What do you mean we ran out of green ink?

Did you catch Ben Bernanke on 60 Minutes last night?  It looked like an edition of that show on television called ‘Scare Tactics’ where they prank and scare the crap out of people.  I swear Bernanke was scared to death and you could tell he was absolutely praying that the left-tard interviewing him, Scott Pelley, would not ask him a hard question or call him on any of the crap he was shoveling.  I mean really, watching the guy reminded me of the time my cousin Ronnie and me got into trouble when we “borrow” his Pop’s jeep and got it stuck down at Grandma’s place.  We weren’t older than 12 or 14 and were shaking in our boots, our lips were quivering, our voices were cracking and our underwear was soiled because we were scared to death.  That’s what Bernanke looked like last night!  He looked like a kid who got caught with his hand in the cookie jar!

So I decided to do a little research and see if what Bernanke said and was broadcast on national television is really true.  So here we go, the data is here for you to draw your own conclusions but my opinion is shown at the end of this post.  By the way, all the data I used came from the government’s Treasury or Economic Advisory Board (EAB) website.

  • Money Supply defined:
    • The money supply is the amount of financial instruments within a specific economy available for purchasing goods or services.  The money supply is usually measured as three categories:
      • M1 is currency (coins and bills) plus checking account deposits
        • M1a is only currency
        • M1b is travelers checks
        • M1c is demand deposits or checking account balances
        • M1d is interest-bearing checking accounts
    • M2 is M1 plus savings deposits
    • M3 is M2 plus larger, less liquid assets such as include time deposits greater than $100,000, institutional money funds, pension funds deposits), repurchase agreements, and Eurodollars held by US residents at foreign branches of US banks worldwide.

So, the measure we would want to check to see just how much currency is in circulation at any time would be M1 and more specifically, M1a.  The U.S. Treasury tracks this data monthly. 

Let’s take a look at the M1a growth rates for Ronald Reagan, George H. Bush, Bill Clinton, George W. Bush and Barack Obama.

  • M1a growth for the period Nov80 thru Oct88, Ronald Reagan’s effective term was $93.7 billion (81.55%) growth in the currency supply, or roughly $11.7b per year.
  • M1a growth for the period Nov88 thru Oct92, George H.W. Bush’s effective term was $76.6 billion (36.36%) growth in the currency supply, or roughly $19.1b per year.
  • M1a growth for the period Nov92 thru Oct00, Bill Clinton’s effective term was $236.9 billion (81.86%) growth in the currency supply, or $29.6b per year.
  • M1a growth for the period Nov00 thru Oct08, George W. Bush’s effective term was $268.4 billion (50.81%) growth in the currency supply, or $33.5b per year.
  • M1a growth for the period Nov08 thru Oct10, Barack Obama’s current term has been $101.3 billion (12.56%) growth in the currency supply, or $53.3 per year.

The really crazy Keynesian kind of stuff really began with Clinton and has continued on ever since.  But there is some rationale behind it . . . that is . . . up until 2009.  Read on.

The real gauge of the effectiveness of a Presidential Administration’s business management policies and skills can be measured by simply looking at the Gross Domestic Product during that President’s term.  Here is the data, 1980 to present (2010 GDP is a BEA projection).

  • During Ronald Reagan’s 8 year term as U.S. President GDP grew from $5,839b to $7,613.9b for a total growth of 30.4%. 
  • George H.W. Bush managed the U.S. economy for 4 years and we saw our GDP grow from $7,613.9b to $8,287.1b for a growth rate of 8.84%. 
  • Bill Clinton sat in the Oval Office for 8 years and during that time our GDP grew from $8,287.1b to $11,226b, or 35.46%. 
  • George W. Bush served 8 years as U.S. President and, in addition to managing the wars that followed 911, grew the economy from $11,226.6b to $13,228.8 or 17.84%. 
  • In the brief time that Barack Hussein Obama has been President (23 months), America’s GDP has experienced negative growth.  The 2009 actual GDP of $12,880.6b is a growth -.3% and the government’s own BEA has projected 2010 GDP at $13,189.73.  With Obama inheriting a 2008 GDP or $13,228.8 and his 2010 GDP performance projections, he has actually somehow managed to shrink the U.S. economy by 3/10 of a percent.

Let’s take a look at a chart of M1a growth and compare it to GDP growth.  In doing so we can size the cost of the growth we experienced during each President’s term. 

  GDP % Growth M1a % Growth M1a/GDP
Reagan 30.4 81.55 2.68
Bush 1 8.84 36.36 4.11
Clinton 35.46 81.86 2.31
Bush2 17.84 50.81 2.85
Obama -0.3 12.56 -41.87

Result and opinion: 

Obama is printing money faster than they can make the paper and he’s doing it at a distantly greater rate than the previous 4 Presidents.  Never mind the numbers because if Obama’s GDP were growing along with M1a growth, I’d have a different opinion.  However, without the growth in GDP there is absolutely NO SANE OR VALID JUSTIFICATION for such a large increase in the money supply.  The guy’s glutting the world with greenbacks.  Period.

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