Full transcript | Michele Bachmann | Announcement of 2012 presidential run | Waterloo, Iowa | 27 June 2011

"I want my candidacy for the presidency to stand for the moment when 'we the people' reclaimed our i

It's great to be in Iowa and even better to be in Waterloo where I was born. It's fitting to be here at the Snowden House, the place that once served as the home of the Waterloo Women's Club. I stand here today in front of many friends and family to formally announce my candidacy for President of the United States. I do so because I am grateful for the blessings God and this country have given to me, and not because of the position of the office, but because I am determined that every American deserves these blessings and that together we can once again strengthen America and restore the promise of the future. I want to bring a voice, your voice, to the White House, just as I have brought your voice to the halls of congress to secure the promise of the future for our generation and generations to come.

I often say that everything I needed to know I learned in Iowa. It was at Hawthorne and Valley Park Elementary Schools and my home, both a short distance from here, where those Iowan roots were firmly planted. It's those roots and my faith in God that guide me today. I'm a descendent of generations Iowans. I know what it means to be from Iowa -- what we value and what's important. Those are the values that helped make Iowa the breadbasket of the world and those are the values, the best of all of us that we must recapture to secure the promise of the future.

Waterloo was different five decades ago when I grew up here. That elementary school building was a lot younger and for that matter so was I. Five decades ago when I went there to school the halls were teeming with young children who, like me, had dreams of their future. A future with promise and parents who wanted it to be filled with more opportunities than they had. Five decades ago America had less debt, in fact our national debt was less than 300 billion dollars. A gallon of gasoline was 31 cents, and owning a home was part of living the American dream. Today our debt is over 14 trillion dollars, a gallon of gas is still outrageously high, millions of homes are in foreclosure, and those dreams are distant for many Americans.

Times have changed here in Waterloo, but the people still have the same spirit we Iowans have come to exemplify. We work hard, we live within our means and we expect to pass on a better life to our children. But our government keeps getting bigger making it tougher for us to pass on that life, causing our jobs to go overseas and spending more of the money we make, while we keep less of it.

Don't mistake my happy memories of growing up in Waterloo as pining for the past. I recognize it's impossible to turn the clock back and go back to a different day. Instead, I want this moment to serve as a reminder about the best of who we are as a nation, what our values are, and what went in to making America great to capture its best for the promise of the future. I want my candidacy for the presidency to stand for the moment when "we the people" reclaimed our independence from a government that has gotten too big, spends too much and has taken away too much of our liberty.

Americans have always confronted challenges. Ours is a history marked by struggles as well as prosperity. My early days were difficult as they were for many Americans, especially during the time when my mother struggled to raise us after divorce. But we made our own way. We depended on our neighbors and ourselves and not our government for help. We trusted in God and our neighbors and not in Government. Americans still have that same spirit. But government keeps trying to erase it because government thinks it knows better -- that government can create jobs, and make a better life for all of us, even make us healthier! But that's NOT the case. We have to recapture our founders' vision of a constitutionally conservative government if we are to secure the promise of the future.

I'm also here because Waterloo laid the foundation for my own roots in politics. I never thought that I would end up in public life. I grew up here in Iowa. My grandparents are buried here. I remember how sad I was leaving Iowa to go to Minnesota in the sixth grade, because this part of Iowa was all I knew -- I remember telling my parents that we couldn't move to Minnesota because I hadn't even been to Des Moines to see the state capitol.

I grew up a democrat. My first involvement in politics was working for Jimmy Carter's election in 1976. But when I saw the direction President Carter took our country; how his big spending liberal majority grew government, weakened our standing in the world, and how they decreased our liberties, I became a Republican. I remember standing in the kitchen of my grandma's house on Lafayette Street in Waterloo listening to my dad, a Democrat debating the merits of the Great Society with my grandmother, a Republican. I remember her prophetic admonition to my father that the Great Society wouldn't work because it wouldn't be my father's generation who paid for it, but rather my brother, David and me. And now that prediction has come true and neither my democrat father nor my republican grandmother would have condoned this spending and debt.

I hadn't planned on getting into politics. I loved the law and went to law school. I went on to William and Mary to become a tax lawyer. Together with my husband we started a successful small business.

