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Editor’s Note: The following report is excerpted from Jerome Corsi’s Red Alert, the premium online newsletter published by the current No. 1 best-selling author, WND staff writer and columnist. Subscriptions are $99 a year or $9.95 per month for credit card users. Annual subscribers will receive a free autographed copy of “The Late Great USA,” a book about the careful deceptions of a powerful elite who want to undermine our nation’s sovereignty.
President Obama may be determined to use the current economic crisis as an excuse for “Obamanomics” to transform the United States into the world’s largest socialist state, Jerome Corsi’s Red Alert reports.
Data emerging from the Congressional Budget Office and various international agencies, including the International Monetary Fund and the Organization for Economic Co-Operation and Development, or OECD, indicate the Obama administration’s $3.6 trillion federal budget will dramatically increase government spending as a percentage of gross domestic product, or GDP, on a scale that rivals even the European Union social welfare states of France, Great Britain and Germany.
Moreover, with the Obama administration suggesting the U.S. Treasury could convert bailout loans to the 19 largest U.S. banks into common stock to extend the remaining $100 billion or so of Troubled Asset Relief Program, or TARP funds, a government nationalization of the nation’s top banks is a real possibility, Corsi wrote.
This, following the Obama administration’s decision to fire General Motors chairman and chief executive Rick Wagoner, extends central government management of the private economy under President Obama to a degree many would only expect in socialist nations.
Before President Obama took office, the OECD projected total U.S. government spending is expected to be 39.9 percent of gross domestic product, or GDP, by 2010, compared to 47.1 percent in the Eurozone, a gap of less than an 8 percent.
Only a decade earlier, U.S. government spending was 34.3 percent of GDP, compared with 48.2 percent in the Eurozone, a gap of approximately 14 percent.
The Congressional Budget Office has estimated that the cumulative deficit from 2010 to 2019 under President Obama’s proposed $3.6 trillion federal budget would total $9.3 trillion, a figure that would nearly double the nation’s current $11 trillion national debt.
Before including the Obama administration’s plan to pass a government-funded universal health care insurance program, the Congressional Budget Office estimated that federal spending on Medicare, Medicaid and Social Security will increase from the current 18.2 percent of GDP, to 28.3 percent in 2050, and 35.3 percent in 2082.
Adding to the calculation the interest payments required to service the national debt, the Congressional Budget Office estimated federal spending will hit 41.8 percent of GDP in 2050 and 75.4 percent by 2082.
Including the interest payments on the Obama administration’s proposed expansion of the national debt means Congressional Budget estimates that interest payments on the national debt could reach 75.4 percent of GDP by 2082 are too low, Corsi wrote.
Sen. Judd Gregg, R-N.H., senior Republican on the Senate Budget Committee and President Obama’s first choice to be secretary of Commerce, emphasized the point by telling National Public Radio on April 14, that President Obama’s proposed federal budget deficits would “take our national debt up to about 80 percent of our gross domestic product,” when a nation does not qualify for membership in the European Union if the nation’s debt is 60 percent of GDP.
The Congressional Budget Office has repeatedly warned that running federal budget deficits that result in dramatically expanding national debt by trillions of dollars in the next few years will diminish the prospects for growth in the U.S. economy.
In a letter to Rep. Paul Ryan, R-Wis., dated May 19, 2008, Peter Orszag, director of the Congressional Budget Office, explained that trillions of dollars in projected federal deficits “would crowd out productive investment in capital in the United States” by absorbing funds from the nation’s pool of savings and absorbing foreign capital that might otherwise be invested in the U.S. private economy.
At the G20 meeting in London on April 2, French Prime Minister Nicolas Sarkozy and German Chancellor Angela Merkel rejected proposals by President Obama and British Prime Minister Gordon Brown to engage in massive deficit spending to fund increased social welfare spending to stimulate the global economy out of recession.
Just prior to the G20 meeting, Merkel told the Financial Times in London that Berlin intends to be more responsible than Washington, respecting as a restraint Germany’s €1.54 trillion ($2.057 trillion) public debt – a figure that looks small in comparison to the U.S. national debt, which just topped $11 trillion.
Merkel suggested Germany was not in the same position as China.
“I think China can do much more [than Germany] to encourage domestic demand because of its massive reserves,” Merkel told the Financial Times. “We are in a completely different situation, we have negative reserves.”
China currently has nearly $2 trillion in foreign exchange reserves, the most held by any country in world economic history, gained largely through China’s massive and continuing positive balances of international trade with the United States.
China has committed to an $800 billion economic stimulus program of its own, having lost some 20 million jobs, largely because its manufacturing plants have had to close by the thousands as U.S. consumer demand has weakened.
Merkel further warned that President Obama was repeating the problem that caused the global economic meltdown in the first place.
Specifically, her charge was that the economy collapsed because the economic stimulus after Sept. 11 depended entirely upon the credit abundantly made available when then-Fed Chairman Greenspan held interest rates at 1 percent in 2003 and 2004.
“This crisis did not come about because we used too little money but because we created economic growth with too much money, and it was not sustainable growth,” Merkel told the Financial Times. “If we want to learn from that, the answer is not to repeat the mistakes of the past.”
On March 26, British Prime Minister Gordon Brown received a similar warning in the European Parliament, when conservative British EU Member of Parliament Daniel Hannan gave a tongue-lashing to Brown that went viral on the Internet and became the most watched clip of any kind in the world in 48 hours.
Red Alert’s author, whose books “The Obama Nation” and “Unfit for Command” have topped the New York Times best-sellers list, said just as Hannan warned Brown “you have run out of our money,” Merkel intends for Obama to hear the same admonition from her next week.
Corsi received his Ph.D. from Harvard University in political science in 1972. For nearly 25 years, beginning in 1981, he worked with banks throughout the U.S. and around the world to develop financial services marketing companies to assist banks in establishing broker/dealers and insurance subsidiaries to provide financial planning products and services to their retail customers. In this career, Corsi developed three different third-party financial services marketing firms that reached gross sales levels of $1 billion in annuities and equal volume in mutual funds. In 1999, he began developing Internet-based financial marketing firms, also adapted to work in conjunction with banks.
In his 25-year financial services career, Corsi has been a noted financial services speaker and writer, publishing three books and numerous articles in professional financial services journals and magazines.
For more information on Obama’s plans for socialism and for financial guidance during difficult times, read Jerome Corsi’s Red Alert, the premium, online intelligence news source by the WND staff writer, columnist and author of the New York Times No. 1 best-seller, “The Obama Nation.”