Category Archives: U.S. Economics

Cripple by way of rendering a Country’s People helpless. You see it happening but you are doing nothing about it. Here’s the proof. Are you just going to set there? Or are you going to contact the military, start having meetings in your town to discuss something more than teas and policy?

History Lesson On Your SS Card

Posted on 27/01/2012 | 1 Comment

post sent by Dan Morris

[My SS card was issued in 1969 and, indeed, the Not for Identification is not on it. Neither does it appear on my children’s, but there is something strange.

The information provided on the back of my card exactly as it’s written: Contact any social security office immediately if you: lose your card—to get a duplicate card.; change your name—to get a card in your new name.; are unable to work because of a severe disability expected to last a year or more.; are 62 or older—to ask about retirement checks.; are within 2 or 3 months of age 65, even if you don’t plan to retire—to sign up for Medicare. [Then at the very bottom] Department of Health and Human Services, Social Security Administration Form OA-702 (5-80)

Here’s what’s on my children’s, again exactly as it’s written: (Date: 1995) This card is the official verification of your Social Security number. Please sign it right away. Keep it in a safe place. Improper use of this card or number by anyone is punishable by fine, imprisonment or both. This card belongs to the Social Security Administration and you must return it if we ask for it. If you find a card that isn’t yours, please return it to: Social Security Administration, P.O. Box 17087, Baltimore, MD 21235. For any other Social Security business/information, contact your local Social Security office. If you write to the above address for any business other than returning a found card, it will take longer for us to answer your letter. [At the bottom] Social Security Administration Form SSA—3000 (4-95)

On my youngest: (Date: 2000) All is the same except: The address is P. O .Box 33008, Baltimore, MD 21290-3008, and the form is Form SSA—3000 (6-99)

I find that the information on my children’s cards is more authoritative sounding than on mine. It’s almost like more control is being put into play. Of course, that could be just me. Read the following. It’s very interesting.]

I checked my SS Card and it says “Not For Identification”! Of course it’s 43 years old and still the original one I was issued!

Just in case some of you didn’t know this. It’s easy to check out, if you don’t believe it. Be sure and show it to your family and friends. They need a little history lesson on what’s what and it doesn’t matter whether you are Democrat or Republican. Facts are Facts.

Social Security [SS] Cards up until the 1980s expressly stated the number and card were not to be used for identification purposes. Since nearly everyone in the United States now has a number, it became convenient to use it anyway and the message, NOT FOR IDENTIFICATION, was removed.

clip_image001

An old Social Security card with the “NOT FOR IDENTIFICATION” message.

Our Social Security: Franklin Roosevelt, a Democrat, introduced the Social Security (FICA) Program. He promised:

  1. Participation in the program would be completely voluntary.
    No longer voluntary.
  2. Participants would only have to pay 1% of the first $1,400 of their annual incomes into the program.
    Now 7.65%, on the first $90,000.
  3. The money the participants elected to put into the program would be deductible from their income for tax purposes each year.
    No longer tax deductible.
  4. The money the participants put into the independent Trust Fund rather than into the general operating fund, and therefore, would only be used to fund the Social Security Retirement Program, and no other government program.
    Under Johnson, the money was moved to The General Fund and Spent.
  5. The annuity payments to the retirees would never be taxed as income.
    Under Clinton & Gore: Up to 85% of your Social Security can be Taxed.

Since many of us have paid into FICA for years and are now receiving a Social Security check every month, [we] find that we are being taxed on 85% of the money we paid to the Federal government.

You may be interested in the following:

Q: Which Political Party took Social Security from the independent Trust Fund and put it into the General Fund so that Congress could spend it? 
A: It was Lyndon Johnson and the democratically controlled House and Senate.

Q: Which Political Party eliminated the income tax deduction for Social Security (FICA) withholding?
A: The Democratic Party.

Q: Which Political Party started taxing Social Security annuities?
A: The Democratic Party, with Al Gore casting the tie-breaking deciding vote as President of the Senate, while he was Vice President of the US.

