The Beginning Of The End
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Obama’s Five Trillion Dollar Lie

Why isn't the U.S. economy in a depression right now?  The number one reason is because the federal government has stolen more than five trillion dollars from future generations since Barack Obama was elected and has used that money to pump up our grossly inflated standard of living.  Whether the federal government spends money wisely or foolishly, the truth is that the vast majority of it still ends up in the pockets of the American people who then use it to buy the things they need for their daily lives.  If the U.S. government had not borrowed and spent an extra five trillion dollars that we did not have over the past several years, we would be in the middle of a rip-roaring economic depression right now.  So any talk that Barack Obama is "improving the economy" is a total farce.  It is a five trillion dollar lie.  The reality is that Barack Obama and the U.S. Congress have been stealing trillions of dollars from future generations in order to make things tolerable in the present.  If the federal government adopted a balanced budget next year, the debt-fueled prosperity that we are currently enjoying would start disappearing very rapidly and all hell would break loose in America.

At this point, the U.S. national debt is over 15.7 trillion dollars.

When Ronald Reagan took office it was less than a trillion dollars.

If you were to divide the national debt up equally, it would come to more than $50,000 for every man, woman and child in the United States.

So the share of the national debt for an average family of four would be about $200,000.

When the government borrows and spends money that it does not have, that increases the amount of dollars in circulation and it causes GDP to go up.

That is one of the reasons why our politicians like to borrow and spend money that we do not have.  It makes the economic statistics look good.  They can point to those economic statistics as a reason to send them back for another term.

This is a major flaw in our system.  Most of our politicians do not care about how they are raping future generations financially.  Most of them just care about getting elected again.

If you will notice carefully, neither Mitt Romney nor Barack Obama are promising to balance the budget any time soon.  Like so many politicians in the past, they promise to do it "eventually", but "eventually" never arrives.

According to a recent article in the Washington Times, Mitt Romney declared during a recent campaign appearance that he has no plans to balance the federal budget in his first year....

"My job is to get America back on track to have a balanced budget. Now I'm not going to cut $1 trillion in the first year"

Why would he say that?

Why wouldn't he want to balance the budget?

He went on to explain that....

"The reason," he explained, "is taking a trillion dollars out of a $15 trillion economy would cause our economy to shrink [and] would put a lot of people out of work."

Romney is right about this.  Taking a trillion dollars out of a 15 trillion dollar economy would plunge us into an economic nightmare.

And that would make him look bad.

Of course if Obama wins the election we can just expect more of the same from him as well.

For example, just check out what White House Chief of Staff Jack Lew had to say about balancing the budget recently....

“The time for austerity is not today,” Lew told NBC News “Meet the Press.” “If we were to put in austerity measures right now, it would take the economy in the wrong way.”

Why is the time for austerity not today?

It is because the 2012 election is coming up and Obama wants the economic statistics to look good.

But can you blame our politicians for being cowardly?

Just look at what is happening in Greece.  After several years of austerity they are in the midst of a full-blown economic depression and they still have not balanced their budget.

Do we want to end up like Greece?

Most Americans do not realize this, but the U.S. already has more government debt per capita than Greece, Portugal, Italy, Ireland or Spain.

So why haven't we collapsed yet?

Well, because we continue to borrow larger and larger amounts of money.

It took from the founding of America until 1995 for the federal government to accumulate 5 trillion dollars of debt.

Under Obama, we have accumulated more than 5 trillion dollars of new debt in just over 3 years.

Amazingly, Obama has added more to the national debt than George W. Bush did during his entire 8 year term.

And let there be no mistake - George W. Bush was a wild spender.  A fiscal conservative he most certainly was not.

But Barack Obama does not seem troubled by any of this.

Barack Obama is prancing about the countryside touting his great "economic plan", but the truth is that the only reason the economy has not totally collapsed is because he is stealing 150 million dollars an hour from our children and our grandchildren.

Sadly, most Americans don't understand that the current level of prosperity that we are enjoying is a grand illusion.  Most Americans still expect things to return to the way that they used to be, and they are increasingly becoming angry that it is taking so long to get back there.

In fact, a whole host of recent surveys have shown that Americans are very dissatisfied with the direction the economy is heading in....

Four recent surveys have found that on average only 28% of Americans are satisfied with the condition of the country, while 70% are dissatisfied. Three recent surveys have found that between 69% and 83% of Americans believe that the country is still in recession (it isn’t), and only half believe that a recovery is under way.

