If the quadrillion dollar derivatives bubble implodes, who should be stuck with the bill? Well, if the “too big to fail” banks have their way it will be you and I. Right now, lobbyists for the big Wall Street banks are pushing really hard to include an extremely insidious provision in a bill that would keep the federal government funded past the upcoming December 11th deadline. This provision would allow these big banks to trade derivatives through subsidiaries that are federally insured by the FDIC. What this would mean is that the big banks would be able to continue their incredibly reckless derivatives trading without having to worry about the downside. If they win on their bets, the big banks would keep all of the profits. If they lose on their bets, the federal government would come in and bail them out using taxpayer money. In other words, it would essentially be a “heads I win, tails you lose” proposition.
Just imagine the following scenario. I go to Las Vegas and I place a million dollar bet on who will win the Super Bowl this year. If I am correct, I keep all of the winnings. If I lose, federal law requires you to bail me out and give me the million dollars that I just lost.
Does that sound fair?
Of course not! In fact, it is utter insanity. But through their influence in Congress, this is exactly what the big Wall Street banks are attempting to pull off. And according to the Huffington Post, there is a very good chance that this provision will be in the final bill that will soon be voted on…
According to multiple Democratic sources, banks are pushing hard to include the controversial provision in funding legislation that would keep the government operating after Dec. 11. Top negotiators in the House are taking the derivatives provision seriously, and may include it in the final bill, the sources said.
Sadly, most Americans don’t understand how derivatives work and so there is very little public outrage.
But the truth is that people should be marching in the streets over this. If this provision becomes law, the American people could potentially be on the hook for absolutely massive losses…
The bank perks are not a traditional budget item. They would allow financial institutions to trade certain financial derivatives from subsidiaries that are insured by the Federal Deposit Insurance Corp. — potentially putting taxpayers on the hook for losses caused by the risky contracts.
Five years after the Wall Street coup of 2008, it appears the U.S. House of Representatives is as bought and paid for as ever. We heard about the Citigroup crafted legislation currently being pushed through Congress back in May when Mother Jones reported on it. Fortunately, they included the following image in their article:
Unsurprisingly, the main backer of the bill is notorious Wall Street lackey Jim Himes (D-Conn.), a former Goldman Sachs employee who has discovered lobbyist payoffs can be just as lucrative as a career in financial services. The last time Mr. Himes made an appearance on these pages was in March 2013 in my piece: Congress Moves to DEREGULATE Wall Street.
Fortunately, it was stopped in the Senate at that time.
But that is the thing with bank lobbyists. They are like Terminators – they never, ever, ever give up.
And they now have more of a sense of urgency then ever, because we are moving into a period of time when the big banks may begin losing tremendous amounts of money on derivatives contracts.
For example, the rapidly plunging price of oil could potentially mean gigantic losses for the big banks. Many large shale oil producers locked in their profits for 2015 and 2016 through derivatives contracts when the price of oil was above $100 a barrel. As I write this, the price of oil is down to $65 a barrel, and many analysts expect it to go much lower.
So guess who is on the other end of many of those trades?
The big banks.
Their computer models never anticipated that the price of oil would fall by more than 40 dollars in less than six months. A loss of 40, 50 or even 60 dollars per barrel would be catastrophic.
No wonder they want legislation that will protect them.
And commodity derivatives are just part of the story. Over the past couple of decades, Wall Street has been transformed into the largest casino in the history of the world. At this point, the amounts of money that these “too big to fail” banks are potentially on the hook for are absolutely mind blowing.
ISIS is marching through city after city in Iraq, and they are doing it with American weapons. Thanks to a series of stunning victories in recent months, ISIS has captured a vast array of U.S. military equipment including trucks, Humvees, rockets, artillery pieces and Stinger missiles. When the U.S. was pulling out of Iraq, we were extremely generous to the new Iraqi army. We basically armed them to the teeth with equipment that U.S. taxpayers paid for. But now that the new Iraqi army is folding like a 20 dollar suit in the face of ISIS jihadists, vast quantities of that military equipment are falling into the hands of some of the most radical jihadists the world has ever seen. And considering the fact that ISIS also recently seized the equivalent of nearly $500 million in cash from a bank in Mosul, the leadership of ISIS won’t be having much problem buying anything else that they might need either. ISIS is getting stronger with each passing day, and they are not going to be satisfied until the Iraqi government has been toppled. It is a geopolitical mess of epic proportions, and there don’t seem to be any easy solutions on the horizon.
