Under Barack Obama, the U.S. national debt has risen from $10,626,877,048,913.08 on January 20th, 2009 to $18,795,033,928,275.59 on December 21st, 2015. That means that the debt that we are passing on to future generations has increased by 8.16 trillion dollars since Barack Obama was inaugurated. There is still a little more than a year to go in Obama’s presidency, and it is already guaranteed that Obama will add more than a trillion dollars a year to the national debt during his presidency. In fact, when you do the math, we are stealing more than 100 million dollars from future generations of Americans every single hour of every single day. It is a crime of a magnitude that is almost unimaginable, and at this point it is mathematically impossible for the U.S. government to pay off all of this debt. To say that we are in trouble would be a massive understatement.
And of course not all of the blame goes to Obama. The Republicans have had control of the House of Representatives for all but two years while Obama has been in the White House, and they have gone along with all of this reckless spending. Without the approval of the House, Obama could not spend a single penny, but the Republicans have consistently chosen not to stand up to him. In fact, the Republicans in Congress just approved another massive 1.2 trillion dollar spending bill that essentially gave the Democrats every single thing that they wanted. House Minority Leader Nancy Pelosi even admitted that the Republicans “were willing to concede so much” during the negotiations.
So why do we even have a Republican Party? They always just go along with pretty much whatever the Democrats want anyway. Why shouldn’t we just disband the Republican Party and let the Democrats completely run things? How would Washington D.C. be any different if the Republicans didn’t even exist?
At this point, even Rush Limbaugh is completely disgusted with the Republican Party…
I have a headline here from the Washington Times: “White House Declares Total Victory Over GOP in Budget Battle.” That headline’s a misnomer. There was never a battle. None of this was opposed. The Republican Party didn’t stand up to any of it, and the die has been cast for a long time on this. I know many of you are dispirited, depressed, angry, combination of all of that. But, folks, there was no other way this could go. Because two years ago when the Republican Party declared they would never do anything that would shut down the government and they would not impeach Obama, there were no obstacles in Obama’s way and there were no obstacles in the way of the Democrat Party.
Do you remember when Republican politicians were running around promising that they would defund Obamacare?
That didn’t happen.
Do you remember when Republican politicians were running around promising that they would defund Planned Parenthood?
That didn’t happen.
Do you remember when Republican politicians were running around promising that they would defund Obama’s refugee program?
That didn’t happen.
In this new spending deal, the Republicans got nothing. It was a sham, a farce and a total insult to the American people. Here is more from Rush Limbaugh…
It fully funds Planned Parenthood. That, to me, is unforgivable, with everything now known about what goes on behind closed doors at Planned Parenthood, and that the federal government, led by a Republican Party, sees fit to pay for it. It is beyond comprehension, and it is a total squandering of moral authority to fully fund the butchery at Planned Parenthood. This spending bill fully pays for Obama’s refugee plans, fully. This spending bill, this budget bill quadruples the number of visas Obama wants for foreign workers. This is even a slap at American union workers. Not the leaders. The union leaders seem to be in favor of it, but blue-collar people, known as working people, have been sold down the river along with everybody else here.
This spending bill even fully pays for every dime asked for by Obama on all of this idiocy that’s tied up into climate change. Everything Obama wanted, everything he asked for, he got. You go down the list of things, it’s there.
Even after watching all of the undercover Planned Parenthood videos that came out over the past year, the Republicans in Congress still voted to fund the harvesting and sale of body parts from aborted babies.
And surveys have found that the American people support the continued funding of Planned Parenthood by about a 2 to 1 margin. After everything that we have seen, the vast majority of Americans still want to continue giving those butchers hundreds of millions of taxpayer dollars a year.
No wonder so many people are comparing America to Nazi Germany these days. We truly have become an exceedingly wicked nation.
We like to think that we are an “example” for the rest of the planet, but in reality the only example that we are is a bad one. Our guilt has been put on display for all the world to see, and yet we just continue to race toward even more evil.
Not only did the Republicans not defund Planned Parenthood, the truth is that not a single pro-life amendment of any sort even got into the bill thanks to Paul Ryan. The following comes from lifesitenews.com…
“The bill failed to include a single major pro-life policy rider, despite the requests of over 120 members of Congress and the disturbing revelations about Planned Parenthood brought to light this year,” said Congresswoman Diane Black, R-TN, who voted against the bill.
The House Freedom Caucus offered a series of amendments to the bill defunding Planned Parenthood, strengthening conscience protections for pro-life physicians and organizations, and ending all U.S. funding for the United Nations Population Fund (UNFPA). The House Rules Committee rejected these riders earlier this week, as Speaker Paul Ryan said he did not want conservative amendments added to the bill that would drive away his Democratic colleagues.
The committee also rejected an amendment to increase vetting of refugees who enter the United States from the terrorist hotbeds of Syria and Iraq, which had previously passed the House, with 47 Democrats adding strong bipartisan support.
Like I said, the Republicans completely capitulated, just like they always do.
Now the U.S. national debt is nearly double the size that it was just before the last financial crisis struck, and our leaders continue to borrow and spend as if there is no tomorrow.
Perhaps they have convinced themselves that there will never be any consequences for acting so foolishly.
Perhaps they believe that in the end everything will turn out okay somehow.
Perhaps they are able to rationalize the theft of more than a hundred million dollars an hour from future generations of Americans.
But nothing can erase what they have done to us. The promising future that our children and our grandchildren should have had has been completely wiped out, and the leading edge of the greatest economic crisis that any of us has ever known is now upon us.
If we had done things differently, things wouldn’t have had to turn out this way. But now the die is cast, and we are all going to pay a very high price for the mistakes that have been made in Washington.
If you know someone that actually believes that the U.S. economy is in good shape, just show them the statistics in this article. When you step back and look at the long-term trends, it is undeniable what is happening to us. We are in the midst of a horrifying economic decline that is the result of decades of very bad decisions. 30 years ago, the U.S. national debt was about one trillion dollars. Today, it is almost 17 trillion dollars. 40 years ago, the total amount of debt in the United States was about 2 trillion dollars. Today, it is more than 56 trillion dollars. At the same time that we have been running up all of this debt, our economic infrastructure and our ability to produce wealth has been absolutely gutted. Since 2001, the United States has lost more than 56,000 manufacturing facilities and millions of good jobs have been shipped overseas. Our share of global GDP declined from 31.8 percent in 2001 to 21.6 percent in 2011. The percentage of Americans that are self-employed is at a record low, and the percentage of Americans that are dependent on the government is at a record high. The U.S. economy is a complete and total mess, and it is time that we faced the truth.
