If there were any shreds of hope left that the stunning decline of the middle class could be turned around, Obamacare has absolutely destroyed them. Over the past decade or so, the middle class in the United States has been absolutely eviscerated. The number of working age Americans without a job has increased by 27 million since the year 2000, median household income in the U.S. has fallen for five years in a row, and the poverty numbers in this country are spiraling out of control. And now here comes Obamacare. As you will see below, Obamacare is causing millions of Americans to lose their current health insurance policies, it is causing health insurance premiums to explode to absolutely ridiculous levels, and it is systematically killing jobs even though the employer mandate has been delayed for a while. All of this is creating a tremendous amount of stress for millions of middle class families that are already stretched extremely thin financially. According to CNN, a survey that was conducted earlier this year found that 76 percent of all Americans are living paycheck to paycheck. Most of those families simply cannot afford to pay much higher health insurance premiums for new policies that also come with much larger deductibles and significantly increased out-of-pocket costs. Millions of those families will ultimately end up choosing to do without health insurance altogether, and that will create a whole host of new problems. This is a disaster that is so enormous that it is really hard to put into words. If the U.S. health care system was a separate country, it would be the 6th largest economy on the entire globe all by itself. And now Obamacare is going to bring the entire U.S. health care system to its knees.
Obamacare: Since October 1st, The Number Of Americans With Health Insurance Has Fallen By Nearly 4 Million
Last week, Barack Obama decided to allow Americans to keep their current health insurance plans for one more year.
Isn’t that generous of him? Especially considering the fact that he promised us over and over that if we liked our current health insurance policies that we would be able to keep them permanently.
The funny thing is that Obama is not actually changing the law. So if your health insurance company allows you to stay on your current health insurance plan that does not meet the requirements of Obamacare, it is technically breaking the law.
And if you continue to stay on that current health insurance plan that does not meet the requirements of Obamacare, you are technically breaking the law.
It is just that Obama has promised not to enforce what the law says for one year.
For a president to just blatantly disregard the rule of law is a very dangerous precedent. Do we really want the president to have the power to decide what laws are going to be enforced and what laws are not going to be enforced?
That sounds dangerously close to a dictatorship to me.
And in any event, there are many Americans that are not going to be able to keep their current policies no matter what Obama says. For example, just two hours after Obama announced his plan last week, the state of Washington announced that they would not be allowing insurance companies to extend their old health insurance plans if they don’t comply with Obamacare under any circumstances…
State Insurance Commissioner Mike Kreidler has rejected President Obama’s proposal to allow insurance companies to extend health insurance policies for people who have received notices that their policies will be cancelled at the end of the year.
Within two hours of President Obama’s news conference announcing the proposed administrative fix for Americans upset by their policy cancellations, Kreidler issued a statement rejecting the proposal.
“I understand that many people are upset by the notices they have recently received from their health plans and they may not need the new benefits [in the Affordable Care Act] today,” he said. “But I have serious concerns about how President Obama’s proposal would be implemented and more significantly, its potential impact on the overall stability of our health insurance market.”
“I do not believe his proposal is a good deal for the state of Washington,” Kreidler’s statement continued. “We will not be allowing insurance companies to extend their policies.”
How do you think the people of the state of Washington will respond to that?
Things are getting crazy out there, and the number of people that are losing their health insurance policies is absolutely stunning.
According to the Wall Street Journal, so far 106,185 Americans have enrolled in Obamacare since October 1st. Most of those that have successfully enrolled have done so through the state insurance exchanges. So far, only 26,794 Americans have signed up for health insurance using the federally run exchanges on HealthCare.gov.
Meanwhile, during that same time frame, 4.02 million Americans have had their health insurance policies cancelled.
So that means that the number of Americans with health insurance has actually decreased by 3,918,205 since October 1st.
Wasn’t Obamacare supposed to result in more Americans being covered?
And according to U.S. Senator Rand Paul, Obama not only knew that this would happen, he actually wrote the regulation that caused this to happen…
“I’m still learning about it. It’s 20,000 pages of regulations. The Bill was 2,000 pages and I didn’t realize this until this week, the whole idea of you losing or getting your insurance cancelled wasn’t in the original Obamacare. It was a regulation WRITTEN BY PRESIDENT OBAMA, three months later. So we had a vote, this is before I got up there. The Republicans had a vote to try to cancel that regulation so you COULDN’T BE CANCELLED, to grandfather everybody in. You know what the vote was? Straight party line. EVERY DEMOCRAT VOTED TO KEEP THE RULE THAT CANCELS YOUR INSURANCE.”
So now millions of Americans, including women battling cancer, are losing health insurance plans that they were depending upon.
Obamacare: Skyrocketing Health Insurance Premiums
How much more are you willing to pay for health insurance than you are paying right now?
Well, according to one study health insurance premiums for men are going to go up by an average of 99 percent under Obamacare and health insurance premiums for women are going to go up by an average of 62 percent under Obamacare.
And of course some groups are going to see increases that are much larger than that. For example, it is being projected that health insurance premiums for healthy 30-year-old men will rise by an average of 260 percent.
And there are some families out there that have already been hit with health insurance premium increases that are absolutely jaw-dropping. In a previous article, I included the example of one family down in Texas that has been hit with a 539% rate increase…
Obamacare is named the “Affordable Care Act,” after all, and the President promised the rates would be “as low as a phone bill.” But I just received a confirmed letter from a friend in Texas showing a 539% rate increase on an existing policy that’s been in good standing for years.
As the letter reveals (see below), the cost for this couple’s policy under Humana is increasing from $212.10 per month to $1,356.60 per month. This is for a couple in good health whose combined income is less than $70K — a middle-class family, in other words.
Obamacare: Enormous Deductibles And Huge Out-Of-Pocket Expenses For All
It isn’t just health insurance premiums that are going up either. Deductibles are going up too. In fact, just check out what one survey of Americans living in seven different states recently discovered…
Expenses for some policies can reach $6,350 for a single person and $12,700 per family, the most allowed by the health-care law, according to a survey by HealthPocket Inc. of seven states, including California and Ohio. That’s 26 percent higher than the average deductible in the seven states, and a scenario likely repeated across the country, said Kev Coleman, head of research and data at Sunnyvale, California-based HealthPocket.
That same article has a great quote from an elderly New Jersey resident. 82-year-old Larry Saphire thinks that if you have to pay a $5,000 deductible up front, “you might as well not have any insurance at all”…
“If you have to pay $5,000 upfront” when illness hits, “you might as well not have any insurance at all,” said Larry Saphire, 82, of West Orange, New Jersey, who shopped for coverage for his wife and two children, ages 16 and 21. “That’s not insurance.”
On California’s state-run exchange site, the standard low-premium “bronze” plan carries a $5,000 deductible per person, a $60 co-pay to see a doctor and a 30 percent fee, known as coinsurance, on hospital care. In Rhode Island, Blue Cross Blue Shield’s bronze plan has a $5,800 deductible while Missouri’s U.S.-run exchange offers plans by Anthem Blue Cross with the maximum-allowable $6,350 in out-of-pocket costs.
Obamacare: The Quality Of Care Is Going To Go Into The Toilet
A lot of Americans that are signing up for Obamacare are going to be in for a huge shock. Many of the best hospitals and many of the best doctors are not covered by their plans…
Meanwhile, sometime between March and June, the other shoe drops: People who bought exchange policies realize that the restricted networks insurers created to keep the premium costs low cut out the best hospitals and doctors. A newly insured child with cancer cannot get into a top pediatric hospital because her insurance has zero coverage for out-of-network emergency care. Tearful Mom goes on the evening news and says that she thought when they went on Obamacare, that meant they were safe, and why can’t I take my baby to Philadelphia Children’s Hospital, Mr. President?
Can you imagine being a parent in that situation?
In response, some hospitals are already filing suit over this. For instance, check out what is happening over in Seattle…
Seattle Children’s Hospital filed suit against Washington State’s Office of the Insurance Commissioner this week, after Obamacare implementation caused the hospital to be cut from four of the six insurance plans offered by the new Washington Health Benefit Exchange.
And even if you are on Medicare that does not mean that the quality of your care is going to stay the same either. As Reuters just reported, UnitedHealth is dumping “thousands of doctors” from their Medicare Advantage plans for the elderly because of Obamacare…
UnitedHealth Group dropped thousands of doctors from its networks in recent weeks, leaving many elderly patients unsure whether they need to switch plans to continue seeing their doctors, the Wall Street Journal reported on Friday.
The insurer said in October that underfunding of Medicare Advantage plans for the elderly could not be fully offset by the company’s other healthcare business. The company also reported spending more healthcare premiums on medical claims in the third quarter, due mainly to government cuts to payments for Medicare Advantage services.