When I saw the problems with our local school district and how academic excellence was being eroded by federal government interference with the local schools, I decided to do more than just complain about it. One of those Iowa values instilled in me was to always leave whatever you were involved with better than when you found it, so I decided to seek public office to make our local school district better. I didn't seek public office for fortune or power, but simply to make life better in our community and education better for our children. And now I seek the presidency not for vanity, but because America is at a crucial moment and I believe that we must make a bold choice if we are to secure the promise of the future.

We cannot continue to kick the can of our problems down the road, because they are problems of today and not tomorrow.

We cannot continue to rack up debt on the backs of future generations.

We can't afford an unconstitutional health plan that costs too much and is worth so little.

And we can't afford four more years of failed leadership at home and abroad.

We can't afford four more years of millions of Americans out of work or in jobs that that pay too little to support their families.

We can't afford four more years of a housing crisis that is devaluing our homes and making home ownership impossible for many Americans.

We can't afford four more years of a foreign policy that leads from behind and doesn't stand up for our friends and stand up to our enemies.

We can't afford four more years of Barack Obama.

As a constitutional conservative, I believe in the Founding Father's vision of a limited government that trusts in and preserves the unlimited potential of the American people. I don't believe that the solutions to our problems come from Washington: more than ever, Washington IS the problem, and the real solutions will come from our businesses, our communities, our schools and the most basic and powerful unit of all-our families.

We've started another campaign season, almost when it seemed like the last one just ended. Through all of the rancor of the campaign, let us always remember that there is much more that unites us than divides us. Our problems don't have an identity of party, they are problems created by both parties.

Americans agree that our country is in peril today and we must act with urgency to save it. And Americans aren't interested in affiliation; they are interested in solutions, and leadership that will tell the truth. And the truth is that Americans ARE the solution and not the government!

This election is about big issues, not petty ones. When all is said and done, we cannot be about big government as usual. Then America will lose.

In Washington I am bringing a voice to the halls of congress that has been missing for a long time. It is the voice of the people I love and learned from growing up in Waterloo. It is the voice of reasonable, fair-minded people who love this country, who are patriotic, and who see the United States as the indispensable nation of the world.

My voice is part of a movement to take back our country, and now I want to take that voice to the White House. It is the voice of constitutional conservatives who want our government to do its job and not ours and who want our government to live within its means and not our children's and grandchildren's.

I am here in Waterloo, Iowa to announce today: We can win in 2012 and we will. Our voice has been growing louder and stronger. And it is made up of Americans from all walks of life like a three-legged stool. It's the peace through strength Republicans, and I'm one of them, it's fiscal conservatives, and I'm one of them, and it's social conservatives, and I'm one of them. It's the Tea Party movement and I'm one of them.

The liberals, and to be clear I'm NOT one of them, want you to think the Tea Party is the Right Wing of the Republican Party. But it's not. It's made up of disaffected Democrats, independents, people who've never been political a day in their life, libertarians, Republicans. We're people who simply want America back on the right track again.

We're practical people who want the country to work again. This is a powerful coalition the left fears, and they should because, Make no mistake about it, President Obama is a one-term president!

In February 2009 President Obama was very confident that his economic policies would turn the country around within a year. He said, "A year from now, I think people are going to see that we're starting to make some progress. If I don't have this done in three years, then there's going to be a one-term proposition." Well Mr. President, your policies haven't worked. Spending our way out of this recession hasn't worked. And so Mr. President We Take You at Your Word!

Waterloo holds a special place for me, but also holds a special place for our country. You sent and still do send your sons and daughters off to fight for America and to protect the freedoms that allow us to gather here today. I honor my dad who served in the United States Air Force. I honor my step dad who served in the United States Army. And I honor my stepbrother who retired full United States Navy. We will never forget those sacrifices; it is part of our past we must remember to secure the promise of the future. It is those values that make our country unique and make us the most powerful force for good on this planet. I believe the United States of America is THE indispensible nation. It is that spirit
that separates us from those who would give their own life for others from those who sacrifice others, like terrorists who use little children as human shields.]

