“Truth persists and illuminates, even if there is no one to utter it.“
Government is not the solution; rather, it is causing the problems. The below slides (view at Scribd, backup PDF) highlight the economic situation, updated from a May presentation. I’ve written about the solutions to the unemployment problem, the deficit, Social Security, and the high costs of health care which are linked below.
For Liberty and the Constitution,
Will the real national debt please stand up? The national debt published in the papers and online – which is closely tied to the USTreasury market is now over $13.3 trillion. Current government plans include massive deficit spending through 2013, and the government’s optimistic projections of a return to “normalcy” after 2013 are not anchored in reality. Source of budget data.
However, the true national debt is hidden by the cash-based accounting method government uses. The true national debt is over $120 trillion when GAAP (Generally Acceptable Accounting Principles) are used to identify future taxation sources and future debts such as Social Security and Medicare. That’s around $400,000 for every man, woman, and child in the country. Massive reductions in spending and taxation are necessary if America is to regain its financial sovereignty, my proposals are outlined here and in “Guns or Health Care?“
As seen in the official USTreasury report on page 178/254, the total unfunded liabilities for Medicare and Social Security is a jaw-dropping $107 trillion over the future of these programs. While I predict the Democrats may bear the brunt of the blame for the collapse of Medicare, one must not forget that it was the Republican’s massive expansion of Part D’s prescription drug plan under Bush that severely worsened Medicare’s fiscal situation. While the situation in Medicare is worse – and changing daily due to the new healthcare legislation – some of my proposals to maintain Social Security are outlined in “Social Security or Insecurity?“
“He has erected a multitude of New Offices, and sent hither swarms of Officers to harass our People, and eat out their substance.” – Declaration of Independence, 1776
The quote above from the Declaration is far more true in 2010 than it was in 1776. Not counting the millions of government contractors, the government’s Republocrat-controlled work force is currently 22.8 million bureaucrats. This is America’s largest single job sector, and remember, the taxpayer bears the full cost to keep these bureaucrats employed. Like something out of an Orwell novel, the Washington Post estimates 854,000 bureaucrats are employed to spy on and keep tabs on the rest of us and the world. Lisa Benson’s cartoon says it all.
Keep in mind bureaucrats make nearly twice the average wage of the private sector, and have better benefits. My solution? Lead by example. I will refuse the elite congressional pension and healthcare plans when elected, and keep just the median income for a salary and donate the rest of the $116,000 to local non-profit hospitals.
Next, notice that more than 1 in 8 Americans are on food stamps, or 40.4 million people. USDA link here. Note the strong rise in number of SNAP food stamp recipients during the past year. One would expect to see this number dropping or even flat-lining – along with employment rising – if a recovery were underway. The annual projected cost is now $66 billion, paid for by the ever-diminishing work force.
No jobs, no recovery. BLS link here. Note that while the “newspaper” unemployment rate is still 10%, the U-6 figure – which more accurately describes total unemployment is 17% – a depression statistic. An estimated 1.6 million will file for bankruptcy this year. I’ve described the common sense solutions to end the rampant unemployment created by the government almost overnight in the campaign’s Jobs plank.
Since the BLS drops off workers from its U-6 figure, the real unemployment rate is likely greater than 17%. Shadowstats estimates the rate at about 22%.
The number of new housing starts has reached a 5-decade low, while about 25% of all residential mortgages are underwater. Note that in prior recession cycles, a quick rebound occurred while this depression looks more like a dead cat bounce. This is because….
The Federal Reserve bailed out the bankers and Freddie Mac and Fannie Mae. The above is built from the Federal Reserve H.4.1 data here. The red line is the total (reported) balance sheet of the FED, which has more than doubled since the time of the Banker Bailout. While the original TARP bailout (not shown) accounted for much of the initial sharp increase, most of the debt has been replaced by $1.12 trillion of mortgage-backed securities (the purple line).
This graph shows the nationalization and propping of America’s entire residential housing industry. The yellow and green lines show the cumulative totals of USTreasury and USAgency debt held by the FED. While the Federal Reserve has admitted it will take losses on the MBS debt, the question remains as to how much and when.
The purchasing power of the dollar has lost well over 94% since FDR took America off the classical gold standard in 1933 through monetary inflation. The monetary inflation is caused by the Federal Reserve. They debase the dollar by creating more and more irredeemable paper dollars, which is of increasing concern since China has stopped buying Treasury debt. A major reason why healthcare now appears so expensive is this money-printing, as I highlighted in my article “Health Care Solutions.” Graph provided by Bloomberg Financial, 2009.
To cap off the situation with the dollar, the latest quarterly banking profile from the FDIC state the deposit insurance fund (DIF) is bankrupt. While consumers at failed banks still receive “insured” funds, the losses are presumably filled in with dollars from the FED, as reported last here. The current FDIC “watch list” rose to 775 banks, or almost 10% of all FDIC-insured banks in the US per p. 3/26.
In summary, do not expect a recovery until the Republocrat ruling elite are removed from power or are forced to address the problems the rest of society faces. As the extravagant $5 million Bill Clinton wedding under heavy security – possibly paid for by the taxpayer – and $7 million John Kerry yacht (and avoidance of >$500,000 in taxes) demonstrate, the elite are not exactly suffering.
As Stuart Carlson’s great cartoon shows, the “Great Recession” still has a firm grip on the economy. Sadly, the truth is the situation in America will not improve until the government removes its jackboots from the throat of the economy. Ceasing all special privileges to special groups would help as well.
That Freedom Shall Not Perish,
TOWNE FOR CONGRESS
Disclosure: No positions.