To say that the new Iraqi army has been incompetent would be a massive understatement. Not only have they run away like scared kittens from these jihadists, they have also left behind staggering amounts of weaponry for them. According to the Los Angeles Times, ISIS has captured “the weapons stores of the 2nd and 3rd [Iraqi army] divisions in Mosul, the 4th division in Salah al Din, the 12th division in the areas near Kirkuk, and another division in Diyala”. And we aren’t just talking about rifles and ammunition. We are talking about some pretty impressive hardware…
Government forces retreated en masse from the onslaught, leaving behind a military hardware bonanza, including the U.S.-made armored Humvees as well as trucks, rockets, artillery pieces, rifles, ammunition, even a helicopter. Some of the seized materiel was old or otherwise non-functioning; but a lot was promptly put to use on the battlefield.
Pictures of grinning Islamist warriors cruising in U.S. Humvees bedecked with white-on-black militant flags flooded the Internet and became the signature image of the ISIS rampage.
ISIS social-media enthusiasts even mocked the global #BringBackOurGirls Twitter campaign, referring to girls kidnapped by an Al Qaeda offshoot in Nigeria. ISIS sympathizers began tweeting #BringBackOurHumvee.
One of the most popular photos mocking the Obamas and the U.S. military under the #BringBackOurHumvee hashtag is posted below…
We have become a laughingstock to ISIS. They know that we are not going to invade Iraq again. So they are laughing at us as they use our own equipment to take over the country.
As WND has documented, members of ISIS were actually trained by U.S. personnel at a secret base in Jordan back in 2012…
Members of the Islamic State of Iraq and the Levant, or ISIS, were trained in 2012 by U.S. instructors working at a secret base in Jordan, according to informed Jordanian officials.
The officials said dozens of ISIS members were trained at the time as part of covert aid to the insurgents targeting the regime of Syrian President Bashar al-Assad in Syria. The officials said the training was not meant to be used for any future campaign in Iraq.
The Jordanian officials said all ISIS members who received U.S. training to fight in Syria were first vetted for any links to extremist groups like al-Qaida.
So U.S. taxpayers have not just paid for their weapons.
The revelations comes as the State Department acknowledged that ISIS has captured a stockpile of old chemical weapons at the Al Muthanna chemical weapons production complex as its fighters sweep through Iraq’s Sunni- controlled region.
The access to a sarin poison gas production facility, and the man with the expertise to operate it, is the result of a new alliance between the brutal jihadist fighters and Izzat Ibrahim al-Douri, who was a top military commander and vice president to the deposed Saddam Hussein.
And the folks running ISIS are crazy enough to do just about anything. They are stone cold killers that will go to extreme lengths to advance their cause. If you are not very familiar with ISIS yet, the YouTube documentary posted below contains some footage from some of their recent triumphs…
Iraq is literally being torn to pieces by this conflict, and even young boys are getting swept up into the fighting.
It was a surprising sight. The customers standing in Haj Hamdoun’s store in central Mosul watched as a masked child came into the shop, bought what he wanted without saying a word and then left again, carrying a bag containing candies and milk in one hand and a heavy machine gun, which was just about as big as him, in the other.
This was Abdullah, who appears to be the city’s youngest volunteer with the Sunni extremist group, the Islamic State of Iraq and al-Sham, or ISIS, that took control of Mosul over two weeks ago.
Abdullah is not yet 11 years old. But his older brother and his father, who was a senior member of ISIS, were killed in fighting between the group and Iraqi security forces in 2013. That’s why Abdullah joined ISIS, although he is far from the only child in its ranks.
Since leaving the White House, the Clintons have earned at least 100 million dollars and currently have a net worth of up to 50 million dollars. So why in the world do the taxpayers need to give Bill Clinton $944,000 to fund his extravagant lifestyle in 2014? If ordinary Americans truly understood how much money many former politicians are being handed every year they would go bananas. According to a Congressional Research Service report that was published earlier this year, the federal government has given a total of nearly 16 million dollars to Bill Clinton since 2001. Each one of those dollars is a dollar that some U.S. taxpayer worked really hard for or that we had to borrow. Yes, we don’t want our former presidents to go broke for a whole bunch of reasons, but it is absolutely absurd that we are showering them with millions upon millions of dollars.
Yesterday, I wrote about the trouble that Hillary has caused for herself by claiming that the Clintons were “dead broke” when they left the White House.