Q: Which Political Party decided to start giving annuity payments to immigrants?
A: That’s right! Jimmy Carter and the Democratic Party. Immigrants moved into this country, and at age 65, began to receive Social Security payments!

The Democratic Party gave these payments to them, even though they never paid a dime into it! Then, after violating the original contract (FICA), the Democrats turn around and tell you that the Republicans want to take your Social Security away! And, the worst part about it is… uninformed citizens believe it!

The most recent tax break that the puppet administration is pushing is, in fact, a reduction in the FICA tax that workers pay, which goes to pay Social Security, which is unfunded.  Why not cut some other tax rather than the FICA tax?

IF enough people SEE this, maybe a seed of awareness will be planted and maybe changes will evolve.

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Paid-For Benefits Deemed Entitlements?

Posted on 07/12/2011 | 1 Comment

post sent via email by Geno Ledet

[Oh, what web we weave! Mr. Ledet is dead-on target with this one. The saddest part of it is that no one is raising enough hell about this. Debate, debate, debate without any action! Corruption at its best.]

I paid—Didn’t You?

The only thing wrong with this calculation is they forgot to figure in the people who died before they collected their social security! Where did that money go? This is another example of what Rick Perry called “treason in high places!”

Remember, not only did you contribute to Social Security but your employer did, too. It totaled 15% of your income before taxes. If you averaged only $30K over your working life, that’s close to $220,500. If you calculate the future value of $4,500 per year (your’s & your employer’s contribution) at a simple 5% (less than what the govt. pays on the money that it borrows), after 49 years of working you’d have $892,919.98.

If you took out only 3% per year, you’d receive $26,787.60 per year and it would last better than 30 years (until you’re 95 if you retire at age 65) and that’s with no interest paid on that final amount on deposit! If you bought an annuity and it paid 4% per year, you’d have a lifetime income of $2,976.40 per month.

The folks in Washington  have pulled off a bigger Ponzi scheme than Bernie Madhoff ever had.

Entitlement my ass, I paid cash for my social security insurance! Just because they borrowed the money, doesn’t make my benefits some kind of charity or handout! Congressional benefits—free healthcare, outrageous retirement packages, 67 paid holidays, three weeks paid vacation, unlimited paid sick days, now that’s welfare, and they have the nerve to call my social security retirement entitlements!

We’re “broke” and can’t help our own seniors, veterans, orphans, homeless. In the last months we have provided aid to Haiti, Chile, and Turkey. And now  Pakistan—home of bin Laden. Literally billions of dollars!

Our retired seniors living on a fixed income receive no aid nor do they get any breaks while our government and religious organizations pour hundreds of billions of dollars and tons of food to foreign countries!

They call Social Security and Medicare entitlements even though most of us have been paying for it all our working lives and now when it’s time for us to collect, the government is running out of money. Why did the government borrow from it in the first place? Imagine if the GOVERNMENT gave US the same support they give to other countries!

Sad isn’t it?

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Change?

Posted on 25/04/2011 | 3 Comments

post by unknown author (from email)

The puppet kept his promise of change. Here are some of the changes. Are you ready for 4 more years of changes? After two years of the puppet, here’s your change!

