America is Broke
By Greg Hunter’s USAWatchdog.com (Revised)
Saturday, the House of Representatives passed legislation with more than $60 billion of budget cuts. It is the proverbial “drop in the bucket” when compared to the $14.1 trillion (and counting) outstanding federal debt. Soon, this ever increasing national debt will eclipse the Gross Domestic Product (GDP.) That means America will owe more than all the goods and services it produces in one year. When you owe more than you make, isn’t that a sign you need to change course? The new Speaker of the House, John Boehner, said this just after the budget cut vote, “We will not stop here in our efforts to cut spending, not when we’re broke and Washington’s spending binge is making it harder to create jobs.” I think it is ironic Congress wants to cut $60 billion today and then turn around and consider raising the debt ceiling $1 trillion tomorrow. This is crazy, but that is exactly what’s going to happen because if we don’t, Treasury Secretary Tim Geithner says it could cause, “catastrophic damage to the economy.”
I don’t think most people grasp just how serious America’s budget problem really is. When Mr. Boehner says, “we’re broke,” he’s not kidding. America is broke. The only reason this has gotten so out of control is the U.S. dollar is the world’s reserve currency, and the government can just print money whenever it needs funds. Right now, the Fed is creating $75 billion a month to help finance government operations. This is met with a shrug, like it is no big deal. But, it is a big deal, and it comes with a significant downside—inflation. Sure, there is deflation in housing, but everything else is going up in price.
It is not just the federal government that’s swimming in red ink, but more than 40 states in the union are also tens of billions of dollars underwater in deficits, pensions and health-care obligations. The union protests in Wisconsin are just the tip of the iceberg. Contrary to what left wing commentator Rachael Maddow says, the $137 million deficit problem in Wisconsin was not caused by Governor Walker’s tax-cut bills approved in January. Here’s how The Wisconsin Journal Sentinel summed up the false story, “There is fierce debate over the approach Walker took to address the short-term budget deficit. But there should be no debate on whether or not there is a shortfall. While not historically large, the shortfall in the current budget needed to be addressed in some fashion.” (Click here to read the entire Sentinel story.)
I was a guest on the nationwide radio show Coast to Coast AM last week. I was there to talk about the protests in Wisconsin and elsewhere. I said this was only the beginning because many states were billions of dollars in the hole. The states cannot print money, so unions will have to take cuts to pay and benefits. I got some very foul and angry emails from listeners. One wrote, “. . . F*** YOU! Unions are the only reason we had good wages and decent places to work in the USA. It’s greed by companies that have destroyed this country.” Another anonymous email said, “. . . You don’t have any idea of what is going on. Now you think the Gov’t workers should get screwed. You subservient dick.” I wrote back and said, “. . . What you are angry about is something we all face. The nation is broke, and we are headed for a crash. In the end, we are all screwed, government workers are just first.” But that really is not correct. I should have said, “It is now the government workers turn to feel the pain the rest of America has been feeling.” These emails are examples of how Americans will just not accept that we are out of money. The sovereign debt problem is here today staring us all in the face.
State and city budgets are so deep in red ink that former L.A Mayor Richard Riordan said recently, “Throughout the country, 90 percent of cities and states are going to go bankrupt within the next five years, many of them sooner.” (Click here to read and hear Mayor Riordan for yourself.) Things have gotten so bad that investors are starting to shun municipal bonds. (This is the state version of printing money.) Sales are way off, and one reason may be that Congress has been quietly talking about letting states go bankrupt. Here’s how the New York Times reported the story last month, “Bankruptcy could permit a state to alter its contractual promises to retirees, which are often protected by state constitutions, and it could provide an alternative to a no-strings bailout. Along with retirees, however, investors in a state’s bonds could suffer, possibly ending up at the back of the line as unsecured creditors.” (Click here to read the complete NYT story.)
On one end of the spectrum, I see, at the very least, high inflation. On the other end of the spectrum of possibilities is the financial collapse of the United States. Economist John Williams of Shadowstats.com has been talking about this possibility since I first met him in 2008. He says hyper-inflation leading to collapse is a definite possibility. Williams is not the only one who thinks there is a potential breakdown coming. Dmitry Orlov, author of the new book “Reinventing Collapse,”witnessed firsthand the Soviet meltdown in the early 1990’s. Orlov says, “Something similar is happening here where we have people in all branches of government, both political parties trying to prop up the financial industry, which has become completely irrelevant to most people in the United States, who don’t have savings and are not creditworthy. They’re basically trying to use up people’s savings and use up people’s retirement to prop up this set of institutions that only help the very rich people, and these very rich people are only rich on paper, they are “long paper,” all of them. What they own is pieces of paper with letters and numbers on them, which will turn out to be worthless. So this is all just basically musical chairs, and something very similar was happening in the Soviet Union, and something like that is happening here.” (Click here to read and hear Mr. Orlov for yourself.)
Just the fact that collapse is a possibility should be sobering to anyone. Americans are fooling themselves if they think we can get back to the way things were before using borrowed and printed money.
Multiply that 560 billion by ten and you get 5.6 trillion. (we are ten times the population of canada). Still, I wish our debt was only 5.6 trillion, not 14+ trillion.
?? I paid both to get in (Niagra Falls mandatory bridge crossing) & out (Michigan side) of Canada last summer riding a motorcycle. $5.50 is cheap. I also paid $10.00+ US for a pack of cigarettes (before the VAT 13% increase) while I was there. I think we will all get a little hungrier before this one is over.
the states capitol rally feb 26 2011 11:00 to 3:00pm, unions have too much power.Please spread news,and show up at your state capitol
You wrote: “…government workers are just first.”
I have been living our current economic reality for three years now. Gobmint workers are FIRST!
Get a clew dude! The “HAVES” of our society need to feel my pain (I am a “HAVE NOT” from the private sector).
If only I had listened to my father 30 years ago, I would have gotten a gubmint job and now I would be a RICH PERSON, and retired.
Gubmint workers are pissed-off? Gubmint workers will figure out what pissed-off is when people like me hit the streets and protest their lazy asses.
Might want to keep in mind that “government worker” is a blanket term for anyone who works in every branch of government across our splendidly broke nation. I am a state worker in Arkansas, and we made poverty-level salaries BEFORE the meltdown…guess what? We haven’t had a raise in three years! Our state is supposedly one of those who were conservative in their budgets, but that’s because we had so little beforehand!
So, before you hack on the government workers, keep in mind that some of us went into government jobs to serve the public and get away from dog-eat-dog capitalist jobs that helped to create the mortgage mess to begin with. I barely make enough to pay for things like auto maintenance for my 16 year old paid-for vehicle, and groceries…
I do agree that greed got us into this, and the idea that we deserve to be prosperous, no matter what…
Wake up America, we don’t deserve any more than other people do…
one more thing…my family does not have health insurance…the premium alone was 23% of my pay…and that is with $1,000 deductible per person…I could choose to have groceries, a rental house, or health insurance…take your pick.
Apparently I wasn’t slick enough to choose one of those “cradle to grave” government jobs…
To be honest, I think the jobs many are complaining about are in the minority…I don’t know anyone besides high-level officials who make anything to be jealous of…
You were too gracious and incorrect in your email response to the radio listener when you said “we are all screwed, government workers are just first”.
The reality is that government workers are just beginning to feel the pinch the private sector began to experience a couple years ago. My pension was permanently frozen a few years ago, and I have been paid less every year since 2007.
A friend, here in Texas is complaining the community college he works for is considering demanding he pay half his health insurance premiums. ( After ten years employment he gets health care for life). He gets 35 paid days off a year, not including his vacation. He says he will quit and go to work in the private sector. He is clueless about the job prospects.
BTW, I have been paying for 50% of my premiums for 25 years, and there is none available when I retire.
Public workers mistakenly thought they were exempt from the pain our country will feel. It is a case of false expectations- like so much else.
My opinion on this matter is this:
If State workers are being asked to take a pay/benefit cut to help with the economic crisis, then Congress and the Senate need to do the exact same thing. Why doesn’t Mr. Boehner step up to the plate and insist that his fellow elected officials take a pay/pension/benefit cut? Our elected officials are also “public servants”. I have not heard one peep about Washington making any such sacrifice. Has anyone?
MANY of the Congresspeople and Senators are already very wealthy; why not show good faith and “give back”?
