Breaking The Bank

There was a time when Democrats were screaming about the costs of the Iraq War.

Okay, $7 trillion it is, and if you think that's an exaggeration, you're wrong. In this year alone, we have committed an amount that is more than half of our entire annual gross national product to assorted bailouts and guarantees. No, that doesn't mean that we have diverted half our GNP for bailouts; it means that we have created half our gross national product virtually out of nothing.

Tuesday it was the Fed saying it would buy up to $600 billion more in mortgage-related assets and will lend up to $200 billion to holders of securities backed by some consumer loans. That $800 billion is more than what Social Security lays out each year, and twice as much as the federal government annually collects in corporate income tax. It is about three times as much the entire federal deficit.

Consider: President George W. Bush has been passionately faulted for "breaking the bank" by conducting the Iraq War. But the non-partisan Congressional Research Service figures that the total cost of the Iraq War and the rest of the global war on terror, including the war in Afghanistan since Sept. 11, 2001 is $864 billion. Now, we can whistle past that in a single day, and few seem to worry. There are no metaphors for this because there is nothing comparable to the rapidity of our plunge into national hock.

"Talk about throwing money at a problem," said Sheila A. Weinberg, founder of the Northbrook (Ill.) based Institute for Truth in Accounting. "The better question is where is all this money coming from? The people I ask either don't know, believe that it's money we have on hand or will come from taxing the wealthy. We're borrowing it. About half of the borrowings are coming from foreign entities."

In a matter of a few months Congress has managed to exceed the costs of the five year Iraq War many fold.

This has got to lead to stagflation. I think Obama will be a one term President.

H/T The Whig