11 Signs That The U.S. Government Has Become An Overgrown Monstrosity That Almost Every American Is Dependent Upon For Economic Survival

Today, the number of Americans who are able to financially survive without any reliance on the U.S. government whatsoever is declining at a staggering rate.  Whether it is through direct handouts, entitlement programs, student loans, government bailouts, government contracts or direct employment, the truth is that now a solid majority of the American people are at least partially dependent on the federal government for their economic survival.  The sad thing is that the majority of the American people say that there is too much government in their lives when opinion polls are taken, but if you try to take the government check that they are getting away from them those same people will scream bloody murder.  But the truth is that it is getting to be really, really hard to be completely independent of the U.S. government economically.  That is because the U.S. government has their hands in almost everything.  The ideal of a “limited federal government” has long since faded away.  Very few people seem to believe in it anymore.  Instead, Americans today look to the federal government as the answer to all of our problems, as the provider of all of our needs, and as the regulator of every single detail of our lives. 

The U.S. government has become the “Big Mother” that we all scramble to for a handout when we get into trouble.

When you sit down and really analyze it, you quickly realize that there is no way that the U.S. government can be extricated from the U.S. economy now.  Instead of the free enterprise system that we once had in this country, today we have a situation where the U.S. government has become the very core of the economy.  It is the hub around which everything else in the economy revolves.

You don’t believe this?

The following are 11 signs that the U.S. government has become an overgrown monstrosity that almost every American is dependent upon for economic survival…. 

#1) The Explosion Of Government Handouts

39.68 million Americans are now on food stamps.  Millions of others are completely dependent on the extended unemployment benefits that they are receiving.  Millions of other Americans are able to survive financially because of the dozens of other welfare programs that the U.S. government subsidizes.  More Americans are receiving some form of welfare than ever before in history, and each month the numbers continue to go up.  Could there come a day when we all receive government handouts every month?

#2) The Entitlements Programs That Threaten To Destroy U.S. Government Finances

Entitlements are the single biggest U.S. government expense.  These programs include Social Security, Medicare, Medicaid and other social Ponzi schemes.  Tens of millions of Americans receive government assistance through these programs.  In fact, nearly 51 million Americans received $672 billion in Social Security benefits in 2009.  We all have friends or family members who receive these kinds of payments.  But cutting so many people a check year after year is slowly but surely destroying U.S. government finances.  According to an official U.S. government report, rapidly growing interest costs on the national debt together with spending on major entitlement programs will absorb approximately 92 cents of every dollar of federal revenue by the year 2019.  That is before a penny is spent on anything else.  This is clearly not a sustainable financial situation by any definition, but who wants to tell tens of millions of Americans that their checks are going to be reduced?

#3) The U.S. Government Is Now Even Paying Mortgages

Yes, you read that right.  As part of the “stimulus” package, the U.S. government is going to send money to some of the states that were hit the hardest by the real estate crisis.  So what is that money going to be used for?  Well, Florida, Michigan, California and Arizona have all announced that they plan to use $1.4 billion the Obama administration is sending their way to help the unemployed and the “underwater” pay their mortgages.

#4) Without The Student Loan Program A Huge Percentage Of College Students Would Not Get An Education

The federal student loan program (which was recently entirely nationalized) helps millions of college students pay for their education.  Without this assistance by the government, a lot less students would be going to college.  In fact, many of you that are reading this article directly benefited from the federal student loan program.

#5) The Bailout Of AIG

One of the biggest insurance companies in the world, AIG, would not be in existence today if not for direct federal government intervention.  It kind of makes you wonder what George Washington and Thomas Jefferson would think about a federal government that hands big bags of cash to a giant insurance company so that it can survive.  Whether it was so they could pay off their debts to Goldman Sachs or whether it was so that they could keep paying out record-setting bonuses, the truth is that AIG would not have made it without the federal government stepping in.

