Obama Is On Track To Be The Only President In U.S. History To Never Have A Year Of 3% GDP Growth

Barack Obama Giving A Speech - Public Domain

We just got another extremely disappointing GDP number. It was being projected that U.S. GDP would grow by 2.5 percent during the second quarter of 2016, but instead it only grew by just 1.2 percent. In addition, the Census Bureau announced that GDP growth for the first quarter of 2016 had been revised down from 1.1 percent to 0.8 percent. What this means is that the U.S. economy is just barely hanging on by its fingernails from falling into a recession. As Zero Hedge has pointed out, the “average annual growth rate during the current business cycle remains the weakest of any expansion since at least 1949”. This is not what a recovery looks like.

In addition, Barack Obama remains solidly on track to be the only president in all of U.S. history to never have a single year when the economy grew by at least 3 percent. Every other president in American history, even the really bad ones, had at least one year when U.S. GDP grew by at least 3 percent. But this has not happened under Obama even though he has had two terms in the White House.

The following are the yearly GDP growth numbers under Obama. They come directly from the official website of the World Bank

2009: -2.8 percent

2010: 2.5 percent

2011: 1.6 percent

2012: 2.2 percent

2013: 1.5 percent

2014: 2.4 percent

2015: 2.4 percent

Does that look like a “recovery” to you?

Of course not.

And many are anticipating that this latest extremely disappointing GDP number will discourage the Federal Reserve from raising interest rates any time in the near future

The disappointing report could keep the Federal Reserve on hold longer as it considers another interest rate hike. The Fed lifted its key rate in December for the first time in nine years but has held it steady since.

According to the pundits in the mainstream media, this was supposed to be the year when the U.S. economy finally returned to “normal”, but that has not happened at all. In fact, in recent days we have gotten a spate of bad news about the economy. We just learned that the homeownership rate in the United States has hit the lowest level ever, and Gallup’s U.S. economic confidence index has fallen to the lowest level so far this year.

With the election coming up rapidly, this is the kind of news that Hillary Clinton definitely does not need. She needs to be able to sell the American people on the idea that the Obama years have been very good for the U.S. economy. If things take a sharp turn down in the coming months, that may be enough to cost her the election.

So far, Hillary Clinton’s economic agenda has not received that much scrutiny, but the truth is that she hopes to increase taxes in a whole bunch of ways which would be very harmful for the economy. The following comes from an excellent piece by John Kartch and Alexander Hendrie

Hillary has endorsed several tax increases on middle income Americans, despite her pledge not to raise taxes on any American making less than $250,000. She has said she would be fine with a payroll tax hike on all Americans, she has endorsed a steep soda tax, endorsed a 25% national gun tax, and most recently, her campaign manager John Podesta said she would be open to a carbon tax. It’s no wonder that when asked by ABC’s George Stephanopoulos if her pledge was a “rock-solid” promise, she slipped and said the pledge was merely a “goal.” In other words, she’s going to raise taxes on middle income Americans.

Hillary’s formally proposed $1 trillion net tax increase consists of the following:

Income Tax Increase – $350 Billion: Clinton has proposed a $350 billion income tax hike in the form of a 28 percent cap on itemized deductions.

Business Tax Increase — $275 Billion: Clinton has called for a tax hike of at least $275 billion through undefined business tax reform, as described in a Clinton campaign document.

“Fairness” Tax Increase — $400 Billion: According to her published plan, Clinton has called for a tax increase of “between $400 and $500 billion” by “restoring basic fairness to our tax code.” These proposals include a “fair share surcharge,” the taxing of carried interest capital gains as ordinary income, and a hike in the Death Tax.

Taxes tend to be a pet peeve of mine, so looking at that list of proposed taxes definitely makes me cringe.

If Donald Trump wants to hit the Democrats really hard on the economy, all he has to do is point out the fact that Barack Obama is going to be the only president in American history to never see 3 percent economic growth for an entire year, and he had two entire terms in which to try to turn things in a positive direction.

Sadly, things are very likely going to be worse for the economy no matter who wins the election. Under Obama, our national debt, our trade deficit, and most of our other long-term economic problems have gotten much, much worse, and so the table is set for a major economic disaster during the next presidential administration.

