Is This The Generation That Is Going To Financially Destroy America?

Did you know that the federal government is going to spend more than 4 trillion dollars this year?  To put that into perspective, U.S. GDP for the entire year of 2017 is going to be somewhere between 18 and 19 trillion dollars.  So when you are talking about 4 trillion dollars you are talking about a huge chunk of our economy.  But of course the federal government doesn’t bring in 4 trillion dollars a year.  At the beginning of Barack Obama’s first term, we were 10.6 trillion dollars in debt, and now we are nearly 20 trillion dollars in debt.  That means that we have been adding more than a trillion dollars a year to the national debt.  When you break that down, that means that we have essentially been stealing more than a hundred million dollars from future generations of Americans every single hour of every single day to pay for our debt-fueled lifestyle.  Even Federal Reserve Chair Janet Yellen is warning that this is not sustainable, and yet we just keep on doing it.

Nobody can pretend that what we have today is the kind of limited federal government that our founders intended.  When federal spending accounts for more than 20 percent of GDP, it is hard to argue that we haven’t moved very far down the road toward socialism.  As I mentioned above, total federal spending will surpass 4 trillion dollars for the first time ever in 2017…

Both the Congressional Budget Office and the White House Office of Management and Budget project that federal spending will top $4 trillion for the first time in fiscal 2017, which began on Oct. 1, 2016 and will end on Sept. 30.

In its “Update to the Budget and Economic Outlook: 2017 to 2027” published last week, CBO projected that total federal spending in fiscal 2017 will hit $4,008,000,000,000.

I was recently asked how we are going to pay for a 4 trillion dollar government if we abolish the income tax like I am proposing.

Well, the truth is that we would have to dramatically reduce the size and scope of the federal government.  Our founders always intended for the individual state governments to be much stronger than they are right now, and it is time for us to restore that constitutional balance.

Something desperately needs to be done, because we have a federal government that is completely and totally out of control.  Even the Congressional Budget Office agrees that we are headed toward absolute disaster if our leaders in Washington don’t start displaying some fiscal responsibility…

A large and continuously growing federal debt would increase the chance of a fiscal crisis in the United States. Specifically, investors might become less willing to finance federal borrowing unless they were compensated with high returns. If so, interest rates on federal debt would rise abruptly, dramatically increasing the cost of government borrowing. That increase would reduce the market value of outstanding government securities, and investors could lose money. The resulting losses for mutual funds, pension funds, insurance companies, banks, and other holders of government debt might be large enough to cause some financial institutions to fail, creating a fiscal crisis. An additional result would be a higher cost for private-sector borrowing because uncertainty about the government’s responses could reduce confidence in the viability of private-sector enterprises.

It is impossible for anyone to accurately predict whether or when such a fiscal crisis might occur in the United States. In particular, the debt-to-GDP ratio has no identifiable tipping point to indicate that a crisis is likely or imminent. All else being equal, however, the larger a government’s debt, the greater the risk of a fiscal crisis.

The likelihood of such a crisis also depends on conditions in the economy. If investors expect continued growth, they are generally less concerned about the government’s debt burden. Conversely, substantial debt can reinforce more generalized concern about an economy. Thus, fiscal crises around the world often have begun during recessions and, in turn, have exacerbated them.

I get so frustrated with Republicans in Congress, because they are supposed to be watching out for us.

During the 2010 elections, one of the biggest mid-term landslides of all time gave Republicans control of the House of Representatives and they have had it ever since.  One of the pillars of the “Tea Party revolution” was fiscal responsibility, but the national debt has just continued to explode.

When the Republicans took control of the House in early 2011, we were about 14 trillion dollars in debt, and now we are nearly 20 trillion dollars in debt.

We have been betrayed, and those that have done this to us need to be held accountable.

Of course the big reason why our politicians never want to control spending is because they know what it will do to our economy.

During the Obama years, we spent more than 9 trillion dollars that we didn’t have.  If we could somehow go back and take 9 trillion dollars out of the economy over those 8 years, we would be in the worst depression in U.S. history right now.

Nobody in Washington wants to be responsible for plunging us into an economic depression, and so they just keep stealing from the future in order to prop things up in the short-term.

And a similar thing could be said about central bank intervention.  If the Federal Reserve and other global central banks had not pumped trillions upon trillions of dollars into the financial system over the past 8 years, we would be in the midst of a horrific economic nightmare right now.

But now all of that “hot money” has created epic financial bubbles all over the planet, and when they finally burst the ensuing crisis will be far, far worse than if they had never intervened in the first place.

Global central banks now have more than 20 trillion dollars in assets on their balance sheets and the world is more than 217 trillion dollars in debt.  The desperate measures that national governments and central banks have been taking have delayed the coming crisis, but they have also guaranteed that it will be far worse than it could have otherwise been.

The stage is set for the worst financial crisis in world history, and the only way that it can continue to be delayed is for our leaders to continue to inflate the bubbles larger and larger and larger.

But of course no bubble can last forever, and the bigger they become the harder they burst.

The World Is Now $217,000,000,000,000 In Debt And The Global Elite Like It That Way

The borrower is the servant of the lender, and through the mechanism of government debt virtually the entire planet has become the servants of the global money changers.  Politicians love to borrow money, but over time government debt slowly but surely impoverishes a nation.  As the elite get governments around the globe in increasing amounts of debt, those governments must raise taxes in order to keep servicing those debts.  In the end, it is all about taking money from us and transferring it into government pockets, and then taking money from government pockets and transferring it into the hands of the elite.  It is a game that has been going on for generations, and it is time for humanity to say that enough is enough.

