Archive for the ‘National Debt’ Category
It’s hard to believe how little Americans know about the real issues facing them after $6 billion was spent by both parties getting their message out (a record $2 billion for President alone). I don’t blame the politicians in this or any election cycle. After all, why talk about tough issues and choices if you are not pressured to do so. I blame the mainstream media (MSM) for acting more like cheerleaders and spin doctors than arbiters of truth for the public. The MSM ignored the real issues while spending hours on things like the Trayvon Martin tragedy. I do not know who is at fault, but I do know the MSM’s wall-to-wall coverage inferred there was a national problem of white on black murder when there is none. According to the latest FBI information, around 90% of blacks are killed by black people (likewise for the white on white murder rate).
The U.S. faces a financial storm of biblical proportions; I am talking a Noah’s Ark tsunami. The real fiscal cliff isn’t what is coming at the end of the year. It is the debasement of the U.S. dollar at the hands of the Federal Reserve that is printing $85 billion every month in “open-ended” currency creation. According to experts, it is only a matter of time before the U.S. bond market collapses with an interest rate spike that money manager Michael Pento says will turn into “an interest rate shock that will make the Great Depression look like the days of wine and roses.” Not a word in the debates or questions by the MSM to the candidates about money printing on a scale that has never been done in human history.
The 2008 financial meltdown was caused by a housing crisis created by big banks. They sold “liar loans,” packaged those loans into mortgage-backed securities, they were rated “Triple-A” when they were “toxic;” and when it all blew sky high, the bankers committed forgery, perjury and fraud that was politely called “robo-signing.” According to Professor William Black, who was also a top regulator in the Savings and Loan crisis of the 1980’s, more than 1,000 financial elites were successfully prosecuted in the aftermath of the S&L calamity. The 2008 meltdown was 70 times larger. There has not been a single financial elite charged with a crime. This fraud and crime is one of the main reasons the economy is still in deep trouble. According to Fabian Calvo of TheNoteHouse.us, “We haven’t even scratched the surface of being at the bottom of the housing market.” (His company buys and sells $100 million a year in real estate and sour mortgage debt.) $40 billion of the $85 billion the Fed prints every month is going for continued banker bailouts. You can talk all you want about raising taxes on rich, but the real money is in the banker bailouts. No meaningful discussion or questions were asked of the Presidential candidates on this subject either.
It has been widely reported the U.S. used al-Qaeda terrorists to help overthrow the Libyan government. It is doing the same thing in Syria. We all saw the results of this policy on 9/11/12 in Libya where four Americans (including a U.S. Ambassador) were killed in an al-Qaeda terrorist attack. Calls for help went unanswered, even though there was a live Internet video feed going into the White House situation room. No questions were asked by the MSM of either candidate of the logic and danger of this kind of foreign policy.
The President can legally order the execution of any U.S. citizen without due process. The President did just that last year when he ordered drone strikes in Yemen that killed three suspected American born terrorists. Relatives are suing the U.S. government for wrongful-death. According to a New York Times story, “The killings violated fundamental rights afforded to all U.S. citizens, including the right not to be deprived of life without due process of law,’ the complaint says.” (Click here for the NYT story.) There was not a single question asked of either Presidential candidate by the MSM about Presidential “license to kill.”
Finally, the National Defense Authorization Act (NDAA) was signed into law by President Obama on New Year’s Eve 2011. It allows for the indefinite detention of suspected terrorists which includes U.S. citizens. This law overrides due process contained in the Constitution. The President’s signing statementsays, “I want to clarify that my Administration will not authorize the indefinite military detention without trial of American citizens.” But that didn’t stop President Obama, a Constitutional scholar, from signing it into law anyway. The American Civil Liberties Union (ACLU) called this act “. . . a stain on our nation’s history – one that will ultimately be viewed with embarrassment and shame.” (Click here for more on the story.) You can’t get more liberal than the ACLU; and, yet, the left and right were silent and asked no questions of either Presidential candidate about this Constitutional atrocity.