#6) The “Too Big To Fail” Banks

But it wasn’t just AIG that got bailed out.  A number of big banks may have gone under if not for the U.S. government.  The U.S. government decided that they were “too big to fail”.  Well, what about all the small banks that are going under?  The truth is that they are “too small to bother with”.  We now live in a nation where the U.S. government is the one who decides which banks live and which banks die like dogs.  Doesn’t that just make you feel all warm and fuzzy?

#7) The Bailout Of General Motors

But not only does the federal government bail out financial institutions – it is also now in the car business.  Yes, grand old General Motors may have ended up on the scrap heap of history if not for the U.S. government stepping in.  So if you work for General Motors or if you work for any company that does business with General Motors, you can thank Uncle Sam for the fact that you still have a job.

#8) The Bailouts Of Fannie Mae and Freddie Mac

If the U.S. government had not bailed out Fannie Mae and Freddie Mac, we may not have much of a mortgage industry at this point at all.  According to Inside Mortgage Finance, government-related entities backed 96.5% of all home loans during the first quarter of 2010, which was up from 90% in 2009.  So if you borrowed money to buy a home over the past couple of years, there is a very strong likelihood that the U.S. government was involved.

#9) The U.S. Government – The Nation’s Biggest Employer

According to the Bureau of Labor Statistics, approximately 2 million civilians work for the federal government, excluding the Postal Service.  When you add in all U.S. military personnel, that number goes much higher. 

The truth is that as the government continues to expand (become more bloated), more Americans than ever are hopping aboard the gravy train.  Today, the average federal worker now earns about twice as much as the average worker in the private sector.  So if you want to do little work, produce little of real value and enjoy super cushy benefits, maybe you should apply for a job with the federal government too.

#10) Millions Of Americans Are Employed By Firms That Rely On Government Contracts

When considering the impact of the U.S. government on the economy, you can’t forget the hundreds of companies that would go out of business if their U.S. government contracts were taken away.  There are literally millions of people who work for companies that do business with the government.  If the government disappeared it would cause economic chaos for those firms.  The truth is that a whole lot of people make a really good living plugging into the sweetest revenue source of them all – the U.S. government.

#11) The U.S. Government Takeover Of The Health Care System

The U.S. government takeover of the health care system is going to fundamentally change the economics of the health care industry.  The U.S. government will now play a major role in deciding which hospitals get built and which do not.  Approximately 17% of U.S. GDP is spent on health care, and now the U.S. government has unprecedented control over where that money goes.  Over a dozen new taxes have been established by the new health care reform law, and the U.S. government is going to pour an unprecedented amount of money into the system.  So will this result in all of us getting better health care?  We’ll just have to wait and see.

The truth is that the Founding Fathers never envisioned a federal government that completely dominated that national economy.  But that is what we have got.  As of now, only a very small percentage of Americans are still able to say that they are completely financially independent of the U.S. government. 

You see, in economic terms the U.S. government is not just the elephant in the room.  It is the elephant that sat on the room and nearly suffocated everything else out of existence.

As Americans, we live in an economy that is so intertwined with the government that it is impossible to separate the two anymore.

But the really bad news is that the U.S. government is in massive financial trouble.  According to one new report, the U.S. national debt will reach 100 percent of GDP by the year 2015.  Many economists regard that as an incredibly dangerous threshold to cross.

If U.S. government finances collapse, it will mean the collapse of the entire U.S. economy as well.  There is simply no separating the two.  And considering the fact that the U.S. government has piled up the biggest mountain of debt in the history of the world, things don’t look promising.

America is headed for an unprecedented economic collapse, and the U.S. government is leading the way.  If you can get financially independent, now is the time to try to do that, but the reality is that we will all feel massive economic pain when this thing comes crashing down.