The way things have been set up, there is no way in the world that any former president is going to be “dead broke” ever again unless the law is changed.
According to the Washington Post, Bill Clinton has been receiving about a million dollars a year “for office space, staff, and a pension” since he left office…
According to an April report from the Congressional Research Service, Bill Clinton has received nearly $16 million in pensions and benefits from the federal government since leaving office. That includes $944,000 in fiscal year 2014 for office space, staff, and a pension.
Bush the younger is costing taxpayers $1.28 million this year, and averages 4 per cent more annual than Clinton.
The government’s General Services Administration inexplicably budgeted $102,000 for Bush’s telephone expenses in 2014, and planned to spend $135,000 more on furniture, computers, office supplies and other miscellany.
How in the world is George W. Bush racking up $102,000 in phone expenses a year?
Does he have the world’s worst calling plan?
And of course what we spend on our former presidents is peanuts compared to what we spend on our current president.
-Obama has 469 senior staff working directly under him, and 226 of them make more than $100,000 a year.
-There is always at least one projectionist at the White House 24 hours a day just in case there is someone that wants to watch a movie.
-The “dog handler” for the family dog Bo reportedly makes $102,000 per year and sometimes he is even flown to where the family is vacationing so that he can care for the dog.
Yes, the White House needs a large staff.
But at this point we spend more on our presidents than any nation on the planet does on their entire royal families.
Over the years, the political elite have tilted the rules of the game dramatically in their favor. Neither political party objects because they both benefit from riding on the endless gravy train.
If you can believe it, there are close to 15,000 retired federal employees that are currently collecting federal pensions for life worth at least $100,000 annually. This list includes names such as Newt Gingrich, Bob Dole, Trent Lott, Dick Gephardt and Dick Cheney.
Not that they need the money. As I wrote about recently, more than half of the members of Congress are millionaires at this point, and nearly 200 of them are multimillionaires.
Politics in America has become a game that is played by the elite for the benefit of the elite. If it seems like they are “out of touch” with ordinary Americans that is because they are.
Meanwhile, things just continue to get even tougher for the middle class. Even though money is flowing like wine in Washington D.C. for the moment, a brand new Gallup survey discovered that 58 percent of Americans believe that the economy is getting worse.
It is shameful that our politicians are living like rock stars while tens of millions of American families are suffering so deeply. For example, consider the case of Andrew and Kristen Cummins…
Andrew and Kristen Cummins and their 8-year-old son Colton have been in and out of homelessness for the past four years.
It all started when Andrew moved to Indiana for a temporary warehouse job that was supposed to turn into a full-time job. But instead he said he was let go as soon as the company would have had to start providing him with full-time benefits.
Since then, he has worked at several other temporary jobs that haven’t turned into full-time work either.
Kristen has been in the same position: She has also had temporary jobs, but nothing has stuck.
So for now, the three stay at a local homeless shelter called the Haven House. Since women and men are required to sleep in separate areas, Andrew doesn’t get to see his wife or son after 9 p.m. each night.
There are millions of other families just like them that are scratching and clawing their way through life the best that they can.
Perhaps our politicians should actually do something to help them instead of sitting back and living the high life at our expense.
The middle class has quite a gift welcoming them as the calendar flips over to 2013. Their payroll taxes are going to go up, their income taxes are going to go up, and approximately 28 million households are going to be hit with a huge, unexpected AMT tax bill on their 2012 earnings. So happy New Year middle class! You are about to be ripped to shreds. In addition to the tax increases that I just mentioned, approximately two million unemployed Americans will instantly lose their extended unemployment benefits when 2013 begins, and new Obamacare tax hikes which will cost American taxpayers about a trillion dollars over the next decade will start to go into effect. If Congress is not able to come to some sort of a deal, all middle class families in America will be sending thousands more dollars to Uncle Sam next year than they were previously. And considering the fact that the middle class is already steadily shrinking and that the U.S. economy is already in an advanced state of decline, that is not good news. You would think that both major political parties would want to do something to keep the middle class from being hit with this kind of tax sledgehammer. Unfortunately, at this point it appears that our “leaders” in Washington D.C. are incapable of getting anything done. So get ready for much smaller paychecks and much larger tax bills. What is coming is not going to be pleasant.
So what happened?
Weren’t the tax increases only supposed to be for the wealthy?
Well, that is what the politicians always promise, but it is always the middle class that ends up getting hit the hardest.
