Posted by: Rick | Thursday, July 14, 2011

Bush: Obama’s Secret Weapon

Dubya’s legacy:

Voters are increasingly displeased with President Obama’s handling of the economy, but a new poll finds most Americans still think George W. Bush is responsible for the nation’s dismal financial state.

According to a new Quinnipiac poll, 54 percent of those surveyed say Bush is responsible for the “current condition” of the economy, compared to just 27 percent who blame Obama.

54-27.  Not even close.

This guy was such a disaster that even the voters can’t forget him.



  1. The biggest problem with this whole thing is while the debt is a serious issue it is really only the symptom of the bigger problem.

    We have inflated the amount of money in circulation over 20 times since 1972. In 1972 there was only about $500 billion of currency in circulation according to the St. Louis Fed. Today there is over $10 trillion again according to the St. Louis Fed. Many others say the amount is higher, some as much as $14 trillion. Estimates of the total amount of money held in derivatives, exceeds $1 quadrillion or one thousand million-million…

    The debt is just the after-effect of the years of constantly increasing the currency regardless of the real value of the US’ assets. It was important to drive up housing as that is the tangible asset that banks use to leverage 10 to 1 against, under the fractional reserve system we and most European countries use.

    The real problem is our assets are not worth the amount of money we have in circulation. If you project the amount of money we would have today using the growth rates prior to 1972 we should have an economy with about $4 trillion in total value not $10 to $16 trillion as we have.

    Finally, I keep hearing that China holds most of our debt, but China actually holds about $900 billion of our debt, and our total debt is between $14 and 16 trillion. Then how can China hold the majority if it is less than 6%? Who holds the rest? Well the answer is either no-one or all of us U.S. of A. taxpayers. Remember if you don’t pay taxes then you’re not responsible for the debt are you?

  2. 54-27 Proof that a majority of those few polled where chosen for their ignorance.

    @Mr Loker. China holds about $1.1 trillion as of April 2011, all foreign holders of American debt is $4.5 trillion. The other $10 trillion is either held by private US investors or international banks through IMF or the Federal Reserve.

  3. Thanks for the further clarification. I have not revisited these numbers in a long time. But, I think the point remains the same. Most of the debt is in fact held by us through bond investment or in the Fed itself. So, still the effect is the same. My overall point was that since we dumped the gold standard – and I am not sure what the alternative was in 1972 as the gold standard was a major choke on our economy then – we have, to a great extent, inflated the economy by pumping in money.

    When money is created by government and it pays for creation of value in goods or services it is not inherently inflationary. Conversely, when the government prints money to pay for interest, or non-value based expenses than it becomes a different matter. It is the continual accumulation of the non-value producing accruals of interest and trade deficit subsidies that have put us in the hole we are in now.

    If we continue to eschew manufacturing and primary production in favor of middle tier roles in the economy, we will continue to see our assets, in the form of money, passing out of our country into the hands of those willing to produce the goods cheaper, not necessarily more efficiently. This will continue until the rest of the world decides are money is overvalued. Then they may just come to demand the hard assets at bargain prices.

    The good news for us at the moment is much of western Europe has the same fractional reserve system we do and faces similar sets of fiscal problems and their currency is not the benchmark.

    We need to rethink the basis of our national economy and make some careful decisions as to how we regain a profitable national business in the world’s economy.


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