Obama's Legacy: Wasteful Spending, Economic Crisis

Thursday, 12 Aug 2010 12:15 PM

By E. Ralph Hostetter

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The accepted definition of an unfunded mandate is a statute or regulation that requires a state or local government to perform certain functions but does not provide the necessary funding.

Quite often this practice is used by politicians and councils to push some controversial issue for which the council either lacks the funds for the project at present or doesn't want to accept the criticism that goes with pushing the issue through. Sometimes it's easier to kick the can down the road and let someone else pay the bill.

Unfunded mandates have a cumulative effect, something that politicians don't want to acknowledge.

The U.S. government, to date, has assumed $1 trillion dollars in unfunded mandates, with that figure growing larger every year. Economists state that this figure is larger than the United States can make good on.

Extremists claim the figure is climbing to $100 trillion.

The U.S. dollar continues to be under attack.

One of the most pessimistic views on the future of the U.S. dollar appears in a column from American Thinker written by Vasko Kohlmayer, who claims "our federal government is flat-out bankrupt."

He continues, "Under normal circumstances, the dollar would have collapsed already, given how impossibly indebted our government is. Some people are puzzled by its continued survival . . .

"The dollar is still alive because there is no ready alternative... Big time holders of the U.S. dollar keep hanging on because they have nowhere else to go.

"Where else could China invest its nearly one-trillion-dollar reserves? . . .

“China keeps propping up America's federal debt by purchasing treasury notes, and thus keeping the dollar afloat."

The federal government has been in control of the U.S. dollar since 1913 when the Federal Reserve Banking System was established.

The 130 years prior to 1913, going back to 1783, was the longest period of currency stability in U.S. history.

Since the dollar came under control of the Federal Reserve Bank in 1913, it has lost 90 percent of its original value. Eighty percent of that loss has occurred since President Richard Nixon took the United States off the gold standard in 1971. One thousand 1971 dollars would purchase only $185 worth of merchandise today.

Prior to the establishment of the Federal Reserve Bank in 1913, the U.S. dollar was acknowledged as a real store of value. A dollar saved in 1800 was worth the same in 1900, a century later.

If any lesson is to be learned, it's that elected politicians cannot be expected to have the expertise to be directly involved in the hands-on management of the financial affairs of the nation.

Election to any office does not bestow upon the politician any special expertise.

Such is the case with President Barack Obama.

President Obama, to anyone's stated knowledge, has never had any real experience in the world of finance.

As a community organizer, he was never in a position to gain experience of any sort with finance. Now he heads the world's largest corporation with no known competence to handle the job.

Therefore, he must rely heavily on his staff and those who surround him in his cabinet. Close friends, such as Van Jones, come in and out of the picture, but the mere fact that they are close by, along with his dozens of czars (other close friends) raises serious questions about the stability of the Obama White House.

His administration has presented the largest budget in history, in excess of $3.5 trillion dollars with anticipated receipts of less than $2.4 trillion, leaving a deficit unheard of in U.S. history, another $1 trillion-plus.

Responsible economists stand in amazement and repeat, "This is unsustainable."

It is unfortunate that the unfunded mandate gimmick has come into play at this time.

No responsible president or Congress would take advantage of such a policy, program or loophole to push such a financial burden off on the future children and grandchildren of the nation. It is they who will bear the burden of paying for the follies of today’s leaders’ wasteful spending at a time when they will need every penny they can muster to provide for their families in a very uncertain future.

Their plight would be a sad epitaph for those of us who were known as “the greatest generation.”


E. Ralph Hostetter, a prominent businessman and agricultural publisher, also is a national and local award-winning columnist. He welcomes comments by email sent to eralphhostetter@yahoo.com.

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