I think it’s amusing he used the word “subservient” to describe you. He may want to check the definition before he throws around big words again since you are obviously anything but subservient. But what can you expect from a typical government employee. Macaroons like that are the perfect reason for spending cuts starting with HIS job and pension.
I find most government workers attitudes to be similar and their work ethic to be deplorable. It doesn’t matter what you tell most people. They will not listen because it’s not what they want to hear. If/when hyperinflation hits they will still be in denial and say things like, “they (gubbermint) will figure something out.”. The typical response of relinquishing responsibility to someone else so they do not have to pay attention and can blame someone else when it all falls apart.
If you punch a clock at our local government office please resign and leave the country you leach.
My fellow Americans, yesterday I watched ten minutes of Fox News with Mike Wallace interviewing Senators Coburn and McCaskill about cutting the government debt. In that ten minutes, Coburn came out twice and said that “if we don’t make these cuts, then the people who own our debt are going to be telling us what to do”.
Let’s analyze this for a minute. Who owns our debt? China? So if we don’t make cuts immediately, Coburn is saying China is going to be telling us what to do? Who else owns our debt? The federal Reserve? Isn’t the Federal Reserve partly owned by foreigners? So, in either case, A US Senator is saying we are not far away from foreigners dictating policy to our elected officials?
Now we could make the argument that the Federal reserve is partially owned by Americans, in which case we still have a US Senator saying that a private, for profit corporation is going to be dictating policy to our elected officials?
So, ten minutes of Fox News put through the propoganda filter, and according to at least one US Senator, our elected officials are about to become powerless to the dictate of foreigners and private corporations! Not that it has had much meaning since 1913, but WHAT GOOD DOES IT DO TO VOTE IF OUR ELECTED OFFICIALS HAVE TO ANSWER TO THE PARTIES THAT OWN OUR DEBT?
Buy Silver and crash these idiots that have stolen our country, or willingly let it slip away!!!!!!
How long heve Coburn & McCaskill been up on the hill?
As if anything is going to change this season…
Perhaps the Obama Administration should seek a Federal Grand Jury to go after those who bilked our Govenrment out of billions during the Bush/Cheney years, e.g., the billions that disappeared in Iraq, those off-book expenditures for the wars, no-bid contracts, government pay outs for poor services or shoddy products, payments to corrupt dictators, payments to landowners not to grow crops. Seems that Enron culture infected our Government. Maybe Swiss and other offshore bank accounts should be scrutinized. Where is the justice?
Sir, please keep in mind, EVERY penny spent by the US Government is authorized by the US Congess. Bush/Cheney/Haliburton didn’t spend a dime that CONgress didn’t allow them to. Farm subsidies, Enron accounting, again, thank Congress, they authorize every penny of farm subsidies and over-see every federal law enforcement agency. Sadly the past 40+ years we the people have elected parasites to the Legislative and Executive branches over and over and over and…
The “Big Three” used to be Ford, Chevy and Chrysler. Now it is Inflation, Debt and Unemployment. Let us face the truth. We are all screwed! Sure we do not like to have money taken away but you can not have it both ways. Fix it or let it go. There is going to be plenty of blame to go round but we will be so busy trying to save ourselves that it doesn’t matter. In fact, to those I have warned over the years and receiving so much flack is “I TOLD YOU SO!”. If you think the government is going to save us, you are fools. You all thought Bush was a dumb M.F. Well he has land down in Paraguay. You see Murbarack went to a nice place and probably took millions with him. Think our Congress has not thought of the BIG Bug Out? That will not happen till Hillary Clinton gets her mug on Mount Rushmore.
They have control of government.
They have control of the money.
They have control of education.
They have control of News Media.
So get up on that couch with a few Burgers and fries. Pay close attention to the drug commercials cause you are going to need them later.
Greg, best article you ever wrote in my opinion. The speaker of the house is using that trifle sum of reduction (60 billion) as a prelude to raising the debt ceiling. I have heard him interview 4 times in the last two weeks and he refuses to say he won’t do it. He claims that there must be …”more cuts promised or coming before any raise in the ceiling”. Clearly, Boehner is just playing us for fools, that language is very telling, Obama will promise, then Boehner and the other “legal criminals” will vote for the raise.
Your article is factual, well written, and heart felt. I sense you, like myself and others, are greatly saddened about our future as a great nation and culture. The reality is the collaspe is more than just a mere possibility, its a strong probability.
Another t-shirt in the making: “legal criminals”
Funny how the public sector persons don’t want to face reality. They remind me of the cop who was a union leader in upper New York state. He could care less about the people’s taxes going up, all he wanted was “…what’s coming to me. I want what’s mine.” That is basically what these “protests” in Wisconsin are all about, about public sector people who can’t seem to face reality. They are paid far above their counterparts in the private sector, get good benefits, a lavish pension, and healthcare until the day they die.
For those who missed it, Greg basically started a firestorm when he stated last Friday on “C2C” that the poorly paid private sector is forced to support the public sector’s lavish lifestyle. Many persons in the private sector have no benefits; if they are working part time, they have they have little in the way of benefits, no vacation, no sick leave. (If they are in the hell that is “temping,” they are verbally abused by the client’s employees as well as the temp agency’s personnel, have no paid holidays, no vacation, nothing. They have to work like slaves for a hand to mouth existence, and although most do a good job, have to suffer the indignation of not getting hired because they are considered as lepers. I should know, I had to “temp” for a while, and do not wish this on anyone.) Those who own and run small businesses work long hours, they have health care if they are lucky, their pension comes if they are able to sell the business, otherwise they work until the day they die.
Now, the public sector does not want to hear that they are living off the backs of the poorly paid. Hence the name-calling Greg had to suffer. The public sector wants the ride to go on, never mind that the bridge is out. To be fair, the public sector was given a lot of promises by politicians who were given faulty feasibility studies. Politicians claimed that they created all of this in order to attract “the best,” when in reality public sector people are hired and promoted by way of racial quotas; there is no “best hire” here.
Public sector people don’t want to believe that they were lied to, that the promises made cannot be fulfilled in even the best of times. It is time for those in the public sector to grow up and face reality. It’s time they turned on their unions, they were the ones who demanded such unrealistic “benefits” in the first place. If public sector people want such “benefits” they’re going to have to put off or sell their expensive toys and chip in to their healthcare and retirement. We in the private sector have to pay for our own retirement (it’s called “savings”), it’s time these freeloaders paid for theirs.
Sam, you are so right in everything you said. The economy has just about put me out of business, I’m just trying to keep the doors open, my home is in foreclosure, my health care for my family was the first to go two years ago when the cost went from $575 a month to $1425, and no one is sick in the family. Here I sit, my business broke, no health care, what securities I did have crashed and burned in the crash – and, yet, they protest for the same and more of the great pay and benefits they have to continue and then some – criminal in my mind to be so blind to their fellow Amerians who are hurting.
At 60 I’m starting to get angry, and I don’t want too, I do feel that I did not cause any of this, just a sucker for the government and its other branch of lies, the MSM’s rendition about how to succeed in America. Well, I am not blaming myself any longer for my downward sprial – all the branches, the Fed, Wall Street, and their puppet, the MSM no longer demand respect or to be respected or to be something in which to aspire to. I still have a family with needs, and yes, I will take it to the streets in civil protest to get our side out there.
Art, I KNOW what you’re going through for the most part, although I am thankful to God that we still have a roof over our heads and for the stockpile of food. I would love to expand by manufacturing, as it’s easy as pie to turn my hobby into a business, but with these “environmental” (read: keep the little guy out) laws, how can you, I, or anyone else?
Please save some room for me, as I’ll be joining you in the protests. We had our say in November, but it seems no one listened, now we’ll have to shout a bit louder.
These public unions make me sick!! I work full time as a security guard in the private sector. I do not get any sick days, vacation days, health insurance, or a pension. However, I am supposed to pay increased taxes to make sure these people do. Enough is enough. As usual, you were spot on. Here is the links for your latest appearance on Coast To Coast:
Sorry Greg, but this is getting ridiculous…there may be a few public workers (those who “retire” and then get hired back doing the same or similar job while getting a full pension, for example) who do need to be cut or reduced, but those are a small minority. Unless they have a spouse who has health insurance and benefits, most of my coworkers cannot afford basic life expenses; many are on welfare and will never own a home, much less “live it up” as is being described.