In this day and age, the big corporations and the ultra-wealthy are absolute masters at avoiding taxes.
For example, Facebook paid approximately $4.64 million in taxes on their entire foreign profits of $1.344 billion for 2011.
Keep in mind that U.S. GDP for 2011 was only slightly above 15 trillion dollars.
So the global elite have an amount of money parked in offshore banks that is substantially larger than the total value of all goods and services produced in the United States each year.
According to one estimate, a third of all the wealth in the entire world is stationed in offshore banks. Our politicians are playing checkers and the global elite are playing chess when it comes to taxes. Our current system of taxation is irreversibly broken and should be entirely thrown out and replaced with something else.
And of course under our current system those that are poor don’t pay much in taxes because they are just trying to survive.
So who always ends up getting the painful end of the hammer?
The middle class does, and that really stinks.
Let us hope and pray that our politicians can come together and do something for the middle class. In particular, we should all be screaming and yelling at our politicians about the Alternative Minimum Tax. It was originally designed as a method to “tax the rich”, but unless Congress does something the middle class is about to be ripped to shreds by it. The following is from a recent CNBC article about the AMT…
In a cruel epilogue to 2012, roughly 28 million families would owe the IRS $86 billion more than they anticipated for this year should the country plunge off the cliff, according to the nonpartisan Tax Policy Center.
Those families would face the “Alternative Minimum Tax,” which was introduced in 1969 to supposedly guarantee that wealthy Americans could not elude the taxman. But the AMT not only flopped, it was never indexed to inflation. So with each passing year, it seeps away from high society and into the wallets of Target and Wal-Mart shoppers. That sets up a disaster for April 15.
So how much money are we talking about?
According to that same article, many families are about to be socked by tax bills that will be absolutely huge…
On the whole, 98 percent of those with incomes between $200,000 to $500,000 would pay an additional $11,000 in AMT this year, according to the center’s estimates. About 88 percent of those with incomes of $100,000 to $200,000 would need to fork over another $3100, and even the majority of Americans with earnings between $75,000 and $100,000 would have an AMT liability.
Most of the tax increases that will be coming as a result of the fiscal cliff will be for 2013 earnings, but the AMT tax hike will apply to 2012 earnings. So if you end up falling under the AMT, you better get ready to write a very large check to Uncle Sam in just a couple of months.
And the AMT is only just one of the very painful tax increases that American families will be facing. If no deal is reached in Congress, every single middle class American taxpayer will be dealing with significantly higher taxes.
During a recent interview on CNBC, Ron Paul explained that “they pretend they are fighting up there, but they really aren’t. They are arguing over power, spin, who looks good, who looks bad; all trying to preserve the system where they can spend what they want, take care of their friends and print money when they need it.”
Most in the mainstream media are making it sound like some kind of a “battle royal” is going on in Washington, but as Lou Dobbs recently pointed out, the U.S. national debt is going to end up in just about the same place no matter what happens.
According to Dobbs, if we “do nothing” the U.S. national debt will be approximately 25.8 trillion dollars in 2022.
If “Obama wins”, the U.S. national debt will be approximately 25.4 trillion dollars in 2022.
If “Boehner wins”, the U.S. national debt will be approximately 25.2 trillion dollars in 2022.
You can watch the entire analysis by Lou Dobbs right here…
So they are putting all of us through all of this torture even though nothing will really change in the long run no matter who wins?
Barack Obama has just issued a new executive order that ends the pay freeze for federal workers that had been in place.
So now all federal employees will be getting a nice hefty pay raise.
For example, Vice President Joe Biden brought in $225,521 this year.
Next year, he will make $231,900.
Not that our politicians really need the money. Most members of Congress are millionaires anyway. But if they can get us to pay for it, they might as well go for it, eh?
There are now close to half a million federal employees that bring home at least $100,000 a year. Plus, it is important to keep in mind that the benefits that federal employees get are absolutely outstanding, and it is close to impossible to actually fire a federal worker.
Life is good if you are working for Uncle Sam.
Meanwhile, our politicians seem determined to keep draining more blood out of the middle class. Even if a “deal” is reached, we will still be hit by some categories of tax increases. Let’s just hope and pray that we don’t get hit by all of the tax increases that are scheduled to go into effect. That would be a financial disaster for millions of families.
So happy New Year middle class. Your taxes are about to go through the roof and our politicians are too busy fighting with each other to do anything about it.