In the United States, we already pay much more for health care than everyone else in the world, and we typically have to wait longer to see a doctor than most of the rest of the industrialized world does.
Now Obamacare is going to make all of this even worse, and the quality of the care that we receive is going to go downhill fast.
Obamacare: The Jobs Killer
A while back, Obama unilaterally made the decision to delay the implementation of the employer mandate until 2015.
That was probably a good political decision, because it would have been a huge political issue in the 2014 elections.
But the truth is that we won’t have to wait until 2015 for Obamacare to start killing jobs. In fact, according to CNBC it is already happening…
Approximately one-third of business decision-makers at companies with between 40 and 500 employees, say the health-care law has already increased their costs due to hikes in both the cost of insurance and compliance, according to a recent report from political-research firm Public Opinion Strategies. As a result, many business leaders say they are already making personnel decisions based on the Affordable Care Act.
Among franchised businesses, 27 percent report their company has replaced full-time workers with part-time workers and 31 percent have reduced worker hours. Among non-franchised businesses, 12 percent are replacing full-time workers with part-time workers or reducing hours. This is happening now, with more than a year before the mandate goes into effect; and undoubtedly, these numbers will rise as we approach next July’s “look back” period for tabulating workers’ hours.
It is kind of startling that we are already seeing employers make such big changes even though the employer mandate does not come into effect until 2015. You can find a very long list of some of the employers that have already either eliminated jobs or cut hours because of Obamacare right here.
Remember, this is just the tip of the iceberg. Once we get closer to the deadline things are going to get much, much worse.
At a time when the middle class desperately needs jobs, Obamacare is going to slaughter them.
And even if you are able to keep your current job, that does not mean that your health plan will remain the same. In fact, Forbes is projecting that a staggering 51 percent of all employment-based health insurance plans will be canceled and replaced with new ones.
Overall, Forbes is projecting that an astounding 93 million Americans will eventually lose their current health insurance policies due to Obamacare.
Obamacare: Providing Huge Incentives For Many Americans To Work Less And Make Less Money
Did you know that Obamacare is going to cause millions of Americans to want to keep their incomes under certain levels?
If you make too much money under Obamacare, you will miss out on some absolutely massive health care subsidies. The following is an excerpt from one of my previous articles…
The figures that you are about to see were calculated using the Kaiser Family Foundation subsidy calculator. These numbers apply to a husband and a wife that are both 62 years old.
A non-smoking, married couple living in San Francisco, California earning $63,000 a year will have to pay $20,318 a year for a silver plan under Obamacare and $12,647 a year for a bronze plan.
At $63,000, that couple would be making too much money to be eligible for a subsidy, so that couple will have to pay the total cost of whatever plan they choose by themselves.
But if that couple only made $62,000 a year, things would dramatically change.
The plans would still cost the same, but the couple would now be eligible for an Obamacare subsidy of $14,428.
So a silver plan would end up costing them only $5,890, and they would ultimately pay nothing for a bronze plan.
In other words, by reducing their income by $1,000, that couple would save $14,428 if they got a silver plan or they would save $12,647 if they got a bronze plan.
Isn’t that bizarre?
In the end, millions upon millions of middle class families will decide to go without health insurance entirely for one reason or another.
This will work great until they get into an accident or become seriously ill.
As I have discussed previously, approximately 60 percent of all personal bankruptcies in the United States are related to medical bills. And most of those bankruptcies actually happen to people that are supposedly “covered” by health insurance.
Obamacare is going to make all of this so much worse. Millions of middle class families will end up with no health insurance at all, and because so many of them are living paycheck to paycheck a single health emergency will be enough to send them hurtling down the path to financial oblivion.
If you get into an accident, a visit to the emergency room and a single night in the hospital can easily cost tens of thousands of dollars in many areas of the country.
If you get a serious illness such as cancer, the medical bills can be absolutely astronomical. For instance, there are many cancer patients that rack up medical bills well in excess of a million dollars by the time that they die.
Something desperately needs to be done about our horrible health care system. Unfortunately, Obamacare is going to make just about everything that is bad about our current system much, much worse.
And the American people are becoming increasingly disgusted and frustrated with Obamacare. According to Real Clear Politics, an average of recent opinion polls shows that the American people are opposed to Obamacare by an average margin of 14.2 percentage points.
So what do you think about Obamacare?
Please feel free to share your opinion by posting a comment below, and please share this information with as many people as you possibly can.
Have you ever laid in bed awake at night with a knot in your stomach because you didn’t know how your family was possibly going to make it through the next month financially? Have you ever felt the desperation of not being able to provide the basic necessities for your family even though you tried as hard as you could? All over America tonight, there are millions of desperate families that are being ripped apart by this economy. There aren’t nearly enough jobs, and millions of Americans that actually do have jobs aren’t making enough to even provide the basics for their families. When you have tried everything that you can think of and nothing works, it can be absolutely soul crushing. Today, one of my regular readers explained that he was not going to be online for a while because his power had been turned off. He has been out of work for quite a while, and eventually the money runs out. Have you ever been there? If you have ever experienced that moment, you know that it stays with you for the rest of your life. If you are single that is bad enough, but when you have to look into the eyes of your children and explain to them why there won’t be any dinner tonight or why they have to move into a homeless shelter it can feel like someone has driven a stake into your heart. In this article you will find a lot of very shocking economic statistics. But please remember that behind each statistic are the tragic stories of millions of desperately hurting American families.
Over the past decade, things have steadily gotten worse for American families no matter what our politicians have tried. Poverty and government dependence continue to rise. The cost of living continues to go up and incomes continue to go down. It is truly frightening to think about what this country is going to look like if current trends continue.
The following are 37 facts that show how cruel this economy has been to millions of desperate American families…
1. One recent survey discovered that 40 percent of all Americans have $500 or less in savings.
2. A different recent survey found that 28 percent of all Americans do not have a single penny saved for emergencies.
3. In the United States today, there are close to 10 million households that do not have a single bank account. That number has increased by about a million since 2009.
4. Family homelessness in the Washington D.C. region (one of the wealthiest regions in the entire country) has risen 23 percent since the last recession began.
5. The number of Americans living in poverty has increased by about 6 million over the past four years.
6. Median household income has fallen for four years in a row. Overall, it has declined by more than $4000 over the past four years.
7. 62 percent of middle class Americans say that they have had to reduce household spending over the past year.
8. According to a survey conducted by the Pew Research Center, 85 percent of middle class Americans say that it is more difficult to maintain a middle class standard of living today than it was 10 years ago.
9. In the United States today, 77 percent of all Americans are living to paycheck to paycheck at least some of the time.
10. In the United States today, more than 41 percent of all working age Americans are not working.
11. Since January 2009, the “labor force” in the United States has increased by 827,000, but “those not in the labor force” has increased by 8,208,000. This is how they have gotten the unemployment numbers to “come down”.
12. Sadly, 60 percent of the jobs lost during the last recession were mid-wage jobs, but 58 percent of the jobs created since then have been low wage jobs.
13. Today, about one out of every four workers in the United States brings home wages that are at or below the federal poverty level.
14. Right now, the United States actually has a higher percentage of workers doing low wage work than any other major industrialized nation does.
15. At this point, less than 25 percent of all jobs in the United States are “good jobs”, and that number continues to shrink.
16. There are now 20.2 million Americans that spend more than half of their incomes on housing. That represents a 46 percent increase from 2001.
17. According to USA Today, many Americans have actually seen their water bills triple over the past 12 years.
18. Electricity bills in the United States have risen faster than the overall rate of inflation for five years in a row.
19. In 1999, 64.1 percent of all Americans were covered by employment-based health insurance. Today, only 55.1 percent are covered by employment-based health insurance.
20. Health insurance premiums rose faster than the overall rate of inflation in 2011 and that is happening once again in 2012. In fact, it has been happening for a very long time.
21. According to one recent survey, approximately 10 percent of all employers in the United States plan to drop health coverage when key provisions of the new health care law kick in less than two years from now.
22. Back in 1983, the bottom 95 percent of all income earners had 62 cents of debt for every dollar that they earned. By 2007, that figure had soared to $1.48.
23. Total home mortgage debt in the United States is now about 5 times larger than it was just 20 years ago.
24. Total consumer debt in the United States has risen by 1700 percent since 1971.
25. Recently it was announced that total student loan debt in the United States has passed the one trillion dollar mark.
26. According to one recent survey, approximately one-third of all Americans are not paying their bills on time at this point.
