If You Have $4 and You Spend $7… [Living in an Obama Nation]

Frightening, but not all that surprising. (HT: Ryan Griffith)

As the Obama administration pushes through Congress its $800 billion deficit-spending economic stimulus plan, the American public is largely unaware that the true deficit of the federal government already is measured in trillions of dollars, and in fact its $65.5 trillion in total obligations exceeds the gross domestic product of the world.

I checked with someone I trust on financial and economic matters, and while it’s difficult to know the exact numbers, the basic premise of the article is sound. And in case you missed it: We owe more money than exists in the world. Only the United States government could accomplish such a feat.

When I read the story, it reminded me of Matt Chandler’s talk at the recent Desiring God Conference for Pastors. At one point, he cracked a joke about debt in which he imagined a hypothetical Christian worship leader writing a song that said, “If you have $4 and you spend $7, that’s dumb.”

So what is it if you have a couple trillion, but you spend 65 trillion? Oh, and what if, technically-speaking, the only work you did in order to get it was promising people that you would give them things, and that you did such lofty work as the representatives of the people who will inevitably pay for your insanity?

I love the last line of the story.

“The federal government is bankrupt,” Williams told WND. “In a post-Enron world, if the federal government were a corporation such as General Motors, the president and senior Treasury officers would be in federal penitentiary.”

For related thoughts on the Government’s game of Grabby-Grabby, see this one by Doug Wilson.

The Globo-Obanomics Report [Living in an Obama Nation]

Trying to understand economics is somewhat of a hobby of mine. I’m no expert, so all analyses should be taken with a huge shaker of salt. I’ve read some good books on the subject, books that make sense to me and seem to jive nicely with The Book. So periodically, I’ll put together a post like this that highlights things that I find on the internets.

1. In a post that was practically made for Unintended Consequences, Will Wilkinson highlights the fallout of the government’s past push for home-ownership for every American. In a nutshell,

Government-subsidized borrowing gave us the housing bubble, precipitated financial Armageddon, helped prompt recession and mass unemployment. But, as the infomercials say, that’s not all! By zealously pushing home-ownership, federal housing policy has pinned to the map many now-jobless Americans who otherwise would have moved to find new work.

In other words, the government forced banks and lending companies to lower their standards so that more people could “have a piece of the American Dream.” People bought more house than they could afford, the housing bubble burst, the economy cratered, those same people are now losing their jobs, and…. they can’t move to find new jobs because they’re stuck in their piece of the American Dream. And no one saw it coming.

2. Here’s a little historical perspective on the relationship between government action in the New Deal and the prolonging of the Depression Previously Known as The Great.

Why wasn’t the Depression followed by a vigorous recovery, like every other cycle? It should have been. The economic fundamentals that drive all expansions were very favorable during the New Deal…So what stopped a blockbuster recovery from ever starting? The New Deal. Some New Deal policies certainly benefited the economy by establishing a basic social safety net through Social Security and unemployment benefits, and by stabilizing the financial system through deposit insurance and the Securities Exchange Commission. But others violated the most basic economic principles by suppressing competition, and setting prices and wages in many sectors well above their normal levels. All told, these antimarket policies choked off powerful recovery forces that would have plausibly returned the economy back to trend by the mid-1930s.

Well, at least we learned our lesson.

3. And now for a little economic apocalypticism from Peter Schiff. In the short interview on the left side of the screen, Schiff thinks the economic “stimulus” will be “an unmitigated disaster.” He predicts a crisis of the dollar, hyper-inflation, and the collapse of the current consumer economy resulting in an Even Greater Depression. I’m wary of Chicken-Little-style sermons, but Schiff has been predicting a collapse like this for some time, and he seems to have more economic sense than both houses of Congress.

4. Finally, if you’re like me, you listen to someone like Schiff and you start to panic a little. “What happens if the economy does go belly up?” Anxiety starts to well up in the heart, sin crouches at the door, and you start to get the economic equivalent of a bad case of indigestion. If that happens, I would heartily commend John Piper’s message “What Is the Recession For?” from a couple of weeks ago, as well as a couple of posts from Doug Wilson (here and here).

Remember: The Market is not sovereign; it does not run the world. Jesus does, and of all people, that should give those who belong to him a mighty dose of mind-blowing, soul-anchoring peace.

“Tomorrow, Tomorrow”: A New New Deal For Valentine’s Day [Surprised by Joe]

So Jen and I went to see the  Annie: The Broadway Musical last night. Having never seen the  movie, I wasn’t sure what to expect. Of course, it was Kid’s Night at the Orpheum, and the little boy sitting next to us was almost as entertaining as the show itself.