And if what I have to share about the future of America in my new book is correct, we are definitely moving into a “perfect storm” that will not just be economic in nature. The things that are coming are going to shake this nation to the very core, and I believe that we will soon face the consequences for decades of exceedingly foolish decisions.

So in the end, we may look back and long for the days of 1.2 percent economic growth, because what is on the horizon is going to make that look like a Sunday picnic.

*About the author: Michael Snyder is the founder and publisher of The Economic Collapse Blog and End Of The American Dream. Michael’s controversial new book about Bible prophecy entitled “The Rapture Verdict” is available in paperback and for the Kindle on Amazon.com.*

If Everything Is So Great, Then Why Do Two-Thirds Of Americans Say The Country Is On The Wrong Track?

Wrong Way - Public Domain

Americans appear to be increasingly pessimistic about the future of America. According to a Real Clear Politics average of recent polls, 68.9 percent of Americans believe that the country is on the wrong track, and only 23.1 percent of Americans believe that we are headed in the right direction. But if you have been listening to the endless parade of political speeches at the Democratic and Republican National conventions, you would be tempted to think that the greatest days for the United States are right around the corner. The politicians keep promising us that better times are coming if we will just make the “correct” choices on election day, but no matter who we send to Washington D.C. things just seem to keep getting worse and worse. Let’s take a look at just a few of the signs that indicate that our country is going in the wrong direction…

-The rise in violent crime: We haven’t seen crime rise this rapidly in our major cities in a very long time, and according to a report that was just released this week many forms of violent crime are way ahead of where they were at this time last year

A new report published by the Major Cities Chiefs Association said that violent crime – homicides, rapes, robberies, assaults and shootings – is on the rise nationwide.

The troubling results, though just one survey, could provide vindication to Republican presidential candidate Donald Trump. President Barack Obama has contested Trump’s assertionmade prominently in his nomination acceptance speech last week – that crime is a national epidemic and major problem.

The mid-year violent crime survey, released Monday, shows 307 more homicides so far in 2016, according to data compiled from 51 law enforcement agencies from some of America’s largest cities, including Chicago, Los Angeles and New York. There have also been 1,000 more robberies, approximately 2,000 more aggravated assaults, and 600 more nonfatal shootings in 2016 compared to this time in 2015.

-Police officers are being shot at a staggering rate: The number of police officers shot in the United States during the first half of 2016 was up 78 percent compared to the exact same time period last year.

-Mass shootings: In just the past few weeks we have seen the worst mass shooting in U.S. history in Orlando, and there were mass shootings of police in Dallas and in Baton Rouge.

-The U.S. economy continues to crumble: We just learned that orders for durable goods fell again in June, Gallup’s U.S. economic confidence index just hit the lowest level so far this year, and at this moment 43 million Americans are on food stamps.

-The U.S. consumer appears to be increasingly tapped out as the middle class shrinks: Most of the country is living paycheck to paycheck these days. One recent survey found that 62 percent of all Americans have less than $1,000 in savings, and U.S. News & World Report is reporting that some analysts are projecting that we are heading for a “restaurant recession”…

Analysts are forecasting a “restaurant recession” in the U.S., which is bad news for America’s food and drink establishments and potentially even worse news for the economy at large.

Paul Westra, a senior research analyst at Stifel Financial Corp., said in a research note Tuesday that he’d turned “decidedly bearish” on the restaurant industry, downgrading Stifel’s stance on 11 different restaurant stocks, including Chipotle Mexican Grill, Panera Bread and Cheesecake Factory.

He and his colleagues now “confidently believe” that the weak restaurant consumer spending seen in the second quarter of the year “reflects the start of a U.S. restaurant recession.”

-Business is not booming: The total amount of stuff our businesses have been selling has been declining since mid-2014, and it is being projected that corporate earnings will be down for a fifth consecutive quarter. Earlier today, we learned that our biggest aircraft manufacturer, Boeing, has reported its first quarterly loss in nearly seven years.

-Government debt continues to explode: The U.S. national debt has hit a staggering 19.4 trillion dollars, and we have added an average of more than 1.1 trillion dollars to the debt since Barack Obama has been in the White House.

-Our politicians just continue to go from bad to worse: If you thought that the Obama years were bad, just wait until you see what Hillary Clinton can do. The woman that the Democratic Party just nominated for president of the United States is one of the most evil, wicked and corrupt politicians the nation has ever seen.

