FedUpUSA

Archive for the ‘welfare’ Category

Did you know that the federal government is giving out free cell phones and free cell phone minutes to welfare recipients?  It may be hard to believe, but it is true.  Right now, there are companies that are running advertisements specifically targeted at low income Americans informing them of the fact that all they have to do is sign up and they can get a free cell phone and hundreds of free cell phone minutes every single month and it will all be paid for by the federal government.  Some have referred to this as “The Obama Phone”, but that is not exactly accurate.  The outrageous federal programs that are paying for this were initiated before Barack Obama entered the White House.  But the fact that welfare recipients have been receiving free cell phones and free cell phone minutes under both the Bush and Obama administrations has been confirmed as being true by Snopes.  All of this is paid for by “the federal Universal Service Fund”.  That is one of those annoying little taxes that you may have noticed on your phone bill.  So what is essentially happening is the federal government is taking money from all of us so that they can provide free cell phone service for welfare recipients every single month.

When some of my readers informed me of this free cell phone scheme, I decided that I better go to the source.  So I went over to the FCC website, and it turns out that there are two federal programs involved.  “Link Up” provides a one-time connection discount on phone service, and it can be applied to the cost of a cell phone.  So this is where the free cell phone comes from.  “Lifeline” provides a monthly discount on telephone service.  So this is where the free cell phone minutes each month come from.  The following is a description of these programs from the FCC website….

What Benefits are Available Under the Lifeline and Link Up Programs?

• Lifeline provides discounts on one basic monthly telephone service (wireline or wireless) for qualified subscribers. These discounts can be up to $10.00 per month, depending on your state. Federal rules prohibit qualifying low-income consumers from receiving more than ONE Lifeline service at the same time. That is, qualifying low-income consumers may receive a Lifeline discount on either a home telephone or wireless telephone service, but may not receive a Lifeline discount on both services at the same time. Lifeline also includes Toll Limitation Service, which enables a telephone subscriber to limit the amount of long distance calls that can be made from a telephone.
• Link Up Up provides qualified subscribers with a one-time discount (up to a maximum of $30) off of the initial installation fee for one traditional, wireline telephone service at the primary residence or the activation fee for one wireless telephone. It also allows subscribers to pay the remaining amount they owe on a deferred schedule, interest-free. Federal rules prohibit qualifying low-income consumers from receiving more than ONE Link Up discount at a primary residence. That is, qualifying low-income consumers may receive a Link Up discount on installation or activation charges associated with either a home telephone or wireless telephone service.

Apparently these programs are becoming quite popular.

You can find a company called Safelink Wireless offering welfare recipients a free cell phone and 250 free cell phone minutes a month right here.

You can find a company called Assurance Wireless offering welfare recipients a program that is virtually identical right here.

This is absolutely outrageous, and it is yet another sign that dependence on the government is totally out of control.

Not that assisting the poor is bad.  Of course we always want to help those that cannot help themselves.  We never want to see anyone go without daily food or sleep in the streets.

But providing the poor with the basics of life is much different from providing them with luxuries such as cell phones.

In some areas of the country, the poor can also receive nearly free Internet service every single month.

Just check out the following example from the Houston Chronicle….

When Comcast acquired NBC Universal earlier this year, an FCC-mandated requirement was that the cable giant offer cheap Internet access to low-income households. Comcast is making good on the mandate through a new program called Internet Essentials.

Families who qualify will be able to sign up for 1.5-Mbps Internet access – the same download speed as AT&T’s basic DSL service – for just $9.95 a month. Customers may also be eligible for a computer that costs just $150 and free Internet training.

Also, a new bill has been introduced in Congress that would give “eligible” households money to help pay for gasoline….

Low-Income Gasoline Assistance Program Act – Directs the Secretary of Health and Human Services to make grants to states to establish emergency assistance programs to pay eligible households for the purchase of gasoline.

These days, as long as you are “eligible”, just about everything you need will either be purchased for you or subsidized by the federal government.

Yes, we will always need programs to help take care of the poor, but some of the things that go on today are absolutely outrageous.

There are millions of people out there that have become extremely comfortable receiving government benefits and it will be extremely difficult to ever get them to give them up.

After all, why bust your behind for 40 or 50 hours a week at some meaningless, low paying job when you can live a similar lifestyle by just depending on government benefits?

The following is a rap video that shows the kind of mindset that is developing all across America.  Please be advised that it contains some very strong language.  It was done by a rapper known as “Mr. EBT”, and it is a perfect example of the kind of attitude that many welfare recipients have today….

Yes, everyone needs a helping hand once in a while.  But if you do have to rely on government benefits for a time, you should be fighting like crazy to improve your situation so that you can get off of them as soon as possible.

Of course the biggest welfare recipients of all are the big corporations.  The federal government showers billions upon billions of dollars on them every year, and this has got to stop.

The following example comes from an article in the Weekly Standard….

General Electric, one of the largest corporations in America, filed a whopping 57,000-page federal tax return earlier this year but didn’t pay taxes on $14 billion in profits. The return, which was filed electronically, would have been 19 feet high if printed out and stacked.

Can you imagine a 57,000 page federal tax return?

That is absolutely disgusting and it is a perfect example of how corrupt our system has become.

