Rick Santelli's Chicago Tea Party

Coming inflation? Posted: 28 Apr 2009 07:06 AM PDT At the moment, we are mired in a deflationary recession, but there is growing concern over future inflation.  After expanding its balance sheet to an unprecedented $2.2 trillion, the Federal Reserve plans to rely on interest paid on bank reserves to stem a potential bout of high inflation.  The strategy is a gamble, however.  Just last year, interest on bank reserves failed to prevent the benchmark interest rate from falling below  the policy makers’ target.  Are rising prices on the horizon for the US taxpayer? Read more Here were some interesting quotes from a Bloomberg article: “You’ve got the raw material there for a rapid monetary expansion and credit expansion,” said former St. Louis Fed President, William Poole. Policy makers “have to be more aggressive than in the past about stopping inflation,” said Fed historian, Allan Meltzer. Some are worried that the Fed will face a difficult quandry.  When the economy eventually recovers, unemployment will likely remain high for an extended period of time, but the Fed will have to begin raising interest rates in order to stem the tide of rising prices.  However, if it raises interest rates too high, too fast, then economic recovery may suffer, according to some economists. Current New York Fed President, William Dudley, isn’t worried though.  He stated, “I am not worried at all that the Federal Reserve’s balance sheet will generate an inflation problem,” though he acknowledge worry by other Fed officials.  This is ironic, since the last New York Fed President didn’t predict this current economic meltdown, and now he’s the Secretary of Treasury. On April 14, even Bernanke admitted that containing a potential bout of inflation now occupies a significant portion of Fed meetings.  Clearly, the Fed is worried. Read the article here.

US Treasury to borrow $361 billion this quarter Posted: 28 Apr 2009 06:43 AM PDT Setting yet another record, the Treasury is set to borrow $361 billion during the second quarter.  To cover the government’s intensifying borrowing needs, Congress raised the national debt limit to $12.1 trillion as part of the “stimulus” package back in February.  National debt currently stands at $11.1 trillion and is rising fast.  So, while President Obama tells Americans that we need to become a nation of savings and investment once again, the government continues to borrow and spend its way into massive debt.  It’s the old “Do what I say, not what I do approach.” Read the article here.

Not just the federal government Posted: 27 Apr 2009 12:59 PM PDT Most state governments can’t balance their budgets either.  According to this UPI article, the States are facing at least $200 billion in budget deficits.  States have cut about $40 billion in spending and may cut $62 billion more.  Only Missouri, Arkansas, North Dakota, and Wyoming are likely to avoid budget shortfalls in the upcoming fiscal year.  At least 12 states have taken steps to raise income and sales taxes, and many states have hiked “fees” on a variety of products and services in an attempt to avoid severe deficits. What are your city councils,  reps & senators, and governors doing to balance the budget?  Are they cutting spending or just raising taxes & fees? Who’s up for re-election in 2010, and how have they voted on fiscal matters? Are any first-time, fiscal conservatives* running for office as political “outsiders”?  Perhaps some fresh faces are needed. Read the article here. *  Fiscal conservatives can be Republicans, Democrats, Independents, or Third Party

Obama wants more money for science and technology Posted: 27 Apr 2009 07:48 AM PDT President Obama wants to devote 3% of GDP to scientific innovation. Obama claims his administration would double the budgets of key agencies such as the National Science Foundation and the National Institute of Standards and Technology. Now, who can argue with science? We all agree that science, research, and technology are vital aspects of human civilization. However, several, key questions should be considered. Read more Doesn’t the free market know better which research and development products consumers want and need? Or does government know better? Couldn’t government intervention stifle private investment and competition? Why doesn’t government cut taxes or provide other incentives to private outlets as well? Aren’t science foundations in the private sector just as worthy? Will government sponsored science programs thwart critical analysis, objective critique, and thoughtful opposition in the name of “consensus”? Who will police government oversight of scientific innovation? What set of criteria will the government apply when assessing the success or failure of federally funded science programs? Will there be specific benchmarks and specific timelines? How can government afford to increase federal funding when it’s running a nearly $2 trillion budget deficit? Will it cut other programs to make up the massive shortfall? Is this even constitutional? Article I, Section 8 of the Constitution states that Congress has the authority to promote the progress of science and useful arts, only by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries. What are some of your thoughts and questions? Read the article here.

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