RKMBs Forums .::Important::. Politics and Current Events Great Depression 2.0 May Be On Its Way

Meanwhile, American businesses continue to suffer from virtually the highest corporate tax rates in the industrialized world, leaving American companies uncompetitive in the global economy. Yet under President Obama there is no relief in sight. Instead he continually proposes still further tax increases on American business.

President Obama and the Democrats doggedly pursue these tax policies because they believe ideologically in socialist wealth redistribution. But openly raiding small businesses, job creators, investors, and American companies is crippling for the economy, particularly this weak economy. This ends up hurting working people and their families the most, as they lose the jobs, wages, and opportunity they need for a decent life.

Besides this tax tsunami, President Obama is implementing another trillion dollar plus cost burden on the economy through the EPA's cap and trade tax policy. That is one central feature of President Obama's war on production of traditional, low cost, energy, shutting down drilling, extraction and pipelines from the northern tip of Alaska, down through Canada, to the energy rich Western states, through Texas, to the Gulf of Mexico. Obama keeps issuing statements that he is opening drilling or permitting or exploration here and there, only to have it shut down by his bureaucracy soon thereafter. All of this will only raise energy prices higher and higher through to 2013, squelching the economy still further.

President Obama doggedly pursues this because he and his advisers believe ideologically that higher energy prices and less energy production and use are good for the environment. But this extremist view of what is good for the environment is a catastrophe for the economy, jobs, and working people.

This is just the beginning, however, of President Obama's reregulation burden on the economy, which is estimated to be rapidly rising towards $2 trillion, or over $8,000 per employee, in annual costs even before EPA's calamitous cap and trade really begins. That is close to 10 times the corporate tax burden, and double the individual income tax burden. With another 4,225 federal regulations already in the pipeline, and the new regulatory burdens from Obama and the Dodd-Frank financial regulation bill still to come, how high will that burden be by 2013?

Then there is the Fed and the effects of its monetary policy. The Obama Administration has cheered on the Fed's loose-as-a-bordello monetary policy, with near zero interest rates for years now, and the printing presses cranking out reams of cheap money. But once the Fed ends this monetary crack, the artificial pump up for the economy ends as well, and the underlying weakness of the economy is revealed. That appears to be what is happening now, as QE2 ends.

If the Fed stands pat, the downturn will feed on itself, fueled further by all of the above contractionary policies. If the Fed is spooked into resorting to QE3 and the return to easy money, that will cause the inflation started by QE2 to surge. Indeed, once the Fed goes down that road, it surely will not try to cut back again until the 2012 election is past, to avoid a nasty downturn in the middle of President Obama's planned reelection victory tour. Inflation would consequently surge all through next year, cutting the real wages of working people and their families further.

Right after the election, the Fed will stop the merry go round to finally pull the plug on burgeoning inflation. But that extended monetary malpractice will only make the downturn withdrawal from the monetary crack high all the more nasty.

From the comprehensive tax rate increases, to the soaring energy costs, to the costly regulatory burdens, to the monetary policy mindlessness, all of this adds up to one whopping double-dip downturn in 2013. The extended unemployment exploding into double digits will be effectively another depression. Once it starts feeding on itself, there is no telling just how far it will go.

But with the deficit already at $1.6 trillion or so this year, America cannot handle another recession, let alone effectively another depression that will cause the deficit to soar well beyond any possibly manageable levels. World financial markets cannot bear that load, and will not even try. Indeed, it is the Fed's monetary policy working the printing presses overtime for QE2 that has financed the purchase of the debt for the current all-time record deficit.

Our Choice in 2012

Because of the willfully mindless irresponsibility and ideological self-indulgence of Obamanomics, America is mortally vulnerable to another recession at any time soon. The result would be precisely the national bankruptcy of Greece, where we cannot raise in the world credit markets the further debt to finance what will be well over half of our budgeted federal spending. We are already borrowing and adding to the debt to finance 43% of our federal spending today.

That is bad enough for a puny, insignificant nation like Greece, where riots increasingly leave the government dysfunctional, with the EU likely to take over the country effectively. But what is the effect when that happens to the world's supposed superpower? America financed World War II by running up our national debt to its all-time record as a percent of GDP (for now). But that won't be possible when we have already run ourselves into national bankruptcy.

Our potential military enemies will be quite aware of this historic vulnerability of America. Just as Reagan brought us Peace through Strength, Obamanomics will be inviting War through Weakness. With a 2013 American economic collapse that will also disable the entire West, the world's uncivilized rogues from Russia, to China, to North Korea, to the Middle East Islamists dreaming of renewed world conquest, will all be tempted probably beyond resistance and reason to strike. They don't need even to attack the homeland to deal America a decisive defeat. They can just decimate our suddenly overwhelmed allies, from Israel to South Korea to Taiwan to our allies in the Middle East, let alone some even in Europe.

The only way to get off this bullet train to oblivion is to radically reverse Obamanomics in dogged detail. The American people get one more chance to do that in 2012.