When you talk to most Americans about taxes, primarily what they think about is the U.S. government and the federal income tax. But while that may be the biggest tax that most Americans pay, the reality is that the truly insidious nature of the tax system in the United States is how it sucks money out of us in dozens of different ways until we don’t even feel it anymore. Instead of having one or two big tax bills, U.S. taxpayers face a “death by a thousand cuts” as tax after tax after tax just keeps coming. Most Americans don’t even realize how many kinds of taxes they pay. Before reading the rest of this article, try to estimate how many different kinds of taxes that Americans pay each year. Five? Ten? Twenty? Well, below we have listed over 50 different kinds of taxes that Americans pay. It is no wonder the Tea Party movement is growing so fast! People are sick and tired of constantly being financially drained by tax after tax. But even as you read this, members of the White House panel charged with reducing the U.S. national debt are considering recommending the adoption of a “European-style” Value Added Tax as a way for the U.S. government to bring in even more money.
Well, the truth is that millions upon millions of Americans are quite sick of being taxed into financial oblivion and they have one giant message for those who want to tax us some more….
“We Are Being Taxed Enough Already!”
Just consider the following list of the various types of taxes that Americans have to pay each and every year…..
Accounts Receivable Tax
Building Permit Tax
Capital Gains Tax
CDL license Tax
Cigarette Tax
Corporate Income Tax
Court Fines (indirect taxes)
Dog License Tax
Federal Income Tax
Federal Unemployment Tax (FUTA)
Fishing License Tax
Food License Tax
Fuel permit tax
Gasoline Tax
Gift Tax
Hunting License Tax
Inheritance Tax
Inventory tax IRS Interest Charges (tax on top of tax)
IRS Penalties (tax on top of tax)
Liquor Tax
Local Income Tax
Luxury Taxes
Marriage License Tax
Medicare Tax
Payroll Taxes
Property Tax
Real Estate Tax
Recreational Vehicle Tax
Road Toll Booth Taxes
Road Usage Taxes (Truckers)
Sales Taxes
School Tax
Septic Permit Tax
Service Charge Taxes
Social Security Tax
State Income Tax
State Unemployment Tax (SUTA)
Telephone federal excise tax
Telephone federal universal service fee tax
Telephone federal, state and local surcharge taxes
Telephone minimum usage surcharge tax
Telephone recurring and non-recurring charges tax
Telephone state and local tax
Telephone usage charge tax
Toll Bridge Taxes
Toll Tunnel Taxes
Traffic Fines (indirect taxation)
Trailer registration tax
Utility Taxes
Vehicle License Registration Tax
Vehicle Sales Tax
Watercraft registration Tax
Well Permit Tax
Workers Compensation Tax
When you add all the taxes together, a significant percentage of Americans end up paying well over 50 percent of their income in taxes of one form or another.
And the list above does not even include all of the new taxes that are in the new health care law that was just rammed down the throats of the American people.
But if you enjoy being taxed until you are dry then none of this should bother you.
Sadly, according to an official U.S. government report, even with all of this taxation rapidly growing interest costs on the national debt together with spending on major entitlement programs such as Social Security and Medicare will absorb approximately 92 cents of every dollar of federal revenue by the year 2019. That is before a penny will be spent on anything else. Because of our reckless financial insanity, the U.S. government is now facing a financial crisis of unprecedented magnitude.
But whatever we end up giving to the federal government just never seems to be enough. It’s voracious appetite for spending just seems to multiply the bigger it gets.
The really tragic thing is that the U.S. federal government is not just spending our money. It is spending the money of our children and our grandchildren and of our great grandchildren.
We are being taxed into oblivion and yet the U.S. government apparently has no shame in stealing increasing amounts of money from future generations year after year after year.
Do you think that the U.S. federal government will one day wake up and decide that we are being taxed enough already?
No.
The truth is that unless we vote out all of the Republicans and all of the Democrats that have been taxing us to death, they will keep right on doing it.
We deserve better and future generations deserve better.
One of the key signs that we are in the early stages of an economic collapse and that we are heading towards another Great Depression is America’s crumbling infrastructure. The truth is that our infrastructure is literally falling apart all around us. Thousands of bridges are structurally deficient and there have already been some very high profile collapses. Over 30 percent of the highways and roads in the United States are in very poor shape. Aging sewer systems are leaking raw sewage all over the place. The power grid is straining to keep up with the ever-increasing thirst of the American people for electricity. There have already been some regional blackouts, and unless something is done quickly things promise to get even worse. The truth is that a nation’s infrastructure says a lot about who they are. So what does America’s infrastructure say about us? It says that we are a rusting, crumbling, decaying leftover from a better, more prosperous time.
*According to the U.S. Department of Transportation, more than 25 percent of America’s nearly 600,000 bridges need significant repairs or are burdened with more traffic than they were designed to carry.
*According to the Federal Highway Administration, approximately a third of America’s major roadways are in substandard condition – a significant factor in a third of the more than 43,000 traffic fatalities in the United States each year.
*The Texas Transportation Institute estimates that traffic jams caused by insufficient infrastructure waste 4 billion hours of commuters’ time and nearly 3 billion gallons of gasoline a year.
*The Association of State Dam Safety Officials has found that the number of dams in the United States that could fail has grown 134% since 1999 to 3,346, and more than 1,300 of those are considered “high-hazard” – meaning that their collapse would threaten lives.
