The U.S. National Debt

March 2017: The End Of A 100 Year Global Debt Super Cycle Is Way Overdue

February 27, 2017February 27, 2017 by Michael

For more than 100 years global debt levels have been rising, and now we are potentially facing the greatest debt crisis in all of human history. Never before have we seen such a level of debt saturation all over the planet, and pretty much everyone understands that this is going to end very, very badly at some point. The only real question is when it will happen. Many believe that the current global debt super cycle began when the Federal Reserve was established in 1913. Central banks are designed to create debt, and since 1913 the U.S. national debt has gotten more than 6800 times larger. But of course it is not just the United States that is in this sort of predicament. At this point more than 99 percent of the population of the entire planet lives in a nation that has a debt-creating central bank, and as a result the whole world is drowning in debt.

When people tell me that things are going to “get better” in 2017 and beyond, I find it difficult not to roll my eyes. The truth is that the only way we can even continue to maintain our current ridiculously high debt-fueled standard of living is to grow debt at a much faster pace than the economy is growing. We may be able to do that for a brief period of time, but giant financial bubbles like this always end and we will not be any exception.

Barack Obama and his team understood what was happening, and they were able to keep us out of a horrifying economic depression by stealing more than nine trillion dollars from future generations of Americans and pumping that money into the U.S. economy. As a result, the federal government is now 20 trillion dollars in debt, and that means that the eventual crash is going to be far, far worse than it would have been if we would have lived within our means all this time.

Corporations and households have been going into absolutely enormous amounts of debt as well. Corporate debt has approximately doubled since the last financial crisis, and U.S. consumers are now more than 12 trillion dollars in debt.

When you add all forms of debt together, America’s debt to GDP ratio is now about 352 percent. I think that the following illustration does a pretty good job of showing how absolutely insane that is…

If your brother earns $100,000 in annual income and borrowed $10,000 on his credit card, he could consume $110,000 worth of stuff. In this example, his debt to his personal GDP is just 10%. But what if he could get more credit year after year and reached a point where his total debt reached $352,000 but his income remained the same. His personal debt-to-GDP ratio would now be 352%.

If he could borrow at super low interest rates, maybe he could sustain the monthly loan payments. Maybe? But how much more could he possibly borrow? What lender would lend him more? And what if those low rates began to rise? How much debt can his $100,000 income cover? Essentially, he has reached the end of his own debt cycle.

The United States is certainly not alone in this regard. When you look all over the industrialized world, you see similar triple digit debt to GDP figures.

When this current debt super cycle ultimately ends, it is going to create economic pain on a scale that will be unlike anything that we have ever seen before. The following comes from King World News…

That is the inevitable consequence of 100 years of credit expansion from virtually nothing to $250 trillion, plus global unfunded liabilities of roughly $500 trillion, plus derivatives of $1.5 quadrillion. This is a staggering total of $2.25 quadrillion. Therefore, the question is not what could go wrong since it is guaranteed that all these liabilities will implode at some point. And when they do, it will bring misery to the world of a magnitude that no one could ever imagine. It is of course very difficult to forecast the end of a major cycle. As this is unlikely to be a mere 100-year cycle but possibly a 2000-year cycle. It is also impossible to forecast how long the decline will take. Will it be gradual like the Dark Ages, which took 500 years after the fall of the Roman Empire? Or will the fall be much faster this time due to the implosion of the biggest credit bubble in world history? The latter is more likely, especially since the bubble will become a lot bigger before it implodes.

And there are certainly lots of signs that a global slowdown is already beginning. For example, global trade growth has fallen below 2 percent for only the third time since the year 2000. On each of the other occasions, we witnessed a horrible recession take place. For more signs that economic conditions are deteriorating, please see my previous article entitled “Recession 2017? Things Are Happening That Usually Never Happen Unless A New Recession Is Beginning“.

Of course much of the globe is already in the midst of a horrible economic crisis. Brazil is in the middle of their worst recession ever, and people are literally starving in Venezuela. A new round of debt problems has erupted in Europe, with Greece, Portugal and Italy being the latest flashpoints.

Just like in 2007, many are mocking the idea that the a major economic downturn is coming to the United States. They believe that the ridiculously high stock market valuations of today can stick around indefinitely, and they are putting their faith in politicians.

But it won’t be too long before a new economic crisis begins in America and the kind of civil unrest that I portray in “The Beginning Of The End” erupts all across the country.

I just don’t understand why more people cannot see this. Government debt, corporate debt and consumer debt have all been growing much, much faster than the overall economy. Can someone please explain to me how that could possibly be sustainable in the long-term?

Someone that I considered to be a mentor but that has since passed away once said that things would seem like they would be getting better for a little while before the next crash comes.

And it turned out that he was precisely correct. We are in a season of time when economic conditions have appeared to be getting a little bit better in the United States, and this has blinded so many people to the truth of what is about to happen to us.

