The 2009 Financial Report Of The U.S. Government has finally been released, and the news is not good. It basically confirms much of what we already know – that the United States government is a complete financial mess. The U.S. government budget deficit for 2009 was a record-setting 1.417 trillion dollars. The total liabilities of the U.S. government rose from 12.178 trillion dollars at the end of 2008 to 14.123 trillion dollars by the end of 2009. At their present rates of growth, the interest on the national debt and spending on entitlement programs will gobble up almost every single dollar of federal revenue by the end of the decade. Throughout the report, the word “unsustainable” is repeatedly used. The authors of the report understand that the U.S. government simply cannot keep spending and borrowing like it has been recently. But if the U.S. government slows down this reckless spending even a little bit it could literally plunge the U.S. economy into a deflationary depression. In fact, even with all of the “bailouts” and “stimulus packages” there are many who would argue that we are already in a depression. In any event, the authors of the report make it clear that the United States government is facing a financial crisis of unprecedented magnitude. (Read More...)
Is Moving Out Of The United States A Way To Escape The Coming Economic Collapse?
With the U.S. economy in a death spiral, many Americans have been wondering if moving out of the United States is a way to escape the coming economic collapse. While it is true that the U.S. economy will drag down the rest of the economies around the globe at least to an extent, the reality is that someone living on an island in the middle of nowhere will be able to weather the coming economic storm a whole lot better than someone in New York or Los Angeles. But is moving out of the United States a practical alternative? First of all, it is very important to realize that moving some to another country can cause a massive culture shock. Even a nation that you would think would be somewhat similar such as the U.K. can be radically different from what most Americans are accustomed to. In addition, in some cases there can be huge taxes and fees imposed on those moving to a new country. (Read More...)
The Chair Of The European Commission Calls For A European Economic Government
The recent economic collapse in Greece has caused a significant weakening of the Euro and has created a measure of financial panic all over Europe. So what solutions are being put forward by the governments of Europe? More centralization, more globalization and more power for the EU. For example, the German and French finance ministers have formulated a draft plan that would significantly strengthen “financial policy cooperation” within the EU. In essence, the plan would create the framework for a “European economic government” that would have substantial power over the economic decisions of member nations. But if Brussles continues to swallow more and more economic power, where does that do to the governments of individual member nations? (Read More...)
Has The United States Become A Nation With No Economic Spine?
What are hard working Americans who have scrimped and saved and have done everything “right” financially for decades supposed to think about all of these “bailouts” and of the massive financial mess in Washington? How are people who have handled their own finances admirably supposed to feel now that the foolishness of others is leading us all towards a horrific economic collapse? Well, a reader named “Mae” recently left a comment that I think does a good job of communicating what a lot of hard working Americans are feeling right now: My situation is this – we have lived our lives playing by the rules: never carried debt on a credit card that we couldn’t pay off by the due date. If we couldn’t afford the item, we didn’t buy it. We always had a Christmas Club which enabled us to pay cash for the holiday. We payed ourselves first after every paycheck whether it was $10 or $100, whatever we could afford. We made double payments on our mortgage when we could which helped us to pay off our modest home 10 years early. We knew that we couldn’t afford to “have it all” so we made our choices early on and stuck with it. We sacrificed the fancy vacations in order to do large home repairs (like a new roof) ourselves. We didn’t buy expensive cars and now own one outright and carry a small loan on another. That’s our only debt besides monthly bills. We chose jobs that provided health care benefits. We did everything right…we saved and saved and saved to have a decent retirement but of course last year took half the value of our 401k. (Read More...)
Day Of Reckoning: Congress Cuts Off Federal Unemployment Benefits For Millions Of Unemployed Americans
Starting on Monday, the unemployed in the U.S. will no longer be able to apply for federal unemployment benefits or the COBRA health insurance subsidy. This means that millions of Americans that have been unemployed for a long period of time may suddenly find themselves without an unemployment check and without any health coverage. You see, normally state-funded unemployment benefits last for about 26 weeks. After that, federal unemployment benefits kick in. During this recent economic crisis, the U.S. Congress has approved up to an additional 73 weeks of unemployment benefits for unemployed Americans. But now the U.S. Senate has not approved an extension, and so now millions of unemployed Americans that are relying on federal unemployment benefits will stop getting checks once their current federal benefits run out. Millions more will not be able to apply for federal unemployment benefits. (Read More...)
Federal Reserve Chairman Ben Bernanke Warns Congress That The Federal Reserve Will Not “Print Money” To Pay For The Exploding U.S. National Debt
On Wednesday, Federal Reserve Chairman Ben Bernanke warned Congress that the Federal Reserve does not plan to “print money” to help Congress finance the exploding U.S. national debt. In fact, Bernanke told Congress that the U.S. could soon face a debt crisis as bad as the one in Greece if the U.S. government does not get things in order financially. This represents a fundamental change in policy for the Federal Reserve, because they have been enabling the massive borrowing by the U.S. government over the past couple of years by “buying” the majority of new U.S. government debt that has been issued. But now the fat cats over at the Federal Reserve have apparently changed their minds. Using uncharacteristic bluntness, Bernanke told Congress that the Federal Reserve is “not going to monetize the debt”. (Read More...)
15 Reasons Why Barack Obama’s Declaration That “A Second Depression Is No Longer A Possibility” Is Dead Wrong
Is the United States economy headed for another Great Depression? Well, according to Barack Obama, that is no longer possible. According to Obama, the United States has avoided an economic collapse and is headed for another wonderful era of growth and prosperity. But is Obama right? Do the economic signs indicate that the U.S. is headed towards recovery or towards even more difficult times? As you shall see below, there is no way in the world that Barack Obama should have ever said that “a second depression is no longer a possibility”. In fact, as the U.S. financial system continues to crumble, it is likely that those words will be exploited by his political adversaries again and again. If you are a politician and you are going to issue a guarantee, you had better be able to deliver the goods. In this case, Obama is making a promise that defies all of the economic data. (Read More...)
The American Economy: The Wealthy Make The Mistakes But The Hard Working Middle Class Pays The Price
This is how the U.S. economy works much of the time – the wealthy make most of the big economic mistakes but the hard working middle class ends up paying for them. This time around is no exception. The financial crisis of the past several years was caused by Wall Street, but they got bailed out and relatively few of them lost their jobs. However, even though middle class and working class Americans were not the ones who made the mess, they are paying for it dearly. This is especially true when it comes to unemployment. While it is true that jobs are being lost on every level of American society, the reality is that unemployment is hitting Americans on the lowest end of the income scale the hardest. (Read More...)