http://www.personalliberty.com/john-myers/santa-claus/One Christmas past my eldest son Richard was furious with me.
Since he was old enough to remember, his mother and I had told him about Santa Claus. It seemed like a harmless enough fib.
He loved Santa Claus. Not only was Santa a magical character of mythical proportions, but his very existence—in the eyes of a 7-year-old—meant limitless potential. If he wanted something special, all he had to do was ask Santa Claus.
Of course Santa didn’t always bring everything he wanted; but there was always the prospect that he could, or the hope that next year he would. It was the ultimate fantasy of something for nothing.
Unfortunately Richard’s fairy tale came to an end.
“There really isn’t a Santa Claus, is there Dad?”
It is one thing to perpetuate a myth and another one to outright lie.
“No son,” I said, “Santa Claus isn’t real.”
Disappointment washed over his face. He had to get the truth from his cousin. Mom and Dad couldn’t be trusted. The whole thing, even the milk and cookies set beside the fireplace, were one big lie.
Yet for our 5- and 3-year-olds—Matthew and Sarah—the myth burned on for a few more years. They knew there was a Santa. Mom mailed letters to the North Pole every year, and there were visits to the mall to see Santa himself. Sometimes Santa even brought them exactly what they wanted.
It’s been 20 years since that Christmas and I am starting to wonder if there is a Santa Claus. It is our Federal Government, and this Santa gives the gift that lasts all year.
“If you take the government to be Santa Claus,” says economist Robert Higgs, “you naturally want every day to be Christmas; and the bigger the Santa, the bigger his sack of goodies.”
That sack is certainly getting bountiful. Today the Federal Government is not only the nation’s largest creditor, debtor, lender, employer, consumer and contractor; it is also Santa Claus to tens of millions of Americans.
According to the Brookings Institution and the Urban Institute, roughly 47 percent of Americans either pay no tax or a negative tax (Washington sends money to some people every year through such programs as the Earned Income Tax Credit).
The Federal Government has a long list and lately it hasn’t bothered checking it twice. Since October of 2008 the Federal Government has committed $700 billion and already spent $420 billion through the Emergency Economic Stabilization Act. The Feds have also set aside another $400 billion in separate bailouts to Fannie Mae and Freddie Mac.
For companies like General Motors (GM) and AIG, which have been gifted $50.4 billion and $69.8 billion respectively, there really is a Santa Claus.
If you want to check on all the goodies that Washington has given, there is a detailed list you can see here.
Best of all, Santa wants to see all of his gifts given. On Dec. 8, President Obama unveiled plans to use some of the $200 billion in lower-than-expected spending on troubled bank assets as a fiscal stimulus. Obama claimed his proposal is aimed at alleviating the “continued human tragedy” of unemployment.
Obama said he wants to create “the greatest number of jobs while generating the greatest value for our economy.” And just like Santa, Obama is leaving the price tag off.
What we do know is that the President is calling for an extension of unemployment and health insurance benefits for the more than 15 million out-of-work Americans. According to Obama, boosting jobs—through more government spending—is the best way to tackle the deficit. That kind of deductive reasoning is every bit as magical as Santa Claus.
The list seems endless. Forty billion dollars needed in Afghanistan? Done! One trillion dollars needed for Obamacare? The Democrats are working on that. Meanwhile there is even $1.1 billion for a new agency to protect consumers. And the Greens can count on a stocking-stuffer delivered fresh from Copenhagen.
Bad Santa
There is just one problem. Santa is broke. The budget deficit is a runaway sleigh. For the year ending in September it hit a stunning $1.4 trillion. If that weren’t bad enough, the Congressional Budget Office forecasts a cumulative $9 trillion deficit over the coming decade. When I started in this business in the early 1980s some were issuing dire warnings over Reagan pushing federal debt above the $1 trillion mark. This Christmas it is $12 trillion and climbing.
“No single year’s deficit is any particular danger,” says the Dec. 8 Motley Fool, “but their accumulation quickly becomes lethal. Piling up endless sums of debt works until it doesn’t, at which time a vengeful flock of chickens comes home to roost. Those needing proof can ask Dubai, or simply refer to the recent performance of the U.S. dollar.”
In fact there may be one heck of a Christmas hangover. Moody’s is looking at the debt of both the U.S. and U.K. and might downgrade it from “Triple-A” status.
According to The Wall Street Journal, “Moody’s released the report as part of an effort, spurred by investor demand, to examine the creditworthiness of the world’s most highly rated countries.”
That’s very bad news for Treasury investors. And in the end it may mean the end of Santa Claus. Foreigners hold $3.5 trillion in Treasury debt. If they start unloading even a fraction of this debt the U.S. dollar will crash and the price of gold will soar.
So let me leave you with this Christmas wish; that you buy you and your loved ones some gold. Unlike Santa Claus, it will always be there for you.
Yours for real wealth, good health and, Season’s Greetings,
John Myers
Myers’ Energy and Gold Report
Topic: Santa Claus (Read 1100 times)