All year long, GE has people pouring over the tax code just looking for any little tax loophole that it can exploit.

GE made $14,000,000,000 in profits, but they paid less taxes to the government than you or I did.

There is something very, very wrong with that picture.

All of this unnecessary welfare has got to stop.

No more free cell phones for people on welfare.

No more giving billions of dollars in tax breaks to big corporations.

We simply cannot afford it.

The U.S. debt problem is way, way out of control.  We have piled up the biggest mountain of debt in the history of the world, and it gets about 150 million dollars worse every single hour.

Sadly, none of this is likely to change any time soon.

The big corporations provide the money that our politicians need to win campaigns, and most of our politicians are very careful not to bite the hands that feed them.

On the other end of the spectrum, our economy continues to crumble and the number of poor Americans continues to increase.  So even if we don’t provide them with free cell phones, the truth is that the number of Americans that need basic food and housing is not going to go down any time soon.  In fact, it is going to go a lot higher in the years ahead.

We are rapidly becoming a European-style socialist welfare state.

In America today, the poor are absolutely showered with outrageous government benefits and so are the big corporations.

So who pays for all of this?

You and I do.

I am afraid that the joke is on us, and nothing is going to change as long as we keep sending the same kind of politicians back to Washington D.C. over and over.

The Economic Collapse

We have or will soon have 20-25 million unemployed people with few prospects for a job. This is a problem we cannot and should not dodge just because it’s inconvenient to our cargo-cult political Elites. There is a low-cost solution that everyone will dislike.

America has a systemic problem which it refuses to recognize because the usual Left-Right ideologies would all be revealed as complete failures.Here is the problem: there are 15 million officially recognized unemployed, and another 5 million zombie-unemployed who have dropped off the government’s tabulation because they are politically inconvenient.

The other half of this problem is that the nation’s job-creation machinery is completely broken for structural reasons I have described many times, most recently inYou Want to Create Jobs? Here’s How (August 2, 2011) andYou Want to Create Jobs? Here’s How Part II(August 4, 2011).

The hard reality is that the U.S. economy must be re-ordered from the ground up if we are to revive the job-creation machinery.This will require many systemic changes, the two key ones being A) breaking the death-grip of the top 1/10th of 1% financial/political Elite’s grip on the throat of the economy and central government, and B) transitioning the entire economy from a bloated, inefficient, rigid, high-cost, crony-capitalist, monopoly/cartel-dominated, credit-based consumerist economy to a productive, capital/savings based economy based on the  rule of law, community governance, individual rights and decentralized competition.

The current model of pretend-Capitalism and extend-and-pretend debt consumption is falling apart due to intrinsic, structural reasons.Rather than add jobs, the U.S. economy will shed another 4 to 5 million jobs in the next few years. While our government will gerrymander the statistics, the bleak reality is that there will be between 20 and 25 million unemployed Americans with essentially zero job prospects by 2013/14.

Neither the Left nor Right is willing or able to face this reality.This is because ideologues are like alcoholics; getting drunk every night “works” because it’s easier than facing up to failure and wrenching change. Ideologues turn a blind eye to the failures of their chosen political faith because it’s easier than facing their failure and having to toss their cherished ideological security blanket on the trash heap of history.

The fervent proponents of Left and Right  are all alike in cherry-picking evidence to support their own  rigid orthodoxies and ignoring any evidence that the “big ideas” of their faith  are not just failures in the real world, but actively pernicious and counter-productive.

If we dare to set aside our ideological blinders for a moment, perhaps we can deal honestly with the reality that the job-creation machinery of the U.S. economy is fundamentally broken.Left and Right ideologues are in effect adjusting the rear-view mirror on a car with a blown engine, hoping that adjusting our view of the past will magically fix the destroyed engine.

Reduced to their essence, the “big ideas” of Left and Right are: government control and spending fixes everything (Left) and lowering taxes and boosting corporate/banker/Wall Street welfare fixes everything (Right).

The Bush Administration squandered trillions of borrowed dollars implementing the Right’s “big idea,” and the Obama Adminstration has squanderd $6 trillion of borrowed money pursuing the Left’s “big idea.”  Both have undermined the economy and burdened future generations with a criminally large debt/claim on their earnings, yet all we hear from both camps of cargo-cultistsis that we didn’t do enough of their magic.

They are just like alcoholics who are “gonna quit right after I get drunk one more time.” It never happens, because they’re in denial and can’t bear the pain of their failure.

The job machinery is broken for a lot of reasons, and most of them are not explicitly political.If you are unfamiliar with the concept of “the end of work,” please read these previous entries to get an understanding of the global, systemic and technological reasons why the machinery which “worked” during the post-war boom no longer works.

The “End of Work” and the Coming Revolution in Education  (June 7, 2011)

End of Work, End of Affluence   (December 5, 2008)

  End of Work, End of Affluence I: Cascading Job Losses(December 8, 2008)

  The End of (Paying) Work (January 21, 2009)

There are eight pages of entries on “the end of work” in my archives; just enter “end of work” in the custom search box in the upper left sidebar to view them all.

