Is the US government "Too Big To Fail?"

As I see it, Too Big to Fail means "Too Big to Function" I think the term was coined to encompass a situation where poor decisions land an abnormally large group of people in a bad situation. The answer (at least so far) has been for the government to make certain economic concessions to benefit failed companies. With this type of system in place there is absolutely no incentive for the heads of business to asses risk because the government is already committed to propping the company up regardless of how the business is run. No free economic model can function without risk.

It seems, as was the case with General Motors, that there is a belief that once an entity becomes large enough it will heal itself. There is this belief, before the time of collapse, that "There's someone for that", "There's someone who can fix that", or "They wouldn't do something that would run us into the ground." Of course, this is all based on the belief that those at the top are competent and honest. In government, like in large businesses, people are only held accountable for a limited amount of time. There seems to be a culture of getting what you can while you're there, and letting the next guy deal with it.

Right now our government is operating in this manor. There is little to no risk for politicians who make poor economic decisions. Most people are either too far removed from the issue, or don't even hear about it. Thank the major legacy news outlets for that.

We are in the situation we are because the government has inserted itself in the economy to the extent that arbitrary government actions have a greater economic effect than organic market forces. Once this happens it is nearly impossible for the market to correct. But it seems that the government is quickly loosing its ability to prop up the system. The real crash is coming, until that happens there will be no "recovery."

The US is not too big to fail.

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It's already starting; Moodys is starting to point to a downgrade in the US "AAA" bond rating. Strange considering that borrowing more was supposed to fix the credit problem. The US is starting to operate a lot like General Motors. The government has made promises without the financial backing to realize them. Also like General Motors the government has borrowed to uphold current obligations. The key ingredient to the analogy is the fact that both the US and General Motors made economic moves which weakened their ability to gain future revenues. The end result; you'll see...

The outlook for the U.S. grade is now negative, Moody’s said in a statement yesterday after President Barack Obama signed into law a plan to lift the nation’s borrowing limit and cut spending following months of wrangling between Democratic leaders and Republican lawmakers.

But Obama said that we had to increase the debt limit to avoid crisis!? I don't think that the debt ceiling was ever the issue; in fact it wasn't --spending is. The day after the debt ceiling was raised the National Debt exceeded GDP.

US debt shot up $238 billion to reach 100 percent of gross domestic project after the government's debt ceiling was lifted, Treasury figures showed Wednesday.

Treasury borrowing jumped Tuesday, the data showed, immediately after President Barack Obama signed into law an increase in the debt ceiling as the country's spending commitments reached a breaking point and it threatened to default on its debt.

This, of course, flies in the face of everything Obama said. All of the panic, all of the chaos, was fabricated. The sheer fact that the debt ceiling would be increased was proof enough that the US is not going to make good on its debt. Everyone knows that in real-world terms the debt ceiling makes no logical sense, because it's not based on ability to repay! In the real world debt limits mean nothing, the ability to pay does. Once the National Debt surpassed GDP it was all over. I'm no economist, but I don't loan money to people who can never pay me back --it's not a loan at that point.

The Republicans dropped the ball. They did help to focus the debate on the debt ceiling, but they led a half-ass effort to stop the increase. Republicans finally got the attention they were looking for and at the highest point of visibility (publicly) they dropped the ball.

I'm starting to think that we do need a third party. If the Republicans can't hold the line when nearly all of the polling data shows that Americans back their position, how are they going to hold the line at any other point!?

This "disaster" is fabricated, the economy is being broken down on purpose. If I can see the writing on the wall don't you think that the most influential people in the world can as well?

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It's interesting that when Egypt is in real trouble there is nothing on the front page of US newspapers, but the blog section of the New York Times has insight. This is a very important development. Remember we had the President of The United States saying that Hosni Mubarak had to step down so that the Egyptian people could determine their future. Well that has happened and what do we see now?

As my colleague Anthony Shadid reports, tens of thousands of Egyptians poured into Tahrir Square on Friday for a day that had been billed as one of unified protest against the interim military government. But the turnout was lopsided, dominated by members of religious movements, ranging from the most conservative, the Salafists, to the relatively moderate Muslim Brotherhood.

According to The Associated Press, instead of chanting “The people want to topple the regime,” a slogan heard at protests across the Arab world this year, from Tahrir Square to Tunisia, demonstrators called out, “The people want to implement Sharia,” a strict code of Islamic law.

I thought these protests were carried out by people who want freedom? I thought that Islamists were nowhere to be seen during the Egyptian protests, that's what we were told. Now all of a sudden the people everyone was worried about are right there in the middle of it.

I predicted this in May of this year. Why would anyone actually believe that in a majority Muslim country there would be a "revolution" and no involvement by Islamnists?

Here is what I said in May.

It is likely that the most organized group will gain control of whatever government eventually manifests itself. The Muslim Brotherhood has been waiting for an opportunity like this for many years. Now it's time for them to act. Pay close attention to Egypt in the coming weeks.

Free thinking people are unlikely to organize and create a system of government. For Islamists the job is easy, their religion is a form of government; they just have to implement it.

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Obama wishes his policies were easier to mandate.