*More than a third of all dam failures or near failures since 1874 have happened in just the last decade.
*According to the U.S. Environmental Protection Agency, aging sewer systems spill an estimated 1.26 trillion gallons of untreated sewage every single year, resulting in an estimated 50.6 billion dollars in cleanup costs.
*A decaying transportation system costs our economy more than $78 billion annually in lost time and fuel.
*The United States must invest $225 billion per year over the next 50 years to maintain and adequately enhance our surface transportation systems. Currently, we’re spending less than 40% of this amount.
*U.S. transit systems earned a D+ rating from the American Society of Civil Engineers. Transit funding is declining even as transit use increases faster than any other mode of transportation – up 21% between 1993 and 2002.
*Costs attributed to airline delays – due in large part to congestion and an antiquated air traffic control system – are expected to triple to $30 billion from 2000 to 2015.
*By 2020, every major U.S. container port is projected to be handling at least double the volume it was designed to handle.
*Throughout the United States, railroads are projected to need nearly $200 billion in investment over the next 20 years to accommodate freight increases.
Are you starting to get the picture?
America’s aging infrastructure cannot handle the number of people that we have now. With the population of the United States expected to hit 420 million by 2050, there are serious questions about how the national infrastructure is going to hold up under such a strain.
Already the infrastructure in many areas of the United States is beginning to resemble that of a third world nation. The video posted below contains some of the highlights from a History Channel special about America’s infrastructure from a couple of years ago that highlights many of these problems….
So can anything be done about America’s crumbling infrastructure?
Of course.
State and local governments can spend the money needed to fix and maintain our infrastructure.
But that is not going to happen.
Why?
Because state and local governments are now facing unprecedented financial shortfalls.
In fact, it is more likely that expenditures on infrastructure will actually be cut.
According to a new report from the Center on Budget and Policy Priorities, after two years cutting spending on schools, health care, and other public services, U.S. states are preparing to carve even deeper into funding for 2011.
Of course the U.S. government could step in with necessary infrastructure funding, but considering the state of the U.S. national debt, it seems unlikely that state and local governments will be able to count on much more help from the folks in Washington D.C.
So what does that mean?
It means that America’s infrastructure will continue to rust, decay and fall to pieces. Our grandparents and great-grandparents invested a lot of time, energy and money into building up this great nation, but now we are letting it rot right in front of our eyes.
Back during Bill Clinton’s 1992 presidential campaign, “It’s the economy, stupid” was a phrase that Clinton campaign officials used to keep the focus on the troubled U.S. economy. The truth is that Americans as a whole care about very few things more than their own economic well being, and by keeping the debate focused on economic issues, Clinton was able to defeat George H. W. Bush. Nearly 20 years later, that slogan is as true today as it ever has been. The American people care dearly about their own wallets and bank accounts. With the economy tanking badly and with unemployment at very high levels, dissatisfaction with the U.S. government is at record highs. In fact, acccording to a newly released poll byPew Research Center, just 22% of Americans believe that they can trust the government in Washington almost always or most of the time. Nearly half of the respondents said that the government has a negative effect on their daily lives. Only 25% of those responding expressed a favorable opinion of Congress, which was the lowest favorable rating for Congress in a quarter century of Pew Research Center surveys.
So why are the American people so angry and frustrated with their government?
It’s the economy, stupid.
Millions of Americans have lost their jobs and their homes, and millions more Americans are on the verge of losing their jobs and homes.
The result is a massive horde of pissed off American voters.
As long as Americans are fat and happy and their wallets are full, most of them really could care less how involved the government is in their lives. But when things go bad economically, all of a sudden the government becomes a major annoyance.
And this is not a Republican v. Democrat thing either. The truth is that both parties have been radically expanding the size of the U.S. government for decades. Both parties have been spending taxpayer money like there is no tomorrow. Both parties have mortgaged the future of America to please their constituents. Now average Americans from both parties are alarmed at how large the government has become and how badly it is screwing things up. Just consider the following quote from USAToday.com….
“The government’s been lying to people for years. Politicians make promises to get elected, and when they get elected, they don’t follow through,” says Cindy Wanto, 57, a registered Democrat from Pennsylvania who joined several thousand for a rally in Washington on April 15 — the tax filing deadline. “There’s too much government in my business. It was a problem before Obama, but he’s certainly not helping fix it.”
If he wants to get re-elected, the best thing that Barack Obama could do to get votes would be to get the U.S. government to spend as much money as humanly possible in a last ditch attempt to stimulate the U.S. economy with a flood of paper money. That might work just long enough to get re-elected and buy himself another four years in the White House. Of course that strategy would also likely create hyperinflation and would make the long-term financial problems of the U.S. government far, far worse.
But unless the American people start feeling a lot better about the economy, they are not going to look too kindly on anyone who is currently holding office either in 2010 or in 2012.
Meanwhile, playing politics is more profitable than it ever has been.
According to Forbes magazine, Glenn Beck made 32 million dollars in the 12 months ending March 1st.
Politicians may not be very popular these days, but it sure is a profitable racket if you can get into the club.
Republicans make a ton of money convincing millions of Americans that the Democrats are the cause of all the problems that they are experiencing. Democrats make a ton of money convincing millions of Americans that that Republicans are the cause of all the problems that they are experiencing. Meanwhile, both parties continue to pile up the biggest mountain of debt in the history of the world and continue to sell out the future of our children and our grandchildren.