The following are 40 statistics about the fall of the U.S. economy that are almost too crazy to believe…
#1 Back in 1980, the U.S. national debt was less than one trillion dollars. Today, it is rapidly approaching 17 trillion dollars…
#2 During Obama’s first term, the federal government accumulated more debt than it did under the first 42 U.S presidents combined.
#3 The U.S. national debt is now more than 23 times larger than it was when Jimmy Carter became president.
#4 If you started paying off just the new debt that the U.S. has accumulated during the Obama administration at the rate of one dollar per second, it would take more than 184,000 years to pay it off.
#5 The federal government is stealing more than 100 million dollars from our children and our grandchildren every single hour of every single day.
#6 Back in 1970, the total amount of debt in the United States (government debt + business debt + consumer debt, etc.) was less than 2 trillion dollars. Today it is over 56 trillion dollars…
#7 According to the World Bank, U.S. GDP accounted for 31.8 percent of all global economic activity in 2001. That number dropped to 21.6 percent in 2011.
#8 The United States has fallen in the global economic competitiveness rankings compiled by the World Economic Forum for four years in a row.
#9 According to The Economist, the United States was the best place in the world to be born into back in 1988. Today, the United States is only tied for 16th place.
#10 Incredibly, more than 56,000 manufacturing facilities in the United States have been permanently shut down since 2001.
#11 There are less Americans working in manufacturing today than there was in 1950 even though the population of the country has more than doubled since then.
#12 According to the New York Times, there are now approximately 70,000 abandoned buildings in Detroit.
#13 When NAFTA was pushed through Congress in 1993, the United States had a trade surplus with Mexico of 1.6 billion dollars. By 2010, we had a trade deficit with Mexico of 61.6 billion dollars.
#14 Back in 1985, our trade deficit with China was approximately 6 million dollars (million with a little “m”) for the entire year. In 2012, our trade deficit with China was 315 billion dollars. That was the largest trade deficit that one nation has had with another nation in the history of the world.
#15 Overall, the United States has run a trade deficit of more than 8 trillion dollars with the rest of the world since 1975.
#16 According to the Economic Policy Institute, the United States is losing half a million jobs to China every single year.
#17 Back in 1950, more than 80 percent of all men in the United States had jobs. Today, less than 65 percent of all men in the United States have jobs.
#18 At this point, an astounding 53 percent of all American workers make less than $30,000 a year.
#19 Small business is rapidly dying in America. At this point, only about 7 percent of all non-farm workers in the United States are self-employed. That is an all-time record low.
#20 Back in 1983, the bottom 95 percent of all income earners in the United States had 62 cents of debt for every dollar that they earned. By 2007, that figure had soared to $1.48.
#21 In the United States today, the wealthiest one percent of all Americans have a greater net worth than the bottom 90 percent combined.
#22 According to Forbes, the 400 wealthiest Americans have more wealth than the bottom 150 million Americans combined.
#23 The six heirs of Wal-Mart founder Sam Walton have as much wealth as the bottom one-third of all Americans combined.
#24 According to the U.S. Census Bureau, more than 146 million Americans are either “poor” or “low income”.
#25 According to the U.S. Census Bureau, 49 percent of all Americans live in a home that receives direct monetary benefits from the federal government. Back in 1983, less than a third of all Americans lived in a home that received direct monetary benefits from the federal government.
#26 Overall, the federal government runs nearly 80 different “means-tested welfare programs”, and at this point more than 100 million Americans are enrolled in at least one of them.
#27 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.
#28 As I wrote recently, 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.
#29 At this point, Medicare is facing unfunded liabilities of more than 38 trillion dollars over the next 75 years. That comes to approximately $328,404 for every single household in the United States.
#30 Right now, there are approximately 56 million Americans collecting Social Security benefits. By 2035, that number is projected to soar to an astounding 91 million.
#31 Overall, the Social Security system is facing a 134 trillion dollar shortfall over the next 75 years.
#32 Today, the number of Americans on Social Security Disability now exceeds the entire population of Greece, and the number of Americans on food stamps now exceeds the entire population of Spain.
#33 According to a report recently issued by the Pew Research Center, on average Americans over the age of 65 have 47 times as much wealth as Americans under the age of 35.
#34 U.S. families that have a head of household that is under the age of 30 have a poverty rate of 37 percent.
#35 As I mentioned recently, the homeownership rate in America is now at its lowest level in nearly 18 years.
#36 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.
#37 45 percent of all children are living in poverty in Miami, more than 50 percent of all children are living in poverty in Cleveland, and about 60 percent of all children are living in poverty in Detroit.
#38 Today, more than a million public school students in the United States are homeless. This is the first time that has ever happened in our history.
#39 When Barack Obama first entered the White House, about 32 million Americans were on food stamps. Now, more than 47 million Americans are on food stamps.
#40 According to one calculation, the number of Americans on food stamps now exceeds the combined populations of “Alaska, Arkansas, Connecticut, Delaware, District of Columbia, Hawaii, Idaho, Iowa, Kansas, Maine, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Dakota, Oklahoma, Oregon, Rhode Island, South Dakota, Utah, Vermont, West Virginia, and Wyoming.”
The fiscal cliff deal contains more bad news than it does good news. Yes, the tax increases on the middle class could have been much worse, and we should be thankful that Congress at least did something for the middle class. Unfortunately, they didn’t do enough. Every American worker is going to pay higher taxes next year as a result of this deal. The fiscal cliff deal represents the biggest tax increase in 20 years, and it is also projected to increase the U.S. national debt by an additional 4 trillion dollars over the next decade. In the final analysis, U.S. government finances are still wildly out of control and we are all going to be paying higher taxes. Not a whole lot to be excited about, and nothing has really been fixed for the long-term. Our politicians have kicked the can down the road once again, but someday they will run out of road and all of this debt will absolutely crush us. And of course a lot of our politicians didn’t even really know what they were voting for. The fiscal cliff bill was more than 150 pages long, and our Senators got the bill into their hands just 3 minutes before they voted on it. So none of them actually read the bill. But that is the way things work in America today. The blind are leading the blind and everyone is mindlessly hoping that everything will turn out okay somehow.