Foreigners Are Dumping U.S. Debt At A Record Pace And Our $20 Trillion National Debt Is Poised To Become A Major Crisis

January 22, 2017January 22, 2017 by Michael

While most of the country has been focused on the inauguration of Donald Trump, a very real crisis has been brewing behind the scenes. Foreigners are dumping U.S. debt at a faster rate than we have ever seen before, and U.S. Treasury yields have been rising. This is potentially a massive problem, because our entire debt-fueled standard of living is dependent on foreigners lending us gigantic mountains of money at ultra-low interest rates. If the average rate of interest on U.S. government debt just got back to 5 percent, which would still be below the long-term average, we would be paying out about a trillion dollars a year just in interest on the national debt. If foreigners keep dumping our debt and if Treasury yields keep climbing, a major financial implosion of historic proportions is absolutely guaranteed within the next four years.

One of the most significant aspects of the “Obama legacy” is the appalling mountain of debt that he has left behind. As I write this article, the U.S. national debt is sitting at 19.944 trillion dollars. During Obama’s eight years, a staggering 9.3 trillion dollars was added to the national debt. When you break that number down, it comes to more than a hundred million dollars every single hour of every single day while Obama was living in the White House. In just two terms, Obama added almost as much to the national debt as all of the other presidents before him combined.

What Obama and the members of Congress that cooperated with him have done to future generations of Americans is beyond criminal.

Unfortunately, hardly anyone is talking about this right now, but the consequences are about to start catching up with us in a major way.

The only possible way that our game of “borrow, spend and stick future generations with the bill” can continue is if the rest of the world participates. In other words, we need them to continue to buy our debt.

Unfortunately for us, a major shift is now taking place. According to Zero Hedge, the most recent numbers that we have show foreigners dumping more than 400 million dollars of U.S. debt over the past 12 months…

The wholesale liquidation of US Treasuries continued in November, when according to the just released TIC data, foreign central banks sold another $936 million in US paper in November 2016, which due to an offset of $892 million in buying one year ago, means that for the 12 month period ended November, foreign central banks have now sold a new all time high of $405 million in the past 12 months, up from a record $403 million in LTM sales as of one month ago.

This isn’t a catastrophic emergency just yet, but if we continue down this road we will eventually get there. The only way that the U.S. government can continue on with business as usual is if it can continue to borrow billions upon billions of dollars at ultra-low interest rates. Now that Treasury yields are rising, some people are beginning to get quite nervous…

As we pointed out one month ago, what has become increasingly obvious is that both foreign central banks, sovereign wealth funds, reserve managers, and virtually every other official institution in possession of US paper, is liquidating their holdings at a disturbing pace, something which in light of the recent surge in yields to over 2 year highs, appears to have been a prudent move.

In some cases, like China, this is to offset devaluation pressure; in others such as Saudi Arabia and other petroleum exporting nations, it is to provide the funds needed to offset the drop in the petrodollar, and to backstop the country’s soaring budget deficit. In all cases, it may suggest concerns about a spike in future debt issuance by the US, especially now under the pro-fiscal stimulus Trump administration.

Someday historians are going to look back in horror at what took place during the Obama years.

The amount that was added to the national debt during his years comes to “approximately $75,129 for every person in the United States who had a full-time job in December”. There is no possible justification for this. But because there haven’t been any catastrophic consequences so far, most people assume that this theft from future generations of Americans must be okay.

In a previous article, I explained that government debt greatly stimulates the economy. If we had not borrowed and spent 9.3 trillion dollars over the past eight years, we would be in the worst economic depression in U.S. history right now.

But most people don’t understand this. They don’t get the fact that we are living way, way above our means. And they also don’t get the fact that the only way that Donald Trump can keep the party going is to borrow and spend just like Obama was doing.

And even with all of Obama’s recklessness, he was still the only president in all of U.S. history not to have a single year when U.S. GDP grew by at least three percent. The following comes from the Hill…

Despite the trillions of dollars in government spending pumped into the economy every year under Obama, America has never once enjoyed an annual GDP growth rate at 3 percent or higher, making Obama the least successful president—at least when it comes to economics—in modern history.

A historically sluggish GDP isn’t the only concern worth mentioning. Under Obama’s tenure, average annual food stamp enrollment has risen by more than 15 million (compared to 2008). The home ownership rate is the lowest it has been since 1995, the earliest year provided in the U.S. Census Bureau’s most recent report. The Bureau of Labor Statistics reports more than 590,000 Americans say they are not in the labor force because they are discouraged, a figure that’s 26 percent higher than even the worst annual average under George W. Bush. Additionally, the employment-population ratio has been continuously below the 60-percent threshold under Obama; the last time it was this low was 1985.

Now that Donald Trump is president, he is going to have some very hard choices in front of him.

If Donald Trump and the Republicans stop borrowing and spending so much money, the economy will immediately start suffering.

But if they do continue down the same path that Obama put us on, it is a recipe for national suicide.

So either we take our medicine now, or we risk completely destroying the bright future that our children and grandchildren were supposed to enjoy.

Wake up America, because time is running out.

19.4 Trillion Dollars In Debt – We Have Added 1.1 Trillion Dollars A Year To The National Debt Under Obama

July 20, 2016July 20, 2016 by Michael

In 2006, U.S. Senator Barack Obama’s voice thundered across the Senate floor as he boldly declared that “increasing America’s debt weakens us domestically and internationally. Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren.” That was one of the truest things that he ever said, but just a couple of years later he won the 2008 election and he turned his back on those principles. As I write this article, the U.S. national debt is sitting at a grand total of $19,402,361,890,929.46. But when Barack Obama first entered the White House, our federal government was only 10.6 trillion dollars in debt. That means that we have added an average of 1.1 trillion dollars a year to the national debt under Obama, and we still have about six more months to go.