-Everywhere you look, evil is exploding: The social fabric of our nation is coming apart all around us, and most of our men are hooked on pornography

A 2014 national survey commissioned by the organization found one-third of men ages 18-30 admitted they are either addicted to porn (23 percent) or are unsure if they are addicted (10 percent).

“According to our survey, over one-half (52 percent) of men age 18-30 admit to risking their careers and livelihood by viewing porn at work within the past 3 months,” Hesch told WND. “The numbers are even higher for men ages 31-49, with nearly three-fourths (74 percent) watching porn at work.”

-Sadly, most Americans are way too addicted to entertainment to bother noticing that our nation is rapidly going down the toilet: In America today, millions of people would rather spend endless hours playing video games such as Pokemon Go on their phones rather than getting involved in their communities. And it is difficult to say that we even have “communities” anymore when most people spend far more time online than in face to face interaction with others. If you can believe it, one recent survey found that half the population of the United States and Canada uses Facebook at least once a day.

I could go on and on, but hopefully you are getting the point.

The average American spends more than five hours a day watching television, and the television is telling them that everything is going to be just wonderful and that they should go out and vote for Hillary Clinton because she would be the first woman president and that would make history.

Meanwhile, our society is falling apart in literally thousands of different ways, and most Americans know deep inside that our country is deeply, deeply broken. That is why more than two-thirds of us tell the pollsters that America is on the wrong track. Virtually all of us know that something is seriously wrong with the United States, even if we can’t always agree on what the solutions should be.

Let us work very hard to wake our fellow Americans up while we still can, because time for turning this country in the right direction is rapidly running out.

*About the author: Michael Snyder is the founder and publisher of The Economic Collapse Blog and End Of The American Dream. Michael’s controversial new book about Bible prophecy entitled “The Rapture Verdict” is available in paperback and for the Kindle on Amazon.com.*

Member Of Congress: It’s Easy ‘To Manipulate A Nation Of Naive, Self-Absorbed Sheep’

Sheeple - Photo by Andrew R Tester

You may not believe the incredible things that one member of Congress is saying about the corruption of our political system and the gullibility of the American people. In a brand new book entitled “The Confessions of Congressman X“, one anonymous member of the U.S. House of Representatives confesses that he hardly ever reads the bills that he votes on, that his main job is to get reelected, and that it is “far easier than you think to manipulate a nation of naive, self-absorbed sheep who crave instant gratification”. This book is being published by Mill City Press, and it is being billed as “a devastating inside look at the dark side of Congress as revealed by one of its own.” I don’t know if you would classify this anonymous member of Congress as “brave” since he does not wish to reveal his identity, but the things that he is admitting confirm suspicions that many of us have had for a very long time. Just check out a few of the most important quotes from his book…

-“Most of my colleagues are dishonest career politicians who revel in the power and special-interest money that’s lavished upon them.”

-“My main job is to keep my job, to get reelected. It takes precedence over everything.”

-“Fundraising is so time consuming I seldom read any bills I vote on. Like many of my colleagues, I don’t know how the legislation will be implemented, or what it’ll cost.”

-“Voters are incredibly ignorant and know little about our form of government and how it works.”

-“It’s far easier than you think to manipulate a nation of naive, self-absorbed sheep who crave instant gratification.”

-“It’s about getting credit now, lookin’ good for the upcoming election.”

-“We spend money we don’t have and blithely mortgage the future with a wink and a nod. Screw the next generation.”

That last quote made me want to tear my hair out.

This is exactly what I have been saying for years.

One of the things that will really get me ranting is the national debt. Since Barack Obama entered the White House, we have been stealing an average of more than 100 million dollars from future generations of Americans every single hour of every single day.

What we are doing to future generations of Americans is beyond criminal. In a just society, a whole lot of our politicians would be going to prison over this. And now this anonymous member of Congress is openly admitting that they understand precisely what they are doing.

And in the quotes above you can see the contempt that our career politicians have for the American people. They know that society has become so “dumbed-down” that it is easy to trick and manipulate most of the population. And they are also very well aware that the key to staying in office is raising as much money as possible. In fact, according to the Washington Post the candidate that spends the most money wins 91 percent of the time.

