Our Vice President, Joe Biden spoke to a town hall meeting of AARP members last week. He told them that unless we pass this new health care bill, our country will be bankrupt. When questioned further, he suggested that we have to go spend money to avoid bankruptcy! Once again, the people's economist delivers another one of Biden's Bonehead Botches!
Recently, at a convention for financial advisors, some interesting talks were given that we thought you might enjoy hearing about.
The first one was delivered by Bob Woodward. For all you old folks like us, Bob along with Carl Bernstein (both reporters for the Washington Post) were credited with exposing Watergate which led to the resignation of President Richard Nixon. Mr. Woodward was lunching with Al Gore recently when the conversation turned to politics.
Mr. Woodward asked Mr. Gore how much the public really knows about what happens in the White House on a day-to-day basis. Mr. Gore replied that we only now about 1% of all the events that go on and furthermore, he doesn't think we learn much more after the president leaves the White House.
Mr. Woodward told the audience that "he gets up every morning and wonders what the bastards are hiding today." He essentially said that he does not believe the American people are getting enough truth from the White House and Congress for democracy to function effectively. He told the audience,"You cannot know the future because often you cannot even know the present."
He said that the White House public relations staff is operating at full capacity. They examine every press conference and every disclosure before hand to determine the proper spin. He also blames to media as well saying, "The media is now driven by impatience. The refrain today is: give me a sound bite-on things that don't readily reduce themselves to one."
Reporters dumb down news and report lies as being credible. Mr. Woodward noted that the CEO of Bear Stearns was widely quoted saying that his firm's liquidity and business were strong. Thirty-six hours later they were bankrupt, seized and sold, never to be seen again. One more example: Mr. Woodward said that four months before he was arrested, Bernie Madoff was widely quoted as saying that in this modern age, it is impossible to break the rules. We think that what he meant to say was it is impossible to break the rules unless you have the backing and full support of the financial regulators!
Mr. Woodward concluded his speech by saying, "secrecy in government may be a bigger danger today than the economy or the environment. Democracies die in darkness. If we lose the capacity to find out what's going on, we'll end up jeopardizing both capitalism and democracy."
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The second speaker was David Walker, one of our heroes, who served as the Comptroller General and head of the U.S. General Accounting Office (GAO) under George Bush. He left in February 2008, presumably (and this is Bob's take after being at the premier of the documentary I.O.U.S.A last July in Vancouver)because he had been waving the flag for years and warning the government of impending doom due to the exorbitant debt levels. Our guess is Mr. Walker had no clue what would ensue less than one year after he quit. Although he told us he resigned, we believe that since he had been giving too many speeches around the country warning about the country's finances that he was pressured to resign. It was just another classic case of shooting the messenger.
Mr. Walker talked about the recent economic meltdown and warned the audience, "This was not the Big One. The real risk is a super-subprime crisis, which will also involve a global flight from the dollar, plus a huge increase in interest rates, accompanied by a loss of confidence in the federal government." He said it could happen sooner than later.
The real problem, he says, is the unfunded liabilities of Medicare, Medicaid and Social Security. Furthermore, Mr. Walker said, "the risks are growing daily. When you are a debtor, the power of compounding works against you. The longer we wait to restructure our finances, the higher the future tax increases will have to go." Whew! Finally, you are hearing fright tales from someone other than us!
"Today, America owes more than America is worth and the gap is growing", Mr. Walker said. The solution is to make hard decisions which Capitol Hill refuses to do. "Washington leaders are plagued by laggardship. We have to pressure public officials to impose tough budget controls, reform Social Security, control health care costs and pass a universal care package that provides basic health coverage for everybody."
"Meanwhile, we have to improve personal responsibility for health and welfare, reform and simplify the tax system, and collect more revenues. We need to hold our elected officials accountable for what they do, and more importantly, what they don't do. And all this has to happen within the next five years."
There you have it dear readers, a newspaper reporter and a former high level government official, both suggesting that we, as citizens, have an obligation to make our voices known and demand fiscal responsibility and transparency. Or, we must be prepared to suffer the consequences. For a cheery and optimistic look (ah, just kiddin') at the debt problems America faces, I encourage you to order the DVD (or ask your local video store or Netflix) about Mr. David Walker and his crusade against America's handling of the financial debt problems called I.O.U.S.A. You will be astounded.
Ronald Reagan said, "Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it."
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