Even though Barack Obama is on track to be the first president in all of U.S. history to not have a single year when the U.S. economy grew by 3 percent or better, many have still been mystified by the fact that the economy has been relatively stable in recent years.

But the explanation is rather simple, actually. Anyone can live like a millionaire if the credit card companies will lend them enough money. You could even do it yourself. Just go out and apply for as many credit cards as possible and then spend money like there is no tomorrow. In no time at all, you will be living the high life.

Of course many of you would immediately object that a day of reckoning would come eventually, and you would be right. Just like for those that abuse credit cards, a financial day of reckoning is coming for America too.

In the United States today, our standard of living is being massively inflated by taking trillions of dollars of future consumption and moving it into the present. The politicians love to do this because it makes them look good and they can take credit for an “economic recovery”, but what we are doing to our children and our grandchildren is beyond criminal.

On average, we are stealing more than 100 million dollars from future generations of Americans every single hour of every single day. We are complete and utter pigs, and yet most Americans don’t see anything wrong with what we are doing.

At this point, our national debt is more than 30 times larger than it was just 40 years ago, and many (including myself) have argued that it is now mathematically impossible for the U.S. government to ever pay off all of this debt.

The only thing that we can do now is to keep the party going for as long as possible until the day of reckoning inevitably comes.

Under Obama, our national debt will come close to doubling. What that means is that during Obama’s eight years we will accumulate almost as much debt as we did under all of the other presidents in U.S. history combined.

Right now, the U.S. government is responsible for about a third of all the government debt in the entire world. Fortunately the financial world continues to lend us gigantic mountains of money at ridiculously low interest rates, but if that were to ever change we would be in an enormous amount of trouble very rapidly.

For instance, if the average rate of interest on U.S. government debt simply returns to the long-term average, we would very quickly find ourselves spending more than a trillion dollars a year just in interest on the national debt.

And as the Baby Boomers age, our “unfunded liabilities” threaten to absolutely swamp us. By the year 2025, it is being projected that “mandatory” federal spending on “unfunded liabilities” such as Social Security, Medicaid and Medicare plus interest on the national debt will exceed total federal revenue. What that means is that we will spend every penny we bring in before a single dollar is spent on the military, homeland security, paying federal workers, building roads and bridges, etc.

In recent years the Federal Reserve has also had a “buy now, pay later” mentality.

While Obama has been in the White House, the size of the Fed balance sheet has grown by about two and a half trillion dollars. The goal has been to artificially pump up the economy, but when the Federal Reserve creates money out of thin air it is actually a tax on all of us. The purchasing power of every dollar that we will spend in the future has been diminished thanks to the Fed, but most Americans don’t understand this.

What most Americans want is for someone to “fix things” in the short-term, and not much consideration is ever given to the long-term damage that is being done.

I know that the phrase “trillion dollars” is thrown around a lot these days, and to a lot of people it doesn’t have a whole lot of meaning anymore. But the truth is that it is an absolutely enormous amount of money. In fact, if you went out right this moment and started spending one dollar every single second, it would take you more than 31,000 years to spend one trillion dollars.

A final example of our “buy now, pay later” mentality can be seen in our ridiculously bloated trade deficit. We consume far more than we produce as a nation, and we buy far more from the rest of the world than they buy from us. As a result, tens of thousands of businesses and millions of good paying jobs have gone overseas, and many of our formerly great manufacturing cities are now vast industrial wastelands. Our economic infrastructure has been gutted at a pace that is staggering, and yet most Americans still don’t understand what has been done to them.

If you visit your typical “big box” retail store today, where is most of the stuff made? Instinctively, most of you would answer “China”, and that is not too far from the truth.

We buy far, far more stuff from China then they buy from us. This makes them steadily wealthier, and it makes us steadily poorer. Unfortunately, our trade deficit with China has gotten much, much worse while Barack Obama has been in the White House.

At the end of Barack Obama’s first year in office, our yearly trade deficit with China was 226 billion dollars. Last year, it was more than 367 billion dollars.

Are you starting to see a trend?

Our long-term economic and financial problems have greatly accelerated under Barack Obama, but our leaders feverishly work to make things look okay in the short-term and so most Americans don’t notice what is happening.

Unfortunately, this Ponzi scheme cannot go on forever and a day of reckoning is coming. And when it arrives, the pain that it is going to cause for ordinary Americans is going to be far greater than most of us would dare to imagine.

It’s Official: Over A Trillion Dollars A Year Will Be Added To The Debt During Obama’s Presidency

December 21, 2015December 21, 2015 by Michael

Under Barack Obama, the U.S. national debt has risen from $10,626,877,048,913.08 on January 20th, 2009 to $18,795,033,928,275.59 on December 21st, 2015. That means that the debt that we are passing on to future generations has increased by 8.16 trillion dollars since Barack Obama was inaugurated. There is still a little more than a year to go in Obama’s presidency, and it is already guaranteed that Obama will add more than a trillion dollars a year to the national debt during his presidency. In fact, when you do the math, we are stealing more than 100 million dollars from future generations of Americans every single hour of every single day. It is a crime of a magnitude that is almost unimaginable, and at this point it is mathematically impossible for the U.S. government to pay off all of this debt. To say that we are in trouble would be a massive understatement.