What few are willing to discuss is what we as a nation should do with 25 million people with few job prospects in a broken economy.The economy could be fixed, but it will require from-the-bottom-up changes that will up-end all the Elites and fiefdoms which currently benefit from the Status Quo Central State/Cartel-Capitalism partnership.

As a result of the immense power and resistance of these corporate cartels and Savior State fiefdoms, structural change is politically impossible.  The only politically “possible” action is to keep adjusting the rear-view mirror on the broken-down car while chanting tired old incantations.

The Right’s cargo-cult fantasy is that cutting taxes will create 20 million jobs.The Right is beholden to cartel-Monopoly Capitalism, a.k.a. Global Corporate America, and Corporate America views competition as the one great evil that might limit vast profits. So it has enlisted the Savior State to decimate competition. Whatever can’t be quashed is snapped up to preserve the highly profitable monopoly/cartel.

The Mainstream Media loves to hype the story of three college kids who start a multi-million dollar Web 2.0 business in their cramped San Francisco apartment,  but as I constantly remind readers, Twitter has about 300 employees and Facebook around 1,700.  The reality is that Web 2.0 businesses are all about lowering costs (free software replacing employees) and attracting eyeballs, i.e. marketing, which pulls revenues from old-line media and causes cascading job losses in those industries.

Life is good for the top 1/10th of 1% of America’s entrepreneurs, but for real-world small business, prospects are bleak and getting bleaker:Shrinking in a Bad Economy: America’s Entrepreneur Class.

I often summarize the reality thusly: you have to be insane to start a business in the U.S., unless you’re the proverbial smart kid with a Web 2.0 idea you can monetize in a few years and then sell to Global Corporate America for tens of millions of dollars.

If the ranks of the jobless are set to swell by millions, and the job machinery is broken for reasons that are politically impossible to fix, then where does that leave the 25 million unemployed, and where does it leave the nation?

I have a solution, but since it’s practical and doesn’t fit every ideologue’s narrow view, then everyone will find plentiful reasons to dismiss it, Left, Right and Libertarian alike. So then the question to ideological purists is: what’s your solution?Doing nothing doesn’t work, cutting taxes doesn’t work, and propping up the Corporatocracy with trillions in Status Quo Savior State spending doesn’t work, either.

The London riots have triggered avalanches of hand-wringing, stern lectures and pontificating, and at the risk of oversimplification I think we can boil the riots down to a simple but profound concept: the disenfranchised no longer have a stake in the Status Quo or in their communities.

Here is the ugly truth about the Savior State, welfare state, social welfare state, or whatever you choose to call the Central State: The Savior State displaces and destroys community and social capital.By making individuals dependent on the Central State for free money, free food, free housing, etc., then the State has taken over the natural function of community.

Being part of the community is no longer a requisite for social capital, employment or meaning.Free money is not a positive, it is a force of destruction for the individual and the community.

One thing I have noticed about ultra-orthodox Liberals/Leftists: they are rarely self-employed in the private sector, rarely own a small business with actual blue-collar/pink collar workers, and they have little actual experience with the systems they ceaselessly hype as “positive solutions”: unemployment lines, emergency rooms, applying for SSI, a.k.a. “crazy money” permanent disability from Social Security, Section 8 housing, food stamps (SNAP), finding a doctor to extend your workers compensation stress claim, or any of the other ways that the “poor” either navigate the system or game it.

The Left’s cargo-cult fantasy is that giving tens of millions of people free money is going to “tide them over” until some magical return to 1999 occurs and 20 million jobs arise out of nowhere.Since nobody on the Left has ever started a small business or hired anyone, then the job creation that will someday arrive to save us (cargo-cult!) truly is inexplicable “magic.”

On the Right, most of the cheerleaders of lower taxes/cartel-capitalism/Central State spending on Global Empire, etc., are safely perched in some protected fiefdom sucking off the very State they piously deplore. Very few have started and operated a small business from scratch; those few who claim business experience usually inherited the business from their family.

Thus both sets of ideologues are like car owners who are anxious to tell a mechanic how to fix the blown engine even though they’ve never even picked up a wrench or changed a spark plug.

Here’s the deal with humanity: we will exploit whatever windfalls are offered to us.Windfall exploitation is a key concept in Survival+, and it is value-judgment neutral, meaning that it is a trait that has been selected as extremely helpful; saying it’s “good” or “bad” is meaningless.

Left and Right ideologues turn a blind eye to the windfall exploitation that doesn’t fit their views.If I am a very wealthy person, and I can invest $300,000 in tax attorneys and shell companies that save me $3 million in annual taxes, then that is a windfall I would be foolish to pass up.

If I an CEO of a Global Corporate America company, and spending $3 million in campaign contributions will reap my firm $300 million in tax breaks or government contracts, then I would be foolish to pass up such a windfall.

“Poor” people are no different; if being “poor” is incentivized, then remaining “officially” poor is a modest but very real windfall. If being a single Mom is incentivized, then the obvious choice is to avoid marriage to collect the windfalls that flow to single moms. If workers compensation can be gamed via a “stress claim” for a long “free” vacation, then  it’s foolish not  to exploit the windfall.

The Right is blind to the windfall exploitation of the financial Elite, and the Left is blind to the windfall exploitation of those with access to Savior State free money. Those of us with actual experience in blue-collar/pink-collar America and “poor” communities are keenly aware of this because we know dozens of people who are scamming the system.

