Monthly Archives: July 2011
It really is hard to find the words to describe the true horror of the national debt of the U.S.
Sunday, July 31st, 2011
The U.S. government has been on the greatest debt binge in all of human history, and a day of reckoning is coming that is going to be so painful that it is going to shock America to the core. [Let me explain further.
So says an article* at TheEconomicCollapseBlog.com which Lorimer Wilson, editor of munKNEE.com (It’s all about Money!), has further edited ([ ]), abridged (…) and reformatted below for the sake of clarity and brevity to ensure a fast and easy read. Please note that this paragraph must be included in any article re-posting to avoid copyright infringement. The article goes on to say:
We have lived so far above our means for so long that none of us really has any concept of what “normal” is like anymore. The United States has enjoyed the greatest party in the history of the world, but now this decades-old party is ending and the bills are coming due. Our current system is headed for an inevitable collapse. There is no way of getting around it – a horrific economic collapse is coming [and] it is going to change the world. You better get ready.
It was Dick Cheney who famously said that “deficits don’t matter”. Well, try telling that to the nation of Greece right about now. The horror that Greece is just beginning to experience is a preview of what is going to happen to us as well. Only when it happens to us it is going to be so much worse, because when we go down we are going to bring the entire global financial system down with us.
What we have done to future generations is beyond sickening. Previous generations entrusted to us the greatest economic machine in the history of the world and we destroyed it. Now we are leaving to our children and our grandchildren an economic future that has been totally wiped out and a national debt of more than 14 trillion dollars that we expect them to repay.
In Washington D.C. these days, there is a lot of talk about the debt ceiling but whatever the politicians do, it is not going to solve our debt problems. If the debt ceiling does not get raised, we move the financial pain into the present. World financial markets would crash and that would be followed by a devastating economic nightmare. If we do raise the debt ceiling, that will “kick the can down the road” a little bit farther. However, world financial markets will still crash eventually and our eventual economic nightmare will be even worse.
Who in the world is currently reading this article along with you? Click here to find out.
Can’t we just “inflate our way” out of debt? No, unfortunately things are just not that easy. If we try to inflate our way out of debt, interest rates will likely rise just as quickly as inflation does, and that would be absolutely catastrophic. Before interest rates even reached 20% we would hit a point where it would take every single dollar taken in by the federal government just to pay the interest on the national debt. Meanwhile, rapidly rising inflation would devastate the value of all of your bank accounts and every other single financial asset that you own. So no, inflating our way out of debt is not going to work.
At the moment, the U.S. federal government is able to borrow gigantic quantities of money at super low interest rates – but when that changes, all hell is going to be unleashed.
[Below is an abbreviated list of 25] statistics about the national debt that are almost too crazy to believe:
- As of June 20th, the U.S. national debt was $14,344,524,186,068.19 [see here for today’s number] yet 30 years ago the U.S. national debt was approximately 14 times smaller.
- It took from the presidency of George Washington to the presidency of Ronald Reagan for the U.S. government to accumulate one trillion dollars of national debt yet since then we have added more than 13 trillion dollars of additional debt.
- During Barack Obama’s first two years in office, the U.S. government added more to the U.S. national debt than the first 100 U.S. Congresses combined.
- The U.S. national debt is currently rising by well over 4 billion dollars every single day with the U.S. government borrowing over 2 million more dollars every single minute.
- The combined debt of the major GSEs (Fannie Mae, Freddie Mac and Sallie Mae) has increased from 3.2 trillion in 2008 to 6.4 trillion in 2011 [which,] thanks to George W. Bush, Barack Obama and the U.S. Congress, U.S. taxpayers are guaranteeing. This is debt that is not even included in the $14.3 trillion national debt figure.
- Interest on the national debt and mandatory spending on entitlement programs will absorb approximately 92 cents of every dollar of federal revenue by the year 2019.
- Between 2007 and 2010, U.S. GDP grew by only 4.26%, but the U.S. national debt soared by 61% during that same time period.
- The U.S. national debt has increased in size for 54 years in a row.
- If you divide up the national debt equally among all U.S. households, each one owes over $125,000 and it has gone up by $29,660 per household since Barack Obama signed the economic stimulus law.
- The U.S. government spent over 413 billion dollars on interest on the national debt during fiscal 2010 and it is projected that by the year 2021, interest payments on the national debt will amount to $1.1 trillion dollars a year.
