Tax

If You Live In California Things Just Got A Whole Lot Worse

Why does the state of California seem to be so incredibly hopeless?  These days California can’t seem to do anything right, and if you live in California things just got a whole lot worse.  Governor Brown has announced that the state budget deficit for this year is going to be much larger than projected, that more government services are going to be cut and that voters are going to vote on another round of tax increases in November.  Meanwhile, unemployment is sitting at 11 percent and extended federal unemployment benefits for workers in the state are ending.  Because California is one of the worst places in the nation to conduct business, there has been a steady flow of companies leaving the state.  Those companies have taken a whole lot of good jobs with them.  Due to the lack of jobs and a steady stream of impoverished immigrants coming in from Mexico and other countries, poverty in the state has exploded and crime is rapidly increasing.  California may be the land of “endless sunshine”, but for the California economy there are only dark clouds on the horizon.  The state is coming apart at the seams and there is not much hope that things are going to turn around any time soon.

These days, California is very similar to Greece in many ways.

Just like Greece, California has had round after round of “austerity” and yet still cannot seem to balance the budget.

Even after all of the cuts that have been implemented in recent years, the California budget deficit is still going to be far larger than originally projected this year.  The following is from the Los Angeles Times….

Gov. Jerry Brown announced on Saturday that the state’s deficit has ballooned to $16 billion, a huge increase over his $9.2-billion estimate in January.

The bigger deficit is a significant setback for California, which has struggled to turn the page on a devastating budget crisis. Brown, who announced the deficit on YouTube, is expected to outline his full budget proposal on Monday in Sacramento.

“This means we will have to go much further, and make cuts far greater, than I asked for at the beginning of the year,” Brown said in the video.

During his remarks on YouTube, Governor Brown stated that California is “still recovering from the worst recession since the 1930s” and he stressed that hard choices are ahead.

But the California state government has already cut back in so many places.  For example, back in the late 1970s the state of California was number one in per-pupil spending on education, but now California has fallen to 48th place.

Unfortunately, Governor Brown does not believe that budget cuts alone will solve the problem.

So you know what that means.

Tax increases!

The tax increases that California voters will be voting on in November were outlined in a recent Bloomberg article….

Brown this week submitted more than 1.5 million signatures to place the tax measure on the ballot. It would temporarily raise the state sales tax, already the highest in the U.S., to 7.5 percent from 7.25 percent. It would also boost rates on income starting at $250,000. The 10.3 percent levy on those making $1 million or more would rise to 13.3 percent, the most of any state.

Get ready to fire up the moving vans.

The rest of the California economy may be falling apart, but moving companies will continue to do very well.

As I have written about previously, California has already experienced a net loss of approximately four million residents to other states over the past 20 years.

If the top rate on those making a million dollars or more a year hits 13.3 percent you will see a lot more wealthy people leave.

And thousands of businesses have left California in recent years as well.  Sadly, one survey found that CEOs ranked California as the worst place in the United States to do business for seven years in a row.

You would think that the state legislature would get the message.

Unfortunately they have not.

California absolutely suffocates businesses with rules and regulations and it gets worse with each passing year.

So lots of good jobs continue to leave the state.

As mentioned earlier, the official rate of unemployment in California is sitting at 11 percent.  That is almost 3 points higher than for the nation as a whole.

Of course the “official” numbers greatly understate the true scope of the unemployment problem, but for more on that you can check out this article.

However you want to look at it, the reality is that California has a massive unemployment problem.

Sadly, a whole bunch of unemployed workers in California are about to lose their unemployment benefits.

On Saturday, more than 200,000 unemployed Americans were dumped off the unemployment rolls.  Close to half of them live in California.

Instead of 99 weeks, unemployed workers in California will now only be able to collect unemployment benefits for a maximum of 79 weeks.

It is estimated that a total of 93,000 people in California have suddenly lost their benefits as a result of this change.

Unfortunately, the truth is that the employment picture in California is not really getting any better.  It is still incredibly difficult to find a decent job.

Unless you are “connected”, it can be a horribly frustrating experience trying to find a new job in this economic environment.

But if you are truly desperate, there are some folks out there who are always hiring.

These days, “national security” is quite a growth industry.  For example, if you are currently unemployed you can always apply to work as an Internment/Resettlement Specialist for the national guard.

While the economy is going to pot, you can get paid to lock up other Americans that are protesting about the state of our country.

Doesn’t that sound fun?

But seriously, if you live in California right now you probably don’t need anyone else to tell you how bad things are.

You probably already know that the number of children living in poverty in the state of California has increased by 30 percent since 2007.

California is rapidly changing, and not for the better.

But it is not just the economy that is falling apart in California.  The truth is that there are a whole host of good reasons to move away from California.  The traffic is nightmarish, crime is on the rise, the gangs are bigger and more active than ever before, millions of illegal immigrants have poured into the state, and the control freak politicians become more insane with each passing year.

Plus there is the constant threat that your home will be destroyed by a mudslide, a wildfire or an earthquake.

One of these days the “big one” will hit California.

You do not want to be there when that happens.

But if you decide that you do want to move from California, what is the best state to move to?

That is a very good question.

The truth is that economic conditions are horrible in most of the country and are rapidly getting a whole lot worse.

According to one poll, 30 percent of all Americans described the condition of the economy as “good” back in February but only 20 percent do now.

When we enter the next major economic downturn, unemployment is going to go higher everywhere in the nation.

There will be small pockets where jobs are still plentiful (where the oil industry is strong for example) but almost everywhere else will be really hurting.

So what do all of you think?

For people looking to move away from California, where should they go?

Please feel free to post a comment with your thoughts below….

Why New York Times Economist Paul Krugman Is Partly Right But Mostly Wrong

In recent days, New York Times economist Paul Krugman has been doing a whole bunch of interviews in which he has declared that the solution to our economic problems is very easy.  Krugman says that all we need to do to get the global economy going again is for the governments of the world to start spending a lot more money.  Krugman believes that austerity is only going to cause the economies of the industrialized world to slow down even further and therefore he says that it is the wrong approach.  And you know what?  Krugman is partly right about all of this.  The false prosperity that the United States and Europe have been enjoying has been fueled by unprecedented amounts of debt, and in order to maintain that level of false prosperity we are going to need even larger amounts of debt.  But there are several reasons why Krugman is mostly wrong.  First of all, we have not seen any real “austerity” yet.  Even though there have been some significant spending cuts and tax increases over in Europe, the truth is that nearly every European government is still piling up more debt at a frightening pace.  Here in the United States, the federal government continues to spend more than a trillion dollars a year more than it brings in.  If the United States were to go to a balanced federal budget, that would be austerity.  What we have now is wild spending by the federal government beyond anything that John Maynard Keynes ever dreamed of.  Secondly, Krugman focuses all of his attention on making things more comfortable for all of us in the short-term without even mentioning what we might be doing to future generations.  Yes, more government debt would give us a short-term economic boost, but it would also make the long-term financial problems that we are passing on to our children even worse.

It is important to understand that Paul Krugman is a hardcore Keynesian.  He believes that national governments can solve most economic problems simply by spending more money.  His prescription for the U.S. economy in 2012 was summarized in a recent Rolling Stone article….

The basic issue, says Krugman, is a lack of demand. American consumers and businesses, aren’t spending enough, and efforts to get them to open their wallets have gone nowhere. Krugman’s solution: The federal government needs to step in and spend. A lot. On debt relief for struggling homeowners; on infrastructure projects; on aid to states and localities; on safety-net programs. Call it “stimulus” if you like. Call it Keynesian economics, after the great economic thinker (and Krugman idol) John Maynard Keynes, who first championed the idea that government has an essential role in saving the free market from its own excesses.