The tragedy of “free money” is that the subtext of this “help” is so perversely negative.When you get free money or equivalent, rather than an opportunity to contribute, what you’re  being told–and recipients understand this quite well–is that you’re not worth any real investment or effort. The “free money” is a bribe to keep quiet and invisible. Those skimming the benefits of the Status Quo don’t want you pestering them or upsetting the apple cart, so they give  out enough free money and goodies to buy everyone off, making them complicit in the  whole rotten system. The real message of free money is this: you’re worthless.

And because we’re designed to take free money, or free anything, we take whatever’s free: the $3 million tax break, the $300 million government contract, or the food stamps and unemployment.  But there is a cost, of course: in taking free money from the Savior State, as corporate or individual welfare, we have sacrificed our autonomy for our yoke of dependence on a disembodied, distant State.

If we want to get 20 million people back to productive work, we need to incentivize productive work and stop incentivizing unproductive gaming the system. I already laid out some structural steps in You Want to Create Jobs? Here’s How (August 2, 2011) andYou Want to Create Jobs? Here’s How Part II(August 4, 2011), but these are all politically “impossible” at this time.

Maybe in five years things will be different, but in the meantime, what do we do with 20-25 million people with nothing to do? Answer: we put them to work.

Before I describe how, let’s be honest about how destructive it is to sit at home doing nothing, contributing nothing and being utterly unproductive.  People who are denied a chance to contribute and be part of their community are unhappy people. People without productive work are so unhappy that many people who retire to an unproductive life simply die.

I think the evidence is profoundly obvious that paying people to sit at home watching the telly is profoundly destructive.  It is no wonder that people paid to do nothing, people dependent on the Central State for handouts, are filled with resentment; nobody likes to be worthless or dependent, and yet this is precisely what “free money” does to the human spirit.

Free money destroys the value of social capital, community, and the fabric of community, which is responsibility and reciprocity. With Free Money, there is no need to engage in social capital building, because the State check comes regardless.

There is a deeply pernicious political agenda to free money: it atomizes people, and this makes them much easier to control.By issuing individual checks and benefits, the Central State has set up a diabolical social Darwinism, in which competition for entitlements creates a dog-eat-dog environment in which community is discounted to zero and gaming the centralized State bureaucracy is highly rewarded.

Once you discount community to zero, it unravels.  Poverty is not just a lack of money, it is a lack of social and human capital, a topic I address in An Unconventional Guide to Investing in Troubled Times.

The only way to restore value to community and social capital is to require every recipient of State welfare/free money/free benefits to contribute time and effort to their community, and cut off the benefits/free money if they choose not to. With choice comes responsibility.

(For obvious reasons, the working poor with full-time jobs drawing benefits would be excluded from community work. The idea is to reward productive work, not punish it.)

Since we’re giving people free money and free goods/services anyway, why not enable them to be productive, build social capital and keep their skills sharp, or learn new ones?The net additional cost is essentially zero, as all we’d be doing is leveraging systems which already exist.

This is not “national service,” because it’s not controlled by the Central State. It is a form of “workfare,” which is positive for the individuals being given the choice. Why is workfare positive for the unemployed?  The best way to acquire valuable skills and valuable social-capital contacts is to enter the workforce and start doing something productive.  Once a person is needed, and contributes something positive to their community, their self-worth rises and the community gains the benefits of their labor.

The transition from incentivizing doing nothing to incentivizing productive labor on behalf of community will be difficult for many; even though it is terribly debilitating to sit at home doing nothing, it is certainly “easy,” just like it’s easy to live off government contracts (corporate welfare) as opposed to actually having to compete in the real world.

We don’t need to reinvent the wheel to put 20 million people to productive work in their communities.There are  a million churches, community groups, non-profits,  service clubs, garden clubs, etc. in the U.S. (not to mention state and National Parks desperate for motivated volunteer labor). Giving 20 million unemployed a choice of places to contribute to their community would eventually distribute about 20 people on average to each organization.

The vast majority of these organizations are already set up to put volunteers to work. They already exist; there is no vast machinery to invent at the Savior State level. The decentralized machinery already exists to do everything that Global Corporate America can’t do for stupendous profits.

As cities, counties and states trim their workforces to align expenses with their tax revenues, then community tasks like maintaining parks will devolve to volunteer groups.  Rather than pay 20 million people to sit at home doing nothing, why not engage them in their community, and get them back into the positive world of contributing and being valued?

Those collecting food stamps and Section 8 housing can also contribute, in proportion to the benefits they’re accepting.  Free anything is debilitating, and it’s crazy to be giving tens of millions of people money to contribute nothing while the nation falls apart out of neglect.

Global Corporate America will only do and only go wherever it can reap staggering profits; that is its raison d’etre. Thus most of the real work of the nation is of zero interest to Global Corporate America and its politico toadies.

Here are the numbers.I have sourced these many times so look in my archives:

Corporate profits: $1.4 trillion, or 10% of GDP.

The Free Money programs: extended unemployment: $160 billion, SNAP food stamps: $60 billion, Section 8 housing vouchers: $10 billion, total around $230 billion, or 8.4% of annual Federal spending of $3.8 trillion, and less than 2% of GDP.