For a few moments, let’s take a closer look at the fiscal cliff deal. There are some good things in there, there are some bad things in there, and there are some things about the deal that are downright ugly.
-One of the best things about the fiscal cliff deal is that income tax rates did not rise on the poor and the middle class. This is great news for millions of families that are struggling to make ends meet each month. A significant rise in income tax rates would have been crippling.
-The Alternative Minimum Tax will now be permanently adjusted for inflation. This is something that I had screamed about in previous articles. If an AMT fix had not been passed, approximately 28 million households would have been hammered with the Alternative Minimum Tax on their 2012 earnings.
-Millions of unemployed workers will continue to receive extended federal unemployment benefits. We probably cannot really afford to keep doing this, but at least now there won’t be millions of unemployed workers that suddenly have their only source of income shut off. The next trick will be to find jobs for all of those workers. Unfortunately, millions of our jobs continue to be shipped to the other side of the world.
-Payroll taxes are going up for every American worker. The fiscal cliff deal allows the 2 percent payroll tax cut to expire, and so now the average U.S. household bringing in about $50,000 a year will pay approximately $1,000 more per year in payroll taxes. As a result, it is being projected that U.S. consumers will have $115 billion less in disposable income to spend in 2013. Happy New Year American workers!
-The fiscal cliff deal did nothing about the new Obamacare taxes that went into effect on January 1st. Many of these taxes will hurt the middle class. To see an example of a receipt where a consumer was charged the new “medical excise tax” in Obamacare, just check out this article.
-The carried-interest deduction loophole remains intact, so incredibly wealthy hedge fund managers will continue to get away with paying very little in taxes. If the rest of us are being taxed into oblivion, then they should share in the pain with the rest of us. Of course I personally believe that the income tax should be abolished entirely, but none of our politicians seem interested in that idea at all.
-Income tax rates will increase for high earners. This will hurt a lot of small businesses. Many small businesses that earn more than $400,000 a year will now be faced with making some really tough choices. Some may have to lay off workers. The top rate will now be 39.6 percent, but when other federal and state taxes are factored in, many small businesses will now be paying a top marginal rate of well over 50 percent. That is absolutely obscene.
-A compromise was reached on the estate tax. The exemption was scheduled to fall to just $1 million and the rate was scheduled to go up to 55 percent, and fortunately Congress decided to do something about that. As I have written about previously, that would have been a disaster for many small businesses and family farms. As a result of the fiscal cliff deal, the estate tax will only rise from 35 percent to 40 percent. The exemption for individuals will be about 5 million dollars and for couples it will be about 10 million dollars, and those figures will now be indexed for inflation. A tax increase is never a good thing, but if Congress had done nothing things would have been far worse.
-The fiscal cliff deal contains a lot of pork. In particular, it contains provisions that extend specific tax breaks related to Puerto Rican rum, electric motorcycles, biodiesel and renewable diesel fuel, the film and television business, and motorsports entertainment complexes.
According to the Congressional Budget Office, as a result of this deal the U.S. national debt will be about $4 trillion higher a decade from now than it would have been if Congress had done nothing.
The deficit for fiscal year 2013 alone will be about $330 billion higher than it would have been if Congress had done nothing.
So this deal has made our debt problems even worse.
Right now, the U.S. has a debt to GDP ratio of about 103 percent. We are already well into the “danger zone”, yet most Americans still don’t seem very concerned about all of this debt.
The fiscal cliff deal contained hardly any spending cuts at all. In fact, there was a 41 to 1 ratio of tax increases to spending cuts in the deal. The Democrats definitely won this round. But of course they had most of the leverage. If Congress had done nothing, the middle class would have been absolutely devastated by all of the tax increases, and the Republicans were desperate to prevent that.
But now that the battle over taxes is done, the leverage is going to shift over to the Republicans for the next big fight.
The battle over the debt ceiling is next. If Congress does not act, the U.S. government will soon not be able to borrow any additional money. This battle will be one of the stories that dominates the headlines over the next few months.
If the Republicans want to do something serious about spending, now is their chance. The battle over tax rates is already over, and there is no election in November. The Republicans could conceivably say “NO” to a debt ceiling increase if they want to. If that happened, the federal government would only be able to spend the money that it already has. It would not be able to borrow more. That would mean that we would have to start living within our means.
What a novel concept.
Of course there is no reason to believe that the Republicans in the House will suddenly grow a spine. They have folded every other time that the debt ceiling has come up. It will probably be the same again in 2013.
And Barack Obama is already saying that there will be “no negotiations” over the debt ceiling this time. He expects the Republicans to raise the debt ceiling for him without getting anything in return…
“I will not have another debate with this Congress over whether they will pay the bills they’ve already racked up.”
But the U.S. government cannot spend a single penny or borrow a single penny without the approval of the U.S. House of Representatives.
If the Republicans in the House want to ever get serious about government spending, the upcoming battle over the debt ceiling is a golden opportunity.
They could stop the Obama administration from piling up crazy amounts of debt if they want to. All they need is the courage to take a stand.
During the first four years of the Obama administration, the U.S. government accumulated about as much debt as it did from the time that George Washington took office to the time that George W. Bush took office.
The Republicans have had control of the House for about half of that time. That means that they have been willing accomplices.
So will they take a stand?
That is very doubtful. Over the past few years they have exhibited the intestinal fortitude of a frightened chicken. They will probably huff and puff a little bit, but in the end they will probably give in to Obama once again.
But what we are doing to our children and our grandchildren is so immoral that it is hard to describe. We are stealing more than 100 million dollars from them every single hour of every single day, and we plan on leaving them with the biggest pile of debt the world has ever seen. We should be absolutely ashamed of ourselves.
Why can’t we just spend the money that we have?
What would be so wrong with that?
Unfortunately, that would mean such a painful downward adjustment in our standard of living that most Americans would freak out. We are addicted to debt-fueled prosperity, and so we can’t stop stealing from future generations. We need their money to feed our addiction.
