If Obama soon loses office he will leave behind the first $15 trillion dollar deficit ’ and rising
The Bernanke Project is running out of time, solutions and ideas before the presidential elections in just six weeks’ time. QE3 is pumping $45.0 billion a month by buying bonds to keep the Obama economy and his re-election chances alive against a background of a stalling economy, with persistently high unemployment.
So Bernanke has invented another variant called QE3+, which will pump $40.0 billion a month into the economy by buying mortgages, making a total of $85.0 billion a month until the end of the year – and also making Obama the most expensive national liability ever, a clear winner against the next candidate, Ronald Reagan.
When Reagan, a B-movie star who could always read the lines that were written for him, left office he left behind the first trillion dollar deficit in history. If Obama soon loses office he will leave behind the first $15 trillion dollar deficit – and rising.
Obama’s economics has been disastrous, and in a world which has lost growth, you only have to look at the expansion of government spending everywhere as the root cause. Reagan was a prototypical escapee who retired before the damage was clearly visible; Obama, however, is the damage.
Obama failed to deal with the real economy’s problems, as when he came to office the US banking crisis, thanks to the Republican TARP’s $700 billion bail-out, was already coming under control. Obama thought the real economy would recover as per normal, but he didn’t realise there was a global liquidity crisis coming down the pike, along with a sovereign debt crisis to boot, and zero economic growth and persistent unemployment. So, he applied a dose of old-fashion Keynesian shovel-ready projects that didn’t perform any trick at all, and so he didn’t bother to do anything else.
As a consequence, he lost the mid-term elections and control of the House of Representatives, and so resorted to a French bureaucratisation of Washington, bypassing the elected chambers and spending money by creating Gordon Brown-style unproductive jobs which produced tons of paper but nothing else.
Meanwhile, the real economy couldn’t get out of bed, so the Bernanke embarked on QE2, as the first dose of QE hadn’t helped the patient at all, other than to maintain bankers’ bonuses and stock markets and asset managers’ returns, but not create new jobs.
Now Obama should be staring electoral defeat in the eye, but he could be saved by the foot-in-mouth-prone Republican Mitt Romney. First he was shifty over his tax returns, as though he had never heard of ‘publish and be damned’, as The Duke of Wellington correctly observed when a secret liaison was about to be exposed.
Then Mitt referred to 47 per cent of the electorate as a bunch of scroungers, and suddenly Obama looked good again. If Mitt the Gaffe finds a way of permanently upsetting the other 53 per cent of the electorate, Obama might even win!
What Mitt should do is attack the failed incumbent, not the people who he is seeking to lead. He has said that if he wins, Bernanke is going on the scrapheap, but he has got to say why, instead of leaving it to the likes of Paul Volcker speaking to a bunch of Scottish accountants to say that QE3 and QE3+ are a waste of time.
Why? Because liquidity is no longer the issue: it’s the real economy, stupid! And if Obama wins and the Bernanke stays in place, the US will be going nowhere except straight over the fiscal cliff…
Wake up, Mitt! Let’s hear about tax and government expenditure cuts, before you blow it!