Downsize DC President Jim Babka will be doing radio interviews tonight and tomorrow. For more information, see the P.S. section.

Quote of the Day:
"There are 10^11 stars in the galaxy. That used to be a huge number. But it's only a hundred billion. It's less than the national deficit! We used to call them astronomical numbers. Now we should call them economical numbers."
~Richard Feynman, physicist, Nobel laureate (1918-1988)

. . . or better yet, government numbers!

Subject: Will the government repudiate its debt?

The government caused the housing bubble. Even the editorial page of the Washington Post agrees. 

But when the bubble burst, something strange happened. People fled for safety to . . .

The arms of the government.

Investors took out hundreds of billions of dollars from the stock market and re-invested it in government securities. This flight to Treasuries was so pronounced that the yield became negative, when adjusted for inflation!

People are actually paying the government to borrow their money, because of a government-caused problem!

Of all the absurdities of the current mess this is perhaps the most symbolic.

We've said it before, we'll say it again: This is how government works. It causes disasters and then benefits from those disasters. Governments thrive on failure, and invest in it heavily. Government is the Failure Sector of our economy.

Here's how bad it is . . .

CNBC reported yesterday that if an investor bought the entire Dow Jones index at current prices the dividends alone would return more than 5%. And yet, people continue to leave the stock market and invest in government securities that return less than the rate of inflation.

The TV talking heads call this a flight to safety. We call it a flight to failure.

This mass insanity is based on a fundamental error, the idea that governments don't go bankrupt. Supposedly, because the government has the power to confiscate as much money as it wants, it will never default on its debts. Therefore, people assume that government debt instruments are the safest investment of all.

Nothing could be further from the truth, because there's a limit to how much governments can tax and borrow.

Governments throughout history have defaulted on their obligations. They have often either refused to pay or have paid with devalued money by inflating the currency.

If the federal debt becomes too large to service then our government will do the same thing. It will default on its debts. It will either inflate the money supply, or refuse to keep all of its promises. For example, there is an increased likelihood that the government will default on its Medicare and Social Security promises. The politicians can start by increasing the retirement age and/or trimming the benefit.

This is becoming more and more likely with every passing day. The federal government already has future unfunded liabilities totalling somewhere between 40 and 60 trillion dollars. And our politicians just added another trillion dollars of debt in the space of just a few days. But they aren't done yet . . .

Now they want to pass another so-called stimulus package, at the cost of adding another $300 billion to the national debt.

Is this what you want? If not, then please speak-up and tell Congress to oppose this boondoggle. So far, 543 DC Downsizers have sent messages to Congress opposing "Stimulus Package II." But this still leaves 23,648 subscribers to this newsletter who have remained silent. 

If you remain silent then Congress will assume they have public support -- YOUR support -- to continue piling up more and more debt. Please withdraw your consent. Send Congress a message telling them you oppose "Stimulus Package II." You can send your message using our free Educate the Powerful System.

If you've already sent a message on the stimulus package, keep up the pressure. Send another message using our "Unfunded Liabilities" campaign. Tell Congress they're piling up debt too fast. Tell them they need to find places to cut spending. You can send that message with our easy-to-use Educate the Powerful System.

Second, forward this message to others. Proclaim your lack of consent far and wide.

Third, sign up for a Digg account and Digg this message on our DownsizeDC.org blog, so more people will see it.

Finally, make a contribution to help us grow. You can contribute on our secure web form.

Thank you for being a part of the growing Downsize DC Army, which has added more than 400 new members over the last month.

Jim Babka
President
DownsizeDC.org, Inc.

P.S. Jim Babka is scheduled to be interviewed (live appearances are always subject to last minute change) . . .

Tonight (Thursday) 7:00 PM Eastern (4:00 PM Pacific), on Livin Free with JP, and you can listen online. Details on our blog.

Tomorrow (Friday) 3:00 PM Eastern (Noon, Pacific), on Straight Talk with Jerry Hughes, and you can listen online. Details on our blog.