12 Facts About Money And Congress That Are So Outrageous That It Is Hard To Believe That They Are Actually True

Do you want to get rich?  Just get elected to Congress.  The U.S. Senate and the House of Representatives are absolutely packed with wealthy people that are very rapidly becoming even wealthier.  The collective net worth of the members of Congress is now measured in the billions of dollars.  The people that we have elected to the House and Senate are absolutely swimming in money.  Unfortunately, it is not easy to get elected to Congress.  In this day and age you generally have to be heavily connected to those that are very wealthy to get into Congress because it takes gigantic amounts of cash to win campaigns.  But if you can get in to the club, you pretty much have it made.  The numbers that you are about to read are very difficult to believe and they should deeply sadden you.  They show that Congress has become all about money.  Congressional races are mostly financed by wealthy people, most of the people that we elect to Congress are very wealthy, and they rapidly get wealthier after they are elected.  All of this money has turned our republic into something far different than our founding fathers intended.

The following are 12 statistics about money and Congress that are so outrageous that it is hard to believe that they are actually true….

#1 The collective net worth of all of the members of Congress increased by 25 percent between 2008 and 2010.

#2 The collective net worth of all of the members of Congress is now slightly over 2 billion dollars.  That is “billion” with a “b”.

#3 This happened during a time when the net worth of most American households was declining rapidly.  According to the Federal Reserve, the collective net worth of all American households decreased by 23 percent between 2007 and 2009.

#4 The average net worth for a member of Congress is now approximately 3.8 million dollars.

#5 The net worth of House Minority Leader Nancy Pelosi increased by 62 percent from 2009 to 2010.  In 2009 it was reported that she had a net worth of 21.7 million dollars, and in 2010 it was reported that she had a net worth of 35.2 million dollars.

#6 The top Republican in the Senate, Mitch McConnell, saw his wealth grow by 29 percent from 2009 to 2010.  He is now worth approximately 9.8 million dollars.

#7 More than 50 percent of the members of the U.S. Congress are millionaires.

#8 In 2008, the average cost of winning a seat in the House of Representatives was $1.1 million and the average cost of winning a seat in the U.S. Senate was $6.5 million.  Spending on political campaigns has gotten way out of control.

#9 Insider trading is perfectly legal for members of the U.S. Congress – and they refuse to pass a law that would change that.

#10 The percentage of millionaires in Congress is more than 50 times higher than the percentage of millionaires in the general population.

#11 U.S. Representative Darrell Issa is worth approximately 220 million dollars.  His wealth grew by approximately 37 percent from 2009 to 2010.

#12 The wealthiest member of Congress, U.S. Representative Michael McCaul, is worth approximately 294 million dollars.

So how are members of Congress becoming so wealthy?

Well, there are lots of ways they are raking in the cash, but one especially alarming thing that goes on is that members of Congress often make investments in companies that will go up significantly if legislation that is being considered by Congress “goes the right way”.

This is called a “conflict of interest”, but it happens constantly in Congress and nobody seems to get into any trouble for it.

The following is video of Steve Kroft of 60 Minutes ambushing Nancy Pelosi about one particular conflict of interest involving credit card legislation.  As you can see, she does not want to talk about it….

As noted above, insider trading is perfectly legal for members of Congress.

A law that would ban insider trading by members of Congress has been stalled for years on Capitol Hill.

So has this been a significant benefit to members of Congress?

Well, there has been at least one study that appears to indicate that members of Congress have been much more successful in the stock market than members of the general public have….

A 2004 study of the results of stock trading by United States Senators during the 1990s found that that senators on average beat the market by 12% a year. In sharp contrast, U.S. households on average underperformed the market by 1.4% a year and even corporate insiders on average beat the market by only about 6% a year during that period. A reasonable inference is that some Senators had access to – and were using – material nonpublic information about the companies in whose stock they trade.

Of course all of this could just be a coincidence, right?

Meanwhile, members of Congress keep telling the rest of us that we are just going to have to cut back because times are tough.

For example, during an interview with George Stephanopoulos of ABC News, Nancy Pelosi actually claimed that we should try to encourage poor people to have less children because it costs the government so much money to take care of them….