And of course not all of the blame goes to Obama. The Republicans have had control of the House of Representatives for all but two years while Obama has been in the White House, and they have gone along with all of this reckless spending. Without the approval of the House, Obama could not spend a single penny, but the Republicans have consistently chosen not to stand up to him. In fact, the Republicans in Congress just approved another massive 1.2 trillion dollar spending bill that essentially gave the Democrats every single thing that they wanted. House Minority Leader Nancy Pelosi even admitted that the Republicans “were willing to concede so much” during the negotiations.

So why do we even have a Republican Party? They always just go along with pretty much whatever the Democrats want anyway. Why shouldn’t we just disband the Republican Party and let the Democrats completely run things? How would Washington D.C. be any different if the Republicans didn’t even exist?

At this point, even Rush Limbaugh is completely disgusted with the Republican Party…

I have a headline here from the Washington Times: “White House Declares Total Victory Over GOP in Budget Battle.” That headline’s a misnomer. There was never a battle. None of this was opposed. The Republican Party didn’t stand up to any of it, and the die has been cast for a long time on this. I know many of you are dispirited, depressed, angry, combination of all of that. But, folks, there was no other way this could go. Because two years ago when the Republican Party declared they would never do anything that would shut down the government and they would not impeach Obama, there were no obstacles in Obama’s way and there were no obstacles in the way of the Democrat Party.

Do you remember when Republican politicians were running around promising that they would defund Obamacare?

That didn’t happen.

Do you remember when Republican politicians were running around promising that they would defund Planned Parenthood?

That didn’t happen.

Do you remember when Republican politicians were running around promising that they would defund Obama’s refugee program?

That didn’t happen.

In this new spending deal, the Republicans got nothing. It was a sham, a farce and a total insult to the American people. Here is more from Rush Limbaugh…

It fully funds Planned Parenthood. That, to me, is unforgivable, with everything now known about what goes on behind closed doors at Planned Parenthood, and that the federal government, led by a Republican Party, sees fit to pay for it. It is beyond comprehension, and it is a total squandering of moral authority to fully fund the butchery at Planned Parenthood. This spending bill fully pays for Obama’s refugee plans, fully. This spending bill, this budget bill quadruples the number of visas Obama wants for foreign workers. This is even a slap at American union workers. Not the leaders. The union leaders seem to be in favor of it, but blue-collar people, known as working people, have been sold down the river along with everybody else here.

This spending bill even fully pays for every dime asked for by Obama on all of this idiocy that’s tied up into climate change. Everything Obama wanted, everything he asked for, he got. You go down the list of things, it’s there.

Even after watching all of the undercover Planned Parenthood videos that came out over the past year, the Republicans in Congress still voted to fund the harvesting and sale of body parts from aborted babies.

And surveys have found that the American people support the continued funding of Planned Parenthood by about a 2 to 1 margin. After everything that we have seen, the vast majority of Americans still want to continue giving those butchers hundreds of millions of taxpayer dollars a year.

No wonder so many people are comparing America to Nazi Germany these days. We truly have become an exceedingly wicked nation.

We like to think that we are an “example” for the rest of the planet, but in reality the only example that we are is a bad one. Our guilt has been put on display for all the world to see, and yet we just continue to race toward even more evil.

Not only did the Republicans not defund Planned Parenthood, the truth is that not a single pro-life amendment of any sort even got into the bill thanks to Paul Ryan. The following comes from lifesitenews.com…

“The bill failed to include a single major pro-life policy rider, despite the requests of over 120 members of Congress and the disturbing revelations about Planned Parenthood brought to light this year,” said Congresswoman Diane Black, R-TN, who voted against the bill.

The House Freedom Caucus offered a series of amendments to the bill defunding Planned Parenthood, strengthening conscience protections for pro-life physicians and organizations, and ending all U.S. funding for the United Nations Population Fund (UNFPA). The House Rules Committee rejected these riders earlier this week, as Speaker Paul Ryan said he did not want conservative amendments added to the bill that would drive away his Democratic colleagues.

The committee also rejected an amendment to increase vetting of refugees who enter the United States from the terrorist hotbeds of Syria and Iraq, which had previously passed the House, with 47 Democrats adding strong bipartisan support.

Like I said, the Republicans completely capitulated, just like they always do.

Now the U.S. national debt is nearly double the size that it was just before the last financial crisis struck, and our leaders continue to borrow and spend as if there is no tomorrow.

Perhaps they have convinced themselves that there will never be any consequences for acting so foolishly.

Perhaps they believe that in the end everything will turn out okay somehow.

Perhaps they are able to rationalize the theft of more than a hundred million dollars an hour from future generations of Americans.

But nothing can erase what they have done to us. The promising future that our children and our grandchildren should have had has been completely wiped out, and the leading edge of the greatest economic crisis that any of us has ever known is now upon us.

If we had done things differently, things wouldn’t have had to turn out this way. But now the die is cast, and we are all going to pay a very high price for the mistakes that have been made in Washington.

