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Belmont Club

The Gathering Storm

March 26th, 2010 - 5:43 am

This year was was the first in which Social Security payments exceeded contributions. The NYT says “analysts have long tried to predict the year when Social Security would pay out more than it took in because they view it as a tipping point — the first step of a long, slow march to insolvency, unless Congress strengthens the program’s finances.” Well wonder no longer. The year is 2010.

But analysts are still undecided about when Euro will begin to unravel. The Greek debt crisis, which a top Chinese banker called “the tip of the iceberg” continues to rise menacingly, with Italy and Spain glimpsed not far beneath. The Eurozone may survive for now, but perhaps only if sweeping new EU controls are approved over member economies and Greek load is spread beyond Europe to the International Monetary Fund. Europe needs a bigger bureaucracy and more shoulders to hold up Greece.  And it can’t afford to do so alone; and naturally the burden must be partly borne by the American and Japanese taxpayers, who are themselves in shaky condition. The IMF is the lender of last resort; but the agency itself is operating in deficit. Never mind. The important thing is that Greece needs another loan that it will never repay to keep its public sector going, so the hat must be passed around. After all, if Greece could repay its debts, would it be borrowing?

This is the unassailable reasoning of our age. Even Sacramento knows you can borrow your way out of debt. Of course, Iraqi bonds are now on par with California. But it’s all going to work out. It’s a truism that everyone needs a little more time to come up with the money. So President Obama is now proposing that banks suspend mortgage payments of the unemployed — in effect lending them more money — until they get the check they’re waiting for to settle their account. What check you might ask?  Why maybe the one from Social Security, the program that’s recently gone into the red. Never fear. Social Security will borrow the money it needs from somewhere.

Everybody’s got money except the taxpayer. The WSJ says that personal income has dropped all across the country. But before you thank God for your existing health care plan, or the one you will soon get from the government, remember that CBS News says that if you’re already insured, you should get ready to pay more. And more. But that’s not even going to begin to make a dent in paying for all the free government programs coming up the pipe. So Charles Krauthammer warns that a national value added tax is probably in the works. Because someone’s got to pay for Greece. And California and healthcare and Medicare and all that affordable housing.

2010. Quite a year.

And the President knows it. He’s a man in a hurry. For example he’s given Netanyahu until Saturday, you know the Sabbath, to answer an unspecified set of demands that will allow Washington to go to the Arab League and receive that organization’s backing for ‘proximity talks’ so that maybe the Palestinian Authority may someday, sometime decide to negotiate with Israel. For their part, the Arab News says the Palestinians are discussing whether to postpone their proximity talks with Israel. The article said:

“Any talks with Israel can never be launched as long as the Israeli government continues its settlement plans in the Palestinian territories, mainly in occupied east Jerusalem,” said the official on Saturday.

The official revealed that several Palestinian figures are pressuring on Abbas to postpone the talks.

“There are Palestinian concerns that the indirect talks would fail as Israel insists on continuing construction in settlements in east Jerusalem,” said the official.

Israel has all the watches, but the Palestinians have all the time. 2010. The other thing that may happening in this fateful year is a disarmament deal with the Russians. Ralph Peters says that Moscow hurried things along by announcing a deal was done even when it wasn’t. “Folks, this is diplomacy at a level we can’t begin to touch. With their unilateral announcement, the Russians ensured that Obama will cave on the final points — otherwise, it would look as though he scuttled the disarmament deal and undercut his own argument for anti-nuclear sanctions on Iran.” This happens as Washington handed Pakistan a $7.5 billion for being America’s stalwart ally against the Taliban. The sands of time and money are running free.

Jay Cost says the Republicans have got messaging on Obamacare completely wrong. He believes it’s wrong to be talking in terms of repealing the health care “reform” bill since that somehow sounds like being against mom and apple pie. No. Cost says the Republicans should simply talk about the economy. Focus on it like a laser beam. Because once the economy is front of everyone like a dead and gutted fish it will be perfectly obvious to everyone there’s no way can Obamacare can be funded. Or maybe not. Maybe if we think happy thoughts all the bad things will go away. Ezra Klein at the Washington Post says talk like that is dangerous.  It’s “fear-mongering”.

Fear is probably the last thing that needs selling. It’s already creeping like a vast shadow. The real problem now is not whether there’s something to worry about, but how to get out from under. The terrible skeins are all coming together: the accumulated fecklessness, the foreign policy misjudgements, the deception and the unkeepable promises are gathering like a terrible storm. An entire era has come to the end of a joy-ride. The bill has come due; and everyone is doing a courtesy reach-around for his empty wallet hoping that someone else can pay for what they can’t.


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