The general public is blind to the great danger to the economy and our Republic. I lay the blame squarely at the feet of the MSM for not doing its job for the public good. PIMCO chief Bill Gross summed it all up in a tweet on Election Day that said, “Gross: Whew! It’s over. To the victor belongs the spoils of political power but to the US voter only continuing frustration will accrue.”
Greg Hunter USAWatchdog.com
I’m going to reprise a Ticker from 2011-10-18, which you can read here if you want the original, but in a political context.
There was once a nation that was comprised of fish. The fish lived in a pond that was 64×64 in size, or 4096 square units of surface area. As with all fish they survived on dissolved oxygen in the water, which came to the water by exchange with the atmosphere above. Plants grew in the water, receiving their energy from the sun while recycling the waste emitted by the fish as nutrients, and the fish ate the plants. All was well in the nation of fish.
But the economy of fish was limited by its growth. Some of the bottom where the fish lived was rather rocky, and not much suited to cultivation of aquatic plants. Some of the bottom was fertile, and beneath still more were various rare and natural treasures, such as energy sources that the fish could use for manufacturing.
One day a bright fish that worked for a bank called “Goldfishbank” got the idea that since plants were food, and more growth is better, the nation would be served by faster “growth.” He introduced to the pond a species of lilly that reproduced very rapidly. In fact, it produced a new lilly once each day. He began by placing just one lilly of one unit of size, or 1/4096th of the surface of the pond, in the water.
The next day there were two, and the fish nation cheered. Then four, and the fish nation demanded that this fine fish be President. Then eight, and all was even better in the world.
There were, however, some fish that became alarmed, for they had not been sleeping in school. They knew, as well, that their very survival depended on the exchange of oxygen with the air above, and that absent this exchange all of the fish would surely die.
The great prosperity that appeared to flow, however, led the scholars to be shouted down.
Unfortunately the great prosperity resulted in the price of fish dwellings, foods and fuels rising precipitously. The credit created by all of this growth, which had heretofore appeared to be impossible, made everyone feel wealthy. After just eight days what was 1 lilly had become 128; both great and permanent prosperity appeared to have blessed the fish.
Two days later the pond was 12.5% covered with lillies.
But in the middle of this prosperity there was much corruption and theft. The interest rates charged to lend money were corrupted by some of the fish banksters, who reasoned that they were merely making very smal changes in what they reported, and due to the leverage they employed, reaping billions of profits. This they did by stealing pennies from each fish per day. Nobody would jail them.
There were other fish that were involved in lending for dwellings, and they too scammed the public. Some of the lenders collapsed, yet they paid only small fines while most of the fish suffered monstrous losses, with many losing their homes.
Still other parts of the fish economy were involved in health care, and they got laws passed to make differential pricing, cost-shifting and other monopoly behavior protected, for this was their way to riches. Soon the fish nation spent twice as much on health care as a percentage of its economy as all the other fish nations, but all these monopoly protections, enacted into law, were not seen as the corruption they were.
Unemployment became a problem and the fish nation saw its standard of living decline. This was puzzling, for the proponents of the new lily had said that such prolific growth would lead to permanent prosperity. There were many who claimed that the lily was simply not prolific enough, and that means must be found to spur even more lilies to grow.
The three major political parties sparred over the unemployment and economic malaise. The two largest ones offered that taxes should be increased on the most-fortunate fish and that taxes should be decreased for all fish, respectively. But neither put forward a plan to cut down the size of the government, which was sapping an increasing amount of the economy.
The third party decided to state that it should cut the size of the government by 43%. But it refused to address the main growth drivers of the government, that being the medical industry’s special protections. Nor did that party appear to give a damn about all the scams and frauds, which had stolen monstrous amounts of wealth from all the fish.
Soon the political debate within that third party turned to whether fish should be able to smoke pot, which was currently prohibited under penalty of law, and whether a fish named Steve should be able to marry one named Larry. Some fish believed this was a civil right and of the utmost importance, while others believed it was Satanic.
