Blindness prevails, ignorance dominates!!!
They're using our pockets as well as our money. The entire dollar is in their hands.
Cary, help me out here. Is that right?
Lonewolf, do you mean that you are experiencing no financial distress, or that there really isn't any national economic crisis? Perhaps if the corporations were to pay taxes...
Well, I'll throw in my 2 cents. The country's total debt between federal and state govts., corporations and the consumer is pushing $40 Trillion. That's about a 360% debt to GDP ratio. The last time debt got this close in relative terms was in 1929, when the debt to GDP ratio was 275%. The next Greater Depression will make the 1930's look like a warm up game. That's a lot of wampum. $1 Trillion is 1 million X 1 million. Our GDP (gross domestic product) is right at $11 Trillion. The unfunded liability for Social Security and Medicare between now and 2020 is about $42 Trillion. Add in mandatory funding in the Federal budget (interest, entitlement payments, running minimal govt. services, etc.) over the same time period, and we are a very "broke" country. No country in the history of the planet has ever been allowed to amass so much debt in any way you measure it. What follows a credit bubble of this magnitude is a deflationary depression.
Total federal debt that is issued is pushing $8 Trillion into year's end. The federal debt ceiling (limit) is about $7.38 Trillion, and we're just below that. Treas. Sec. Snow has been begging Congress all summer to raise the debt ceiling because even with accounting tricks at Treasury, the govt. will run out of money by mid-November. Congress being the election year whores that they are, were not about to raise the debt ceiling until after the Nov. 2 election.
The other thing you need to know about the way the federal govt. accounts for deficits is that it is on a strictly cash basis. So surpluses from Social Security have been used for decades to fund the govt.'s spending, leaving the SS Admin. with a bunch of IOU's. There's no money in the kitty so to speak. So the federal budget deficits reported are actually way under reported. If you back out the SS surpluses of the late Clinton admin. (when everyone was bragging about our record budget surpluses and were projecting a $10 Trillion surplus into 2010) we were actually posting net deficits. Corporate executives would be indicted, tried, found guilty and jailed for such accounting practices, but not the politicians. When the baby boomers begin to retire the deficit will become a vast mega ocean of red ink (deficits) The $42 Trillion net deficit I mentioned above is discounted to present value. The future dollar value is something in the $100 Trillion range. Greenspan and Snow have both warned the Congress that future SS benefits need to be trimmed now to avoid a "systemic dislocation" (financial system crash) in the future, and to give baby boomers time to prepare. Five to ten years ain't much time to prepare for the cuts that will have to be made down the road. If Congress is true to form, they'll wait for a crisis to erupt before doing anything, making the personal pain on retirees worse.
The taxes that we are assessed won't even come close to paying the interest on our projected future mountain range of debt, much less the principle. Our children and their grandchildren will still be trying to pay this much debt off, unless the US repudiates its own debt, a la Argentina and Russia style. Can't happen? Won't happen? I'd bet heavily that that's where we're unavoidably headed. Not tomorow or next year, but the debt is being financed mainly by Asian central banks. Total US Treasury debt is now about 40% to 45% owned by foreign central banks - mainly China and Japan. Who controls the debt market? Foreign central banks do. There will be a day when they won't want our dollars or our bonds in payment of our massive trade deficit. BTW, July's trade deficit was an eye popping new record of $55.8 billion, and the federal budget deficit was $69+ billion for the same month. So we're on track to borrow over $1 Trillion this year to keep the sheeple grazing in the pastures of consumerism and more debt. Yeeha.
Damn, this turned into a long ass post. Sorry folks. If you want to see a video on how the Fed operates, I posted one over on the Politics/Military/Law thread. It's called "Money, Banking and the Federal Reserve" Yeah, I know it's 42 minutes long, but it's informative and gives you a better idea of how we're being robbed of our own damned "money" if that's what it is anymore. Look at the currency you carry. Prominently displayed at the top of every bill is "Federal Reserve Note". "Note" = debt. The "real" dollar is long gone. The Fed manufactures all the Federal Reserve Notes it wants without Congressional control. There is nothing "federal" or "reserve" about the Fed. It's basically owned by banking cartels in the US and Europe, and not subject to Congressional oversight, but that's another long ass post.
Cary
P.S. If you're interested in what to expect in the coming years (and you should be), I highly recommend "Conquer the Crash" by Robert Prechter, Jr. Prechter does an excellent job at laying out the case for a deflationary depression of epic proportions. Make sure you get the 2004 updated version. Some of it is a little technical, but most of it is easy to read and understand. I've had clients read it. It scared some so much they couldn't finish the book. Yes, we are in for some very scary times over the next 6 to 10 years.