So is Krugman right?

Would the U.S. economy improve if the federal government borrowed and spent an extra half a trillion dollars this year for example?

Yes, it would.

But it would also get us half a trillion dollars closer to bankruptcy as a nation.

Krugman claims that “austerity” has failed, but the truth is that we have not even seen any real “austerity” yet.

When a government spends more than it brings in, that is not real austerity.

People talk about the “austerity” that we have seen in places such as Greece and Spain, but the truth is that both nations are still piling up huge amounts of new debt.

So let’s not pretend that the western world is serious about austerity.

The goal for most European nations at this point is to get their debts down to “sustainable” levels.

But for economists such as Krugman, this is a very bad idea.  Krugman insists that cutting government spending during a recession is a very stupid thing to do.  The following is from one of his recent articles in the New York Times….

For the past two years most policy makers in Europe and many politicians and pundits in America have been in thrall to a destructive economic doctrine. According to this doctrine, governments should respond to a severely depressed economy not the way the textbooks say they should — by spending more to offset falling private demand — but with fiscal austerity, slashing spending in an effort to balance their budgets.

Critics warned from the beginning that austerity in the face of depression would only make that depression worse. But the “austerians” insisted that the reverse would happen. Why? Confidence! “Confidence-inspiring policies will foster and not hamper economic recovery,” declared Jean-Claude Trichet, the former president of the European Central Bank — a claim echoed by Republicans in Congress here. Or as I put it way back when, the idea was that the confidence fairy would come in and reward policy makers for their fiscal virtue.

Yes, Krugman is correct that government austerity measures will only make a recession worse.

Just look at what has happened in Greece.  Wave after wave of austerity measures has pushed Greece into an economic depression.  If you want to see what austerity has done to the unemployment rate in Greece, just check out this chart.

As other nations across Europe have taken measures to get debt under control, we have seen similar economic results all across the continent.

The overall unemployment rate in the eurozone has hit 10.9 percent which is a new all-time high, and youth unemployment rates throughout Europe are absolutely skyrocketing.

Right now there are already 12 countries in Europe that are officially in a recession, and in many European nations manufacturing activity is slowing down dramatically.

So, yes, austerity is not helping short-term economic conditions in Europe.

But what are the nations of the western world supposed to do?

According to Krugman, they are supposed to run up gigantic amounts of new debt indefinitely.

And that is what the United States is doing right now.  But at some point the clock strikes midnight and all of a sudden you have become the “next Greece”.

U.S. government debt is already rising much, much faster than U.S. GDP is.

Between 2007 and 2010, U.S. GDP grew by only 4.26 percent, but the U.S. national debt soared by 61 percent during that same time period.

Today, the U.S. national debt is equivalent to 101.5 percent of U.S. GDP.

But Paul Krugman does not consider this to be a major problem.

The Obama administration is currently stealing approximately 150 million dollars from our children and our grandchildren every single hour to finance our reckless spending, but for Paul Krugman that is not nearly good enough.

To Krugman, the only thing that is important is what is happening right now.  Apparently the future can be thrown into the toilet as far as he is concerned.

The founder of PIMCO, Bill Gross, told CNBC on Tuesday that the U.S. government is likely to be hit with another credit rating downgrade this year if something is not done about our exploding debt.

The United States already has more government debt per capita than Greece, Portugal, Italy, Ireland or Spain does.

But Krugman insists that the solution to our economic problems is even more debt and even more spending.

In a previous article, I detailed how we are doomed if the U.S. government keeps spending money wildly like this and we are doomed if the U.S. governments stops spending money wildly like this.

If we keep running trillion dollar deficits every year, at some point our financial system will collapse, the U.S. dollar will fail, and we will essentially be facing national bankruptcy.

But if the federal government stops borrowing and spending money like this, our debt-fueled prosperity will rapidly disappear, unemployment will shoot well up into double digits, and we will soon have mass rioting in major U.S. cities.

The truth is that we have already been following Paul Krugman’s economic prescription for the nation for decades.  Our 15 trillion dollar party has funded a standard of living unlike anything the world has ever seen, but the party is coming to an end.

The Federal Reserve is trying to keep the party going by buying up huge amounts of government debt.  The Fed actually purchased approximately 61 percent of all government debt issued by the U.S. Treasury Department in 2011.

It is a shell game that cannot go on for too much longer.

The national debt crisis can be delayed for a while, but at some point the house of cards is going to come crashing down on top of us all.

If Paul Krugman wanted to talk about real solutions he could talk about shutting down the Federal Reserve and he could talk about going to an entirely debt-free currency.

But we all know that is not going to happen, don’t we?

As I have written about before, the Federal Reserve was designed to be a perpetual government debt machine.  The system was designed to have the amount of money and the amount of government debt constantly expand.

And it has been working quite well in that regard.  At this point, the U.S. national debt is more than 5000 times larger than it was when the Federal Reserve was first created.

But Paul Krugman is not going to talk about the real issues.  Instead, he is just going to keep running around declaring that more government spending and more government debt will solve all of our problems.

It is a very big lie, but millions of people are going to believe it.

Class Warfare Is Being Used To Divide America – And It Is Working

At a time when America desperately needs to come together, we are becoming more divided than ever.  The mainstream media and most of our politicians love to pit us against one another in dozens of different ways, and right now class warfare has become one of their favorite tools for getting us to hate one another.  If you are struggling in this economy, you are being told that “the wealthy” are the cause of your problems.  If you have money, you are being told that the poor hate you and want to tax you into oblivion.  Class warfare has already become a dominant theme in the 2012 race for the White House, and there will certainly be endless speeches given along these lines by politicians from both major political parties all the way up to election day.  Class warfare will be used by both sides as a way to divide America and get votes.  And the frightening thing is that it is clearly working.  There is more hatred between the poor and the wealthy in America today than at any other time that I can remember.  But hating people because of how much money they have or don’t have is not going to solve anything.  Instead, it is just going to cause more problems.

The other day, Yale economics professor Robert Shiller told CNBC that the globe is already in a state of “late Great Depression“.  The United States is heading into unprecedented economic and financial problems and we desperately need to pull together as a country and solve these problems.

But instead, our leaders are tapping into the politics of division in a desperate attempt to get elected in the fall.

Rather than focus on real issues and real solutions, our politicians attempt to make “the wealthy” or “welfare recipients” the focus of our debates.

Well, you know what?

Most people that are rich and most people that are poor are not purposely trying to abuse the system.  Most of them are hard working people that are trying to do the best that they can in a world that is increasingly going crazy.

These days, the Occupy Wall Street crowd loves to talk about how evil the “1 percent” is.  But most of the “1 percent” are people that have worked really hard and that have been fortunate enough to get some really good breaks in life.

Yes, there are some among the “1 percent” that do some really bad things.  The too big to fail banks and the big money managers on Wall Street should be held accountable for the crimes that they have committed.

But most wealthy Americans are not trying to oppress the poor.  Most of them are just trying to do the best that they can for themselves and their families.

Neither are most poor people trying to abuse the system either.

Yes, without a doubt there are some that do not want to work and that want to live on government benefits indefinitely.

But that is a minority.

Most Americans that are receiving government benefits today would rather be working good jobs that would enable them to provide for their families.

Most Americans understand that government handouts can never provide dignity and hope for a better future.

But if you don’t demonize the poor and you point out the decline of the middle class, many Republicans will call you a “liberal” or a “socialist”.

