By Charles Biderman
As some of you keep reminding me, I am an old man. Yes I am as old as I am and I believe I have lived an interesting life. Three times, starting from zero, I have created a multimillion dollar net worth. To make three fortunes starting from nothing, means that I lost two fortunes. In other words, I know a great deal about success and failure.
What I have learned is that success usually comes from hard work and constantly adapting to reality. That means being totally engaged in what you are creating and being fully present in all parts of the process, particularly when you do not want to be. I have also learned that I have to be willing to fail, and most important learn from my failures.
Although hard work can create success, what follows, as night follows day, is arrogance. Most people get arrogant after being wildly successful. We all want to enjoy our success, In other words, enjoy the fruit of our labor. That is OK, if you get back to work soon after. However, real arrogance all too often leads to forgetting about the hard work that got you there and coasting on your laurels. It is like saying: “I am so great, look at what I did. Obviously I can do that again any time, but for now I just want to enjoy my life.”
That is how arrogance can create failure.
The Obama administration is the epitome of arrogance gone wrong. Yes, over the past two hundred years the US economy has been the most successful ever in the history of the world. Therefore, since the Obama Administration believes that our past results guarantee a great future. So he and his supporters are out there shilling that worrying about deficits is dumb. Just give the Obama administration all the spending authority it wants and not only will the poor and downtrodden rise up, but the overall economy will soar as it always has. And all will be good.
But that is the arrogance speaking. There is an underlying assertion that the Obama government, or any government, can effectively provide services, much better and fairer than the free market. But there’s little proof to back this up.
Let’s look at the result of recent wars. The US government under the Bush and Obama administrations, have done a horrible job since 9/11, killing hundreds of thousands, spending trillions and accomplishing nothing! The Post Office? The War on Drugs? The War on Poverty? Trillions spent and nothing gets done other than giving government workers paychecks.
This year the US government will collect $1.9 trillion in income taxes and spend $2.6 trillion on whatever, resulting in a $700 billion deficit. In addition, while only $600 billion in employment taxes will be collected in 2013, $1 trillion or so will be spent on Medicare, Social Security and government pensions. That’s another $400 billion gap.
And where will the government get the $1.1 trillion to fund that combined deficit? By printing as much paper money as necessary. After all government bonds keep going up in price and down in yield. So why not? What’s the problem with printing money forever?
The true arrogance of the Obama Administration is that it believes that the world will always treat the dollar as being as good as gold. Yes, since World War II the world has relied on the US dollar as the reserve currency. If our government stays as arrogant as it is, at some point soon the Black Swan will fly and the rest of the world will get smart and dump the dollar.
In recent videos I predicted that Barack Obama will go down in history as the worst fiscal US president ever. The railroad tracks that the US government has laid is leading us straight to bankruptcy before the end of Obama’s four years, unless of course we get off the train and point the tracks in a new direction.
Tags: capital gains Census Bureau economic recovery Economics Economy employment entitlements Gold government services Government Spending Iraq War Magnificent Seven mutual funds NYX pollyanna Santelli TrimTabs