Yet these were the only points of political debate on which this third party focused, instead of on the financial institutions that had skimmed off all the “prosperity” that had been promised to the fish nation by the Goldfishbank and others in the financial industry, along with the medical industry that had lobbied for their special protections and which were bankrupting the fish nation’s government.
A few of the third party analysts saw that in point of fact the lily issue was soon to kill all the fish and the entire fish nation economy. They were poo-pooed and called alarmists, for the sun was still visible in the sky above, and their rising stridency was called “divisive” or that “if you simply changes your approach you could actually influence people.” They were even told that their commentary was “self-righteous.”
But that commentary, labeled “divisive” and in fact dismissed with “that ends our conversation and damages both our working relationship and friendship” was based the simple fact that while just 12.5% of the pond was covered, the entire fish nation was only three days from extinction, and the last two days had been wasted arguing over gay marriage and dope smoking instead of addressing the impending and mathematically-certain disaster.
Even though most Americans have become very frustrated with this economy, the reality is that the vast majority of them still have no idea just how bad our economic decline has been or how much trouble we are going to be in if we don’t make dramatic changes immediately. If we do not educate the American people about how deathly ill the U.S. economy has become, then they will just keep falling for the same old lies that our politicians keep telling them. Just “tweaking” things here and there is not going to fix this economy. We truly do need a fundamental change in direction. America is consuming far more wealth than it is producing and our debt is absolutely exploding. If we stay on this current path, an economic collapse is inevitable. Hopefully the crazy economic numbers from 2011 that I have included in this article will be shocking enough to wake some people up.
At this time of the year, a lot of families get together, and in most homes the conversation usually gets around to politics at some point. Hopefully many of you will use the list below as a tool to help you share the reality of the U.S. economic crisis with your family and friends. If we all work together, hopefully we can get millions of people to wake up and realize that “business as usual” will result in a national economic apocalypse.
The following are 50 economic numbers from 2011 that are almost too crazy to believe….
#1 A staggering 48 percent of all Americans are either considered to be “low income” or are living in poverty.
#2 Approximately 57 percent of all children in the United States are living in homes that are either considered to be “low income” or impoverished.
#3 If the number of Americans that “wanted jobs” was the same today as it was back in 2007, the “official” unemployment rate put out by the U.S. government would be up to 11 percent.
#4 The average amount of time that a worker stays unemployed in the United States is now over 40 weeks.
#5 One recent survey found that 77 percent of all U.S. small businesses do not plan to hire any more workers.
#6 There are fewer payroll jobs in the United States today than there were back in 2000 even though we have added 30 million extra people to the population since then.
#7 Since December 2007, median household income in the United States has declined by a total of 6.8% once you account for inflation.
#8 According to the Bureau of Labor Statistics, 16.6 million Americans were self-employed back in December 2006. Today, that number has shrunk to 14.5 million.
#9 A Gallup poll from earlier this year found that approximately one out of every five Americans that do have a job consider themselves to be underemployed.
#10 According to author Paul Osterman, about 20 percent of all U.S. adults are currently working jobs that pay poverty-level wages.
#12 Back in 1969, 95 percent of all men between the ages of 25 and 54 had a job. In July, only 81.2 percent of men in that age group had a job.
#13 One recent survey found that one out of every three Americans would not be able to make a mortgage or rent payment next month if they suddenly lost their current job.
#14 The Federal Reserve recently announced that the total net worth of U.S. households declined by 4.1 percent in the 3rd quarter of 2011 alone.
#15 According to a recent study conducted by the BlackRock Investment Institute, the ratio of household debt to personal income in the United States is now 154 percent.
#16 As the economy has slowed down, so has the number of marriages. According to a Pew Research Center analysis, only 51 percent of all Americans that are at least 18 years old are currently married. Back in 1960, 72 percent of all U.S. adults were married.
#17 The U.S. Postal Service has lost more than 5 billion dollars over the past year.
#18 In Stockton, California home prices have declined 64 percent from where they were at when the housing market peaked.