What they don't realize is that if we were not massively ripping off our kids and our grandkids things would be much, much worse.

Thomas Jefferson understood that government borrowing is essentially the same as theft from future generations.

He once made the following statement....

And I sincerely believe, with you, that banking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.

What we are doing to our children and our grandchildren is so immoral that it is hard to put into words.

We are running up trillions upon trillions of dollars of debt in their name just so that our lives can be more comfortable right now.

How could we be so selfish?

The sad thing is that even with all of this reckless spending our economy is still not in great shape.

In fact, the middle class continues to shrink at an alarming rate.  The following are just a few statistics from a recent article I did about this phenomenon....

-Today, approximately 48 percent of all Americans are currently either considered to be "low income" or are living in poverty.

-Back in 1960, social welfare benefits made up approximately 10 percent of all salaries and wages.  In the year 2000, social welfare benefits made up approximately 21 percent of all salaries and wages.  Today, social welfare benefits make up approximately 35 percent of all salaries and wages.

-The United States actually has a higher percentage of workers doing low wage work than any other major industrialized nation does.

-Every year now, we see millions of Americans fall out of the middle class.  In 2010, 2.6 million more Americans descended into poverty.  That was the largest increase that we have seen since the U.S. government began keeping statistics on this back in 1959.

-At this point, approximately 22 percent of all American children are living in poverty.

-When Barack Obama took office, there were 32 million Americans on food stamps.  Now, there are more than 46 million Americans on food stamps.

So how much worse would things be if a trillion dollars of federal spending was suddenly removed from the economy?

Are you starting to get the picture?

As bad as things are right now, they are about to get a whole lot worse.

So why can't we just keep on borrowing and spending forever?

Well, just like Greece found out, debt always catches up with you eventually.

During fiscal 2011, the U.S. government spent over 454 billion dollars just on interest on the national debt.

But just like we are seeing in Europe, if confidence in U.S. government debt starts to disappear the U.S. government could end up facing much higher interest rates to borrow money.

If the average rate on U.S. government debt only rose to 7 percent (in the past it has actually been much higher than that), then the U.S. government would be spending about 1.1 trillion dollars a year just on interest on the national debt.

During fiscal year 2011, the U.S. government spent 3.7 trillion dollars but it only brought in about 2.4 trillion dollars.

So if we were spending 1.1 trillion dollars just on interest, that would be close to half of all the revenue the federal government brings in.

Right now, the Federal Reserve is manipulating the system in a desperate attempt to keep interest rates down.  During 2011, the Federal Reserve bought up approximately 61 percent of all government debt issued by the U.S. Treasury Department.

But most Americans have no idea how fragile our financial system is.

Most Americans just assume that we will always be the greatest economy on the planet and that there is nothing to be worried about.

Sadly, one way or another this debt bubble is going to burst and then our debt-fueled false prosperity is going to disappear.

Most Americans are not going to understand what is happening and they are going to go absolutely nuts.

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  • Kelby

    If the federal government adopted a balanced budget next year, the debt-fueled prosperity that we are currently enjoying would start disappearing very rapidly and all hell would break loose in America.

    So we’re damned if we do and damned if we dont. This is just terrible!!

  • Washington

    The current path to WWIII and total social collapse
    http://www.youtube.com/watch?v=m5D9fM5gEXY

  • Evie

    Do we waant to be like greece. Ask goldman sacs they lent them money it os in the book boomerang. Very few pay taxes most are self employed and tax cheat would fill a library. Why are for profit prisons not tjere? In the usa they woild imprison you for .50. It os not like they do npt get money in the usa. Money is squandered.

    • Gary2

      we can never be grease-that is a right wing myth for low information people.

      • GaryToo

        give your reasons, 300 million odd dead people decomposing would amount to grease.

  • George

    If the federal government adopted a truly balanced budget– a budget in which annual appropriations plus new bonded indebtedness plus loan guarantees could not exceed the prior fiscal year revenues– the federal government could only pay for defense, social security, medicare/medicaid and interest on the national debt. All other departments (except the IRS)would be unfunded. GDP would immediately fall by at least 10%. The collateral economic fallout from the ensuing depression would be impossible to predict. Breaking the deficit spending addiction by means of a truly balanced budget would involve excruciating withdrawal pains for all Americans.

  • El Gordo

    Dick Cheney, to Paul O’Neill, then Treasury Secretary: “You know, Paul, Reagan proved that deficits don’t matter. We won the mid-term elections, this is our due.”

