On Obama’s newfound thriftiness

Dear Reader,

One year after the collapse of Lehman Brothers set off a series of massive Bush-Obama federal interventions in the U.S. economy, the U.S. government under President Barack Obama is now the nation’s largest lender, insurer, automaker and guarantor against risk for investors large and small.

According to one of Big Government’s major cheerleaders, The New York Times, “…between financial rescue missions and the economic stimulus program, government spending accounts for a bigger share of the nation’s economy – 26% – than at any time since World War II.”

The government is financing nine out of 10 new U.S. mortgages. Buy a General Motors car and you’re buying from a company 60% government owned. Borrow for a car loan or run up your credit card, the government probably is financing both your debt and your bank. And if you buy life insurance from the American International Group, your insurance company is almost 80% federally owned.

Federally Owned

Get that phrase “federally owned” — that means the American taxpayers are paying the bill for these bailout billions, even though national polls show strong and growing opposition to all this wild spending.

Even The Times admits that the scale of federal intervention is staggering.

The Federal Reserve has bought more than $700 billion in mortgage-backed securities so far, and officials say they will buy up to $1.25 trillion, creating more federal debt. To help Fannie and Freddie raise money to buy mortgages from lenders, the Fed is buying $200 billion of their worthless bonds too. All told, the government is propping up almost the entire mortgage market and, by extension, what remains of the housing industry.

And now Dr. Obama’s National Health Cure Elixir, he insists, will not cost one dime more!

Why? Because he’s going to find a quarter of a billion and more in Medicare fraud and savings to pay for it all. This, from the Great Economizer who has run up a 2009 deficit of nearly $1.8 trillion – larger than the entire federal budget in 2000.

Tale O’ the Tape…

Vern Jacobs CPA, gives us the frightening numbers:

“When you add up the roughly $11 trillion of federal debt, the disputed shortfall in Social Security of as much as $13 trillion, an even larger projected deficit of almost $30 trillion for Medicare and various additional unfunded federal obligations, the total estimates of total federal obligations range from $65 trillion to $100+ trillion.

“Except for the $11 trillion of current federal debt, the remainder is an estimate of the cost (present value) of various future entitlements. These debt estimates do not include any of the economic ‘stimulus’ spending, nor any increases in health care or other government programs. And, these projections are based on highly optimistic assumptions about future economic growth, employment and inflation.”

And Yet…

And yet, “What have you done for me lately,” is the public cry from far too many Americans.

Alexis de Tocqueville was right in predicting that once Americans discovered they could elect leaders that would buy their votes with other peoples’ money, democracy would become a farcical bidding war. Now we are here.

Currently, about 20 million people work for the government. About 45 million receive Social Security benefits. About 34 million depend on food stamps. That’s 99 million people who have a direct interest in expanding government outlays with some overlap, of course. And that doesn’t count the millions more who get subsidies, bailouts, welfare payments (often masquerading as tax credits), or government contracts.

And did you know that 47% of Americans will not be required to pay income tax in 2009?

(Now perhaps you can understand why the Sovereign Society has long advocated the purchase of gold and investing in far more stable currencies like gold.)

The truth – one I know from personal experience – is that lying (with or without the intent to deceive) comes to most politicians as easily as breathing. It was President Ronald Regan who posed the question: “Do you know how to tell when a politician is lying?” His answer: “Whenever their lips are moving.”

So is our current President glazing over deliberate theft? Or is he simply unaware that he’s driving the freight train off the cliff? It’s anyone’s guess, but it doesn’t really matter…

Because the solutions work either way. They’re not very easy or simple – by any stretch of the imagination – but how many worthwhile things really are? You must do what’s been done by the Germans…by the Argentineans…by so many of the world’s people when they could no longer have faith in their government. You need to vote with your dollars and your feet. That means considering banking alternatives outside the U.S., diversifying into foreign currencies, and keeping a watchful eye on your domestic affairs.

You can learn the solutions at the Sovereign Society’s 3rd Annual Offshore Advantage Seminar: A Beginner’s Guide to the Offshore World, November 4, 2009 – November 7, 2009, at the Westin in Los Cabos, Mexico.

Twenty-one of the world’s most respected offshore masterminds – with over 325 years of collective knowledge in private offshore banking, global investments, and asset protection – will assemble in Los Cabos for four days of closed-door mastermind meetings.

If you act fast, you should still be able to reserve a spot. This year’s function has filled up faster than any of our previous events, and with the details mentioned above, I’m sure you can imagine why. For full details on our Los Cabos meeting agenda and the tactics to be revealed, click here. Act fast though, we’re nearing capacity at the hotel and may not be able to accommodate late reservations…

Sincerely,
Bob Bauman, JD
Legal Counsel