#19 Nevada has had the highest foreclosure rate in the nation for 59 months in a row.
#20 If you can believe it, the median price of a home in Detroit is now just $6000.
#21 According to the U.S. Census Bureau, 18 percent of all homes in the state of Florida are sitting vacant. That figure is 63 percent larger than it was just ten years ago.
#22 New home construction in the United States is on pace to set a brand new all-time record low in 2011.
#23 As I have written about previously, 19 percent of all American men between the ages of 25 and 34 are now living with their parents.
#24 Electricity bills in the United States have risen faster than the overall rate of inflation for five years in a row.
#25 According to the Bureau of Economic Analysis, health care costs accounted for just 9.5% of all personal consumption back in 1980. Today they account for approximately 16.3%.
#26 One study found that approximately 41 percent of all working age Americans either have medical bill problems or are currently paying off medical debt.
#27 If you can believe it, one out of every seven Americans has at least 10 credit cards.
#28 The United States spends about 4 dollars on goods and services from China for every one dollar that China spends on goods and services from the United States.
#29 It is being projected that the U.S. trade deficit for 2011 will be 558.2 billion dollars.
#30 The retirement crisis in the United States just continues to get worse. According to the Employee Benefit Research Institute, 46 percent of all American workers have less than $10,000 saved for retirement, and 29 percent of all American workers have less than $1,000 saved for retirement.
#31 Today, one out of every six elderly Americans lives below the federal poverty line.
#32 According to a study that was just released, CEO pay at America’s biggest companies rose by 36.5% in just one recent 12 month period.
#34 The six heirs of Wal-Mart founder Sam Walton have a net worth that is roughly equal to the bottom 30 percent of all Americans combined.
#35 According to an analysis of Census Bureau data done by the Pew Research Center, the median net worth for households led by someone 65 years of age or older is 47 times greater than the median net worth for households led by someone under the age of 35.
#36 If you can believe it, 37 percent of all U.S. households that are led by someone under the age of 35 have a net worth of zero or less than zero.
#37 A higher percentage of Americans is living in extreme poverty (6.7%) than has ever been measured before.
#38 Child homelessness in the United States is now 33 percent higher than it was back in 2007.
#39 Since 2007, the number of children living in poverty in the state of California has increased by 30 percent.
#40 Sadly, child poverty is absolutely exploding all over America. According to the National Center for Children in Poverty, 36.4% of all children that live in Philadelphia are living in poverty, 40.1% of all children that live in Atlanta are living in poverty, 52.6% of all children that live in Cleveland are living in poverty and 53.6% of all children that live in Detroit are living in poverty.
#41 Today, one out of every seven Americans is on food stamps and one out of every four American children is on food stamps.
#43 A staggering 48.5% of all Americans live in a household that receives some form of government benefits. Back in 1983, that number was below 30 percent.
#44 Right now, spending by the federal government accounts for about 24 percent of GDP. Back in 2001, it accounted for just 18 percent.
#45 For fiscal year 2011, the U.S. federal government had a budget deficit of nearly 1.3 trillion dollars. That was the third year in a row that our budget deficit has topped one trillion dollars.
#46 If Bill Gates gave every single penny of his fortune to the U.S. government, it would only cover the U.S. budget deficit for about 15 days.
#47 Amazingly, the U.S. government has now accumulated a total debt of 15 trillion dollars. When Barack Obama first took office the national debt was just 10.6 trillion dollars.
#48 If the federal government began right at this moment to repay the U.S. national debt at a rate of one dollar per second, it would take over 440,000 years to pay off the national debt.
#49 The U.S. national debt has been increasing by an average of more than 4 billion dollars per day since the beginning of the Obama administration.
#50 During the Obama administration, the U.S. government has accumulated more debt than it did from the time that George Washington took office to the time that Bill Clinton took office.