According to the Institute of International Finance, global debt has now reached a new all-time record high of 217 trillion dollars

Global debt levels have surged to a record $217 trillion in the first quarter of the year. This is 327 percent of the world’s annual economic output (GDP), reports the Institute of International Finance (IIF).

The surging debt was driven by emerging economies, which have increased borrowing by $3 trillion to $56 trillion. This amounts to 218 percent of their combined economic output, five percentage points greater year on year.

Never before in human history has our world been so saturated with debt.

And what all of this debt does is that it funnels wealth to the very top of the global wealth pyramid.  In other words, it makes global wealth inequality far worse because this system is designed to make the rich even richer and the poor even poorer.

Every year the gap between the wealthy and the poor grows, and it has gotten to the point that eight men have as much wealth as the poorest 3.6 billion people on this planet combined

Eight men own the same wealth as the 3.6 billion people who make up the poorest half of humanity, according to a new report published by Oxfam today to mark the annual meeting of political and business leaders in Davos.

This didn’t happen by accident.  Sadly, most people don’t even understand that this is literally what our system was designed to do.

Today, more than 99 percent of the population of the planet lives in a country that has a central bank.  And debt-based central banking is designed to get national governments trapped in endless debt spirals from which they can never possibly escape.

For example, just consider the Federal Reserve.  During the four decades before the Federal Reserve was created, our country enjoyed the best period of economic growth in U.S. history.  But since the Fed was established in 1913, the value of the U.S. dollar has fallen by approximately 98 percent and the size of our national debt has gotten more than 5000 times larger.

It isn’t an accident that we are 20 trillion dollars in debt.  The truth is that the debt-based Federal Reserve is doing exactly what it was originally designed to do.  And no matter what politicians will tell you, we will never have a permanent solution to our debt problem until we get rid of the Federal Reserve.

In 2017, interest on the national debt will be nearly half a trillion dollars.

That means that close to 500 billion of our tax dollars will go out the door before our government spends a single penny on the military, on roads, on health care or on anything else.

And we continue to pile up debt at a rate of more than 100 million dollars an hour.  According to the Congressional Budget Office, the federal government will add more than a trillion dollars to the national debt once again in 2018…

Unless current laws are changed, federal individual income tax collections will increase by 9.5 percent in fiscal 2018, which begins on Oct. 1, according to data released today by the Congressional Budget Office.

At the same time, however, the federal debt will increase by more than $1 trillion.

We shouldn’t be doing this, but we just can’t seem to stop.

Let me try to put this into perspective.  If you could somehow borrow a million dollars today and obligate your children to pay it off for you, would you do it?

Maybe if you really hate your children you would, but most loving parents would never do such a thing.

But that is precisely what we are doing on a national level.

Thomas Jefferson was strongly against government debt because he believed that it was a way for one generation to steal from another generation.  And he actually wished that he could have added another amendment to the U.S. Constitution which would have banned government borrowing…

“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.”

And the really big secret that none of us are supposed to know is that governments don’t actually have to borrow money.

But if we start saying that too loudly the people that are making trillions of dollars from the current system are going to get very, very upset with us.

Today, we are living in the terminal phase of the biggest debt bubble in the history of the planet.  Every debt bubble eventually ends tragically, and this one will too.

Bill Gross recently noted that “our highly levered financial system is like a truckload of nitro glycerin on a bumpy road”.  One wrong move and the whole thing could blow sky high.

When everything comes crashing down and a great crisis happens, we are going to have a choice.

We could try to rebuild the fundamentally flawed old system, or we could scrap it and start over with something much better.

My hope is that we will finally learn our lesson and discard the debt-based central banking model for good.

The reason why I am writing about this so much ahead of time is so that people will actually understand why the coming crisis is happening as it unfolds.

If we can get everyone to understand how we are being systematically robbed and cheated, perhaps people will finally get mad enough to do something about it.

The Debt Crisis Of 2017: Once Their Vacation Ends, Congress Will Have 4 Days To Avoid A Government Shutdown On April 29

April 2017 could turn out to be one of the most important months in U.S. history that we have seen in a very long time.  On April 6th, Donald Trump attacked Syria on the 100th anniversary of the day that the U.S. officially entered World War I, and now at the end of this month we could be facing an unprecedented political crisis in Washington.  On Friday, members of Congress left town for their two week “Easter vacation”, and they won’t resume work until April 25th.  What this means is that Congress will have precisely four days when they get back to pass a bill to fund government operations or there will be a government shutdown starting on April 29th.

Up to this point, there has been very little urgency by either party to move a spending bill forward.  It is almost as if everyone is already resigned to the fact that a government shutdown will happen.  The Democrats will greatly benefit from a government shutdown because they can just blame the entire mess on the Republicans.  But for the GOP, this is essentially the equivalent of political malpractice.

To me, there is simply no way that Congress is going to be able to agree on a bill that funds the entire government in just four days.  And it turns out that this upcoming deadline comes exactly on the 100th day of Trump’s presidency

The U.S. government is poised to shut down on Day 100 of Donald Trump’s presidency, unless Congress can pass a new spending bill or a continuing resolution before the current one expires on April 28.