And if you don’t demonize the rich and you don’t blame them for all of our economic problems, many Democrats will call you a “pig” or a “fascist”.

Unfortunately, playing the blame game is not going to get us anywhere.

The number of Americans living in poverty increased dramatically under George W. Bush and it also increased dramatically under Barack Obama.

Our country is drowning in debt, millions of our jobs are being shipped overseas, the middle class is shrinking at an astounding pace, and the Federal Reserve continues to destroy our financial system.

Getting angry at the wealthy or the poor is not going to fix those problems.

But it will distract us from the reality that both major political parties have been doing a horrible job.

Sadly, Americans seem to really enjoy blaming one another these days.  Just check out some of the slogans that have been seen on various signs at Occupy Wall Street protests….

“They Only Call It Class Warfare When We Fight Back”

“Eat The Rich – Feed The Poor”

“The Rich Are Wrecking The Planet”

So will destroying the lives of the rich solve our problems?

Of course not.

The truth is that we should want millions more Americans to be prosperous.  We should be cheering for one another instead of tearing one another down.

But that is heresy to many on the left.

On the right, it is heresy even to mention that our tax system is fundamentally flawed and that it has thousands of loopholes that are being abused by the very wealthy.

In a previous article, I detailed how many of the largest and most profitable corporations in America get away with paying absolutely nothing in taxes.

There is something very wrong with that.

Our income tax system should be abolished altogether, but if we do have to pay income taxes, then it is fundamentally unfair for some people and businesses to be able to pay little or nothing while the rest of us get absolutely obliterated by taxes.

But if you try to say that to many on the right, they will look at you in horror.

The other day, there was a New York Times article that detailed the extreme measures that Apple takes to avoid paying taxes.  It turns out that Apple sets up shell offices all over the globe in order to evade taxation….

As it has in Nevada, Apple has created subsidiaries in low-tax places like Ireland, the Netherlands, Luxembourg and the British Virgin Islands — some little more than a letterbox or an anonymous office — that help cut the taxes it pays around the world.

That same article talked about how Apple has become a model which hundreds of other companies have followed.  To giant corporations such as Apple, tax evasion has become an art form….

Apple, for instance, was among the first tech companies to designate overseas salespeople in high-tax countries in a manner that allowed them to sell on behalf of low-tax subsidiaries on other continents, sidestepping income taxes, according to former executives. Apple was a pioneer of an accounting technique known as the “Double Irish With a Dutch Sandwich,” which reduces taxes by routing profits through Irish subsidiaries and the Netherlands and then to the Caribbean. Today, that tactic is used by hundreds of other corporations — some of which directly imitated Apple’s methods, say accountants at those companies.

So what is the solution to all of this?

Raising income taxes won’t work too well because the tax lawyers are always several steps ahead of our politicians.

The truth is that when taxes get raised it is always the middle class that gets absolutely clobbered and the wealthy always find more ways to reduce their exposure.

Just take a look at Mitt Romney.  He made more than 42 million dollars in 2010 and yet Romney had an effective tax rate of only 14 percent.

If I could find a way to have an effective tax rate of only 14 percent I would be jumping up and down for joy, and so would millions of other Americans.

Our tax system is deeply, deeply broken and needs to be thrown into the trash can.

Abandoning the current tax system would not solve all of our problems, but it would be a start.

Unfortunately, neither political party is willing to even consider this.

Instead, the Democrats want to raise taxes a little bit and the Republicans want to lower taxes a little bit.

But neither alternative will do much of anything to solve any of the real problems we are facing.

Our economy is dying and it is not producing nearly enough jobs for all of us.  When Barack Obama took office, the number of “long-term unemployed workers” in America was 2.6 million.  Today, it is 5.3 million.

At this point, an astounding 53 percent of all college graduates under the age of 25 are either unemployed or underemployed.

So where is all of the “change” that Obama promised?

Things just keep getting worse.

Since Obama has been in the White House, 14 million more Americans have gone on food stamps, and more than 25 percent of all American children are enrolled in the program today.

How will class warfare help those people?

Will blaming the wealthy make things better for them?

They are already receiving government handouts.

Will increasing those handouts a little bit more fundamentally change their lives for the better?

Of course not.

What those people need are good jobs.

But instead, both the Democrats and the Republicans continue to pursue the same job killing policies that have been destroying American jobs for decades.

Without good jobs, the number of Americans dependent on the government is going to continue to grow.

In a previous article, I detailed the explosive growth of social welfare benefits that we have seen under both Republicans and Democrats….

Back in 1960, social welfare benefits made up approximately 10 percent of all salaries and wages.  In the year 2000, social welfare benefits made up approximately 21 percent of all salaries and wages.  Today, social welfare benefits make up approximately 35 percent of all salaries and wages.

The goal should not be to rape the rich and give out even more social welfare benefits.

Instead, the goal should be to develop an economy that creates good jobs.

We need have an economy that empowers individuals and small businesses.

Instead, we have an economy dominated by big government and big corporations.

We have an economy that funnels the vast majority of the economic rewards to a tiny elite while most of the rest of us struggle.

Just consider the following statistics….

*Back in the 1970s, the top 1 percent of all income earners in the United States brought in about 8 percent of all income.  Today, they bring in about 21 percent of all income.

*The following is how income gains in the U.S. were distributed during 2010….

-37 percent of all income gains went to the top 0.01 percent of all income earners

-56 percent of all income gains went to the rest of the top 1 percent

-7 percent of all income gains went to the bottom 99 percent

*In America today, the wealthiest one percent of all Americans have a greater net worth than the bottom 90 percent combined.

*According to Forbes, the 400 wealthiest Americans have more wealth than the bottom 150 million Americans combined.

So what is the solution to that problem?

Is it to attack the rich and take away all their money and give more government handouts to the poor?

Of course not.

Rather, we need to change the rules of the game so that individuals and small businesses are empowered to succeed.

We need to decentralize economic power and dramatically reduce the undue influence that big government and giant corporations have over our economic system.

We need to create an environment where almost anyone that has a good idea and that is willing to work hard can succeed.

But instead of focusing on real solutions like shutting down the Federal Reserve, converting to debt-free currency, eliminating the income tax, shutting down the IRS, massively reducing the size of government and getting rid of thousands upon thousands of unneeded regulations, the mainstream media and our politicians are going to continue to try to get Americans to blame one another for our problems.

The efforts to divide America are working, and hatred is growing to unprecedented levels in this country.

Eventually this will lead to mass rioting in our major cities and that will make our problems far worse.

Hatred and division are not going to bring us a better future.

They are only going to destroy us from within.

We don’t need hate.

What we need is more love and more solutions.

Unfortunately, our leaders are leading us down a very dark path, and we are heading for a future that is going to be a complete mess.

22 Signs That The Collapsing Spanish Economy Is Heading Into A Great Depression

What happens when debt-fueled false prosperity disappears?  Just look at Spain.  The 4th largest economy in the eurozone was riding high during the boom years, but now the Spanish economy is collapsing with no end in sight.  When a debt bubble gets interrupted, the consequences can be rather chaotic.  Just like we saw in Greece, austerity is causing the economy to slow down in Spain.  But when the economy slows down, tax revenues fall and that makes it even more difficult to meet budget targets.  So even more austerity measures are needed to keep debt under control and the cycle just keeps going.  Unfortunately, even with all of the recently implemented austerity measures the Spanish government is still not even close to a balanced budget.  Meanwhile, the housing market in Spain is crashing and unemployment is already above 24 percent.  The Spanish banking system is a giant, unregulated mess that is on the verge of a massive implosion, and the Spanish stock market has been declining rapidly.  The Spanish government is going to need a massive bailout and so will the entire Spanish banking system.  But that is going to be a huge problem, because the Spanish economy is almost 5 times as large as the Greek economy.  When the Spanish financial system collapses, the entire globe is going to feel the pain and there will be no easy solution.