The Good, The Bad And The Ugly From The Fiscal Cliff Deal

January 2, 2013 by Michael

The fiscal cliff deal contains more bad news than it does good news. Yes, the tax increases on the middle class could have been much worse, and we should be thankful that Congress at least did something for the middle class. Unfortunately, they didn’t do enough. Every American worker is going to pay higher taxes next year as a result of this deal. The fiscal cliff deal represents the biggest tax increase in 20 years, and it is also projected to increase the U.S. national debt by an additional 4 trillion dollars over the next decade. In the final analysis, U.S. government finances are still wildly out of control and we are all going to be paying higher taxes. Not a whole lot to be excited about, and nothing has really been fixed for the long-term. Our politicians have kicked the can down the road once again, but someday they will run out of road and all of this debt will absolutely crush us. And of course a lot of our politicians didn’t even really know what they were voting for. The fiscal cliff bill was more than 150 pages long, and our Senators got the bill into their hands just 3 minutes before they voted on it. So none of them actually read the bill. But that is the way things work in America today. The blind are leading the blind and everyone is mindlessly hoping that everything will turn out okay somehow.

For a few moments, let’s take a closer look at the fiscal cliff deal. There are some good things in there, there are some bad things in there, and there are some things about the deal that are downright ugly.

The Good

-One of the best things about the fiscal cliff deal is that income tax rates did not rise on the poor and the middle class. This is great news for millions of families that are struggling to make ends meet each month. A significant rise in income tax rates would have been crippling.

-The Alternative Minimum Tax will now be permanently adjusted for inflation. This is something that I had screamed about in previous articles. If an AMT fix had not been passed, approximately 28 million households would have been hammered with the Alternative Minimum Tax on their 2012 earnings.

-Millions of unemployed workers will continue to receive extended federal unemployment benefits. We probably cannot really afford to keep doing this, but at least now there won’t be millions of unemployed workers that suddenly have their only source of income shut off. The next trick will be to find jobs for all of those workers. Unfortunately, millions of our jobs continue to be shipped to the other side of the world.

The Bad

-Payroll taxes are going up for every American worker. The fiscal cliff deal allows the 2 percent payroll tax cut to expire, and so now the average U.S. household bringing in about $50,000 a year will pay approximately $1,000 more per year in payroll taxes. As a result, it is being projected that U.S. consumers will have $115 billion less in disposable income to spend in 2013. Happy New Year American workers!

-The fiscal cliff deal did nothing about the new Obamacare taxes that went into effect on January 1st. Many of these taxes will hurt the middle class. To see an example of a receipt where a consumer was charged the new “medical excise tax” in Obamacare, just check out this article.

-The carried-interest deduction loophole remains intact, so incredibly wealthy hedge fund managers will continue to get away with paying very little in taxes. If the rest of us are being taxed into oblivion, then they should share in the pain with the rest of us. Of course I personally believe that the income tax should be abolished entirely, but none of our politicians seem interested in that idea at all.

-Income tax rates will increase for high earners. This will hurt a lot of small businesses. Many small businesses that earn more than $400,000 a year will now be faced with making some really tough choices. Some may have to lay off workers. The top rate will now be 39.6 percent, but when other federal and state taxes are factored in, many small businesses will now be paying a top marginal rate of well over 50 percent. That is absolutely obscene.

-A compromise was reached on the estate tax. The exemption was scheduled to fall to just $1 million and the rate was scheduled to go up to 55 percent, and fortunately Congress decided to do something about that. As I have written about previously, that would have been a disaster for many small businesses and family farms. As a result of the fiscal cliff deal, the estate tax will only rise from 35 percent to 40 percent. The exemption for individuals will be about 5 million dollars and for couples it will be about 10 million dollars, and those figures will now be indexed for inflation. A tax increase is never a good thing, but if Congress had done nothing things would have been far worse.

-The fiscal cliff deal contains a lot of pork. In particular, it contains provisions that extend specific tax breaks related to Puerto Rican rum, electric motorcycles, biodiesel and renewable diesel fuel, the film and television business, and motorsports entertainment complexes.

The Ugly

According to the Congressional Budget Office, as a result of this deal the U.S. national debt will be about $4 trillion higher a decade from now than it would have been if Congress had done nothing.

The deficit for fiscal year 2013 alone will be about $330 billion higher than it would have been if Congress had done nothing.

So this deal has made our debt problems even worse.

Right now, the U.S. has a debt to GDP ratio of about 103 percent. We are already well into the “danger zone”, yet most Americans still don’t seem very concerned about all of this debt.

The fiscal cliff deal contained hardly any spending cuts at all. In fact, there was a 41 to 1 ratio of tax increases to spending cuts in the deal. The Democrats definitely won this round. But of course they had most of the leverage. If Congress had done nothing, the middle class would have been absolutely devastated by all of the tax increases, and the Republicans were desperate to prevent that.

But now that the battle over taxes is done, the leverage is going to shift over to the Republicans for the next big fight.

The battle over the debt ceiling is next. If Congress does not act, the U.S. government will soon not be able to borrow any additional money. This battle will be one of the stories that dominates the headlines over the next few months.