January 2009 TODAY

% chg

Source
Avg.. Retail price/gallon gas in U.S. $1.83 $3.104

69.6%

 1
Crude oil, European Brent (barrel) $43.48 $99.02

127.7%

 2
Crude oil, West TX Inter. (barrel) $38.74 $91.38

135.9%

 2
Gold: London (per troy oz.) $853.25 $1,369.50

60.5%

 2
Corn, No.2 yellow, Central IL $3.56 $6.33

78.1%

 2
Soybeans, No. 1 yellow, IL $9.66 $13.75

42.3%

 2
Sugar, cane, raw, world, lb. Fob $13.37 $35.39

164.7%

 2
Unemployment rate, non-farm, overall 7.6% 9.4%

23.7%

 3
Unemployment rate, blacks 12.6% 15.8%

25.4%

 3
Number of unemployed 11,616,000 14,485,000

24.7%

 3
Number of fed. Employees, ex. Military (curr = 12/10 prelim) 2,779,000 2,840,000

2.2%

 3
Real median household income (2008 v 2009) $50,112 $49,777

-0.7%

 4
Number of food stamp recipients (curr = 10/10) 31,983,716 43,200,878

35.1%

 5
Number of unemployment benefit recipients (curr = 12/10) 7,526,598 9,193,838

22.2%

 6
Number of long-term unemployed 2,600,000 6,400,000

146.2%

 3
Poverty rate, individuals (2008 v 2009) 13.2% 14.3%

8.3%

 4
People in poverty in U.S. (2008 v 2009) 39,800,000 43,600,000

9.5%

 4
U.S.. Rank in Economic Freedom World Rankings 5 9

n/a

 10
Present Situation Index (curr = 12/10) 29.9 23.5

-21.4%

 11
Failed banks (curr = 2010 + 2011 to date) 140 164

17.1%

 12
U.S.. Dollar versus Japanese yen exchange rate 89.76 82.03

-8.6%

 2
U.S.. Money supply, M1, in billions (curr = 12/10 prelim) 1,575.1 1,865.7

18.4%

 13
U.S.. Money supply, M2, in billions (curr = 12/10 prelim) 8,310.9 8,852.3

6.5%

 13
National debt, in trillions $10..627 $14..052

32.2%

 14

Just take this last item—In the last two years we have accumulated national debt at a rate more than 27 times as fast as during the rest of our entire nation’s history. Over 27 times as fast. Metaphorically speaking, if you are driving in the right lane doing 65 MPH and a car rockets past you in the left lane 27 times faster, it would be doing 7,555 MPH! (Over 10 times the speed of sound) No wonder we did not see it!

Sources—(1) U.S. Energy Information Administration; (2) Wall Street Journal; (3) Bureau of Labor Statistics; (4) Census Bureau; (5) USDA; (6) U.S. Dept. of Labor; (7) FHFA; (8) Standard & Poor’s/Case-Shiller; (9) RealtyTrac; (10) Heritage Foundation and WSJ; (11) The Conference Board; (12) FDIC; (13) Federal Reserve; (14) U.S. Treasury

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Economic Recover: 100% Fake

Posted on 25/04/2011 | Leave a comment

post by Robert Wiedemer, MoneyNews.com

That’s right. The recovery is a fake. It is completely a result of massive increases in government borrowing. The cheerleaders like to tell you that the economy has rebounded. We had government stimulus earlier, but now animal spirits have taken over and it is running on its own. Hah! The recovery is only stimulus.

Let’s look at the numbers—In 2007, the GDP was $14.0 trillion. In 2010, the GDP was $14.6 trillion. That’s a net increase of $600 billion—$600 billion in 3 years is not good, but it is a rebound that is at least slightly above inflation.

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However, let’s compare that to the increase in government borrowing.
  • In 2007, the U.S. government borrowed and spent $163 billion.
  • In 2010, the U.S. government borrowed and spent almost $1.4 trillion.

That’s a net increase of over $1.2 trillion. The entire increase in our GDP can be attributed to the increase in government spending. In fact, the increase in government spending is almost two times the increase in our GDP. That means the economy is doing very poorly indeed. Without massive increases in government borrowing and spending, there would be no recovery at all.

As a final note of how much the U.S. government has increased its borrowing and spending, in February 2011 alone we borrowed and spent $222 billion. That’s almost 40 percent more than in all of 2007.

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Government AAA Rating: Fishy

Posted on 25/04/2011 | Leave a comment

post by Lee Bellinger, publisher of Independent Living [I've been reading about the U.S. debt for a year now and it's strange to see articles like this one below and then watch the news on T.V. Am I the only one seeing the drastic difference here? The T.V. news is constantly reporting that the Wall Street numbers are climbing (in fact a few days ago there were some Wall Street people standing outside their building with clappers celebrating! as reported on CNN). So, who's telling the truth? If you are paying attention, there are swarms of businesses drastically advertising to get your gold. Okay, why would they be doing that if the Wall Street numbers are climbing? Interesting, isn't it, how the news on T.V. and the government seems to be deliberately hiding the reasons why gold is all of a sudden so much in demand! Just a thought.]