So just how bad are things in Spain at this point?

The following are 22 signs that the collapsing Spanish economy is heading into a great depression….

#1 The unemployment rate in Spain has reached 24.4 percent – a new all-time record high.  Back in April 2007, the unemployment rate in Spain was only 7.9 percent.

#2 The unemployment rate in Spain is now higher than the U.S. unemployment rate was during any point during the Great Depression of the 1930s.

#3 According to CNBC, some analysts are projecting that the unemployment rate in Spain is going to go above 30 percent.

#4 The unemployment rate for those under the age of 25 in Spain is now a whopping 52 percent.

#5 There are more than 47 million people living in Spain today.  Only about 17 million of them have jobs.

#6 Retail sales in Spain have declined for 21 months in a row.

#7 The Bank of Spain has officially confirmed that Spain has already entered another recession.

#8 Last week, Standard & Poor’s Ratings Services slashed Spain’s credit rating from A to BBB+.

#9 The yield on 10-year Spanish bonds is up around 6 percent again.  That is considered to be very dangerous territory.

#10 Two of Spain’s biggest banks have announced that they are going to stop increasing their holdings of Spanish government debt.

#11 Of all the loans held by Spanish banks, 8.15 percent are considered to be “bad loans”.

#12 The total value of all bad loans in Spain is equivalent to approximately 13 percent of Spanish GDP.

#13 Of all real estate assets held by Spanish banks, more than 50 percent of them are considered to be “troubled” by the Spanish government.

#14 That total amount of money loaned out by Spanish banks is equivalent to approximately 170 percent of Spanish GDP.

#15 Home prices in Spain fell by 11.2 percent last year, and the number of property repossessions in Spain rose by a staggering 32 percent during 2011.

#16 Spanish housing prices are now down 25 percent from the peak of the housing market and Citibank’s Willem Buiter expects the eventual decline to be somewhere around 60 percent.

#17 It is being projected the the economy of Spain will shrink by 1.7 percent this year, although there are some analysts that feel that projection is way too optimistic.

#18 The Spanish government has announced a ban on all cash transactions larger than 2,500 euros.

#19 One key Spanish stock index has already fallen by more than 19 percent so far this year.

#20 The Spanish government recently admitted that its 2011 budget deficit was much larger than originally projected and that it probably will not meet its budget targets for 2012 either.

#21 Spain’s debt to GDP ratio is projected to rise by more than 11 percent during 2012.

#22 Worldwide exposure to Spanish debt is estimated to be well over a trillion euros.

Spain is going down the exact same road that Greece went down.

Greece is already suffering through a great depression and now Spain is joining them.  The following is from a recent BBC article….

“In Spain today, a cycle similar to Greece is starting to develop,” said HSBC chief economist Stephen King.

“The recession is so deep that when you take one step forward on austerity, it takes you two steps back.”

In Spain right now there is a lot of fear and panic about the economy.  In many areas, it seems like absolutely nobody is hiring right now.  The following is from a recent USA Today article….

“The situation is very bad. There’s no work,” said Enrique Sebastian, a 48-year-old unemployed surgery room assistant as he left one of Madrid’s unemployment offices. “The only future I see is one with wages of €400 ($530) a month for eight-hour days. And that’s if you can find it.”

But Spain is just at the beginning of a downward spiral.  Just wait until they have been through a few years of economic depression.  Once that happens, millions of people begin to lose all hope.  A recent Reuters article discussed the epidemic of suicides that is happening in Greece right now….

On Monday, a 38-year-old geology lecturer hanged himself from a lamp post in Athens and on the same day a 35-year-old priest jumped to his death off his balcony in northern Greece. On Wednesday, a 23-year-old student shot himself in the head.

In a country that has had one of the lowest suicide rates in the world, a surge in the number of suicides in the wake of an economic crisis has shocked and gripped the Mediterranean nation – and its media – before a May 6 election.

And you know what?

The nightmares that we are seeing unfold in Spain and Greece right now are just a preview of what is coming to most of the rest of the world.

The next wave of the economic crisis will soon envelop the United States, Japan and the rest of Europe.

When it strikes, the pain will be immense.

But it won’t be the end – it will only be just the beginning.

The global financial system is starting to crumble.

You better get ready.

Chimps Throwing Poop And 29 Other Mind Blowing Ways That The Government Is Wasting Your Money

Why do chimpanzees throw poop?  The federal government would like to know and is using your tax dollars to investigate the matter.  Every single year, we all send huge amounts of our hard-earned money to the federal government.  We hope that they will spend that money wisely.  Unfortunately, that is simply not the case.  You are about to read some examples of how the government is wasting your money that are absolutely mind blowing.  Anyone that claims that there is not a lot of waste that can be cut out of the federal budget is lying to you.  Our politicians have racked up the biggest pile of debt in the history of the world and they are spending our money on some of the stupidest things imaginable.  It is imperative that the American people be educated about all of this outrageous government waste, because right now the political will to change this corrupt system is simply not there among the current crop of politicians in Washington.  We are stealing trillions of dollars from future generations and many of the things that our politicians are wasting that money on are almost too bizarre to believe.

The following are 30 mind blowing ways that the government is wasting your money….

#1 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.

#2 The National Institutes of Health has spent more than 5 million dollars on a website called Sexpulse that is targeted at “men who use the Internet to seek sex with men”.  According to Fox News, the website “includes pornographic images of homosexual sex as well as naked and scantily clad men” and features “a Space Invaders-style interactive game that uses a penis-shaped blaster to shoot down gay epithets.”

#3 The General Services Administration spent $822,751 on a “training conference” for 300 west coast employees at the M Resort and Casino in Las Vegas.

The following is how the Washington Post described some of the wasteful expenses that happened during this “conference”….

Among the “excessive, wasteful and in some cases impermissable” spending the inspector general documented: $5,600 for three semi-private catered in-room parties and $44 per person daily breakfasts; $75,000 for a “team-building” exercise — the goal was to build a bicycle; $146,000 on catered food and drinks; and $6,325 on commemorative coins in velvet boxes to reward all participants for their work on stimulus projects. The $31,208 “networking” reception featured a $19-per-person artisanal cheese display and $7,000 of sushi. At the conference’s closing-night dinner, employees received “yearbooks” with their pictures, at a cost of $8,130.

You can see some stunning pictures of GSA employees living the high life in Las Vegas right here.

#4 Do you remember a few days ago when credit rating agency Egan Jones downgraded U.S. government debt from AA+ to AA?  Well, someone in the federal government apparently did not like that at all.  According to Zero Hedge, the SEC plans to file charges against Egan Jones for “misstatements” on a regulatory application with the SEC.

Normally, the SEC does not go after anyone.  After all, when is the last time a major banker went to prison?

No, the truth is that the SEC is usually just a huge waste of taxpayer money.  According to ABC News, one investigation found that 17 senior SEC officials had been regularly viewing pornography while at work.  While the American people were paying their salaries, this is what senior SEC officials were busy doing….

One senior attorney at SEC headquarters in Washington spent up to eight hours a day accessing Internet porn, according to the report, which has yet to be released. When he filled all the space on his government computer with pornographic images, he downloaded more to CDs and DVDs that accumulated in boxes in his offices.