27. Right now, approximately 25 million American adults are living at home with their parents.
28. The percentage of Americans that find that they are able to retire when they reach retirement age continues to decline. According to one new survey, 70 percent of middle class Americans plan to work during retirement and 30 percent plan to work until they are at least 80 years old.
29. The U.S. economy lost more than 220,000 small businesses during the recent recession.
30. In 2010, the number of jobs created at new businesses in the United States was less than half of what it was back in the year 2000.
31. Back in 2007, 19.2 percent of all American families had a net worth of zero or less than zero. By 2010, that figure had soared to 32.5 percent.
32. Approximately 57 percent of all children in the United States are living in homes that are either considered to be either “low income” or impoverished.
33. In the United States today, somewhere around 100 million Americans are considered to be either “poor” or “near poor”.
34. In October 2008, 30.8 million Americans were on food stamps. Today, 46.7 million Americans are on food stamps.
35. Approximately one-fourth of all children in the United States are enrolled in the food stamp program.
36. Right now, more than 100 million Americans are enrolled in at least one welfare program run by the federal government. And that does not even count Social Security or Medicare.
37. According to the U.S. Census Bureau, an all-time record 49 percent of all Americans live in a home where at least one person receives financial assistance from the federal government. Back in 1983, that number was less than 30 percent.
What makes all of this even more frightening is that many homeless shelters and food banks around the nation are so overloaded at this point that they are already over capacity. Just consider this example…
When Janice Coe, a homeless advocate in Loudoun County, learned through her prayer group that a young woman was sleeping in the New Carrollton Metro station with a toddler and a 2-month-old, she sprang into action.
Coe contacted the young woman and arranged for her to take the train to Virginia, where she put the little family up in a Comfort Suites hotel. Then Coe began calling shelters to see who could take them.
Despite several phone calls, she came up empty. Coe was shocked to learn that many of the local shelters that cater to families were full, including Good Shepherd Alliance, where Coe was once director of social services.
“I don’t know why nobody will take this girl in,” Coe said. “The baby still had a hospital bracelet on her wrist.”
Keep in mind that Loudoun Country is smack dab in the middle of one of the wealthiest areas of Virginia.
So if things are that bad in the wealthy areas, exactly how bad are things getting in many of the poorer areas?
Unfortunately, things continue to get worse for this economy. DuPont has just announced plans to eliminate 1,500 jobs. There are more major layoff announcements almost every single day. So how bad will things get when our crumbling economic system finally collapses? When kind of chaos will be unleashed all over the nation when millions upon millions of Americans finally lose all hope?
In the introduction to this article, I mentioned that one of my regular readers has had his lights turned off. The following is how he described his situation…
No gas, no water, no electricity at my house. Couldn’t pay the bills. I’m broke. Desperately searching for any means of income, or at least enough cash to get the juice (electricity) restored.
Typing this missive in a dark house using the battery on my laptop. Feels like I’m camping out at home. Hope to get this situation fixed tomorrow… somehow. Needless to say, I *…. hate this.
I was ready for this, but it is still a major league inconvenience. For those of you who DO have power, etc. – and are not ready… oh brother. You need to get ready. Seriously, you do. Because what I’m going through is just an inconvenience. It may someday be a normal occurence. Ugh. (expletives deleted)
Hopefully a way can be found to get his situation turned around, but the truth is that there are tens of millions of other similar stories out there in America today.
What about you? What are things like in your neck of the woods? Please feel free to share your thoughts below…
Are you better off today than you were four years ago? This is a question that comes up nearly every election. This year the Romney campaign has even created a Twitter hashtag for it: #AreYouBetterOff. The Democrats are making lots of speeches claiming that we are better off, and the Republicans are making lots of speeches claiming that we are not. So are most Americans actually better off than they were four years ago? Of course not. One recent poll found that only 20 percent of Americans believe that they are better off financially than they were four years ago. But the same thing was true four years ago as well. Our economy has been in decline and the middle class has been shrinking for a very long time. The Democrats want to put all of the blame on the Republicans for this, and the Republicans want to put all of the blame on the Democrats for this. A recent CNN headline defiantly declared the following: “Decline of middle class not Obama’s fault“, and this is the kind of thing we are going to hear day after day until the election in November. But obviously something has gone fundamentally wrong with our economy. So who should we blame?
Sadly, you hear very little on the mainstream news networks or the talk radio shows about the institution that has the most power over our economy. The Federal Reserve has far more power over our financial system than anyone else does, but the media and both political parties tell us that the Federal Reserve is “above politics” and that their “independence” must never be questioned.
Unfortunately, most Americans have gone along with that.
But the truth is that the debt-based financial system that the Federal Reserve is at the core of is absolutely central to our economic problems. If you do not understand this, please see this article: “10 Things That Every American Should Know About The Federal Reserve“.
The Federal Reserve has done more to mess up our economy than anyone else has.
So shouldn’t they be held accountable?
That is a very good question.
Have you ever wondered why financial markets move so dramatically whenever Federal Reserve Chairman Ben Bernanke gives a speech?
The same thing does not happen when Barack Obama gives a speech.
That is because the financial markets know who holds the real power in our financial system.
But during this election season the American people are told to put all of their attention on the “red team” and the “blue team”. We are told that the two major political parties are philosophical opposites and that they want to take the United States is two completely different directions.
The “true believers” on the blue team are completely and totally convinced that Barack Obama will be able to rescue the economy and save America.
The “true believers” on the red team are completely and totally convinced that Mitt Romney will be able to rescue the economy and save America.
Once upon a time I was one of those political activists. I was fully convinced that America could be turned around if we could just get enough Republicans into office.
But then I noticed that nothing really seemed to change no matter who was in power. I became disillusioned as I realized that Republicans were doing things pretty much the exact same way that Democrats were doing them when they got into power.
Yes, there are some minor differences between the two parties on taxes and regulations.
If we elect one guy over the other our economy might decline at a slightly different pace.
But in the end both political parties are taking us to the exact same place.
Down the toilet.
I wish that wasn’t true.
But we need to be honest with ourselves….
-Both parties fully support the Federal Reserve.
-Both parties supported the nomination of Ben Bernanke to a second term as the head of the Federal Reserve.
-Both parties endlessly push the job-killing “free trade” agenda of the global elite.
-Both parties see nothing wrong with running absolutely enormous trade deficits with the rest of the world.
-Both parties supported TARP.
-Both parties supported the “economic stimulus” packages.
-Both parties supported the auto industry bailouts.
-Both parties have run up massive amounts of federal debt when in power.
-Both parties have greatly expanded the size of the federal government when in power.
-Both parties are full of control freaks and both parties have added more layers of ridiculous regulations to our already overburdened society when in power.
-Neither party supports getting rid of the income tax or the IRS.
-Neither party has any intention of doing anything to prevent the coming derivatives crisis that could bring down the entire global financial system.
-Both parties are absolutely showered with cash from the big Wall Street banks.
-Both parties think that the TSA is doing a great job.
-Both parties supported the NDAA and the renewal of the Patriot Act.
-Both parties have greatly expanded the unconstitutional surveillance of American citizens by government agencies.
-Both parties are extremely soft on illegal immigration.
-Both parties have treated military veterans horribly.
-Both parties are absolutely packed with corrupt politicians that are living the high life at your expense.
-Neither party plans to balance the federal budget in 2013 if their candidate wins the election.
-Neither party has a plan that will fix our deeply broken health care system.
-Neither party has any plans to shut down the Federal Reserve. In fact, both parties see absolutely nothing wrong with our current system.
Of course this list could go on indefinitely, but hopefully you get the point.
But I can understand those that are deeply frustrated with Barack Obama and that desperately want to avoid another four years of his policies.
I also believe that Barack Obama has been the worst president in U.S. history and that he and his entire cabinet should immediately resign in disgrace.
However, the Republican party foolishly chose to nominate the Republican candidate that was most like Barack Obama to run against him.
That was an enormous mistake.
No matter what the talk radio shows are telling you, the truth is that this country will continue on pretty much the same path no matter who wins the election.
I know that statement is going to make a lot of people angry. But it is the sad reality of what we are facing.
Even if you focus on just the economy, the truth is that Mitt Romney’s “five point plan” is almost exactly the same thing that Barack Obama has been saying.
Many Americans believe that since Mitt Romney made lots of money on Wall Street conducting leveraged buyouts of vulnerable corporations that he understands how to fix our economy.
Sadly, that is not the truth.
I have listened to many Romney speeches about the economy and I keep waiting for some pearls of wisdom, but I have found that he is just as clueless about the economy as our other recent presidents have been.
Look, I know that there are a lot of people out there that have good hearts that want to have someone that they can believe in.