Trying to figure out how the U.S. dollar’s swan song is going to play out is among the favorite parlor games among analysts these days. And the truth is, none of us is really smart enough to know! But there are some tantalizing warnings out there for those with the courage to pay attention to the grim realities now unfolding.

The National Inflation Association recently pointed out that the Federal Reserve is buying a whopping 70% of U.S. government debt. This is the most inflationary thing a country can do. But the U.S. feels forced to fill the void left by waning foreign purchases of U.S. debt, which have fallen from 50% of all debt issuance to 30%. So our government is essentially writing and cashing checks to itself.

Last Monday, even the politically compromised Standard and Poor’s credit rating service had no choice but to lower its long-term outlook for U.S. debt from stable to negative. Disturbingly, it still gave Uncle Sam a AAA credit rating, despite the fact that government finances are hanging by a thread and totally dependent on desperation-level money creation to stave off a major cash flow crisis.

This government-debt Ponzi scheme is many years in the making, and readers of my two subscription publications—Independent Living and Money, Metals, and Mining—are well aware of the problems brewing now, the coming storm, and how to protect their wealth from the impending collapse of the dollar.

An important note—S&P only downgraded its outlook, which means it may lower the U.S. AAA rating in the next two years if Congress doesn’t fix its problems. In other words, it’s just a warning!

There’s Something Fishy Going on When
Government Debt Can Maintain AAA Rating

It’s a shame S&P has dragged its feet for years to warn the average citizen of the dangers ahead. Why the lag? Chalk it up to another blatant example of crony capitalism. Should we trust the S&P’s ratings? Remember, during the subprime-mortgage market fiasco, S&P maintained AAA ratings on many mortgage-backed securities up until the day they imploded. Something doesn’t smell right.

Don’t Let Your Guard Down

Behind the curtain of the bond and stock market circus and government newspeak, the smart money globally is shunning U.S. paper, seeing the inflationary destruction ahead.

I hope you’ve been taking to heart the insights we’ve issued for the past two years—long before the S&P’s revised outlook—and are using them to fine tune your own contingency plans. But so many others have issued dire warnings in recent weeks and months—

  • Warren Buffet—”I do not like short-term bonds, and I do not like long-term bonds. And if you push me, I’m sure I don’t like intermediate-term bonds either. I just think it’s a terrible mistake to buy into fixed-dollar investments at these kinds of rates.”
  • Jim Rogers—”Bonds are making a top. They’ll be in a bear market soon.“
  • Bill Gross—Both the world’s top bond fund manager and manager of the world’s largest bond fund, Gross dumped ALL U.S. government debt from his funds’ holdings. He diversified his Total Return fund (PTTDX) into corporate and foreign bonds as well as bond alternatives such as convertibles and preferred equity shares.
  • Robert Zoellick—The World Bank President said last November that gold has become the “yellow elephant in the room.”

The implications for your future purchasing power are dire…

  • China and four other leading high-growth economies, the so-called BRICS economies (Brazil, Russia, India, China, and South Africa), have taken landmark steps toward lowering the importance of the dollar in international financial transactions by moving towards a multi-currency reserve and trading system.
  • It’s highly likely that Japan, one of the largest holders of U.S. Treasuries ($885.9 billion worth) will sell some to fund the rebuilding of its disaster-ravaged economy.
  • China, the biggest buyer of U.S. Treasury securities, trimmed its holdings for a fourth straight month in February.

