This says more about the needs and plans of the Obama administration than anything President Obama may have said at his State of the Union address the day before. Obama tirelessly promoted Bernanke as the great captain of the economic ship when it was on the verge of sinking. Without him, everyone in America would be destitute.
This is all nonsense , of course, since the ship was sinking due to the refusal of Captain Ben to jettison any of the trash overboard that the ship had accumulated under his tenure. The fact is, Obama needs him desperately.
From speaking with people I know involved in matters of business, finance and government, I’ve learned that for at least the last six months and maybe more, the Federal Reserve has monetized over 80 percent of the national debt. It works like this: When the government issues bonds, the Federal Reserve is the one who buys them. Not China. Not Japan.
In essence, the government through the Federal Reserve is buying its own debt. This can be very inflationary, but mainly it shows what happens to a country that runs up so many trillions of dollars in debt and simultaneously debauches its currency. Today’s news that the new budget projects an additional $8.5 trillion to the national debt over the next decade makes matters even more dire.
Coincidentally, before the vote on Bernanke’s confirmation last week, the Senate also voted to raise the debt ceiling. A lovely pairing, I’d say. Like champagne and caviar.
Interestingly, though, it is the hardcore left who opposed Bernanke’s second term. They understand socialist economics, and they understand what President Obama is up to. He is not punishing the crooks at the top of the economic heap. He has, instead, made a deal with the Devil. He has agreed to do everything he can to preserve the secrecy of the Federal Reserve, while Bernanke has agreed to keep the money coming. Wall Street was the one who really wanted Bernanke to stay, because he will keep their paper games going.
The left is no longer happy with this game because they see the groups who are emerging from the Obama economic vision — the rich, those receiving government benefits to stay above water, and the well-to-do who work for the government. This kind of economic system crushes the private sector middle class. Crazy as it sounds to conservatives, the traditional left idolizes the working man, and he is quickly disappearing. The road to luxury, nowadays, is through Washington, D.C. and through dealings with the people who work there.