Let’s be honest: it’s easy to pay people to do nothing.Requiring people to be productive is fraught with challenges: liability issues, oversight, lack of training, and a thousand other problems.

It’s easier to pay people to do nothing than give them an opportunity to contribute and improve their skills and social capital.

That’s too bad, because the machinery is already in place:we already have a vast system in place for teaching new skills called adult education and community colleges. We have a vast decentralized system in place to serve and nurture communities (community and non-profit organizations), which are ultimately the lifeblood of the nation. We already have a bureaucracy in place with systems for tracking and monitoring unemployed people called the state unemployment system.

Paying people to be idle and unproductive is destructive and debilitating; giving them a chance to contribute and become valued would be hugely positive, for the idle and for their communities. The message would change from: you’re worthless, just stay home and fade away, to: you are too valuable to pay to sit at home doing nothing.

I know this idea goes against every ideologically pure ideal out there; it is simply too practical, too cost-effective, too positive and too unrewarding to Central State fiefdoms and Global Corporate America cartels to gain any support from the financial and political Elites.

So instead we’ll watch our Elites fiddle with the rear-view mirror to “fix” the jobs machine which has a blown engine and frozen transmission, and as the unemployment lines lengthen by millions, we’ll continue paying people to sit at home rotting away and feeling worthless while the country falls apart at the seams. And why? Because it’s easier than giving them a chance to be productively useful by contributing to their community.

Charles Hugh Smith – Of Two Minds

The crumbling U.S. economy is putting an extraordinary amount of financial stress on American families.  For many Americans, “flat broke” has become a permanent condition.  Today, over half of all American families live paycheck to paycheck.  Unemployment is rampant and those that do actually have jobs are finding that their wages are rising much more slowly than prices are.  The financial condition of average American families continues to decline and this is showing up in all of the recent surveys.  For example, according to a new Gallup poll, “lack of money/low wages” is the number one financial concern for American families.  To make ends meet, many American families are going into even more debt and more American families than ever are turning to government assistance.  Right now, more Americans than at any other point since World War II are flat broke and have lost hope.  Until this changes, the frustration level in this country is going to continue to grow.

The following are 10 facts about the financial condition of American families that will blow your mind…..

#1 Only 58 percent of Americans have a job right now.

#2 Only 56 percent of Americans are currently covered by employer-provided health insurance.

#3 The median yearly wage in the United States is $26,261.

#4 The average American household is carrying $75,600 in debt.

#5 Only the top 5 percent of U.S. households have earned enough additional income to match the rise in housing costs since 1975.

#6 At this point, American families are approximately 7.7 trillion dollars poorer than they were back in early 2007.

#7 The poorest 50% of all Americans now own just 2.5% of all the wealth in the United States.

#8 According to one study, approximately 21 percent of all children in the United States were
living below the poverty line in 2010.

#9 Today, there are more than 44 million Americans on food stamps, and nearly half of them are children.

#10 According to Newsweek, close to 20 percent of all American men between the ages of 25 and 54 do not have a job at the moment.

So what is causing all of this?

Where in the world did all of the good jobs go?

Well, the truth is that millions of them have been shipped overseas.

Our politicians promised us that merging our economy with the economies of other nations where it is legal to pay slave labor wages to workers would not create more unemployment inside America.

They were dead wrong.

Now we are being told that we just need to accept a lower standard of living.

For example, billionaire Howard Marks says that it is time for all of us to just accept that the standard of living of American workers is inevitably going to decline to the level of the rest of the world….

“In addition to balancing the budget and growing the economy, I think we have to accept that the coming decades are likely to see U.S. standards of living decline relative to the rest of the world. Unless our goods offer a better cost/benefit bargain, there’s no reason why American workers should continue to enjoy the same lifestyle advantage over workers in other countries. I just don’t expect to hear many politicians own up to this reality on the stump.”

Are you willing to accept that?

Well, most Americans appear to be willing to accept this “new reality” because they keep sending most of the exact same bozos back to Washington D.C.

Meanwhile, the job losses continue to get worse.  As I wrote about the other day, as the U.S. economy has started to slow down again we are starting to see another huge wave of layoffs all over America.

It doesn’t take a genius to figure out where all of our jobs are going.  But unfortunately, most Americans don’t understand what is happening because neither the mainstream media nor our politicians are telling them the truth.

For much more on how millions of our good jobs are being shipped out of the country, please see another article I recently published entitled “How Globalism Has Destroyed Our Jobs, Businesses And National Wealth In 10 Easy Steps“.

But it is not just the globalization of the economy that is destroying our jobs.

The federal government bureaucracy has become so oppressive that it is amazing that anyone is still willing to hire workers in this day and age.

Hiring workers has become so complicated and so expensive that many small business owners want to avoid it at all cost.

For example, a small business owner identified as “007″ recently left the following comment on
one of my recent articles….

Speaking as a small employer, I would rather have a root canal than another employee.  Let’s see. You first have to hire someone you trust without some labor lawyer suing you for some type of discrimination. Then you have OSHA to make sure your work place is safe. Then you have workmans compensation insurance, unemployment taxes, health insurance, liability insurance, now Obamacare. Oh be careful not to be deemed to have a “hostile work environment”.  Then you have to negotiate the labor laws. The Department of Labor is constantly cranking out regulation.

