Sunday, June 21, 2009

Does China Now Own the United States?

According to a recent article in Newsweek, the United States is now currently $11 trillion in debt and $3.3 trillion of that is owned by foreign countries. 53 foreign countries now own the debt of the US and out of all of these countries, who do you think is the largest share holder? If you guessed China, then you would be correct. China comes in first on the list, owning $767.9 billion and Japan comes in second owning $686.7 billion of our national debt (Newsweek, 2009). Saudi Arabia, Iran, Iraq, Algeria and Russia now also own part of the United States, just to name a few.
Despite this, the national debt keeps on growing. Every second it increases by $1 million dollars. Since 2007 it has increased by $3.71 billion per day, but since President Obama took office only 5 months ago the national debt has grown a staggering $137.27 billion per day. The new universal healthcare system that the Obama administration wants to implement is projected to put the US $1.2 trillion more in debt over the next 10 years, but will still leave 37 million people uninsured. Many believe that this number will actually end up being closer to $5 trillion after all of the smoke has cleared. George W. Bush started the problem and Barack Obama has now exacerbated it beyond repair (The Economist, 2009). Instead of fixing the problem and proving to be different then Gorge W. Bush, Obama and Congress have chosen to make the problem much, much worse. How does that make them any different then their nemesis?

So what exactly does it mean when countries like China own our debt? Well, when you take out a car loan to buy a car, the lender that gave you the loan puts a lean on your car until you are able pay off the loan, which basically means that the lender owns part of your car until you pay them back. So essentially, these foreign nations now own part of the US. Their control over the interest rates on these loans and thus their control over all of us is now at their discretion. But it gets even worse. China has recently expressed uneasiness and anger to the Secretary of Treasury Timothy Geithner because they have not seen a return on their investment and are starting to believe that the US will not be able to pay them back. They do not want to loan us anymore money, and they now want us to start paying them back right away. And there are other disastrous ramifications that will occur if the national debt continues to grow at the alarming rate that it is. The US government has already surpassed "bankruptcy" since "bankruptcy" signifies being at a "zero" point on the number scale and the US government is at a negative 12 trillion point on the scale. Thus the US has already far surpassed the point of "bankruptcy" and if the Chinese government were to ever stop funding this massively increasing debt then the US government would completely collapse and Americans would ultimately feel the ramifications of being beyond "bankrupt." The Federal Reserve is dangerously printing money to pay off the government's massive debt and as a result, inflation is now increasing at a rapid rate and the value of the dollar is quickly growing smaller and smaller. It is also possible that the US government could face "hyperinflation" at some point in time and if that happens then the dollar bill, your property, your life savings and everything else will be worth absolutely nothing (The Economist, 2009).

Don't think this could ever happen to your country? It happened to Germany after WWI and it is currently happening to the the citizens of Zimbabwe who are struggling to survive on a daily bases because of hyperinflation. It has made it virtually impossible for people who live there to purchase an item as basic as a slice of bread. If hyperinflation could happen to both of these nations then it could happen to any nation because history has proven time after time that if one does not learn from it, then it is doomed to be repeated. Unfortunately the Federal Reserve has now put us on a collision course with history.

Is the behavior of these politicans criminal? Would their behavior be considered theft on a massive scale? Absolutely because they are recklessly wasting your money without your consent. One way or another, you, your children and your grandchildren will have to pay it back. No debt ever goes unpaid. Most people are forced to live within a budget, so why shouldn't politicans be forced to operate by the same principle? People like you and me would be in prison if we even attempted a small portion of this behavior, so why is it that politicians (people who you elect to represent your voice) are allowed to recklessly waste your hard earned money without ever facing any consequences? And isn't it the President's duty and obligation to protect the financial stability of our Nation? What good will any social programs be if there is no longer a country to have them in anymore? Clearly the reckless and negligent spending spree in Washington needs to stop, but unfortunately the new administration shows no sign that this will actually happen anytime soon.

Tuesday, June 16, 2009

4 Simple Reasons Why Politicians Are Destroying Our Economy

Capitalism in the US is struggling because it's not being practiced correctly. This is largely due to the oppressive economic legislation that politicians have put into place. This legislation has made our economy Socialistic in nature, resembling the sluggish and unproductive Socialistic economies of countries like France. The reason is 4 fold:

1. Government assistance and bailouts to companies that failed because they did not provide consumers with what they wanted. Companies that don't provide consumers with what they want normally go out of business long before they ever reach the bankruptcy level. However, because of government assistance (which was happening long before the recent bailouts) these toxic companies have been able to stay afloat until they reach the bankruptcy level. This is also known as "corporate welfare."
2. Labor unions that have increased production costs for companies which has forced many of them to move their production to foreign countries in order to save money. Companies that have stayed in the US have been forced to increase their prices because of the labor unions, and consequently have trouble competing with companies from other countries who have much lower prices because they do not have labor unions.
3. The tax and regulation barriers that the government has put in place that hurt businesses in order to limit the competition of large corporations. This includes high taxes on small businesses, high property and capital gains taxes, and the many strict business regulations that have been created to limit the competition of large corporations but have made it more difficult for small businesses to survive and for ordinary people to start their own business and obtain wealth by working for themselves.
4. Government interference in the free market, for example The Bill Clinton "Fair and Affordable Housing Initiative" that gave trillions of dollars to mortgage companies who were willing to give home loans to risky people. Had it not been for this bill, this one single act of government interference, these risky people would have never received home loans and therefore would have never defaulted on their mortgages and the crash of the housing market would have never occurred (please refer to the article below titled "Who Really Caused the Bad Economy").


If politicians would get out of the way and let the free market take care of it's self, then Capitalism would be able to flourish like it hasn't been able to for sometime now. The legislation that politicans have put into place has turned our free market economy into a Socialistic one. This is why our economy is failing and becoming like France's, who in terms of GDP has a very sluggish and unproductive economy. China on the other hand does not have this kind of restrictive legislation in place and as a result Capitalism is working there and working very well. They now have a surplus that is estimated to be around 3 trillion dollars. So the question is, do you really want our economy to become like France's when China's economy is becoming like the way our's used to be? You make the call.

We don't need government run healthcare. Here is a better solution!!