In the end, this gigantic mountain of debt is absolutely going to destroy everything that our forefathers built for us. There have been some people that have been warning about this for decades, but the American people did not listen.
Soon enough, we will all pay the price for this foolishness.
The U.S. government has stolen $15,876,457,645,132.66 from future generations of Americans, and we continue to add well over a hundred million dollars to that total every single day day. The 15 trillion dollar binge that we have been on over the past 30 years has fueled the greatest standard of living the world has ever seen, but this wonderful prosperity that we have been enjoying has been a lie. It isn’t real. We have been living way above our means for so long that we do not have any idea of what “normal” actually is anymore. But every debt addict hits “the wall” eventually, and the same thing is going to happen to us as a nation. At some point the weight of our national debt is going to cause our financial system to implode, and every American will feel the pain of that collapse. Under our current system, there is no mathematical way that this debt can ever be paid back. The road that we are on will either lead to default or to hyperinflation. We have piled up the biggest debt in the history of the world, and if there are future generations of Americans they will look back and curse us for what we did to them. We like to think of ourselves as much wiser than previous generations of Americans, but the truth is that we have been so foolish that it is hard to put it into words.
Whenever I do an article about the national debt, Democrats leave comments blaming the Republicans and Republicans leave comments blaming the Democrats.
Well you know what?
Both parties are to blame. Both of them get a failing grade.
If the Republicans really wanted to stop the federal government from running up all this debt they could have done it.
If the Democrats really wanted to stop the federal government from running up all this debt they could have done it.
So let’s not pretend that one of the political parties is “the hero” in this little drama.
The damage has been done, and both parties will go down in history as being grossly negligent on fiscal issues during this period of American history.
Sadly, neither party is showing any signs of changing their ways.
Neither Barack Obama nor Mitt Romney is promising to eliminate the federal budget deficit in 2013. They both talk about how the budget will be balanced “someday”, but as we have seen so many times in the past, “someday” never comes.
I didn’t mean to get all political in this article, but the truth is that the national debt threatens to destroy everything that previous generations have built, and our politicians continue to give us nothing but excuses.
The following are 27 things that every American should know about the national debt….
#1 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?
#2 If the average interest rate on U.S. government debt rises to just 7 percent, the U.S. government will find itself spending more than a trillion dollars per year just on interest on the national debt.
#3 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.
#4 Since Barack Obama entered the White House, the U.S. national debt has increased by an average of more than $64,000 per taxpayer.
#5 Barack Obama will become the first president to run deficits of more than a trillion dollars during each of his first four years in office.
#6 If you were alive when Jesus Christ was born and you spent one million dollars every single day since that point, you still would not have spent one trillion dollars by now.
#7 The U.S. national debt has increased by more than 1.6 trillion dollars since the Republicans took control of the U.S. House of Representatives. So far, this Congress has added more to the national debt than the first 97 Congresses combined.
#8 During the Obama administration, the U.S. government has accumulated more new debt than it did from the time that George Washington became president to the time that Bill Clinton became president.
#9 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.
#10 As Bill Whittle has shown, you could take every single penny that every American earns above $250,000 and it would only fund about 38 percent of the federal budget.
#11 Today, the government debt to GDP ratio in the United States is well over 100 percent.
#12 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.
#13 The United States already has more government debt per capita than Greece, Portugal, Italy, Ireland or Spain does.
#14 At this point, the United States government is responsible for more than a third of all the government debt in the entire world.
#15 The amount of U.S. government debt held by foreigners is about 5 times larger than it was just a decade ago.
#16 The U.S. national debt is now more than 22 times larger than it was when Jimmy Carter became president.
#17 It is being projected that the U.S. national debt will surpass 23 trillion dollars in 2015.
#18 Mandatory federal spending surpassed total federal revenue for the first time ever in fiscal 2011. That was not supposed to happen until 50 years from now.
#19 Between 2007 and 2010, U.S. GDP grew by only 4.26%, but the U.S. national debt soared by 61% during that same time period.
#20 The U.S. government has total assets of 2.7 trillion dollars and has total liabilities of 17.5 trillion dollars. The liabilities do not even count 4.7 trillion dollars of intragovernmental debt that is currently outstanding.
#21 U.S. households are now actually receiving more money directly from the U.S. government than they are paying to the government in taxes.
#22 The U.S. government is wasting your money on some of the stupidest things imaginable. For example, in 2011 the National Institutes of Health spent $592,527 on a study that sought to figure out once and for all why chimpanzees throw poop.
#23 If the federal government used GAAP accounting standards like publicly traded corporations do, the real federal budget deficit for last year would have been 5 trillion dollars instead of 1.3 trillion dollars.
#24 The Federal Reserve purchased approximately 61 percent of all government debt issued by the U.S. Treasury Department during 2011.
#25 At this point, the U.S. national debt is more than 5000 times larger than it was when the Federal Reserve was first created.
#26 If the federal government began right at this moment to repay the U.S. national debt at a rate of one dollar per second, it would take over 480,000 years to completely pay off the national debt.
#27 The official government debt figure does not even account for massive unfunded liabilities that the U.S. government will be hit with in the years ahead. According to Professor Laurence J. Kotlikoff, the U.S. government is facing a future “fiscal gap” of more than 200 trillion dollars.
As the U.S. economy continues to crumble, even more Americans are going to become financially dependent on the federal government.
For example, spending on food stamps has doubled since 2008. Millions of Americans have lost their jobs and have needed some assistance from the government. Since Obama became president the number of Americans on food stamps has gone from 32 million to 46 million.
But the Obama administration believes that a lot more Americans should be enrolled in the food stamp program. The Obama administration is now spending millions of dollars on ads that urge even more people to sign up for food stamps. In fact, their efforts to get even more Americans to sign up for food stamps have become very creative….
The government has been targeting Spanish speakers with radio “novelas” promoting food stamp usage as part of a stated mission to increase participation in the Supplemental Nutrition Assistance Program (SNAP), or food stamps.
Each novela, comprising a 10-part series called “PARQUE ALEGRIA,” or “HOPE PARK,” presents a semi-dramatic scenario involving characters convincing others to get on food stamps, or explaining how much healthier it is to be on food stamps.
