According to a new report released by the Congressional Budget Office (CBO), the deficits to be generated over the next 10 years by the Obama administration's proposed budget will be much higher than the administration's estimates — unsustainably high, in fact. The CBO foresees an additional $9.3 trillion in red ink per year from 2010 to 2019, which by decade's end would exceed five percent of the gross domestic product (GDP). According to House Minority Leader John Boehner (R-Ohio), "We simply cannot continue to mortgage our children and grandchildren's future to pay for bigger and more costly government."
On February 4, Rep. Rosa DeLauro (D-Conn.) introduced the Food Safety Modernization Act of 2009 (H.R. 875) in the House. Its stated objective sounds rather benign — even beneficial: "To establish the Food Safety Administration within the Department of Health and Human Services to protect the public health by preventing food-borne illness, ensuring the safety of food, improving research on contaminants leading to food-borne illness, and improving security of food from intentional contamination, and for other purposes."
A United Nations panel is about to recommend that the world abandon the dollar as the world’s reserve currency, according to a Reuters report. Next week, the UN will propose that the dollar be replaced with a “shared basket of currencies” similar to the old Ecu (European Currency Unit) of the former European Community (the predecessor to the European Union), which was replaced at parity by the euro in 1999. According to Avinash Persaud, a member of the UN panel, now “is a good moment to move to a shared reserve currency."
If there were any lingering doubts as to where the Federal Reserve’s expansive monetary policies are leading, they were dispelled by yesterday’s shocking announcement that the Fed intends to purchase more than $1 trillion in additional debt, which it will pay for by printing new money.
Economists have long used 1920s Germany as the classic example of what can happen to a nation when monetary inflation gets out of control. So rapid was the inflation of the money supply that the exchange rate went from 60 marks per U.S. dollar during the first half of 1921 to 8,000 marks per dollar by December 1922.