Americans Will Be Living Under a Dictatorship in a Few Years

Soon after the Third Stimulus America will be Living under a Dictatorship

July 2, 2010

Don Koenig - I have been saying all along that there will not be any real economic recovery any time soon. Now it looks like the markets have finally figured that out as well. By this fall unemployment will be rising again. When one third of the homes being sold in America are in foreclosure how in the world can people expect a real economic recovery? Here are just some of the things still coming down the pipeline this year and next. I think within a few years this will bring us under a dictatorship.

Even a higher rate of home foreclosures – It looks like there will be a trillion dollar bail-out of Fannie and Freddy by American taxpayers. These two federalized corporations virtually own all the mortgages in America, and taxpayers have to pay their losses (yes taxpayers are paying all the costs of all the loan defaults and the loan restructuring programs, not the banks).

Bail-out of state and local governments – Federal taxpayers are going to be picking up the tab for the huge bureaucracies in the liberal states and cities that went broke because of all their socialist programs. Maybe you don’t like the socialism in California or New York? Tough! You will pay the costs of their huge government programs anyway.

Commercial real estate is collapsing - That will cause many, if not most, local banks to fail.

The FDIC will have to be bailed-out – The price will be hundreds of billions. The banks probably will be taken over by the too-big-to-fail banks; and we already know who pays the losses of those that the government declares too big to fail.

Unemployment and welfare benefits will be extended and extended – Taxpayers will keep picking up the many billions in costs for the unemployed and underemployed. That is not going away before a world war. The alternative is riots.

The largest tax rise in the history of this country is due to go into effect in six months – What will that do to business if it actually takes place?

I believe there will be a third stimulus. There is no real recovery, and there is an election coming up in November

If you remember, Bush had a stimulus, then Obama had a much larger stimulus (besides massive government bailouts). That is why our budget is $1.5 trillion in the hole this year alone. But, my point is that I think there will be a third stimulus this fall. Politicians are not going to go into an election without offering people some hope for an economy recovery. So I expect that at least a $500 billion third stimulus will be passed before the election.

Of course none of this is on budget, so add up the additional costs that are not in the budget and then subtract the money they will not collect in revenue because there was no recovery like they projected in their budget. I would say the real government deficit next year is going to be about double what they projected; it will be about $3 trillion. That will bring the nation to a $16 trillion national debt by next fall and probably $20-25 trillion by 2015.

There really are only two options from here on out. They cut spending and don’t further stimulate the economy and the nation goes into a deflationary depression. Or they stimulate the economy and try to kick the can down the road again. I think we know what choice they will make, except this time that can is going to be kicked into a inflationary black hole.

From whom will the U.S. borrow this new $3 trillion shortfall plus the interest coming due on our national debt? When the world sees our situation, nobody is going to lend to us; besides they have grave economic problems of their own. So money will just have to be printed. That means the value of the dollar will drop like a rock and nations will start dumping dollars just to get rid of them before they devalue any further. That will just aggravate the dollar fall. (There are external factors here that could come into play, so I cannot be sure it will play out that way. Much of the rest of the world could be heading into a real deflationary depression. In that case, so we also could be dragged into a world trade war and see a deflationary depression along with debt defaults.)

There will soon be wars in the Middle East and elsewhere that could radically change things in America and the world very quickly. When at war, everything suddenly becomes a matter of national security and everyone obeys government. Government becomes a virtual dictatorship during a crisis, and you can be sure that crises are coming. Soon after the third stimulus, the dollar either will collapse or there will have to be a world war. In either case, America will be living under a dictatorship by 2015 regardless of which political party wins in 2012.

While we celebrate our independence and our national freedoms this week, let us also realize that freedom is not free, nor is it guaranteed to any nation whose God is not the Lord.