I’m all for helping those that cannot feed themselves, but do we really need to run ads urging more people to become dependent on the government?
Of course Obamacare is going to cause our debt to balloon in size as well. It is being projected that Obamacare will add more than 2.6 trillion dollars to the U.S. national debt over the first decade alone.
So where are we going to get all this money?
We can’t keep spending money that we do not have. We have got to prioritize. Every single category of government spending needs to be cut.
But instead we feel like we can keep ripping off future generations of Americans and that we will always be able to get away with it.
What we have done to our children and our grandchildren is beyond criminal.
The truth is that we should have listened to the warnings of our founding fathers about government debt. For example, Thomas Jefferson once said that if he could add just one more amendment to the U.S. Constitution it would be a complete ban on all borrowing by the federal government….
I wish it were possible to obtain a single amendment to our Constitution. I would be willing to depend on that alone for the reduction of the administration of our government to the genuine principles of its Constitution; I mean an additional article, taking from the federal government the power of borrowing.
Where would we be today if we had taken the advice of Thomas Jefferson?
That is something to think about.
What is the biggest economic problem that the United States is facing? Very simply, our biggest problem is that we have way too much debt. Over the past 30 years, household debt, corporate debt and government debt have all grown much faster than our GDP has. But no nation on earth has ever been able to expand debt much faster than national output indefinitely. All debt bubbles eventually burst. Right now, we are living in the greatest debt bubble in the history of the world. All of this debt has fueled a “false prosperity” which has enabled many Americans to live like kings and queens. But no nation (or household) can pile on more debt forever. At some point the weight of the debt becomes just too great. It is amazing that the United States has been able to pile up as much debt as it has. Over the years, many authors have predicted that U.S. government finances would collapse long before the U.S. national debt ever got to this level. So the mountain of debt that we have accumulated is quite an “achievement” if you want to look at it that way. But the clock is ticking on this debt bubble and when it collapses we will say “bye bye” to our vastly inflated standard of living and we will discover that we have destroyed the economy for all future generations of Americans.
Sometimes a picture is worth a thousand words. When most Americans think of the “debt problem” in this country, they think of the debt of the federal government.
But that is not the only debt bubble that we are facing.
Thirty years ago, household debt in the United States was approaching the 2 trillion dollar mark. Today, it is sitting at about 13 trillion dollars….
We have been trained to pay for everything with debt.
We pay for our homes with debt, and mortgage debt as a percentage of GDP has more than tripled since 1955.
We pay for our cars with debt, and at this point about 70 percent of all auto purchases in the United States involve an auto loan.
We pay for higher education with debt, and the total amount of student loan debt in America recently surpassed the one trillion dollar mark.
Wherever we go we pay with plastic.
If you want a heated cat bed and a cute little cat sweater for your little kitty just put it on your Visa or Mastercard.
Amazingly, consumer debt in America has risen by a whopping 1700% since 1971, and if you can believe it, 46% of all Americans carry a credit card balance from month to month.
We are absolutely addicted to debt and we do not know how to stop.
State And Local Government Debt
Our state and local governments are also addicted to debt.
30 years ago, state and local government debt was approaching the 400 million dollar mark. Today, state and local government debt is hovering around the 3 trillion dollar mark….
In the United States today, we don’t just have one “government debt problem” – the truth is that we have hundreds of them. All over the country, state and local governments are facing bankruptcy because of too much debt.
For example, according to Fox News the city of Stockton, California is right on the verge of declaring bankruptcy. In fact, an announcement could come as early as this week….
Stockton, Calif., is set to declare bankruptcy as early as this week, according to local officials, a move that would make it one of the largest U.S. cities ever to file for reorganization.
On Monday, a state-required mediation with creditors to find a fiscal solution is scheduled to expire. Stockton’s City Council is then slated to meet Tuesday to decide whether to adopt a budget for operating in bankruptcy, a move widely considered the last step before the city formally submits a Chapter 9 petition to federal bankruptcy court.
Federal Government Debt
Of course the biggest offender of all is the federal government. 30 years ago, Ronald Reagan was running around proclaiming what a nightmare it was that the U.S. national debt was reaching the one trillion dollar mark.
Well, now we are about to blast through the 16 trillion dollar mark with no end in sight….
Running up debt at a much faster rate than our GDP is rising is a recipe for national financial suicide. Our politicians continue to steal about 150 million dollars an hour from future generations and everybody just acts like this is perfectly normal.
We are going down the same path that Greece, Portugal, Italy, Ireland and Spain have gone.
In fact, we already have more government debt per capita than all of those nations do.
Both political parties have been doing this to us, and it just keeps getting worse and worse.
Incredibly, the national debt has grown more under Obama in less than 4 years than it did under George W. Bush during his entire 8 year term.
Since Barack Obama entered the White House, we have accumulated more than five trillion dollars of additional debt.
We are on the road to national financial oblivion, and most Americans don’t seem to care.
Debt From Sea To Shining Sea
Now let’s add up all the debt in the country. When you total up all household debt, business debt and government debt, it comes to more than 300% of our GDP….
In fact, if current trends continue we will hit 400% of GDP before too long.
As you can see from the chart, there was a little “hiccup” during the last recession, but now the debt bubble is growing again.
So how high can it go before the entire system collapses?
Total credit market debt owed is roughly 10 times larger than it was about 30 years ago.
How in the world did we accumulate 10 times more debt in just 30 years?
If we do that again in the next 30 years, our total debt will be more than 500 trillion dollars in the 2040s.
Unfortunately, that is the way that debt spirals work. They either have to keep expanding or they collapse.
So will the U.S. debt spiral continue to expand?
Or will we soon see a collapse?
Sadly, this exact same thing is happening all over the world. The government debt to GDP ratio in Japan (the third largest economy in the world) blew past the 200% mark quite a while ago, and almost every country in the EU is absolutely drowning in debt.
The world has never faced anything quite like this. There is way, way too much debt in the world, but the only way we can continue to enjoy this level of prosperity under the current system is to pile up a lot more debt.
The western world is like a debt addict in a deep state of denial. Some debt addicts end up with dozens of credit card accounts. They will keep opening more accounts as long as someone will let them. Most debt addicts actually believe that they will be able to get out of the hole at some point, but most never do.