Neither party seems interested in addressing the root causes of our national financial nightmare. Instead, politicians from both parties seem to think that they can keep making all kinds of promises to get elected and then never delivering on them.
Well, the American people are starting to wake up to all of this nonsense. Tens of millions of Americans are experiencing extreme financial pain and they are looking for answers.
Unfortunately, the U.S. economy is going to get a whole lot worse, and very few of the politicians in Washington have the guts to tell the American people the truth.
If the United States experiences a horrifying economic collapse (and it most definitely will), will that cause a complete and total collapse of society? Will we experience crime, violence, riots and social unrest on a scale that is unprecedented in U.S. history? Before you dismiss such notions as utter foolishness dreamed up by a few bloggers with too much time on their hands, perhaps you should consider what one of the biggest credit rating organizations in the world is saying. According to a report on sovereign debt by Moody’s, the world’s five biggest AAA-rated countries (including the United States) are all at risk of soaring debt costs and will have to implement austerity plans that threaten “social cohesion”. In case you are wondering what happens when “social cohesion” starts to break down due to economic factors, just check out the recent examples in Iceland and Greece. If even Moody’s is warning that there is a realistic possibility that “social cohesion” in the United States may break down due to economic factors, perhaps we should all start listening.
Or if you will not listen to Moody’s, then perhaps you will listen to the man who has been called the top trends researcher in the entire world. Gerald Celente is the CEO of Trends Research Institute, and he is convinced that we are heading into what he calls “The Greatest Depression”. The picture that he paints of the future of America is extremely alarming and extremely sobering. It would be easy to dismiss his forecasts as just the ramblings of another useless “talking head”, but unfortunately Celente has been dead-on accurate time after time after time in the past. Considering his exemplary track record, what Celente says is coming next for America is incredibly frightening….
At this point you may be tempted to think that America has been through extremely tough economic times before (The Great Depression for example) and came through them okay.
So what is so different now?
Well, the truth is that the character of the American people is dramatically different. At the time of the Great Depression, the American people were tough, self-sufficient people who knew how to live off the land. Today, most Americans are weak, spoiled little children who will throw a temper tantrum whenever anyone tries to take their toys away. The character of the American people has been decaying for decades, and there is no way that the current crop of Americans has any chance of weathering a horrible economic depression the way Americans back in the 1930s did.
Already we are seeing early signs of what the rest of America could soon be like. The city of Detroit is a rotting, crime-ridden war zone that has a “real” unemployment rate of somewhere around 40 to 50 percent. The state of California has become a cesspool of gang violence, rampant unemployment, rising foreclosures, unchecked drug dealing, and depressing economic decline. Even in New York City we are seeing early signs of what is ahead. Residents are quite alarmed about the dramatic rise in violent crime that is happening throughout the city. Many New Yorkers were convinced that the days of “The Rotten Apple” were behind them, but economic problems are going to cause an increase in crime in just about any city.
But it just isn’t crime that is on the rise. Millions of normal, law-abiding Americans are angry. This anger is coming out in various ways – including the Tea Party protests that are sweeping the nation. The majority of the American people are frankly disgusted with the government, and the approval ratings for both major parties continue to hover around record lows. As things continue to get worse for the U.S. economy, the anger of the American people is going to continue to rise.
All of this is causing many in the U.S. government to view “troublemakers” inside the United States as one of the greatest threats to national security. In fact, according to FBI Director Robert Mueller, “homegrown terrorists” represent as big a threat as al-Qaeda.
As big a threat as al-Qaeda?
For a top U.S. government official to come right out and make a statement like that is absolutely mind blowing.
Not only that, but now former U.S. President Bill Clinton is comparing Tea Party members to Timothy McVeigh.
Considering the fact that Timothy McVeigh received the death penalty, that is a very frightening parallel for Clinton to draw.
Does Clinton actually believe that Tea Party protesters should receive the same treatment as McVeigh?
Even more alarming is new legislation being pushed in the U.S. Senate. A new bill introduced by Senators John McCain and Joe Lieberman would allow the U.S. military to round up large numbers of Americans and detain them indefinitely without a trial if they “pose a threat” or if they have “potential intelligence value” or for any other reason the President of the United States “considers appropriate”.
The reality is that as “necessary” as bills like that may seem to many as we edge ever closer to the breakdown of society, the reality is that the United States is quickly becoming just like so many of the other horrific totalitarian regimes that we have seen rise throughout the 20th and 21st centuries.
In fact a time may soon be coming when authorities in the U.S. may soon be able to legally utter this bone chilling phrase: “Your Papers Please!” Lawmakers in Washington D.C. working to create a new immigration “reform” bill have decided on a way to prevent employers from hiring illegal immigrants: a national biometric identification card that all American workers would be required to obtain.
Can you imagine being forced to carry around a national identification card?
Or worse?
A startup company developing “chipless RFID ink” has already tested its product on cattle and laboratory rats.
Could one day we all be required to sport an “RFID tatoo” to prove our identity to authorities?
Let’s hope not.
But many of us never thought that the day would come when we would see things such as the Patriot Act, “no fly” lists, the NSA’s warrantless wiretapping program, DNA databases, Guantanamo Bay or full-body scanners at airports that reveal the graphic details of our naked bodies either.