Then you get the pleasure of paying payroll taxes both state and federal along with the required filing of a multitude of payroll forms. Miss filing or paying these taxes and you will be crushed with interest and penalties.

Of course, you are competing with businesses that can hire at a fraction of the cost of American Labor and with very little regulations. In this economy, no one in their right mind is hiring into this unstable and declining economy.

If business turns down all you have to worry about is laying off workers. Of course your unemployment insurance tax will go up 200% for years. Then you only have to then worry about a wrongful termination law suit.

The entire system is stacked against American workers.

If you are a blue collar worker, you should give up hope that things are going to get better.  The system has failed you.

You can stop waiting for the “good jobs” to come back.

They aren’t coming back.

That is one reason why I try to encourage everyone to become more independent of the system.

As our economic system continues to degenerate, Americans are going to become increasingly desperate.

Sadly, desperate people do desperate things.  Already we are starting to see signs that the fabric of American society is starting to be ripped to shreds.

So what is going to happen if the economy gets even worse?

There is a limit to how many people we can actually put in prison.  The reality is that the number of Americans in prison has nearly tripled since 1987.

Our prisons are already dangerously overcrowded.  As society falls apart, many communities will simply not be able to shove more people behind bars.

Even with our prisons stuffed to the gills, many of our largest cities continue to be transformed into absolute hellholes.

Detroit is now the 3rd most dangerous city on the entire planet and New Orleans is now the 9th most dangerous city on the entire planet.

So what are our leaders doing about all of this?

Well, they appear to be too busy fighting with each other and cheating on their wives to do much about our problems.

According to Politico, U.S. Representative David Wu is the latest member of Congress to be accused of a sex scandal….

Rep. David Wu has been accused of an “unwanted sexual encounter” with the teenage daughter of a longtime friend, the latest scandal to engulf the troubled Oregon Democrat.

This country is a complete and total mess.  Tens of millions of American families are flat broke and are about to slip into poverty.  Meanwhile, our politicians continue to prove that they are some of the most corrupt on the planet.

There are many out there that still believe that America has a bright future ahead.

It is getting really hard to see why anyone could possibly believe that.

The Economic Collapse

The grand financial recovery myth – 8 charts reflecting the true beneficiaries of four years of taxpayer bailouts.  Transfer payments make up 22 percent of household income and public debt surpasses annual GDP.

While the economy is recovering in raw GDP terms the working and middle class Americans are having a smaller and smaller piece of the pie.  The recovery is disproportionately flowing to a tiny fraction in our population and largely is based on targeted bailouts to the financial sector.  After four full years of bailouts and transfers to the banking sector it is clear that the inflation of the stock market has occurred only because of government support of failed banks (many who are now reaping profits overseas).  This also explains why unemployment is still stubbornly high and each month we keep shattering records for those receiving food stamps.  The upcoming decade if we continue down this path may be known as the great middle class swindle.  The evidence is rather conclusive that the current safety net resurrected by taxpayers has largely benefitted the same banking system that has led us down this unfortunate financial path.  Let us examine 8 charts regarding the current state of the economy.

Chart #1 – U.S. household income

U.S. household income is rarely brought up in the press.  The reason of course is that household income has gone absolutely nowhere for an entire decade.  Instead of focusing on this the media chooses to focus on fleeting stories that have little impact on the daily lives of Americans and serve more as mere sideshows and distractions.  While the cost of education, food, fuel, and other daily goods have soared to the stratosphere the wages that pay for these goods has shrunk.  Those who were able to stash money away in the stock market have seen practically no returns over the decade.  And why would they?  The big money to be had is in hedge funds where many make bets on a failing economy and profit handsomely.  The buy and hold investors thinks that purchasing a stock is largely a long-term investment and this is what they are conditioned to believe.  In reality, you have high frequency traders and hedge funds making billions of dollars on quick trades that have little impact on long-term sustainability and actually create crisis over the long-term.  With no income growth, that same paycheck is being eaten up by the cost of more expensive goods and the volatility of the market soars.

Chart #2 – Transfer payments

Source:  Of Two Minds

Transfer payments include welfare (financial aid), social security, and other subsidies by the government to certain businesses (i.e., ethanol).  I was amazed to see the above chart.  Government transfers now make up 22% of household income, a record amount.  Keep in mind this is happening at a time when the economy is supposedly recovering.  What the above chart is telling us is that more and more people unable to find work in the regular economy are depending on a variety of government payments.  Unlike the banks however, who needed taxpayer bailouts to continue financing their yachts and gambling lifestyle many of the above are using the funds to pay for food and basic necessities.  The fact that we are reaching a debt ceiling is troubling and we are clearly down an unsupportable road.  Bottom line is the money has run out a long time ago and all of this is now being financed on debt.

