We The People of Longview, TX

The federal government has bailed out many industries, including banking, mortgage lenders, insurers, money market funds, automakers, credit card issuers, home builders, the states and so on.  This invites ongoing gambling at public expense by any business or entity that can reasonably expect a bailout.  Moreover, this is a prescription for fiscal insolvency, which could culminate in hyperinflation, says Laurence J. Kotlikoff, an economics professor at Boston University and a senior fellow with the National Center for Policy Analysis.

AIG was effectively nationalized on September 16, 2008, at a cost of $85 billion to taxpayers.  Since AIG’s nationalization, the government has engaged in a massive and potentially more expensive policy.  The policy entails providing systemic risk insurance to the financial sector — that is, insurance against system-wide collapse.  Indeed, the federal government has already handed out, or publicly committed to hand out, more than $12 trillion to the financial sector, says Kotlikoff.

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It is economic evening in America as our nation’s spending, government programs and deficits balloon.  The federal deficit this fiscal year will be $1.6 trillion, or about 10.6 percent of gross domestic product (GDP).  That is the largest deficit since World War II, and even President Obama’s optimistic estimates show our deficits will not return to sustainable levels for at least the next decade, says Pete du Pont, Chairman of the National Center for Policy Analysis and a former Governor of Delaware.

Continue reading article from NCPA.