They want to believe that things can get better.
They want to have hope.
And I don’t blame them for that.
I just think that it is time to pull our heads out of the sand and realize that things are not going to be getting any better.
A political savior on a white horse is not going to come riding in to save the day.
So by this point in the article a whole lot of Democrats and a whole lot of Republicans are very upset with me.
But I am not against you. There is way too much hate in our society today. Even if we disagree with someone else we can still love them.
I just think that it is very important that we understand that there is not going to be a solution to our problems on the national level and that our economy is headed for collapse no matter who gets elected.
The total amount of debt in the United States has risen from less than 2 trillion dollars to nearly 55 trillion dollars over the past 40 years, and there is nothing that Barack Obama or Mitt Romney can do to prevent the “correction” that is coming.
So are Americans better off than they were four years ago?
Of course not.
But things will soon get a whole lot worse no matter how the election turns out.
The following are 40 statistics that will absolutely shock you….
#1 During the time Barack Obama has been in the White House, median household income has fallen by 7.3 percent.
#2 Back in 2007, 19.2 percent of all American families had a net worth of zero or less than zero. By 2010, that figure had soared to 32.5 percent.
#3 According to the Federal Reserve, the median net worth of American families dropped “from $126,400 in 2007 to $77,300 in 2010“.
#4 According to the Pew Research Center, 61 percent of all Americans were “middle income” back in 1971. Today, only 51 percent of all Americans are “middle income”.
#5 Back in 1970, middle income Americans brought home 62 percent of all income in the United States. In 2010, middle income Americans only brought home 45 percent of all income.
#6 The unemployment rate in the United States has been above 8 percent for 42 straight months.
#7 The percentage of working age Americans with a job has been below 59 percent for 35 months in a row.
#8 In June, the number of Americans added to the food stamp rolls was nearly three times larger than the number of jobs added to the U.S. economy.
#9 Approximately 53 percent of all U.S. college graduates under the age of 25 were either unemployed or underemployed last year.
#10 Since Barack Obama entered the White House, the number of long-term unemployed Americans has risen from 2.7 million to 5.2 million.
#11 Today, the average duration of unemployment in the United States is about three times as long as it was back in the year 2000.
#12 According to a report that has just been released by the National Employment Law Project, 58 percent of the jobs that have been created since the end of the recession have been low paying jobs.
#13 According to the Center for Economic and Policy Research, only 24.6 percent of all of the jobs in the United States are “good jobs”.
#14 In 2010, the number of jobs created at new businesses in the United States was less than half of what it was back in the year 2000.
#15 The average pay for self-employed Americans fell by $3,721 between 2006 and 2010.
#16 According to U.S. Representative Betty Sutton, America has lost an average of 15 manufacturing facilities a day over the last 10 years. During 2010 it got even worse. That year, an average of 23 manufacturing facilities a day shut down in the United States.
#17 At this point, one out of every four American workers has a job that pays $10 an hour or less.
#18 While Barack Obama has been president the velocity of money has plunged to a post-World War II low.
#19 According to one recent survey, 85 percent of middle class Americans say that it is harder to maintain a middle class standard of living today compared with 10 years ago.
#20 Electricity bills in the United States have risen faster than the overall rate of inflation for five years in a row.
#21 There are now 20.2 million Americans that spend more than half of their incomes on housing. That represents a 46 percent increase from 2001.
#22 Over the past decade, health insurance premiums have risen three times faster than wages have in the United States.
#23 Health insurance costs have risen by 23 percent since Barack Obama became president.
#24 As I wrote about yesterday, back in 1980 less than 10 percent of U.S. GDP was spent on health care but now about 18 percent of U.S. GDP goes toward health care.
#25 In a previous article, I noted that 62 percent of all middle class Americans say that they have had to reduce household spending over the past year.
#26 Family budgets in America are being stretched to the breaking point. Today, 77 percent of all Americans live paycheck to paycheck at least part of the time.
#27 While Barack Obama has been president, U.S. home values have fallen by another 11 percent.
#28 More than three times as many new homes were sold in the United States in 2005 as will be sold in 2012.
#29 The United States was once ranked #1 in the world in GDP per capita. Today we have slipped to #11.
#30 Since Barack Obama became president, the number of Americans living in poverty has risen by 6.4 million.
#31 The number of Americans on food stamps has grown from about 17 million in the year 2000 to 31.9 million when Barack Obama entered the White House to 46.7 million today.
#32 Approximately one-fourth of all U.S. children are enrolled in the food stamp program at this point.
#33 It is being projected that half of all American children will be on food stamps at least once before they turn 18 years of age.
#34 It is estimated that child homelessness in the United States has risen by 33 percent since 2007.
#35 Back in 1965, only one out of every 50 Americans was on Medicaid. Today, approximately one out of every 6 Americans is on Medicaid.
#36 As I wrote about the other day, it is being projected that Obamacare will add 16 million more Americans to the Medicaid rolls.
#37 It is being projected that the number of Americans on Medicare will grow from 50.7 million in 2012 to 73.2 million in 2025.
#38 The number of Americans receiving federal housing assistance increased by a whopping 42 percent between 2006 and 2010.
#39 At this point, well over 100 million Americans are enrolled in at least one welfare program run by the federal government.
#40 Amazingly, more than half of all Americans are now at least partially financially dependent on the government.
So are you better off than you used to be or worse off?
Please feel free to post a comment with your thoughts below….
Barack Obama has destroyed the future of America in order to improve his chances of winning the next election. Under Obama, 5.3 trillion dollars has been ruthlessly stolen from our children and our grandchildren. That money has been used to pump up the debt-fueled false prosperity that we have been experiencing. When the U.S. government borrows money that it does not have from someone else (such as China) and spends that money into the economy it is going to make our economic numbers look better. Even if the government spends that money on incredibly stupid things, it still gets into the hands of average Americans who in turn spend that money on food, gas, clothes, etc. If we were to go back and take that extra 5.3 trillion dollars out of the U.S. economy, I guarantee you that we would be in a rip-roaring depression right now. We would look a lot like Greece at this point. For several years Greece has been raising taxes and cutting government spending in an attempt to balance the budget and these austerity measures have resulted in an unemployment rate of over 23 percent and an economy that has contracted by close to 25 percent. Most Americans don’t want to go through pain like that so they are okay with continuing to financially rape our children and our grandchildren. Just imagine how you would feel if your parents died tomorrow and you found out that they had left you with a million dollar debt that you were legally obligated to pay off. How would you feel, knowing that you had just been sold into debt slavery for the rest of your life? Well, that is how our children and our grandchildren are going to feel. We are destroying the greatest economic machine the world has ever seen, we are accumulating the biggest mountain of debt in the history of the planet, and the coming economic collapse that we have caused is going to wipe out the promising future that our children and our grandchildren were supposed to have. If they get the chance, future generations of Americans will curse us bitterly and will spit on our graves. What we are doing to our children and our grandchildren is the kind of stuff that horror movies are made of. You should be ashamed of yourself America.
The federal budget deficit for 2012 will be larger than the entire U.S. national debt was 30 years ago. In 1982 Ronald Reagan was in the White House and the U.S. national debt was considered to be a tremendous national crisis. But somehow we have allowed our national debt to grow from about a trillion dollars back then to approximately $16,000,000,000,000 today.
By the end of Obama’s first term, the U.S. national debt will have grown more than it did from the time that George Washington became president to the time that George W. Bush became president.
That is hard to believe.
Obama is going to outdo all the presidents from George Washington through Bill Clinton in just one term.
At this point, the U.S. national debt is more than 22 times larger than it was when Jimmy Carter became president.
This has allowed us to enjoy a standard of living far beyond what we deserved to. We have stolen from the future to make the present more pleasant.
But hardly anybody wants the party to end. Especially not our Congress critters – they are living like kings and queens at our expense. Our “representatives” in Washington D.C. love to give speeches about being “financially responsible”, but most of them never take any serious action about the debt because the way things are working now has been incredibly good to them.
And the truth is that both political parties have been responsible. In 2010, Republicans took control of the House of Representatives with a clear mandate to get government spending under control. Not a single penny of government money can be spent without their permission. But since they took control, the U.S. national debt has increased by another 1.8 trillion dollars.
At this point, this current Congress (controlled by both Republicans and Democrats) has added more to the national debt than the first 97 Congresses combined.
We expect this kind of nonsense from the Democrats, but the Republicans are supposed to know better.
Of course our entire financial system is designed to permanently entrap our federal government in an endless spiral of debt, but neither political party ever talks about that.
Sadly, the U.S. national debt is now more than 5000 times larger than it was when the Federal Reserve was first created.