This is not an exaggeration. I realize the private section is hurting, but keep in mind that my job will never pay more than it already does regardless of whenever the economy recovers. Also my job required a master’s degree that took six years of sacrifice and work to obtain, and I make less now than I did as a factory worker in 1996 when I had only a high school diploma…I’d go back to that job if it existed…
Obama is grasping for straws, he is like a puppet with the bankers & unions pulling the strings. Our only hope is to audit,seize the assets of the federal reserve & all assets of its owners, plus claw backs on all the huge bonuses of the wall street elites. Also those billionaires Progressives like Soros that have pushed socialism should have all of his assets seized & have him jailed for Treason against the people of the USA. This is just one of the many reasons this nation is broke. Corruption is every where, the CME group & Comex are just the tip of the iceberg, the stock market is a trap to steal more wealth, pensions will be next, then the PE will create some sort of lies to start a war because they have 2 billion body bags packed in ware houses that needs filling. Being broke is one thing, losing power is un-acceptable to the PE.
Greg, I hope you stay safe while you are among a few that dares to tell the Real Truth, may GOD Bless you & your family, we will need each other more than ever!
Greg keep up the good work. I look foward your postings each day as a Canadian who has lived in America for 16 years this is not the land of oppertunity that I came for I traded a snow shovel for a gun crazy me. In responce to the travel tax all canadiens do is spend money when they come to USA so why jack them at the border. Maby they will stay home and the only source of unfed printed money will be gone too.
A couple of thoughts: one, a few reasons why the states are in debt, and two, as it begins so shall it end.
We’ve heard that due to foreclosures, states aren’t collecting the amount of tax dollars that they used to. The same is true for sales of goods and services: if folks are bankrupt, they’re not spending as they were. If folks aren’t employed, there’s no income tax receipts for the state (in the majority of states that collect it, not in WA where I live). I suppose states have certainly overspent, but are these the main reasons why so many states are suddenly broke?
As it begins, so shall it end–I’m writing an article that begins with this paragraph: About four hundred years ago when the Dutch East India Company sailed into Hudson Bay, they weren’t looking for a new land to conquer. They were on a commercial voyage hoping to discover a shorter trade route to the Far East. Their focused goal was to implement a business cost cutting measure. In 1609, the Dutch East India Company was a thriving commercial enterprise with a presence in all the major business centers of the known world: the first multinational corporation.
The idea here is that the roots of our beginning lie in making a buck and profit at the expense of others. We’re about to come full circle on this journey. This is a normal occurrence for the Natural Law of Balance. Fortunately, on the other side we’ll have a new beginning, one that will reflect the pain that we’re about to experience in a positive way, with lessons learned, and the wisdom we’ll gain.
Personally I hope not, and here’s why.
Fernando “FerFAL” Aguirre wrote that the only good that Argentinians experienced during their hyperinflation was that homeowners were able to pay off their mortgages (Aguirre “The Modern Survival Manual: How to Survive the Economic Collapse” 2009). The losers were the lenders, as they were paid in highly inflated, and nearly useless, pesos.
Smile! There is a silver lining in every disaster. 😉
Wasn’t the so called stimulus package really nothing more than a state government bailout from the fed govt? Seriously, these states would have been in the same position now as they were before the bailout/stimulus and the stimulus actually made it worse throwing good(well good as good as worthless paper can be I guess) money after bad. The new American way is to prop up the loosers and penalize the winners. I should have seen this coming about five years ago when I took my ex-girlfriends son to his baseball game. They pitch to every kid until he gets a hit. If it takes 50 pitches every kid gets a hit. It took an hour to play 2 innings and when one team got too far ahead they stopped the game. This is insanity. No one is allowed to fail and as far as I am concerned unions( I have worked for two of them and they are nothing more than miniature governments and corrup to the bone) are bad enough but they should be illegal for state employees all together. They are collectively bargaining against the people of the state. Like Mr Christie said to the teacher that claimed she could earn double in the private sector, “You do not have to work here”. The government is broke regardless and the Fed is trapped and a meltdown is inevitable at this point so let’s prepare and we can sit back and watch all the useless union tax leeches fight it out in comfort. This can not be fixed by elections as we have seen blatently in the last two. The agenda is the same in both partys, corruption is the norm and bailouts are the new reward for failure. If you make good money by working hard it is stolen from you by threat of imprisonment and given to failure. Socialism is a very insidious disease and fascism is no way to make it work better. I think we have both at once right now somehow if that is possible and apparently it is.
Man, you really hit it! When I lived in California I was forced to pay the unions in both private and public sector. One time, when I was a part time janitor, the company I worked for did not take out union dues. The union (good ol’ SEIU), had a cow and demanded “back dues!” Result? For nearly TWO MONTHS we were lucky we received TEN BUCKS in our pay!
The public one was just as bad. I had dues taken from my pay, and for what!? I was forced to quit my job after two months because of reverse discrimination by a supervisor (I’m a White male, the supervisor was a lesbian). Some “fighting for the worker!!!!!”
As a Wisconsinite, I am deeply upset with the route our teachers and our State Senators have taken with this issue. I am also discouraged with the ignorance of my neighbors and friends. No one wants to take responsiblibity for the mess our state is in and no one wants to pay the bill. It is a sad, sad day in Wisconsin for those of us stuck dealing with the ignorance and lack of integerity of our leaders and teachers.
Labor Unions are criminal gangs, licensed by Democrat politicians in exchange for union member votes. They use coercion to extort money from employers and, in the case of Public Employee Labor Unions, from the citizenry at large. That this incestuous relationship would lead to the bankruptcy of states controlled by Democrats, including Wisconsin, was inevitable. They must be abolished.
The real reason we’re in dire straits is two fold. Greed and ignorance. There’s no reason a person needs to have hundreds of millions of dollars or billions of dollars. Ignorance, because we’ve created a non-linear system that is not controllable by human beings because of too many inputs. We live in hazard and black swans. Good luck to us all.
Here’s a question for you. Wih all that coverage last week on the Wisconsin calamity, what wasn’t covered by the news? I get suspicious when something like this gets so much coverage and being that it is a Democratic party caused situation what are they doing that is under the radar? I didn’t see or hear anything about the 2% inflation rate climb since Dec. Phil
That’s why I for one am so glad you and some other sites are around, telling us all what’s really going on. Thank you again for being there!
Greg, You are correct! United we stand but divided we fall! This is clearly an attempt to divide the American worker and pit them against one another. I just don’t understand why non-union people complain about their low wages because corporate America has driven wages down and profits up!Without collective bargining corporate America reigns supreme because of their political power to effect legistation. State and local governments do not operate under the secrecy of a corporation and can not plot to destroy unions the way corporate America does.
And I had to laugh when I was reading about the $117 Million in tax cut handed out by Walker and I was not surprised. Then it was added to the budget as if it was a positive just like the retail sales numbers which turn out to be a “net” negative.
FYI; some important info coming out now on the Alex Jones show regarding the economy according to a globalist leaker.
Is the GDP really the measure that you should be using to evaluate whether you are in trouble? I would think the best measure is the total debt to the revenue of the agency (government) which is doing the borrowing. With the tax cuts and decline in general revenues, it would look much more serious….
Great article, My dad and mom lost their farm and left Kansas in 1936. He moved to California and rented a Chicken Coup behind a house where I was born. Until the War it was hard times, I was working at the age of seven and our family survived by hard work and sticking together. I joined the Army, served, graduated from college and raised a family. My kids are all contributing hard working folks who have never been on the welfare roles. We have seen the “handwriting on the wall” and as a family we have 15,000 pounds of wheat, freezers kept full, and our root cellars full. We have all bought silver or gold and our philosophy is to help all of the people who have not prepared that we can. My point is this, it is time for all Americans, to grow up and take care of themselves, help one another, family first, and neighbors as they can. We can make this country great once again, but only by faith, hardwork, and love for our fellowman.
Too soon ve get olt and too late ve get schmart.
this article is shocking. asinine commentary to an ignorant public. yes, the country is broke. but the problem is that the dollar is the world reserve currency and government can print money whenever it wants? really?
1) the government does not create money whenever it wants nor does government print the money it needs. money is printed by the privately owned and operated federal reserve banking system, at interest and expense to the united states government.
2) if the government printed its own money instead of borrowing what it has the authority to issue, american taxpayers would owe nothing to either a private banking cartel or foreign bond holders.
