Gingrich: This is a government bubble soon to burst

We have been in a long cycle of government employee unions, bureaucracies, and politicians building systems that are more and more expensive, more and more inflexible and more and more incapable of meeting the challenges of the modern world. This process has affected Europe and Japan as well as America.

Its final, collapsing phase is being signaled by the Greek debt crisis, the Japanese 21 year cycle of deflation and slow growth and the financial crises in many of our state capitals, of which Sacramento and Albany are the biggest examples.

The Obama-Pelosi-Reid Secular-Socialist Machine is making the bubble problem bigger and more dangerous, but this is simply the last phase of a long process of unionization, bureaucratization and steadily rising costs of government.

Today government has become the fourth recent bubble.

The first three bubbles were information technology in 1999, housing in 2007 and Wall Street in 2008.

Looking back everyone wonders why we didn’t see those three bubbles coming.

The failure to anticipate them and to take appropriate, corrective steps before it was too late has caused enormous pain in the American economy and for the American people.

This fourth bubble is even bigger and more dangerous. If we don’t get state, federal and local spending under control we will have a wave of crises that will shatter our economy with higher interest rates and a series of state and local defaults.

Bond market says Berkshire, Procter, Johnson, Lowe's better bets than U.S. government

March 22 (Bloomberg) -- The bond market is saying that it’s safer to lend to Warren Buffett than Barack Obama.

Two-year notes sold by the billionaire’s Berkshire Hathaway Inc. in February yield 3.5 basis points less than Treasuries of similar maturity, according to data compiled by Bloomberg. Procter & Gamble Co., Johnson & Johnson and Lowe’s Cos. debt also traded at lower yields in recent weeks, a situation former Lehman Brothers Holdings Inc. chief fixed-income strategist Jack Malvey calls an “exceedingly rare” event in the history of the bond market.

The $2.59 trillion of Treasury Department sales since the start of 2009 have created a glut as the budget deficit swelled to a post-World War II-record 10 percent of the economy and raised concerns whether the U.S. deserves its AAA credit rating. The increased borrowing may also undermine the first-quarter rally in Treasuries as the economy improves.

“It’s a slap upside the head of the government,” said Mitchell Stapley, the chief fixed-income officer in Grand Rapids, Michigan, at Fifth Third Asset Management, which oversees $22 billion. “It could be the moment where hopefully you realize that risk is beginning to creep into your credit profile and the costs associated with that can be pretty scary.”