Perhaps the valor of our American fighting heroes was never captured better than in the sacrifice made by the Sullivan brothers from right here in Waterloo. The Sullivan family was much like other families in America during the depression. They were fortunate to get by. Most of the family worked here in Waterloo at the local meat packing plant. When a close friend of the family died at Pearl Harbor, the five Sullivan brothers enlisted in the Navy, but under the condition that they be allowed to serve together. One of the brothers wrote, "We will make a team together that can't be beat." Born and raised here in Waterloo, the five Sullivan brothers had always stuck together. However, one fateful morning after a long night of intense battle, a Japanese torpedo struck the USS Juneau, the ship on which they served killing most of the crew and launching the rest into the water. The oldest of the Sullivans, George, searched tirelessly for his brothers, but they were not to be found. He had survived the attack, but later perished at sea. All but 10 of the 697 brave men of the Juneau, gave their lives for their country. In spite of the intense pain of losing their five sons all at once, the parents of the Sullivans became an inspiration to America speaking to millions on behalf of the war effort. To honor the Sullivans two ships were named for them. The motto of the last ship -- We Stick Together!

Theirs was a demonstration of the Holy Scriptures that says: "Greater love hath no man than this, but that he lay down his life for his friend."

That is the kind of love we Americans have for our country. We Americans stick together. We triumph together. In the words of Daniel Webster, we are, "One cause, one country, one heart." That is the kind of commitment it will take to face the great challenges of today. The people of this great country have that level of courage and they are longing for a President who will listen to them, who will lead from the front, and not from behind.

I'm Michele Bachmann and I'm running for President of the United States.

Together, we can do this. Together we can reign in all the corruption and waste that has become Washington and instead leave a better America for future generations.

Together we can make a team that can't be beat!

Together we can secure the promise of the future.

Together we can - and together we will!

God bless you and God bless the United States of America!

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We're racing towards another private debt crisis - so why did no one see it coming?

The Office for Budget Responsibility failed to foresee the rise in household debt. 

This is a call for a public inquiry on the current situation regarding private debt.

For almost a decade now, since 2007, we have been living a lie. And that lie is preparing to wreak havoc on our economy. If we do not create some kind of impartial forum to discuss what is actually happening, the results might well prove disastrous. 

The lie I am referring to is the idea that the financial crisis of 2008, and subsequent “Great Recession,” were caused by profligate government spending and subsequent public debt. The exact opposite is in fact the case. The crash happened because of dangerously high levels of private debt (a mortgage crisis specifically). And - this is the part we are not supposed to talk about—there is an inverse relation between public and private debt levels.

If the public sector reduces its debt, overall private sector debt goes up. That's what happened in the years leading up to 2008. Now austerity is making it happening again. And if we don't do something about it, the results will, inevitably, be another catastrophe.

The winners and losers of debt

These graphs show the relationship between public and private debt. They are both forecasts from the Office for Budget Responsibility, produced in 2015 and 2017. 

This is what the OBR was projecting what would happen around now back in 2015:

This year the OBR completely changed its forecast. This is how it now projects things are likely to turn out:

First, notice how both diagrams are symmetrical. What happens on top (that part of the economy that is in surplus) precisely mirrors what happens in the bottom (that part of the economy that is in deficit). This is called an “accounting identity.”

As in any ledger sheet, credits and debits have to match. The easiest way to understand this is to imagine there are just two actors, government, and the private sector. If the government borrows £100, and spends it, then the government has a debt of £100. But by spending, it has injected £100 more pounds into the private economy. In other words, -£100 for the government, +£100 for everyone else in the diagram. 

Similarly, if the government taxes someone for £100 , then the government is £100 richer but there’s £100 subtracted from the private economy (+£100 for government, -£100 for everybody else on the diagram).

So what implications does this kind of bookkeeping have for the overall economy? It means that if the government goes into surplus, then everyone else has to go into debt.

We tend to think of money as if it is a bunch of poker chips already lying around, but that’s not how it really works. Money has to be created. And money is created when banks make loans. Either the government borrows money and injects it into the economy, or private citizens borrow money from banks. Those banks don’t take the money from people’s savings or anywhere else, they just make it up. Anyone can write an IOU. But only banks are allowed to issue IOUs that the government will accept in payment for taxes. (In other words, there actually is a magic money tree. But only banks are allowed to use it.)

There are other factors. The UK has a huge trade deficit (blue), and that means the government (yellow) also has to run a deficit (print money, or more accurately, get banks to do it) to inject into the economy to pay for all those Chinese trainers, American iPads, and German cars. The total amount of money can also fluctuate. But the real point here is, the less the government is in debt, the more everyone else must be. Austerity measures will necessarily lead to rising levels of private debt. And this is exactly what has happened.

