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Total federal government
debt
($14.5 Trillion as of JULY-2011)
per-capita has never been larger. Also, there are no surpluses in
the Social Security and Medicare systems (only non-marketable I.O.U.s).
Social Security and Medicare are pay-as-you-go systems. The money coming
into those systems have been spent and replaced with I.O.U.s, leaving both
pay-as-you-go, with the beginning of a 78 million baby-boomer bubble (that's 13,175
new recipients per day!). The U.S. is also dangerously
dependent on foreign loans. Over the past few decades, foreigners have
been buying up huge amounts of U.S. debt, which is propping up the U.S.
Dollar. But how long can that last, when the U.S. federal government and
the Federal Reserve are borrowing and/or creating
new money out of thin air? What will happen to the U.S.
Dollar when these foreign nations stop funding the U.S.' rampant borrowing and
spending?
As of JULY-2011, the
federal National Debt
per-person
is $46,474, which is 2.1 times more than the previous
record-high (which was $22,099 in year 1945, after World War II, in 2011
dollars).
As of JULY-2011, the
federal National Debt per-person is $46,474, which is 8.2 times
more than the it was near the end of the Great Depression (which was $5,674 in year 1941
in 2011 dollars).
Population in year 1941 = about 133 Million; National Debt = $49 Billion =
$752 Billion in 2011 Dollars
Population in year 1945 = about 140 Million; National Debt = $259 Billion =
$3.25 Trillion in 2011 Dollars
Population in year 2011 = about 312 Million;
Total personal household debt nation-wide
($13.8 Trillion as of year 2008) has never been larger,
both in size and as a percentage of the $15.1 Trillion GDP (as of
2011).
What will happen when mo
st
Americans are already so deep in debt and unable to borrow any more?
Like playing the game of Monopoly where
one player can print all the money they want, how long will it be until most (if
not all) people are broke or deep in debt?
While the wealthy may also become less wealthy, and after the currency has
crashed, the wealthy will still own most of all wealth in the U.S., because they
will have converted their wealth to land, property, real-estate, gold, and other
assets that retain value. However, most Americans will suffer
significantly by the erosion of their wages, savings, pensions, and entitlements
due to the incessant erosion of the currency, and their savings.
Total nation-wide debt ($57 Trillion) has never been larger, both in size and as a percentage of the $15.1 Trillion GDP (GDP=$15.1 Trillion in year 2011):
private domestic financial sector debt=$17.2 Trillion;
household debt= $13.8 Trillion;
business debt=$11.1 Trillion;
federal government National Debt=$Loading....00
state and local government debt=$2.2 Trillion;
other private sector
foreign debt=$1.9 Trillion;
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Total nation-wide debt = $57 Trillion
QUESTION:
Where will the money come from to pay the interest on the $57
Trillion of nation-wide debt, much less the money to reduce the principal
debt of $57 Trillion, when that money does not yet exist?
Real median household incomes have fallen since year 1999, and have actually never been lower since year 1978 when also including the fact that:
there are now more workers per household;
we have more regressive taxation (voters should ask to see the tax curve on gross income; before a myriad of tax loop holes are applied);
and the 40-hour work week is disappearing;
urban sprawl and high fuel costs are hammering the middle-income and lower-income levels;
The current number of unemployed (13.2-to-30.7
Million as of MAR-2009) has
never been worse since the Great Depression (12.83 Million).
Unemployment increased by over 500,000 in DEC-2008, by over 500,000 in JAN-2009,
by 651,000 in FEB-2009, and is expected to grow higher throughout year 2009.
Unemployment (as of FEB-2009) is at a 25 year record-high.
Illegal immigration has never been worse and more costly, costing American citizens an estimated $70 Billion to $327 Billion annually in net losses. The problem has quadrupled since the amnesty of year 1986. Hundreds of overrun hospitals have closed (60-to-84 in California alone), California is now laying off 20,000 teachers in the public school system. 29% of all people incarcerated in Federal prisons are illegal aliens. The politicians (despicably) capitalize on it in 3 ways:
by pitting American citizens and illegal aliens against each other for profits and to depress wages (Wage_Stagnation + Cheap_Labor = Big_Profits);
by dividing the voters (capitalizing on Americans misplaced compassion for illegal aliens more than their fellow Americans);
and by pandering for votes;
The
wealth disparity gap has never been larger since year 1930.
The
gap started growing larger, and has not stopped growing larger since year 1976.