If the Republicans want to do something serious about spending, now is their chance. The battle over tax rates is already over, and there is no election in November. The Republicans could conceivably say “NO” to a debt ceiling increase if they want to. If that happened, the federal government would only be able to spend the money that it already has. It would not be able to borrow more. That would mean that we would have to start living within our means.

What a novel concept.

Of course there is no reason to believe that the Republicans in the House will suddenly grow a spine. They have folded every other time that the debt ceiling has come up. It will probably be the same again in 2013.

And Barack Obama is already saying that there will be “no negotiations” over the debt ceiling this time. He expects the Republicans to raise the debt ceiling for him without getting anything in return…

“I will not have another debate with this Congress over whether they will pay the bills they’ve already racked up.”

But the U.S. government cannot spend a single penny or borrow a single penny without the approval of the U.S. House of Representatives.

If the Republicans in the House want to ever get serious about government spending, the upcoming battle over the debt ceiling is a golden opportunity.

They could stop the Obama administration from piling up crazy amounts of debt if they want to. All they need is the courage to take a stand.

During the first four years of the Obama administration, the U.S. government accumulated about as much debt as it did from the time that George Washington took office to the time that George W. Bush took office.

The Republicans have had control of the House for about half of that time. That means that they have been willing accomplices.

So will they take a stand?

That is very doubtful. Over the past few years they have exhibited the intestinal fortitude of a frightened chicken. They will probably huff and puff a little bit, but in the end they will probably give in to Obama once again.

But what we are doing to our children and our grandchildren is so immoral that it is hard to describe. We are stealing more than 100 million dollars from them every single hour of every single day, and we plan on leaving them with the biggest pile of debt the world has ever seen. We should be absolutely ashamed of ourselves.

Why can’t we just spend the money that we have?

What would be so wrong with that?

Unfortunately, that would mean such a painful downward adjustment in our standard of living that most Americans would freak out. We are addicted to debt-fueled prosperity, and so we can’t stop stealing from future generations. We need their money to feed our addiction.

In the end, this gigantic mountain of debt is absolutely going to destroy everything that our forefathers built for us. There have been some people that have been warning about this for decades, but the American people did not listen.

Soon enough, we will all pay the price for this foolishness.

16 Things About 2013 That Are Really Going To Stink

December 27, 2012 by Michael

The beginning of the year has traditionally been a time of optimism when we all look forward to the exciting things that are going to happen over the next 12 months. Unfortunately, there are a whole bunch of things about 2013 that we already know are going to stink. Taxes are going to go up, good paying jobs will continue to leave the country, small businesses will continue to be destroyed, the number of Americans living in poverty will continue to soar, our infrastructure will continue to decay, global food supplies will likely continue to dwindle and the U.S. national debt will continue to explode. Our politicians continue to pursue the same policies that got us into this mess, and yet they continue to expect things to magically turn around. But that is not the way that things work in the real world. Bad decisions lead to bad outcomes. Instead of realizing that what we are doing is not working, our “leaders” continue to give us more of the same. As a result, there are going to be a lot of things about 2013 that will not be great. Sticking our heads in the sand and pretending that everything will be “okay” somehow is not going to help anyone. We’ve got to make people understand exactly what is happening and why it is happening if we ever hope to see real changes.

The following are 16 things about 2013 that are really going to stink…

#1 Taxes Are Going To Go Up

Even if a fiscal cliff deal is reached, some taxes will still go up next year. And if no deal is reached, there will be a whole bunch of different tax increases in 2013.

According to CBS News, these tax increases would be very painful for the middle class…

If lawmakers fail to work out any sort of deal, there will be severe long-term consequences for the economy: According to the Tax Policy Center, going off the “cliff” would affect 88 percent of U.S. taxpayers, with their taxes rising by an average of $3,500 a year; taxes would jump $2,400 on average for families with incomes of $50,000 to $75,000. Because consumers would get less of their paychecks to spend, businesses and jobs would suffer.

#2 The Middle Class Is About To Be Scorched By The Alternative Minimum Tax

Of more immediate concern for the middle class is the Alternative Minimum Tax. Many Americans have never heard of the AMT, but it is truly one of the worst things about our tax code.

If Congress does not act, and right now it does not look promising, millions of middle class households will see a massive increase in their tax bills for 2012.

According to one analysis, households that are forced to pay the AMT will end up paying an extra $3,700 in taxes…

Unless Congress acts by the end of the year, more than 26 million households will for the first time face the AMT, which threatens to tack $3,700, on average, onto taxpayers’ bills for the current tax year. Because those people have never paid the AMT, they have no idea they are in its crosshairs — put there by a broader stalemate over tax policy that has kept Congress from limiting the AMT’s reach.

Do you have an extra $3,700 sitting around to send to Uncle Sam?

If not, you had better contact your representatives in Congress and scream like crazy about passing a fix for the AMT. They have always gotten it done before, but this year there is so much animosity between the Republicans and the Democrats that nothing may end up getting done.

#3 The Economy Will Continue To Get Worse

Despite all of the talk in the mainstream media and from our politicians that our economy is getting better, the truth is that the U.S. economy continued to decline in 2012. If you doubt this, just read the 75 statistics in this article.