An SEC accountant attempted to access porn websites 1,800 times in a two-week period and had 600 pornographic images on her computer hard drive.

Another SEC accountant used his SEC-issued computer to upload his own sexually explicit videos onto porn websites he joined.

And another SEC accountant attempted to access porn sites 16,000 times in a single month.

#5 According to InformationWeek, the federal government is spending “millions of dollars” to train Asian call center workers.

#6 If you can believe it, the federal government has actually spent $750,000 on a new soccer field for detainees held at Guantanamo Bay.

#7 The U.S. Agency for International Development spent 10 million dollars to create a version of “Sesame Street” for Pakistani television.

#8 The Obama administration has plans to spend between 16 and 20 million dollars to help students from Indonesia get master’s degrees.

#9 The National Science Foundation spent $198,000 on a University of California-Riverside study that explored “motivations, expectations and goal pursuit in social media.” One of the questions the study sought an answer to was the following: “Do unhappy people spend more time on Twitter or Facebook?”

#10 The federal government actually has spent $175,587 “to determine if cocaine makes Japanese quail engage in sexually risky behavior”.

#11 In 2011, $147,138 was given to the American Museum of Magic in Marshall, Michigan.  Their best magic trick is making U.S. taxpayer dollars disappear.

#12 The federal government recently spent $74,000 to help Michigan “increase awareness about the role Michigan plays in the production of trees and poinsettias.”

#13 In 2011, the federal government gave $550,000 toward the making of a documentary about how rock and roll contributed to the fall of the Soviet Union.

#14 The National Institutes of Health has contributed $55,382 toward a study of “hookah smoking habits” in the country of Jordan.

#15 The federal government gave $606,000 to researchers at Columbia University to study how heterosexuals use the Internet to find love.

#16 A total of $133,277 was recently given to the International Center for the History of Electronic Games for video game preservation.  The International Center for the History of Electronic Games says that it “collects, studies, and interprets video games, other electronic games, and related materials and the ways in which electronic games are changing how people play, learn, and connect with each other, including across boundaries of culture and geography.”

#17 The federal government has given approximately $3 million to researchers at the University of California at Irvine to fund their research into video games such as World of Warcraft.

#18 In 2011, the National Science Foundation gave one team of researchers $149,990 to create a video game called “RapidGuppy” for cell phones and other mobile devices.

#19 The U.S. Department of Agriculture once handed researchers at the University of New Hampshire $700,000 to study methane gas emissions from dairy cows.

#20 In 2011, $936,818 was spent developing an online soap opera entitled “Diary of a Single Mom”.  The show “chronicles the lives and challenges of three single mothers and their families trying to get ahead despite obstacles that all single mothers face, such as childcare, healthcare, education, and finances.”

#21 The federal government once shelled out $2.6 million to train Chinese prostitutes to drink responsibly.

#22 Last year, the federal government spent $96,000 to buy iPads for kindergarten students in Maine.

#23 The U.S. Postal Service once spent $13,500 for a single dinner at Ruth’s Chris Steakhouse.

#24 In 2011, the Air Force Academy completed work on an outdoor worship area for pagans and Wiccans.  The worship area consists of “a small Stonehenge-like circle of boulders with [a] propane fire pit” and it cost $51,474 to build.  The worship area is “for the handful of current or future cadets whose religions fall under the broad category of ‘Earth-based’, which includes Wiccans, druids and pagans.”  At this point, that only includes 3 current students at the Air Force Academy.

#25 The National Institutes of Health once gave researchers $400,000 to study why gay men in Argentina engage in risky sexual behavior when they are drunk.

#26 The National Institutes of Health once gave researchers $442,340 to study the behavior of male prostitutes in Vietnam.

#27 The National Institutes of Health once spent $800,000 in “stimulus funds” to study the impact of a “genital-washing program” on men in South Africa.

#28 The National Science Foundation recently spent $200,000 on a study that examined how voters react when politicians change their stances on climate change.

#29 The federal government recently spent $484,000 to help build a Mellow Mushroom pizzeria in Arlington, Texas.

#30 At this point, China is holding over a trillion dollars of U.S. government debt.  But that didn’t stop the United States from sending 17.8 million dollars in foreign aid to China in 2011.

Do you feel good about paying your federal taxes after reading all of those examples of wasteful government spending?

All over America, middle class families are scratching and clawing in an effort to survive in this economy, and the oppressive levels of taxation imposed on those families certainly does not make things any easier for them.

It is tremendously immoral for the federal government to take money out of the hands of hard working families and spend it on such ridiculous things.

So what do you all think about the list above?

Do you have any things that you would add to that list?

Are you disgusted by how the federal government is mismanaging our money?

Feel free to leave a comment with your opinion below….

There Is Not Going To Be A Solution To Our Economic Problems On The National Level

For those waiting for our economic problems to be solved, you can quit holding your breath.  There is simply not going to be a solution to our economic problems on the national level.  So why is that the case?  Well, it is because the economic policies of both major political parties are very, very similar when you take a close look at them.  Yes, that statement may sound downright bizarre to many Americans, but it is true.  Both major political parties supported the Wall Street bailouts, both of them fully support the job-killing “free trade” globalization agenda, both of them have dramatically increased the national debt when in power, both of them fully support the currency-killing policies of the Federal Reserve, and neither major political party would get rid of the income tax and the IRS.  And that is just for starters.  Yes, there are some minor differences when it comes to taxing and spending between the two parties, but the truth is that they are a lot more similar on economic issues than they are different.  What we desperately need on the national level is a fundamental change in direction when it comes to economic policy, but we simply are not going to get that from either the Democrats or the Republicans.  That means that there is no hope that the economic storm that is coming will be averted.

So why are the Democrats and the Republicans so similar on these issues?  Well, a big reason is because of who they are trying to please.

The reality of the matter is that most politicians do not really care about what you or I have to say.  Instead, what they are really concerned about is getting as much money for their campaigns as possible so that they can keep getting elected.

When you take a close look at the results of federal elections over the past several decades, it quickly becomes apparent that the candidate that raises the most money almost always wins.

So most politicians have learned to please those that fund their campaigns so that the money will keep rolling in.

Yes, there are a few candidates that are willing to rebel against “the system”, but they are few and far between and the major parties tend to marginalize them.

Once again in 2012, political races will overwhelmingly be won by those that raise the most cash.  The following is from Politifact….

In congressional races in 2010, the candidate who spent the most won 85 percent of the House races and 83 percent of the Senate races, according to the Center for Responsive Politics. That’s a large percentage, but it’s lower than what the sign indicated.

Indeed, the percentage for 2010 was lower than it had been in recent election cycles. The center found that in 2008, the biggest spenders won 93 percent of House races and 86 percent of Senate races. In 2006, the top spenders won 94 percent of House races and 73 percent of Senate races. And in 2004, 98 percent of House seats went to candidates who spent the most, as did 88 percent of Senate seats.

Once you understand how Washington works, it becomes easier to understand why our politicians do such stupid things.

For example, big corporations tend to donate large amounts of money to political campaigns and they love the “free trade” globalization agenda.

They love to import massive quantities of super cheap foreign goods so that they can undercut the prices of goods made in the United States.

They love to set up manufacturing facilities on the other side of the globe where it is legal to pay slave labor wages to workers.

The “free trade” agenda is great for the largest corporations, but it is horrible for the average American worker.

According to the Economic Policy Institute, the U.S. economy loses approximately 9,000 jobs for every $1 billion of goods that are imported from overseas.

