century of monetary corruption. The fascist allience between banking cartels and governments lead to a financial collapse that is being scapgoated onto free markets. This century long embezzlement by central bankers and governments of their citizens wealth has created massive imbalances in wealth, debt, malinvestment and excessive growth of kleptocratic governments and corporate dinasours. This destruction was envisioned by none other than John Maynard Keynes (one of its key architects) at the beginning of the twentieth century.

    READ CAREFULLY – In fact read the following quote five times (tis an ill wind that blows no minds) !!!

    ” Lenin is said to have declared that the best way to destroy the Capitalist System was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they do not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. the sight of this arbitrary rearrangement of riches strikes not only at security, but at confidence in the equity of the existing distribution of wealth. Those to whom the system brings windfalls, beyond their just deserts and even beyond their expectations or desires, become “profiteers,” who are the object of the hatred of the bourgeoisie, whom the inflationism has impoverished, not less than of the proletariat. As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery.

    Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”

    John Maynard Keynes

  • LindaRivera

    There is certainly no doubt that the financial destruction of America is planned and deliberate.

    Fall Of The Republic – The Presidency Of Barack H Obama – The Full Movie HQ
    http://www.youtube.com/watch?v=F8LPNRI_6T8&feat

    WORLDNETDAILY.COM
    Get economic video too hot for Amazon
    'The Secret of Oz' banned by e-commerce giant
    November 21, 2009

    © 2009 WorldNetDaily

    After being sold on Amazon.com for only three days, a new DVD video
    documentary on the state of the economy has been banned by the e-commerce giant for mysterious reasons, according to the fimmaker.

    “You may no longer sell on our site,” said Amazon in an email to Still Productions at noon yesterday. Still's documentary suggests government debt is at the root of the world's global economic problems.

    “In the coming year, the federal government will spend $4 trillion, but it will have to borrow half of that from big banks, both here and abroad,” he explains. “It creates a vicious cycle of government debt dependency. Government just can't say no to them – or so officials think.”

    This was Thomas Jefferson's main complaint about the U.S. Constitution as well: “I wish it were possible to obtain a single amendment to our Constitution … taking from the federal government the power of borrowing.”

    So what can be done with the national debt rocketing above $12 trillion?
    “You can't just reduce the national debt,” explains Still. “You have to change the system and eliminate it entirely. We have to eliminate the ability of the government to borrow our money into existence. There are ways to do this. 'The Secret of Oz' shows that we've done it before in American history; and we can do it again. The federal government has to be put on a pay-as-you-go basis.”

    In “The Secret of Oz,” Still, the filmmaker behind the mega-successful “The Money Masters,” warns the U.S. is heading for a deep Depression – unless lawmakers address the root of the problem: mounting interest payments
    on the national debt.
    http://www.wnd.com/index.php?fa=PAGE.view&pageI

    “The Secret of Oz” trailer – How to Fix the 2010 Depression – directed by Bill Still
    http://www.youtube.com/watch?v=6cq9yEVcGIU&feat

  • LindaRivera

    Obama Says U.S. Long-Term Debt Load ‘Unsustainable’
    By Roger Runningen and Hans Nichols

    May 14 (Bloomberg) — President Barack Obama, calling current deficit spending “unsustainable,” warned of skyrocketing interest rates for consumers if the U.S. continues to finance government by borrowing from other countries.

    “We can’t keep on just borrowing from China,” Obama said at a town-hall meeting in Rio Rancho, New Mexico, outside Albuquerque. “We have to pay interest on that debt, and that means we are mortgaging our children’s future with more and more debt.”

    Holders of U.S. debt will eventually “get tired” of buying it, causing interest rates on everything from auto loans to home mortgages to increase, Obama said. “It will have a dampening effect on our economy.”…
    http://www.bloomberg.com/apps/news?pid=20601087

    Obama admits the terrible financial destruction wrought against Americans. WHY THEN DOES OBAMA NOT IMMEDIATELY REVERSE THIS TRAGEDY?

    A major investor states America is going to reach Zimbabwe hyperinflation.
    http://economyincrisis.org/articles/show/2942

    Billions of dollars urgently needed for America's defense is instead gifted to Islam. Nuclear Iran and nuclear North Korea both state they intend to destroy America. They are not idle threats. The same venomous hate for the U.S. is shared by other nations and Muslim terrorist organizations. The treasonous response of the U.S. government to America's increasing danger, is to drastically reduce our defenses facilitating America's annihilation.

    See: Aloha, “Star Wars” By: Washington Times Editorial
    Washington Times | Monday, June 29, 2009
    http://www.frontpagemag.com/readArticle.aspx?AR

  • LindaRivera

    U.S. BROKE, but BILLIONS for Muslim FAVORITES

    DRUDGE REPORT
    'WE'RE OUT OF MONEY'
    May 23 2009

    In a sobering holiday interview with C-SPAN, President Obama boldly told Americans: “We are out of money.”