3) the fractional reserve banking system purchases bonds which mature over time from the federal treasury, which carry interest upon maturity. the bank then issues currency at cost and interest to the united states government. the bank is permitted to print ten times the quantity of currency to bonds which were purchased. bonds upon maturity are collected at interest in addition to the interest on the debt incurred for the printed currency.
4) as it turns out, the only state that issues its own currency is also the only state running a massive surplus. north dakota does not borrow money it is entitled to issue. as a result it owes no debt to the reserve banking system.
the federal apparatus is not a state and derives no privileges of a state of the republic. get educated and learn to understand the hyperbole and rhetoric present in articles such as this. this problem can be solved by taking control of our financial system back from power brokers who benefit from the dissolution of our country. study north dakota and see how this can be achieved at the state and local levels.
the hostile tone was unmerited. i am not familiar with a majority of your work. it is of grave concern to me that those already terribly indoctrinated are treated to the implication that our elected officials are in any sort of control of US fiscal policy or the printing of currency. this simply is not so, even though it can be made to appear veritas.
congress abdicated its responsibility to provide and regulate sound money to a privately owned cartel. neither congress, nor any other element of federal government is granted provision by the constitution or bill of rights either to interpret these document, nor to abdicate granted authority to any other body. we are ultimately responsible for continuing to allow the behavior. how is a people to combat any issue to which they are made largely unaware by persistently granting treason the appearance of legitimacy? that is a general question, not pointed.
i believe you have the ability (though no responsibility) to make these clear distinctions and disseminate unpopular truths from your platform. no hostility is intended in my response.
Isn’t it ironic that…
In the Middle East the PEOPLE are protesting against the Overly Oppressive GOVERNMENT…
While in the US Mid-West it’s the GOVERNMETN EMPLOYESS who are protesting against the Overly Generous PEOPLE!
The question I have is the following (& you have yet to answer it) – why aren’t most Americans getting it?
From the 9 to 5 cubicle here is my answer & I’m curious to see what yours is.
1) Most people don’t understand basic economic theories like money supply, inflation, debt, etc. etc.
2) If you have a job and you are still getting your salary, you think you’re fine. The only thing I’ve heard them complain about is the price of food. That’s the only inflation number most people get right now. Soon, it will be gas, but they’re not feeling that yet.
3) I just don’t think people understand government debt and what it means for them personally. Is there a way to explain it in a bread and butter way?
What? Stock market is up, recession is over, economy is recovering, excuse me, American Idol is on and then my favorite, Flip that house. See ya.
I am a Deputy Sheriff and would like to thank you for attempting to wake people up to the problems we face in the United States. It’s a shame that union workers and government employee’s do not fully understand the comming nightmare we WILL face and soon. I am working on getting my wife and children out of the city soon, because when the truth comes to light, we will be in a world of hurt. Thanks to all the hard working tax payers who have provided my family and I, a good life. Please prepair your families for a mess thats about to happen.
Part of the problem is that government represents a huge part of the economy. This means that the income of many people depends directly on government spending even if that spending exceeds the revenue raised by taxes. One hundred years ago, the public sector was close to 10% of the economy. Today, the public sector is closer to 40% of the economy. In order to reduce deficits and public debts, we need to reduce the size of the public sector. This can not be done overnight, it will take many years if not decades.
The greatest fallacy was to allow the economy to deindustrialize by building up the so called service sector (financial services and fast food restaurants) and shipping all the manufacturing industries to cheap labor countries like China. This process started a long time ago but accelerated since 1970 when US oil production started its long term decline.
A great obstacle to progress is the general unwillingness to face the truth. As long as the economic truth can not be stated in plain terms, there is little chance for a turnaround.
Our problems were masked for a long time by the reserve status of our currency (the Dollar). Trade deficits could persist for decades without any alarm ringing simply because foreigners were willing to accept (and hold) our Dollars for the goods and services they delivered to us. Everybody believed into the fallacy that it is more economical to buy cheap Chinese products instead of making these things ourselves. This kind of thinking was so corrosive that it even affected the quality of our school education: American students are poorly educated in comparison to their foreign counterparts.
Take a look at Russia. Their currency is being shunned by the rest of the world. Consequence: The Russian national debt is only 10% of their economy. The corresponding US debt is close to 100% of our economy partly because our currency enjoys the reserve status. It was easy for us to load up on debt. For the Russians, nobody wanted to give them credit. The result are totally different levels of indebtness.
The only things bad about ‘printing money’ is that everyone, our government, businesses or individuals have to borrow it to get it and pay interest on it to use it. We have too much debt. We have ‘printed’ too much debt NOT too much money. Additionally, we do not ‘print’ money. Printed money, Federal Reserve Notes and coins are not available for direct delivery to the public. They must be purchased with checkbook money.
How can a nation with the Constitutional authority to create money be broke?
How? Because Congress has wrongfully farmed out its authority to create money debt free as a wealth to the people to the banking industry. Now, the private commercial banks create all the money as loans when we sign promissory notes pledging our collateral.
Creating and putting all money into circulation as loans creates economic servitude and only the principal is created never the interest. The interest must be borrowed too. When the principal of the loan is repaid the money is removed from circulation and extinguished. It no longer exists until a new borrower comes along.
Unfortunately, America is mortgaged to the hilt and can no longer afford to borrow. The solution is to SPEND not LEND all new money into circulation.
Money should represent what we OWN, not what we OWE! If men can create money as numbers in computers and LEND them into circulation as a DEBT for their personal profit, men can also create numbers in computers and SPEND them into circulation DEBT-FREE as a public benefit! “Congress shall…provide post-roads, coin-money..” Let’s stop being played for fools, acting foolish and let it be known that debt-money is dead! We’re supposed to be Freedom-loving Americans not Economic slaves!
My mother is a retired teacher and my sister is a Ohio teacher and I really don’t bring this topic up because they do not get it! It is almost like any topic is on the table for fair play and compromise except their pensions & benefits!
I heard that in Wisconsin they were bringing in union people from three states to protest. Wisconsin teachers called in sick making many school districts shut down and working mothers/fathers not go to work to watch their kids…………………..and they wonder why most Americans despise public unions!
Great Article Greg
Im Paying down debt,turned a van
into a camper,storing canned food,camping gear,
and plenty ammo because Im a high tech worker
in the electronics field and when the collapse happens,
and it will I at least will have a place to live,and
shelter.That van Ive worked on for 6 months and it
could be my next home.at least I wont be looking
under bridges or in a tent–Time for all Americans
to go into survivalist mode.
Tim in Texas
I heard you on coast to coast the other night and man, what a breath of fresh air. Anyone who is mad at you for what you said is either living in a state of denial or sadly ignorant of our economic situation. Reality is right around the corner for lots of people. Keep putting the truth out there and lets hope for the best.
Is that our 51st state? Sounds like a lot of people have already moved there. I live in Reality, right around the corner.
So….what do we do to prepare?
I mean, i have purchased some food and some precious metals but not much. Its tough to know when to “pull the trigger”. When do i know to go all in and buy as much gold/silver/food. i can afford.
Brian, just a not of encouragement. Gold at $249 an oz. in 1979 was just as expensive as it is at $1400. I hope that makes sense to you.
It’s fitting if not ironic that Wisconsin, the birthplace of the public employee union will become its burial ground as well. Maybe we should call what is unfolding there the “Nightshade Revolution,” as they seem to be poisoning themselves by the consumption of the fruits of their own corruption.
So then I have a few questions for our liberal and union friends that are in need of answers:
1. How is it not corrupt, if not morally incestuous, for public employee unions to use the state to forcefully expropriate dues from its compulsory members and then use those dues to elect the very politicians with whom they negotiate their contracts?
2. Is it simply beyond the intellectual capabilities of the left to see the hypocrisy of chanting for freedom and democracy while attempting to block a vote by duly elected representatives? Or that Democrat State Senators have fled from the democratic process because they know they will lose that vote?
3. Are these same Democrats that so loudly protested Republican efforts to use the established rules of the US Senate to block President Obama’s Agenda now celebrating an abrogation of the rules of the Wisconsin Senate?
4. When President Obama said “Elections have consequences,” and “We won,” did he mean that they only have consequences for their opponents and his friends in organized labor should be exempt from the consequences of elections or their own corruption?