But we never hear about the link between the Federal Reserve and our national debt from either political party or on the mainstream news.
So most Americans do not even realize that our system is designed to create government debt.
It is absolutely disgusting.
We say that we care about our kids, and yet we are passing down a $16,000,000,000,000 debt to them.
Talk about child abuse.
Most people have a really hard time grasping how much money 16 trillion dollars actually is.
If right this moment you went out and started spending one dollar every single second, it would take you more than 31,000 years to spend one trillion dollars.
And it would take you more than half a million years to spend 16 trillion dollars.
This is a debt that is impossible to pay back. Just look at how it has exploded over the past 40 years….
In a previous article I discussed the distressing rate at which our debt is growing….
It took more than 200 years for the U.S. national debt to reach 1 trillion dollars. In 1986, the U.S. national debt reached 2 trillion dollars. In 1992, the U.S. national debt reached 4 trillion dollars. In 2005, the U.S. national debt doubled again and reached 8 trillion dollars. Now the U.S. national debt is about to cross the 16 trillion dollar mark. How long can this kind of exponential growth go on?
If we can’t even slow down the growth of our debt, how do we ever expect to repay a single penny?
The sad truth is that we aren’t ever going to start paying down our debt. We have gotten to the point where if we take our foot off the debt accelerator we plunge directly into a depression and the entire system collapses. It is like a really sick version of the movie “Speed”.
Where is Keanu Reeves when you need him?
Since Barack Obama entered the White House, he has approved a whole host of measures that have been good for the economy in the short-term. TARP, the stimulus packages, the auto industry bailout and the payroll tax cut are just a few examples.
Barack Obama has wanted to do everything he possibly can to stimulate the economy in the short-term so that he can win again in 2012.
But what about the future?
Barack Obama could not care less about the future. He is just like so many of our other politicians. He is blinded by selfish ambition.
Since Barack Obama became president, the U.S. national debt has increased by an average of more than $64,000 per taxpayer.
Are you willing to write a check for your share?
Oh, let’s just pass this horrific debt on to our children, right?
The path that we are on as a nation cannot go on too much longer. The truth is that we are headed for financial oblivion.
A recently revised IMF policy paper entitled “An Analysis of U.S. Fiscal and Generational Imbalances: Who Will Pay and How?” projects that U.S. government debt will rise to about 400 percent of GDP by the year 2050.
Of course we will never get to the point. Our financial system will collapse long before then.
Sadly, the United States already has more government debt per capita than Greece, Portugal, Italy, Ireland or Spain does.
So why are we not like Greece or Spain yet?
Well, it is because we are still able to borrow huge piles of money very, very cheaply.
But at some point that will come to an end, and when it does the consequences are going to be nightmarish.
Historically, the interest rate on 10 year U.S. Treasuries has averaged 6.68 percent. If the average rate of interest on U.S. debt rose to that level today, we would be paying more than a trillion dollars a year just in interest on the national debt.
And when you consider our future unfunded liabilities things get even more frightening.
According to Boston University economist Laurence Kotlikoff, the “fiscal gap” is “the present value difference between projected future spending and revenue”. His calculations have led him to the conclusion that the United States is facing a fiscal gap of 222 trillion dollars.
And this gap is rising at a breathtaking pace.
The following is an excerpt from a recent article co-authored by Kotlikoff….
In 2007, the first year the CBO produced the Alternative Fiscal Scenario, the gap, by our reckoning, stood at $175 trillion. By 2009, when the CBO began reporting the AFS annually, the gap was $184 trillion. In 2010, it was $202 trillion, followed by $211 trillion in 2011 and $222 trillion in 2012.
But if we interrupt this debt cycle we immediately go into a depression.
We are a debt addict that will die without more debt.
Meanwhile, our national ability to produce wealth is going down the toilet.
All over the country businesses are shutting down, factories are being closed and millions of jobs are being sent overseas.
As I wrote about the other day, American families are steadily getting poorer. The middle class is shrinking and the tax base is shriveling up.
Many Americans end up flat broke at the end of their lives these days. In fact, one study found that nearly half of all retirees end up with $10,000 or less when they die.
So where is all of the money for servicing this gigantic national debt going to come from?
Even if Bill Gates gave every single penny of his fortune to the U.S. government, it would only cover the U.S. budget deficit for 15 days.
So what is the solution?
If we keep spending money like this we are doomed, but if we stop spending money like this we are doomed.
And debt is not just a problem that the federal government is facing.
Posted below is a chart that shows the growth of all forms of debt in the United States over the past several decades. 40 years ago, there was less than 2 trillion dollars of total debt owed in the United States. Now there is nearly 55 trillion dollars of debt owed. This generation has destroyed the future and has set the stage for an unprecedented economic collapse. Shame on you America….
All over America the corn is dying. If drought conditions persist in the middle part of the country, wheat and soybeans will be next. Weeks of intense heat combined with extraordinarily dry conditions have brought many U.S. corn farmers to the brink of total disaster. If there is not significant rainfall soon, many farmers will be financially ruined. This period of time is particularly important for corn because this is when pollination is supposed to happen. But the unprecedented heat and the extremely dry conditions are playing havoc with that process. With each passing day things get even worse. We have seen the price of a bushel of corn soar 41 percent since June 14th. That is an astounding rise. You may not eat much corn directly, but it is important to realize that corn or corn syrup is just about in everything these days. Just look at your food labels. In the United States today, approximately 75 percent of all processed foods contain corn. So a huge rise in the price of corn is going to be felt all over the supermarket. Corn is also widely used to feed livestock, and if this crisis continues we are going to see a significant rise in meat and dairy prices as well. Food prices in America have already been rising at a steady pace, and so this is definitely not welcome news.
The weather conditions in the middle part of the country during the last couple of months have been highly unusual. The following is from a recent article in the Los Angeles Times….
It’s not that the Midwest hasn’t been extremely hot before, and it’s not that it hasn’t been incredibly dry.
But it’s unusual for a vast swath of the Midwest to be so very hot and so very dry for so very long — particularly this early in the summer.
The current heat wave — which is spurring comparisons to the catastrophic heat of 1936 — is “out of whack,” meteorologist Jim Keeney said Friday in an interview with the Los Angeles Times.
Corn crops typically pollinate and mature in June and early July. That is why this time of the year is so vitally important for corn. We have reached a make it or break it moment.
The following is how an Accuweather.com report described what is happening right now….
Either heat or drought can stress the stalks, but both can basically shut down the pollination process. When this happens few, small or no ears of corn form.
According to AccuWeather.com Agricultural Meteorologists, you can’t raise a corn crop with less than an inch of rain over six weeks, combined with 100-degree and higher temperatures. However, these conditions have taken place in much of the southern corn belt through the week of July 4, 2012.
If pollination does not happen, corn farmers might as well give up.
Just check out what agricultural economist Chris Hurt said the other day….
“Pollination problems just can’t be overcome, even if the weather turns. There’s no turning back. There’s just failure.”
At this point, half of all corn in the state of Indiana is already in poor shape.
With each passing day, the condition of the corn gets even worse.
As a recent article in the Chicago Tribune detailed, many farmers feel completely helpless at the moment….
Dave Kestel, who farms about 1,300 acres in Manhattan about 40 miles southwest of Chicago, said he feels helpless.
“Every day you get out there and it’s the same heat and cloudless sky,” he said. “You see your corn just withering out there, knowing you can’t do anything about it.”
The United States is suffering from a severe lack of rain. Just look at the chart posted below. According to the U.S. Drought Monitor, most of the country is experiencing drought conditions right now….
These drought conditions have also played a major role in the huge number of wildfires that we have seen lately.
There are a few northern states that are not feeling the drought right now, but otherwise the rest of the country is extremely dry.
So what does all of this mean for you and I?
A recent article by Holly Deyo summarized why we should all be praying for rain….
Since 75% of grocery store products use corn as a key ingredient, expect food prices to skyrocket. Corn is also a staple in many fast foods. Corn is in ethanol and the main food source or chickens. In addition to this, maize is in many things that aren’t obvious like adhesives, aluminum, aspirin, clothing starch, cosmetics, cough syrup, dry cell batteries, envelopes, fiberglass insulation, gelatin capsules, ink, insecticides, paint, penicillin, powders, rugs and carpets, stamps, talcum, toothpaste, wallpaper, and vitamins. That’s just for starters…
This is a huge heads up for you to purchase corn-using products NOW before these conditions reflect in grocery goods. It will be a narrow window of opportunity.
These thoughts are being echoed by many agricultural economists as well. According to Businessweek, the outlook for U.S. food prices is bleak….