Since Congress is currently on a two-week recess, there will be a sense of urgency to get a new bill passed once they reconvene on April 25. Leaders in both chambers would have four days to craft a new proposal that each side can agree on and get it on the president’s desk for Trump to sign.

If the Republicans control the White House, the Senate and the House of Representatives, why will it be so difficult to get an agreement on a spending bill?

Well, first of all, look at how difficult it was for the Republicans to agree on a bill to repeal and replace Obamacare.  At this point, it doesn’t look like that is going to happen at all.

More importantly, any bill to fund the government is going to require 60 votes in the Senate.  The “nuclear option” that the Republicans just used to push the Gorsuch Supreme Court nomination through is not available in this case under current Senate rules because a spending bill of this nature would not qualify.

So the Democrats have leverage, and they plan to use it to the maximum.  Senate Minority Leader Chuck Schumer is already promising to block any spending bill that includes funds for a border wall or that defunds Planned Parenthood

The threat from Senate Minority Leader Chuck Schumer and other Democratic leaders sets up a climactic first showdown with the president, particularly with their inclusion of Trump’s signature border wall proposal.

“If Republicans insist on inserting poison pill riders such as defunding Planned Parenthood, building a border wall, or starting a deportation force, they will be shutting down the government and delivering a severe blow to our economy,” Schumer said in a statement.

Up until now, Trump hasn’t needed Democratic votes to stock his cabinet or advance the repeal of Obamacare, but a spending bill keeping the government open is subject to a 60-vote threshold in the Senate.

Do you understand what this means?

President Trump is going to be under an immense amount of pressure to end the government shutdown once it begins, but to do so will mean that he has to give up his goal of getting a border wall.

Do you think that Trump will just throw in the towel and forget about his beloved border wall after giving countless speeches promising one?

It is a game of chicken between Trump and the Democrats, and I don’t think that either side will give in easily.

Of even greater importance is the debate over the funding of Planned Parenthood.

There are members of the Freedom Caucus that will absolutely not vote for any spending bill that includes funding for Planned Parenthood.  But without the Freedom Caucus, there aren’t enough Republican votes to get a spending bill through the House of Representatives.

Alternatively, Senate Minority Leader Chuck Schumer is vowing that his party will block any funding bill that attempts to defund Planned Parenthood in the Senate.

If Planned Parenthood is not defunded now, it never will be defunded.  This is one of the most pivotal moments in recent U.S. political history, and the outcome is going to have extraordinary consequences for our nation.

For those that are optimistic that there will not be a government shutdown, do you actually expect me to believe that this battle over the funding of Planned Parenthood will somehow get resolved in just four days?

Give me a break.

And of course there are dozens of other major issues that have to be resolved as well.  For example, Senator McCain is promising note to vote for any bill unless it includes an enormous increase in military spending, while many Senate Democrats would be very much against such a move.

I don’t see any way that a government shutdown is going to be avoided at this point, and the longer it goes on the more financial markets are going to get rattled.

Meanwhile, we continue to get even more signs that a substantial slowdown has begun for the U.S. economy.  Last week, we learned that only 98,000 jobs were added in March, and that was only about half of what most analysts were expecting.

And since it takes approximately 150,000 jobs a month just to keep up with population growth, that means that we are losing ground.

At the same time, the Atlanta Fed’s GDPNow forecasting model is now projecting that U.S. GDP growth for the first quarter of 2017 will be just 0.6 percent on an annualized basis.

That is absolutely pathetic, and as I have said before, I wouldn’t be surprised at all if we actually end up with a negative number for the first quarter.

If we do indeed get a negative number for the first quarter and that is followed by another negative number for the second quarter, that will mean that a new recession has already started right now but we just haven’t gotten official confirmation yet.

And lots of other things are already happening which have not happened since the last recession.  For instance, this is the first time since the last financial crisis when there has been no growth for commercial and industrial lending for at least six months.

In addition, commercial bankruptcies spiked during the last recession, and now it is happening again

Commercial bankruptcy filings, from corporations to sole proprietorships, spiked 28% in March from February, the largest month-to-month move in the data series of the American Bankruptcy Institute going back to 2012.

Of course consumer bankruptcies are rising at an alarming rate as well.  The following comes from Wolf Richter

In December, bankruptcy filings rose 4.5% from a year earlier. In January they rose 5.4%. It was the first time consumer bankruptcies rose back-to-back since 2010. I called it “a red flag that’ll be highlighted only afterwards as a turning point.”

In March, consumer bankruptcy filings rose 4% year-over-year, to 77,900, the highest since March 2015, when 79,000 filings occurred, according to the American Bankruptcy Institute data.  The turning point has now been confirmed.

If you would like, I could keep talking about the bad economic news for a couple thousand more words.  U.S. credit card debt has just surpassed the one trillion dollar mark, a major crisis has arrived for the U.S. auto industry, thousands of retail stores are closing all over America, our pension funds are underfunded by trillions of dollars, and the U.S. national debt is now sitting at a grand total that is just shy of 20 trillion dollars.  The only reason that we have not crossed that 20 trillion dollar mark yet is because the debt ceiling deadline has already passed, and that is another thing that Congress needs to address very quickly if they want to avoid a major crisis.

Needless to say, the last thing that we need at this point is another war or two on top of everything else.

Unfortunately, a U.S. aircraft carrier strike group headed by the USS Carl Vinson is heading toward North Korea right at this moment, and Russia and Iran are promising to “respond with force” to any new U.S. attacks on Syria.  I will be writing quite a bit more about all of this on End Of The American Dream later today.

