The mainstream media – including all the conservative outlets – have been thumping their chest about our economic recovery. The liberals say it’s a robust recovery. The conservatives, reluctantly, say it’s weak but gaining momentum.
This isn’t an economic recovery. It’s a statistical anomaly created by excessive government spending and intervention.
The Federal Reserve has, without any government oversight, purchased $2 trillion in U.S. Treasury Bills using money they printed. The Fed has purchased 60% of the U.S. debt obligation for the last 18 months.
The Fed has kept interest rates at 0.25% for almost four years now. Inflation is averaging 2.5%. The Fed is, in effect, paying banks to borrow – paying those banks with taxpayer’s money.
Obama’s administration started off with the $900 billion fiscal stimulus package.
Obama’s administration has kept spending an additional $900 billion a year, as if the original stimulus package was a permanent, annual fiscal stimulus package. The whole nation was outraged that we spend $900 billion to bail out Wall Street.
Where’s the outrage about the other $2.7 trillion?
All of these actions by our government have contributed to our “economic recovery.” The only reason the housing market is doing better is the Fed’s hyper low interest rate policy. As it is, the FHA is $30 billion in debt; Fannie Mae and Freddie Mac are in hock another $30 billion.
Economists quote our Gross Domestic Product at $17 trillion. Deduct the $1.5 trillion deficits and the $500 billion that is printed by the government, and our GDP is $15 trillion. That puts our debt to GDP ratio at 109%.
Four more years of $1 trillion deficits equals a national debt of $20 trillion when Obama leaves office (it was $10 trillion four years ago). That would make our debt to GDP ratio equal to 133%, the same as Greece.
The average debt owned by each Greek citizen is $33,000. The average debt per capita in the U.S. is $55,000. This will increase to $68,000 in four years – twice as bad as Greece.
Were in some kind of bad shape, people.