“When people look at rising prices for hamburger, butter, eggs and other protein sources from higher corn costs, that’s when more money ends up in the food basket,” said Minneapolis- based Michael Swanson, a senior agricultural economist at Wells Fargo & Co., the biggest U.S. farm lender. “We were hoping for a break, and we aren’t going to get it.”
Unfortunately, the fact that the corn is dying all over America is not just a problem for the United States.
As Businessweek also recently noted, the fate of U.S. corn affects the entire globe….
When rain doesn’t fall in Iowa, it’s not just Des Moines that starts fretting. Food buyers from Addis Ababa to Beijing all are touched by the fate of the corn crop in the U.S., the world’s breadbasket in an era when crop shortages mean riots.
This year they have reason to be concerned. Stockpiles of corn in the U.S. tumbled 48 percent between March and June, the biggest drop since 1996, the U.S. Department of Agriculture said last week. And that was before drought hit the Midwest.
The United States is the world’s biggest exporter of corn by far, and if there is a massive corn crop failure in America it is going to be felt to the four corners of the earth.
Just check out what Abdolreza Abbassian, a senior economist with the U.N. Food & Agriculture Organization, said the other day….
“Everyone watches the U.S. because they can rely on it. Without it, the world would starve.”
Back in February, I wrote an article that suggested that we could see dust bowl conditions return to the middle part of this country in the years ahead.
A lot of people were skeptical of that article.
Not quite as many people are skeptical today.
The following is from a recent article posted on MSNBC entitled “Fears of new Dust Bowl as heat, drought shrivel corn in Midwest“….
Crop insurance agents and agricultural economists are watching closely, a few comparing the situation with the devastating drought of 1988, when corn yields shriveled significantly, while some farmers have begun alluding, unhappily, to the Dust Bowl of the 1930s. Far more is at stake in the coming pivotal days: with the brief, delicate phase of pollination imminent in many states, miles and miles of corn will rise or fall on whether rain soon appears and temperatures moderate.
As I wrote about last week, if the weather does not turn around soon the implications are going to be staggering.
Even if we got some significant rainfall at this point a tremendous amount of damage has already been done according to the Washington Post….
Jay Armstrong, owner and operator of Armstong Farms in Kansas, flew his small plane over a portion of the affected area and landed with the impression that the potential damage is far worse than is commonly understood.
“At this time of year, when you look down in a place like Indiana or Illinois, you should see just lush green fields,” Armstrong said. “I saw bare soil. I just thought to myself, the market has no idea what’s coming.”
So is there significant rain in the forecast?
Unfortunately, the answer is no.
The National Weather Service says that the corn belt will experience “above-normal temperatures” and “below-normal rainfall” over the next week.
At this point it does not look like there will be any significant rainfall for the foreseeable future….
“We got a break in the temperatures over the weekend but no rain of significance is in sight for next seven days,” said Jim Keeney, a meteorologist for the National Weather Service the US central region based in Kansas City, Missouri.
Needless to say, that is really bad news.
Right now we just have more heat and more dryness to look forward to. The skies are like iron and the earth is like brass. We like to think that we have conquered nature, but at moments such as these we see that is not true at all.
A couple of weeks ago I wrote an article about all of the reasons why we should be concerned about the second half of 2012. In that article I did not even mention drought and crop failures. Sometimes major problems have a way of piling on top of themselves.
The U.S. economy is already in bad enough shape without adding major crop failures to the mix. This is something that we just don’t need right now.
But it looks like we are going to have to deal with it. Unless there is a major change in the weather, food prices are going to go up even more and large numbers of farmers and ranchers are going to be absolutely devastated.
Let us all pray for rain. We desperately need it.
The way that we tax people in the United States is fundamentally broken and should be completely discarded. The U.S. tax code is absolutely riddled with loopholes that allow the super rich to legally avoid taxes while many of the rest of us are being taxed into oblivion. In our system of taxation, middle class families that work hard and try to play by the rules are deeply penalized while those that are willing to abuse the system make out like bandits. There is something fundamentally wrong with a system that enables wealthy politicians such as Barack Obama and Mitt Romney to pay a smaller percentage of their incomes in taxes than millions of middle class families. Mitt Romney has millions of dollars parked down in the Cayman Islands and in other tax havens. He does this to avoid taxes. Unfortunately, most Americans do not have the resources to funnel money through offshore tax havens. Most Americans just automatically have their paychecks shredded by taxes and then try to live on whatever is left over. Most Americans are just trying to survive financially from one month to the next. But the super rich have options. Thanks to technology, they can live almost anywhere they want and they can run their companies and manage their investments from anywhere in the world. The truth is that the wealthier you are the easier it is to avoid taxes. But even as the ultra-wealthy do their best to avoid taxes, many of them still feel free to demand that the rest of us be taxed more.
So what are some of the ways that the super rich avoid taxes?
Well, let’s start with those that are just “somewhat wealthy”. Many millionaires still want or need to be U.S. citizens, so they are subject to the U.S. tax code. Fortunately for them, their tax lawyers know of thousands of loopholes that have been designed to help the rich avoid taxes.
The following is from a recent article by Jen Talley….
Some of the richest people in the country pay the least, relatively speaking, in taxes. How is this possible? Answer: Through the clever manipulation of the U.S. tax code’s loopholes. And it works: as income rises, effective tax rates rise as well, but only up to a point. IRS data shows that the effective income tax rate flattens out at just over 24 percent for those making over a million dollars. As income exceeds $1.5 million, the rate begins to decline; those with incomes above $10 million pay an average income tax rate of around 19 percent. So, how do they do it?
You could write an entire series of books on the technical details of how this gets done. Trust me, I studied tax law when I was in law school.
If you are interested in digging into some of the technical details of tax avoidance, a recent Businessweek article detailed 10 ways that the wealthy use our current tax code to avoid paying billions of dollars in taxes. It is an article worth reading if you have the time.
Sadly, tax avoidance by the wealthy is not just something that happens in the United States. The truth is that the exact same kind of thing happens in the UK as well.
There is not an easy fix to this problem. Our politicians have had decades to try to come up with a fair tax system and they have completely failed. The wealthy are always several steps ahead of them.
But federal taxes are not the only taxes that can be avoided. The vast difference in state tax rates creates another opportunity.
One advantage that wealthy Americans have is that they are far more mobile than most other Americans are. So if they don’t like the tax system in one state they can simply pick up and move to another state.
According to the Tax Foundation, 3.4 million Americans left New York state between 2000 and 2010.
So where did they go?
The following is from a recent CNS News article….
Where are they escaping to? The Tax Foundation found that more than 600,000 New York residents moved to Florida over the decade – opting perhaps for the Sunshine State’s more lenient tax system – taking nearly $20 billion in adjusted growth income with them.
There is no state income tax in Florida. So moving from New York to Florida can end up saving you a bundle.
The same kind of migration is happening out west as well. According to that same CNS article, hundreds of thousands of people have been moving from California (a high tax state) to Texas (no state income tax)….
Between 2000 and 2010, the most recent data available, 551,914 people left California for Texas, taking $14.3 billion in income. Texas has no state income tax or estate tax.
A total of 48,877 people moved to Texas from California between 2009 and 2010 alone, totaling $1.2 billion in income. Another 28,088 from California relocated to Nevada and 30,663 to Arizona, a loss of $699.1 million and $707.8 million in income respectively.
Not that anyone really needs much of an excuse to move away from California. It is rapidly decaying right in front of our eyes.
But a lot of families do not have the same options that wealthy people do. Unfortunately, most average Americans are tied to their jobs and it would be much more difficult for them to pick up and move across the country. In this economy it can be economic suicide to give up a good job.
The reality is that most of us simply do not have the resources to play the same kinds of games that the wealthy play.
Sadly, even our most prominent politicians avoid taxes.
Just look at Massachusetts Senator John Kerry. He has avoided approximately $500,000 in taxes by docking his yacht in Rhode Island rather than in Massachusetts.
Yet Kerry sure does love to call for more taxes on the rest of us, doesn’t he?
Now let’s talk about the “super rich” and the “ultra-wealthy”. For many people that are worth billions of dollars, tax avoidance has become an art from.
Facebook co-founder Eduardo Saverin made national headlines recently when he gave up his U.S. citizenship, but the truth is that his case is small potatoes compared to the global elite and the shadow banking system that supports them.
According to the IMF, the global elite are holding a total of 18 trillion dollars in offshore banks.
That amount is more than the GDP of the United States for an entire year.
So what do I mean by “offshore banks”? I defined the term in a previous article….