Good news for sound money advocates and gold and precious metals investments—

  • In March, the Utah state legislature passed the largely symbolic Utah Legal Tender Act, making Utah the first state in recent times to accept gold and silver coins as legal tender. Other states are considering similar legislation in response to the Federal Reserve’s dangerous monetary policy.
  • The UTIMCO endowment, which oversees funds held by the University of Texas System and Texas A&M University exchanged fiat and gold paper investments and took delivery of 6,643 physical gold bars valued at nearly $1 billion. Dallas hedge-fund manager J. Kyle Bass, who helped advise UTIMCO says, “Central banks are printing more money than they ever have, so what’s the value of money in terms of purchases of goods and services. I look at gold as just another currency that they can’t print any more of.”
  • Even establish mentarian banks are acknowledging the dollar is emerging as a solid alternative to the dollar. In early February J.P. Morgan bank quietly announced it would accept gold as collateral for loans.
  • In November, ICE Futures Europe (Intercontinental Exchanges, Inc.) began to accept gold bullion as initial margin for crude oil and natural gas futures (a big step given that global energy prices have been almost exclusively denominated in dollars).
  • The Wall Street Journal recently noted another sign that the greenback is rapidly losing its credibility—Stock exchanges in Chicago, New York, and Europe have started accepting gold for some trades.
  • Central banks worldwide became net buyers of gold starting in 2009, after more than two decades as net sellers.

Protect yourself from the toxic dollar with a safe-haven portfolio for inflationary times. It should contain a multitude of assets such as precious metals, commodity-related stocks, emerging markets stocks, dividend-paying stocks, and alternative cash cushions found in foreign currencies. To obtain more information on basic strategies and tactics, go here.

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How’s that hope and change working for you now?

Posted on 07/03/2011 | Leave a comment

post from unknown author

Time for the revelation of some very interesting numbers—

Two years ago today, [the puppet] was inaugurated as president of the United States. Are you better off today than you were two years ago? Numbers don’t lie, and here are the data on the impact he has had on the lives of Americans—

  January 2009 TODAY % chg Source
Avg. retail price/gallon gas in U.S. $1.83 $3.104 69.6% 1
Crude oil, European Brent (barrel) $43.48 $99.02 127.7% 2
Crude oil, West TX Inter. (barrel) $38.74 $91.38 135.9% 2
Gold: London (per troy oz.) $853.25 $1,369.50 60.5% 2
Corn, No.2 yellow, Central IL $3.56 $6.33 78.1% 2
Soybeans, No. 1 yellow, IL $9.66 $13.75 42.3% 2
Sugar, cane, raw, world, lb. fob $13.37 $35.39 164.7% 2
Unemployment rate, non-farm, overall 7.6% 9.4% 23.7% 3
Unemployment rate, blacks 12.6% 15.8% 25.4% 3
Number of unemployed 11,616,000 14,485,000 24.7% 3
Number of fed. employees, ex. military (curr = 12/10 prelim) 2,779,000 2,840,000 2.2% 3
Real median household income (2008 v 2009) $50,112 $49,777 -0.7% 4
Number of food stamp recipients (curr = 10/10) 31,983,716 43,200,878 35.1% 5
Number of unemployment benefit recipients (curr = 12/10) 7,526,598 9,193,838 22.2% 6
Number of long-term unemployed 2,600,000 6,400,000 146.2% 3
Poverty rate, individuals (2008 v 2009) 13.2% 14.3% 8.3% 4
People in poverty in U.S. (2008 v 2009) 39,800,000 43,600,000 9.5% 4
U.S. rank in Economic Freedom World Rankings 5 9 n/a 10
Present Situation Index (curr = 12/10) 29.9 23.5 -21.4% 11
Failed banks (curr = 2010 + 2011 to date) 140 164 17.1% 12
U.S. dollar versus Japanese yen exchange rate 89.76 82.03 -8.6% 2
U.S. money supply, M1, in billions (curr = 12/10 prelim) 1,575.1 1,865.7 18.4% 13
U.S. money supply, M2, in billions (curr = 12/10 prelim) 8,310.9 8,852.3 6.5% 13
National debt, in trillions $10.627 $14.052 32.2% 14

Just take this last item—In the last two years we have accumulated national debt at a rate more than 27 times as fast as during the rest of our entire nation’s history. Over 27 times as fast! Metaphorically, speaking, if you are driving in the right lane doing 65 MPH and a car rockets past you in the left lane 27 times faster . . . it would be doing 1,755 MPH! This is a disaster!