- U.S. national debt will rise to about 400 percent of GDP by the year 2050.
- Some experts estimate that the unfunded liabilities of the U.S. government for programs such as Social Security and Medicare are in the neighborhood of 60 trillion dollars. Other experts claim that the total for federal government unfunded liabilities could be well over $100 trillion but what almost everyone agrees on is that it is going to be virtually impossible to even come close to meeting all of those obligations.
- Approximately one out of every four dollars that the U.S. government borrows goes to pay the interest on the national debt.
- The U.S. government currently has to borrow approximately 41 cents of every single dollar that it spends.
- If interest rates were to move back to 5% (2006 levels) it would increase annual U.S. interest expense by almost $700 billion annually. This is against current U.S. government tax revenues of $2.228 trillion (CBO FY 2011 forecast).
- If the U.S. government was forced to use GAAP accounting principles (like all publicly-traded corporations must), the U.S. government budget deficit would be somewhere in the neighborhood of $4 trillion to $5 trillion each and every year.
- Mandatory federal spending is going to surpass total federal revenue for the first time ever in this fiscal year. That was not supposed to happen until 50 years from now.
- In 1980, government transfer payments accounted for just 11.7% of all income. Today, government transfer payments account for 18.4% of all income.
- U.S. households are now actually receiving more money from the U.S. government than they are paying to the government in taxes.
- 59 percent of all Americans now receive money from the federal government in one form or another.
- Back in 1965, only one out of every 50 Americans was on Medicaid. Today, one out of every 6 Americans is on Medicaid.
- Back in 1950, each retiree’s Social Security benefit was paid for by approximately 16 workers. Today, each retiree’s Social Security benefit is paid for by approximately 3.3 workers. By 2025 it is projected that there will be approximately two workers for each retiree.
- Back in the 1950s, corporate taxes accounted for about 30 percent of all federal revenue. In 2009, corporate taxes accounted for just 6.6 percent
- The total compensation that the federal government workforce earned last year came to a grand total of approximately 447 billion dollars.
- The level of government waste in this country is absolutely mind blowing. For example, the Department of Health and Human Services has just announced a brand new $500 million program that will, among other things, seek to solve the problem of 5-year-old children that “can’t sit still” in a kindergarten classroom. In the past, the U.S. government has spent $2.6 million dollars to study the drinking habits of Chinese prostitutes and $400,000 dollars to pay researchers to cruise bars in Buenos Aires, Argentina to find out why gay men engage in risky sexual behavior when drunk.
The national debt is a problem that should have been handled 20 or 30 years ago but it wasn’t so now what we have to look forward to is a very bleak future. Even if we totally scrapped our current monetary system and repudiated the debt, the transition would be “rocky” at best and we would not enjoy anything close to the standard of living that we are enjoying today.
Unfortunately, [however,] the vast majority of our politicians in Washington D.C. would never even dream of abandoning the current system [even though they] are now admitting that our current state of affairs is “unsustainable”. They just don’t have the guts to do anything about it.
[As such,] this current system is headed for an inevitable collapse. There is no way of getting around it – a horrific economic collapse is coming [and] it is going to change the world. You better get ready.
- “Financial Repression” May Soon Become Our Worst Nightmare! Here’s Why
- Get Ready: Economic Hell is Coming!
- How to Restore Fiscal Sanity to the USA
- We Have Fallen Head First Into An Economic Abyss! Here’s Why
- Americans Are Hurting And It’s Going To Get Worse – Here’s Why
- The U.S. is Headed Towards Self-inflicted Disaster: Here’s Why
- IMF: Major Changes Required to Close U.S. Fiscal Imbalance – Here’s Why, What and How
- America: The Party is Over! Here’s Why
- Weiss: A Financial Apocalypse Awaits America!
- Is the Bankruptcy of the US and the UK Unavoidable?
- America’s Political Process Guarantees Another Financial Crisis!
- Washington Faces Possible Armageddon Unlike Any Since Civil War
- Americans Have Thrown in the Towel as They Await “The Big Splatter”
- Remedies to Fiscal Gap Guarantee Hyperinflation!
- Warning Signs Suggest U.S. Headed for a Complete Societal Collapse!
