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In this
week's much anticipated State of the Union address, President Obama again
demonstrated his poor understanding of the fundamental problems
that confront our nation. By following the advice of the same people
who helped guide our economy to the precipice of total collapse, Obama now
threatens to push it over the edge.
Notwithstanding his well crafted lip service regarding future spending
restraint, the essence of his current program is for more government spending
and larger deficits. For all his talk about job creation, his policies
will further burden those who might otherwise create those jobs with higher
taxes and more regulation. While he did call for tax cuts for the middle
class and offered what amounts to bailouts for those struggling to repay
student loans, such cuts do nothing to promote growth in the near term and
will add to the deficits in the long term.
The President spoke optimistically about the future, but in reality there is
little evidence to support such an upbeat outlook. He began his speech
by assuring us that the worst of the storm had passed. General Custer
may have said something similar when the first wave of Indian
attacks ebbed at Little Big Horn.
While Obama did have some harsh words for Wall Street (not exactly
a courageous political stance), he leveled no criticism at the Federal
Reserve or other government agencies that had financed and guaranteed all the
ridiculous real estate speculation that precipitated the crash. And
while he at least conceded that the prosperity of the last decade was based
on illusions, he continued to endorse the very policies that produced the
mirage in the first place.
To lead us back to brighter days, he articulated a vision of a centrally
planned recovery, where clean energy and a Soviet style five-year plan to
double our exports would make our economy preeminent once more. He
fails to understand that the only reason our economy rose to the top in the
first place is that the government left it alone.
In the words of the Spanish philosopher George Santayana, "Those who
cannot learn from history are doomed to repeat it." Since our
President cannot even learn from the mistakes of his immediate predecessor,
to say nothing of those he made himself while in the Senate or during his
first year as president, we are surely doomed to repeat them, perhaps more
quickly than Santayana could have imagined.
Rather than tightening the reins on the reckless monetary policy that
undermined our savings, diminished our industrial output, inflated asset
bubbles, and led to reckless speculation on Wall Street and excess consumption
on Main Street, we are loosing them further. Rather than repealing
regulations that distort markets and create moral hazards, we are adding new
ones that do more of the same. Rather than cutting government spending
to reduce the burden it places on our economy, we are increasing both the
amount of the spending and the size of the burden. Rather than making
government smaller so that the private sector can grow, we are making
government bigger and forcing the private sector to shrink. Rather than
paying off our debts we are taking on even more. Rather than
encouraging people to save we are enticing them to spend. Rather than
creating jobs, we are merely creating unemployment benefits.
As a result, instead of seeding the soil for a real recovery we are setting
the stage for a prolonged depression.
For a
more in-depth analysis of our financial problems and the inherent dangers
they pose for the U.S. economy and U.S. dollar, read Peter Schiff's 2008
bestseller "The Little Book of Bull Moves in Bear Markets"
and his newest release "Crash Proof 2.0: How to Profit from the
Economic Collapse." Click here to learn more.
More importantly, don't let the great deals pass you by. Get an inside view
of Peter's playbook with his new Special Report, "Peter Schiff's Five
Favorite Investment Choices for the Next Five Years." Click here to download the
report for free. You can find more free services for
global investors, and learn about the Euro Pacific advantage, at www.europac.net.
Peter D. Schiff
President/Chief Global Strategist
Euro Pacific Capital, Inc.
20271 Acacia Street, #200 Newport Beach, CA 92660
Toll-free: 888-377-3722 / Direct: 203-972-9300 Fax: 949-863-7100
www.europac.net
pschiff@europac.net
For a more in depth analysis of the
tenuous position of the American economy, the housing and mortgage markets,
and U.S. dollar denominated investments, read my new book : The Little Book of Bull Moves in Bear Markets" (Wiley,
2008).
More importantly take action to
protect your wealth and preserve your purchasing power before it’s too
late. Protect your wealth and preserve your purchasing power before
it’s too late. Discover the best way to buy gold at www.goldyoucanfold.com , download my free
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, and subscribe to my free, on-line investment newsletter at http://www.europac.net/newsletter/newsletter.asp
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