  • erheault

    The current batch of demopublicans are trying their damdest to hold together the bag of wild cats that is our ecenomy untill after Captain Zero is reelected then all hell will breakout at that time all finincial products will be boiling over meanwhile the rich will be getting richer and the poor will be getting poorer

  • http://economiccollapseblog.com bill

    do you want bad times nobody does,BUT MAN UP AND TAKE YOUR PUNISHMENT FOR LIVING PAST YOUR MEANS,is everyone sissys,yes its going to be rough but we need to stop being theives and start being men.Where are the true men,during the depression they toke it and done what needed done,they didnt steal from us.
    so bring on the collapse and anyone that says no,get off your welfare butt get a job and bring the collapse on.
    COME ON AND MAN UP AMERICA

  • http://economyincrisis.org Eric

    First of all, when Obama took office the debt was somewhere between 12 and 13 trillion. The first of two major economic stimulas packages was approaved and created by the Bush administration. The two wars, hello this is the real cost of our doing buisness right now, were still around. The wars did not just evaporate when the Democrats took office.

    I’ve said enough, reading this article made me feel you are very bias between the current regime. I think they have done more for the American people then any president since RR. Ops, I went the other way! Look up your money facts, and figure out the costs of the wars before you tried to act so sofisticated!!!

  • i’vegivenup

    Once America falls into an economic depression WWIII will begin and the End of Days will be at hand….

    • GaryToo

      true but maybe cart b4 horse there i’vegp

  • Gary2

    Here is what I think–The future of republicans and conservatives is pretty dim due to demographics. There are almost no young conservatives. Simply look at a tea party rally-all over 45 and many in their government scooters. We just had more minority babies born than white. I doubt many minorities vote conservative. In fact I know and work with many and NONE of them would ever vote republican.

    Michael–what do you think? Strictly looking at demographics the conservative movement is doomed. Full disclosure–this is a good thing.

    The tea party is the rights last gasp.

    • GaryToo

      Minorities get more conservative with future generations, however elections in usa will be a moot point soon enough. 450 million hollow points TSA, homeland security, FEMA camps, all under democrat president GARY2, so the current democrat admin is the last one regardless of whether the minority majority ever come down from their hopium high.

    • Louise in MO

      GARY2

      It is nothing to be proud of that young minorities in particular would never vote Republican.

      Are you aware that 70 percent of minority black babies are born OUT OF WEDLOCK to SINGLE WOMEN! Guess who pays to take care of these babies!

      America is so morally bankrupt, and most of it is due to the young….not all, but most.

      Know you aren’t keen on the Bible, Gary2, but it foretells that “the end will come when everyone does what is right in their own eyes.” I’d say we are just about there!

  • Robert

    Sadly, there will be no avoiding this calamity. Even more unfortunate is the squabbling among those replying to this article. The enormity of this situation requires unity among those gettig screwed and a clear understanding of who is doing the screwing. Obama, Bush belong to the same club tell the same lies and and have the same agenda. You can’t save yourself or your loved ones while you are busy cutting each other’s throats.

    • GaryToo

      insignificant little people like to identify with something large like a political party, especially fighting an enemy that can do them no real harm, real brave warriors left against right. Ingroup/outgroup bravado. thats why this diversion comes up again and again regardless of how many times the sensible point out its two sides of same coin.

  • John McNamara

    Why don’t we just go to the record and avoid the Fox News-type reporting on such issues. Why do these morons continue to send these chain e-mails, spewing lies and character assassinations. Why do they open their mouths without factchecking what they say, then ask those who read their terrible lies to “PASS THIS ALONG, IF YOU LOVE YOUR COUNTRY,” or some other obnocuous parallell phrase. Here is the truth on Obama’s spending, and if you think that Ryan’s hope of austerity is the answer, you have not been reading the European headlines as of late. Here is the truth:
    http://tucsoncitizen.com/baja-democrats/2012/05/23/president-obama-out-of-control-spending-not-hardly/

    John McNamara

    • Louise in MO

      TObama lied about EVERYTHING during the 2008 campaign. He did NOT do one thing he promised…nothing!

      Our troops are still overseas.

      Guantanomo prison…still there.

      A transparent president…..he lies every time he opens his mouth!

      No lobbyists in his White House….get real, they have a revolving door into the oval office all to themselves.

      Will do away with pork barrel spending….go over bills line by line…..more LIES.

      These are just a few. Anyone who votes for him again are not paying attention.

