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Broke-Ass America

Contributed by Chriss Street.

Broke-ass is an urban slang term for someone who either has no money or is in debt beyond their means. This used to be a term for inner city ghetto dwellers and folks “Living in a Van Down by the River.” But since 2008, 2.2 million net jobs have been lost among the prime American working demographic of 25-54 year olds, even as their numbers grew by over 3 million.

A Google search of “broke-ass” generates 33,900,000 hits. There are broke-ass brides, dads, home, gourmet, bizness, and thousands more. Young people who thought they would scrimp by until they “moved up” in a career, now expect to never have a decent life and are trying to adapt to their new reality. Since 2008, America seems to have failed many Americans.

The United States was founded through a revolution against the colonial tyranny of the richest and most powerful nation on earth. The revolutionaries triumphed because they authentically stood for liberty, egalitarianism, individualism, populism and laissez-faire economics; virtues their British imperial elites sought to deny them. In the 1920s, the American Communist Party in frustration referred to this unique lack of class distinction as “American Exceptionalism” to explain why the mentality of American working class was not ripe enough to rise up and violently overthrow the factory owners.

In the most recent Rasmussen Poll, 63% of employed adults still consider themselves middle class, 21% self-identify as upper middle class, while only just 3% view themselves as wealthy and 8% regard themselves as the working poor. These numbers have remained fairly stable for the last 30 years.

What has not remained stable is the percentage of “employed adults” in America. The labor participation rate, the measure of the number of people working or looking for a job, has declined for each of the last four years from 66% to 63% and now stands at the lowest rate since Jimmy Carter was President in 1979. The decline in this statistic is virtually the mirror image of the historic percentage gains in the labor force participation from 1980 to 1988.

Last month’s decline was extraordinarily brutal as job growth was cut in half to only 88,000, while 496,000 workers gave up looking for work and dropped out of the labor force. Although media reported unemployment figure declined slightly to 7.6%; the total unemployed that includes those who want full time work but can only find part-time employment, stands at a Great Depression level of 13.8%. For those Americans lucky enough to have a job, one in four is working for $10 an hour or less.

According to the U.S. Census Bureau, approximately one out of every six Americans is living in poverty and over 146 million are either “poor” or “low income”. Nearly 20% of all children in the United States currently live in poverty and approximately 57% live in homes that are either considered to be either “low income” or impoverished. More than a third of children in the U.S. live in a home without a father and families that have a head of household under the age of 30 have a poverty rate of 37%. There are over a million public school students in the U.S. that are homeless.

The federal government responded to the broke-ass America crisis by annually increasing deficit spending by $800 billion and increasing taxes by $400 billion. About $100 billion a year is being spent increasing the number of Americans enrolled in at least one federal welfare program to 100 million.

No one is exactly sure where Congress has been “investing” the other $700 billion per year, but accountants tell us that every American’s share of the national debt has risen from $31,847 to $54,140. Maybe over the next four years if jobs keep disappearing and debt keeps rising, we might all be broke-ass Americans living in a van down by the river. Contributed by Chriss Street.

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Republican Freshmen Protect Big Government

The Community Development Block Grant program is a perfect example of the blurring of responsibility between the federal government and the states. The program’s roots go back to the Great Society and the wishful belief that the problems of urban Americans could be solved with handouts from Washington. Instead, the program “has degenerated into a federal slush fund for pet projects of local politicians and politically connected businesses.”

That quote comes from Rep. Tom McClintock (R-CA) who introduced an amendment this week to terminate CDBGs. As McClintock explained to his House colleagues, it is not the federal government’s responsibility to fund purely parochial activities:

Even in the best of circumstances, these are all projects that exclusively benefit local communities or private interests and ought to be paid for exclusively by those local communities or private interests. They are of such questionable merit that no city council is willing to face its constituents and say, this is how we’ve spent your local taxes.  But they are more than happy to spend somebody else’s federal taxes.

Unfortunately, McClintock’s words fell upon deaf ears as his amendment was voted down 80 to 342.  Not a single Democrat supported the amendment. But it was the 156 Republicans who voted against the amendment that doomed it. Among those Republicans voting “no” was House Budget Committee chairman Paul Ryan (R-WI). Worse, only 33 percent of the GOP “Tea Party Freshmen” voted to terminate a program that is completely at odds with the principles of limited government.

