Tags: barney | frank | bankruptcy

Memo to Barney Frank: We're Broke

Tuesday, 21 Oct 2008 06:04 PM

By Phil Brennan

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Barney Frank, a Democratic member of Congress from the People's Republic of Massachusetts and chairman of the House Banking Committee, has lavish plans for the next Congress: He wants to speed America's headlong plunge into bankruptcy by taxing and spending without restraint.

Said Barney on Monday, "At this point there needs to be a focus on an immediate increase in spending (I'm not kidding, that's what he said) ... I believe later on there should be tax increases. Speaking personally I think there are a lot of very rich people out there whom we can tax at a point down the road that would cover some of this money."

In case it's escaped his notice up there in his lofty post fiddling around with the country's economy, the United States of America is broke - flat broke. The U.S. doesn't have all that money Congress recently appropriated - $700 billion for the bailout bill alone, and billions more to pump up the economy. It simply doesn't exist. It has to be borrowed, or in other words, created by the Federal Reserve out of thin air.

And the more money borrowed or simply created sucks more and more value out of the already shrunken U.S. dollar.

How shrunken? In 1946, I was awarded compensation from the V.A. for a minor service-connected disability of 10 percent, or $13.80. Today that same 10 percent amounts to $117. Nothing has changed but the value of the dollar. And in 1946 that $13.80 bought more than the $117 does today.

What happened in 62 years to reduce the value of the dollar by $103? Deficit spending by the Federal government, financed by borrowing. The more money the Fed creates, the less it's worth. And the Fed is now faced with the need to create more than a trillion dollars just to pay for the bailout and all the other costly new bills Congress has just passed.

Let Barney Frank and Barack Obama have their way and we'll be paying $50 for a loaf of bread — and sending most of our earnings to Washington to pay the bill for their out-of-control squandering of our money.

The United States is already facing monstrous bills it cannot hope to pay. Take the looming crisis of the unfunded liabilities of the Social Security and Medicare and Medicaid systems alone.

As I wrote on September 12, Dallas Federal Reserve Bank President Richard W. Fisher said in a speech on May 28, 2008, that "the unfunded liabilities from Medicare and Social Security come to $99.2 trillion over the infinite horizon. Traditional Medicare composes about 69 percent, the new drug benefit roughly 17 percent, and Social Security the remaining 14 percent."

That's $99.2 TRILLION! How big is that? It's more money than exists in the entire world. If you began to spend $1,000 a day the moment Christ was born, you would not yet have spent a mere billion dollars. And a trillion dollars is a thousand billion dollars.

I warned then that "the debt bomb is exploding. Even without the current Wall Street crisis, this debt-ridden economy is heading for a collapse. The greater the amount of public debt, the lower the value of the dollar. The lower the value of the dollar, the less oil or any other foreign products it will buy. Once the world's premier currency, today's dollar is now approaching the value of monopoly game money."

Then there’s the climate. Despite the now almost comical hysteria promoted by the global warming fanatics, the world is getting colder by the year. Yet the Obama campaign's climate change guru is talking about Draconian regulations and ruinous new taxes to fight a non-existent threat if Obama wins the election.

Moreover, all those "very rich people out there" Barney wants to soak are already shouldering the heaviest share of the tax burden. According to the Wall Street Journal "the top fifth of earners" - those with family incomes above $150,000 — "currently pay 67 percent of all federal taxes, including not just income taxes, but payroll taxes, corporate taxes and death taxes.

"The top 1 percent of earners pay 26 percent of federal taxes." And about 40 percent of all employed Americans pay no income taxes at all.

In Barney Frank's world, punishing those who work the hardest and create the majority of jobs is called "fairness."

It won't be long before we'll be asking "Buddy, can you spare a dime?"

Phil Brennan is a veteran journalist and World War II Marine who writes for Newsmax.Com. He is editor and publisher of Wednesday on the Web (http://WWW.pvbr.Com) and was Washington columnist (Cato) for National Review magazine in the 1960s. He also served as a staff aide for the House Republican Policy Committee and helped handle the Washington public relations operation for the Alaska Statehood Committee which won statehood for Alaska. He is also a trustee of the Lincoln Heritage Institute and a member of the Association For Intelligence Officers.

He can be reached at pvb@pvbr.com.

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