RUSH: Here’s what’s happened in Europe. The European Union has put Athens, Greece, on an unprecedented short leash demanding deep fiscal adjustments and regular reports on the progress in slashing Greece’s deficit to below 3% in 2012. Now, imagine if the ChiComs did that to us? Imagine if the ChiComs demanded that we go on an austerity program like the EU is demanding of Greece. That could be what’s spooking the US market, even the world. We drive the world’s economy, but we have lost control of our economic destiny, folks. Our economic destiny is no longer ours, individually — and there’s Obama, predictable, speaking again about how he saved the nation from depression. Today’s news suggests we’re climbing out of the hole we found ourselves in, he said. No, I wish it were true, folks. I wish it was true. But it isn’t.
Greece’s deficit, by the way, is 12.7% of GDP. That’s what the European Union has found to be unacceptable. Greece has now pledged to reduce its deficit by four percentage points to 8.7% of gross domestic product in ’10 and thereafter to 5.6% and then 2.8% and 2% down in 2013. Last year 12.7% was their fiscal deficit. Obama’s budget proposal, $1.6 trillion in the red in 2010, a deficit equal to 10.6% of GDP, and they’re demanding that Greece get down to 8% of GDP. If the ChiComs decided to do this to us? This is all predictable, this is all predictable. Proposed new small business tax credit, we’ve pulled the country out of depression, saved it from depression, climbing out of the hole we find ourselves in; climbing out of the hole that we inherited. This is leadership from the young man-child somehow elected president of the United States.
RUSH: Now, we spent a lot of time on Europe yesterday and explaining why what’s happening over there could be having an effect on our stock market, and of course the problem that’s happening now is that — I mentioned this yesterday — that the euro may actually collapse. These are states, equivalent to our states. Greece is like a state in the European Union and they can’t print their own money. New Jersey can’t print its own money. The four countries that are really providing problems are Portugal, Italy, Greece, and Spain. They have huge deficits and no monetary policy, no national monetary policy that they can monkey with and manipulate. A lot of people are fearful that they can’t resolve the problems within the confines of the euro because they don’t know that the EU can bail ’em out. The EU is not working. It’s a grandiose idea trying to mimic us but of course we are the product of ideas, and they’re not.
Now, Mike Munger thinks it’s possible we’re looking at the end of the euro as we know it, as one or more of these countries may have to — normally, folks, I wouldn’t bother you with all this, but it has an effect, it’s having an effect on the stock market here. And a lot of these countries are socialist countries — and hang on for the piece de resistance — now, Munger says that ‘It is not impossible that we are looking at the end of the euro as we know it, as one or more of these countries may have to drop out and inflate a new national currency to get out from under their fiscal situation,’ and he says this is 37% probability. He’s run the numbers. And the situation is getting worse rather than better because as the EU has demanded that Greece lower its deficit as a percentage of GDP, the announced austerity programs are causing rioting, ‘striking and Portuguese legislators appear to be thinking about increasing spending and raising rather than lowering their deficit. The Spanish stock market fell 6% yesterday, Portugal’s 5% and Greece’s 3.5 %.’
And from the Los Angeles Times: ‘Protests in Greece Over New Austerity Measures — Reporting from Athens — Tax and customs inspectors took to the streets of Greece on Thursday at the head of an expected wave of new labor unrest as the country tries to claw its way out of a debt crisis that threatens to engulf much of Europe. The walkout was the first of several planned protests over the government’s new austerity plan intended to restore confidence in its finances.’ But you have all these dependent people, and they hear an austerity program, and, ‘Oh, I’m not going to get my government goodies!’ ‘More labor unrest is expected as the government drafts a plan to trim the budget and raise levies –‘ taxes, that’s a new word, by the way, to replace tax. ‘– raise levies to cut the deficit, which has passed 12%.’ So, same thing could happen here. I want you to put yourself in the future and imagine the ChiComs demanding that we do the same thing the EU is demanding of Greece. Your debt as a percentage GDP, ’cause we own it, ChiComs say, is way too high. We need you to get that debt down to 8% instead of the 10.6% that it is.
Well, the only way to do that would be to really cut spending and lower taxes to create jobs and economic output. Is Obama going to do any of that? If he did, can you imagine the howls of protest from at least the 36% of the people in this country that Gallup found like socialism? Riots? Strikes? Same thing could happen here. The situation is not that much different. We can inflate our currency all we want, we can continue to print it, but in the end it only makes it much worse. And right now what Obama and the Democrats are looking at, if you take a look at their budget and everything else, they’re looking at getting outta town before we have to make the deal with the devil. They’re looking at getting out of town before the excrement hits the fan. That’s their plan. Wreck the country and then flee.
RUSH: Back to the phones, Boca Raton, this is Jim. By the way, I just got a fax, or an e-mail. Jim, I’m told there are three conservatives in Boca Raton.
CALLER: (laughing) Well, I happen to be one of them, Rush. Not all the folks down here are socialists or liberals. And I want to bring up a point that has not been discussed on the air and get some advice from you on it. As a matter of fact, you’re the only person that mentioned it. I am going to say two words, Rush Limbaugh: China card. In other words, what I’m talking about is, because the United States is dependent on what will be the second largest economic power by the end of the year — taking that spot from Japan — they have started to flex their muscles as far as the control over the United States and how we do business, vis-a-vis the severe consequences of Obama meeting with the Dalai Lama, the arms sales to Taiwan, and the refusal to devaluate their currency — also to threaten severe consequences, as well as to flex their muscles at all these areas. They are going to pull the plug on loans, and then where will we be?
RUSH: Well, not as bad as if they called ’em.
RUSH: I want to ask you something. I’ve got a story from the Washington Times, I didn’t get into it in a lot of detail, just pulled one quote from it, but here it is. It’s by David Dickson. ‘China has acknowledged that its export-driven economy took a beating in 2008 and 2009, but Western analysts, most of whom are suspicious of Beijing’s willingness to concede downturns, think China may have already slipped into a recession.’ And that they’re hiding it with phony, trumped-up numbers that show rabid economic growth. And more and more people are beginning to think that the ChiComs are manipulating their economic statistics just like the Obama administration is. Now, how do you explain? When you say that the ChiComs are going to play the card, how is that going to manifest itself?
CALLER: Well, you can see the move toward socialism right now as far as the government is concerned, and I really am feeling more and more like they are going to have more of an influence economically, as far as these loans are concerned. They’re supporting a lot of financing of this thing we’re going through right now, and if they pull the plug on that… If they seem to be our major source of funds in order to even float this thing during this crazy time.
RUSH: Well, it could be. I know that they have — at least there have been reports that the ChiComs have told Obama they’re very, very worried about all of this debt and all of this borrowing, and Obama is going to turn that around and say we gotta raise taxes, and I think that’s… His trip over to China was a dud. By all measures and all reports, it was a dud. Yeah, and this ChiCom thing it’s got everybody on edge, a little unease out there, because if they called the debt, or if they did what the EU was doing to Greece and demanded that we get our debt down below to 10% of GDP, whew! (interruption) Well, they’re kind of interlinked with us. I mean it might hurt their economy because they’re export driven. We consumers here have to have money to buy their stuff. And not only us, but around the world, too. Anyway, Jim, thanks much for the call. I appreciate it.