I have known for quite some time that Obama takes issue with the fact that laws limit our government. I just never thought that he would come out and say as much.

Obama Would Radically Rework the Constitution

A 2001 interview of Sen. Barack Obama saying some pretty remarkable things about what he sees as the inadequacy of our Constitution has recently come to light. They go to the core of what this election is about and, even more fundamentally, what America is and may be.

Obama in his interview disparages the Constitution as merely "a charter of negative liberties. It says what the states can't do to you. Says what the federal government can't do to you but doesn't say what the federal government or state government must do on your behalf." He believes—and he's right—that changing this is the way to bring about "redistributive change."

But the founders were deeply purposeful and intellectually coherent in their definition of rights. Classically, rights are the lowest, most basic universal claims. Think of them as the ground rules for everyone, weak and strong, to respect each other and get on.

This way of thinking might be confusing to some people, but you have to understand Obama's frame of mind. He doesn't look a The Constitution as a document from the aspect of We The People, he looks at it from the aspect of the government ruling its subjects. That's where the disconnect is. The left has no respect for The Constitution, because it does exactly what it's supposed to do, LIMIT THEIR POWER.

Many people disregard these things and just claim it's a wish list for Obama or whatever leftist is in power. What they don't understand is that this is the core belief of ALL LEFTISTS. This belief doesn't go away with the person at the time. The next leftist person will be working towards the same goal, and so on.

These beliefs were again echoed by Obama on the subject of immigration reform.

America's immigration system is broken, but only a bipartisan political movement can fix it, President Barack Obama said Monday.

"The idea of doing things on my own is very tempting, I promise you, not just on immigration reform. But that's not how our system works. That's not how our democracy functions," Obama told the National Council of La Raza.

Speaking at the organization's annual conference in Washington, Obama said passing immigration reform measures will require support from both sides of the aisle in Congress.

"Let's be honest, I need a dance partner here, and the floor is empty," he said.

The President of The United States recites an oath to uphold the Constitution of The United States.

Each president recites the following oath, in accordance with Article II, Section I of the U.S. Constitution:

"I do solemnly swear (or affirm) that I will faithfully execute the office of President of the United States, and will to the best of my ability, preserve, protect and defend the Constitution of the United States."

Why would Obama take an oath to "preserve, protect and defend the Constitution of the United States" if he takes issue with it? Obama and the Democrats have been openly at odds with the US Constitution ever since Obama took the oath of office. Most of the major legislation to be passed as part of Obama's agenda had to be structured to circumvent the US Constitution, not abide by it.

The first oath administered on January 20, 2009 was administered incorrectly. The oath was again administered on January 21, 2009 in the Map Room at the White House. The second time there was no Bible present.

After constitutional law experts questioned the validity of his swearing-in because of a fluffed line in the oath of office, Mr Obama moved quickly to quash speculation that his presidency was in any way illegitimate.

John Roberts, the Chief Justice charged who helped bungle the oath on Tuesday, was summoned to the White House and, in front of a small pool of reporters, Mr Obama carefully and accurately repeated the 35-word oath prescribed by Article 2 of the Constitution.

The problem was, no-one thought to bring a Bible and Mr Obama decided to go ahead without one.

Maybe it's just me, but I would have waited for a Bible to be brought in.

Only history will tell if the oath was taken seriously by Obama.

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The government is thinking of turning foreclosed homes into rental properties.

The Obama administration is examining ways to pull foreclosed properties off the market and rent them to help stabilize the housing market, according to people familiar with the matter.

While the plans may not advance beyond the concept phase, they are under serious consideration by senior administration officials because rents are rising even as home prices in many hard-hit markets continue to fall due to high foreclosure levels.

When will these people learn? How can someone look at this and take it seriously. We have to do something to bring down the cost of rent, I know, let's flood the market with rental properties. I thought that the idea was for everyone in America to own a home? How are we going to do that through rental properties?

The housing prices in the government rental areas are going to increase to ridiculous levels, because it will create a shortage of homes for sale in that market. It will be no different than the First-Time Homebuyer Credit.

Feb. 25, 2009

Buyers can claim 10% of the purchase price, up to $8,000, or $4,000 for married individuals filing separately, according to the IRS' Web site. The credit starts to phase out for those whose adjusted gross income exceeds $75,000, or $150,000 for joint filers.

The U.S. Department of Housing and Urban Development also announced on Wednesday that it will temporarily increase loan limits for Federal Housing Administration-backed mortgages, also in accordance with provisions in the stimulus. The new FHA limits now go up to $729,750 in high-cost areas. The new limit on FHA's reverse mortgage product also has been raised to $625,500.

The higher limits are in effect until the end of the year.

The First-Time Homebuyer Credit kept housing prices artificially high because sellers knew that most buyers had an extra 8,000 dollars on hand. The truth is; people paid more money for less house, but taxpayers supplied 10% of the inflated price (up to 8,000 dollars). Then when the credit expired; the housing market dipped again.

Most of these government housing programs only cause changes in the market for a short period, but the unintended negative effects are long lasting. The housing market will not stabilize until the government gets out of the market. Once the real bottom of the housing market is reached it will stabilize, but the government keeps stepping in and propping it up.

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