- Let’s Get Real: The U.S. is Bankrupt and the Consequences Will Be Dire!
- U.S. Between a Rock and a Hard Place and Its Options Are – At Best – Dire!
- Will the Fed Engineer a Stock Market Crash to Flood the Bond Market With Much Needed Demand?
- The above article consists of reformatted edited excerpts from the original for the sake of brevity, clarity and to ensure a fast and easy read. The author’s views and conclusions are unaltered.
- Permission to reprint in whole or in part is gladly granted, provided full credit is given as per paragraph 2 above.
- We Have Fallen Head First Into An Economic Abyss! Here’s Why
- “The Great Dollar Devaluation Disaster” is Only Just Beginning – and the Intended Victim is YOU!
- These Long-Term Trends Are Destroying U.S. Economy – and America’s Way of Life!
- Buffett, Russell and Hoisington: Deflation or Inflation?
- Michael Pento Doubts U.S. Can Inflate Its Way Out of Debt – Here’s Why
- Tony Robbins, Ron Paul And Ben Bernanke All Agree: The National Debt Crisis Could Destroy America (theeconomiccollapseblog.com)
- The 15 Trillion Dollar Party (blacklistednews.com)
July 19, 2011 at 8:01 am by William O’Keefe
Last week, the House Energy and Commerce Committee held a hearing on how the U.S. Environmental Protection Agency regularly avoids the public comment process on potentially controversial and excessively expensive regulations. The technique is known as “sue and settle.”
Environmental laws contain citizen suit provisions which are intended to provide recourse by affected parties—states, for example—in cases of non-compliance. But for years, environmental groups have used these provisions in collaboration with a friendly EPA to achieve ends that would be difficult to achieve through the normal rulemaking process.
In an Investor’s Business Daily article earlier this month, reporter John Merline noted:
The EPA even tacitly encourages such suits, going so far as to pay for and promote a “Citizen’s Guide” that, among other things, explains how to sue the agency under “citizen suit” provisions in environmental laws. The guide’s author — the Environmental Law Institute — has received $9.9 million in EPA grants over the past decade.
And, to top it off, critics say the EPA often ends up paying the groups’ legal fees under the Equal Access to Justice Act.
Under the Administrative Procedures Act, an agency like EPA that wants to change or issue a regulation makes a proposal, solicits public comments, theoretically revises the proposal based on those comments, and then publishes the final regulation in the Federal Register. The entire process is intended to be open and transparent.
The “sue and settle” tactic circumvents the process.
An environmental organization can start off in court by claiming that the agency has failed to meet a deadline or has not satisfied some regulatory requirement. The agency then has two choices. It can either challenge the legal action or enter into settlement negotiations.
In the case of an environmentally biased EPA (as opposed to a neutral one), the agency and environmental group reach, what is usually a one-sided agreement and sign a consent decree that is usually accepted by the court.
The tactic offers regulators political cover against public outcry, since they can simply throw their hands up and say “the courts made us do it.” And once the judicial system approves a settlement, getting it overturned is extremely difficult.
According to U.S. Chamber of Commerce Senior Vice President William Kovacs’ testimony [pdf], EPA has increasingly employed this tactic—at least 16 times in recent years—to institute controversial rules impacting utilities, refineries, and gas drilling regulations.
Moreover, Investor’s Business Daily’s investigation shows just a handful of major environmental outfits that were responsible for more than 3,000 suits against EPA and other government agencies received tens of millions in tax dollars from it over the past decade.
Our regulatory system is out of balance and not getting better. Some fundamental changes are needed. One that could help provide better balance would involve Congressional review and approval of any regulatory proposal or settlement agreement that had a cost exceeding $100 million.
Thursday, July 14, 2011
by Joao Peixe
Energy-poor Poland is about to embark upon using hydraulic fracturing to develop the country’s natural gas reserves. The practice is controversial in many countries, including the U.S., because of its potential impact on the environment, particularly groundwater. Many municipalities and counties in the U.S. have adopted stringent regulations as a result.
Poland’s Petrolinvest has formed a joint venture, Silurian-Hallwood, with the U.S.-based Hallwood Energy to begin shale gas extraction after funding is raised, Rzeczpospolita newspaper reported.
Silurian-Hallwood is currently attempting to raise $90-100 million, of which, $20-25 million will come from private investment with the remaining $70-75 million from an initial public offering (IPO) prior to the company being listed on London’s Alternative Investment Market (AIM) later this year.
