The Borrower is the Servant of the Lender

A single verse of Old Testament Scripture explains the current turmoil of the Western financial markets: The Rich rule over the poor, And the borrower is the servant to the lender. Proverbs 22:7

The biggest concern of the Congress and the Bush Administration during the current financial crisis is to save the investments of the Chinese, the Japanese, the Saudis and other foreigners. Undersecretary of the Treasury, David McCormich actually called foreign investors to assure them that bonds issued to them by Fannie Mae and Freddie Mac would be honored before the government took over those mortgage companies. When the government took over the two firms, the American stock holders including those with preferred shares lost all their money. Meanwhile the Japanese, Chinese and Saudis got every dime they had invested in those institutions guaranteed for repayment. That has been repeated in virtually every government takeover this year, including that of Washington Mutual.

Why? The trade imbalance is so great because of imports from China and oil from the Middle East, that the only way to attract dollars back to the USA is to borrow them. The reality is that the Iraq war debt along with most of the funds to bail out Wall Street is money borrowed from the dictators of China and the Islamic royalty of Saudi Arabia. Without money borrowed from them, the Treasury would have to print huge sums of money and cause such inflation that our economy would collapse.

This problem would not exist if the Democrats had allowed drilling for oil and expanded coal mining here at home. In North America, we have more energy reserves than do the Saudis. It is just that liberals and environmentalists have blocked obtaining that energy. As a result we are transferring the wealth of our nation overseas in exchange for energy. As an example, the largest deposits of uranium in the world are in Virginia, but it is against the law to mine it. No new nuclear plants have been authorized in the United States for decades.

The Democrat controlled Congress voted to allow offshore drilling for oil a short time ago as the anger of the American people rose with the cost of energy. Unfortunately the bill is just a farce based on lies. Radical Nancy Pelosi, who controls the House, presented a 243 page bill to congressmen just a few hours before scheduling a vote. It allowed drilling for oil from 50 to 100 miles offshore. No oil company will buy a lease or drill there, because 90% of the oil is within 50 miles of the shore. Also, the bill still forbids any drilling at all off the coasts of California and Florida where most of the oil actually is located. At the same time, the bill raised taxes on energy so that the heating bill of every American would go up this winter if it is passed into law.

It gets worse: American individuals and companies have $13.5 trillion invested overseas because of the high tax rates on business here in the U.S. Our government taxes corporations at the second highest rate in the world, so they simply build their factories overseas. If the tax rate were lowered and the $13.5 trillion were moved back to the U.S., the amount borrowed from the Saudis and the Chinese to finance everything from the Iraq war to home construction would decrease.

Senator Barack Obama has an answer to all of this. Unfortunately it is the same as the answer San Francisco radical Nancy Pelosi has -- raise taxes even higher on corporations and investors. Gov. Mike Huckabee had an interesting comment on the Pelosi-Obama tax increases. He pointed out that corporations don’t pay taxes, just collect them. If an oil company is taxed another 10 cents for every gallon of gas it sells, it simply charges the customer 10 cents more per gallon. There is really no such thing as a “corporate tax” because the corporations see the tax as a business cost and pass it on to the consumers. The Pelosi - Obama tax increases are really just inflation drivers that will make our paychecks worth less.

Our debt, created by liberals, now drives our foreign policy.

Author: William J Murray, Chairman of GING-PAC