Thursday, January 15, 2009

The Coming of Obama, the Going of the System

He's coming, he's coming. Presto! He's here!
The cult surrounding Obama just gets bigger and bigger. I was in the downtown mall in Cuidad El Jefe yesterday, looking for an ATM. The place was plastered with a new line of Pepsi advertising that looked suspiciously like Obama ads from the campaign. A few seconds with Google showed that I wasn't imagining the similarity. Walked into the bookstore, and everyplace I turned, I was greeted by an advertising display hawking a new gushy pro-Obama tome.
Shook myself, making sure I wasn't in Stalin's Russia, or Castro's Cuba. Still, if you want to see the future, watch the sales clerk give you dirty looks when you buy Corsi's Obama Nation or Freddoso's The Case Against Barack Obama. If you're smart, you'll perform those transactions in cash only. No, I'm really not kidding. The people who called Bush a dictator are now in the saddle, and they can dispense with pretence: perhaps we'll find all the ragging on Bush the Tyrant these several years past was just a projection of their own attitudes.
You can't get away from Obama: he's everyplace. Obama's bringing change and here to save us, as your kids will soon be telling you; and if you like your job, best just agree and say nothing more.
It's almost beside the point whether Obama as president succeeds or fails. Obama's not going to fail, by the way. Anything that goes wrong with Obama will be Bush's fault; and when that gets old Hillary's or his advisers, or the "right wing conspiracy" or (add name of despised group here). But nothing will be Obama's fault, ever. Like Citigroup, he's Too Big To Fail.
Speaking of Citigroup, the impending inaugural party is, perhaps fortunately, somewhat masking the continued implosion of the financial system. Obama wants Congress to give him the second $350 billion of the "Troubled Asset Relief Program" (TARP) -- or rather, he wants Congress not to block his using it. If that's not enough, the Democrats are preparing an $850 billion "stimulus package" ($300 billion in tax cuts, $500 billion in domestic spending) -- in addition to the TARP 2's $350 billion, and the $350 billion already advanced . . .
This is in addition to the government's already considerable spending on everything from the wars to snail-darter research. The Congressional Budget Office projects that the 2009 federal budget deficit will be $1.2 trillion.
We should be so lucky. Try doubling that. The $1.2 trillion figure is the deficit -- not the budget -- it's the part of the Federal budget that is not being covered by the government's income from taxes. Total spending is supposed to be about $3.5 trillion for Fiscal Year 2009, which seems to me to be an underestimate. For comparison, when President Bush took office in 2000, the entire spending of the US government totaled about $1.5 trillion -- or just a little more than the projected deficit for this year.
We're not going to service the deficits and the consequent growth of the debt with taxes -- Obama's promising tax cuts, and he'll have no problem finding bipartisan support for that. If the government will not tax to cover its bills, it can try borrowing: but one wonders how long the Chinese and everybody else are going to keep buying the Treasury's debt -- surely it's occurring to them that they haven't a prayer in hell of ever being paid.
The government's last alternative is to just print the money. Can you say "banana republic?" The dollar will collapse, and when you go shopping you can take your cash to Kroger in the grocery basket, and bring home your groceries in your wallet. Wonder how the Chinese will enjoy us settling our debts to them with toilet paper dollars?
Messiah-Elect Obama is evoking Lincoln themes with his inauguration, which is understandable, it's the bicentennial year of Lincoln's birth, and (quite aside from the first Black president thing) every President thinks he's Lincoln. On cue, the talking heads are all solemnly proclaiming that Obama faces Lincoln-style problems.
Maybe. Or maybe Lincoln had it easier. When Lincoln got to Washington, he was taking charge of a rich country that could really afford to fight a war to force the southern states to stay in the Union. Money, factories, people, even without the South -- you name it, the Union had it. Lincoln had some huge problems: he was facing a war, but he had a giant storehouse of real assets to face it with.
So what's Obama got, exactly, to face our problems with? Oh yeah, Hope, Change etc. Well, platitudes and $1.2 trillion dollars will buy you a vente Starbucks.

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