BURNING DOWN THE HOUSE

I thought the "Obama House" binge deficit-frat-party would only last the weekend, and we could start cleaning up Monday and get back to work, but it's Wednesday, the party has only gotten bigger, and the neighbors just called the police.

Bluto.
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Obama and the frat-house Dems say the neighbors are fascists anyway, extremists, conservatives, all of them. Party on!

Benny "Big Times" Bernake, the banker, is stumbling around with an empty bottle of QE2 in his hand, singing "Louie-Louie" at the top of his lungs, while Barry Obama, chief party planner, is already working on the next party in 2012. Who knew Benny was such an awesome party guy?

Benny Big Times, Wearing Party Wig

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But even though the government's got debt sloshing down its snorkel right now, we're all better off, ain't we? Got more money now, right? With all that stimulus money giving us fiscal goose-bumps?

Well, no, actually. Not at all. Not even close.

Since the Great Campaigner has already begun his 2012 election march, let us ask the question "are we better off now than before President Obama got into office?"

Here is "Hope and Change," by the numbers, 2008-2011 (an article in NRO supplied the figures):

gasoline - $1.83 per gallon to almost $4
oil - $41 per barrel to over $90
gold - $853 per ounce to $1,500
corn - $3.56 per bushel to $6.33
sugar - $13.37 per pound to $35.39
median household income - declined by $300, to under $50,000
food-stamp recipients - 32 million to 43 million
people officially in poverty - up 10 percent (to 44 million)
long-term unemployed - up from 2.6 million to 6.4 million.

News flash: 6.5% unemployment in October, 2008; 8.9% unemployment, March of 2011. Obama promised it would plummet to 8% in 2010, after it spiked up to over 10% in 2009. Yup. Down to 8% in 2010. Promised.

Wrong.

Total U.S. debt in 2008 was $10 trillion. Total U.S. debt in March, 2011 was over $14 trillion. Badda-bing.

U.S. debt as a percentage of gross national product? It's gone from less than 70% to over 100% in 2.5 years. Here's a neat "hockey stick" picture:

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Annual government deficits have tripled since 2008. Here's a picture comparing Bush II and Obama deficits:

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Printing cheap dollars with low-interest debt to "stimulate" the economy has blown up commodities. More money is chasing the same amount of commodities. So the price of commodities in dollars goes way up. That's inflation.

The Fed and the Treasury have done this because it avoids deflation. Deflation has you dealing with your fiscal problems right now, like rehab. Deflation gets Presidents "de-elected." People feel terrible when they are drying out. Cranky. And we can't have that.

We've used cheap money to solve our economic woes for 2 decades. We've just pushed one bubble forward into another, bigger one. Clinton and Alan Greenspan did it to get out of one bubble (savings and loan) and into the dot.com bubble. Bush II did it - dot.com bubble to sub-prime bubble. Right now Obama and Bernake are pushing the bubble from the sub-prime collapse straight into a bigger one: government debt.

Once the government debt bubble bursts we are at the end of the bubble pushing party. No one will take our funny money anymore. We'll have to figure out some other way to be irresponsible.

Economics is frustrating. How about all those foreign policy successes? Yeah, buddy:

Afghanistan? We are in a stand-still there.
Iraq? We won, as Bush insisted we would, and just as Obama predicted we could not.
Egypt? First do one thing, then another. Then do the first thing.
Libya? Please can't somebody else handle this.
Syria? Let Hassad gun down funeral mourners.
Israel? Go ballistic when they build some houses.
Iran? Remain comatose while Prime Minister Aminadab'lldooya, supporter of all Anti-American terrorism everywhere, builds a nuclear bomb.
China? Apologize for how nutty Arizona is. Ignore Chinese gulags. Keep borrowing their money.
Palestine? Pretend the corrupt government is not composed of terrorists.

There was the Monroe Doctrine, then the Bush Doctrine. Now, the Obama Doctrine:

"If We Drive Slow Enough No One Will Notice We Are High."

You know what? Never mind foreign policy. That's frustrating, too.

How about campaign music? What is the Obama 2012 theme song going to be?

It's easy: "Burning Down The House," by the Talking Heads. (Click the link to watch.)

Watch out you might get what you're after. . .
Hold tight wait till the party's over.
Hold tight we're in for nasty weather.
There has got to be a way.
BURNING DOWN THE HOUSE.

Obama II Campaign Haiku:

Hope and change blossomed
in the sunshine of your smile -
now only ashes.

SPENDALOT

Camelot.
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Older liberals wax nostalgic about Camelot, the magical time in the early '60s when Jack and Jackie were in charge, and the first wave of Baby Boomers were in high school.

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Right now we Baby Boomers are hitting our entitlement prime like a runaway big-rig with the driver on meth. We are set to soak Social Security and Medicare fabulously, having recently had a practice run scoring a $14 trillion national debt.

FYI to future generations: We BBs couldn't care less about you. We've killed 48 million of our own children so far through an elective procedure we like to call "family planning." You think we are going to go all soft over distant descendants?

In our sunset years we need a magical government, though, like the Camelot of our youth. I say we call the present Administration Spendalot, and make do.