So that is why these Congress critters spend as much time as possible raising money. If they want to keep their jobs, that is what they need to do. Whether they actually do any good for their constituents is basically immaterial. If you want to read more of what this particular anonymous member of Congress has to say, you can find the book right here. I think that because of these revelations this is going to be one of the most important political books to come out in decades.

In the end, I believe that our system of governance is heading for an inevitable implosion. Even now, most Americans have completely lost faith in the way that we are being governed. According to an average of polls compiled by Real Clear Politics, Congress has a 12.8 percent approval rating and a 78.8 percent disapproval rating right at this moment.

Those are absolutely stunning numbers.

And trust in the main institution propping up faith in our system of government has also fallen to extraordinary lows. One recent survey discovered that only 6 percent of all Americans have “a lot of confidence” in the mainstream media at this point…

Trust in the news media is being eroded by perceptions of inaccuracy and bias, fueled in part by Americans’ skepticism about what they read on social media.

Just 6 percent of people say they have a lot of confidence in the media, putting the news industry about equal to Congress and well below the public’s view of other institutions.

There are lots and lots of reasons why the American people are dissatisfied, and I write about many of them on my website. But it isn’t just the “big issues” that are upsetting people. Today, we have gotten to a point where the government cannot seem to perform even the most basic functions such as fixing our roads and protecting our power grid. The following comes from CNBC

America is falling apart. And the repair bill is getting bigger.

That’s the conclusion of the latest “report card” on American roads, bridges, airports, power grid and other critical infrastructure from the American Society of Civil Engineers.

Over the next decade, it would cost more than $3.3 trillion to keep up with repairs and replacements, but based on current funding levels, the nation will come up more than $1.4 trillion short, the group says. When projected to 2040, the shortfall is expected to top $5 trillion, unless new funds are allocated.

I would like to believe that it is going to be possible to smoothly reform our system and make it a lot less corrupt.

I would like to believe that we can return to the ideal of “citizen politicians” that our founders envisioned.

But everyone knows that those things are not likely to happen any time soon. With each passing year, we come closer to resembling other extremely evil and wicked societies that experienced great falls. What we are doing right now is not even close to being sustainable. If we continue on this current path, it is only a matter of time before our nation completely implodes.

My hope is that there will be a mass awakening and the United States will be pulled back from the brink at the last moment, but the truth is that it may already be too late for that.

*About the author: Michael Snyder is the founder and publisher of End Of The American Dream. Michael’s controversial new book about Bible prophecy entitled “The Rapture Verdict” is available in paperback and for the Kindle on Amazon.com.*

It Is Mathematically Impossible To Pay Off All Of Our Debt

Money - Public Domain

Did you know that if you took every single penny away from everyone in the United States that it still would not be enough to pay off the national debt? Today, the debt of the federal government exceeds $145,000 per household, and it is getting worse with each passing year. Many believe that if we paid it off a little bit at a time that we could eventually pay it all off, but as you will see below that isn’t going to work either. It has been projected that “mandatory” federal spending on programs such as Social Security, Medicaid and Medicare plus interest on the national debt will exceed total federal revenue by the year 2025. That is before a single dollar is spent on the U.S. military, homeland security, paying federal workers or building any roads and bridges. So no, we aren’t going to be “paying down” our debt any time in the foreseeable future. And of course it isn’t just our 18 trillion dollar national debt that we need to be concerned about. Overall, Americans are a total of 58 trillion dollars in debt. 35 years ago, that number was sitting at just 4.3 trillion dollars. There is no way in the world that all of that debt can ever be repaid. The only thing that we can hope for now is for this debt bubble to last for as long as possible before it finally explodes.

It shocks many people to learn that our debt is far larger than the total amount of money in existence. So let’s take a few moments and go through some of the numbers.

When most people think of “money”, they think of coins, paper money and checking accounts. All of those are contained in one of the most basic measures of money known as M1. The following definition of M1 comes from Investopedia

A measure of the money supply that includes all physical money, such as coins and currency, as well as demand deposits, checking accounts and Negotiable Order of Withdrawal (NOW) accounts. M1 measures the most liquid components of the money supply, as it contains cash and assets that can quickly be converted to currency.