America is quickly changing. The next Great Depression is coming, and society is not going to be able to handle it. How the U.S. government (and governments around the world) handle the coming social problems is going to be very interesting to watch. Let’s hope that all of this does not degenerate into the absolute societal nightmare that many are projecting that it could be.
According to some estimates, there are as many as 30 million illegal aliens in the United States today. The vast majority of them pay absolutely no federal or state income taxes. And yet they seem more than happy to take advantage of the free social services and benefits offered to them. In fact, stories of how “good” life in America is just encourages more and more immigrants to come to the United States illegally. Not that all immigration is bad. The United States will always be able to use immigrants who come in the “front door” legally. In fact, my wife is originally from Canada. But those who would break the law by entering the U.S. illegally also are the same kind of people who are serial criminals, join gangs, deal drugs, bring diseases and are economic parasites. So can the U.S. economy ever fully recover if we continue to carry tens of millions of illegal aliens on our backs? If Barack Obama and the U.S. Congress open the door for illegal aliens even further, will it create a social and economic nightmare that none of us would even dare to imagine?
Today, there are approximately 20 million American workers who are unemployed or who are underemployed. More than 36 million Americans are on food stamps and that number continues to increase each month. Over 13 million American children now live in poverty. We cannot provide for the people that are already here, and yet the U.S. government is making virtually no effort to stem the flood of illegal immigrants that are streaming into this nation.
In fact, it is projected that the United States will add another 100 million people over the next 25 years. Where in the world will they get jobs? How in the world will we take care of them all?
With the U.S. economy already on the verge of complete and total collapse, can we afford to continue to allow the problem citizens of other nations to pour into ours? Already, drug violence has turned many areas of northern Mexico into absolute war zones. Juarez, Mexico (which is just across the U.S. border) has become the murder capital of the western hemisphere. Much of that violence has begun to spill over into areas of the southwestern United States.
For example, NPR recently described one incident in the Juarez Valley that involved American citizens….
A couple of weeks ago, gunmen in the Juarez Valley killed the Mexican relative of a Fort Hancock high school student. When the student’s family in Fort Hancock heard about it, they crossed the border at 10 a.m. to see the body, and took the student with them.
“By 10:30, they had stabbed the relatives that went with him, which included his grandparents, with an ice pick,” says school superintendent Jose Franco. “My understanding is that the gentleman is like 90 years old, and they poked his eyes out with an ice pick. I believe those people are still in intensive care here in a hospital in the U.S.”
Is this how we want to live?
To illustrate how draining illegal immigration is on the U.S. economy, an anonymous piece that has been floating around the Internet entitled “Joe versus Jose” is reproduced below. Try not to get too angry as you read this….
*****
Here is an example of why hiring illegal aliens is not economically
productive for the State of California…or any other state for that matter.
You have 2 families…”Joe Legal” and “Jose Illegal”. Both families have
2 parents, 2 children and live in California . “Joe Legal” works in
construction, has a Social Security Number, and makes $25.00 per hour
with payroll taxes deducted…. “Jose Illegal” also works in construction,
has “NO” Social Security Number, and gets paid $15.00 cash per hour
“under the table”.
Joe Legal…
$25.00 per hour x 40 hours $1000.00 per week, $52,000 per year…
Now take 30% away for state & federal tax…
Joe Legal now has $31,231.00
Jose Illegal…
$15.00 per hour x 40 hours $600.00 per week, $31,200.00 per year…
Jose Illegal pays no taxes…
Jose Illegal now has $31,200.00
Joe Legal pays Medical and Dental Insurance with limited coverage
$1000.00 per month $12,000.00 per year
Joe Legal now has $19,231.00
Jose Illegal has full Medical and Dental coverage through the state and local clinics at a cost of $0.00 per year
Jose Illegal still has $31,200.00
Joe Legal makes too much money to be eligible for Food Stamps or welfare – Joe Legal pays for food $1,000.00 per month $12,000.00
per year – Joe Legal now has $ 7,231.00
Jose Illegal has no documented income, so he is eligible for Food Stamps and Welfare – Jose Illegal still has $31,200.00
Joe Legal pays rent $1,000.00 per month – $12,000.00 per year
Joe Legal is now in the hole minus (-) $4,769.00
Jose Illegal receives a $500 per month Federal rent subsidy…
Jose Illegal pays rent $500.00 per month (section 8 housing)
$6,000.00 per year – Jose Illegal still has $25,200.00
Joe Legal now works overtime on Saturdays or gets a part time job
after work or his wife must work. Jose Illegal has nights and
weekends off to enjoy with his family (and eat out!).
Joe Legal’s and Jose Illegal’s children both attend the same school.
Joe Legal pays for his children’s lunches
Jose Illegal’s children get a government sponsored breakfast & lunch,
and they also qualify to be bused to school at taxpayer expense.
Jose Illegal’s children have an after school ESL program.
Joe Legal’s children have to find a way to get to school and go home
after school as, “latch-key kids” with no adult supervision.
Joe Legal and Jose Illegal both enjoy the same police and fire services,
but Joe paid for them and Jose did not pay.