Sources—(1) U.S. Energy Information Administration; (2) Wall Street Journal; (3) Bureau of Labor Statistics; (4) Census Bureau; (5) USDA; (6) U.S. Dept. of Labor; (7) FHFA; (8) Standard & Poor’s/Case-Shiller; (9) RealtyTrac; (10) Heritage Foundation and WSJ; (11) The Conference Board; (12) FDIC; (13) Federal Reserve; (14) U.S. Treasury

 

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Obamacare: Cost States $118 Billion

Posted on 07/03/2011 | Leave a comment

post for Newsmax

[This information proves me correct! Does anyone realize how destructive this is? Does anyone see that this puppet is doing whatever he can to break us? Why are your eyes shut? Already the dollar is falling and many places, in the United States, are printing their own money. There are places on the East coast accepting the Euro! In other countries, shops are refusing to take the dollar. Watch the video I have on Argentina. That is happening to us. Americans are in denial! The Jews were in denial, too, and look what happened to them!]

The health-care reform bill passed last year will cost states at least an additional $118.04 billion through 2023 due to their increased Medicaid costs, according to a new congressional report. That’s nearly double the Congressional Budget Office’s recent estimate of $60 billion through 2021.

“The enactment of the Patient Protection and Affordable Care Act in March 2010 was the largest expansion of [Medicaid] since its inception more than 45 years ago,” according to a statement from the House Energy and Commerce Committee and the Senate Finance Committee, which jointly produced the report. “Half of those obtaining healthcare coverage under the new law will get it through Medicaid. The committee report provides a State-by-State analysis of the financial impact the new healthcare law will have on states and demonstrates the unsustainable fiscal burden this new law will foist upon taxpayers.”

The joint congressional report “is the first to provide a comprehensive overview of State government estimates regarding the cost of the Patient Protection and Affordable Care Act to state Medicaid programs,” the report states.

Sen. Orrin Hatch of Utah, the ranking Republican on the Senate Finance Committee, said, “Governors of both political parties were clear when Congress was debating the $2.6 trillion health law that they could not afford a massive expansion in Medicaid. Washington didn’t listen and plowed forward instead by putting 16 million Americans onto the Medicaid rolls to keep the federal price tag down.

“With this report, we see the true cost to states, who are already facing a collective $175 billion budget shortfall, of this unsustainable expansion.”

The report’s State-by-State breakdown shows that California will spend at least another $19.4 billion on Medicaid, and Texas will be forced to spend another $27 billion—more than the program’s entire annual budget today. Obamacare will cost Florida taxpayers $12.9 billion through 2023. Louisiana will have to pay an additional $7 billion; New York, 2.8 billion; and Virginia, $2.2 billion. Even a less populated State, Iowa, will have to take on 100,000 new Medicaid enrollees, and spend an added $250 million.

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Important! Credit/debit Cards at the Gas Pump

Posted on 26/01/2011 | Leave a comment

post by Clyde Robbins

Using credit/debit card to purchase gasoline? Read this note very carefully. I did not know about the clear button, but I will be pushing the clear button before I swipe my gas or debit card and after just to be safe. People are getting really desperate due to the constantly rising gas prices. A friend just told me about something that happened to one of his coworkers. She used her credit/debit card to purchase gas at the pump (like most of us do). She received her receipt like normal. However, when she checked her statement, there were two $50 charges added in addition to her purchase. Upon investigation, she found out that because she did not press the 'clear' button on the pump, the employee inside the store was able to use her card to purchase his/her own gas! To keep this from happening, after you get your receipt, you must press the 'CLEAR' button or your information will be stored until the next customer inserts their card. Be sure to tell all your friends/family so that this doesn't happen to them! I had never noticed the clear button but I got gas the other day and sure enough it is there. I shall be using it from now on.