As you can see from the chart below, M1 has really grown in recent years thanks to rampant quantitative easing by the Federal Reserve. At the moment it is sitting just shy of 3 trillion dollars…

M1 Money Supply 2015

So if you gathered up all coins, all paper currency and all money in everyone’s checking accounts, would that even make much of a dent in our debt?

Nope.

We’ll have to find more “money” to grab.

M2 is a broader definition of money than M1 is, because it includes more things. The following definition of M2 comes from Investopedia

A measure of money supply that includes cash and checking deposits (M1) as well as near money. “Near money” in M2 includes savings deposits, money market mutual funds and other time deposits, which are less liquid and not as suitable as exchange mediums but can be quickly converted into cash or checking deposits.

As you can see from the chart below, M2 is sitting just short of 12 trillion dollars right now…

M2 Money Supply 2015

That is a lot more “money”, but it still wouldn’t pay off our national debt, much less our total debt of 58 trillion dollars.

So is there anything else that we could grab?

Well, the broadest definition of “money” that is commonly used is M3. The following definition of M3 comes from Investopedia

A measure of money supply that includes M2 as well as large time deposits, institutional money market funds, short-term repurchase agreements and other larger liquid assets. The M3 measurement includes assets that are less liquid than other components of the money supply, and are more closely related to the finances of larger financial institutions and corporations than to those of businesses and individuals. These types of assets are referred to as “near, near money.”

The Federal Reserve no longer provides charts for M3, but according to John Williams of shadowstats.com, M3 is currently sitting somewhere in the neighborhood of 17 trillion dollars.

So even with the broadest possible definition of “money”, we simply cannot come up with enough to pay off the debt of the federal government, much less the rest of our debts.

That is not good news at all.

Alternatively, could we just start spending less than we bring in and start paying down the national debt a little bit at a time?

Perhaps that may have been true at one time, but now we are really up against a wall. Our rapidly aging population is going to put an enormous amount of stress on our national finances in the years ahead.

According to U.S. Representative Frank Wolf, interest on the national debt plus “mandatory” spending on programs such as Social Security, Medicare and Medicaid will surpass the total amount of federal revenue by the year 2025. That is before a single penny is spent on homeland security, national defense, paying federal workers, etc.

But even now things are a giant mess. We are told that “deficits are under control”, but that is a massive hoax that is based on accounting gimmicks. During fiscal year 2014, the U.S. national debt increased by more than a trillion dollars. That is not “under control” – that is a raging national crisis.

Many believe that that we could improve the situation by raising taxes. And yes, a little bit more could probably be squeezed out of us, but the impact on government finances would be negligible. Since the end of World War II, the amount of tax revenue taken in by the federal government has fluctuated in a range between 15 and 20 percent of GDP no matter what tax rates have been. I believe that it is possible to get up into the low twenties, but that would also be very damaging to our economy and the American public would probably throw a huge temper tantrum.

The real problem, of course, is our out of control spending.

During the past two decades, spending by the federal government has grown 63 percent more rapidly than inflation, and “mandatory” spending on programs such as Social Security, Medicare and Medicaid has actually doubled after you adjust for inflation.

We simply cannot afford to keep spending money like this.

And then there is the matter of interest on the national debt. For the moment, the rest of the world is lending us gigantic mountains of money at ridiculously low interest rates. However, if the average rate of interest on U.S. government debt was just to return to the long-term average, we would be spending more than a trillion dollars a year just in interest on the national debt.

So the best possible environment for “paying down our debt” that we are ever going to see is happening right now. The only place that interest rates on U.S. government debt have to go is up, and our population is going to just keep getting older and more dependent on government programs.

Meanwhile, our overall debt continues to spiral out of control as well. According to CNBC, the total amount of debt that Americans owe has reached a staggering 58.7 trillion dollars…

As the nation entered the 1980s, there was comparatively little debt—just about $4.3 trillion. That was only about 1.5 times the size of gross GDP. Then a funny thing happened.

The gap began to widen during the decade, and then became basically parabolic through the ’90s and into the early part of the 21st century.

Though debt took a brief decline in 2009 as the country limped its way out of the financial crisis, it has climbed again and is now, at $58.7 trillion, 3.3 times the size of GDP and about 13 times what it was in 1980, according to data from the Federal Reserve’s St. Louis branch. (The total debt measure is not to be confused with the $18.2 trillion national debt, which is 102 percent of GDP and is a subset of the total figure.)