As I noted back in May, many of the GOP freshmen have switched from tea to Beltway Kool-Aid. Take, for example, tea party favorite Allen West of Florida. On West’s congressional website, he states that “As your Congressman, I will curb out of control Government spending.” He also says that “we need to challenge the status quo in Washington and stop the floodgates of government spending” and that he will “carry the torch of conservative, small government principles with me to Washington.” West, however, voted to save the CDBG program and he also voted back in May to save the Economic Development Administration, which is another parochial slush fund. In April, he accused Democrats of being communists. That’s pretty rich given that he proceeded to vote to protect programs that engage in central planning.

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Fast and Furious: Draft Contempt Charges Show Depth of Agency Involvement

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Cartoon by “Chip” Bok

May 6th 2012

A section of the draft of contempt charges against Attorney General Eric Holder is dedicated to explaining how Fast & Furious branches off into different departments within the Department of Justice (DOJ).

While most know about the operation being based in Phoenix, the strategy was actually developed in the Office of the Deputy Attorney General (ODAG) in Washington, DC. The ODAG decided it would be brilliant to concentrate on identifying the members of the trafficking network instead of seizing the firearms right away.

The goal was to capture the big fish of the cartels. The ATF Phoenix Field Office decided to use this strategy in Fast & Furious. But that wasn’t good enough for them and in late January 2010 the office “applied for Fast and Furious to become an Organized Crime Drug Enforcement Task Force (OCDETF) case.” In order to do that the agents had to tell all about their investigative strategy, i.e. gunwalking. It was approved and was given new funding. Also, since it became a prosecutor-led OCDETF Strike Force case, other departments would come in. Those include FBI, DEA, IRS, and ICE under the US Attorney’s Office for the District of Arizona. Fast & Furious came to the attention of ATF headquarters on December 8, 2009. The ATF’s Office of Strategic Information and Intelligence (OSII) told senior personnel about the operation, especially about recoveries of weapons in Mexico. But the more statistics they received, the more concerned they became about the operation.

Deputy ATF Director Billy Hoover called for an exit strategy in March 2010. He received one in May, but we all know it didn’t happen. The office continued to delay the indictments and ATF headquarters never demanded them to arrest the straw purchasers. Operation Wide Receiver, a gun tracking operation during the George W. Bush administration, is often brought up to deflect from Fast & Furious. Most people on the other side want to prosecute that case instead. Well, as it turns out, the DOJ’s Criminal Division sent prosecutors to Arizona to help the US Attorney to prosecute cases, including Wide Receiver. Indeed, Assistant Attorney General in charge of the Criminal Division Lanny Breuer was very interested in the operation. James Trusty, senior official in the Criminal Division’s gang Unit, said Mr. Breuer was very interested in the case and wanted to be briefed on it. A briefing on March 5, 2010, “highlighted the large number of weapons the gun trafficking ring had purchased and discussed recoveries of those weapons in Mexicio.” Steve Martin, Deputy Assistant Director in ATF’s Office of Strategic Intelligence and Information, said everyone knew the guns were being linked to the cartels. However it’s the wiretaps that prove how deeply involved the Criminal Division was with Fast & Furious. It shouldn’t come to anyone’s shock that the DOJ hasn’t handed over the applications to the Committee. After all, the top dogs signed them: Deputy Assistant Attorney Generals Jason Weinstein, Kenneth Blanco, and John Keeney. It’s more than obvious the DOJ can say this was just a local issue. There’s more than enough evidence to prevent them from continuing to brush it off as a rogue field office mistake.

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Utah Expands Legal Tender in the State

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Posted by Doug Tjaden

In 2011, Utah was the first state in over 80 years to pass a law making gold and silver coin legal tender.  Its passage sparked articles in the New York Times, The Los Angeles Times, The Washington Post and a host of major internet news sources.  After decades of obscurity, Utah’s historic measure put sound money back on the map.  Not satisfied to rest on their laurels, Utah passed a companion bill in the 2012 session, and it was signed by Governor Herbert.

The bill clarifies several tax measures and more importantly, expands the available specie to include gold and silver coin approved by the state.

