The Silent Entitlements Monster: Social Security, Medicare And Interest On The Debt Will Gobble Up Every Single Tax Dollar By 2020

There is a silent monster that looms menacingly over U.S. government finances.  Every politician knows about it, but very few of them ever want to talk about it.  This silent monster grows larger every year, and yet nobody seems to know quite what to do about it.  Those who have closely analyzed this monster all seem to agree that one day it will create a financial tsunami of a magnitude that is absolutely unprecedented, but there is vast disagreement about how to escape this financial tsunami or if it is even possible to escape it.  The name of this monster is “entitlements” – Social Security, Medicare and other social Ponzi schemes that the U.S. government has locked itself into funding.  It would be hard to understate the seriousness of the problem that entitlements present.  In fact, according to an official U.S. government report, rapidly growing interest costs on the national debt together with spending on major entitlement programs will absorb approximately 92 cents of every dollar of federal revenue by the year 2019.  By 2020, that figure will be up around 100 cents of every dollar of federal revenue.  So that means that interest on the debt and spending on entitlement programs will eat up everything the U.S. government takes in before a penny is spent on anything else.  That is a recipe for national financial suicide. (Read More...)

79 Percent Of American Voters Say They Think The U.S. Economy Could Collapse – And They Are Absolutely Right

An overwhelming majority of American voters now believe that the United States could experience a total economic collapse.  According to the latest Fox News poll, 79 percent of U.S. voters believe “it’s possible the nation’s economy could collapse”, and the poll found that this belief in the fragility of the American economy cuts across the entire political spectrum.  The truth is that the American people, at least on some level, know that a day of reckoning is at hand.  For decades, America has been enjoying the biggest party in the history of the world, but unfortunately that party was fueled by a gigantic mountain of debt, and now the bills are starting to come due.  Unfortunately for those trying to do something about this economic mess, the American people are starting to realize that the U.S. economy is now basically a house of cards, and that could lead to massive financial panic when things really start to fall apart. (Read More...)

If The Money Supply Is Exploding Why Are We Not Seeing Rampant Inflation?

The U.S. money supply has been expanding at an absolutely unprecedented rate.  So why are we not experiencing rampant inflation?  Why is the U.S. dollar not falling through the floor?  Well, the truth is that all of this new money has gotten into the U.S. financial system but it is not getting into the hands of U.S. businesses and consumers.  In fact, even though the money supply is exploding, U.S. banks have dramatically decreased lending.  This has brought us to a very bizarre financial situation as a nation. (Read More...)

Has The State Of California Become The Epicenter Of The Economic Collapse Of America?

Once upon a time, California was the state that everyone wanted to move to.  The endless sunshine, the gorgeous weather, the beaches, the lure of Hollywood and a booming economy made it extremely attractive to millions of Americans who wanted to fulfill their “California dreams”.  But those days are long gone.  Now, the state of California has become an economic nightmare.  In fact, many would argue that California has now become the epicenter of the economic collapse of the United States.  Everything that once made California great is now being swamped by a tidal wave of unemployment, foreclosures, crime, budget cuts, traffic, taxes and natural disasters.  There is a reason why every year now many more people leave the state of California than move into it.  The state of California is suffering a slow economic death, and if something is not done it could end up being one of the biggest financial disasters in history. (Read More...)

Not Everyone Is Hurting – The Rich Get Richer As The Income Inequality Gap Explodes

Not everyone in America is hurting during this economic downturn. In fact, the wealthiest Americans are doing just fine. At a time when millions of Americans are losing their jobs and their homes, the folks at the top end of the income scale are actually seeing their incomes go up. In 2009, the number of millionaires in the United States rose 16 percent to 7.8 million at a time when tens of millions of other Americans were experiencing gut-wrenching economic despair. The truth is that the statistics and the data do not lie. Wealth and income are increasingly becoming concentrated in the hands of the wealthiest Americans. So just what in the world is going on? (Read More...)

Is The United States Headed For A Commercial Real Estate Crash Of Unprecedented Magnitude?

Will commercial real estate be the next shoe to drop in the ongoing U.S. financial crisis?  While most eyes are on the continuing residential real estate disaster, the reality is that the state of the commercial real estate market in America could soon be even worse.  Very few financial pundits are talking about this looming disaster but they should be.  The truth is that U.S. commercial property values are down approximately 40 percent since the peak in 2007 and currently approximately 18 percent of all office space in the United States is now sitting vacant.  That qualifies as a complete and total mess, but the reality is that the commercial real estate crisis is just starting. (Read More...)

Money Out Of Thin Air: Now Federal Reserve Chairman Ben Bernanke Wants To Eliminate Reserve Requirements Completely?

Up until now, the United States has operated under a “fractional reserve” banking system.  Banks have always been required to keep a small fraction of the money deposited with them for a reserve, but were allowed to loan out the rest.  But now it turns out that Federal Reserve Chairman Ben Bernanke wants to completely eliminate minimum reserve requirements, which he says “impose costs and distortions on the banking system”. At least that is what a footnote to his testimony before the U.S. House of Representatives Committee on Financial Services on February 10th says. So is Bernanke actually proposing that banks should be allowed to have no reserves at all? (Read More...)