As I discussed above, there isn’t enough money in our entire system to even pay off a significant chunk of that debt.

So what happens when the total amount of debt in a society vastly exceeds the total amount of money?

Is there any way out other than collapse?

You can share what you think by posting a comment below…

(Originally published on The Economic Collapse Blog)

Barack Obama Says That What America Really Needs Is Lots More Debt

Obamacare

When it comes to taking a chainsaw to the future of America, nobody seems more eager than Barack Obama. Despite the fact that the U.S. national debt is on pace to approximately double during his eight years in the White House, he has just proposed a budget that would take government spending to crazy new heights. When Barack Obama took the oath of office, the U.S. national debt was 10.6 trillion dollars. Today, it has surpassed the 18 trillion dollar mark. And even though we are being told that “deficits are going down”, the truth is that the U.S. national debt increased by more than a trillion dollars in fiscal 2014. But that isn’t good enough for Obama. He says that we need to come out of this period of “mindless austerity” and steal money from our children and our grandchildren even faster. In addition, Obama wants to raise taxes again. His budget calls for 2 trillion dollars in tax increases over the next decade. He always touts these tax increases as “tax hikes on the rich”, but somehow they almost always seem to end up hitting the middle class too. But whether or not Congress ever adopts Obama’s new budget is not really the issue. The reality of the matter is that the “tax and spend Democrats” and the “tax and spend Republicans” are both responsible for getting us into this mess. Future generations of Americans are already facing the largest mountain of debt in the history of the planet, and both parties want to make this mountain of debt even higher. The only disagreement is about how fast it should happen. It is a national disgrace, but most Americans have come to accept this as “normal”. If our children and our grandchildren get the opportunity, they will curse us for what we have done to them.

All debt destroys.

All debt enslaves.

And when you are talking about an 18 trillion dollar debt, you are talking about an amount of money that is almost unimaginable.

If our national debt was reduced to a stack of one dollar bills, it would circle our planet at the equator 45 times.

How could we have done such a thing?

Thomas Jefferson once said that “the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.” He correctly understood that government debt is stealing. We are financially raping our children, our grandchildren and all future generations of Americans. It is an incredibly wicked thing to do.

But instead of men like Thomas Jefferson running our country, we have men like Barack Obama running it.

And to Barack Obama, running up a trillion dollars of debt a year is “mindless austerity”

“I want to work with Congress to replace mindless austerity with smart investments that strengthen America,” Obama said in a speech at the Department of Homeland Security. “I’m not going to accept a budget that locks in sequestration going forward. It would be bad for our security, and bad for our growth.”

Yes, if we steal money from future generations it will artificially inflate our current standard of living and make our economy look temporarily better than it should be.

But it is morally wrong to do this, and our current crop of politicians have no intentions of ever bringing the debt party to an end.

Even with the ridiculously optimistic economic assumptions that are used in Obama’s new budget, the federal budget is never projected to balance within the next decade. Instead, Obama’s budget projects that the national debt will rise from 18.1 trillion dollars right now to 26.2 trillion dollars in 2025.

Of course it would greatly help if the federal government actually spent our money wisely. But instead, the feds often waste our hard-earned tax dollars in some of the most bizarre ways imaginable. The following is just one example

The U.S. federal government has prompted controversy after spending over $33,000 on a study to find out whether same-sex couples live closer to tobacco shops than heterosexuals.

The large sum was spent on a study by the National Institutes of Health entitled, ‘Relationship Between Tobacco Retailer Density and Sexual Minority Couples.’

Thanks to this kind of insane spending, our debt is completely and totally out of control.

While Barack Obama has been in the White House, the U.S. national debt has increased by $84,266 per full-time private sector worker. Anyone that believes that this kind of debt accumulation is sustainable is absolutely delusional.

The only reason why our house of cards has not completely collapsed already is because the rest of the world has been willing to lend us gigantic piles of money at artificially low interest rates.

In December, the average rate of interest on the government’s marketable debt was 2.013 percent. But in the past, interest rates have been much higher than that. For example, in January 2000 the average rate of interest on the government’s marketable debt was 6.620 percent. If we returned to that level today, we would be paying well over a trillion dollars a year just in interest on the national debt.

And the issue isn’t just the more than one trillion dollars in new debt that we are accumulating every 12 months.