Of course the heart of our economic problems is the Federal Reserve. The Federal Reserve is a perpetual debt machine, it has almost completely destroyed the value of the U.S. dollar and it has an absolutely nightmarish track record of incompetence. If the Federal Reserve system had never been created, the U.S. economy would be in far better shape. The federal government needs to shut down the Federal Reserve and start issuing currency that is not debt-based. That would be a very significant step toward restoring prosperity to America.
During 2011 we made a lot of progress in educating the American people about our economic problems, but we still have a long way to go.
Hopefully next year more Americans than ever will wake up, because 2012 is going to represent a huge turning point for this country.
Simpson, a former U.S. Senator from Wyoming, and Bowles, the White House chief of staff under President Clinton, say the only way to get the country’s finances on a sustainable path is a combination of cutting costs, increasing taxes and encouraging economic growth — putting everything from Social Security benefits to defense spending and Medicare on the table.
Right. In other words what I’ve said since the beginning: Government cannot spend more than it takes in via current taxes. Period.
Now pay attention folks, because this is a bi-partisan recognition of what I’ve been saying since 2007, and it has a timeline on it:
If the country doesn’t act, the financial markets eventually will raise the cost of credit, likely turning on a dime and moving quickly without warning, as is happening in Europe. If that happens, the cost of everything from credit card debt to home mortgages — along with cost of borrowing for the country — will shoot up and the U.S. will experience “a recession like you’ve never seen before,” Bowles said.
Uh, that’s Depression, not recession. And it’s coming whether we like it or not. The question is whether we’d like a really bad one or whether we want to risk the destruction of our government and society.
We’re doing the latter by refusing to address this problem and playing political games.
Simpson said commission members differed on when they thought the tipping point might come, but no one thought it would be more than two years away.
Incidentally if “it” happens like that the S&P 500 will trade at 1/5th to 1/10th of its current price as will every other asset that has leverage embedded in it, from housing to stocks to bonds to commodities.
If you’re “invested” in such things when it occurs you’re financially done.
Democrats and Republicans are horn-locked in a debate about whether budget cuts should be $30 billion or $60 billion.
Senate Majority Leader Harry Reid, says President Barack Obama’s offer to accept a total of $30 billion in spending cuts for 2011 is “clearly in the same ballpark” with what House Republican leaders asked for.
The pathetic debate lingers on.
Republicans and Democrats in Congress traded charges over which party is stifling agreement on budget cuts needed to avert the first U.S. government shutdown in 15 years.
With no accord in sight on legislation to extend government spending past April 8, Senate Majority Leader Harry Reid, a Nevada Democrat, accused Republican leaders of trying to placate an “extreme minority” of their party by spurning an offer to reach a deal.
President Barack Obama’s offer to accept a total of $30 billion in spending cuts for 2011 is “clearly in the same ballpark” with what House Republican leaders initially sought before their rank-and-file demanded deeper reductions, Reid said.
“Are they afraid to tell the extreme Tea Party members of their caucus that they’re trying to find common ground with Democrats?” Reid asked yesterday at his weekly news conference.
Pathetic Performance by Both Parties
Quite frankly this is a pathetic performance by both parties. Moreover, I will flat out state the Republicans have only themselves to blame.
By offering a piss poor budget reduction of a mere $60 billion, they now look like the bad guys for not meeting the Obama half-way at $30 billion.
Just the Math Maam
Please do the math. $30 billion is a mere 1.875% of the budget. That is what everyone is pissing and moaning over.
If Republicans had any balls, and they clearly don’t, they would have proposed cutting the budget by $300 billion. Then, a compromise at $150 billion would have been a mere 9.375% of the deficit.
It is is bad enough to argue over 9% of the budget, so what does it mean to bicker over 1.875% of the budget?
What it means is that neither party has the balls to fix a damn thing. It also means the Republicans can blame themselves for being placed in this absurd position.
Reader Don comments …
“Don’t you mean 1.875% of the deficit? I believe $30 billion is less than 1% of the budget.”
Don is correct, proving even more so just how absurd all this pissing and moaning is.
Mike “Mish” Shedlock
Global Economic Analysis