Those that were hoping for some sort of “reprieve” under Donald Trump can forget all about that now.  The pace of global events is really starting to accelerate, and the U.S. is already in a more precarious position than it was at any point in 2016.

The clouds have been building for a very long time, and now the storm is almost upon us.  I hope that you have been getting prepared, because a day of reckoning for the United States of America is closing in very rapidly.

$21,714 For Every Man, Woman And Child In The World – This Global Debt Bomb Is Ready To Explode

Debt Bomb Globe - Public DomainAccording to the International Monetary Fund, global debt has grown to a staggering grand total of 152 trillion dollars.  Other estimates put that figure closer to 200 trillion dollars, but for the purposes of this article let’s use the more conservative number.  If you take 152 trillion dollars and divide it by the seven billion people living on the planet, you get $21,714, which would be the share of that debt for every man, woman and child in the world if it was divided up equally.

So if you have a family of four, your family’s share of the global debt load would be $86,856.

Very few families could write a check for that amount today, and we also must remember that we live in some of the wealthiest areas on the globe.  Considering the fact that more than 3 billion people around the world live on two dollars a day or less, the truth is that about half the planet would not be capable of contributing toward the repayment of our 152 trillion dollar debt at all.  So they should probably be excluded from these calculations entirely, and that would mean that your family’s share of the debt would ultimately be far, far higher.

Of course global debt repayment will never actually be apportioned by family.  The reason why I am sharing this example is to show you that it is literally impossible for all of this debt to ever be repaid.

We are living during the greatest debt bubble in the history of the world, and our financial engineers have got to keep figuring out ways to keep it growing much faster than global GDP because if it ever stops growing it will burst and destroy the entire global financial system.

Bill Gross, one of the most highly respected financial minds on the entire planet, recently observed that “our highly levered financial system is like a truckload of nitro glycerin on a bumpy road”.

And he is precisely correct.  Everything might seem fine for a while, but one day we are going to hit the wrong bump at the wrong time and the whole thing is going to go KA-BOOM.

The financial crisis of 2008 represented an opportunity to learn from our mistakes, but instead we just papered over our errors and cranked up the global debt creation machine to levels never seen before.  Here is more from Bill Gross

My lesson continued but the crux of it was that in 2017, the global economy has created more credit relative to GDP than that at the beginning of 2008’s disaster. In the U.S., credit of $65 trillion is roughly 350% of annual GDP and the ratio is rising. In China, the ratio has more than doubled in the past decade to nearly 300%. Since 2007, China has added $24 trillion worth of debt to its collective balance sheet. Over the same period, the U.S. and Europe only added $12 trillion each. Capitalism, with its adopted fractional reserve banking system, depends on credit expansion and the printing of additional reserves by central banks, which in turn are re-lent by private banks to create pizza stores, cell phones and a myriad of other products and business enterprises. But the credit creation has limits and the cost of credit (interest rates) must be carefully monitored so that borrowers (think subprime) can pay back the monthly servicing costs. If rates are too high (and credit as a % of GDP too high as well), then potential Lehman black swans can occur. On the other hand, if rates are too low (and credit as a % of GDP declines), then the system breaks down, as savers, pension funds and insurance companies become unable to earn a rate of return high enough to match and service their liabilities.

There is always a price to be paid for going into debt.  It mystifies me that so many Americans seem to not understand this very basic principle.

On an individual level, you could live like a Trump (at least for a while) by getting a whole bunch of credit cards and maxing all of them out.

But eventually a day of reckoning would come.

The same thing happens on a national level.  In recent years we have seen examples in Greece, Cyprus, Zimbabwe, Venezuela and various other European nations.

Here in the United States, more than 9 trillion dollars was added to the national debt during the Obama years.  If we had not taken more than 9 trillion dollars of consumption and brought it into the present, we would most assuredly be in the midst of an epic economic depression right now.

Instead of taking our pain in the short-term, we have sold future generations of Americans as debt slaves, and if they get the chance someday they will look back and curse us for what we have done to them.

Many believe that Donald Trump can make short-term economic conditions even better than Obama did, but how in the world is he going to do that?

Is he going to borrow another 9 trillion dollars?

A big test is coming up.  A while back, Barack Obama and the Republican Congress colluded to suspend the debt ceiling until March 15th, 2017, and this week we are going to hit that deadline.

The U.S. Treasury will be able to implement “emergency measures” for a while, but if the debt ceiling is not raised the U.S. government will not be able to borrow more money and will run out of cash very quickly.  The following comes from David Stockman

The Treasury will likely be out of cash shortly after Memorial Day. That is, the White House will be in the mother of all debt ceiling battles before the Donald and his team even see it coming.

With just $66 billion on hand it is now going to run out of cash before even the bloody battle over Obamacare Lite now underway in the House has been completed. That means that there will not be even a glimmer of hope for the vaunted Trump tax cut stimulus and economic rebound on the horizon.

Trump is going to find it quite challenging to find the votes to raise the debt ceiling.  After everything that has happened, very few Democrats are willing to help Trump with anything, and many Republicans are absolutely against raising the debt ceiling without major spending cut concessions.

So we shall see what happens.

If the debt ceiling is not raised, it will almost certainly mean that a major political crisis and a severe economic downturn are imminent.

But if the debt ceiling is raised, it will mean that Donald Trump and the Republicans in Congress are willingly complicit in the destruction of this country’s long-term economic future.