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Return America to the Gold Standard

Posted on 23/12/2010 | Leave a comment

by Greg Brown and Ashley Martella NewsMax

Jeffrey Bell, a two-time campaign adviser to Ronald Reagan, says it’s high time that the United States return to the gold standard, abandoned by President Richard Nixon in 1971. He cites Reagan as a proponent of the monetary regime and squarely blames current Federal Reserve Chairman Ben Bernanke’s policies for the ongoing global economic stagnation. Bell is policy director of the American Principles Project. He served as an issues adviser in Ronald Reagan’s 1976 and 1980 presidential campaigns and was the Republican Party’s nominee for the U.S. Senate in New Jersey in 1978. Bernanke’s policies—extremely low interest rates and flooding the system with unneeded dollars—are feeding stagnation and making our debt problems worse, Bell tells Newsmax.TV.

“Right now, Ben Bernanke, the chairman of the Fed, is printing dollars. He’s really just summoning them up from cyberspace, out of a computer,” Bell says. “If he had to know that each dollar was something of independent value, backed by gold or some other commodity—preferably gold—it would be much harder for the United States to borrow all this money it does from foreigners in order to finance huge budget deficits.”

Since rates are at zero, Bell says, nobody can tell what shape the economy is in or how long rates will stay low. The longer we stay at artificially low rates through money printing, the more the confusion grows, Bell maintains. “I think that’s a big threat to the world economy’s sense of confidence,” Bell says.

Bernanke has gone on the offensive, appearing on 60 Minutes to defend the Fed’s $600 billion bond-buying plan. During the interview, he suggested that a third round wasn’t impossible. The bigger problem now isn’t a second recession, he says, but stagnation as a result of confusion sown by Bernanke and the Fed.

“Ironically, Mr. Bernanke is addressing a problem, namely a slow recovery, that he himself is heavily responsible for creating,” Bell says. Reagan understood the complexity of world economy, Bell says, and knew that it was simply too hard to eliminate human error from the equation. The late president always felt that being off the gold standard was a mistake, especially in times of double-digit inflation, which was happening as Reagan took office. The sheer complexity of world economics is now coming back to bite the United States, which controls the world’s most widely used currency. Unfortunately for U.S. competitors that might like to get rid of the dollar, such as China and Russia, any move to dump it would create far bigger problems for them.

“The deterioration of the dollar is particularly threatening to the world’s confidence in its money,” since most countries use the dollar to back their own currency, Bell points out. “The countries that have it don’t like that it’s depreciating, but if they start to sell it, it depreciates even more,” Bell says. “It’s a kind of gridlock.” The weaker dollar is already feeding higher oil prices, with some analysts suggesting a return to $100 crude in just a few months. Since oil is priced in dollars, as it falls in value producers raise prices to compensate.

“The global market for oil is diverging as never before,” Wood Mackenzie analyst Francis Osborne told ABC News. “While the economy in the mature OECD regions continues to struggle, and with it oil demand, in the emerging markets it has generally been full speed ahead on both fronts. Leading this recovery is China and the rest of Asia.”

 

 

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Irreversible–Out of Control

Posted on 22/12/2010 | Leave a comment

post by Lee Bellinger Independent Living’s Executive Bulletin

[This shouldn't be a surprise, but to many it is. The United States HAS to fall! You are not seeing what's between the lines. I thought Boehner was the good guy. I believe I was wrong. Like I said many times DC is corrupted and greed is the primary kill switch! Welcome to freedoms being lost for good!]

Big news this week—The incoming Republican majority and voter anger have persuaded the puppet to block tax increases scheduled for January 1. It’s possible this welcome-but-insufficient development may indeed coax stock markets higher in over the short term. But let’s look at fundamentals. Sadly, the spectacle of the puppet tax cuts and other developments since the GOP won the House only reconfirmed our belief that nothing has (or is going to) cause a deviation in the government’s path toward fiscal and monetary disaster. We all want to believe that politics can undo decades of structural damage—a private sector with crippling debt, massive mal-investment, and zealous send-the-jobs-overseas monetary policy and over regulation. I do not enjoy being a naysayer, but the facts do not support the notion that we are returning to government getting off the backs of productive people on whom prosperity depends. Far from it.