PELOSI: Well, the family planning services reduce cost. They reduce cost. The states are in terrible fiscal budget crises now and part of what we do for children’s health, education and some of those elements are to help the states meet their financial needs. One of those – one of the initiatives you mentioned, the contraception, will reduce costs to the states and to the federal government.

STEPHANOPOULOS: So no apologies for that?

PELOSI: No apologies. No. we have to deal with the consequences of the downturn in our economy.

This elitist attitude extends all the way into the White House as well.  Earlier this year, Barack Obama made the following statement….

“If you’re a family trying to cut back, you might skip going out to dinner, or you might put off a vacation.”

Meanwhile, the Obamas are living the high life at taxpayer expense.  In a previous article I mentioned one outrageously expensive vacation taken by the Obamas that was paid for by our taxes….

“Back in August, Michelle Obama took her daughter Sasha and 40 of her friends for a vacation in Spain.

So what was the bill to the taxpayers for that little jaunt across the pond?

It is estimated that vacation alone cost U.S. taxpayers $375,000.”

There is a massive disconnect between what our politicians say and what our politicians do.

The high life is good enough for them, but the rest of us have got to “cut back” and suffer becomes times are hard.

But when it comes to money and Congress, the most corrupting influence of all is probably all of the campaign money that gets thrown around.

In America today, it takes gigantic mountains of money to run a successful campaign.

Sadly, the candidate that raises the most money almost always wins.  In federal elections the candidate that raises the most money wins about 90 percent of the time.

More than 5 billion dollars were spent on political campaigns back in 2008.

That represents a huge number of favors that need to be paid back.

In 2012, it is being projected that 8 billion dollars could be spent on political campaigns.

When big corporations and wealthy individuals shovel huge piles of money into political campaigns, it is generally because they expect something in return.

Most of those that get sent to Congress realize that they never would have won if wealthy donors had not showered cash on them.  Most of them understand that they should not bite the hands that feed them if they want the cash to keep rolling in.

Politics in America has become a game that is played by the elite for the benefit of the elite.

Average Americans have the perception that they are involved in the process and that their opinions really matter, but mostly it is just an illusion.

It is so sad.

Meanwhile, members of Congress rapidly get wealthier and average American families continue to suffer.  In fact, the standard of living in the United States has fallen farther over the past three years than at any other time that has ever been recorded in U.S. history.

But for members of Congress the good times just keep on rolling.

Just as it has been for most of human history, the rich rule over the poor.

Does anyone out there believe that we have any hope of changing this?

Wal-Mart Says “Serious” Inflation Is Coming

Thank you Ben Bernanke for all the money printing.  Thanks to a massive injection of cash into the financial system by the Federal Reserve and other central banks, the price of almost every major commodity has skyrocketed over the past six months.  Now those price increases are starting to filter down to the retail level.  During a recent meeting with USA TODAY’s editorial board, Wal-Mart CEO Bill Simon said that rising inflation in the United States is “going to be serious” and that Wal-Mart is “seeing cost increases starting to come through at a pretty rapid rate.”  For many years Wal-Mart has been famous for their “low prices”, so for the head of Wal-Mart to publicly warn that much higher prices are coming is more than a little alarming.  There are millions of American families that are already drowning in debt, that can barely pay their mortgages and that are struggling to put food on the table for their families.  So what is going to happen to the U.S. economy when prices start rising substantially at places such as Wal-Mart?

But Wal-Mart is not the only major corporation that says that inflation is coming.  Hershey has just announced price increases of about 10 percent on their entire line of products.

So if you like chocolate you better start stocking up now.

Cocoa production is being seriously threatened by the political unrest in Africa right now.  The recent chaos in the Ivory Coast is certainly not good news for Hershey, but the truth is that all of the long-term trends indicate that prices for commodities such as cocoa, coffee and sugar are going to move up anyway.

In fact, Aaron Smith, the managing director of Superfund Financial, believes that coffee, sugar and cocoa will all be five to ten times more expensive by 2014 than they are today.

So if you are addicted to coffee or to sugar you might want to start making your plans accordingly.

