Google CEO says recession is ending… what’s next?

In an interview on NBC’s Meet the Press Sunday, Google’s Eric Schmidt said the recession was in its death throes.  What he didn’t comment on is what’s on the horizon.

by Michael Naragon

“We’re in a classic recovery of a very long and hard recession,” said the Google chief in the interview, claiming that the economy would bottom out over the summer.  The CEOs of Caterpillar, Inc. and Xerox, who also appeared on the program, said their companies were in a wait-and-see mode.

It may very well be that the “recession” is coming to a close in the near future, but does that mean our difficulties are over?  Perhaps it would, had our government not mortgaged our future with a spending policy that has become the largest in our history.

With a $1.8 trillion deficit this year, and at least $10 trillion to be added to the national debt over the next ten years, our recovery from the recession, at this point, is a minor consideration.  The American versions of Pravda and Tass, namely NBC, CBS,The New York Times, and their ilk, will undoubtedly tout the recovery as a triumph of the Obama administration policies and the stimulus package.  If you are unaware of Schmidt’s political affiliations, take a look at the video below.

In fact, the recent restrictions on criticism of the stimulus put forth by the White House (see: White House Eisen Blog) will ensure a cooling of antagonistic statements about government spending.

The recovery, however, will only be short-term.  Gasoline prices continue to rise.  If the federal government passes the cap-and-trade legislation, some organizations predict it will raise family annual energy bills by as much as $3,000.  The president knows this as well, claiming in an interview with the San Francisco Chronicle that, under his plan, “electricity prices would necessarily skyrocket.”

Obama’s health care initiative, which would replace the world’s best health care system with a Marxist shell riddled with rationing and bureaucratic decisions on the life and death of Americans, will necessarily cost trillions of dollars to implement.  Taxpayers have already made a $650 billion “down payment” on this monstrosity.

From where will the money to pay for these programs come?  Loans from China, Saudi Arabia, or other nations antagonistic to U.S. interests?  Not likely.  Our credit rating has been badly damaged by the reckless spending of Bush and Obama.

How do you make trillions of dollars appear then?  One method is by printing it from scratch.  When a family overextends its budget, that family must cut spending to get its finances under control.  Our government has no such compunction, because they can mint their own money.  The Fed is currently working to at least partially monatize the debt, or print money to pay back our creditors.

What is the end result of printing money?  My freshmen U.S. History class could tell you without thinking: inflation.  The value of the dollar will drop considerably, dangerously.  Obama himself appears unconcerned with this phenomenon.  In his interview about the cap-and-trade plan, he shrugs off Republican concerns that he is out to wreck the economy.  How better to enslave the people to government, however, than if the economy is totally dependent upon that government?

The other way to create funds, of course, is to tax the people.  Already, several proposals are being tossed around in the liberal-dominated Congress.  A national sales tax has been proposed that would place a percentage tax on every product purchased in the U.S.  This would be a fine gesture if we were dumping all other taxes, as Rep. John Linder (R-GA) has proposed in his Fair Tax.

Unfortunately, the national sales tax, if implemented, would be in addition to our income tax, capital gains tax, corporate tax, and all other current taxes in the bloated IRS code.

The other possibility being discussed in Washington is the VAT, or value-added tax.  What this would do is install a tax on every facet of production in the U.S.  When Goodyear takes raw materials and produces a tire, that would be taxed because Goodyear has “added value” to the rubber to make it a tire.  When Ford places that tire on a new vehicle, Ford will be taxed for “adding value” to their vehicle by fitting it with tires.  Every piece of the production process will be taxed in this way, up to as much as 25% in some proposals.  Who will ultimately pay this tax?  The answer is obvious.

Also being discussed by Washington insiders is a literal “wealth tax,” that would allow the federal government to make a one-time raid on personal IRAs and 401k’s.  Money that had been promised to be tax-free would now be subject to a 10% to 25% penalty.  You can see, given that possibility, why the Obama administration has been so adamant about businesses and individuals bringing their money back to the U.S., rather than hiding it in accounts in Switzerland or the Cayman Islands.

So it may be true that our so-called recession is ending in the very near future.  I take little comfort in that fact, given the nature of the hurricane that is brewing off our coast.