Most Americans still believe that we are experiencing “temporary” economic problems that will eventually go away. Most Americans still believe that even greater prosperity is still ahead.
Sadly, what the mainstream media and the two major political parties are telling them is a bunch of lies.
We have enjoyed the greatest prosperity that we will ever see in the United States, and when the debt bubble bursts there is going to be an immense amount of pain.
That is a very painful truth, but it is better to come to grips with it now than be blindsided by it later.
Do you believe that 2012 will be more difficult for the global economy than 2011 was? Well, that is what German Chancellor Angela Merkel believes. The woman that has become the most important politician in Europe recently declared that 2012 “will no doubt be more difficult than 2011″. The funny thing is that she has generally been one of the most optimistic public figures in Europe throughout this debt crisis. But now even Merkel is openly admitting that 2012 is going to be a really, really bad year. Sadly, most Americans simply do not understand how important Europe is or how interconnected the global financial system has become. The United States actually has a smaller population and a smaller economy than the EU does. In fact, the EU has an economy that is nearly as large as the economies of the United States and China combined. The EU also is home to more Fortune 500 companies that the U.S. is, and the European banking system is far larger than the U.S. banking system. Anyone that does not believe that a financial collapse in Europe will have a devastating impact on the U.S. economy is living in a fantasy world. Americans better start paying attention to what is going on over there, because we are about to be broadsided by a massive financial tsunami originating out of Europe.
It is not just Angela Merkel that is warning that 2012 is going to be a difficult year. The following are several more very prominent individuals that are warning that bad times are on the way….
*Citigroup’s chief equity strategist, Tobias Levkovich, recently made the following statement….
“Europe is likely to have a meaningful recession in 2012″
*Christine Lagarde, the head of the IMF, recently said that we could soon see conditions “reminiscent of the 1930s depression” and that no country on earth “will be immune to the crisis”.
* Willem Buiter, the chief economist at Citigroup, recently said the following….
“Time is running out fast. I think we have maybe a few months — it could be weeks, it could be days — before there is a material risk of a fundamentally unnecessary default by a country like Spain or Italy which would be a financial catastrophe dragging the European banking system and North America with it.”
* Even Paul Krugman of the New York Times is sounding quite apocalyptic….
“At this point I’d guess soaring rates on Italian debt leading to a gigantic bank run, both because of solvency fears about Italian banks given a default and because of fear that Italy will end up leaving the euro. This then leads to emergency bank closing, and once that happens, a decision to drop the euro and install the new lira. Next stop, France.”
I have written quite a bit recently about all of the signs that parts of Europe have already entered a recession.
Well, in just the past few days even more numbers have been released that indicate that a recession has now begun in Europe…..
-Manufacturing activity in the euro zone has fallen for five months in a row.
-Bad loans in Spain recently hit a 17-year high and the unemployment rate is at a 15-year high.
-Government revenues in Spain have not been up to the level that was expected. The Spanish government just announced that the budget deficit for 2011 is going to end up being much larger than anticipated.
-Unfortunately, it appears that virtually all sectors of the Spanish economy seem to be slowing down….
The central bank said early indicators show that Spanish tourism, exports, spending and investment have been hit, which is likely to have led to a contraction in GDP in the fourth quarter.
Of course one of the most alarming things happening in Europe is the rapid contraction of the money supply. It is almost impossible to avoid a recession when the money supply shrinks substantially. The following comes from an article a few days ago in the Telegraph….
Simon Ward from Henderson Global Investors said the ECB’s “narrow” M1 money figures – tracked for clues on shorter-term spending patterns – show a drastic divergence between the North and South of the eurozone. “Parts of the core may avoid recession but there is no light at the end of the tunnel for the periphery. Real M1 deposits in Greece and Portugal have been falling at an annual rate of roughly 20pc over the last six months,” he said.
Right now, the rest of Europe is heading down the same road that Greece has been traveling on for several years.
Today, Greece is essentially bankrupt and is experiencing a full-blown depression. At this point, nobody in Europe is even pretending that Greece is going to be okay. The following comes from a recent Der Spiegel article….
“With debts amounting to 150 percent of GNP, Greece is de facto bankrupt. Over the course of 2011, even the leading representatives of the euro zone finally accepted this fact — after having claimed its opposite a year previously.”
Greece desperately needs relief from all of this debt, but the other nations in the eurozone do not want to provide that relief. Instead, it looks like Germany is going to ask private creditors to take an even bigger “haircut” on Greek debt than previously proposed. The following comes from a recent Bloomberg article….
“Germany’s government declined to comment on a report that it may push for creditors to accept bigger losses on Greek debt than previously agreed upon, saying only that talks on lowering Greece’s debt level may end soon.
Germany is studying a proposal to write down 75 percent of Greek government bonds held by private creditors as part of a planned debt swap to ensure greater debt sustainability”
If Germany ends up publicly proposing this, it will shatter what confidence is left in European sovereign bonds.
There is not that much of a difference between a 75 percent haircut and a full default. If investors are forced to take a 75 percent haircut on Greek debt, then the financial world will have to start wondering if it is just a matter of time before giant haircuts are proposed for Italian debt, Spanish debt, Portuguese debt and Irish debt as well.
Hopefully Germany will not be this stupid.
But something has to be done about Greece. Right now the IMF is projecting that Greek debt will reach 200% of GDP at some point in 2012 if changes are not made.
Of course Greece could cut government spending even more, but the cuts that have already been made have pushed that country into a total economic nightmare.
In a recent article, I discussed how the brutal austerity measures that we have seen have plunged the economy of Greece into a full-blown depression….
Just look at what happened to Greece. Greece was forced to raise taxes and implement brutal austerity measures. That caused the economy to slow down and tax revenues to decline and so government debt figures did not improve as much as anticipated. So Greece was forced to implement even more brutal austerity measures. Well, that caused the economy to slow down even more and tax revenues declined again. In Greece this cycle has been repeated several times and now Greece is experiencing a full-blown economic depression. 100,000 businesses have closed and a third of the population is living in poverty. But now Germany and France intend to impose the “Greek solution” on the rest of Europe.
The “solution” that the EU and the IMF have imposed on Greece is not working.