    SCULLY: You know the numbers, $1.7 trillion debt, a national deficit of $11 trillion. At what point do we run out of money?

    OBAMA: Well, we are out of money now. We are operating in deep deficits
    http://www.drudgereport.com/flashocs.htm

    CREEPINGSHARIA.COM
    Obama’s Supplemental Bill Passes, Gives Billions to Enemies?
    By creeping

    Barack Obama’s 2009 Supplemental Appropriations for Iraq, Afghanistan, Pakistan, and Pandemic Flu was revised and “passed by the full committee”. Not sure what the next step is, but based on the summary, it gives billions of U.S. taxpayer dollars to countries and entities that support sharia law and/or harbor, hide and support those who want to destroy the U.S. and our allies.

    Read the summary from David Obey’s office that was quietly released last week with nary a word from any media.

    • $3.6 billion, matching the request, to expand and improve capabilities of the Afghan security forces

    • $400 million, as requested, to build the counterinsurgency capabilities of the Pakistani security forces

    • Afghanistan: $1.52 billion, $86 million above the request

    • West Bank and Gaza: $665 million in bilateral economic, humanitarian, and security assistance for the West Bank and Gaza

    • Jordan: $250 million, $250 million above the request, including $100 million for economic and $150 million for security assistance

    • Egypt: $360 million, $310 million above the request, including $50 million for economic assistance, $50 million for border security, and $260 million for security assistance

    • Pakistan: $1.9 billion, $591 million above the request

    • Iraq: $968 million, $336 million above the request

    • Oversight: $20 million, $13 million above the request, to expand oversight capacity of the State Department, USAID, and the Special Inspector General for Afghanistan to review programs in Afghanistan, Pakistan and Iraq

    • Israel: $555 million of the $2.8 billion 2010 request for security assistance, $555 million above the supplemental request. (Note: that means Obama’s original request did not include any money for Israel in 2009)

    • Lebanon: $74 million

    • International Food Assistance: $500 million, $200 million above the request, for PL 480 international food assistance to alleviate suffering during the global economic crisis

    • Refugee Assistance: $343 million, $50 million above the request, …including humanitarian assistance for Gaza. Funding for the UN Relief and Works Agency programs in the West Bank and Gaza is limited to $119 million (Note: Gaza = Hamas)

    • Disaster Assistance: $200 million to avert famines and provide life-saving assistance during natural disasters and for internally displaced people around the world, including Somalia, Zimbabwe, Ethiopia, the Middle East and South Asia

    • Peacekeeping: $837 million for United Nations peacekeeping operations, including an expanded mission in the Democratic Republic of the Congo and a new mission in Chad and the Central African Republic

    • HIV/AIDS: $100 million, $100 million above the request, for the Global Fund to Fight AIDS, Tuberculosis and Malaria to address a funding shortfall for grants in key countries such as Haiti, The Democratic Republic of the Congo, and Afghanistan. (Note: That means Obama’s original request didn’t include any money for AIDs)

    • Africa: $151 million, $18 million above the request, for economic and security assistance for Kenya, Somalia, Southern Sudan, and Zimbabwe

    • Mexico: $470 million, $404 million above the request, to address growing violence along the United States-Mexico border by supporting the Government of Mexico’s war against organized crime and drug-trafficking

    • Georgia: $242 million to fulfill the United States commitment to the people of Georgia

    • Global Financial Crisis: $300 million, $148 million below the request, to address the global financial crisis in developing countries

    • Nuclear Non-Proliferation: $55 million, $34.5 million below the request, for the National Nuclear Security Administration to safeguard nuclear material in Russia and other sites world-wide

    • Department of Justice: $17 million, matching the request, for counter-terrorism activities and to provide training and assistance for the Iraqi criminal justice system

    Updates:

    Mass media remains silent on this but the International News has now picked up the story

    …and then there is Obama’s $108 billion IMF bailout scheme in addition to the Supplemental

    Related:

    To really add insult to injury, check our previous Creeping Sharia post – Obama asks Congress to allow U.S. funds to terrorist Hamas govt

    The Obama administration has asked Congress to let aid to Palestinians continue if Hamas backers are included in a new unity government, observers say. The proposed change in U.S. law would be necessary because Hamas, which controls the Gaza Strip, is designated as a terrorist organization and therefore cannot receive U.S. aid.
    http://creepingsharia.wordpress.com/2009/05/13/

    Whilst homeless shelters are filled to capacity and desperate jobless and homeless, NEGLECTED Americans are living in tent cities all over America, billions are gifted to highly favored Muslims.