When you go into debt there are consequences.

And when the greatest debt bubble in human history finally bursts, the consequences will be exceedingly severe.

The best that our leaders can do for now is to keep the bubble alive for as long as possible, because what comes after the bubble is gone will be absolutely unthinkable.

Debt Apocalypse Beckons As U.S. Consumer Bankruptcies Do Something They Haven’t Done In Almost 7 Years

Bankrupt - Public DomainWhen debt grows much faster than GDP for an extended period of time, it is inevitable that a good portion of that debt will start to go bad at some point.  We witnessed a perfect example of this in 2008, and now it is starting to happen again.  Commercial bankruptcies have been rising on a year-over-year basis since late 2015, and this is something that I have written about previously, but now consumer bankruptcies are also increasing.  In fact, we have just witnessed U.S. consumer bankruptcies do something that they haven’t done in nearly 7 years.  The following comes from Wolf Richter

US bankruptcy filings by consumers rose 5.4% in January, compared to January last year, to 52,421 according to the American Bankruptcy Institute. In December, they’d already risen 4.5% from a year earlier. This was the first time that consumer bankruptcies increased back-to-back since 2010.

However, business bankruptcies began to surge in November 2015 and continued surging on a year-over-year basis in 2016, to reach a full-year total of 37,823 filings, up 26% from the prior year and the highest since 2014.

Of course consumer bankruptcies are still much lower than they were during the last financial crisis, but what this could mean is that we have reached a turning point.

For years, the Federal Reserve has been encouraging reckless borrowing and spending by pushing interest rates to ultra-low levels.  Unfortunately, this created an absolutely enormous debt bubble, and now that debt bubble is beginning to burst.  Here is more from Wolf Richter

The dizzying borrowing by consumers and businesses that the Fed with its ultra-low interest rates and in its infinite wisdom has purposefully encouraged to fuel economic growth, if any, and to inflate asset prices, has caused debt to pile up. That debt is now eating up cash flows needed for other things, and this is causing pressures, just when interest rates have begun to rise, which will make refinancing this debt more expensive and, for a rising number of consumers and businesses, impossible. And so, the legacy of this binge will haunt the economy – and creditors – for years to come.

Despite all of the economic optimism that is out there right now, the truth is that U.S. consumers are tapped out.

If the U.S. economy truly was doing great, major retailers would not be closing hundreds of stores.  Sears, Macy’s and a whole host of other big retailers are closing stores because those stores are losing money.  It truly is a “retail apocalypse“, and this trend is not going to turn around until U.S. consumers start to become healthier financially.

We also see signs of trouble in the auto sales numbers.  Compared to 2016, sales were way down in January this year

Compared to January last year, car sales collapsed for all three US automakers, and the largest Japanese automakers didn’t do much better:

  • GM -21.1%
  • Ford -17.5%
  • Fiat Chrysler -35.8%
  • Toyota -19.9%
  • Honda -10.7%
  • Nissan -9.0%

For all automakers combined, car sales sagged 12.2% from a year ago.

A lot of attention is given to our 20 trillion dollar national debt, and rightly so, but a similar amount of attention should be paid to the fact that U.S. households are collectively more than 12 trillion dollars in debt.

About two-thirds of the nation is essentially living paycheck to paycheck.  Most families really struggle to pay the bills from month to month, and all it would take is a major event such as a job loss or a significant illness to plunge them into financial oblivion.

In America today we are told that the secret to success is a college education, but most young Americans have to go deep into debt to afford such an education.

As a result, most college graduates start out life in the “real world” with a mountain of debt.  And since many of them never find the “good jobs” that they were promised, repayment of that debt becomes a very big issue.  In fact, the Wall Street Journal has discovered that student loan repayment rates are much worse than we were being told…

Last Friday, the Education Department released a memo saying that it had overstated student loan repayment rates at most colleges and trade schools and provided updated numbers.

When The Wall Street Journal analyzed the new numbers, the data revealed that the Department previously had inflated the repayment rates for 99.8% of all colleges and trade schools in the country.

The new analysis shows that at more than 1,000 colleges and trade schools, or about a quarter of the total, at least half the students had defaulted or failed to pay down at least $1 on their debt within seven years.

If you do find yourself deep in debt, a lot of families have found success by following a plan that was pioneered by author Dave Ramsey.  His “Debt Snowball Plan” really works, but you have to be committed to it.

Getting out of debt can be tremendously freeing.  So many people spend so many sleepless nights consumed by financial stress, but it doesn’t have to be that way.

Most of us have had to go into debt for some reason or another, and not all debt is bad debt.  For example, very few of us would be able to own a home without getting a mortgage, and usually mortgages come with very low interest rates these days.

But other forms of debt (such as credit card debt or payday loans) can be financially crippling.  When it comes to eliminating debt, it is often a really good idea to start with the most toxic forms of debt first.

It has been said that the borrower is the servant of the lender, and you don’t want to spend the best years of your life making somebody else rich.

Whether economic conditions turn out to be good or bad in 2017, the truth is that each one of us should be trying to do what we can to get out of debt.

Unfortunately, a lot of people never seem to learn from the past, and I have a feeling that both consumer and commercial bankruptcies will continue to rise throughout the rest of this year.