I for one welcome the public employee unions taking the hard line in Wisconsin. The sooner they self expose their attitude that the State’s purpose is to serve their employees and line the coffers of the unions, over and above the needs and concerns of the public they are supposed to be serving, the sooner this monster can be slain and shoved into the grave of history it so justly deserves. That the union bosses would sooner risk the jobs of their members rather than their corrupt power structure should be telling to anyone who takes the time to do any critical thinking about what is going on here, as to just who they are really looking out for.
Greg and Readers,
Why is does the discussion regarding Social Security always focus on raising the retirement age, reducing benefits or some combination thereof? Why not the obvious: remove the cap on the earnings subject to the tax?
Solve Social Security solvency, reduce the employee and employer contribution to 5% each; a tax cut for everyone and remove the cap of earnings that the percentage is applied to.
Why is dollar 15,000 any different than dollar 100,000, dollar 250,000, dollar 500,000, or dollar 5,000,000? Answer there is no difference in any of these earned dollars. Those Americans at the upper stratas of the earning foodchain have a responsibility to the people of the Nation that have aided them in becoming so financially successful in their chosen endeavors. The professional sports player, the entertainer, the lawyer, and yes the politician would not be the fabulous success they are without the lower and middle class support; buying the tickets, employing their services, paying the lobbyist and funding the campaigns.
Then sunset the entire program effective January 1, 2051. As of that date no one born, moving into the Nation, or becoming a citizen enrolls in Social Security as a ‘new’ payer; existing beneficiaries get their benefits, the ‘baby boom’ generation will pass through the system, the system will be solvent, but the largest ‘Ponzi’ scheme in history will come to an end when the last person born on December 31, 2050 leaves this mortal plane.
Why can we not solve even one problem once and for all?
A very good and cogent article on our current economic situation. Americans have to be honest with themselves and their current economic enviroment. We can’t blame the EVIL BANKSTERS for all of our problems, like some in alternative media are doing. You can subtract all the bankster bailouts (which are lamentable) from the economic equation and we are still faced with profligate government spending on all levels which will surely drive us into fiscal insolvency.
Thank goodnes for insomnia because otherwise I wouldn’t have caught Mr. Hunter’s informative and sobering interview on Coast to Coast early one morning. Mr. Hunter has just been added to my Pantheon of economic journalists to include: Gerald Celente, Robert Chapman, Max Faber, Peter Schiff, and Catherine Austin Fitts. These folks not only have the intelligence and acumen to comprehend our current plight but the courage to ring the alarm bell to those who “have ears to hear”. Thank you Mr. Hunter for your good work. It is going to take every ounce of courage and knowledge to face our coming collapse and I appreciate all the help I can get.
Dmitry Orlov is a genius, as an engineer he knows alot more than just gravity rules the cosmos. I am quite taken with his research and personal experience in the collaspe of a economy. His video is telling, inspiring, and almost prophesy, I ask all to listen to it, the guy knows what happens in collaspe, he was there. America my friends is on the very verge of economic collaspe. Don’t be fooled by Ben B. and the four branches (please add MSM to the other three branches) of the government’s propaganda, we are on the verge of collaspe and its gonna get nasty. Please, please, take the time to hear this guy out, its a learning experience.
thanks for the info.
I have told anyone who will listen at work about your site. Please keep it coming.
Thank you Greg for your smart informed article. However, there seems to be another dimension to our municipal, county, state and federal governments “being broke” that most observers are missing.
Dear reader, please consider what Walter Burien is doing over at http://www.cafr1.com . As you may know he traded in derivatives for 30 years, has a gift for comprehending the big numbers in government financial statements, and is educating people about the fact that collective “government” now literally owns controlling interests in all the Fortune 500 companies and more through thousands of investment accounts held at the municipal, county, state and federal levels.
The proof is revealed in the “Comprehensive Annual Financial Reports” in the public domain. Thus when government bails out various corporate entities, taxpayers are unknowingly simply rescuing government investment portfolios. Naturally, no one explains this to the public; they only get the usual half-truths, lies and obfuscation from New York and Washington D.C.. The profits from these government investments are not shared with the very taxpayers whose money was used to create them.
Fascism, American style.
According to Walter, “taxes” account for a mere third of the money collective government takes in; the rest is obscene levels of profit from investments, carefully not talked about in the mainstream media. All the talk of “budget deficits” does not take into account the “profits from investment” revealed only in the CAFRs that every level of government issues as required by law, and are in the public domain for anyone to look at.
States “going broke” is only partly true; yes, they are usually spending more than their budget funds. However, the profits outlined above are carefully not mentioned to the public. The purpose? To scare the public into putting up with their present tax burden, and to prepare for more because, after all, “the government is going broke and needs our money”.
It is identical to me pulling my empty pocket inside-out and saying to you “See? I’m broke! Please give me money!” while every other pocket is stuffed full with one hundred dollar bills.
Walter Burien explains what I’ve stated here in a new 1 hour 14 minute online documentary he created called “The Only Game In Town”. A 48-hour pass costs $3.00 available here:
I watched it twice. Walter ends his video proposing a smart simple way to address the issue of taxes: create “Tax Retirement Funds” (“TRFs”) that are financed by a small percentage of the profit that every level of government is already making.
My fantasy, Greg Hunter: that you would consider taking the time to view “The Only Game In Town” at the above link, perhaps communicate directly with Walter (his contact info including phone number is at his web site), and then write an article with your response and post it where you can.
Core Government Philosophy:
“Tax Payers are Suckers”.
Definition of Government Job:
Take three when you only need one.
Isn’t it amazing that when wall street was about to go belly up they managed to fork over more than a trillion. When we are now openly saying WE ARE BROKE all they can come up with is 60 billion? And the democrats are crying to high heaven about it? WHAT THE HELL IS GOING ON HERE. WHO REALLY OWNS THIS JOINT?
Sadly, the banksters & wall street owns the joint – and, they have the right to refuse to do business with anyone they want to.
Greg, I believe Jerry Brown is going to have a rude awakening when we turn down his tax extension bill and realizes the “people” do not want to pay for the deficits in the pensions and benefits of the public sector. You noticed he said he was going to cut the public sector workers pay and benefits…………………., however, not those in bargining units. ie: unions.
I agree with almost all of the comments above. However, it saddens me that everyone commenting is as oblivious as Congress to the trillion dollar military budget AND the other trillion off-budget for the military AND the huge percentage of national debt and interest that is related to past wars and military spending. Wars and funding for war are sacred to Congress and, apparently, sacred to the rest of Americans. There is no hope until America ends its global military empire.
As for Social Security, I’m going to choke if I hear another person refer to it as an “entitlement” or “unfunded liability”. Social Security has been making a “profit” for 30 years. It is not directly the fault of everyone who paid into it–and continues to do so–that the trust fund was stolen. It IS indirectly everyone’s fault because they never protested during that whole 30 year period over the theft.
In addition, everyone boo-hoos over the trillion dollar Social Security deficit OVER the NEXT 30 YEARS while the Federal Reserve has dished out, what is it?— $13 Trillion, $23 Trillion or more without batting an eye.
Having said that, I’d like to point out that from 1996 to 2001 under Mayor Willie Brown in San Francisco the budget went from $2.6 Billion to $5.2 Billion. It doubled in five years! Did San Francisco get twice the government service? San Francisco could have paid off 100% of their bonded indebtedness eliminating all debt and interest payments AND could have funded large capital projects out of their current account AND set aside money for unfunded pension liabilities. Note, they COULD have. They didn’t.
If you’d like to read some more on the craziness of pension benefits read this article on Berkeley, California’s $310 Million in unfunded debt liabilities. http://www.contracostatimes.com/ci_17038504?nclick_check=1
Try these three eye-popping paragraphs from the article:
But the cost is driven in large part by lucrative pension benefits that allow police and firefighters to retire starting at age 50 with 3 percent of top salary for each year of work. Thus the pension for a 30-year employee starts at 90 percent of salary and has an annual cost-of-living adjustment.
Other city employees can retire at age 55 and collect about 2.92 percent of salary for every year worked. Thus, someone who worked in government for 35 years can receive a starting pension of 102 percent of salary. That’s right: That employee will collect more in retirement than on the job.
[Unfunded liabilities are] equal to more than two years of city general fund revenues. It works out to about $197,000 for every full-time city employee. Taxpayers must pay it off, at a cost of about $3,000 for every city resident.