Read the rest at My Budget 360

The ratio of government handouts to wages and salaries in the United States is now at an all-time high.  According to TrimTabs Investment Research, government handouts have reached a level that is equivalent to 35 percent of all wages and salaries in the United States.  Considering the fact that this figure was only 21 percent back in the year 2000 and only 10 percent back in 1960 that is very frightening.  The sad truth is that today the American people are more dependent on direct government payments than they ever have been before.  What this does is that it takes formerly independent Americans and transforms them into “sheeple” and pets of the government.  Today we have tens of millions of Americans that eagerly await the crumbs that the federal government tosses them each month.  This is one reason why our national debt is exploding, but our politicians like this system because it enables them to buy votes.  Meanwhile, the federal government and the international corporations that dominate our economy have rigged the game so that power and money are becoming increasingly centralized in their hands.  As a result of the system that the “big boys” have developed, millions of small businesses across the country are being absolutely crushed, the standard of living of the middle class is gradually being destroyed and more American families slip into poverty ever single day.  What we need to do is to dramatically reduce the power of both the federal government and the big corporations so that small businesses and individuals can thrive once again, but instead “activists” such as Michael Moore are out there demanding even more taxes and even more government handouts.

Not that a “safety net” is a bad thing.  We simply are not going to allow tens of millions of Americans to starve out in our streets.  However, it has gotten to the point where the majority of American families are now dependent on the U.S. government in one form or another and that is very, very wrong.

More government handouts are never a long-term solution to anything.  Handouts do not give people dignity.  Handouts do not teach people to be independent.  Handouts do not enable people to live the “American Dream”.  Handouts are not the path to prosperity.

What the American people need are jobs and an environment where small businesses can thrive.  But instead, the federal government has allowed the big global corporations to ship millions of our jobs out of the country and the federal government continues to burden our small businesses with an endless array of new taxes and regulations.

Who is successful in America today?

It is the big boys.  Everyone else is being crushed.

This is what the founding fathers tried to warn us about.  They did not want the federal government to have much power at all, and they were deeply suspicious of large corporations.

But we have turned our backs on the principles of the founding fathers.

We should be figuring out how to get back to the America that our founding fathers originally tried to create, but instead all of the attention is being given to “activists” such as Michael Moore who are calling for even more taxes and even more government handouts.  The following video is of Michael Moore giving a speech to protesters in Madison, Wisconsin on March 5th, 2011.  His speech was entitled “America Is Not Broke”….

Yes, the “little guy” is being absolutely crushed in America today.  But for people like Michael Moore the solution is always to tax the middle class more and to pass out even more government handouts.

That isn’t going to solve anything.  Most of the ultra-wealthy have turned avoiding taxes into an art form.  A third of all the wealth in the world is now held in “offshore banks“.  Many of our largest corporations don’t pay a dime in federal taxes even as they pass out multi-million dollar bonuses to their executives.

Raising taxes in most definitely not the answer.  Those that have mastered the art of avoiding taxes will continue to do so no matter how high you raise them.

The truth is that we need to shut down the IRS and scrap the current tax system entirely.  It simply does not work.

What we need to do is to get the federal government and the big corporations under control and transfer the power back to the American people.

That is what our founding fathers intended.  They intended for the common man to be empowered  to start businesses, create wealth and pursue happiness.

But instead tens of millions of Americans have become addicted to government handouts.  When large numbers of people give up and willingly become wards of the government that is not good for society.

Unfortunately, more Americans today are dependent on the U.S. government than ever before.  Just consider the following statistics….

-According to TrimTabs Investment Research, social welfare benefits in the United States have risen by $514 billion over the past two years alone.

-As 2007 began, only about 26 million Americans were on food stamps, but today over 44 million Americans are now on food stamps.

-Over 50 million Americans are now on Medicaid.

-Back in 1965, only one out of every 50 Americans was on Medicaid.  Today, one out of every 6 American is on Medicaid.

-53 million Americans received $703 billion in Social Security benefits in 2010.

-Right now the U.S. government is either writing or guaranteeing well over 90 percent of all mortgages in the United States.

-It is being projected that extended unemployment benefits will cost the federal government $34 billion over the next two years.

-30 U.S. states have borrowed a total of $41.5 billion from the federal government just so that they could continue paying out unemployment benefits during the recession.

-Entitlement programs such as Social Security and Medicare now account for 58% of all U.S. government spending.

But what else should we expect?  The federal government has been using a sledgehammer to endlessly pound away on the capacity of small businesses and individuals to create wealth and jobs and opportunities.  The business atmosphere in the United States is now so toxic that it is amazing that any small businesses have survived.

Most Americans find themselves with no other way to make a living other than to work for someone else.  But the big global corporations have discovered that they can make much larger profits by getting rid of American workers and by shipping our jobs overseas and our politicians are allowing them to get away with it.

The truth is that both political parties don’t have the answers.  Neither party seems to have any clue about how to stop millions of jobs from leaving the United States and neither party seems to have any clue about how to create a business environment inside the United States where individuals and small businesses can actually thrive.

How much longer will it be before we all finally admit that we are experiencing total system failure in this country?  Should we all just quit trying and sit on our couches waiting for the next government handout?  The truth is that there aren’t nearly enough jobs for all Americans anyway.

The middle class is dying and the establishment has us all fighting with each other.  The left and the right are busy fighting about taxes and budget cuts while the ultra-wealthy continue to enjoy massive profits and incredibly low taxes in the globalized economic system that we have allowed our politicians to create.