But the truth is that inflation is not limited to just a few commodities.  Virtually every major agricultural commodity has soared in price over the past 6 months to a year.

So what is causing all of this?

Well, there are several factors which are major contributors.

First of all, overall global demand continues to increase.  The population of the world continues to grow, and as the economies of nations such as China and India develop, millions more people want to enjoy luxury items such as chocolate and coffee just like Americans do.

Secondly, all over the world central banks have been recklessly printing money in an attempt to stimulate their economies, but this is also going to end up causing tremendous inflation.

So how does that work?

Well, it is actually very simple.

For example, in the United States when there are more dollars chasing the same number of goods and services, what is going to happen?

Prices are going to rise of course.

And we are seeing this happen all over the world right now.

Thirdly, as the price of oil continues to rise, it is going to increase the cost of everything else.  The era of massive amounts of cheap food being transported around the world using massive quantities of cheap oil is rapidly coming to an end.

The following chart if from the Federal Reserve.  It shows that the price of oil is rapidly moving back to the level it was at prior to the financial crisis of 2008.  In fact, this chart is slightly out of date.  At last check, the price of oil was over $107 a barrel.  So what is it going to mean for our economy if we soon surpass the record that was set back in 2008?….

Fourthly, global instability is also going to cause prices to continue to rise.  Over the past year we have had really bizarre weather all over the globe, we have seen revolutions erupt all over Africa and the Middle East and the third largest economy in the world (Japan) just experienced the worst disaster that they have been through since World War 2 ended.

When things are unstable, economies don’t work as efficiently.  That means that less goods and services are produced.

But when there are less goods and services being chased by an increasing amount of money that tends to push prices up.

The truth is that inflation is here, and if the CEO of Wal-Mart is right, it is not going to go away any time soon.

In fact, many believe that the world is on the verge of another major economic crisis.

If you stop and think about it, every major region of the world is dealing with very serious problems right now.

Right now, the European debt crisis is worse than it ever has been before.  Did you notice that Standard & Poor’s just downgraded Portugal’s debt for the second time in a week?  Now Portuguese debt is rated BBB-, which is only one level above junk status.

That is a very alarming sign.

Asia is dealing with the Japanese crisis, nearly all of the countries in the Middle East are dealing with protests or full-blown revolutions, Africa is dealing with the war in Libya and quite a few revolutions of their own, and the U.S. is still deeply struggling with a whole host of economic problems.

Most Americans don’t realize just how precarious things are at the moment for the global economy.  The financial crash of 2008 did a lot of lasting damage, and the next wave of the financial crisis could potentially be even worse.  Unfortunately, the global financial system is more vulnerable than ever right now.

So what are the Federal Reserve and other central banks going to do the next time a major financial crisis happens?

They are going to print even larger quantities of money and they are going to give even larger bailouts to their friends of course.

The dollars that you have today are never going to be more valuable than they are right now.  Don’t wait too long to use them.  If you have a huge pile of dollars sitting in the bank your wealth is slowly but surely rotting away.

Very hard economic times are coming.  The inflation that the CEO of Wal-Mart is warning about is only the beginning.  Eventually we are going to see inflation in this country that is going to be absolutely mind blowing.

But don’t wait until the storm hits to start preparing.  We all have time now to prepare, so let us be wise and make the most of it.

The Death Of Cash? All Over The World Governments Are Banning Large Cash Transactions

Are we witnessing the slow but certain death of cash in this generation?  Is a truly cashless society on the horizon?  Legislation currently pending in the Mexican legislature would ban a vast array of large cash transactions, but the truth is that Mexico is far from alone in trying to restrict cash. All over the world, governments are either placing stringent reporting requirements on large cash transactions or they are banning them altogether. We are being told that such measures are needed to battle illegal drug traffic, to catch tax evaders and to fight the war on terror. But are we rapidly getting to the point where we will have no financial privacy left whatsoever? Should we just accept that we have entered a time when the government will watch, track and trace all financial transactions? Is it inevitable that at some point in the near future ALL transactions will go through the banking system in one form or another (check, credit card, debit card, etc.)?