      Furthermore “I AM NOT BETTER OFF THEN I WAS THREE AND A HALF YEARS AGO!

  • Scooter

    The borrower is always slave to the lender. Many are laboring under the notion that it is our nation that is at stake here. Rather, it is our very souls. If you are naive enough to believe that the president matters at all in this equation, you are lost already. These powers that we are wrestling against are far from stupid. They always get their desired outcome because they control all of the pieces. I urge each of you to step back and consider this from a spiritual perspective and abandon your patriotic dillusions. America was never what you thought it was. It is part of the final phase of a 6000+ year old plan that will end very badly.

  • http://thegreatrecession.info David Haggith

    While your article is right on about the problems of the national debt, the comparison between George Bush II and Obama is unfair for a few reasons:

    “the Obama years do not afford a fair comparison of Republican vs Democrat on the national debt because we entered what may eventually be called the Great Depression II during the Bush II years”

    “Obama has carried out exactly the economic policies that Bush switched to in his final year. He has used the same resident “experts” Bush was relying on, such as Ben Bernanke”

    “George W. Bush said he had to “give up on my Capitalist principles” and approved a 900-billion dollar bailout to be followed by ANOTHER 900 billion later if necessary. This second 900 billion was already scheduled to happen during the next administration (whether the next election turned out to yield a Republican president or a Democrat) and amounts to almost half of Obama’s accumulated debt. With his first bailout, Obama merely carried out what had been established in the final Bush year. ”

    ( Exerpts from: “Deficits, Debts and Democrats vs Republicans — US national debt in graphs by year and president” http://thegreatrecession.info/blog/?p=2213 )

    Much to my own surprise Republicans do not come out at all well compared to Democrats when one looks at the national debt and which part has been in control during the years when it grew the most. I say that as one who used to vote Republican far more than Democrat, but who is amending his ways now that he’s studied who has really done the most financial harm to this country.

    You do a great blog with lots of valuable content, so we are in agreement on many things, but I think it’s time to set the record straight on where a lot of Obama’s debt came from. He still doesn’t get a free pass by any means, since he has certainly done NO BETTER than George Bush.

    –Knave Dave

  • Washington

    Cold Case Posse – Obama’s Birth Certificate Investigation – Sheriff Joe Arpaio – Full Version

    http://www.youtube.com/watch?v=8muZ1Pe9OAo&feature=related

  • Bob Basher

    Ignorance truly is the nations worst enemy….and gary2 is at the top of the list sadly….very soon there will be too many in the wagon for the rest to pull anymore.

  • Ed_B

    “Why isn’t the U.S. economy in a depression right now?”

    Who says that it isn’t? One definition for a depression is “an extended period of time in which an economy contracts coupled with pervasively high unemployment”. Hmmm… is that sounding familiar to anyone else? Seems to me that the US economy has sucked since late 2007 and unemployment is so bad that the Fed and the gov are forced to lie about it lest there be armed insurrection. Check out the REAL numbers on http://www.shadowstats.com sometime. Unemployment is not 8%. It is closer to double that. Add in those who have simply given up looking for work any more and it is nearly triple. Inflation? Uncle Ben said that it was 3.5% in 2011. Real world numbers say that it was triple that. My shopping experiences indicate that the real world numbers are correct and that the Fed / gov numbers are pure BS. Yeah, I know that is not a huge surprise for most of us… just saying.

    • mondobeyondo

      The U.S. economy IS in a depression. The people running the country/pulling the strings just won’t admit it. It makes for bad press. The CBS Evening News ratings would plummet, and Diane Sawyer would be unemployed like so many of the rest of us. (Don’t worry, Diane! I still think you’re hotter than a cat on a hot tin roof!)

      And for you clueless out there – the mainstream media does not always tell the truth. It’s lies and manipulation.

      The real, true unemployment rate is far higher than 8.1 percent – or whatever they’re saying now. It’s more like 22 percent. That is Great Depression statistics.

  • Randy

    Gary2 is right. Dr. Krugman is right and if some of you would read his work with an open mind you would probably be surprised it makes a whole lot of sense. I was a Business Major in college and was gung ho Republican for many years. Over the last 10 years I have seen the light. I knew the financial industry deregulation was insanity. I knew that the housing market was a bubble of insane proportions and that a collapse was coming. There are very few people in this country that read as much as I do on economics, history, human psychology etc. etc.

