A Perfect Description

Transcribed from the Judge's program. He perfectly describes what happened with the debt debacle.


Judge Andrew Napolitano
Fox News Freedom Watch
Monday, August 1, 2011

Congressional leaders reached a deal that pleases almost no one, and displeases just about everyone. Basically, the "weak knee" compromisers who run the Congress did come to a meeting of the minds with the socialist impulses of the White House and agree there are probably enough votes in the Congress to permit the Treasury Department to add 2.4 Trillion dollars to the national debt, driving it from 14.3 Trillion to 16.7 Trillion. Put into perspective, that means President Obama will have added nearly 7 Trillion dollars to the government debt during just one term in office. And during that term, unemployment has gone from 7 percent to 9.2 percent. And, milk, cotton and gasoline have gone up over 40 percent. Government borrowing is the principle reason we have such high unemployment and such growing inflation in basic goods that we use all day. We can't pay back 14.3 Trillion. How can we pay back 16.7 Trillion? I guess they haven't thought about that; some people never learn.

When government borrows, it does so from two sources - from the Federal Reserve and investors. When the FED loans money to the Treasury, it prints the money that it is loaning, thus increasing the money supply, and thus increasing the cost of nearly everything. That's not good! When private investors loan money to the Treasury, they have just that much less money to invest in private productive ventures. That's not good, either! Remember, private investments produces wealth while public expenditures consume wealth.

Last night, the leaders of both parties from both houses agreed with President Obama that the Treasury should just keep doing what it does best, borrow and spend. This is crazy! Einstein has reputed to have reminded us that the definition of insanity is doing the same thing over and over, and expecting a different result. Are members of Congress, who vote to borrow at the rate of 1.6 Trillion dollars a year, year after year, and expect a different result at higher unemployment, and higher inflation insane? You decide the answer to that question.

Many members of Congress are telling you today that this is the best deal they could have gotten. Speaker Boehner even told a conference call last night that he got 98 percent of what he wanted. Well, he may be right. Apparently he did want to dig the hole of debt deeper, because that is what this bill does. Apparently he did want to increase spending every year for the next 10 years, because that is what this bill permits. Apparently he wanted to shift the burden of paying for all of this to a generation of tax payers that's yet unborn just like LBJ and his cronies shifted the burden of paying for all their borrowing to us because that is what this bill accomplishes. Yet, the Republicans claim success, and the Democrats complain of failure that this bill cuts either a Trillion, or 2.4 Trillion from spending over the next 10 years. They are misleading you.

Fact! In every year, government spends more money that it did in the previous year.

Fact! The FEDS expect to spend more in 2011 than they did in 2010, and more in 2012 than they would have spent in 2011.

Fact! What they mean by cut is that the rate of increase in spending will be cut, not the amount of spending. The amount of spending will continue to increase every year because of this borrowing.

So, did those who promised to shrink the government when they had the golden opportunity actually do so? No!

Did those who promised to stop borrowing when they had a great moment in history at which to do so actually stop it? No!

Did they get a balanced budget amendment, or an iron clad reduction in actual spending? No!

Did the President get his 2.4 Trillion in borrowed money? Yes!

Should we re-elect these people to Congress? Of course not.

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