Dateline July 20, 2009: Federal deficit is now highest in the history of the United States, and is expected to top $2 trillion before the end of the year. In view are higher interest rates, and a weaker dollar. Given the high unemployment and lack of “shovel ready” private industry jobs, no matter how much money the Fed tries to pump into the economy, the demand for commodities due to real income will not exist.

        A second wave of real estate foreclosures is about to begin when existing mortgages are reset. For every job that is lost, there is either a rental or mortgage that is likely to go into default. Democrats talk about creating jobs, but almost every bill they pass results in more layoffs and higher unemployment.

        The Obama administration has complained that the banks are not passing out bailout money fast enough, but if no one comes through the door looking for money to expand production, the banks can’t be blamed.

        Higher interest rates will result from the lack of faith in the U.S. Dollar and decreased demand for Treasuries. China has already begun to rid its investments in U.S. Treasuries.

        This is the worst depression since the FDR depression of the 1930’s. Geithner keeps telling Americans that the deficit will be reduced when the economy recovers and tax revenues increase.

        The industrial base of the economy is in shambles. Taxes are going to increase in 2010 when the Bush tax cuts expire. Additional taxes will be necessary to fund the interest on the mountain of debt created by the Obama administration bailouts, stimulus and another one to come. The more jobs disappear the fewer taxpayer contribute to the overall revenue. It is not hard to understand that taxes on existing earners will have to increase.

        The U.S. debt now stands at $11.5 trillion. Interest alone on this debt is going to be a multiple of last year’s $452 billion. Current tax revenue is 17% below last year’s figures. Unemployment is still rising and will continue to rise to over 10% before the end of the year.

        The real unemployment rate is closer to 20% if workers who lost their fulltime jobs and are now working at low paying part-time jobs are included in the calculation. Then there are those who have exhausted their unemployment benefits, and are not being counted among the unemployed. There are roughly 300 million people in the United States. Approximately ½ of them pay taxes. The tax burden falls most heavily on high income wage earners who make jobs for the other 80% of the population. Higher tax burden will result in fewer jobs. There is no disputing this historical fact.

        Already the debt is 80% of the Gross Domestic Product; [GDP] is the total of all goods and services. The debt is not being serviced by wage earners; it is being financed by more borrowing. The Federal Reserve has lowered short-term rates charged to member banks to Zero. The rate can go no lower, and still there is no real evidence of a recovery, other than the kum-bah-yah chorus of Democrats singing on Capital Hill, accompanied by network news anchors and editorial staffs of the failing national newspapers.