As I have discussed previously, the U.S. government has more than seven trillion dollars of debt that must be “rolled over” each year. In other words, the federal government must issue more than seven trillion dollars of new debt just to pay off old debts that are coming due.

If something were to happen which would cause the rest of the planet to either be unwilling or unable to lend us trillions of dollars at ridiculously low interest rates all of a sudden, the game would be over.

We were handed the keys to the greatest and most prosperous economy in the history of the planet, and our greed has totally wrecked it.

We were wealthy beyond imagination, but that was never good enough for us. We always had to have more.

And now we are hurtling toward financial oblivion, and we have a man in the White House that wants us to go into debt even faster.

(Originally published on The Economic Collapse Blog)

Under Obama: Federal Debt Up $84,266 Per Full-Time Private-Sector Worker

Barack Obama

The federal government drove $789,473,350,613.20 deeper into debt in calendar year 2014, an increase that equaled $6,875 per household, $7,458 per full-time year-round worker, and $8,853 per full-time year-round private-sector worker.

According to the Treasury, the debt started calendar year 2014 at $17,351,970,784,950.10 and ended it at $18,141,444,135,563.30.

When Obama took office on Jan. 20, 2009, the debt was $10,626,877,048,913.08. Since then, it has increased $7,514,567,086,650.22–which is $65,443 per household, $70,985 per full-time worker and $84,266 per full-time private-sector worker.

(Read the rest of the story here…)

Money to burn? Federal government spends $33,000 on study to find out whether same-sex couples live closer to tobacco shops

What - Public Domain

The U.S. federal government has prompted controversy after spending over $33,000 on a study to find out whether same-sex couples live closer to tobacco shops than heterosexuals.

The large sum was spent on a study by the National Institutes of Health entitled, ‘Relationship Between Tobacco Retailer Density and Sexual Minority Couples.’

But it’s likely to raise questions about how the government is spending money, particularly at a time when there are widespread economic problems.

(Read the rest of the story here…)

China’s Treasury Holdings Fall to Lowest Since February 2013

Dollars - Public Domain

China’s holdings of U.S. Treasuries fell to a 20-month low in October, as yuan appreciation indicated less of an impetus to buy the government securities.

China held $1.25 trillion in U.S. debt as of October, a $13.6 billion drop from September, the Treasury Department said in a monthly report today. The nation remains the largest foreign holder, ahead of Japan, whose stockpile increased $0.6 billion to $1.22 trillion, reducing the gap between the two countries to the narrowest since September 2012.

The yuan rose 0.4 percent against the dollar in October as the government moves toward a market-determined exchange rate, part of efforts to expand the currency’s use worldwide. The less China intervenes to weaken its currency, the less it needs to buy securities such as Treasuries.

(Read the rest of the story here…)

Senate Passes Budget Over 6 Times Larger Than The Number Of Galaxies In The Universe

Galaxies - Hubble Heritage on Flickr

$1.1 trillion is a little over a thousand billions and astronomers estimate there’s only around 170 billion galaxies in known existence, stretching nearly 14 billion light-years away in every direction.

Additionally, one study estimates the number of stars in the Milky Way Galaxy at 100 billion, not significantly higher than the food stamp program accounting for $82 billion of the budget, which already cleared the House of Representatives on Thursday and is expected to be signed by President Obama.

It’s amazing how the federal budget makes the known universe look less significant in comparison.

To put it into the perspective of time, 82 billion seconds ago was around 528 B.C. during the early stages of the Persian Empire and 1.1 trillion seconds ago was before 30,000 B.C.

If the entire $1.1 trillion budget was stacked in dollar bills, it would reach over 63 miles high into the mesosphere layer of the atmosphere which is well above the maximum altitude of aircraft and not too far from the minimum altitude of satellites.

(Read the rest of the story here…)

John Boehner’s ‘Spending Deals’ Have Increased The National Debt $3.8T In 3.8 Years

Obama, Pelosi, Reid, Boehner, McConnell - Public Domain

The federal debt has increased by $3.8 trillion in the 3.8 years that have passed since House Speaker John Boehner cut his first spending deal with Senate Democrats and President Obama.

That works out to $32,938.38 for every household in the United States—including those taking federal welfare benefits—and $42,783.20 for every full-time year-round private-sector worker in the United States.