And there are a whole host of signs that the economy is starting to slow down even more as we enter 2013. For example, consumer confidence in the United States has experienced its largest two-month drop in over a year, and retail sales during the holiday season turned out to be quite disappointing.

#4 Good Paying Jobs Will Continue To Be Shipped Out Of The United States

Thanks to decades of “free trade agreements”, workers in the United States must directly compete for jobs with hundreds of millions of workers on the other side of the globe that live in countries where it is legal to pay slave labor wages.

We continue to see millions of jobs being shipped out of the country and our politicians stand by and do nothing.

Most Americans have no idea how this emerging one world economic system works. The beautiful product that you buy at the big retail store may have been made by someone working in some of the most horrific conditions imaginable.

A 42-year-old woman named Julie Keith recently found this letter inside a box of Halloween decorations that had been made in China…

“If you occasionally buy this product, please kindly resend this letter to the World Human Right Organization. Thousands people here who are under the persecution of the Chinese Communist Party Government will thank and remember you forever.

People who work here have to work 15 hours a day without Saturday, Sunday break and any holidays. Otherwise, they will suffer torturement, beat and rude remark. Nearly no payment (10 yuan/1 month).

People who work here, suffer punishment 1-3 years averagely, but without Court Sentence (unlaw punishment). Many of them are Falun Gong practitioners, who are totally innocent people only because they have different believe to CCPG. They often suffer more punishment than others.”

But both political parties continue to tell us how wonderful it is that we are trading with communist China. They see no problem with the fact that good paying jobs that used to be performed in America are now being performed by slave laborers on the other side of the planet. And most Americans continue to support this system by filling their shopping carts with lots of stuff that has “made in China” stamped on it.

#5 Small Businesses Will Continue To Be Destroyed

At the same time, small businesses all over America are being strangled to death by taxes and regulations. Just consider the following numbers from a previous article…

We are told that the economy is supposed to be “recovering”, but the number of “startup jobs” at new businesses has fallen for five years in a row. According to an analysis of U.S. Department of Labor data performed by economist Tim Kane, there were almost 12 startup jobs per 1000 Americans back in the year 2006. By 2011, that figure had fallen to less than 8 startup jobs per 1000 Americans.

How is our economy ever going to thrive if we keep killing off our small businesses?

#6 Hunger And Poverty Will Continue To Explode To Unprecedented Levels

As the U.S. economy bleeds jobs and loses small businesses, the number of Americans living in poverty continues to explode.

Here are some numbers to show to people who still don’t understand how desperate the situation is…

-Families that have a head of household under the age of 30 have a poverty rate of 37 percent.

-According to U.S. Census data, 57 percent of all American children live in a home that is either considered to be “poor” or “low income”.

-For the first time ever, more than a million public school students in the United States are homeless. That number has risen by 57 percent since the 2006-2007 school year.

#7 The Number Of Americans On Food Stamps Will Continue To Increase

If the economy is recovering, then why does the number of Americans on food stamps continue to soar?

As I wrote about yesterday, about 17 million Americans were on food stamps back in the year 2000.

Today, more than 47 million Americans are on food stamps.

Does anyone want to explain to me how that is a sign that things are getting better?

Back in the 1970s, about one out of every 50 Americans was on food stamps. Today, about one out of every 6.5 Americans is on food stamps.

How much worse do things have to get before people realize that what we are doing is not working?

#8 Millions Of Americans Are About To Lose Their Unemployment Benefits

During this economic crisis, an unprecedented number of American families have been relying on unemployment benefits in order to stay afloat.

Well, if no agreement is reached in Washington D.C., millions of Americans will shortly lose those benefits…

Three million Americans may become unwitting casualties of the political war in Washington over the fiscal cliff.

Since 2008, the federal government has funded extensions of the unemployment insurance offered by states, more than tripling the amount of aid available to the unemployed in some areas. But the program is expensive, with the Congressional Budget Office estimating it would cost $30 billion to extend it through 2013. President Barack Obama wants to extend the benefits for another year, but Congress has already pared back the program, and Republicans insist it represents the kind of largesse Washington can no longer afford.

#9 Our Infrastructure Will Continue To Rot And Decay

The United States once had the most beautiful infrastructure in the entire world. Our highways, bridges, airports, railroads, sewer systems and electrical grids were the envy of the entire planet.

Well, now we don’t even have enough money to repair what we already have, so our infrastructure will continue to rot and decay in 2013…

Highways and bridges will need $2.5 trillion in upgrades if they are to survive for another 50 years — a must-do to keep commerce thriving. And that figure doesn’t even take into account the airports, railroads, subways, sewage-treatment plants, waterworks, levees, electric grids, pipelines, and all of those other expensive systems that people ignore until they break down.

#10 Many Of Our Major Cities Will Continue To Be Transformed Into Festering Hellholes

A lot of our major cities are also rapidly degenerating. Detroit is one of my favorite examples, but the same kinds of things could be said about dozens of other major cities all over the country. The following is a brief excerpt from one of my recent articles…

If you can believe it, more than 50 percent of all children in Detroit are living in poverty, and close to 50 percent of all adults living in the city are functionally illiterate. The high school graduation rate in Detroit is down to about 25 percent, and the city has become a breeding ground for gangs and violence. The number of murders in Detroit is already higher than last year, and recently groups of young men toting AK-47s have been running around robbing gas stations. How much worse can things possibly get for Detroit?