So why are all of the other troubled nations in Europe being pushed down the same path?
Just consider the following statistics out of Greece….
*The unemployment rate for those under the age of 24 is 39 percent.
*The number of suicides has increased by 40 percent in the past year.
*Thefts and burglaries nearly doubled between 2007 and 2009.
Is that what we want to see throughout the rest of Europe?
The financial path that Europe is now on was criticized very harshly recently in the New York Times….
“Every government in Europe with the exception of Germany is bending over backwards to prove to the market that they won’t hesitate to do what it takes,” said Charles Wyplosz, a professor of economics at the Graduate Institute of Geneva. “We’re going straight into a wall with this kind of policy. It’s sheer madness.”
Yes, it is sheer madness.
Right now, authorities in Europe are desperately trying to keep a lid on this crisis. The European Central Bank has been trying really hard to keep the yield on 10 year Italian bonds from rising above the very important 7 percent level. But unless the ECB is prepared to spend hundreds and hundreds of billions of euros buying up Italian debt in 2012, the yield on Italian bonds is likely to go much higher eventually.
At this point, it is hard to find any economist that is optimistic about Europe or about the euro in 2012.
One of the leading economic think tanks in Europe, the Centre for Economics and Business Research, is extremely pessimistic about the future of the euro as we enter 2012….
“It now looks as though 2012 will be the year when the euro starts to break up”
In fact, they say that there is a 99 percent chance that the eurozone will break up within the next ten years.
Terry Smith, the chief executive of Tullett Prebon, recently used language that was even more apocalyptic….
“If the eurozone crisis could be solved by confident pronouncements, it would already be saved. I would be shocked if Greece does not leave the eurozone in 2012 and this does not lead the markets to test the resolve to defend the positions of Portugal, Spain, Italy and, ultimately, France.”
Yes, there are a whole lot of people out there saying that 2012 will be more difficult than 2011.
Fortunately, there are a few nations out there that are choosing to try some different things.
We aren’t hearing much about it in the United States, but right now Hungary is actually taking some measures to get their central bank under control.
The following comes from a recent article in the Telegraph….
Hungary passed laws for its central bank in a move that experts warned could jeopardise its chances of securing international bail-out funds if it needs them. Officials from the International Monetary Fund (IMF) have warned about the rules which will undermine the independence of the central bank. Hungarian prime minister Viktor Orban the country would not bow to the “European fashion that the central bank must be in a sacred state of independence”.
Of course the IMF is absolutely furious about this. The IMF is warning that there will be no bailouts for Hungary if they mess with the “independence” of the central bank.
But hopefully more countries out there will start going after their central banks. The truth is that it is the central banks and the endless debt spirals that they create that got us into this mess in the first place.
If central banking truly worked, Europe would not be in such a massive amount of trouble. The euro would not be dropping like a rock and the European financial system would not be paralyzed by panic and fear.
The reality is that central banking does not work and it a colossal failure.
For example, in the United States the U.S. dollar has lost well over 95 percent of its value since the Federal Reserve was created, and the U.S. national debt is now more than 5000 times larger than it was when the Federal Reserve was created.
It is amazing that there is anyone out there that is still willing to defend central banking.
2012 is going to be one of the most interesting years that we have seen in a long, long time.
Yes, 2012 will be more difficult than 2011 was, but it will also be a great opportunity to wake people up.
Our world is changing faster than ever before, and the Internet has made it possible for average people such as you and I to significantly participate in that change.
Resolve to do what you can to make a difference in this world in 2012, because time is rapidly running out.
How does a country end up 15 trillion dollars in debt? 30 years ago, we were just a little over a trillion dollars in debt. How in the world do supposedly rational people living in “the greatest nation on earth” allow themselves to commit national financial suicide by allowing government debt to explode like that? It almost seems like there should be some sort of official ceremony in Washington D.C. to commemorate this achievement. It really takes something special to be able to roll up 15 trillion dollars of debt. To get to this level, we really had to indulge in some wild spending. For example, did you know that the U.S. national debt grows by more than 2 million dollars every single minute? All of this debt has fueled an unprecedented boom of prosperity for the last 30 years, but now that prosperity is drying up. Today, there are over 45 million Americans that are on food stamps. America is being deindustrialized at a blinding pace and there are not nearly enough jobs for everyone. Poverty is exploding all over the nation, and millions of families have lost their homes to foreclosure. Unfortunately, there are zero solutions on the horizon. The leaders of both major political parties seem even more clueless right now than in past years. We really could use some hope, but hope is in very short supply.
When evaluating the health of America’s economy, it is important not to look at the short-term numbers. Rather, the key is to look at the long-term trends and the balance sheet numbers.
For example, if a mother and a father gave their teenage kids a bunch of credit cards and told them to go out and buy whatever they wanted, that would create a lot of “economic activity”, but it would also send that family to the poorhouse really quickly.
Well, we have basically done the same thing as a nation. We are drowning in debt, and all of this debt is going to destroy us financially.
Unfortunately, the federal government continues to spend money as if there was no tomorrow. Right now, spending by the federal government accounts for about 24 percent of GDP. Back in 2001, it accounted for just 18 percent.
When you are running up a credit card, it can be a lot of fun and it can seem like there aren’t any consequences.
But when it comes to debt, there are always consequences. The following is what former Republican Senator Alan Simpson (of the Simpson-Bowles Commission) recently had to say about the horrific debt crisis we are currently facing….
“It’s very simple. If you spend more than you earn, you lose your butt”
In the United States, we love to have the government spend money on all sorts of things, but we never want to pay for it.
So the debt just keeps piling up higher and higher.
A lot of Republicans say that spending on social programs has gotten out of control. A lot of Democrats say that spending on the military has gotten out of control.
They are both right. As I have written about previously, the U.S. military accounts for close to half of all the military spending in the world. In fact, U.S. military spending is greater than the military spending of the next 15 countries combined.
Yes, we will always need a very powerful military, but we can have one without going broke in the process.
But an even larger problem is our rampant spending on social programs.
The following comes from a recent article by Janet Tavakoli….