I can have no confidence in any Congress member who continues to refuse to take two key steps to help restore fiscal sanity to our governance: (1) immediately end the endless wars in Iraqnam and Afghan-Nam, thus bringing our needlessly imperiled troops back home where they belong; (2) disband, ASAP, all the 700-plus military bases that Uncle Sam’s empire operates in foreign nations.
Without these actions, we, the governed, will continue to be held hostage by our ultra-hypocritical rulers. Who knew? — Larry W. Bryant (22 Feb 11)
I think a large part of our problem is that most people are simply incapable of doing simple math. I’m not talking about being able to conceptualize billions or trillions, I mean they simply don’t understand even the basics of finance and money.
Our schools have decided that it’s FAR more important to fill student’s heads with all sorts of social propaganda, rather than teach them real world skills like how to analyze an investment, read a balance sheet or even balance their own checkbooks.
I managed to go all the way through 12 years of public schools, as well as a long stretch in college studying physics, math and chemistry, and I never once had a single course that taught basic financial skills.
I didn’t realize how woefully inadequate my education was until I started making enough money and realized I didn’t know a damn thing about how to handle it. I had to give myself a belated education in the subject, but I imagine that most Americans are like me, totally clueless on the subject.
I’m not just talking about the average person. I mean reporters and government officials as well.
That is the fundamental problem with our federal and state’s debt. People HEAR that we are broke, but they don’t really understand the issues and they think that some mean person is just holding out on them.
In the absence of knowledge, they fall prey to hucksters and con artist selling them some version of the socialist cargo cult. Just paint yourself blue, stand on one leg and scream really loud at the rich people, and money will fall from the sky. It beats the hell out of learning about money.
America was broke when the special interest banking industry managed to lobby and change our medium of exchange from an evidence of wealth to an evidence of debt. This ocurred from before the signing of the constitution up to 1934. When one has to borrow to have any money they are broke. When all the money a nation or its people ‘spends’ must be borrowed first they are broke. All we have ‘spent’ has been borrowed–simple bookkeeping entries created when we borrow. How can the lenders ever run out of numbers?
The solution is that people in the land of the free must understand the debt-money system, be brave enough to stand against economic servitude and demand that all money be created and spent into circulation debt-free as a final payment, instead of taxation or borrowing for production that benefits the public-roads and bridges.
It is very sad to see how financially illiterate Americans are, and apparently, this financial illiteracy has moved into Washington. I was asked yesterday when it was that the federal government went broke, the answer is simple, it was $14 trillion dollars ago.
The financial market (stocks, banks, etc) has never really been a barometer of the US economy, at least not for the American worker. This is just bankers taking care of bankers. This country was warned over and over again in the early years of this country to not allow the bankers to run (take over) the financial & currency systems. The US monetary policies have been run by Goldman Sacks for many years now, and look at how that has worked out. Talk about living in denial.
The current bubble that the Fed is creating will decimate the US economy has postponed the inevitable, the bust is slowly occurring but will end suddenly (when Americans can no longer ignore it). What people need to know is after the burst, we will return to local economies and move out of the cities (most of us).
As far as union workers are concerned, I could care less. The years of “collective bargaining” are being shown as nothing short of extortion, only now the bills can not be paid. It appears that union workers were also sold down the river, and the falls are quickly approaching.
Once more Greg, this is a great page to read. But what is really outrageous is that the fat cats of Wall Street are still juicing themselves with sky rocketing bonuses while the rest of America is going down the hill. I mean, not only the banksters responsible for the whole crisis have never been judged and condemned but they are getting richer and gaining more power day after day. And that is a real concern for the future. What sort of society will come out as a result of this process? We have a bunch of psychopathic Madoffs in charge of the financial world. I really wish we had revolts in the streets (like the ones in the Arabic World) to throw the banksters and their friends at congress out of business once and for all… May America stand up on its feet and claim justice for all.
I’m going to use real world examples to show you how most Americans are thinking.
Example Number One:
I work for a small health care delivery company that receives both federal and state money to fund it’s operations.
Recently, the state announced an overall 6% cut in the money we will be receiving. However, despite this cut (& more to come) the executive management team is going to add three more employee’s to our 15 member department!
I asked how they could be adding new employee’s in the face of these coming cuts and their answer was that they expect the department will continue to grow. So, in anticipation of this growth, we need to be ready with the right number of employees!! Even in the face of cuts, they’re still not getting it.
Example Number Two:
I just spoke to a co-worker and suggested she buy gold because she’s always looking at her 401K, which is in a mutual fund right now. Her response was that with inflation already here, gold won’t help her because she’ll be paying more for everything else.
She could not see that gold or PM’s are her only hedge against inflation. She is looking at her 401K and as long as her $300,000 dollar figure is in there, she believes she’ll be fine.
The only time Americans will wake up is when gas goes to $5 dollars and above.
Kevin & Greg,
modern monetary theory or practice – “spending comes before tax revenues are received or bond sales.” this is difficult to believe and the mmt is hard to understand but our government does this and can get away with it since we are the reserve world currency and the dollar floats– other than this i whole heartedly agree with your post kevin — 2 articles you may want to read –
By Scott Fullwiler, Associate Professor of Economics at Wartburg College and
By Cullen Roche
One of the sound bits heard on MSM from union protesters is how Unions have saved the common man and without then we would be working weekends and have no benefits ect. While some of that was true in the early capitalist years, it is certainly not applicable now. It is not unions that set the 40 hr week pay structure or health insurance requirement for public workers (see Obamacare), It is the Government. The same government that is the Public workers. There is no mean corporate profit hungry boss trying to suppress the public employees. It is laughable when I hear this feeble argument on MSM. Their employer is their neighbors and friends that they are trying to screw over under the old “we are doing this for the children arguement”.
Hi BLT & Greg!
If you want the truth God owns this country and every other one too.
1Co 10:26 for the earth is the Lord’s, and the fulness thereof.
His whole purpose for this world and its inhabitants is to raise up sons like His son Jesus Christ. He is about to orchestrate His final act of this age called the 7 year tribulation followed by a year of wrath. During that time most of the world will chose who they follow.
The Lord uses vessels of honor and dishonor to fulfill His will. Here is a perfect example. The Lord is allowing a prince(satan)of Daniel 9:27 to move an elite banking cartel to bring this whole financial mess to a head to drive the world to a covenant with many the prince wants to be the spiritual head of the end time beast of Revelation. Look for things to get much worse with another possible 9/11 type event that will involve tactical nukes. This along with the fiat currency collapse should bring this covenant by fall of this year. This will be the beginning of the tribulation. The prince will then use this covenant through the UN, IMF, along with the central banks of the world to attempt to rule mankind through commerce.
By the middle(3 1/2 years) of the tribulation an electronic system will be in place in most of the developing and all of the developed world to control all transactions by virtue of an imbedded chip just under the skin.
I suggest we all dust off our Bibles and start reading Revelation and for that matter John and any other book in there the Lord leads you to read cause you are about to live through His last chapters of this age.
If you think I am kidding get on you-tube and type in “Positive ID” and check out a few ideas some people have instore for all of us who like being played bye this Pied Piper.
Some will laugh at this, some will think about it, and a few will take this seriously. Those who want more instruction go to our web site unleavendbreadministries and begin a journey with manifold blessing now and on the otherside of this life!
In CHRIST! Rob
Well I am a bit contrarian. I refuse to put blame on others. We all participated in the mess. We gave tacit approval to it. We gloried ourselves with all the imported foofraw garbage.
A brief history of this pile of crap.
The US gov’t ran boom and bust cycles. The bankers lost serious money during the westward expansion cycle(Yes Dorthy, some made millions).
Rise of the unions, Passage of Posse Commitatus (sp) Law.
The Federal Reserve Act came into being to eliminate boom and bust cycles.
The XVIth Amendment provided a revenue stream to make the Federal Reserve Act the tool.
POTUS Roosevelt and the increase of federalism.
Fast forward to balance of payments not balancing..
Rapid rise of service industry aka taking in each other’s laundry.
(sound horns, yell from roof tops)
Our wise elected decided to completely scrap their primary responsibilities: Protection of private property and protection of the domestic open-market by jumping on the Free-Trade bandwagon.
IMPORTANT SIDE NOTE: The experts decide who is an expert. The public believes experts.