    The bottom line is it is “NOT” Repeat “NOT” about the current level of debt or spending. I repeat for the millionth time, WE ARE ALL TO BLAME for the current level of debt and the current spending. Where were all of you people while Congress was ramping up spending to unheard of levels and also deregulating the financial industry? Our problems have mostly been created by policy started back in the 80′s thru recently and the biggest problem has been LOBBYISTS. Lobbyists and our government sold us all down the road and allowed policy that shipped all the good jobs overseas and a whole host of other things.

    The current level of debt is what it is. It is a well known fact and history proves it time and again: AUSTERITY NEVER EVER EVER helps the situation in a severe economic downturn. If we cut cut cut, we will eliminate tens of thousands of more jobs. It just creates a self feeding downward spiral.

    Okay, so eliminate a trillion dollars or two in Federal Spending, cut the welfare, medicare, foodstamps, social security. Not only will the economy completely crash, but there will be rioting in the streets and the end of Amerika as we know it. We can’t gut the middle class and ship those jobs overseas then cut taxes for the rich and expect to pay our bills. When our government allows a huge corporation like GE pay no taxes, then the party is over. The middle class is gutted and still shrinking. That leaves the rich and the corporations to pay more of the tax bill. Unfortunatley they are spending the tax money on lobbyists to ensure they pay as little taxes as possible.

    Michael says it is immoral to push off trillions of dollars in spending to future generations. I say it is immoral to allow lobbyists in Washington DC to push policy that benefits the few at the expense of the masses, I say it is immoral for someone who is making tens of millions of dollars to only pay a 13% tax rate. I say it is immoral for a multi billion dollar corporation to pay NO taxes. This country is broke because of lobbyists, special interest groups and corruption to the core. Fix the system and the debt will be fixed. Will it happen? I doubt it.

  • Howard Kahn

    Indian IT Engineer coming on H1b visa hacked into every US server and system. One the major reason of our economy collapse. They shifted many businesses to India, like Software and call center etc.
    Indian intelligence is sending more and more Indian engineers to hack and access almost every network and server for illegitimate economic gains.

  • bambi

    Debt-hawks tell us that by reducing the federal deficit, they protect our children and grandchildren. But in fact, they condemn our children, grandchildren and us to more costly medical services, fewer doctors, nurses and hospitals, as well as to lower paying Social Security, poorer roads and bridges, a less-equipped military, worse schools and indeed less of every benefit our monetarily sovereign government easily is able to pay for.

    Yes, the EU nations were foolish to surrender their ability to control their money supply. That control is one of the prime duties of any government. But we are even more foolish not to understand that we have that control, yet we neglect to use it.

    Our leaders fear deficits, not realizing that “federal deficit” merely is a synonym for “money created this year.” Rather than being a negative, it’s a positive; it’s an absolute necessity.

    Our leaders fear “federal debt” (which contrary to popular belief is not the total of deficits, but rather the total of outstanding T-securities). Federal debt could be eliminated by the simple act of no longer creating and selling T-securities. They became obsolete in 1971, the end of the gold standard. It is difficult to understand why Congress believes we must borrow the dollars we previously created and have the unlimited ability to create.

    Our leaders fear ” uncontrollable inflation.” They do not understand we are so far from uncontrollable inflation that since we went of the gold standard, there has been no relationship between federal spending and inflation, . Further, our leaders don’t realize inflation easily can be controlled by raising interest rates, which is exactly how the Fed has controlled inflation all these years.

    By what logic could these fears and the resultant actions, be considered “prudent” or “protecting our grandchildren”?

  • Peter

    I didn’t read further than this:

    “At this point, the U.S. national debt is over 15.7 trillion dollars.

    When Ronald Reagan took office it was less than a trillion dollars.”

    Shows me that this article isn’t only highly manipulative but outrightly dumb. Why compare with the time when Reagan took over (from whom?) and not with when he left office? Or when Bush junior left office? Because then you wouldn’t have a point anymore. This is sooo weak!

  • http://www.babyspittle.com babyspittle

    Republicans are insane or stupid.

    Obama inherited a 1.2 trillion dollar deficit.
    without fixing those bush policies that built the deficit, how much does that add up to over 4 years?

    4 x 1.2 trillion = 4.8 trillion without considering any of obama’s policies.

    you idiot conservatives continue to try and blame obama for republican policy.
    F-you, moronic anti-american POS’s.

  • donkey

    Er maybe this guy isnt smart enough to realize 1 trillion when reagan took office had a far greater value than 1 trillion today.

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