Jose Illegal can send most of his money back home to Mexico to build a
new home for retirement, and have money to buy a new truck
(and still have Medi-Cal benefits while living in a foreign country;
until someone turns him in to authorities….if they ever find out)
Joe Legal is still in the hole.
Any questions?
*****
But an even bigger problem may be the rampant lawlessness that many of these illegal aliens bring. Crime, gangs and drug dealing are dramatically exploding all the way from Texas to southern California.
There are fewer and fewer areas that you can call “safe” in the southwestern United States.
But now Barack Obama and the U.S. Congress want to give illegal aliens amnesty.
Trying to make an honest and safe living anywhere near the Mexican border is becoming a very difficult thing to do.
In fact, one sheriff recently told the residents of one Texas border town that they better “arm themselves”. As he warned them of the dangers that they are now facing, he delivered this sobering warning….
“As they say the old story is, it’s better to be tried by 12 than carried by six. Damn it, I don’t want to see six people carrying you.”
Immigrants that are going to be productive members of society are going to come in legally. But we have made the legal process for immigrating extremely complex and very expensive. So we have actually discouraged legal immigration while at the same time highly rewarding those who come in illegally. What kind of sense does that make?
Of course it seems like very little of what our political leaders do these days makes sense. As the number of illegal aliens increases to 40 million or even 50 million, what in the world is that going to do to America?
And once the damage is done, is there any chance that it can ever be reversed?
The U.S. money supply has been expanding at an absolutely unprecedented rate. So why are we not experiencing rampant inflation? Why is the U.S. dollar not falling through the floor? Well, the truth is that all of this new money has gotten into the U.S. financial system but it is not getting into the hands of U.S. businesses and consumers. In fact, even though the money supply is exploding, U.S. banks have dramatically decreased lending. This has brought us to a very bizarre financial situation as a nation.
What we have seen is the U.S. government shovel massive amounts of cash into the U.S. financial system and then watch as the big banks sit on that cash and refuse to lend it. The biggest banks in the U.S. reduced their collective small business lending balance by another 1 billion dollars in November 2009. That drop was the seventh monthly decline in a row. In fact, in 2009 as a whole U.S. banks posted their sharpest decline in lending since 1942.
So all of this money that the U.S. government pumped into the financial system has been doing American businesses and consumers very little good. That is why we can have a vastly increased money supply (as you can see from the chart below) and very little inflation.
So if the banks are not lending the money to the American people, what are they doing with it? One of the things they are doing with it is buying U.S. government debt. As you can see from the chart below, U.S. banks have cut business lending by approximately 350 billion dollars since early 2009 and they have purchased approximately 300 billion dollars worth of U.S. Treasury securities.
So instead of loaning money to American businesses and consumers who desperately need it, a ton of this new money is being used to pump up yet another bubble. This time the bubble is in U.S. Treasuries. Asia Times recently described how this trillion-dollar carry trade in U.S. government securities works….
Remarkably, the most aggressive buyers of US government debt during the past several months have been global banks domiciled in London and the Cayman Islands. They borrow at 20 basis points (a fifth of a percentage point) and buy Treasury securities paying 1% to 3%, depending on maturity.
This is the famous “carry trade”, by which banks or hedge funds borrow short-term at a very low rate and lend medium- or long-term at a higher rate. This works as long as short-tem rates remain extremely low. The moment that borrowing costs begin to rise, the trillion-dollar carry trade in US government securities will collapse.
So what happens when this bubble collapses?
Nobody knows for sure. But anyone who has dealt with carry trades in the past knows that when carry trades unwind they can do so very, very quickly and the results can be nightmarish.
The truth is that the U.S. financial system is a house of cards that could fall at any time. A lot of economic pain is on the horizon – it is only a matter of when it comes and how bad it is going to get. Trends forecaster Gerald Celente is predicting that it could be as soon as this year….
Once upon a time, California was the state that everyone wanted to move to. The endless sunshine, the gorgeous weather, the beaches, the lure of Hollywood and a booming economy made it extremely attractive to millions of Americans who wanted to fulfill their “California dreams”. But those days are long gone. Now, the state of California has become an economic nightmare. In fact, many would argue that California has now become the epicenter of the economic collapse of the United States. Everything that once made California great is now being swamped by a tidal wave of unemployment, foreclosures, crime, budget cuts, traffic, taxes and natural disasters. There is a reason why every year now many more people leave the state of California than move into it. The state of California is suffering a slow economic death, and if something is not done it could end up being one of the biggest financial disasters in history.
The economic crisis of the past several years has hit California so incredibly hard that it is hard to describe. According to the U.S. Labor Department, the unemployment picture in the state continues to deteriorate, with an overall unemployment rate of 12.5 percent in January.
12.5 percent may not sound that bad, but the truth is that the situation in many of the urban areas is much worse. There are now 8 counties in the state of California that have unemployment rates of over 20 percent.
In this economic environment, not even teachers are safe. Just last week, the state of California handed pink slips to nearly 22,000 teachers across the state.
It is hard to even convey how bad things are in California right now. California has always been a “boom or bust” state, but what is happening now is really unprecedented.
In fact, the number of people now unemployed in California is equivalent to the populations of Nevada, New Hampshire and Vermont combined.
One out of every seven businesses has already shut down.
And unfortunately things are going to get even worse.
But that is the last thing that people in California want to hear about now.