Warren Buffett once said that derivatives are “financial weapons of mass destruction”, and that statement is more true today than it ever has been before. Recently, JP Morgan made national headlines when it announced that it was going to take a 2 billion dollar loss from derivatives trades gone bad. Well, it turns out that JP Morgan did not tell us the whole truth. As you will see later in this article, most analysts are estimating that the losses will eventually be far larger than 2 billion dollars. But no matter how bad things get for JP Morgan, it will not be allowed to fail. JP Morgan is the largest bank in the United States, so it is essentially the “granddaddy” of the too big to fail banks. If JP Morgan gets to the point where it is about to collapse, the U.S. government and the Federal Reserve will rush in to save it. Because of this “security blanket”, banks such as JP Morgan feel free to take outrageous risks. Today, JP Morgan has more exposure to derivatives than anyone else in the world. If they win, they win big. If they lose, U.S. taxpayers will be on the hook. Not only that, but thanks to Dodd-Frank, U.S. taxpayers are on the hook for bailing out the major derivatives clearinghouses if there is ever a major derivatives crisis. So when the derivatives market crashes (and it will) you and I will be left holding a gigantic bill.
Derivatives almost caused the complete collapse of insurance giant AIG back in 2008. But instead of learning our lessons, the derivatives bubble has gotten even larger since that time.
A Bloomberg article that was published last year contained a great quote from Mark Mobius about derivatives….
Mark Mobius, executive chairman of Templeton Asset Management’s emerging markets group, said another financial crisis is inevitable because the causes of the previous one haven’t been resolved.
“There is definitely going to be another financial crisis around the corner because we haven’t solved any of the things that caused the previous crisis,” Mobius said at the Foreign Correspondents’ Club of Japan in Tokyo today in response to a question about price swings. “Are the derivatives regulated? No. Are you still getting growth in derivatives? Yes.”
Never in the history of the world have we ever seen anything like this derivatives bubble.
But instead of getting it under control, we just allowed it to get bigger and bigger and bigger.
Now JP Morgan is in quite a bit of trouble. A recent Daily Finance article summarized how JP Morgan got into this mess….
Bruno Iksil, a trader working in the bank’s London office, placed a massive bet in the derivatives market. Derivatives “derive” their value from the value of an underlying asset, like stocks, bonds, currencies, or a market index. The specific type of derivative used in Iksil’s bet was a credit default swap index, known as “CDX.NA.IG.9.”
CDX.NA.IG.9 tracks a basket of corporate bonds. Iksil’s positions on the index were so big (one report put it at $100 billion) that they were moving the market and interfering with other traders’ positions. These annoyed traders — hedge-fund managers — dubbed Iksil “the London Whale” for his outsize bets.
So if the real number isn’t 2 billion dollars, how much will JP Morgan eventually lose?
The Independent is reporting that the losses could eventually reach 7 billion dollars.
One author featured on Zero Hedge suggested that the losses could ultimately reach 20 billion dollars….
Simple: because it knew with 100% certainty that if things turn out very, very badly, that the taxpayer, via the Fed, would come to its rescue. Luckily, things turned out only 80% bad. Although it is not over yet: if credit spreads soar, assuming at $200 million DV01, and a 100 bps move, JPM could suffer a $20 billion loss when all is said and done. But hey: at least “net” is not “gross” and we know, just know, that the SEC will get involved and make sure something like this never happens again.
The truth is that nobody really knows. Everybody agrees that the losses will likely far exceed 2 billion dollars, but the real extent of the crisis will not be known until the trades play out.
According to the Huffington Post, JP Morgan recently sold 25 billion dollars of profitable securities to raise some cash. The profit on the sale of those securities will be somewhere in the neighborhood of a billion dollars.
A billion dollars will help, but it will not be nearly enough.
Many are interpreting this move as a sign of panic by JP Morgan.
Meanwhile, JP Morgan CEO Jamie Dimon continues to do quite well. In fact, his 23 million dollar pay package was recently approved by shareholders at an annual meeting.
Wouldn’t you like to do your job badly and still make 23 million dollars?
Right now, JP Morgan is essentially in a “staring contest” with those on the other side of the derivatives trades that went bad. This “staring contest” was described in a recent CNN article….
It’s clear from public data filed with The Depository Trust & Clearing Corporation that JPMorgan Chase hasn’t sold any of its positions yet.The DTCC tracks trading activity and sizes of positions on the IG9 and other indexes, and there haven’t been any big moves since last week.