Gold or silver coin or bullion, other than gold or silver coin that is issued by the United States, is considered to be specie legal tender and is legal tender in the state if:

(a) a court of competent jurisdiction issues a final, unappealable judgment or order determining that the state may recognize the gold or silver coin or bullion, other than gold or silver coin that is issued by the United States, as legal tender in the state; or
(b) congress enacts legislation that: (i) expressly provides that the gold or silver coin or bullion, other than gold or silver coin that is issued by the United States, is legal tender in the state; or (ii) expressly allows the state to recognize the gold or silver coin or bullion, other than gold or silver coin that is issued by the United States, as legal tender in the state.

By allowing additional specie to be used as legal tender, the Utah legislature has freed its citizens from potential supply constraints imposed by the use of only United States minted gold and silver coin.  More importantly, the people of the state of Utah now define what specie is considered constitutional tender, further distancing themselves from potential control of their competing currency by Washington D.C.

Many who subscribe to Austrian economic theory applaud Utah’s leadership. They clearly see a sovereign debt crisis looming on the not-too-distant horizon and  understand the importance of having in place a hard currency system to fall back on.  Choice and competition in currency has never been more important in this nation.  Well done Utah.  Keep up the great work.  The rest of the nation may soon thank you.

Doug Tjaden is in Strategic Business Development at SilverSaver.com by Mass Metal LLC. He is an avid proponent of helping states re-institute sound money through education and networking. Doug is also an author, pastor and father of five and is a speaker on economics, politics and religion. He is passionate about helping people understand history, and how it can help us identify trends in place which will soon affect our lives.

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Forget The Election News: Keep Your Eye On Tim Geithner And The Love Trapezoid

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David Kotok, Cumberland Advisors 
Jan. 10, 2012, 11:50 AM

If you can take your eyes off the primary election coverage, watch GeithnerThe US is engaged in a love trapezoid.  The four corners are Beijing, Tehran, Tokyo, and Washington.  Treasury Secretary Geithner is the Obama Administration’s front person.  Track the news for the names of the other agents.

This is a very serious time.  The pieces are linked.  Some bullets as you watch the news flow.

1. The US faces the pressure of follow-through on Iran sanctions.  Iran is an exporter of oil to Asia.  Japan is dependent on imported oil.  China is not self-sufficient.  One part of this trapezoidal geometry is about oil.

2. Iran is feeling the heat from sanctions.  The US wants to tighten them.  It cannot do so without help from Asian “friends.”

3. China and Japan are each buyers of US Treasury securities.  They each help finance the American fiscal deficit and the ongoing current-account deficits.  They each want to diversify their reserves.  They are not sellers, but they are reluctant additional buyers.  This is truer for China than for Japan, but it is true in both cases.

4. China is glacially proceeding toward world reserve-currency status.  It gradually allows its currency to strengthen against the dollar.  It follows a policy that is fully rational for the Beijing oligarchs.  It shrugs off political threats from Washington politicians (Schumer, Graham) who love to bash China while talking to their American constituents.  China understands our political processes and our weaknesses.  However, China also understands “realpolitik” and uses it.  They learned US use of realpolitik from Nixon and Kissinger.  Expect them to smile publicly but put some very intense private heat on Geithner.

5. Japan faces enormous economic pressure and sees the yen strength as now threatening.  In order to weaken the yen, it must acquire other currency holdings in large quantity.  (See the Cumberland website, www.cumber.com, for G4 central bank charts, and flip to those on the Bank of Japan.  You will be able to observe how Japan expanded its balance sheet several years ago and subsequently contracted it.  We expect them to expand it in 2012 as they seek to arrest yen strength.)

6. Japan is negotiating with China so that it may acquire reserve debt instruments denominated in Chinese currency.  Beijing likes this because it is a step toward achieving world reserve-currency status.  Geithner now worries, because the trend points toward a gradual and long-term weakening of the US position, as the world’s second (China) and third (Japan) largest economies maneuver their global positions.

7. Our Asian friends know that the US election cycle creates maximum vulnerability for the United States.  That also makes circumstances more dangerous and raises risk profiles.  Europe is of no help to us, given its internal crises.

We recall that a three-legged stool is a stable form.  A four-legged stool is less stable.  A four-legged stool with a trapezoidal top is least stable.  Especially when one of the legs is Iran.

Watch Geithner in Asia and the news flow.  Read between the lines, since the public statements will all be scripted and self-serving.  Risk is high.  Also, stay overweight energy.  We are.

Read more: BI

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