All of these economic problems are playing havoc with the state budget as well. At this point the state of California is essentially dead broke. Yet they have to keep borrowing more and more money because revenues have fallen off so sharply. Basically what California is doing is they are piling up the biggest mountain of debt that any U.S. state has ever accumulated, and there is no hope that they will be able to do anything about it any time soon.
How bad is the problem? Consider that California has a $20.7 billion deficit in the general fund budget over the next 16 months. California owes $8.8 billion in short-term loans that have to be paid off by June, and over $120 billion in outstanding bonds and interest that will be paid over decades. The state’s pension fund, CalPers, has $16.3 billion more in liabilities than assets, plus California also faces a $51.8 billion expense for the health and dental benefits of state retirees and future retirees.
So what can the state of California do? Well, they can either raise taxes or they can cut spending. Considering the fact that taxes are already at an incredibly oppressive level in the state, that is not a great option. Not that they won’t try to suck more money out of the taxpayers anyway.
What California should be trying to do is to cut spending, but the very deep cuts that have been made already have not made that much progress.
California has cut billions of dollars from its education system, including its renowned network of public colleges and universities. Many thousands of teachers have been let go. Budget officials travel the state with a glazed look in their eyes, having tried everything they can think of to balance the state budget. And still the deficits persist.
But it is not just California’s government that is experiencing a financial crisis of unprecedented magnitude.
California’s overstretched health care system is also on the verge of collapse. Dozens of California hospitals and emergency rooms have shut down over the last decade.
Why?
The reality is that many hospitals and emergency rooms simply could not afford to stay open as they were endlessly swamped with immigrants and poor and homeless who were not able to pay for the services they were getting.
As a result of these hospital and emergency room closings, the remainder of the health care system in the state of California is now beyond overloaded. This had led to brutally long waits, diverted ambulances and even unnecessary patient deaths.
And the number of Californians who are unable to pay for their emergency care is only increasing.
But perhaps now that Barack Obama’s health care scheme has passed, maybe the cost of caring for everyone in California will be taken care of by the American taxpayers.
Thanks Obama.
The high unemployment rate and the cuts to the budget in California have also created an environment where crime and gang activity can flourish. Not that crime and gangs were not gigantic problems before. But now thousands upon thousands of young men who can’t or won’t find jobs have nothing better to do than sell drugs and terrorize entire neighborhoods.
In fact, there are many areas of California where you just do not go out of your home at night.
Then there are the devastating droughts, the thousands of wildfires, the endless earthquakes, and the crippling mudslides which California now experiences almost every single year.
No wonder so many people are flocking to leave the state.
But what happens in California eventually spreads to the rest of the United States.
Keep in mind that 13 percent of the U.S. gross domestic product comes from the state of California.
Counted by itself, California would be the 5th largest economy in the entire world.
So to think that these problems can be isolated to California is complete fantasy.
In fact, there are some areas in the United States, such as Detroit, that are just as bad as anything that is going on in California.
So the reality is that this is a national economic cancer that is spreading rapidly.
The economic nightmare that people in California and Michigan are experiencing will be coming to your area sooner or later.
Not everyone in America is hurting during this economic downturn. In fact, the wealthiest Americans are doing just fine. At a time when millions of Americans are losing their jobs and their homes, the folks at the top end of the income scale are actually seeing their incomes go up. In 2009, the number of millionaires in the United States rose 16 percent to 7.8 million at a time when tens of millions of other Americans were experiencing gut-wrenching economic despair. The truth is that the statistics and the data do not lie. Wealth and income are increasingly becoming concentrated in the hands of the wealthiest Americans. So just what in the world is going on?
Well, the reality is that the game is rigged to take wealth away from middle class and working class Americans and to give it to the elite. There is a reason why they push credit cards on you so hard. That $6000 balance that you keep carrying will end up costing you over $30,000 to pay off if you are not careful. We were told that owning a home was “the American Dream” and yet predatory mortgages have destroyed the financial lives of millions of Americans. The majority of Americans now live “month to month” and barely save any money at all. In fact, Americans are programmed to be slaves of the system. We are taught that we need to go get a job (“just over broke”) and work ourselves silly all day, and then at night we are taught to collapse in front of the television where we are bombarded with messages telling us to be good consumers and to go out and get into even more debt so that we will have to endlessly work to pay it off.
Today more wealth is in the hands of the wealthiest Americans than at any other time in modern U.S. history. An analysis of income-tax data by the Congressional Budget Office a couple of years ago found that the top 1% of households own nearly twice as much of the corporate wealth in the United States as they did just 15 years ago. While the average income for the poorest Americans has barely grown over the past several decades, the incomes of the wealthiest Americans have absolutely exploded as the following chart demonstrates….
So why is this happening? Well, automation and “offshoring” are typically offered as two key reasons. Millions of hard working American manufacturing workers have been replaced by robots and by outsourcing, and this has enabled many very wealthy Americans to get even more wealthy. But these reasons alone do not explain the increasing disparities.
The truth is that over the past couple of decades, the “rules of the game” have been tilted even more in favor of the rich. Centralization and globalization have been two keys trend which have contributed to this. For example, in the old days you could make a good living by opening up a store in your local town if you worked really, really hard. But today you will be crushed by Wal-Mart and other “big box” stores.
So where do all the big profits that Wal-Mart and the other “big box” stores make go?
They get shipped out of your community to a bunch of rich fat cats.