#11 State And Local Governments Will Find Ways To Squeeze Even More Money Out Of Us

In case you haven’t noticed, state and local governments all over the country are bleeding cash and are desperate for money. In 2013 you can expect them to continue to find more ways to squeeze even more money out of all of us. Here is one example…

Over the course of 2013, the District government will add 134 traffic cameras to its network, more than doubling the size of a system that generated $85 million in revenues for the city in its last fiscal year.

Police spokeswoman Gwendolyn Crump told The Washington Examiner that the city will intensify its camera-based efforts to cite motorists for speeding and stoplight violations while also adding cameras to detect other moving violations.

#12 Drug Cartels Will Continue To Easily Cross Our Borders And Terrorize Our Citizens

The federal government continues to refuse to protect our borders, and that means that drug runners and gang members will continue to pour into the United States.

Down in the Southwest, many ranchers are being absolutely terrorized by these criminals. The following is from a recent NBC News article…

Just before nightfall, 73-year-old rancher Jim Chilton hikes quickly up and down the hills on his rugged cattle-grazing land south of Tucson, escorting two U.S. Border Patrol agents.

He wants to show them the disturbing discovery he made earlier in the day: a drug-smugglers’ camp on his private property. Stacked together under a stand of trees are blankets, jackets, food, water, binoculars and bales of marijuana from Mexico wrapped in burlap. The smugglers, themselves, are nowhere in sight and are believed to have fled the area, which is about 10 miles north of the Mexican border.

Chilton has had his house burglarized a couple of times and his family regularly encounters groups of armed drug smugglers coming across from Mexico…

Their cattle fences are frequently cut and paths heading north from Mexico cross their property. Beckham says a smuggler even fired shots at him while he walked his land with a U.S. Border Patrol agent. Several illegal border crossers have also approached his house at night–one even reaching his hand into their bathroom window.

“Several years ago, one of my children was taking a shower and had a gentleman reach into the shower while he was in there, and he came out screaming, absolutely refusing to take a shower for the next couple months.”

But even if you don’t live along the border, all of this still affects you. According to government figures, Mexican drug cartels are actively operating in more than 1,200 U.S. cities right now. They are probably hard at work in the community where you live.

So what is the Obama administration doing to fix the problem?

Not much.

In fact, the Obama administration is actually encouraging people to come to the U.S. and become dependent on the system. If you can believe it, there is actually a website run by the Department of Homeland Security that teaches immigrants how to apply for welfare benefits once they get into the United States.

#13 Social Decay Will Continue To Accelerate

All over America we are seeing signs of social breakdown. Here is yet another example…

A woman sleeping on a street bench outside a drug store was doused with an accelerant and set on fire early Thursday morning in Van Nuys.

Witnesses told police that a man poured liquid — possibly a beverage containing alcohol — on the sleeping woman at about 1 a.m. outside a Walgreens store near Van Nuys Boulevard and Sherman Way. He lit a match and ran from the location, witnesses told police.

Who would just run up and set a woman on fire?

Sadly, this is not an isolated incident. For many more examples like this, please see this article: “20 Shocking Examples Of How Sadistic And Cruel People Have Become“.

We need to admit that we have a major problem on our hands. Violent crime in the United States increased by 18 percent in 2011, and another huge increase is expected when the numbers for 2012 come out.

America is changing, and not for the better.

#14 Global Food Supplies Will Continue To Dwindle

Did you know that for six of the last eleven years the world has consumed more food than it has produced?

As a result, global food reserves have reached their lowest level in almost 40 years.

So what is going to happen if the world continues to eat more food than it makes?

Let us hope that there is not another major drought in 2013. If there is, we could be looking at a very serious food crunch.

#15 Wall Street Will Continue To Resemble A Giant Casino

Our financial system seems to have not learned any lessons from the financial crash of 2008.

Instead of admitting their mistakes, they just continue to engage in even more reckless behavior.

Today, there are four major U.S. banks that each have more than 40 trillion dollars of exposure to derivatives.

At some point that house of cards is going to collapse and we will be facing a derivatives crisis of unprecedented magnitude.

Will it be in 2013?

#16 The U.S. National Debt Will Cross The 17 Trillion Dollar Mark

In 2013, our national debt will blow past the 17 trillion dollar mark and start heading toward 18 trillion dollars.

How stupid can we possibly be?

During the first four years of the Obama administration, the U.S. national debt has grown by about as much as it did from the time that George Washington took office to the time that George W. Bush took office.

It really takes something to match more than 200 years of debt accumulation in less than four years.

But our politicians don’t seem to care about all of this debt. They will continue to steal more than 100 million dollars from our children and our grandchildren every single hour of every single day. That is beyond criminal, and yet the American people don’t seem to care.

What in the world has happened to this country?

Of course not everything about 2013 will be bad. Personally, I am looking forward to an exciting year. I have a new book that will be coming out, and my family is blessed and healthy. I would like to wish all of you a very blessed 2013. Things may be falling apart all around us, but that doesn’t mean that we can’t have a great year even in the midst of all the chaos.

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