Herein is the primary problem. An open market affects not just goods, but also the labor component. Plenty of excess labor, wages drop. Labor shortages and wages rise. The open market is a meritocracy, be it goods or services and labor is a service.
We the people supported the union movement. We supported the elimination of merit and substituted tenure. It matters little if it is public or private sector unions. WE even have a law that demands non-union labor get union wages for government projects.
WE did this. We are guilty. The first step in the problem solving process is to correctly identify the problem. I have met the enemy and it is us.
We need to return to a domestic open market, eliminate all income taxes (it is fundamentally illogical to penalize productivity or savings), substantial sales taxes on all imports, restore meritocracy and eliminate free-trade. I have no problem with user fees. You want it, you pay for it.
But I’m just a crazy old man.
I’m usually a fan of your writings but I think you are on the wrong side on this one my friend. Blame the UNIONS? Pretty low on my list if you want to start a blame game. How about Republican policies that lead to this disaster like Nixon defaulting on the debt? Or Reagan unleashing the bull and handing the keys to the gov over to corporate raiders. Or Bush starting 2 wars that are projected to cost multiple trillions? Yeah lets go after hard working Americans who have played by the rules and sacrificed for this country dearly and fought for equality, thats the answer. If you want to expose the financial root cause you have to put aside your own political religion first. Without unions this country would never have a middle class. Thats a fact, destroy it and whats left to pillage?
I don’t agree with you that both parties are to blame for this crisis. When Nixon defaulted on the Bretten Woods agreement he set this country down a path of financial destruction. Reagan then doubled-down and Cheney famously stated deficits don’t matter. I do agree with you on the private vs public share of the profits but at this stage in the game the fact that states are broke is because the financial engine that everyone was promised by said republicans has miserably failed. You don’t fix that by destroying the only firewall that is keeping this country strong. Your argument is that because the private sector has become capitalism eating itself let’s go ahead and make sure the one good thing left is torn down as well. This is not the answer, thank you for the great articles I read them all.
That’s crazy man. America’s not broke! Americans have BILLIONS of dollars in retirement plans (pensions, 401-K’s, IRA’s…). So when the government is desperate, they can raid, plunder, steal, and loot the billions (if not trillions) of dollars in retirement plans to continue their wretched operation. Can you say revolution?
Greg – it’s funny (sad really) the responses you got from your appearance on Coast to Coast. It’s sad to see how greedy and lacking in wisdom those government workers can be. They deserve it all! Sadly, they only care for themselves and don’t give a hoot about the rest of the poeple who are suffering and in poor economic straits. They see the “government” (their employers) as a never ending fountain of wealth. (Maybe they never ponder where that wealth comes from?).
On another website, I read a commenter who said that it is said that all those teachers in Wisconsin are not protesting the constant assail of our God-given rights. The reason for their protest is one, and only one reason – MONEY. They are being asked to contribute a little more to their pension plans and their health insurance. What a sad state our country has arrived at. And guess what? All of those teachers called in SICK to attend that rally (I’m sure they got paid for the sick day too).
First line of the last paragraph above should read:
“On another website, I read a commenter who said that it is SAD…”
Great article as usual. I have to comment on the stupidity of public sector workers who blindly delude themselves into thinking they would achieve a pay increase if they went to the private sector. As an executive recruiter who has worked with some of the best-managed companies in America for over 30 years, I can honestly say that NEVER NEVER have my clients asked me to recruit a person from the public sector!!!! These people have NO CLUE how competitive the private sector is. There is no job security based on seniority in the private sector. Either perform, or you will be found out and you will be fired. Public sector experience isn’t worth anything in the private sector!!! I wish all those arrogant public sector cry babies would LEAVE their cushy jobs — we could replace each two lazy underperformers with one hard working ambitious person who wanted a job and wanted work for the right reasons. That would be the best way to cut the fat from the public sector.
Also, I live in Wisonsin and Milwaukee Public Schools have a 45% graduation rate. These schools are failures that suck enormous amounts of taxpayer dollars into their vortex of waste. So, when you comment that people don’t understand finances or the reality of the debt our nation has — its largely because they are the product of a FAILED PUBLIC EDUCATION system. I wish that all these spoiled teachers who illegally went on strike last week here in our state would get fired. Also, I don’t see this in the media much, but Scott Walker stated what he was going to do with public sector employees while he was running. He WON the election because Wisconsin taxpayers realize that things have to change. Go SCOTT WALKER!!!!!!!!!!!!!
The pie is shrinking. As the process accelerates, so do the envy and resentment that divide haves and have-nots. Americans, in the aggregate, know squat about money and how it works. They think a dollar is a standard unit measure, like a gallon or a mile. Were they to understand banking, then government workers, private sector workers, and those unable to find jobs, instead of envying and resenting one another, would go straight for the throats of the real haves: Jamie and Lloyd and their multitude of parasitic colleagues. The Wisconsin debate, and others like it, magnified by the MSM, create a diversionary political atmosphere that serves no one so much as these criminally destructive thieves who masquerade as a “financial industry.”
You are right … I do think that the corrupt leaders in this country distract the masses with a divide and conquer strategy, thus diverting attention from their own fraud and theft. But, all politics are also local and the state of Wisconsin cannot afford to give Cadillac retirement and health care benefits to state employees any longer. We have to be responsible at all levels of government. Maybe if one state can turn its finances around, others may follow suit and that may force the feds to shape up.
Who knows, maybe the public may actually catch on and insist on accountability.
Sadly, you are doing nothing more than perpetuating a myth as it applies to government workers. The reality is, not all government workers are created equal and most make very modest wages and have been experiencing cutbacks in benefits for years. In fact, in New Jersey, the state government has not contributed (as they are required by law to do so) to the Public Employees Retirement System for a long long time. On the contrary, they have been stealing from the fund so that it is underfunded by billions of dollars. Furthermore, this attack on public sector workers amounts to little more than a game of scapegoating by the criminals on Wall Street, big banks, and those in the upper echelon of government. Accordingly, Greg, I would encourage you to be a part of the solution, to dispel the untruths, and not be another fool blindly pointing a finger of blame where it doesn’t belong.
Having live in Wisconsin all my life this is fascinating, just fascinating, a world wide transformation being played out on a local stage. I graduated from the Milwaukee public schools in the early 1960’s and UW-Madison in the late ‘60’s. I went to a very mixed “ghetto” MPS high school with whites, blacks, well to do kids, poor kids, Hispanics, welfare recipients, and even some American Indians. You know what; we all managed to get along pretty well. I also got an actual education from some truly outstanding teachers, mostly holdovers from the 1920’s and ‘30’s. With that background I had very little trouble getting through UW (engineering). As far as the “liberal” education at UW the most charitable thing I can say is that I was filled with pure s***. I still can quote verbatim our professor in ECON 101, fall of 1965, stating with all the certitude of the cloistered academic …….. “We should be emulating the Russian model of economic organization”. And this man was on LBJ’s Council of Economic Advisors. It wasn’t until the ‘70’s when I (accidently) happened upon real economics that things started to make sense. So to all of the lefties out there protesting against the system, you don’t even realize you’re looking through the wrong end of the telescope. It is not Capitalism you are protesting but Socialism. What we are witnessing is the worldwide collapse of the Socialist myth. Any country with a central bank, fractional reserve banking, manipulated interest rates, and a fiat currency already has a centrally planned economy. This is every country in the world today. At no time in human history has this ever happened. What we see today in Madison and all over the world are but symptoms of the socialist malady and the inevitable results – collapse. We either return to our founding precepts or willfully worsen the situation. The contrasts are just delicious. Madison, the birthplace of Progressivism may now be the place of its’ welcome death. Sadly, all of you ‘60’s and ‘70’s lefties who “changed the world” and are mostly responsible for today’s conditions are going to see your golden years turn to ashes. You may choose to ignore reality but reality is not going to ignore you.
As an aside, the first time I heard Obama speak was a year before he officially ran for President. After a few minutes I said to my wife ….. “It’s the ‘60’s and we’re back in Madison”. Ah, the irony.
U.S. per capita debt is $3 millions, based on $1,500. trillions counterfeit debt created this decade by mass-production of financial derivatives. In fact your U.S. Birth-certificate is a bond, which means that every American is a slave-born collateral to that bond. (Inspect fine prints at bottom of your birth certificate for details.)