Taxation has been
regressive since year 2000 (or before). We have never had so many different kinds of
taxes;
many of which are regressive sales taxes. The current tax code is
ridiculously complex (by design) with a myriad of tax loop-holes that mostly
benefit the wealthy.
Home equities have never been lower (below 50%)
since year 1945.
Home ownership has
fallen
since year 2006 for low-income and middle-income groups. A study shows that only 59.6% of working class families owned their homes in 2003, lower than the 62.5% in year 1978. That is, home ownership is rising among the wealthy, while falling for most Americans that are losing wealth, losing equity, losing income, and losing their homes at record levels.
Currently, home ownership is in a
record plunge, and the 4th quarter of 2007 had the biggest one-year drop
(1.1%) since tracking began in year 1965.
Foreclosures are at record levels:
AUG-2008: 2.0 Million foreclosures year-to-date
Year-2007: 2.0 Million foreclosures
Year-2006: 1.0 Million foreclosures
Year-2005: 846,000 foreclosures
Average personal
savings rates are negative (since year 2005), and
have never been worse since 1933.
Energy vulnerability: high oil and energy prices, which have
recently never been higher (both in nominal price and adjusted for inflation;
worse than the spike in
year 1981).
Despite some recent reduction in oils and fuel prices, the U.S. is still
dangerously dependent on foreign oil.
Federal government
bloat has never been worse, and continues to grow to
nightmare proportions. There are now more jobs in government than all manufacturing nation-wide.
Global competition has never been stronger. Trade deficits have never been larger (see China). Transnational corporations want cheap labor
(WageStagnation + CheapLabor = BigProfits). Jobs are leaving the nation
in droves; a trend that started in the early 1970s, and also helps to explain why real median household incomes have actually been falling since year 1978.
Also, while
6.7% unemployment doesn't sound bad, the jump from 5.0% to 5.5% (from
April-2008 to May-2008) is the largest one-month increase in 34 years
(source: U.S. Labor Dept.). 6.7% is the highest level of
unemployment since year 1974, and it is expected by most analysts to rise by
several more percentage points. Also, since the population is growing by 5
million per year too, the number of unemployed is growing larger,
even if the percentage doesn't.
Medicare has hundreds of billions of unfunded liabilities per year, which are being funded by more borrowing and debt. It is not sustainable; especially with the approaching 77 million baby-boomer bubble. In year 2007, Medicare (16%) and Medicaid (7%) combined were 23% of the $2.7 Trillion federal budget.
Year 2007: $432 Billion (16% of federal budget)
Year 2006: $374 Billion (14% of federal budget)
Year 2005: $333 Billion (13% of federal budget)
Year 2000: $216 Billion (12% of federal budget)
Year 1990: $107 Billion ( 9% of federal budget)
Year 1980: $34 Billion ( 6% of federal budget)
Year 1970: $7 Billion ( 4% of federal budget)
Inflation was higher in the mid-to-late 1970s and early 1980s, but we have had positive inflation since year 1956.
3% to 5% inflation doesn't sound bad, but when it is every year, it becomes exponential (i.e. 3% this year is really more than 3% of last year, which is more than 3% the year before, etc., etc., etc.). Thus, a 1950
U.S. Dollar is now worth less than 10 cents.
As of 16-JUL-2008, consumer prices have rose at a rate that has never
been faster in the
last 26 years. In addition, inflation has been understated for
several years, due to questionable modifications to the inflation calculations
in year 1983 and year 1998:

The calculation was modified such that the weighting factors for some Consumer
Price Index (CPI) components were increased for items falling in price, and
decreased for items rising in price.
Therefore, inflation (as of AUG-2008) is actually 15.6%
(by the pre-1983 method), or 9.8% (by the
pre-1998 method), instead of 5.37% by the
current method.
And year after year, the errors in the inflation numbers are compounded.