King Of Spendalot.
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As King of Spendalot, call him KOS, President Obama made clear in his recent speech that we BBs are gung-ho for more debt. Gordon Gecko said "Greed is Good;" KOS, who is more nuanced and well spoken, says "Debt is Desirable." For instance, KOS recently thundered Progressive doom on Republicans for having the temerity to propose changing "Medicare as we know it."

Now "Medicare as we know it" is going broke. So says Spendalot's chief Medicare actuary. I know that's a heck of a thing to say, but it's really not even arguable.

Since I am sure KOS is not in favor of our entitlement programs going broke, the plan seems to be relatively simple: borrow more, or "Tax the Rich."

Either that or raise magic unicorns that crap million dollar bills. Which I am sure evolutionary biologists are working on right now, funded by a federal grant. To pay for our current 1.6 trillion dollar annual deficit, the unicorns will have to crap exactly 1.6 million of those million dollar bills every year. So they better get busy.

Our Last Best Hope.
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Now "taxing the rich" is a doofy charade, as I am sure the crowd in Spendalot is fully aware. The rich are almost universally in business. That's how they got rich. Businesses do one of two things with new taxes: they avoid them or they pass them on to consumers.

Which would be us.

So "Tax the Rich" does one of two things: it makes lawyers and accountants a ton of money helping the wealthy avoid the new taxes, or it burdens the middle class and the poor with higher commodity prices.

"Tax the Rich" comforts people who want to believe there is an easy way out of the current mess that doesn't involve reforming entitlements and drastically cutting the federal budget. Like all the best lies (e.g., Garden of Eden) it tells people what they want to hear. The best lies don't depend on being particularly credible. They depend on people's desire to escape the truth.

Tax The Rich.
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Getting out of this mess through taxation is laughable. Spendalot currently spends 50% more than it gets in taxes. So is the plan to hike tax revenues by 50%? Because unless it is, the new taxes are like putting a dam half-way across a river. A lot of trouble and a complete waste of time.

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The flip side of the new, brutal, binary world we BBs have created is to cut government spending by 1/3. But that ain't happening, not in Spendalot. Not while KOS is around.

As for the option "let's just keep doing what we're doing," which has been the BB mantra for three decades, what we are doing right now with entitlements is a Ponzi scheme. We make exorbitant promises to "investors," (taxpayers) and then pay off the first investors with money received from the latest investors, all the while fully aware that the promises can't be kept because we don't have the income stream to keep them.

Charles Ponzi. The Master.
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Eventually this mess, like all Ponzi schemes, will dissolve in a sudden and massive collapse. Think Bernie Madoff, but with 100 million victims instead of 100 thousand. The pool of money from the latest "investors" dries up, and is no longer adequate to pay the exorbitant promises made to the first "investors." The first investors scream, and the last investors scream even louder.

Bernie Madoff. $65 Billion Fraudster.
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Since they are not going to cut spending, I urge the folks in Spendalot to jam tax increases through like we did with Obamacare. My advice is to refuse to call the taxes "taxes," just as we finessed that little problem with Obamacare's mandatory health insurance. Call the taxes "investments." The tax fairies in Spendalot can require taxpayers to fork over "investments" worth 50% of whatever their federal tax bill is each year, and voila, problem solved!

The "investment" gets paid to a new firm, called the "Bank Of America's Future." BOAF will be just like Fannie Mae, but without all the failure and corruption and such. BOAF will lend all its money to the Federal government, after making a sizable donation to the 2012 Spendalot reelection campaign.

In return for their "investments," taxpayers will receive official "Shares in America's Future," which can be sold whenever the budget gets balanced. Which will be at the exact moment hell freezes over.

Once you get the hang of the compelled "investment" idea, the possibilities are endless. Which they will need to be to pay for all the BBs waddling up to the entitlement trough over the next 25 years, as the pool of available worker drones paying taxes into the programs grows smaller and smaller.

Baby Boomers Lining Up For Entitlements.
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If only we could develop a derivative that would allow me to sell the federal government short right now, I could make a fortune. Ah me. Where is Wall Street when you really need it?

FIVE TSUNAMIS

The current estimate for cleaning up the tsunami disaster in Japan is $300 billion.

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Our current year's deficit is $1.6 trillion.

That means my government of "Hope and Change" here in fat 'Merica is, during this 12 month period, borrowing 5 times as much as Japan will spend to clean up after one of the most devastating natural disasters of the last century.

Since the numbers are getting so silly, think of this year's deficit as 5 Tsunamis. It's April Fool's day today, so we've completed one-quarter of our year. That means we've accumulated 1.25 Tsunamis of debt so far this year. Right here in 'Merica.

This is the deficit that the Obama Administration refuses to take seriously. The budget proposed by the administration will result in $9.5 trillion more in deficits in the next 10 years. Think of that as 31 more Tsunamis of debt.

At least, that's what the Congressional Budget Office says. Their estimates of budget consequences are usually not as ridiculous as the White House's, but nevertheless they usually fall far short of sad reality.

So think of $9.5 trillion as the lowest reasonable estimate of how much the federal debt will increase. The debt currently tops $14 trillion.

14 trillion is about 46 Tsunamis of total debt. Add 31 Tsunamis and we get 77 Tsunamis of debt.

And right now all the news is about a nuclear power plant in Japan that did not go Chernobyl?

I want to be in the final fight scene in Seven Samurai. Give me a sword and some rice and I will die in the mud and the rain killing bandits come to steal our crops.