Now, if this seems to have very little to do with the way politicians talk about such matters, there's a simple reason: most politicians don’t actually know any of this. A recent survey showed 90 per cent of MPs don't even understand where money comes from (they think it's issued by the Royal Mint). In reality, debt is money. If no one owed anyone anything at all there would be no money and the economy would grind to a halt.

But of course debt has to be owed to someone. These charts show who owes what to whom.

The crisis in private debt

Bearing all this in mind, let's look at those diagrams again - keeping our eye particularly on the dark blue that represents household debt. In the first, 2015 version, the OBR duly noted that there was a substantial build-up of household debt in the years leading up to the crash of 2008. This is significant because it was the first time in British history that total household debts were higher than total household savings, and therefore the household sector itself was in deficit territory. (Corporations, at the same time, were raking in enormous profits.) But it also predicted this wouldn't happen again.

True, the OBR observed, austerity and the reduction of government deficits meant private debt levels would have to go up. However, the OBR economists insisted this wouldn't be a problem because the burden would fall not on households but on corporations. Business-friendly Tory policies would, they insisted, inspire a boom in corporate expansion, which would mean frenzied corporate borrowing (that huge red bulge below the line in the first diagram, which was supposed to eventually replace government deficits entirely). Ordinary households would have little or nothing to worry about.

This was total fantasy. No such frenzied boom took place.

In the second diagram, two years later, the OBR is forced to acknowledge this. Corporations are just raking in the profits and sitting on them. The household sector, on the other hand, is a rolling catastrophe. Austerity has meant falling wages, less government spending on social services (or anything else), and higher de facto taxes. This puts the squeeze on household budgets and people are forced to borrow. As a result, not only are households in overall deficit for the second time in British history, the situation is actually worse than it was in the years leading up to 2008.

And remember: it was a mortgage crisis that set off the 2008 crash, which almost destroyed the world economy and plunged millions into penury. Not a crisis in public debt. A crisis in private debt.

An inquiry

In 2015, around the time the original OBR predictions came out, I wrote an essay in the Guardian predicting that austerity and budget-balancing would create a disastrous crisis in private debt. Now it's so clearly, unmistakably, happening that even the OBR cannot deny it.

I believe the time has come for there be a public investigation - a formal public inquiry, in fact - into how this could be allowed to happen. After the 2008 crash, at least the economists in Treasury and the Bank of England could plausibly claim they hadn't completely understood the relation between private debt and financial instability. Now they simply have no excuse.

What on earth is an institution called the “Office for Budget Responsibility” credulously imagining corporate borrowing binges in order to suggest the government will balance the budget to no ill effects? How responsible is that? Even the second chart is extremely odd. Up to 2017, the top and bottom of the diagram are exact mirrors of one another, as they ought to be. However, in the projected future after 2017, the section below the line is much smaller than the section above, apparently seriously understating the amount both of future government, and future private, debt. In other words, the numbers don't add up.

The OBR told the New Statesman ​that it was not aware of any errors in its 2015 forecast for corporate sector net lending, and that the forecast was based on the available data. It said the forecast for business investment has been revised down because of the uncertainty created by Brexit. 

Still, if the “Office of Budget Responsibility” was true to its name, it should be sounding off the alarm bells right about now. So far all we've got is one mention of private debt and a mild warning about the rise of personal debt from the Bank of England, which did not however connect the problem to austerity, and one fairly strong statement from a maverick columnist in the Daily Mail. Otherwise, silence. 

The only plausible explanation is that institutions like the Treasury, OBR, and to a degree as well the Bank of England can't, by definition, warn against the dangers of austerity, however alarming the situation, because they have been set up the way they have in order to justify austerity. It's important to emphasise that most professional economists have never supported Conservative policies in this regard. The policy was adopted because it was convenient to politicians; institutions were set up in order to support it; economists were hired in order to come up with arguments for austerity, rather than to judge whether it would be a good idea. At present, this situation has led us to the brink of disaster.

The last time there was a financial crash, the Queen famously asked: why was no one able to foresee this? We now have the tools. Perhaps the most important task for a public inquiry will be to finally ask: what is the real purpose of the institutions that are supposed to foresee such matters, to what degree have they been politicised, and what would it take to turn them back into institutions that can at least inform us if we're staring into the lights of an oncoming train?