Well, the term originally developed because the banks on the Channel Islands were “offshore” from the United Kingdom. Most “offshore banks” are still located on islands today. The Cayman Islands, Bermuda, the Bahamas, and the Isle of Man are examples of this. Other “offshore banking centers” such as Monaco are actually not “offshore” at all, but the term applies to them anyway.
Traditionally, these offshore banking centers have been very attractive to both criminals and to the global elite because they would not tell anyone (including governments) about the money that anyone had parked there.
It has been reported that 80 percent of all international banking transactions involve offshore banks. A whopping 1.4 trillion dollars is being held in offshore banks in the Cayman Islands alone.
An article that appeared in the Guardian estimated that a third of all the wealth on the entire planet is being kept in offshore banks. One of the primary reasons for this is tax avoidance.
A lot of wealthy individuals never even visit these tax havens and yet reap the benefits anyway. The truth is that tax avoidance has become way too easy. The following example is from a recent Politico article….
A plausible scenario plays out like this: I hire an accountant. Doing her job, my accountant tells me that if I sign a few legal documents and route my money through a small Caribbean island, I could keep more of my paycheck and pay a lower tax rate. I may have earned my money in the United States, but legally I can claim that it was, in fact, earned in a tax haven.
Are you disgusted yet?
You should be.
But even though they avoid taxes like the plague, many of these elitists have the gall to call for higher taxes on all the rest of us.
For example, let’s review what the managing director of the IMF, Christine Lagarde, said in a recent interview….
“Do you know what? As far as Athens is concerned, I also think about all those people who are trying to escape tax all the time. All these people in Greece who are trying to escape tax.”
Even more than she thinks about all those now struggling to survive without jobs or public services? “I think of them equally. And I think they should also help themselves collectively.” How? “By all paying their tax. Yeah.”
It sounds as if she’s essentially saying to the Greeks and others in Europe, you’ve had a nice time and now it’s payback time.
“That’s right.” She nods calmly. “Yeah.”
And what about their children, who can’t conceivably be held responsible? “Well, hey, parents are responsible, right? So parents have to pay their tax.”
Well, it turns out that she doesn’t pay any income taxes at all on her own income….
The IMF chief Christine Lagarde was accused of hypocrisy yesterday after it emerged that she pays no income tax – just days after blaming the Greeks for causing their financial peril by dodging their own bills.
The managing director of the International Monetary Fund is paid a salary of $467,940 (£298,675), automatically increased every year according to inflation. On top of that she receives an allowance of $83,760 – payable without “justification” – and additional expenses for entertainment, making her total package worth more than the amount received by US President Barack Obama according to reports last night.
Her “diplomatic status” allows her to escape all income taxes.
So perhaps she should pay her “fair share” before pointing the finger at anyone else.
But she is not the only one being hypocritical.
The super rich claim that they should pay lower taxes on investment income for the good of our “capitalist system”, but when their banks are about to go under they are more than happy to have those losses be socialized.
As I wrote about yesterday, the stage is already set for another massive round of bailouts when the next great financial crisis strikes. Once again our taxes will pay for the mistakes of the ultra-wealthy.
The truth is that our system is fundamentally broken.
We need to abolish the income tax and shut down the IRS.
Those two steps alone would do wonders for our economic system.
We also need to shut down the Federal Reserve and break up the too big to fail banks.
Unfortunately, the vast majority of our politicians are not even willing to consider any of those solutions.
So our fundamentally broken system will continue to chug along.
It really is sad.
Which lifestyle choice produces better results – being a hard working American or being a government parasite? Actually, when you look at the cold, hard numbers they may just surprise you. In America today, we deeply penalize hard work and we greatly reward government dependence. If you live in a very liberal area of the country and you know how to game the system, it is entirely possible to live a comfortable existence without ever working too much at all. In fact, there are some Americans that have been living off of “government benefits” for decades. Many of these people actually plan their lives around doing exactly what they need to do to qualify for as many benefits as possible. America is rapidly turning into a European-style socialist welfare state and it is destroying our nation socially and financially. Ever since the “war on poverty” began our debt has absolutely exploded and yet now there are more poor people in this country than ever before. Obviously something is not working.
Now don’t get me wrong. I deeply believe in having compassion for those that are going through tough times and having a safety net for those that cannot take care of themselves. We should not have a single person in this nation going without food or sleeping in the streets.
But in America today it is absolutely ridiculous how many people are climbing aboard the “safety net”. At this point, an astounding 49 percent of all Americans live in a home that receives some form of government benefits.
So who pays for all of this?
The people that drag themselves out of bed and go to work each day pay for it all.
For a few moments, let’s examine how the lifestyle of a typical hard working American compares to the lifestyle of a government parasite.
In America today, the median yearly household income is somewhere around $50,000. About half of all American households make more than that and about half of all American households make less than that. When you break it down, it comes to about $4000 a month.
So how far does $4000 go in America today?
Unfortunately, it doesn’t go very far at all.
First of all, a hard working American family will need some place to live. Unfortunately, the vast majority of the decent jobs are near the big cities, and it is more expensive to live near the big cities. Let’s assume that an average family of four will spend about $1000 a month on rent or on a mortgage payment.
The government parasite, on the other hand, has a whole host of federal, state and local housing programs to take advantage of. During the recent economic downturn, more Americans than ever have been turning to the government for help with housing costs. For example, federal housing assistance outlays increased by a whopping 42 percent between 2006 and 2010.
Once you have a place to live, you have to provide power and heat for it. For the average hard working American, this is going to probably average about $300 a month, although this can vary greatly depending on where you live.
For the government parasite, there are once again a whole host of government programs to help with this. For example, LIHEAP (Low Income Home Energy Assistance Program) assists low income households in paying their home heating bills.
Most average hard working Americans are also going to need phone and Internet service. Let’s assume that the hard working family of four in our example is extremely thrifty and only spends $100 a month for these services.
For the government parasite, cell phone service is not a problem. As I have written about previously, those that “qualify” can receive a free cell phone and free cell phone minutes every single month from the federal government. In addition, in some areas of the nation low income families can qualify for deeply subsidized home Internet service.
In order to earn money, our hard working family is going to need to get to work. In most households, both parents have decided to work these days so both of them will need cars. Let’s assume that the family is very thrifty and that both cars were purchased used and that the car payments only total about $400 a month.
The hard working family will also need auto insurance for the two vehicles. Let’s assume that both parents have a great driving record and that they only pay a total of about $100 a month for car insurance.
The cars will also need to be filled up with gasoline. The average U. S. household spent $4155 on gasoline during 2011, but let’s assume that our family is very, very careful and that they only spend about $300 on gas each month.
So what about the government parasite? Well, the government parasite does not need to go to work, so this expense can potentially be eliminated entirely. But since most other things are paid for by the government or are deeply subsidized, in many instances government parasites are actually able to afford very nice vehicles.
In addition, a new bill (The Low-Income Gasoline Assistance Program Act) has been introduced in Congress that would give “qualifying” households money to help pay for gasoline….
Low-Income Gasoline Assistance Program Act – Directs the Secretary of Health and Human Services to make grants to states to establish emergency assistance programs to pay eligible households for the purchase of gasoline.
A hard working American family is also going to need health insurance. Well, we all know how expensive health insurance has become. In fact, health insurance costs have risen by 23 percent since Barack Obama became president. But let’s assume that our hard working family has somehow been able to find an amazing deal where they only pay $500 a month for health insurance for a family of four.
For the government parasite, health insurance is not needed. If there is an emergency, the government parasite can just go get free medical care at any emergency room.
And of course there is always Medicaid. Back in 1965, only one out of every 50 Americans was on Medicaid. Today, one out of every 6 Americans is on Medicaid, and things are about to get a whole lot worse. It is being projected that Obamacare will add 16 million more Americans to the Medicaid rolls.
So what about food?
Everyone has to eat, right?
Well, the hard working family in our example is faced with an environment where food prices are constantly rising but paychecks are not keeping up. Let’s assume that the hard working family in our example clips coupons and cuts corners any way that it can and only spends about $50 for each member of the family on food and supplies each week. That comes to a total of $800 a month for the entire family.
So what about the government parasite?
Government parasites need to eat too.
Well, that is where food stamps come in. Right now, there are more than 46 million Americans on food stamps. Since Barack Obama became president, the number of Americans on food stamps has increased by 14 million. Food stamps have become so popular that rappers are even making rap videos about using food stamp cards.
Okay, so after all of this where do we stand?
Well, the average hard working family so far has spent $3500 out of the $4000 that they have to spend for the month.
We still need to find money for clothing, for paying off credit card debt, for paying off student loan debt, for dining out, for entertainment, for medications, for pets, for hobbies, for life insurance, for vacations, for car repairs and maintenance, for child care, for gifts and for retirement savings.
