WASHINGTON Jan 25, 2005 — President Bush is getting ready to ask Congress for an additional $80 billion for conflicts in Iraq and Afghanistan, as budget analysts prepare new estimates of the federal deficits that would have loomed even without the wars.
An $80 billion request would push the total provided to the Defense Department so far for those wars and for U.S. efforts against terrorism elsewhere in the world to more than $280 billion. An additional $25 billion has been provided to rebuild Iraq and Afghanistan, all but $4 billion for Iraq.
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Hmmmm . . . Yes, let's borrow more money. Our children can deal with the effects. Know what happens with large deficits? This:
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The US dollar is down, by approx. 30 percent against major currencies. Further weakening of the dollar is going to upset the international trade by making imports more expensive. A softer dollar will make prices rise internationally.
In a report yesterday the Federal Reserve warned of increasing interest rates ahead, despite the reassurance that inflation was very much under control.
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Inflation is not under control if the dollar falls constantly against the euro and other major currencies. With rising deficits and the devaluation of the dollar vs. the euro, inflation will rise. Our national debt automatically gets bigger as the dollar devalues, so guess what? It's a never-ending spiral. My grandmother told me stories about the Weimar Republic and the economic devastation Germany suffered. I still have some of the old 50,000 and 100,000 DM notes that were printed without backing, devalued almost to the point of used toilet paper.
As interest rates go up, the device the Fed is using to curb inflation, it will directly affect the housing market for the worse. Have I mentioned the housing market is resposible for keeping a good part of the economy afloat? This administration's ineptitude is boundless.
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