Generation Snowflake: Percentage Of Young Adults Living With Their Parents Hasn’t Been This High Since 1940

snowflake-public-domainHave we failed this generation of young adults by not equipping them to be able to handle the harsh realities of the real world?  According to the Wall Street Journal, the percentage of Americans in the 18 to 34-year-old age bracket that are currently living with their parents hasn’t been this high in 75 years.  At this point nearly 40 percent of our young adults in that age range are living at home, and many are concerned that this could have some alarming implications for the future of our nation.

In the United States today, more than 60 million people live in multi-generational households, and it is a good thing to have a tight family.  But at some point young adults need to learn how to live their own independent lives, and in millions of cases this independence is being delayed or is never happening at all.

There are many factors involved in this trend.  First of all, there is truly a lack of good jobs despite what we are being told about an “economic recovery”.  Millions of young adults are graduating from college only to discover that there is a very limited number of good jobs available for our college graduates.  So some college graduates are able to secure the types of jobs that they were hoping for, but millions of others are not.

Normally when a recession ends, the percentage of young adults living with their parents starts to go back down.  But this has not happened this time around.  Instead, the percentage of young adults that live at home has just continued to rise

The trend runs counter to that of previous economic cycles, when after a recession-related spike, the number of younger Americans living with relatives declined as the economy improved.

The result is that there is far less demand for housing than would be expected for the millennial generation, now the largest in U.S. history. The number of adults under age 30 has increased by 5 million over the last decade, but the number of households for that age group grew by just 200,000 over the same period, according to the Harvard Joint Center for Housing Studies.

Another major factor in all of this is the fact that Americans are getting married later in life than ever before and they are having fewer kids than previous generations.

In the old days, people got married young and they set up their own households even if they were dirt poor.  But these days we have hordes of single young adults that are perfectly content to sit at home and sponge off of Mommy and Daddy.

There seems to be a real lack of toughness to this generation of young adults, and many that have perceived this lack of toughness have resorted to referring to them as “Generation Snowflake”.  Over the past 12 months this term has become so common that the Guardian has dubbed it “the defining insult of 2016″…

Until very recently, to call someone a snowflake would have involved the word “generation”, too, as it was typically used to describe, or insult, a person in their late teens or early 20s. At the start of November, the Collins English Dictionary added “snowflake generation” to its words of the year list, where it sits alongside other vogue-ish new additions such as “Brexit” and “hygge”. The Collins definition is as follows: “The young adults of the 2010s, viewed as being less resilient and more prone to taking offence than previous generations”. Depending on what you read, being part of the “snowflake generation” may be as benign as taking selfies or talking about feelings too much, or it may infer a sense of entitlement, an untamed narcissism, or a form of identity politics that is resistant to free speech.

The phrase came to prominence in the UK at the beginning of 2016, after Claire Fox, director of the thinktank Institute of Ideas, used it in her book I Find That Offensive to address a generation of young people whom she calls “easily offended and thin-skinned”.

Of course there are exceptions.  I have some close friends that are young adults in this age range, and they are extraordinary people.

But overall, we seem to have dramatically failed this generation.  Maybe it is because we tend to baby our children from a very early age, and we want to protect them from danger so much that we never allow them to be exposed to the challenges that they need to face in order to toughen up and mature.

And it certainly doesn’t help that many of our young adults enter “the real world” already drowning in tens of thousands of dollars of debt.  According to CNN, about 70 percent of all college graduates in the U.S. will leave school with student loan debt, and the average loan balance for those college graduates is approximately $28,950.  Paying off student loan debt can be extremely painful, and it can be financially crippling for young people that are just trying to start their new lives.

When our high school kids are looking toward the future, we very much encourage them to go to the very best schools that they can possibly get into, and we tell them to not even worry about the cost.  We promise them that there will be plenty of good jobs once they graduate, and we push them into these loans without even warning them to consider the future implications.

According to a stunning article in the Wall Street Journal, many Baby Boomers are actually having money taken out of their Social Security checks because of unpaid student loans.  So when you go into student loan debt, it can literally haunt you for the rest of your life…

The government has collected about $1.1 billion from Social Security recipients of all ages to go toward unpaid student loans since 2001, including $171 million last year, the Government Accountability Office said Tuesday. Most affected recipients in fiscal year 2015—114,000—were age 50 or older and receiving disability benefits, with the typical borrower losing about $140 a month. About 38,000 were above age 64.

The report highlights the sharp growth in baby boomers entering retirement with student debt, most of it borrowed years ago to cover their own educations but some used to pay for their children’s schooling. Overall, about seven million Americans age 50 and older owed about $205 billion in federal student debt last year. About 1 in 3 were in default, raising the likelihood that garnishments will increase as more boomers retire.

What we are doing is clearly not working, but I am not particularly optimistic that this system will be fixed any time soon.

If you are a young person, you need to have a solid plan before pursuing an expensive college education.  Many young people just major in anything that they want without even considering if it will lead to a good career.  And instead of working hard to graduate in four years, many decide that they want to stretch the “college experience” out for five or six years so that they can party as much as possible before entering the real world.

The real world is a cold, cruel place, and if you start your new life drowning in debt that is just going to make things even more difficult for you.

On a personal note, I want to thank everyone that has supported the growth of The Most Important News.  It is a central news hub where you can find all of my articles, posts by incredible guest authors and many of the key news stories from all over the globe all gathered in one place.  Some technical issues have forced the site to be down for extended periods of time lately, but now it is being migrated to a much more powerful server.  I will not be updating it during the migration, but I should resume a normal posting schedule again very soon.

