Impending Economic Doom for the United States

President Obama's first 100 days in office is coming this Tuesday, and while it is an arbitrary date, it is the first date that Presidents are expected to produce change and set the tone for their presidency. What tone did President Obama set? My belief is that while he has tried to produce change, the tone he paints an interesting picture of the future; especially in regards to the economy.

In the first 100 days of Obama's presidency, we have seen an unprecedented spending spree. According to CNN.com, the federal government has set aside a grand total of $10.42 trillion to spend if the government believes that this spending is needed. So far, it has spent $2.6 trillion.

Let us for a moment put this into perspective. Our government has spent $2.6 trillion dollars in basically nine months since last September when all the bailouts of various private industries began. Obama could have put an end to it and returned to a more free market economy. But instead we pushed through a massive $787 billion addition to the $2.6 trillion and promised nearly $8 trillion more. All together this is $29,700 per every man, woman, and child in the United States.

What, historically speaking, happens to countries that devalue their currency? Usually a couple of things. First, the money has to be taken out of the system. The normal mechanism for this is rising interest rates. The historic lows of 5% for a 30 year mortgage are going to go away. In 2 to 3 years as this money works it way through the system if you are going to be looking to purchase a home, expect 10, 12, and 14 percent interest rates.

What is the second thing that happens? Inflation. The cost of all goods and services goes up. So far, we have not had any uncontrolled inflation in our economy since the early 1980's. But with more money chasing after the same goods, the price of all those goods is going to rise. There will be an invisible hand that is going to absorb these poor monetary decisions over time.

Both high interest rates and inflation cause consumers not to buy and businesses not the invest.

What happens to the world with the United States economy takes a down turn? The rest of the world follows suit. The United States' people are the world's leading economic people. If they are not buying, the standard of living in other counties does not improve. There is a downward spiral.

Now is the time to write your congress people and call your congress people. If we stop spending, we can avoid a lot of the problems associated with spending $10.42 trillion. Now is the time to take action. Call, write, and run yourself for governmental office and we can stop the impending economic meltdown.

http://www.cnn.com/2009/POLITICS/04/17/interactive.economy.rescue/index.html