“Whatever the size was, it’s clearly not something that you can call one or two dealers and sell,” said Garth Friesen, a co-chief investment officer at AVM, a derivatives hedge fund that’s not involved in these trades.
As soon as it becomes clear that JPMorgan Chase is unwinding its position, it will be obvious to players on every major trading desk. Hedge funds will immediately start piling into that index and buying protection, driving up the bank’s losses.
Until then, it won’t cost the hedge funds much to sit and wait.
JP Morgan is desperately hoping that the markets move in their favor.
If the markets move against JP Morgan in a big way it could potentially be absolutely catastrophic for the biggest bank in America.
An excerpt from an email that Steve Quayle recently received from an anonymous international banking source contained some chilling analysis of the situation….
The derivative market that JPM plays in is the CDX.NA.IG.9, when factions within their London office (London Whale) made overly leveraged swaps, hedge funds smelled blood and so did a few banks. You see any moves that JPM does here on out exposes their weakness further. Which they can not afford any more exposure thus they are not buying back any more shares which is the equivalent of cutting an artery in a pool full of sharks. The strategy they are taking right now is to sit through the storm and ride it out as they can do nothing else for any action will make them even more vulnerable. They can not absorb hits in both JPM SLV and CDX.NA.IG.9. Inactivity is not something they want to do it is something they have to do. There is no other choice for them.
So what will happen if JP Morgan loses too much money?
Well, it will beg the U.S. government and the Federal Reserve for money and the U.S. government and the Federal Reserve will comply.
There is no way that they are going to let the largest bank in America fail.
In addition, as I mentioned earlier, Dodd-Frank has put U.S. taxpayers on the hook for future bailouts of derivatives clearinghouses. This was detailed in a recent Wall Street Journal article….
Little noticed is that on Tuesday Team Obama took its first formal steps toward putting taxpayers behind Wall Street derivatives trading — not behind banks that might make mistakes in derivatives markets, but behind the trading itself. Yes, the same crew that rails against the dangers of derivatives is quietly positioning these financial instruments directly above the taxpayer safety net.
One of the things that Dodd-Frank does is that it gives the Federal Reserve the power to provide “discount and borrowing privileges” to derivatives clearinghouses in the event of a major derivatives crisis.
This is what our politicians love to do.
They love to have the U.S. taxpayer guarantee everything.
Our politicians look at us as one giant insurance policy.
Apparently they believe that if anything in the financial world goes wrong that U.S. taxpayers should be the ones to clean up the mess.
But will we really have enough money to bail everyone out when the derivatives market crashes?
You are not going to believe some of the things that the U.S. government is spending money on. According to a shocking new report, U.S. taxpayer money is being spent to study World of Warcraft, to study how Americans find love on the Internet, and to study the behavior of male prostitutes in Vietnam. Not only that, but money from the federal government is also being used to renovate a pizzeria in Iowa and to help a library in Tennessee host video game parties. These are just some of the examples in a new report on government waste from Senator Tom Coburn entitled “Wastebook 2010“. Even as tens of millions of American families find themselves suffering through the worst economic downturn in modern history, the U.S. government continues to spend money on some of the craziest and most frivolous things imaginable. Every single year articles are written and news stories are done about the horrific government waste that is taking place and yet every single year it just keeps getting worse. So just what in the world is going on here?
It almost seems as though Congress actually enjoys inventing new ways to waste U.S. taxpayer money. It seems nearly inconceivable that anyone could keep a straight face while trying to justify spending money on many of the things in the list below.
At a time when the U.S. national debt is closing in on 14 trillion dollars, government waste just seems more out of control than ever. The following are 20 of the craziest things that the U.S. government is spending money on….
#1 A total of $3 million has been granted to researchers at the University of California at Irvine so that they can play video games such as World of Warcraft. The goal of this “video game research” is reportedly to study how “emerging forms of communication, including multiplayer computer games and online virtual worlds such as World of Warcraft and Second Life can help organizations collaborate and compete more effectively in the global marketplace.”
#2 The U.S. Department of Agriculture gave the University of New Hampshire $700,000 this year to study methane gas emissions from dairy cows.
#3$615,000 was given to the University of California at Santa Cruz to digitize photos, T-shirts and concert tickets belonging to the Grateful Dead.
#4 A professor at Stanford University received $239,100 to study how Americans use the Internet to find love. So far one of the key findings of this “research” is that the Internet is a safer and more discreet way to find same-sex partners.