But apologists for the current system will cry that Wal-Mart and the other “big box” stores create jobs.
Well, yeah, if you like to work for minimum wage.
Have you tried to support a family on minimum wage?
It’s basically impossible.
The entire economy is becoming completely dominated by giant global corporations. These giant corporations are more than happy to put American consumers into debt by selling them substandard junk manufactured in China, India and Mexico.
And it is a great time to be wealthy – especially if you are at the very top. For example, New York state Comptroller Thomas DiNapoli recently announced that Wall Street bonuses for 2009 were up 17 percent when compared with 2008. In fact, incomes for the top 1% of wage earners in the U.S. are shooting into the stratosphere as you can see from the following chart….
Unfortunately, all of this globalization, centralization and greed is fundamentally changing society. The gap between the rich and the poor is growing at an exponential rate. Is it a good thing for a society to have this kind of income inequality?….
Even the current economic collapse is hitting the poor much harder than the rich. Take a moment to examine the chart below. The ten percent of Americans that have the lowest household incomes have an unemployment rate of over 30 percent, while the ten percent of Americans that have the highest household incomes have an unemployment rate of just about 3 percent….
And if the wealthy do get into trouble what happens? Well, they get government bailouts of course.
The U.S. government is more than happy to rush in with billions (and even trillions) of dollars at the drop of a hat when their friends on Wall Street are in trouble.
But if you get into trouble do you think the U.S. government is going to bail you out?
No, the truth is that millions upon millions of Americans are losing their jobs and their homes and the U.S. government seems perfectly fine with that.
We live in a society where individual Americans find themselves with a rapidly diminishing share of the power. Instead, power is concentrated in the hands of massive international corporations and elite power brokers who are more than happy to use globalization to crush anyone who gets in their way.
After all, how can a hard working American compete with someone willing to do the same job for $1.25 an hour in another country?
We have allowed the U.S. economy to become globalized, and so now those who are dependent on a job will increasingly find themselves competing for wages in a global marketplace.
Can someone in China or India do your job?
You better hope not, because there are people there who would be more than happy to do it for a fraction of what you make.
As labor continues to become seen as a globalized commodity, the power and earning ability of the average American worker will continue to decline. The gap between the rich and the poor will continue to expand. The giant international corporations and the elite power brokers of the world will continue to win and the rest of us will continue to lose.
Meanwhile, the vast middle class that once made the United States the envy of the world will continue to rapidly disappear. But instead of doing something to fix the problems, one big group of Americans want to cheer on the wealthy as they plunder the rest of us and another big group of Americans just wants to give everyone a handout.
Wouldn’t it be great if someone actually decided to fix the great economic machine that produced the biggest middle class in the history of the world? Unfortunately, that is not likely to happen. The truth is that the U.S. economy is basically impossible to fix at this point – but that is the subject for another article.
Will commercial real estate be the next shoe to drop in the ongoing U.S. financial crisis? While most eyes are on the continuing residential real estate disaster, the reality is that the state of the commercial real estate market in America could soon be even worse. Very few financial pundits are talking about this looming disaster but they should be. The truth is that U.S. commercial property values are down approximately 40 percent since the peak in 2007 and currently approximately 18 percent of all office space in the United States is now sitting vacant. That qualifies as a complete and total mess, but the reality is that the commercial real estate crisis is just starting.
In fact, the commercial real estate market is likely to get a whole lot worse. It is being projected that the largest commercial real estate loan losses will be experienced in 2011 and the years following. Some analysts are estimating that losses from commercial real estate at U.S. banks alone could reach as high as 200 to 300 billion dollars. To get an idea of how rapidly the commercial real estate market is unraveling, just check out the chart below….
Does that look like things are getting better to you?
And unfortunately, all indications are that the commercial real estate market is going to get much worse.
According to Real Capital Analytics, the default rate for commercial property mortgages held by all U.S. banks more than doubled in the fourth quarter of 2009 and may reach a peak of 5.4 percent by the end of 2011.
But even that estimate may be way too conservative as we shall see in a moment.
According to a recent report by the Congressional Oversight Panel, approximately 3,000 U.S. banks are currently classified as having a risky concentration of commercial real estate loans. All of them are small to mid-size banks which have been already severely weakened by the recent financial crisis.
So could the crisis in the commercial real estate market lead to a massive wave of failures among small and mid-size banks?
Count on it.
In fact, the FDIC has acknowledged that the number of banks on its “problem” list climbed to 702 at the end of 2009. To get an idea of just how bad that is, keep in mind that only 552 banks that were on the problem list at the end of September 2009, and only 252 banks that were on the problem list at the end of 2008.
Are you starting to get the picture?
So how are banks responding to this commercial real estate quagmire?
They are rapidly raising loan standards and they are dramatically reducing the number of loans they are making.
Just a few years ago, the number of commercial real estate loans was exploding, but now the bubble has burst, and as the chart below reveals, commercial real estate lending has absolutely fallen off the map….
What is making things even worse is that owners of commercial real estate are starting to walk away from properties that are heavily “underwater” just as many residential homeowners have been doing. This has caused default rates to start shooting through the roof.
One of the latest and most high profile commercial property owners to do this is Vornado Realty Trust. Earlier this month Vornado indicated that it would walk away from two heavily underwater loans totaling $235 million.