Trade with other countries can be good as long as it is balanced.  Unfortunately, the U.S. trading relationship with the rest of the world is tremendously imbalanced.

In 2011, the United States bought more than 550 billion dollars more stuff from the rest of the world than they bought from us.

This trade deficit has enormous consequences that most Americans simply do not understand.

Over the past decade, tens of thousands of businesses, millions of jobs and trillions of dollars have left our country.

Our industrial base is being dismantled and we are rapidly becoming poorer as a nation.

According to U.S. Representative Betty Sutton, an average of 23 manufacturing facilities a day closed down in the United States during 2010.

Just think about that.

Every single day we lost 23 more.

Overall, America has lost a total of more than 56,000 manufacturing facilities since 2001.

Why do you think cities like Detroit are dying?

The truth is that we killed them with our idiotic policies.

America has a trade imbalance that is more than 5 times larger than any other nation on earth has.  We are losing wealth, jobs and businesses at a pace that is absolutely astounding.

It is neither “conservative” nor “liberal” to commit national economic suicide.

Our trade imbalance with China is particularly bad.  The U.S. spends about 4 dollars on goods and services from China for every one dollar that China spends on goods and services from the United States.

Does that sound fair to you?

China slaps huge tariffs on many of our products, they deeply subsidize their own national industries, the brazenly steal technology from us, and they manipulate currency rates so that their products end up being significantly cheaper than ours.

Our trade deficit with China in 2011 was nearly 300 billion dollars.  That was the largest trade deficit that one country has had with another country in the history of the world.

Yet both major political parties refuse to do anything about it.

Back in 1985, the U.S. trade deficit with China was only 6 million dollars for the entire year.

In 2011, our trade deficit with China was more than 49,000 times larger.

The consequences of this trade deficit with China are being felt all over the United States every single day.

For example, the United States has lost an average of 50,000 manufacturing jobs per month since China joined the World Trade Organization in 2001.

Do you support losing more than half a million manufacturing jobs a year?

If not, then you should be for “fair trade” instead of “free trade” where other nations can cheat us blind as often as they want.

The Economic Policy Institute says that since 2001 America has lost approximately 2.8 million jobs due to our trade deficit with China alone.

Do you think that the U.S. economy could use an extra 2.8 million jobs right now?

Sadly, if current trends continue things are going to get a lot worse.

According to Professor Alan Blinder of Princeton University, 40 million more U.S. jobs could be sent offshore over the next two decades.

So why won’t our politicians do something?

The United States has run a trade deficit every single year since 1976.

During that time, America has had a total trade imbalance of more than 7.5 trillion dollars with the rest of the world.

That 7.5 trillion dollars could have gone to support U.S. jobs and U.S. businesses.

Taxes could have been paid on that 7.5 trillion dollars.

Instead, it went out of the country and made foreigners wealthier.

So what is Barack Obama doing about all of this?

Well, Obama has been aggressively pushing for even more “free trade” agreements.  The Obama administration has inked deals with Panama, South Korea and Colombia and the Obama administration is making the Trans-Pacific Partnership (“the NAFTA of the Pacific“) a very high priority.

Well, Mitt Romney must be criticizing these moves, right?

No, Romney has actually criticized Obama for not pushing for more “free trade” fast enough.

Mitt Romney wants to make it even easier for jobs to go out of the country and for other countries to drain our wealth.  The following quote comes directly from the Romney campaign website….

Access to foreign markets is crucial to growing our economy. We must reassert American leadership in international negotiations, follow through on commitments we have already made, and push aggressively for advantageous new agreements.

So we are not going to see a change in direction in trade policy no matter who wins the next election.

Well, what about the national debt?

Are there differences between the two parties on this issue?

Sadly, there are only minor differences.

Both major political parties are packed with big spenders that have been spending us into oblivion.

Since Barack Obama entered the White House, the U.S. national debt has increased by $5,027,761,476,484.56.

That comes to $16,043.39 for every man, woman and child living in the United States.

What the Obama administration and the Democrats are doing to future generations is absolutely criminal.

So what about the Republicans?

Well, when the Republicans have had control of the White House they have run up debt “like a drunken sailor” as well.

If the Republican Party wants to have any credibility when it comes to fiscal issues, it needs to publicly admit that George W. Bush was a horrible failure when it came to the federal budget.

George W. Bush was a “big government” politician that dramatically increased the size of the federal government and spent money like it was going out of style.

He was not a conservative when it came to fiscal issues, and that is the truth.

Sadly, neither political party is proposing to balance the federal budget any time soon.  There are a few politicians that have suggested doing this, but they have been marginalized.

So why don’t our politicians support living within our means?

Well, the truth is that if the federal government balanced the budget today, it would result in a catastrophic drop in living standards inside the United States.  We are currently living in an era of debt-fueled “false prosperity”, and if that false prosperity were to disappear there would be riots in the streets of our major cities within months.

It is much easier for our politicians to continue to pile up more debt and to continue to kick the can down the road.

But this party cannot go on too much longer.  Already, the United States has more government debt per capita than Greece, Portugal, Italy, Ireland or Spain.

As you can see from the chart below, we are in a whole lot of trouble….

Our foolishness will catch up to us in a big way eventually.

Another area where the two major political parties agree is that they both fully support the Federal Reserve.

The Federal Reserve is supposed to keep inflation low, but the truth is that the Fed has absolutely killed the value of the U.S. dollar.  Just check out the chart below which was produced by the Fed itself.  It shows how dramatically the purchasing power of the U.S. dollar has declined over the years….

Keep in mind that the chart above is using official government numbers which actually downplay how much the U.S. dollar has been debased.

If inflation was measured the exact same way that it was back in 1980, the annual rate of inflation would be more than 10 percent right now.

By any measure, the Federal Reserve has been a colossal failure for the American people.  Since the Fed was created, our currency has lost more than 95 percent of its value and our national debt has gotten more than 5000 times larger.

The current Federal Reserve Chairman, Ben Bernanke, has a track record of failure that is legendary.  If you doubt this, just read this article, this article and this article.

But Barack Obama just loves Bernanke.  He nominated him for another term as Fed Chairman and he never criticizes anything that he does.

Thanks Obama.

So will things be any different under Mitt Romney?

Of course not.

During one Republican debate, Mitt Romney actually had the gall to try to explain to all of us why “we need to have a Fed“.

Mitt Romney says that he is “not going to take my effort and focus on the Federal Reserve“.

But the Federal Reserve is at the very heart of our economic problems.

Doesn’t Mitt Romney understand that?

The mainstream media is already telling us not to expect any significant changes at the Fed if Romney wins.  A recent Reuters article had the following headline….

“Analysis: A Romney win would likely change little at Federal Reserve”

Are you starting to understand why I am saying that there is not going to be a solution to our economic problems at the national level?

A great economic cataclysm is coming, and there is very little hope that it can be averted.

So what does that mean?

It means that we all need to start preparing to weather the coming storm on an individual level.

The nation as a whole may not change course, but as individuals and as families we can change course.

All of us can work to reduce our expenses, get out of debt, build up a six month financial cushion, learn to grow a garden and slowly become more independent of the system.

Both political parties are leading us down a road that will only end in economic disaster.

Instead of waiting for a “national solution” that is never going to come, you need to focus on being your own solution.

Time is short, so you better get ready.

