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 Why does the state of California seem to be so incredibly hopeless? These days California can't seem to do anything right, and if you live in California things just got a whole lot worse. Governor Brown has announced that the state budget deficit for this year is going to be much larger than projected, that more government services are going to be cut and that voters are going to vote on another round of tax increases in November. Meanwhile, unemployment is sitting at 11 percent and extended federal unemployment benefits for workers in the state are ending. Because California is one of the worst places in the nation to conduct business, there has been a steady flow of companies leaving the state. Those companies have taken a whole lot of good jobs with them. Due to the lack of jobs and a steady stream of impoverished immigrants coming in from Mexico and other countries, poverty in the state has exploded and crime is rapidly increasing. California may be the land of "endless sunshine", but for the California economy there are only dark clouds on the horizon. The state is coming apart at the seams and there is not much hope that things are going to turn around any time soon. (Read More....)
 In recent days, New York Times economist Paul Krugman has been doing a whole bunch of interviews in which he has declared that the solution to our economic problems is very easy. Krugman says that all we need to do to get the global economy going again is for the governments of the world to start spending a lot more money. Krugman believes that austerity is only going to cause the economies of the industrialized world to slow down even further and therefore he says that it is the wrong approach. And you know what? Krugman is partly right about all of this. The false prosperity that the United States and Europe have been enjoying has been fueled by unprecedented amounts of debt, and in order to maintain that level of false prosperity we are going to need even larger amounts of debt. But there are several reasons why Krugman is mostly wrong. First of all, we have not seen any real "austerity" yet. Even though there have been some significant spending cuts and tax increases over in Europe, the truth is that nearly every European government is still piling up more debt at a frightening pace. Here in the United States, the federal government continues to spend more than a trillion dollars a year more than it brings in. If the United States were to go to a balanced federal budget, that would be austerity. What we have now is wild spending by the federal government beyond anything that John Maynard Keynes ever dreamed of. Secondly, Krugman focuses all of his attention on making things more comfortable for all of us in the short-term without even mentioning what we might be doing to future generations. Yes, more government debt would give us a short-term economic boost, but it would also make the long-term financial problems that we are passing on to our children even worse. (Read More....)
 At a time when America desperately needs to come together, we are becoming more divided than ever. The mainstream media and most of our politicians love to pit us against one another in dozens of different ways, and right now class warfare has become one of their favorite tools for getting us to hate one another. If you are struggling in this economy, you are being told that "the wealthy" are the cause of your problems. If you have money, you are being told that the poor hate you and want to tax you into oblivion. Class warfare has already become a dominant theme in the 2012 race for the White House, and there will certainly be endless speeches given along these lines by politicians from both major political parties all the way up to election day. Class warfare will be used by both sides as a way to divide America and get votes. And the frightening thing is that it is clearly working. There is more hatred between the poor and the wealthy in America today than at any other time that I can remember. But hating people because of how much money they have or don't have is not going to solve anything. Instead, it is just going to cause more problems. (Read More....)
 What happens when debt-fueled false prosperity disappears? Just look at Spain. The 4th largest economy in the eurozone was riding high during the boom years, but now the Spanish economy is collapsing with no end in sight. When a debt bubble gets interrupted, the consequences can be rather chaotic. Just like we saw in Greece, austerity is causing the economy to slow down in Spain. But when the economy slows down, tax revenues fall and that makes it even more difficult to meet budget targets. So even more austerity measures are needed to keep debt under control and the cycle just keeps going. Unfortunately, even with all of the recently implemented austerity measures the Spanish government is still not even close to a balanced budget. Meanwhile, the housing market in Spain is crashing and unemployment is already above 24 percent. The Spanish banking system is a giant, unregulated mess that is on the verge of a massive implosion, and the Spanish stock market has been declining rapidly. The Spanish government is going to need a massive bailout and so will the entire Spanish banking system. But that is going to be a huge problem, because the Spanish economy is almost 5 times as large as the Greek economy. When the Spanish financial system collapses, the entire globe is going to feel the pain and there will be no easy solution. (Read More....)
 Why do chimpanzees throw poop? The federal government would like to know and is using your tax dollars to investigate the matter. Every single year, we all send huge amounts of our hard-earned money to the federal government. We hope that they will spend that money wisely. Unfortunately, that is simply not the case. You are about to read some examples of how the government is wasting your money that are absolutely mind blowing. Anyone that claims that there is not a lot of waste that can be cut out of the federal budget is lying to you. Our politicians have racked up the biggest pile of debt in the history of the world and they are spending our money on some of the stupidest things imaginable. It is imperative that the American people be educated about all of this outrageous government waste, because right now the political will to change this corrupt system is simply not there among the current crop of politicians in Washington. We are stealing trillions of dollars from future generations and many of the things that our politicians are wasting that money on are almost too bizarre to believe. (Read More....)
 For those waiting for our economic problems to be solved, you can quit holding your breath. There is simply not going to be a solution to our economic problems on the national level. So why is that the case? Well, it is because the economic policies of both major political parties are very, very similar when you take a close look at them. Yes, that statement may sound downright bizarre to many Americans, but it is true. Both major political parties supported the Wall Street bailouts, both of them fully support the job-killing "free trade" globalization agenda, both of them have dramatically increased the national debt when in power, both of them fully support the currency-killing policies of the Federal Reserve, and neither major political party would get rid of the income tax and the IRS. And that is just for starters. Yes, there are some minor differences when it comes to taxing and spending between the two parties, but the truth is that they are a lot more similar on economic issues than they are different. What we desperately need on the national level is a fundamental change in direction when it comes to economic policy, but we simply are not going to get that from either the Democrats or the Republicans. That means that there is no hope that the economic storm that is coming will be averted. (Read More....)
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If You Live In California Things Just Got A Whole Lot Worse