Fred M – Amen! You are a true American and a good man. I’m glad you “saw the light” after being brainwashed by the Marxist scumbags in college.
You are spot on when you say “It is not Capitalism you are protesting but Socialism. What we are witnessing is the worldwide collapse of the Socialist myth. Any country with a central bank, fractional reserve banking, manipulated interest rates, and a fiat currency already has a centrally planned economy,” and “Sadly, all of you ‘60’s and ‘70’s lefties who “changed the world” and are mostly responsible for today’s conditions are going to see your golden years turn to ashes.”
Those elitists that are pushing for a one world government (aka New World Order) are also in the end going to reap what they sow. They seek to enslave the planet, but they will be cast into the ETERNAL LAKE OF FIRE. The current world crisis is being caused by the elitists.
Why is it that nobody ever addresses the fact that the true cause of this problem is Governmentally imposed debt?
Giving “representatives” the ability to acquire debt that has to be paid by the people made this situation inevitable. They’re simply spending other peoples money, which is why every single activity they engage in involves more spending.
Promise this and buy some of that – create a new department here and hire some of your friends over there – attack some people then rebuild what you’ve destroyed…
All with kickbacks, skimming, and no-bid contracts along the way.
If they cannot pay for it, it can’t be done.
When you consider that much of what they continuously spend our promised debt payments on has a negative impact on the people who’re supposed to pay the debt it begins to piss you off – especially when all along it’s the banks and corporations that ALWAYS benefit.
The banking issue is really a mind blower because we’ve been kicked by it several times already. We’re expected to pay off the debt that created the mess even after we paid off the bankers for creating it (while bankers get to keep the properties). We continue to pay for the judicial system and regulatory system that punishes us while rewarding THEM, and suffer through the inflation, loss of jobs, loss of equity, and loss, loss, lossssss……
The MERS fiasco is a prime example of Karma and it’s nice to see judges ruling against banks because of it, but it’ll just tie up the courts and kill housing for years. I read a comment by a guy at zerohedge who said, “In the future people won’t pay for a house, they’ll sue for one.”
We also get to cover the pensions and healthcare of our glorious “representatives” for as long as they live (good thing they don’t have a union!)
Anyone who doesn’t see this entire system as one big rip off isn’t paying attention.
Anyway – thanks for addressing the situation in Wisconsin with a level head. Personally, I don’t know why public workers can have unions because you wind up with two groups making decisions for others – unions for workers, and “representatives” for taxpayers. Where are my “bargaining rights?”
I guess if you want to sell people on the need to buy gold and silver, you’d best convince them America really is broke.
Which is hogwash, of course. But why let that get in the way of a good marketing plan?
Austerity budgets and putting people out of work will not grow this economy. What this does is, it becomes a self-fulfilling prophecy that only drives economic growth down even further. If we could cut unemployment by just a few percentage points, the resulting “lift” to the overall economy would do a great deal to relieve the immediate budget problems seen all over the country (remember what happened in the 1980s after the ’82 recession? During the Reagan presidency, the wealth of the American people grew by some 15 trillion dollars. Need I say more?). If you put more people out of work, how will that help state governments balance their budgets?
I’m with you when you say the government is out of money. But before going after those who have the least amount of wealth in the US we need to go after the bankers by freezing assets and even seizing the FEDERAL RESERVE and going after the shareholders of the FED. They can then go after any other and all corporations by 1st taxing all goods made abroad heavily and 2nd by demanding that all corporations that have benefited from Corporate Welfare for the last 40 years. Those profits have come at the cost of all average Americans via lower wages, standard of living, and the extremely high debt that has resulted as people try to exist by obtaining food, shelter, healthcare, and education. Please note that corporations have benefited for decades and continue to do so due to the outsourcing of jobs.
So before we go after the public sector employee, realize that they are only “overpaid” and seem to have lavish benefits when compared to private sector employees because those same corporations have raped and pillaged their employees for decades. It’s laughable to note that the average white collar worker of the 1980s made would be making $100k today if salaries had kept up with inflation. The average college student going into management consulting or investment banking would be making closer to that $100K too. I don’t see any 21 year old making that much do you?
How can republicans (now) argue that middle income public workers don’t deserve their pensions after they (congress) gave away trillions in PUBLIC money to rich bankers?
This is the slippery moral slop of the bailouts coming back to bite them.
If they had been no bailout to rich bankers, then I would not support the workers in Wisconsin, but because of those immoral bailouts, let them get what they can get and then, we can all go down with the ship.
Good article. And isn’t it interesting that a mainstream publication (Bloomberg) ran an op-ed piece (L. Kotlikoff) stating the country is bankrupt? I read that, too, and was surprised to see it because Bloomberg has sort of been on the rah-rah squad for a long time for whatever regime they helped to get elected. I won’t get my hopes up that the MSM will stop being lapdogs of the gang in possession, but this was a nice change of pace. I’m not sure I would have gone so far as to admit having voted for Mr. Obama, though. Mr. Kotlikoff is probably still re-thinking that admission. He wants to be taken seriously and he’d like to sound smart and credible, but he fell for Mister Hope And Change, oops.
It’s good to read that people are preparing for that inevitable rainy day, and taking responsibility for their own welfare. We think of any items we’ve chosen to purchase and set aside now as part of our savings plan. Not all savings have to be in money, and I salute those with well-stocked pantries and root cellars.
Greg – I have been thinking very deeply in the last couple days. I think these money printers from the U.S. government and the Federal Reserve are trying to start WWIII. Really! Look at the riots around the world. It’s due to rising food prices. I’d hate America too, if I lived in one of those countries. When will this BS end? At what destination do these “policy makers” intending to arrive? It appears they have taken the road to HELL, but do not have the brains or the will to make a U-turn. I think these bastards (excuse my French) are trying to start WWIII. I really do.
Sorry Greg, I know this isn’t your most recent article. I left a very brief comment on that one, but I have a hard time “clicking” on a story about one of those slimy bastards (a bankster).
get a clue there’s a reason they call them corporate raiders the money is long gone
and the Bible spoke of rich mens chances of Heaven being less likely than a camel
being able to pass through the eye of a needle and thats not a sewing term …
and the warning of beware of the military-industrial complex was really beware of
the congressional-military-industrial complex… then you see exactly where we
are and you know the money is gone
Fantastic article! TV partisans like Maddow and Hannity are in severe denial. What will their ilk do when financial armaggedon (coined by author Michael J. Panzner) finally bears its full weight on the fragile American economy. Only two politicians I’ve seen who are serious about reducing debt are Ron and Rand Paul. Rand Paul was almost publicly lynched when he told a reporter he wants to cut off all foreign aid.
Jim Sinclair summed it up best, “Rise of East, Fall of West”.
The U.S. Government has no desire to pay off the debt. Sorry guys you were misled like a bunch of Rats following the Pied Piper…oops the (Media) A Global ponzi scheme.
How will it play out?
Hyperinflationary depression begins. The dollar collapses and the worsening economic conditions made it clear to Washington’s creditors that the federal budget deficit was too large to be financed except only by the printing of money. Bad bad China first, gotta have an enemy. A huge increase of interest rates then hyper-printing of cash then default of foreign held U.S. Treasury Bonds. Shutdown of stock markets and banks. A “Bank Holiday”. Redemption ONLY allowed by U.S. citizens to new Liberty Dollar Denominated Bonds and Liberty Cash. New Liberty Dollar backed by Gold? You Fool! Citizen precious metal confiscation? Massive unemployment. Forced conversion of 401k and IRAs to U.S. Liberty Bonds. Recalculation of Social Security and Medicare benefits. Huge hit of Americans standard of living. New system of Privatization of Social Security grandfathered into the younger groups. Rationing. Martial Law declared. A really angry bunch of Foreign Treasury Bond Holders screeming bluddy murder. Sorry Guys we are in a crisis.
America is beyond broke. People are committing housing fraud to survive and or stealing off of others. You can thank Obama for that one. Go ahead congress, keep letting him milk the USA dry.
Greg, Obama is proposing a $5.50 entry fee by either air or sea to us Canadians when entering the U.S. for an annual infusion of $110 million. Man, how desperate. Maybe we should reciprocate by doing the exact same to U.S. citizens entering Canada when the proverbial s&%t hits the fan and riots appear on the streets of Anytown USA. Our debt is $560 billion so it shouldn’t take long to cover that amount.