24 Outrageous Facts About Taxes In The United States That Will Blow Your Mind

The U.S. tax code is a complete and utter abomination and it needs to be thrown out entirely.  Nobody in their right mind would ever read the whole thing – it is over 3 million words long.  Each year, Americans spend billions of hours and hundreds of billions of dollars trying to comply with federal tax requirements.  Sadly, it is the honest, hard working Americans in the middle class that always get hit the hardest.  The tax code is absolutely riddled with loopholes that big corporations and the ultra-wealthy use to minimize their tax burdens as much as possible.  Many poor people do not pay any income taxes at all.  The dishonest are rewarded for cheating on their taxes (if they can get away with it) and the ultra-wealthy have moved trillions of dollars to offshore tax havens where they can avoid U.S. taxation altogether.  Our system is incredibly unfair to the millions of hard working people in the middle class and upper middle class that drag themselves out of bed and go to work each day and try to do the right thing.  In addition, the current U.S. tax system is incredibly inefficient, it diverts a tremendous amount of resources away from more valuable economic activities, and it has chased thousands of businesses and trillions of dollars out of the United States.  The U.S. tax code is such a complete and utter mess at this point that it can never be “fixed”.  The only rational thing to do is to abolish it completely, and any politician that tells you otherwise is lying to you.

The following are 24 outrageous facts about taxes in the United States that will blow your mind….

1 – The U.S. tax code is now 3.8 million words long.  If you took all of William Shakespeare’s works and collected them together, the entire collection would only be about 900,000 words long.

2 – According to the National Taxpayers Union, U.S. taxpayers spend more than 7.6 billion hours complying with federal tax requirements.  Imagine what our society would look like if all that time was spent on more economically profitable activities.

3 – 75 years ago, the instructions for Form 1040 were two pages long.  Today, they are 189 pages long.

4 – There have been 4,428 changes to the tax code over the last decade.  It is incredibly costly to change tax software, tax manuals and tax instruction booklets for all of those changes.

5 – According to the National Taxpayers Union, the IRS currently has 1,999 different publications, forms, and instruction sheets that you can download from the IRS website.

6 – Our tax system has become so complicated that it is almost impossible to file your taxes correctly.  For example, back in 1998 Money Magazine had 46 different tax professionals complete a tax return for a hypothetical household.  All 46 of them came up with a different result.

7 – In 2009, PC World had five of the most popular tax preparation software websites prepare a tax return for a hypothetical household.  All five of them came up with a different result.

8 – The IRS spends $2.45 for every $100 that it collects in taxes.

9 – According to The Tax Foundation, the average American has to work until April 17th just to pay federal, state, and local taxes.  Back in 1900, “Tax Freedom Day” came on January 22nd.

10 – When the U.S. government first implemented a personal income tax back in 1913, the vast majority of the population paid a rate of just 1 percent, and the highest marginal tax rate was just 7 percent.

11 – Residents of New Jersey pay $1.64 in taxes for every $1.00 of federal spending that they get back.

12 – The United States is the only nation on the planet that tries to tax citizens on what they earn in foreign countries.

13 – According to Forbes, the 400 highest earning Americans pay an average federal income tax rate of just 18 percent.

14 – Warren Buffett had an effective tax rate of just 17.4 percent for 2010.

15 – The top 20 percent of all income earners in the United States pay approximately 86 percent of all federal income taxes.

16 – Sadly, 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.

17 – The United States has the highest corporate tax rate in the world (35 percent).  In Ireland, the corporate tax rate is only 12.5 percent.  This is causing thousands of corporations to move operations out of the United States and into other countries.

18 – Some tax havens are doing a booming business in setting up sham headquarters for U.S. corporations.  For example, the city of Zug, Switzerland only has a population of 26,000 people but it is the headquarters for 30,000 companies.

19 – In 1950, corporate taxes accounted for about 30 percent of all federal revenue.  In 2012, corporate taxes will account for less than 7 percent of all federal revenue.

20 – In a previous article, I discussed how many of our largest corporations make huge profits and yet pay less than nothing in taxes….

What U.S. corporations are able to get away with is absolutely amazing.

The following figures come directly out of a report by Citizens for Tax Justice.  These are combined figures for the tax years 2008, 2009 and 2010.

During those three years, all of the corporations below made a lot of money.  Yet all of them paid net taxes that were below zero for those three years combined.

How is that possible?  Well, it turns out that instead of paying in taxes to the federal government, they were actually getting money back.

So for these corporations, their rate of taxation was actually below zero.

If you have not seen these before, you are going to have a hard time believing some of these statistics…..

*Honeywell*

Profits: $4.9 billion

Taxes: -$34 million

*Fed Ex*

Profits: $3 billion

Taxes: -$23 million

*Wells Fargo*

Profits: $49.37 billion

Taxes: -$681 million

*Boeing*

Profits: $9.7 billion

Taxes: -$178 million

*Verizon*

Profits: $32.5 billion

Taxes: -$951 million

*Dupont*

Profits: $2.1 billion

Taxes -$72 million

*American Electric Power*

Profits: $5.89 billion

Taxes -$545 million

*General Electric*

Profits: $7.7 billion

Taxes: -$4.7 billion

Are you starting to get the picture?

21 – Exxon-Mobil paid $15 billion in taxes in 2009, but not a single penny went to the U.S. government.

22 – Many wealthy Americans hide enormous amounts of money outside the country in order to avoid paying taxes.  According to the IMF, a total of 18 trillion dollars is currently being hidden in offshore banks.

23 – The number of traffic accidents spikes each year right around April 15th.  The following is from a recent Bloomberg article….

Deaths from traffic accidents around April 15, traditionally the last day to file individual income taxes in the U.S., rose 6 percent on average on each of the last 30 years of tax filing days compared with a day during the week prior and a week later, according to research published in the Journal of the American Medical Association.

24 – Most of the tax debate is focused on income taxes, but the truth is that Americans pay dozens of other taxes every single year.  The following are just a few of the taxes that many Americans pay….

#1 Building Permit Taxes

#2 Capital Gains Taxes

#3 Cigarette Taxes

#4 Court Fines (indirect taxes)

#5 Dog License Taxes

#6 Federal Unemployment Taxes

#7 Fishing License Taxes

#8 Food License Taxes

#9 Gasoline Taxes

#10 Gift Taxes

#11 Hunting License Taxes

#12 Inheritance Taxes

#13 Inventory Taxes

#14 IRS Interest Charges (tax on top of tax)

#15 IRS Penalties (tax on top of tax)

#16 Liquor Taxes

#17 Luxury Taxes

#18 Marriage License Taxes

#19 Medicare Taxes

#20 Property Taxes

#21 Recreational Vehicle Taxes

#22 Toll Booth Taxes

#23 Sales Taxes

#24 Self-Employment Taxes

#25 School Taxes

#26 Septic Permit Taxes

#27 Service Charge Taxes

#28 Social Security Taxes

#29 State Unemployment Taxes (SUTA)

#30 Telephone Federal Excise Taxes

#31 Telephone Federal Universal Service Fee Taxes

#32 Telephone Minimum Usage Surcharge Taxes

#33 Telephone State And Local Taxes

#34 Tire Taxes

#35 Toll Bridge Taxes

#36 Toll Tunnel Taxes

#37 Traffic Fines (indirect taxation)

#38 Utility Taxes

#39 Vehicle License Registration Taxes

#40 Vehicle Sales Taxes

#41 Workers Compensation Taxes

When you account for all forms of taxation on the federal, state and local levels there are many Americans that pay out more than half of their incomes in taxes.

We are being taxed into oblivion, and yet most Americans do not even realize that it is happening.

It is kind of like being killed by thousands of tiny cuts.

So what do all of these taxes buy us?

They buy us a massively bloated government that wastes money on some of the craziest things imaginable.