Author Jacek Skorupski observed, “Shale gas is a matter of a political nature. If we treat it like any other investment, we will be faced with mounting difficulties.”
Deputy Environment Minister Jacek Jezierski ambiguously noted, “We will be able to say whether amendments to provisions regulating shale gas extraction are needed once we perform a professional assessment of its environmental impact, not an emotional one. Poland intends to control this process, not to ban it.”
Marek Kryda of the Institute of Civil Affairs emphasized, “It is necessary to look after issues related to property expropriation and lease. We can already see irregularities at the stage of test drilling.”
- Poland detains 7 suspected of shale gas corruption (reuters.com)
- Seven People Have Been Charged With Corruption Over Shale Gas Exploration In Poland (businessinsider.com)
- 7 charged with corruption over shale gas in Poland (foxnews.com)
July 9, 2011 at 4:23 pm Dean Cheng and Walter Lohman
Chairman of the Joint Chiefs of Staff Admiral Mike Mullen will be in the People’s Republic of China for much of the next week to engage in talks with his counterparts from the People’s Liberation Army. His visit comes amidst a thaw in U.S.–Chinese military-to-military relations, capped by the visit of General Chen Bingde, chief of the Chinese general staff.
The Chinese have long seen military-to-military contact as a U.S. “ask”—particularly since 1999, when Congress imposed legal restrictions on precisely what sort of information could be shared. Therefore, Admiral Mullen’s Chinese hosts will likely argue that the United States should make concessions to Chinese demands, essentially in exchange for its willingness to meet and in order to sustain the improving atmospherics.
China is likely to reiterate its position that the South China Sea is not a U.S. concern and there is no role for the United States. The Chinese view the U.S. offer to facilitate confidence-building measures—as well as the recent congressional resolution criticizing China’s actions in that region—as unwarranted meddling. Admiral Mullen is sure to hear an earful on this.
The Chinese are also likely to demand that, in light of improving military relations, the United States cease military activities, including reconnaissance, through waters and airspace that the Chinese claim as part of their exclusive economic zone (EEZ). Such a demand runs counter to basic American interests and against customary international law.
The Chinese loudly claim to respect freedom of navigation, but their definition is much different than America’s. The U.S position has been clear for decades: All states enjoy navigational rights and freedoms in EEZs that are “qualitatively and quantitatively” the same as those they enjoy on the high seas. The Chinese reject the international consensus on this issue and insist on the right to regulate foreign military activities beyond its 12-mile territorial limit.
American reconnaissance activities in what China considers its “near seas” are of critical importance. An oft-quoted line from Sun-Tzu is that “all war is deception.” The only way to counter that deception is to know one’s opponent—which is something that requires a robust program of surveillance and monitoring. The Chinese certainly understand this: Chinese intelligence activities in the United States, including cyber activities, have hardly abated simply because of recent military improvements. The fact is that, however good U.S.–China relations are at any given time, American military forces must be prepared for every contingency. And if it ever comes to conflict, this means having as full an understanding as possible of China’s capabilities and the physical environment beyond its territorial limit.
Moreover, the act of intelligence-gathering itself is a form of deterrence. Only through the conduct of such activities can the U.S. military establish the necessary baseline of Chinese activity to know when they might be acting out of the ordinary. A regular program of surveillance also threatens efforts at deception and surprise, making any Chinese military option that much more risky.
The best demonstration of rights beyond China’s territorial waters is by exercising them. If the U.S. ever forfeits its right to conduct military activities throughout the South China Sea or anywhere else it is lawfully permitted, it will never gain it back.
Admiral Mullen should send a clear message to his Chinese counterparts that the United States welcomes improvements in military relations as it benefits both sides, but it will not seek them at the price of its own security.
Necrotizing fasciitis (NF), commonly known as flesh-eating disease or Flesh-eating bacteria syndrome.
LULING, TX: That’s what I have been battling since mid May.
I had my final skin graft last Thursday and if all goes well; I will be released soon. The only thing holding me back now will be a little walking rehab.
I’ll never know how I got it and hope I never get it again. Thanks to all the Surgeons, Specialists, Doctors and Staff for their help. Without their knowledge and caring, I could have lost my right leg.