Updated since the original publication 4-18-2011 on 11-11-2015.
Roosevelt reinvented fiscal lying with the New Deal. There were other “fiscal liars” who preceded him. And I am not judging him here. Perhaps he had to do what he did. He certainly believed in what he did. But it was a lie. We could not afford what he came up with, but we’ve continued forward with the same original sin/lie since day one of the New Deal.
You’ll note that whenever we need to be “saved” as in the Great Depression and now, the only way out is by deceit. Even Reagan created a massive amount of debt with Democratic help, so he was just one more “fiscal liar” in regard to lowering our Federal debt and gold went down in dollar terms due to interest rate policy, not due to Reagan’s horribly unbalanced budgets that led to a multi-trillion dollar debt (about 3 trillion dollars) by the time he left office shown HERE. Bush II and Obama have sent our debt through the roof. On 11-09-2015 our debt is officially: 18,614,769,216,712.84. That’s 18.6 trillion dollars per Treasury Dept. figures.
Reagan ran based on fiscal responsibility, but was far from it (see comments posted below). Some say he “wanted to balance the budget,” yet he passed the bloated budgets of the Democrats. He also did not solve the Social Security or Medicare issues. Can you guess that I’m an independent? ; )
During Reagan’s first term, it was the Fed that did the work, not the executive and legislative branches. Fed Chairman Volcker hiked rates to squash inflation until mortgage interest rates hit 18% and one CD I bought back then paid 15%! It is of interest that 3 different Fed members have been talking about either raising interest rates or lowering QE2 by 100 billion or more over the last few days. Even a hike to a 2.5% Fed rate could cause gold to drop from 1420 to 1300 in a heartbeat and it could correct much more and stocks would fall initially as well.
Americans love to lie to themselves, so they elect other Americans that lie to them from both parties. So let’s be honest about Reagan. Reagan was as much of a fiscal liar as Carter and Johnson were – the numbers never added up and they all knew it. The trickle down theory Reagan sold was a lie, because our prosperity was paid for with trillions of borrowed money.
Nixon was about the worst fiscal liar by ending the US dollar gold standard and instituting wage and price controls – the latter is the ultimate in fiscal lying – “it should cost more, but we’ll pretend it doesn’t.” It failed!
Don’t you think it’s time for the truth? But it will only happen when the voters stop lying to themselves. We vote our own consciousness into office. That is the nature of politics. The irony for self-deceiving Republicans out there is that Clinton balanced the budget more than any recent President had for the first time in years (despite the Social Security fudge mentioned by a reader in the comments; this has been a tradition among both parties). Clinton had some help from the robust economy partially driven by an internet stock market bubble, but we can admit the budget was balanced. He lied to his wife, but not in fiscal policy. Sure, we can argue about how he did it, by raising taxes, but minus the usual fudging mentioned we cannot say he did not do it, at least much more so than Reagan or the Bushes. That would be lying!
Note: This article was originally written in response to a post on gold, the link for which is not currently working (as of 11-11-2015). This chart at Minefund.com reveals the time of the “invention of fiscal lying”: Purchasing Power of Gold and the US dollar since 1792
I’ll look forward to seeing Tim’s new numbers on the 2003-2011 data that I’ve requested, so we can see what kind of true value in purchasing power terms gold is today. My rough calculation from the chart says gold is not a great value compared to cash flow producing companies and other sources of income that carry pricing power as my comment on Tim’s site discussed (see above link; it’s the reason Warren Buffett prefers buying whole companies that generate cash and have pricing power vs. buying gold).
See the latest Market Timing Analysis: HERE
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