In 1950 spending for social programs was only one percent of the total Federal Budget. As the economy grew, social programs expanded to include Social Security, Medicare, Medicaid, Food Stamps, Unemployment Compensation, Supplemental Security for the Disabled, and educational programs. In 1983 as the United States pulled out of an ugly recession and brought inflation under control, social programs consumed 26% of the budget. In fiscal year 2012, they’ll eat up an estimated 57% of the budget.
Tens of millions of Americans have become absolutely addicted to government money. Nobody ever wants “their government benefits” to be cut, but nobody ever seems to want to have their taxes raised to pay for them.
To get a really good idea of how government transfer payments have absolutely skyrocketed over the years, just check out this chart.
Obviously, the course that we are on is not anywhere close to sustainable.
To say that the “war on poverty” was a failure would be a huge understatement.
The more money we seem to spend on social programs, the more that poverty seems to grow.
Right now, there are over 45 million Americans on food stamps. The economy is supposed to be “recovering”, but the number of Americans on food stamps has grown by over 8 percent in just the past year.
Food stamps are the modern equivalent of the old-fashioned bread lines. The federal government is now feeding an almost unbelievable number of Americans.
According to the Wall Street Journal, nearly 15 percent of all Americans are now on food stamps. That means that approximately one out of every seven Americans is dependent on the federal government for food.
That is not just a crisis – that is a total nightmare.
So what can be done?
Well, we certainly shouldn’t let our people starve in the streets.
But handouts should only be a temporary solution.
What these people really need are good jobs. Unfortunately, our “leaders” have created a business environment in this country that is incredibly toxic, and they have stood by as millions upon millions of good jobs have been shipped out of the country. That is one of the reasons why I write about the insane trade policies of the globalists over and over and over. The American people need to understand that globalization is going to mean a continuing loss of jobs for this country and it is going to result in the destruction of the middle class.
If we are not going to provide good jobs for American workers, then we are going to have to pay higher taxes in order to feed them and take care of them.
But what happens when the “safety net” breaks?
Even now, a lot of state and local governments all over the country are flat broke and they are cutting back on assistance for the poor.
The following is a brief excerpt from a recent article about this issue that was posted on the Fiscal Times….
For years, hundreds of thousands of people in dire straits – mentally or physically disabled, homeless and unemployed, ineligible for federal welfare, disability, or food subsidies – could generally count on state or local government largesse for modest handouts of cash to help scrape by. Under the rubric of “General Assistance,” these down-and-out Americans received modest payments – often no more than a few hundred dollars a month – to help defray the cost of necessities including rent, food, clothing, toilet paper, aspirin, phone cards, and bus tickets.
But in the midst of the worst recession of modern times and changing attitudes about the poor, many states have been gradually chipping away at general assistance programs or eliminating them altogether. Only 30 of 50 states currently offer any form of general assistance – down from 38 in 1989. And just this week, Washington State formally ended its “Disability Lifeline” program for an estimated 18,000 to 22,000 economically desperate residents.
Sadly, even more of us may be joining the ranks of the poor soon. The layoffs just keep on coming.
Normally, most major store closings do not happen until after the holiday season. You see, the reality is that most troubled retailers tend to want to bring in one more year of holiday sales before they finally shut the doors. If you announce store closings before the holidays, that is going to make holiday shoppers less likely to shop at those stores.
So that is why some of the recent store closing announcements have been so troubling.
For example, it just came out that all 46 Syms and Filene’s Basement stores are closing.
Also, Gap recently announced plans to close 189 stores in the United States.
So if this is what we are already seeing now, what is going to happen after the holidays?
That is a very good question.
So many jobs are being lost all around the nation. These days, there is massive competition for just about any job that is available.
People are getting desperate. They just want to be able to pay the bills and take care of their families.
The other day, thousands upon thousands of people lined up to apply for casino jobs in south Florida. Scenes like this are going to become even more frequent in the years ahead.
So do our politicians have any solutions?
Of course not.
The worst of the Republican candidates are actually at the top of the polls. The cold, hard truth is that Romney, Cain and Perry are all clueless when it comes to the economy.
Of course you might as well call Barack Obama “Captain Clueless” when it comes to the economy. Obama keeps giving great speeches about jobs while at the same time signing more “free trade” agreements that will send thousands more businesses and millions more jobs out of the country. Even the CEOs on Obama’s jobs creation panel are shipping huge numbers of jobs out of the United States.
Obama gave a speech in Washington D.C. today that exemplified his clueless approach to the economy. During the speech, Obama made the following statement….
“If Congress tells you they don’t have time, they got time to do it. We’ve been in the House of Representatives, what have you guys been debating? John, you’ve been debating a commemorative coin for baseball? You have legislation reaffirming that In God We Trust is our motto. That’s not putting people back to work. I trust in God, but God wants to see us help ourselves by putting people back to work”
First of all, Obama is not putting people back to work. He has been helping big corporations ship jobs out of the country at a record pace.
Secondly, how does he know what God wants?
A lot of people actually think that the phrase “God helps those who help themselves” is in the Bible.
But it isn’t.
A while after the Obama speech, White House Press Secretary Jay Carney made matters worse when he told reporters the following….
“I believe the phrase from the Bible is ‘The Lord helps those who help themselves”
But once again, there is no such verse in the Bible.
Okay, so quoting a “mystery verse” from the Bible is not that big of a thing at the end of the day, but this is yet another example of how the Obama administration just can’t seem to get anything right.
Look, everyone makes mistakes once in a while. I know that I certainly do.
But when you are wrong about almost everything almost all of the time, that is a major problem.
Especially when you are the president of the United States.
But both political parties are to blame for the mess that we are in. Budget deficits exploded during Republican administrations just like they have under the Democrats.
Both political parties are responsible for us being 15 trillion dollars in debt.
Both political parties are responsible for 45 million Americans being on food stamps.
Both political parties are responsible for the fact that there are not nearly enough good jobs.
If Barack Obama, Mitt Romney or Rick Perry is elected in 2012, we are just going to have more of the same.
America is running out of time. If we are going to change course, we need to do it immediately.
The borrower is the servant of the lender. We are enslaving ourselves and we are enslaving future American generations by going into so much debt.
Shame on the politicians that have rolled up so much debt in our name and shame on us for continuing to send those same politicians back to Washington D.C. time after time after time.
It is so sad to watch what is happening to America.