  • Dose of reality number 1—Our politicized economy still crashed despite the Bush tax cuts. To be clear, I’ve never seen a real tax cut I didn’t like! But the tax cut package hammered out by the puppet and presumptive House Speaker John Boehner is way overblown. The extension of Bush-era tax rates are not new tax cuts, but a temporary, 2-year stay of a higher tax-rate structure. If modestly lower taxes were the elixir to America’s woes, the economy would not have veered off the rails three years ago during the Bush administration! So, why are GOP pundits out there implying that an extension of the Bush tax rates is some kind of economic cure-all? The Bush legacy of horrific new government spending and regulation should have taught us all that tax cuts alone can’t create prosperity. President Ronald Reagan himself said that tax cuts only work if accompanied by fiscal restraint, regulatory relief, and a sound monetary policy. Absent these other pillars of Reaganomics, a simple temporary continuation of tax cuts doesn’t cut the mustard. Not even close. The tax deal once again puts a temporary hold on a dramatic increase in the Alternative Minimum tax. Plus there is a temporary 2% reduction in the Social Security payroll tax, but only pertaining to the employees’ compensation (providing no benefit or incentive to employers to hire anew). In fact, the bill also pays people to stay unemployed for another 13 months!
  • Dose of Reality Number 2—Speaker-elect Boehner has promised to fund the puppet using more debt. But here’s the real enchilada most are missing—Incoming Speaker Boehner has preemptively agreed to support another increase in the national debt limit, which means that Obamacare and the parade of new spending enacted over the last two years remains firmly locked in place. We can expect another 40 cents in debt accumulation for every single $1.00 spent by the federal government. If you are serious about stopping your teen’s reckless credit spending, you cut the card in half, not bump up the limit! Kids judge you by your actions—and, much to the chagrin of many other House members, Boehner has already shown he is not serious about controlling spending—much less reduce it.
  • Dose of Reality Number 3—Markets aren’t going to be fooled by the Boehner-the puppet tax deal. Look, don’t just take my word for it. The markets are already signaling that they are not fooled by the Boehner-the puppet tax deal. On Monday, two top rating services, Moody’s and Fitch Ratings, warned that if Congress passes the Boehner-the puppet tax package, the United States government faces a significant reduction in its credit-worthy status. (Spending remains out of control.) “From a credit perspective, the negative effects on government finance are likely to outweigh the positive effects of higher economic growth,” Moody analyst Steven Hess said in a report. In a Reuter’s news story about the possibility of the U.S. losing its must-have AAA credit rating, they noted that “In a market obsessed with the euro sovereign debt crisis, the Moody’s note reminded foreign exchange investors about their worries of growing debt and was a factor pressuring the dollar….”
  • Dose of Reality Number 4—The Boehner-the puppet tax deal introduces more uncertainty for businesses. One big argument Republican backers of the Boehner-the puppet deal make is that it creates more “certainty” in business tax planning. Nonsense! As a December 14 Wall Street Journal notes, as recently as the 1990s there were fewer than a dozen tax provisions that had to be renewed every year or two. Now there are 141 major tax laws that have to be renewed on a regular basis, which wrecks havoc on estate planners, investors, dividend-paying companies, small businesspeople, and on and on.

Having so many major tax provisions come up for renewal on a regular basis is mostly a boon for Congressional fundraising! Constituencies depending on a continuation of existing tax rates have to “pony up” to incumbents with donations and entirely too much ass-kissing. Once all the political lip service about restraining government fails to turn into reality, good old-fashioned market forces will eventually impose desperately needed reform. But it’s not going to be pretty.

Yours in Freedom and Prosperity.

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