Friday, May 7, 2010


Is Barach Obama channeling John Maynard Keynes? One might reach this conclusion given the economic state of America and the European Union and what is unfolding during this current economic crisis.
Keynes espoused a basic economic theory that made the state dominate over the private sector. It is certainly the direction the British economist saw his own country heading at the time of his death in 1946. And it is the direction the United States is heading under policies being put in place by both the President and the Democrat Congress, ie. healthcare reform.
Europe has been a poster child for Keynesian economic theory - high taxes in return for cradle-to-grave social programs including state run healthcare, subsidized housing, childcare, retirement, wage controls, etc. In theory, Keynesian economics is utopian. In practice, it is proving ruinous for those who espouse it over a free market economy.
Greece is only the first of many Keynesian-like socialized countries to go broke. Greek debt is 115% of its gross national product. By contrast, America's debt is 25% of GDP, but growing rapidly - too rapidly.
And who will save Greece? The International Monetary Fund, the brainchild of John Maynard Keynes and American economist Harry Dexter White.
Who is the biggest contributor to the IMF? Three guesses, and the first two don't count - the United States. American taxpayers are on the hook for up to $39-billion of the $140-billion needed to underwrite Greek debt and save that country from bankruptcy.
Is Barach Obama clairvoyant? Did he see the fiscal crisis in Europe coming. Maybe, because he generously pledged $100-billion to the IMF during one of his several trips to Europe last year.
Just one small problem. America is broke, thanks to 9/11, the war on terror, reckless spending by both Republican and Democrat administrations and the unfunded mandates of social security, medicare, medicade, prescription coverage and now healthcare.
Just to pay the $39-billion to bail out Greece, the Federal Reserve will have to print more money. There is no money in our government bank upon which to draw.
We cannot afford to bail out Greece. And we should withdraw from the International Monetary Fund. We, the taxpayers of the United States, fund nearly 18% of the IMF, but have never benefited from our membership.
The IMF was intended to help emerging countries establish markets and oversee the world's currencies, not bail out nations like Greece that accumulate huge debt because of excessive labor union demands, social programs and a retirement age of 53.
Unfortunately, much of what the IMF has done is bailout profligate countries.
The U. S. has a Department of Treasury and a Federal Reserve to oversee our financial markets and our monetary system; and a Department of Commerce to oversee international trade agreements and domestic markets.
One irony in the Greek financial debacle - the IMF has demanded Greece privatize healthcare as part of the rigorous austerity measures enacted by the Greek Parliament in return for bail out money.

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