Get Ready To Taste The Bitter Side Of Keynesian Economics

Most Americans have no idea what the term “Keynesian economics” means, but the truth is that it has been deeply influencing U.S. economic policy for decades.  Essentially, it is an economic theory that originated with a 20th century British economist named John Maynard Keynes, and it advocates government intervention in the economy in order to smooth out economic cycles.  The general idea was that lower interest rates and increased government spending could be used to increase aggregate demand when the economy was experiencing a downturn, thus increasing economic activity and reducing unemployment.

And you know what?

To a certain degree, Keynesian economic theory actually does work.

Increased government spending DOES stimulate the economy.

But the problem is that governments all over the world decided that they would just run constant budget deficits and stimulate the economy all the time.

All of this debt has brought a temporary prosperity to many of the nations around the globe, but there is one huge problem with debt.

It has to be paid back eventually.

With interest.

So what happens when nations have to start spending huge chunks of their national budgets just to service all the debt that they have piled up?

Well, that is when they taste the bitter side of Keynesian economics.

In fact, we see that starting to happen all over the world right now.

All of a sudden, governments all over the globe are talking about huge budget cuts, pay decreases, and higher taxes.

We all know about what is going on in Greece right now, but suddenly it seems like “austerity measures” are being implemented all over the place.  Just consider the following examples….

*Portugal has pledged to impose fresh austerity measures that include much higher taxes and dramatic budget cuts.

*Barack Obama is personally pressuring Spain to make severe austerity cuts.

*It’s not just Southern Europe that is facing these austerity measures either.  It is being reported that Germans are bracing themselves for a “bitter” round of budget cuts.

*The exploding debt situation in the U.K.was a major issue in the most recent election.  Bank of England governor Mervyn King has even gone so far as to warn that public anger over the “austerity measures” that soon must be implemented in the U.K. will be so painful that whichever party is seen as responsible will be out of power for a generation.

*Federal Reserve Chairman Ben Bernanke says that United States citizens will soon have to make difficult choices between higher taxes and reduced government spending.

*California Governor Arnold Schwarzenegger is reportedly planning to seek “terrible cuts” to eliminate an $18.6 billion budget deficit facing the most-populous U.S. state through June 2011.

*In fact, many U.S. states are getting ready for their biggest budget cuts in decades.

Austerity measures for everyone?

That is the way it is shaping up.

So what happens when austerity measures are implemented?

Well, just as Keynesian economics correctly predicts that economic growth goes up when government spending increases, it also correctly tells us that economic growth goes down when government spending decreases.

So all of these austerity measures are going to mean economic pain for a whole lot of people.

Not only that, but there are now whispers that this European debt crisis could potentially cause the break up of the euro.

Whether or not that is actually the case, officials in Europe are sure seizing on this crisis to advocate for increased centralization of power in the EU.

For example, senior administrators of the European Union are proposing that they be given unprecedented power to scrutinize the spending plans of member countries before national parliaments can vote on those budgets.

Talk about a loss of sovereignty.

But not only that, the Governor of the Bank of England, Mervyn King, has come right out and said that he believes that the European Union must become a federalized fiscal union if it is to survive.

Doesn’t it seem like whenever there is a crisis the solution that is always being proposed is to give centralized institutions even more power?

There has also been talk that nations such as Greece could end up being ejected from the euro, but the reality is that such a scenario is not very likely.

For one thing, the ECB has already come out and said that under current EU law, ejection of a nation from the monetary union is “legally next to impossible”.

In addition, leaders throughout Europe realize that if the euro fails then the entire EU may fail as well.  German Chancellor Angela Merkel made this very clear when she recently warned that if the euro collapses, “then Europe and the idea of European union will fail.”

For many in Europe that would seem like a disaster, but the truth is that it would be a wonderful, wonderful thing if the euro failed.

Why?

Because it would represent a major defeat for those who are seeking to drag us towards a “world currency” and a “global government”.

It would also be a huge victory for those who still believe in national sovereignty and the decentralization of economic power.

So let us hope that the euro breaks up.

But don’t count on it.

Meanwhile, the one thing that we can count on is all of the economic pain that all of these new austerity measures are going to bring.

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