Many manifestations of unchecked greed:
A massive derivative bubble is about to burst. With high inflation and people running all about like chickens with their head cut-off, looking for investments to avoid the incessant erosion of their money, the U.S. financial sector dishonestly and deviously sold debt to investors. It started with shady loans to Americans and then bundling those bad loans into complex financial instruments (CDOs (Collateralized Debt Obligation), SIVs (Structured Investment Vehicles), ABSs (Asset Backed Securities), CDSs (Credit Default Swaps), etc). However, as time went on and the inflows of money increased, financial institutions became reckless in their efforts to manufacture AAA products. They made loans to sub-prime borrowers (sub-prime CDOs) and used financial wizardry to create securities out of thin air (synthetic CDOs). Towards the peak of this financial greed and insanity, banks added large amounts of leverage to their exotic investment products (sub-prime CDOs-squared, and CPDOs (Constant Proportion Debt Obligations)), and built complex, highly leveraged, off-balance sheet vehicles which funded themselves with short term debt (SPVs (Special Purpose Vehicles), SPEs (Special Purpose Entities), VIEs (Variable Interest Entity), and SIVs). Through financial engineering and the mis-pricing of risk, the value of derivatives now far exceeds the amount of real assets and economic resources in the U.S. In addition to the derivative bubble, financial institutions used leverage to sell insurance on an enormous amount of debt, creating today's $55 trillion CDS market. In order to de-leverage and close out their positions, CDS issuers are being forced to buy back huge quantities of insurance, driving up the cost of insuring corporate debt. The higher premiums for CDS translate as higher loan rates for corporations and governments.
Structurally unbalanced economy. Incessant inflation and federal deficit spending for 52 consecutive years, easy credit, predatory loan practices, cookin'-the-books, fraud, and massive debt over the last 30 years have warped the U.S. economy. For example:
(a) Bloated Financial Sector: While cookin'-the-books and packaging risky U.S. debt into complex and exotic vehicles for investors, the financial sectors grew until it consumed 27% of corporate America's total profits. As the credit crunch fuels the disintegration of the financial sector, it leaves a gapping whole in the economy, and increased unemployment.
(b) Automakers dependent on cheap gas: U.S. automakers invested in producing fuel guzzling cars and SUVs. When inflation pushes oil back up over $100, a large part of America's automobile industry will go bankrupt.
(c) Leveraged Stock Buybacks: Many companies (like General Electric) issued large amounts of debt (commercial paper or corporate bonds) to fund share buybacks to prop up stock prices, and are now having trouble paying those loans back, in addition to having trouble getting more loans.
(d) Outsourced manufacturing: Companies that outsourced large portions of their manufacturing overseas, to lower labor costs, whose primary markets are in the U.S., will see labor costs increase as inflation of the U.S. Dollar increases.
Most Consumers are tapped out and broke: 40% of Americans (on
average) have ZERO net worth. The
wealth disparity gap has been growing worse since year 1976. In an
economy that is mostly fueled by consumer spending, most consumers being broke
is an obvious problem. Many Americans wealth has been decimated by
deflating home values, upside-down loans, falling stock prices,
outsourcing and competition with cheap oversea labor, stagnant and/or falling
wages, inflation, etc., etc., etc. And tightening credit is limiting
Americans ability to borrow more (which may be a good thing). The next
year does not look good at all with hundreds of thousands in job cuts in the
pipeline and America's middle-class already getting poorer every day.
Other exacerbating problems are:
2 wars in Afghanistan and Iraq (cost as of 19-JUL-2008 estimated between $557 Billion and $2+ Trillion);
skyrocketing health care costs;
declining quality and rising costs of education;
election system problems;
regressive taxation (voters should always ask to see the tax-curve on gross income; before a myriad of tax loop holes are applied);
violent crime rates are on the rise again, after falling for many years;
declining transparency in government (i.e. the U.S.A. Corruption Perception Index has fallen for 10 years);
for the 2nd time in 125 years, the Red Cross is bankrupt;
the Dow Jones had the worst June since the Great Depression;
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Pressing Problems Facing the U.S. (growing quickly in number and severity) |
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CONGRESS' To-Do List (see what Do-Nothing Congress has done since the last election) |
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10+ Abuses in the U.S. for the past 30+ years |
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Irresponsible Incumbent Politicians (what irresponsible incumbent politicians do while troops risk life and limb) |
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Congress Refuses to Call Article V Convention |
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PROs and CONs (why to stop re-electing irresponsible incumbent politicians) |
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Interest on the National Debt (it will take 140 years to pay off the National Debt) |
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Debt and Money-Printing (Inflation, Debt, and Excessive Money-Printing?) |
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Consider the Following Scenario (must we learn the hard way?) |
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The Environment and Over-Population ; U.S. Population |
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Solutions ; Help Educate Others (peacefully force government to be responsible and accountable too!) |
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Badly-Needed, Common-Sense Reforms (that can never be passed until voters make it happen) |
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The Cheater's Philosophy (learn to recognize the manipulation techniques) |
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Frequently Asked Questions |