Millions of Americans work for the federal government, and yet most of them produce very little of real economic value.  The following comes from a recent National Review article….

By 2005, the federal government employed 14.6 million people: 1.9 million civil servants, 770,000 postal workers, 1.44 million uniformed service personnel, 7.6 million contractors, and 2.9 million grantees. This amounted to a ratio of five and a half “shadow” government employees for every civil servant on the federal payroll. Since 1999, the government had grown by over 4.5 million employees.

According to that same article, when you add in state and local government workers the numbers are even more dramatic….

According to the U.S. Census Bureau, there are 3.8 million full-time and 1.5 million part-time employees on state payrolls. Local governments add a further 11 million full-time and 3.2 million part-time personnel. This means that state and local governments combined employ 19.5 million Americans.

Yes, we do need some government.  For example, without any law enforcement at all our society would descend into complete chaos, and without any military at all we would be completely open to foreign conquest.

In order to have a stable, secure society we do need some government.

However, we definitely do not need the massively bloated government that we have today.

The truth is that most government employees are a drain on the system.  Most of them just push paper around.  I used to work in Washington D.C. so I know what pushing paper around is all about.

And as I wrote about yesterday, there are millions of other Americans that enjoy a comfortable existence at the expense of the federal government without doing any work whatsoever.

Of course the biggest welfare recipients of all are the big corporations.  All forms of corporate welfare should be eliminated immediately.

When are U.S. taxpayers going to get sick and tired of paying for all of this?

Every single year, the federal government, state governments and local governments drain massive amounts of desperately needed money from hard working middle class families.

Then they take that money and spend it on incredibly foolish things.

When are American voters going to stand up and boldly declare that they have been taxed enough already and they aren’t going to take it anymore?

The current tax code is completely and utterly broken and it is beyond repair.

Unfortunately, neither the Republicans or the Democrats are proposing that we should get rid of it.

So we are just going to continue to get more of the same year after year, and it is the middle class that will feel the pain.

Inflation Is A Hidden Tax And The Federal Reserve Is Taxing The Living Daylights Out Of Us

Ronald Reagan once famously declared that inflation is a tax, but sadly most Americans did not really grasp what he was talking about.  If the American people truly understood what inflation was doing to them, they would be screaming bloody murder about monetary policy.  Inflation is an especially insidious tax because it is not just a tax on your income for one year.  It is a continual tax on every single dollar that you own.  As your money sits in the bank, it is constantly losing value.  Over time, the effects of inflation can be absolutely devastating.  For example, if you put 100 dollars in the bank in 1970, those same dollars today would only have about 17 percent of the purchasing power that they did back then.  In essence, you were hit by an 83 percent “inflation tax” and all you did was leave your money in the bank.  So who is responsible for this?  Well, the Federal Reserve controls monetary policy in the United States, and the inflationary monetary policy that the Fed has gotten all of us accustomed to is taxing the living daylights out of us.  This is madness, and it needs to stop.

In previous articles I have discussed how the Federal Reserve creates money.  If you have not read those articles yet, you can find a few of them here, here and here.

The Federal Reserve system is designed to have the U.S. money supply expand indefinitely.

And that is exactly what has happened since 1913.

But when the money supply expands, there are very serious consequences.

Every time more money comes into existence, the dollars that you and I are already holding become less valuable because now there are more dollars chasing the same amount of goods and services.

Right now, the U.S. government says that the annual rate of inflation is somewhere around 2 percent.  Those of you that have to buy food and gas on a regular basis realize how much of a joke that is.

Thankfully, there are others out there that keep track of these statistics as well.  According to John Williams of shadowstats.com, if inflation was measured the same way that it was back in 1980, the annual rate of inflation would be more than 10 percent right now.

But let’s use the doctored government numbers for a moment.  Using the doctored numbers, what inflation has done to all of us is still absolutely horrific.  Just check out the chart below.  This is what the Federal Reserve was designed to do.  It was designed to constantly expand the money supply and create inflation that never ends….

Most of us have been living in an inflationary environment for so long that we have come to accept it as normal.

Most Americans believe that prices are supposed to just keep going up as time goes by.

Unfortunately, we have now entered an era when prices are going up much faster than wages are.  Family budgets are being squeezed tighter and tighter as the inflation tax keeps taking a bigger and bigger toll on all of our paychecks.

I remember the days when I could go into the grocery store and get a large bag of brand name potato chips for 99 cents.

I remember the days when I could get all the groceries that I needed for an entire week for 20 bucks.

Unfortunately, those days are long gone.

Have you been to the grocery store lately?

When I go to the grocery store these days I almost get the feeling that someone is going to ask me to fill out a credit application.

When I get to the checkout counter I almost get the feeling that the cashier is going to ask me if I want to pay with an arm or a leg.

But food is not the only thing going up.  Electricity bills in the United States have risen faster than the overall rate of inflation for five years in a row.  There are millions of American families that are keeping the heat really, really low this winter in an attempt to make ends meet.

Health care is another thing that has become ridiculously expensive.  During the Obama administration, worker health insurance costs have risen by 23 percent.

Has your paycheck increased by 23 percent?

Of course we all know what is happening with the price of gasoline.  The average price of a gallon of gasoline in the United States is now up to $3.72.  It has increased by more than 90 percent since Barack Obama became president.

This is why so many economists get so upset when the Federal Reserve starts printing money like there is no tomorrow.  Inflation is a tax that is very cruel to average American families.  It destroys their wealth and it destroys the purchasing power of their paychecks.

Unfortunately, this is always what happens when a society adopts fiat currency.  Our dollars are just pieces of paper backed by absolutely nothing.  When more pieces of paper are printed up, the value of the pieces of paper already in existence goes down.

This is one of the reasons why so many people out there are talking about “real money” like gold and silver.  Unlike fiat currency, precious metals tend to hold value over a very long period of time.

For example, it will take you about three times as much U.S. currency to buy a gallon of gasoline in 2012 as it did back in 1990.

But an ounce of silver will actually buy you more gasoline today than it did back then.

Back in 1990, an ounce of silver would buy you about 4 gallons of gasoline.  Today it will buy you more than 8 gallons of gasoline.

Talk about holding value.

We see the same kind of thing happening with gold.

When Barack Obama first took office, an ounce of gold was selling for about $850.  Today an ounce of gold costs more than $1700 an ounce.

It is not that gold is becoming so much more valuable.  It is just that the U.S. dollar is losing value on a continual basis.

So why don’t the U.S. government and the Federal Reserve quit flooding our economy with more paper money?

That is a very good question.

Sadly, our leaders seem to have a never ending addiction to more paper money and the American people are not demanding change.

On Wednesday, Federal Reserve Chairman Ben Bernanke told Congress that the Federal Reserve may have to implement even more stimulus measures in order to help the economy.

Of course such talk is utter insanity considering what Bernanke and his cohorts have already done to the monetary base over the past few years….

Thankfully, the vast majority of that money is still trapped in the financial system.  If all of that money was floating around on the street inflation would be far worse.

Those of you that think that the surging stock market is a sign of “economic recovery” should realize that the market has been pumped up by huge amounts of funny money from the Federal Reserve.  Just because the number of dollars circulating has increased does not mean that things are getting better.

There is much more to all of this of course, but what is important for the man and the woman on the street is the fact that when the Federal Reserve expands the money supply it is a tax on all of us and it makes all of us poorer.

So what do you think about the inflation tax and the reckless monetary policy of the Federal Reserve?

Please feel free to leave a comment with your thoughts below….

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