#5 The National Science Foundation spent $216,000 to study whether or not politicians “gain or lose support by taking ambiguous positions.”
#6 The National Institutes of Health spent approximately $442,340 to study the behavior of male prostitutes in Vietnam.
#7 Approximately $1 million of U.S. taxpayer money was used to create poetry for the Little Rock, New Orleans, Milwaukee and Chicago zoos. The goal of the “poetry” is to help raise awareness on environmental issues.
#8 The U.S. Department of Veterans Affairs spent $175 million during 2010 to maintain hundreds of buildings that it does not even use. This includes a pink, octagonal monkey house in the city of Dayton, Ohio.
#9$1.8 million of U.S. taxpayer dollars went for a “museum of neon signs” in Las Vegas, Nevada.
#10$35 million was reportedly paid out by Medicare to 118 “phantom” medical clinics that never even existed. Apparently these “phantom” medical clinics were established by a network of criminal gangs as a way to defraud the U.S. government.
#11 The Conservation Commission of Monkton, Vermont got $150,000 from the federal government to construct a “critter crossing”. Thanks to U.S. government money, the lives of “thousands” of migrating salamanders are now being saved.
#12 In California, one park received $440,000 in federal funds to perform “green energy upgrades” on a building that has not been used for a decade.
#13$440,955 was spent this past year on an office for former Speaker of the House Dennis Hastert that he rarely even visits.
#14 One Tennessee library was given $5,000 in federal funds to host a series of video game parties.
#15 The U.S. Census Bureau spent $2.5 million on a television commercial during the Super Bowl that was so poorly produced that virtually nobody understood what is was trying to say.
#16 A professor at Dartmouth University received $137,530 to create a “recession-themed” video game entitled “Layoff”.
#17 The National Science Foundation gave the Minnesota Zoo over $600,000 so that they could develop an online video game called “Wolfquest”.
#18 A pizzeria in Iowa was given $60,000 to renovate the pizzeria’s facade and give it a more “inviting feel”.
#19 The U.S. Department of Agriculture gave one enterprising group of farmers $30,000 to develop a tourist-friendly database of farms that host guests for overnight “haycations”. This one sounds like something that Dwight Schrute would have dreamed up.
#20 Almost unbelievably, the National Institutes of Health was given $800,000 in “stimulus funds” to study the impact of a “genital-washing program” on men in South Africa.
In light of all this, is it any wonder why the approval rating of Congress recently hit another new record low?
According to the most recent Gallup poll, only 13 percent of Americans approve of the job that Congress is doing.
Just think about that – only 13 percent!
Our politicians seem very confused about why there is so much anger in the country today. Well, there are certainly a lot of reasons for it, including the fact that the U.S. economy is on the verge of collapse, but it certainly doesn’t help that our government is basically flushing our tax dollars down the toilet and spending them on some of the most wasteful things imaginable.
It would be bad enough if the federal government was swimming in money, but the truth is that all of this waste is being committed at a time when the U.S. government is nearing bankruptcy.
Over the last 30 years, the U.S. national debt has gotten 13 times larger. We have accumulated the largest debt in the history of the world and there is no end in sight.
In fact, we are rapidly running out of people to borrow money from. According to the Wall Street Journal, in order to repay maturing bonds and finance the exploding budget deficit, the U.S. government will have to borrow 4.2 trillion dollars in 2011.
Eventually the rest of the world is going to lose confidence in the ability of the U.S. government to repay all of this debt. Once confidence in U.S. Treasuries is totally gone, and there are already signs this is starting to happen, the game will be over and the U.S. financial system will collapse.
But the U.S. Congress just continues to act like it is “business as usual” and the wasteful spending just continues to get worse. Someday historians will look back and think that we must have been a nation full of idiots and morons.
For decades our politicians have been spending us into oblivion, yet we keep sending the vast majority of them back to Washington D.C. every time an election rolls around and the mainstream media keeps assuring us that our “respected leaders” know exactly what they are doing and that everything is going to be okay somehow.
It is almost as if some sort of collective insanity has overtaken most Americans. The path we are on inevitably leads to national bankruptcy and the destruction of our financial system, but only a small percentage of the population seems to care.
Well, in the end we will reap what we have sown. Unfortunately, the economic pain that is coming is going to be devastating for all of us – including those of us who are awake and are trying desperately to change things.