06.05.2012 0

The Ozombie economy

Obama ZombieBy Bill Wilson — How’s that “stimulus” working out for you, America?

After more than $3.4 trillion fiscal and monetary tsunami from the government and Federal Reserve to prop up the economy, things were supposed to get better.

Unemployment was never supposed to rise above 8 percent. Home prices were supposed to rebound. Revenues were supposed to rise dramatically, and Obama promised the deficit would be cut in half. The practices of “too big to fail” banks that led to the crash and the bailouts were supposed to come to an end.

None of that happened. Instead, we’re living in the Ozombie economy.

Unemployment has been above 8 percent for 40 straight months, the longest period of sustained high unemployment since the Great Depression. Any honest accounting of the situation would find a full 27.5 million Americans who cannot find full-time work in the Obama economy — including the 4.6 million of whom have simply given up looking for work since Jan. 2009.

Home values are at about the lowest they have been at any point since the housing bubble began to pop almost six years ago according to the Case Shiller Home Price Index. And as CoreLogic notes, more than 10 million Americans are still underwater on their homes to the tune of $717 billion.

Federal revenues have hardly recovered at all. After peaking at about $2.5 trillion in 2007 and 2008, they came crashing down with the economy to a low of $2.1 trillion in 2009 and 2010. In 2011, they were just $2.3 trillion.

Overall, since 2007, revenues are down $264.5 billion. Meanwhile, annual spending has increased by a gargantuan $875 billion since 2007. That alone explains how the yearly deficit went from just $160.7 billion then to $1.3 trillion in 2011.

Obama’s solution? Raise taxes to confiscatory levels to pay for the unsustainable spending binge. Like a zombie, his appetite for your money is insatiable.

Annual interest payments on the $15.7 trillion national debt have risen to $454 billion, more than 20 percent of revenue. That’s money that could have been invested in the private economy in real companies, creating real jobs. Instead it’s just servicing the debt with payouts to the world banking cartel.

So much for cutting the deficit in half. Deficits have never been higher, with over $1 trillion that will be added to the debt every year this decade until 2022 — when it will rise to more than $25 trillion.

No wonder the nation lost its Triple-A credit rating. Good job, Obama.

Making matters worse, megabanks that Obama promised to rein in are bigger than ever.

“Too big to fail” has as a matter of policy been institutionalized in the Dodd-Frank financial legislation that created a permanent bailout authority. No more messy votes in Congress on Troubled Asset Relief Programs. Instead, faceless bureaucrats will bring banks back from the dead when nobody’s looking.

The Fed in 2009 kicked out some $1.25 trillion in direct bailouts to banks for shoddy mortgage-backed securities — including $442.7 billion that went to foreign banks — and trillions more in emergency loans went out the door during and after the crisis.

Today, the U.S. through the International Monetary Fund (IMF) has lent some $24 billion to Greece, Portugal, and Ireland, bailing out the foreign banking interests that bet poorly on their sovereign debt. Overall, U.S. lending to the fund has risen to some $32.7 billion. That means about 73 percent of the fund’s resources are being sunk into the sovereign debt crisis in Europe.

All this after Obama, with the help of the Pelosi-Reid Congress in 2009, boosted the U.S. commitment to the IMF by some $108 billion.

Supposedly, the economy is in a technical recovery. But all Obama has to show for his efforts was tepid 1.8 percent growth of the economy in 2011 plus an unacceptably high jobless rate. And by the time his fiscal year 2013 spending has fully gone into effect, Obama will have added a full $5.823 trillion to the debt in a single term of office.

Obama’s solution to these multitudes of problems caused by too much debt? More spending. More debt. More bailouts. But, he’s had his chance.

All the trillions of bailouts, deficit-spending, and money printing have accomplished is cementing an economic, financial, and political system that is too big to save. Like the living dead, we’re limping along, with the only magic bullet being a return to free market principles and sound money.

Bill Wilson is the President of Americans for Limited Government. You can follow Bill on Twitter at @BillWilsonALG.

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