And I would like to thank all of my readers for making 2016 an absolutely amazing year.  I love you all, and I wish you all the very best as we head into what should prove to be a very “interesting” 2017.

The Shocking Truth About How Barack Obama Was Able To Prop Up The U.S. Economy

barack-obama-looking-into-a-mirror-public-domainBarack Obama is one of the biggest “Keynesians” of all time, but unfortunately most Americans don’t even understand what that means.  In this article, I am going to share with you the primary reason why Barack Obama has been able to prop up the U.S. economy over the past eight years.  If Barack Obama had not taken the extreme measures that he did, we would be in the midst of a historic economic depression right now.  But by propping things up in the short-term, he has absolutely demolished our long-term economic future.  But like most politicians, Obama has been willing to sacrifice the future for short-term political gain.

If you take any basic college course in economics, you are going to learn about John Maynard Keynes.  Without a doubt, Keynes was one of the most famous economists of the 20th century, and one of the things that he believed was that governments should go into debt and spend more money when an economic downturn strikes.  By injecting additional funds into the economy during a time of crisis, he believed that the severity of recessions and depressions could be reduced.  This approach ultimately become known as “Keynesian economics”, and in the post-World War II era virtually the entire world embraced it at least to some degree.  Here is more on Keynes from Investopedia

An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed by the British economist John Maynard Keynes during the 1930s in an attempt to understand the Great Depression. Keynes advocated increased government expenditures and lower taxes to stimulate demand and pull the global economy out of the Depression. Subsequently, the term “Keynesian economics” was used to refer to the concept that optimal economic performance could be achieved – and economic slumps prevented – by influencing aggregate demand through activist stabilization and economic intervention policies by the government. Keynesian economics is considered to be a “demand-side” theory that focuses on changes in the economy over the short run.

Keynesian economists correctly point out that there is a “multiplier effect” to government spending.  In other words, when the government spends money it ends up in the hands of ordinary people.  In turn, those people spend that money on various goods and services that they need, thus boosting overall economic activity.  And the more the money circulates, the more the economy is stimulated.  So one dollar of additional government spending does not just add one dollar to GDP.  Rather, the impact on GDP is often significantly greater than that.

Of course the bad news is that whenever the government borrows money it is stealing consumption from the future.  So we are literally destroying the future that our children and our grandchildren were supposed to have in order to make the present look a little bit brighter.

When Barack Obama entered the White House, the U.S. was in the midst of the worst financial crisis since the Great Depression.  The Bush administration had already begun to ramp up spending, but Barack Obama took “government stimulus” to ridiculous new levels.  The national debt has risen by an average of more than 1.1 trillion dollars a year while Obama has been in charge, and this fiscal year we are on pace to add more than 2 trillion dollars to the debt.

At this moment, the U.S. national debt is a whopping $19,901,545,151,126.51, and it will cross the 20 trillion dollar mark by the time Donald Trump is inaugurated on January 20th.

But when Barack Obama was inaugurated, the national debt was only 10.6 trillion dollars.  That means that we have added about 9.3 trillion dollars to the debt since that time.

So we have borrowed and spent 9.3 trillion dollars under Obama that we did not have.  But because of the “multiplier effect”, that 9.3 trillion dollars actually had a far greater impact on the U.S. economy.

Let’s be conservative and just double that number.  So that would give us an 18.6 trillion dollar overall impact on U.S. economic activity.  Spread over eight years, that comes to an average GDP impact of 2.325 trillion dollars a year.

But over the last eight years U.S. GDP has only been averaging about 16 trillion dollars a year.  So if you took away 2.3 trillion dollars a year, that would be about one-eighth of our entire economy.

In other words, without all of this debt that Barack Obama and Congress have been getting us into, we would be in the worst economic depression in U.S. history right now.

And I haven’t even factored in state and local government debt, corporate debt or household debt.  The truth is that I am not exaggerating one bit when I say that we are enjoying a debt-fueled standard of living that we simply do not deserve.

But even with all of this debt, the U.S. economy has still not been performing really well.  In fact, Barack Obama is going to be the only president in U.S. history to not have a single year when U.S. GDP grew by at least three percent.

Despite what many in the mainstream media are telling you, the reality of the matter is that Donald Trump is going to inherit an economy that is deeply troubled.  If you doubt this, please see my previous article entitled “11 Very Depressing Economic Realities That Donald Trump Will Inherit From Barack Obama“.

Donald Trump is talking about cutting taxes and reducing regulations, and all of those things are good, but ultimately those measures are not going to matter that much.

What is going to matter is what Donald Trump decides to do about our exploding debt.

If Donald Trump wants the U.S. economy to continue to remain at least somewhat stable in the short-term, he is going to have to keep piling up debt like Obama has.  Because if Trump and the Republicans decide that they want to get our debt under control, that will plunge us into a horrifying economic depression almost immediately.

But if Donald Trump continues to steal money from future generations of Americans at the same pace that Barack Obama has been doing, he will literally be destroying the future of America.  It will be a crime on a scale that is almost beyond words, and if they get a chance to do it, future generations of Americans will look back and curse him for what he has done to us.

So Donald Trump is really in a no-win situation when it comes to the economy.

The only way that he can match Obama’s performance is to do what Obama did, but by doing so he would literally be killing the future.

As a nation we have been consuming far more wealth than we produce for a very, very long time, and the only way that we have been able to do this is because we have been able to go into so much debt.