The truth is that we now live at a time when people who use large amounts of cash are looked upon with suspicion. In fact, authorities in many countries are taught that anyone involved in a large expenditure of cash is trying to hide something and is probably a criminal.

And yes, a lot of criminals do use cash, but millions upon millions of normal, law-abiding citizens simply prefer to use cash as well.  Should we take the freedom to use cash away from the rest of us just because a small minority abuses it?

Unfortunately, the freedom to use cash is being slowly stripped away from us in an increasingly large number of countries.

In fact, as countries like Mexico “tighten the noose” around big-ticket cash purchases, our freedom to use cash is going to erode rather rapidly.

The following is a summary of some of the very tight restrictions being placed on large cash transactions around the globe right now….

Mexico

In Mexico, a bill before the legislature would completely ban the purchase of real estate in cash.  In addition, the new law would ban anyone from spending more than MXN 100,000 (about $7,700) in cash on vehicles, boats, airplanes and luxury goods.

$7,700 is not a very high limit, and this legislation has some real teeth to it.  Anyone violating this law would face up to 15 years in prison.

Greece

In Europe, some of the “austerity packages” being introduced in various European nations include very severe restrictions on the use of cash.

In Greece, all cash transactions above 1,500 euros are being banned starting next year.  The following is a comment by Greek Finance Minister George Papaconstantinou at a press conference discussing the new austerity measures as reported by Reuters….

“From 1. Jan. 2011, every transaction above 1,500 euros between natural persons and businesses, or between businesses, will not be considered legal if it is done in cash. Transactions will have to be done through debit or credit cards”

Italy

Even Italy has gotten into the act.  As part of Italy’s new “austerity measures”, all cash transactions over 5,000 euros will be banned.  It is said this is being done to crack down on tax evasion, but even if this is being done to take down the mafia this is still quite severe.

The United States

The U.S. government has not banned any large cash transactions, and hopefully it will not do so any time soon, but it sure has burdened large cash transactions with some heavy-duty reporting requirements.

For example, your bank is required to file a currency transaction report with the government for every deposit, withdrawal or exchange over $10,000 in cash.

Not only that, but if a bank “knows, suspects, or has reason to suspect” that a transaction involving at least $5,000 is “suspicious”, then another report must be filled out.   This second type of report is known as a suspicious activity report, and it is also filed with the government.

But the reporting does not stop there.  As Jeff Schnepper explained in an article for MSN Money, if you are in business and you receive over $10,000 in cash in a single transaction you must report it to the IRS or you will go to prison…..

If you’re in a business and receive more than $10,000 in cash from a single transaction, or from related transactions within a 12-month period, you have to file Form 8300 and report the buyer to the IRS. Don’t file, and you go to jail.

The IRS isnt kidding. I had a client who was a dealer in Corvette sports cars. He told me he didnt have time to file the forms. I told him several times to file. He thought he knew better. He went to jail. So did his children who were involved in the business.

This is very, very serious.

Just because someone forgets to file a certain form with the IRS, that person can go do serious jail time?

Yes.

According to Schnepper, quite a few Americans have already received very substantial sentences for this kind of thing….

In fiscal 2004, the Internal Revenue Service initiated 1,789 criminal investigations. There were 1,304 indictments and 687 convictions — and an 89.1% incarceration rate. The average sentence: 63 months.

In fiscal 2005, the IRS started 4,269 investigations, winning 2,406 indictments and 2,151 convictions and an 83% incarceration rate. Average sentence: 42 months.

The reality is that governments around the world are getting very, very sensitive about large amounts of cash and they are not messing around.

They don’t want all of us running around with big piles of cash.  They want our money in the banks where they can track it, trace it and keep a close eye on it.

On the one hand, it is a good thing to catch criminals and terrorists, but on the other hand how much privacy and freedom are we willing to lose just so that we can feel a little safer?

And as cash becomes criminalized, are all of us going to be forced into the banking system whether we like it or not?  If we cannot pay for things in cash, what other choices are we going to have?

The truth is that the more you think about this issue, the more disturbing it becomes. 

So what do you think about all of this?  Feel free to leave a comment below.

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