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The actress playing Annie did a great job and the show had some fun little laughs. But perhaps the funniest part of the show was when Annie goes to the White House with her soon-to-be adoptive father, financial heavyweight Oliver Warbucks, and inspires FDR to conceive of the New Deal. Everyone in the Oval Office is all doom and gloom until Annie comes in, sings “Tomorrow” on Roosevelt’s desk, and awakens the innovative juices of the President’s Men.

FDR’s Brain Trust decides to create a bunch of government jobs filling potholes and building dams in order to get people off of welfare and back to work, so that they can “start paying taxes again” (an actual line in the play). Why it’s a good idea to have the government pay people so that people can turn around and pay the government right back is never addressed, nor do they say where the money will come from in the first place. But boy, was the little red-head cute!

In any event, Annie saves the day, is adopted by Daddy Warbucks, the titan of big business, who then joins forces with FDR’s big government to sing the show’s finale, “A New Deal For Christmas,” complete with a list of government programs that will “fill every stocking with laughter,” just as soon as the government waves the printing wand and the magic money appears. I think it would make a great Obama campaign ad.

I kid you not. I mean the show has Republican business leaders getting in bed with a Democratic government in the middle of an economic crisis in the vain hope that massive borrowing and spending will deliver the Hooverville-ites (actual characters in the play) from their slum under the bridge. Reads just like today’s newspaper.

All in all it was a great night with my wonderful wife, and just goes to prove a point that I make every chance I get: you can’t make lousy economics better simply by getting a cute kid to sing about it.

Can You Imagine A Billion? Part Deux [Living in an Obama Nation]

With the popularity of the “Print More Money And Mortgage Our Children’s Future Stimulus Package” (or whatever they’re calling it these days) on the wane, Republicans seem to be smelling some blood in the water. They’ve decided to try to help people imagine how much money President Obama, Nancy Pelosi, and Harry Reid are proposing to beg, steal, and borrow to pay for all the stuff that needs a-fixing. From Senator Mitch McConnell:

To give the proposed economic stimulus plan some perspective, “if you started the day Jesus Christ was born and spent $1 million every day since then, you still wouldn’t have spent $1 trillion.”

So can you imagine a trillion? I still can’t. But that sure helps put in perspective.

(HT: Jim Geraghty)

Just Like the Government [Stories with a Point]

Once there was a little boy who struggled mightily with covetousness. Well, “struggle” is probably not the right word. “Surrendered often” would be more accurate.

Anyway, the struggle manifested itself in a variety of ways, but Christmas and birthdays were always the worst, for obvious reasons. His parents were praying people, and regularly asked God to “lead him not into temptation.” But what they prayed with right hand, they took away with the left, because a few weeks before those gift-receiving holidays, they would take him to Toys R Us and stir up his little desire factory.

He always asked for more than he needed, and, more importantly, more than his parents could afford. However, like all good parents who are accustomed to the incessant begging of children, his had developed a typical parental response, one that, though not very creative, usually did the trick.

One day, the little boy was in a particularly beggary mood and so his father started to pull out that old, trusty one-liner. But before he could, the little boy, who had recently become an avid television news watcher, said, “I know, Dad. ‘Money doesn’t grow on trees.’ But, according to all the senators on TV, it is printed on printing presses. So, instead of real presents this  year, I’d just like one of those. Then, we don’t have to worry about how much we can afford ever again. Just like the government.”

Well, That Backfired [Unintended Consequences]

George Will has a short piece on the consequences of a Supreme Court decision “intended” to strengthen the 1964 Civil Rights act. What the decision (and subsequent actions of Congress) actually did was to make it more difficult for those without college diplomas to get certain jobs. Thus, a legal action designed to help minorities ends up harming them (and other Americans for whom a college education simply isn’t feasible). Here’s how the article ends:

Griggs and its consequences are timely reminders of the Law of Unintended Consequences, which is increasingly pertinent as America’s regulatory state becomes increasingly determined to fine-tune our complex society. That law holds that the consequences of government actions often are different than, and even contrary to, the intended consequences.

Soon the Obama administration will arrive, bristling like a very progressive porcupine with sharp plans — plans for restoring economic health by “demand management,” for altering the distribution of income by using tax changes and supporting more muscular labor unions, for cooling the planet by such measures as burning more food as fuel, and for many additional improvements. At least, those will be the administration’s intended consequences.

(HT: Bench Memos)

And since we’re on the subject of economics, this post at RedState helpfully contrasts two very different ways of approaching economics. One views economies as big machines, technical challenges to be tweaked and modified (like a computer). The other acknowledges the moral dimension of all human existence, particularly the depravity and (at times) irrationality of man. Failure to view economics rightly is one of the chief reasons for all those bad unintended consequences out there.