But now a day of reckoning is fast approaching, and I am not sure if Donald Trump even realizes that he will soon be faced with some incredibly heartbreaking choices.

The Total Amount Of Debt In The World Just Hit A Record $152,000,000,000,000 (152 Trillion)

globe-on-the-brink-of-disaster-public-domainIf anyone ever asks you how much debt there is in the world, now you will know the answer.  According to the IMF, the total amount of debt around the globe has now hit a staggering 152 trillion dollars.  That is an amount of money that is almost unimaginable, and the IMF says that it is equivalent to 225 percent of global GDP.  It is the biggest debt bubble in the history of the planet, and it is rising at an extremely alarming pace.  Experts all over the world agree that when this debt bubble finally bursts, it is going to create an economic crisis on a scale that humanity has never seen before.

When I first saw this number I was absolutely astounded at how reckless we all have become, and I was also amazed that there was hardly anything about this announcement in the mainstream media in the United States.  The following excerpt comes from a story in a major British news source

The International Monetary Fund has urged governments to take action to tackle a record $152tn debt mountain before it triggers a fresh global financial and economic crisis.

Warning that debt levels were not just high but rising, the IMF said it was vital to intervene early in order to mitigate the risks of a repeat of the damaging events that began with the collapse of the US sub-prime housing bubble almost a decade ago.

It said that new research in its half-yearly fiscal monitor covering 113 countries had shown that debt was currently 225% of global GDP, with the private sector responsible for two-thirds of the total.

Right now the mainstream media in the United States is so obsessed with Trump and Clinton that almost every other important story is pushed to the side, but it boggles my mind how this cannot be major front page news.

When we borrow money, consumption is transferred from the future to the present.  For example, if you put a 70 inch television on your credit card today, the quality of your lifestyle will immediately go up, but you won’t have that money to spend at some point in the future.  In fact, you are ultimately going to pay back significantly more money than you originally spent for the television.

So when we go into debt, we are literally destroying the future one dollar at a time.

On a national scale, what we are doing to our children, our grandchildren and all future generations of Americans is beyond criminal.  Thomas Jefferson and other founding fathers warned that government debt was simply thievery from future generations, and they were exactly right.  If future generations get the chance, they will look back and curse us for what we have done to them.

Earlier today I looked up our national debt, and it is currently sitting at $19,688,773,606,117.54.  That means that Barack Obama has officially become “the 9 trillion dollar man”.

When Barack Obama entered the White House, the U.S. government was 10.6 trillion dollars in debt, and now we are 19.6 trillion dollars in debt, and there is a very good chance that we could hit 20 trillion dollars by the time he leaves the White House on January 20th, 2017.

In a just society, the politicians that have done this to future generations of Americans would be going to jail, but instead we put them up on pedestals.

It is truly hard to grasp how much money “a trillion dollars” represents.

For instance, if you were alive when Jesus Christ was born, and you had spent a million dollars every single day since that time, you still would not have spent a trillion dollars by now.

Since Barack Obama entered the White House, we have been stealing more than 100 million dollars from future generations of Americans every single hour of every single day, and as Obama’s second term draws to a close the pace of that theft is accelerating according to Simon Black

In fact, for the 2016 fiscal year that ends in just ten more days, the US government’s debt growth of $1.36 trillion is on track to be the third biggest annual increase ever.

The only two years in all of US history that posted higher US debt growth were 2010 and 2011– the peak of the financial crisis.

Even more acutely, last month the US federal debt grew by $151.5 billion.

Not counting the financial crisis, and a few anomalous months following a debt ceiling reset, August 2016 was the single biggest expansion of US debt EVER.

How could we do this?

And I know that I have pointed the finger at Barack Obama a lot in this article, but the truth is that Republicans are highly to blame as well.

The Tea Party revolution of 2010 gave the Republicans control of the House of Representatives, and since that time they have also gained control of the Senate.  Without Republican approval, Barack Obama would not be able to spend a single penny.  The American people were counting on the Republicans to put a lid on the wild spending of Barack Obama and the Democrats, and the Republicans in Congress have completely failed.

Nobody wants to end the party.  Because without a doubt, cutting back on our wild borrowing and spending would seriously damage the economy in the present, and nobody wants to be responsible for that.

So now the only thing to do is to keep the party going for as long as possible until it ends in a horrible, fiery crash.

Overall, the total amount of debt in the United States is now roughly equivalent to 350 percent of U.S. GDP, and a day of reckoning is rapidly approaching.  Just consider what Charles Schwab’s chief investment strategist, Liz Ann Sonders, recently told Business Insider

Sonders noted that total debt — public, private, nonfinancial, and financial — had become 350% of gross domestic product, and that is already causing problems for the economy.

The question I get all the time is: When are we going to hit the wall? When are we going to hit the debt wall?” Sonders said. “I think we hit the debt wall in ’08, which unleashed a big round one of what I think will be a rolling set of crises — and not just in the US but globally.

And I very much agree with her.

We definitely “hit a wall” in 2008, but it was just “round one” of our problems.

The coming rounds are going to be even more painful, but most Americans don’t understand this.

Most Americans seem to believe that our debt-fueled standard of living can be sustained indefinitely and that there is nothing to be concerned about.

Unfortunately, the laws of economics cannot be defied forever, and eventually the American people are going to experience economic and financial pain on a scale that we have never seen before in our entire history.