Yes, there are tens of millions of Americans that are deeply suffering right now and they need to be helped.

But government handouts are never a long-term solution to anything.  What we need to do is to massively reduce the power of the federal government, massively reduce the power of the big corporations and stop businesses and jobs from being shipped out of the country.  We also need to create an environment in the United States that is very favorable to small businesses.  That would give our country a chance to start creating good jobs again.

But instead, we continue to allow our politicians to destroy our economy.  We actually have 10 percent fewer middle class jobs in this country than we did just ten years ago.  The middle class is being systematically destroyed.  All of the wealth and all of the power are slowly being transferred into the hands of big government and the big corporations.

The vast majority of the rest of us are being transformed from strong, independent, prosperous Americans into dehumanized sheeple that can’t wait for the next government check to come in.

Does anyone out there actually believe that this is what our founding fathers originally intended?

The Economic Collapse

When Barack Obama, the Federal Reserve and the mainstream media tell us that we are in the middle of an economic recovery, is that supposed to be some kind of sick joke?  According to newly released numbers, over 44 million Americans are now on food stamps.  That is a new all-time record and that number is 13.1% higher than it was just one year ago.  So how many Americans have to go on food stamps before we can all finally agree that the U.S. economy is dying?  50 million?  60 million?  All of us?  The food stamp program is the modern equivalent of the old bread lines.  More than one out of every seven Americans now depends on the federal government for food.  Oh, but haven’t you heard?  The economy is showing dramatic improvement.  Corporate profits are up.  The stock market is soaring.  Happy days are here again.

It just seems inconceivable that anyone can claim that the economy is improving when the number of Americans on food stamps continues to set a brand new record every single month.  But the food stamp program is not the only indicator that the economy is still having massive problems.  The following are 10 more reasons why the U.S. economy is simply not getting any better….

#1 Some recent statistics actually indicate that the number of unemployed Americans is still going up.  According to Gallup, unemployment in the United States rose to 10.3% at the end of February.  That is the highest number Gallup has reported since early last year.

#2 The housing industry is still a complete and total disaster.  In fact, new home sales in the U.S. in January were 11.2% lower than they were in December.  Not only that, the number of new home sales in January was 18.6% lower than the number of new home sales in January 2010.  That is not a sign of improvement.

#3 There wouldn’t even be much of a housing industry at all at this point if it was not for the U.S. government.  Right now the U.S. government is either writing or guaranteeing well over 90 percent of all mortgages in the United States.  So what would the housing market look like in 2011 if the government was not in the picture?

#4 In 2010, more than a million U.S. families lost their homes to foreclosure for the first time ever, and that number is expected to go even higher in 2011.

#5 Due to rampant economic decay and record numbers of foreclosures there are areas in most of our major cities that now look like “war zones”.  For example, the Huffington Post is reporting that there are now approximately 15,000 vacant buildings in the city of Chicago and there are approximately 60,000 vacant houses and apartments in the city of Las Vegas.

#6 According to the Oil Price Information Service, U.S. drivers spent an average of $347 on gasoline during the month of February, which was 30 percent more than a year earlier.  This represented 8.5% of median monthly income.  So what is going to happen when gas prices go even higher?  Sadly, the average price of gasoline in the U.S. has risen another 4 cents since yesterday and it is likely to go much higher from here.

#7 The U.S. trade deficit continues to grow.  The trade deficit was about 33 percent larger in 2010 than it was in 2009, and the 2011 trade deficit is expected to be even bigger.

#8 The CredAbility Consumer Distress Index, which measures the average financial condition of U.S. households, declined in every single quarter in 2010.

#9 The number of Americans that have become so discouraged that they have given up searching for work completely now stands at an all-time high.

#10 The U.S. national debt is growing faster than ever.  The Obama administration is projecting that the federal budget deficit for this fiscal year will be a new all-time record 1.65 trillion dollars.  It is hard to even imagine how much money that is.  If you went out today and started spending one dollar every single second, it would take you over 31,000 years to spend one trillion dollars.  Long ago the U.S. government should have been getting these deficits under control, but instead they are just getting even larger.

So in light of the statistics above, can anyone really claim that we are in the middle of an economic recovery?

The truth is that there is no sign that any of the long-term trends that are destroying the U.S. economy are even slowing down.

Millions of jobs continue to be shipped overseas.

The U.S. dollar continues to be devalued.

The federal government continues to go into more debt.

State and local governments continue to go into more debt.

Our trade deficit continues to grow.

Our cities continue to be transformed into wastelands as they are being systematically deindustrialized.

The number of Americans that are dependent on the government continues to soar.

The U.S. middle class continues to shrink.

I know that I harp on these themes over and over, but it is vitally important that everyone understands that the mainstream media is lying to us.

The U.S. economy is dying a very painful death and there is no hope on the horizon.

Things are not going to be getting better.  Well, they may get a bit better for the boys down on Wall Street, but for the rest of us our standards of living are going to continue to decline.

The best days for the U.S. economy are already behind us.  What lies ahead is a whole lot of pain.

We are going to pay the price for decades of corruption and incompetence.

An economic collapse is coming and you had better get ready.

The Economic Collapse