There is actually no money left at all because we have forgotten one of the biggest expenses of all.
When you total up all federal, state and property taxes, our average hard working family is going to pay at least $1000 a month in taxes.
So that puts our average hard working family in the hole every single month.
Meanwhile, the government parasite does not pay any taxes because he or she does not earn enough money to be taxed.
Are you starting to get the picture?
In many ways, life can be so much easier when you are constantly taking from the government instead of constantly giving to the government.
New Jersey Governor Chris Christie recently put it this way….
“We’ll have a bunch of people sitting on a couch waiting for their next government check”
Once again, I am not dumping on those that have been through all kinds of nightmares because of this economy. As I have written about so frequently, the U.S. economy is simply not producing enough jobs for everyone anymore, and this is creating major problems.
Just about everyone needs a helping hand at some point, and we should always be compassionate to those that are in need.
However, there is also a growing number of Americans that are content to simply give up and live off of the government, and that is fundamentally wrong.
It is not the job of the U.S. government to take care of you from the cradle to the grave. What the U.S. government is supposed to do is to make sure that we have a well functioning economy that operates in an environment where hard working individuals and small businesses can thrive, and sadly the U.S. government has failed miserably in that regard.
We desperately need the U.S. economy to be fixed, but I wouldn’t hold my breath waiting for that to happen.
As economic conditions get even worse in this country, millions more Americans are going to turn to the government for assistance and at some point the safety net is going to break.
What is our country going to look like when that happens?
For a long time, most analysts have believed that if someone was going to leave the euro, it would be a weak nation such as Greece or Portugal. But the truth is that financially troubled nations such as Greece and Portugal don’t want to leave the euro. The leaders of those nations understand that if they leave the euro their economies will totally collapse and nobody will be there to bail them out. And at this point there really is not a formal mechanism which would enable other members of the eurozone to kick financially troubled nations such as Greece or Portugal out of the euro. But there is one possibility that is becoming increasingly likely that could actually cause the break up of the euro. Germany could leave the euro. Yes, it might actually happen. Germany is faced with a very difficult problem right now. It is looking at a future where it will be essentially forced to bail out most of the rest of the nations in the eurozone for many years to come, and those bailouts will be extremely expensive. Meanwhile, the mood in much of the rest of Europe is becoming decidedly anti-German. In Greece, Angela Merkel and the German government are being openly portrayed as Nazis. Financially troubled nations such as Greece want German bailout money, but they are getting sick and tired of the requirements that Germany is imposing upon them in order to get that money. Increasingly, other nations in Europe are simply ignoring what Germany is asking them to do or are openly defying Germany. In the end, Germany will need to decide whether it is worth it to continue to pour billions upon billions of euros into countries that don’t appreciate it and that are not doing what Germany has asked them to do.
German Chancellor Angela Merkel’s Christian Democratic Union party recently approved a resolution that would allow a country to leave the euro without leaving the European Union.
Many thought that the resolution was aimed at countries like Greece or Portugal, but the truth is that this resolution may be setting the stage for a German exit from the euro.
The following is an excerpt from that resolution….
“Should a member [of the euro zone] be unable or unwilling to permanently obey the rules connected to the common currency he will be able to voluntarily–according to the rules of the Lisbon Treaty for leaving the European Union–leave the euro zone without leaving the European Union. He would receive the same status as those member states that do not have the euro.”
So was that paragraph written for Greece?
Or was it written for Germany?
That is a very interesting question.
What is clear is that the status quo cannot last much longer.
Voters in Germany are definitely not in the mood to give any more bailout money to other nations in Europe, but if Germany is going to continue to stay in the eurozone many more bailouts will be required in the coming years.
Meanwhile, Germany is rapidly losing control over the rest of the eurozone….
*Greece has implemented some of the austerity measures that have been required of it, but many others have not been implemented. In a few weeks there will be a national election, and parties that are opposed to the austerity measures are surging in the polls. It is likely that the new government will be much less friendly toward Germany.
*The Spanish government is already defying the budgetary requirements that the EU is trying to impose upon it. Spain is definitely going to miss the debt targets mandated by the EU, and the Spanish government has absolutely no plans of making more reductions to government spending.
*The upcoming election in France could be absolutely crucial. Nicolas Sarkozy is not doing well in the polls and the new French government could totally wreck the recent fiscal agreement that the members of the eurozone recently agreed to.
The following is how Graham Summers recently summarized the current situation in France….
We should also take Schäuble’s statements in the context of Angela Merkel’s recent backing of Nicolas Sarkozy’s re-election campaign in France against hardened socialist François Hollande, who wants to engage in a rampant socialist mission to lower France’s retirement age, cut tax breaks to the wealthy, and break the recent new EU fiscal requirements Germany convinced 17 members of the EU to agree to.
Obviously Germany has been trying very hard to keep the eurozone together. But the German government also believes that if it is going to be bailing everyone out that it should also be able to set the rules.
So what happens if the rest of Europe tells Germany to stick their rules where the sun doesn’t shine?
Well, Germany would be forced to make a very difficult decision, and Germany appears to making plans for that eventuality.
For example, Germany recently reinstated its Special Financial Market Stabilization Funds. This money would be used to bail out German banks in the event of a break up of the euro. The following is from a recent article by Graham Summers….
In short, Germany has given the SoFFIN:
- €400 billion to be used as guarantees for German banks.
- €80 billion to be used for the recapitalization of German banks
- Legislation that would permit German banks to dump their euro-zone government bonds if needed.
That is correct. Any German bank, if it so chooses, will have the option to dump its EU sovereign bonds into the SoFFIN during a Crisis.
In simple terms, Germany has put a €480 billion firewall around its banks. It can literally pull out of the Euro any time it wants to.
If the rest of Europe continues to defy Germany, then at some point Germany may decide to simply pick up the ball and go home.
Germany is the strongest economy in the eurozone by far, and if Germany were to pull out the euro would absolutely collapse. Whatever currency Germany decided to issue would be extremely valuable. Such an event would actually have some tremendous side benefits for Germany.
Right now, the German national debt is denominated in euros.
If Germany left the euro, the value of euros would plummet and would likely keep declining as the rest of the eurozone fell apart financially and Germany would be able to pay back its debt in rapidly appreciating “marks” or whatever other currency it decided to issue.
All other debts in Germany would also be denominated in euros and would also be repaid with a much stronger currency.
Are you starting to get the picture?
Yes, Germany would likely have to bail out German banks if it left the euro, but leaving the euro could also prove to be a tremendous windfall for Germany.
If Germany chooses to say in the euro, it is going to be faced with extremely expensive bailouts of other countries for as far as the eye can see.
The following is from a New York Times article….
Bernard Connolly, a persistent critic of Europe, estimates it would cost Germany, as the main surplus-generating country in the euro area, about 7 percent of its annual gross domestic product over several years to transfer sufficient funds to bail out Europe’s debt-burdened countries, including France.
That amount, he has argued, would far surpass the huge reparations bill foisted upon Germany by the victorious powers after World War I, the final payment of which Germany made in 2010.
If Germany leaves the euro, that does not mean that the dream of a single currency is dead. Germany could just let the rest of the eurozone collapse and then invite them to join the new German currency eventually after all the carnage is over.
At that point, Germany would have all the leverage and Germany would be able to dictate all the rules.
What is clear is that the status quo in Europe is becoming extremely unacceptable in Germany. The Germans do not intend to give endless bailouts to other nations that do not appreciate them and that do not intend to follow the rules.
At some point Germany may actually decide to walk, and there are lots of whispers that Germany has been steadily preparing for that day.
For example, there are persistent rumors that Germany has ordered printing plates for the printing of new German marks. Philippa Malmgren, a former economic adviser to President George W. Bush, says that she believes that this is already happening….
“I think they have already got the printing machines going and are bringing out the old deutschmarks they have left over from when the euro was introduced.”
Increasingly, it really is looking as if Germany is actually preparing to leave the euro.
If Germany did leave the euro, the consequences for the rest of Europe would be catastrophic.
The euro would rapidly drop to all-time lows.
The global financial system would be thrown in chaos.
Countries such as Greece would lose their major source of bailout money and would be forced to default.
The recession in Europe would likely deepen into a devastating economic depression.
So there would be a lot of downside.
But Germany would fare much better than most of the rest of Europe, and in the end Germany would be left holding most of the cards.
Keep a close eye on the upcoming European elections and the evolving political situation in Europe.
If things don’t go well for Germany, at some point Germany may just get fed up and walk away from the euro.
Stranger things have happened.