In the past commercial property owners would be very hesitant to do such a thing, but the reality is that the stigma has faded for these kind of “strategic defaults”. Just as with residential real estate, these kinds of defaults have almost become accepted practice now.
The number of defaults is likely to skyrocket even further with so many commercial real estate loans scheduled to rollover in the next few years.
You see, commercial real estate properties typically carry mortgages with lives of 5 to 10 years. A vast array of commercial real estate loans made between 2000 and 2005 are coming up for a rollover, but because credit standards have tightened, borrowers may find that they simply do not qualify for refinancing.
In fact, a report entitled “Commercial Real Estate at the Precipice” estimates that even under lenient lending standards, approximately 57 percent of existing commercial real estate mortgages will not qualify for refinancing.
That is a nightmare.
But if you apply more conservative lending standards, it is estimated that almost two-thirds of all commercial real estate borrowers will not qualify for a rollover.
So what is going to happen to the U.S. commercial real estate market when large numbers of borrowers start walking away from their “underwater” loans and about half of those who want to rollover their loans don’t qualify for refinancing?
What do you think that is going to do to commercial real estate prices?
Somebody better do something, because both the commercial and the residential real estate markets in the U.S. face a crisis of unprecedented magnitude.
But most Americans still have no idea that the great economic machine that their forefathers built is falling to pieces all around them. They would rather numb the pain by watching the latest episode of American Idol or by catching up on the latest round of celebrity gossip.
But that is not going to stop what is about to happen.
One of the key signs that we are in the early stages of an economic collapse and that we are heading towards another Great Depression is America’s crumbling infrastructure. The truth is that our infrastructure is literally falling apart all around us. Thousands of bridges are structurally deficient and there have already been some very high profile collapses. Over 30 percent of the highways and roads in the United States are in very poor shape. Aging sewer systems are leaking raw sewage all over the place. The power grid is straining to keep up with the ever-increasing thirst of the American people for electricity. There have already been some regional blackouts, and unless something is done quickly things promise to get even worse. The truth is that a nation’s infrastructure says a lot about who they are. So what does America’s infrastructure say about us? It says that we are a rusting, crumbling, decaying leftover from a better, more prosperous time.
Taxed Enough Already!
Well, the truth is that millions upon millions of Americans are quite sick of being taxed into financial oblivion and they have one giant message for those who want to tax us some more….
“We Are Being Taxed Enough Already!”
Just consider the following list of the various types of taxes that Americans have to pay each and every year…..
Accounts Receivable Tax
Building Permit Tax
Capital Gains Tax
CDL license Tax
Cigarette Tax
Corporate Income Tax
Court Fines (indirect taxes)
Dog License Tax
Federal Income Tax
Federal Unemployment Tax (FUTA)
Fishing License Tax
Food License Tax
Fuel permit tax
Gasoline Tax
Gift Tax
Hunting License Tax
Inheritance Tax
Inventory tax IRS Interest Charges (tax on top of tax)
IRS Penalties (tax on top of tax)
Liquor Tax
Local Income Tax
Luxury Taxes
Marriage License Tax
Medicare Tax
Payroll Taxes
Property Tax
Real Estate Tax
Recreational Vehicle Tax
Road Toll Booth Taxes
Road Usage Taxes (Truckers)
Sales Taxes
School Tax
Septic Permit Tax
Service Charge Taxes
Social Security Tax
State Income Tax
State Unemployment Tax (SUTA)
Telephone federal excise tax
Telephone federal universal service fee tax
Telephone federal, state and local surcharge taxes
Telephone minimum usage surcharge tax
Telephone recurring and non-recurring charges tax
Telephone state and local tax
Telephone usage charge tax
Toll Bridge Taxes
Toll Tunnel Taxes
Traffic Fines (indirect taxation)
Trailer registration tax
Utility Taxes
Vehicle License Registration Tax
Vehicle Sales Tax
Watercraft registration Tax
Well Permit Tax
Workers Compensation Tax
When you add all the taxes together, a significant percentage of Americans end up paying well over 50 percent of their income in taxes of one form or another.
And the list above does not even include all of the new taxes that are in the new health care law that was just rammed down the throats of the American people.
When you add up all the taxes in that bill, it amounts to the largest tax increase in the history of the United States.
But if you enjoy being taxed until you are dry then none of this should bother you.
Sadly, according to an official U.S. government report, even with all of this taxation rapidly growing interest costs on the national debt together with spending on major entitlement programs such as Social Security and Medicare will absorb approximately 92 cents of every dollar of federal revenue by the year 2019. That is before a penny will be spent on anything else. Because of our reckless financial insanity, the U.S. government is now facing a financial crisis of unprecedented magnitude.
But whatever we end up giving to the federal government just never seems to be enough. It’s voracious appetite for spending just seems to multiply the bigger it gets.
The really tragic thing is that the U.S. federal government is not just spending our money. It is spending the money of our children and our grandchildren and of our great grandchildren.
We are being taxed into oblivion and yet the U.S. government apparently has no shame in stealing increasing amounts of money from future generations year after year after year.
Do you think that the U.S. federal government will one day wake up and decide that we are being taxed enough already?
No.
The truth is that unless we vote out all of the Republicans and all of the Democrats that have been taxing us to death, they will keep right on doing it.
We deserve better and future generations deserve better.