In fact, the $42,783.20 that the federal government has borrowed per full-time year-round private-sector worker since Boehner cut his first federal spending deal exceeds the $41,916 that according to the Census Bureau was the median annual earnings of full-time year-round private-sector wage and salary workers in 2013.

(Read the rest of the story here…)

Is This $18 Trillion Ticking Time Bomb About to Explode?

Debt

In just the last seven years—the last under George W. Bush and the first six under Obama—the debt has increased by roughly $7.4 trillion. That’s 10 times the entire debt incurred in our first 200 years as a nation.

My view is that government debt isn’t always inherently evil. The wisdom of borrowing depends on what you use the money for.

  • We borrowed trillions (in today’s dollars) to win World War II. Surely it was worth it.
  • We borrowed another $1.8 trillion during the Reagan years to finance winning the Cold War and rebuild the private economy with growth hormone tax cuts. That has clearly benefitted future generations, so they should bear some of the cost.

But what we have bought with most our debt of the last two decades has been a bigger, more expansive welfare state. Almost half of all American households, according to the U.S. Census Bureau, get a government check or direct benefit from government today. More than one-third of households get some kind of unearned welfare.

Obama called his spend-and-borrow policies a “stimulus.” Really?

(Read the rest of the story here…)

Average Federal Spending Per Household Nearly $30K

America Is Broke

Did you know that the National Institutes of Health spent $374,000 to find out if a puppet show would convince preschoolers to eat more vegetables? Or, that the Department of Agriculture gave $50,000 to a business that packs and sells alpaca manure?

Whether you knew or not, your tax dollars paid for it–and much more. In 2014, federal spending per household was a staggering $28,826.

Here are some more key facts from “Federal Spending by the Numbers 2014,” a new Heritage report.

1. Even with the temporary drop in deficits and the Budget Control Act, federal spending and the national debt are projected to increase drastically. The current national debt tops $18 trillion, which is more than 100 percent of the national Gross Domestic Product. Without reforming federal spending, especially on Medicare, Medicaid and Social Security, the rising debt threatens Americans with higher taxes and fewer economic opportunities through less growth. At some point, investors may even lose confidence in the federal government’s ability to service the debt.

(Read the rest of the story here…)

Five Lies About America’s New $18 Trillion Debt Level

US-18-trillion-debt

There’s so much misinformation and propaganda about this; let’s examine some of the biggest lies out there about the US debt:

1) “They can get it under control.”

What a massive lie. Politicians have been saying for decades that they’re going to cut spending and get the debt under control.

FACT: The last time the US debt actually decreased from one fiscal year to the next was back in 1957 during the EISENHOWER administration.

FACT: For the last several years, the US government has been spending roughly 90% of its ENTIRE tax revenue just to pay for mandatory entitlement programs and interest on the debt.

This leaves almost nothing for practically everything else we think of as government.

(Read the rest of the story here…)

It Will Take 398,879,561 Years To Pay Off The US Government’s Debt

National Debt - Public Domain

The current debt level of over $17.9 trillion would thus take more than 398 million years of working at the average wage to pay off.

This means that even if every man, woman and child in the United States would work for one year just to help pay off the debt the government has piled on in their name, it still wouldn’t be enough.

Mind you that this means contributing everything you earn, without taking anything for your basic needs—which equates to slavery.

Now, rather than saying that the national debt is reaching $18 trillion, which means nothing to most people, you could say that the debt would currently take almost 400 million work-years to pay off. Wow.

When accounting for unfunded liabilities, the work-years necessary to pay off the debt amount to astonishing 2.38 BILLION work-years…

And the years of slavery required are only growing.

As an amount alone the debt is meaningless, but in terms of your future enslavement it can be better understood.

To put this in perspective even further—what was the situation like previously?

At the end of the year 2000, the national debt was at $5.7 trillion, while the average yearly income was $32,154. That’s 177 million work-years.

Again—wow.

(Read the rest of the story here…)

Interest On The U.S. National Debt To Triple Within Ten Years?

Money - Photo by Pen Waggener

For the current fiscal year, the U.S. government is estimated to pay $430 billion in interest on the national debt. The Federal Reserve has stated it plans to raise interest rates starting in 2015 and will continue to do so right through to 2017.

According to the CBO, interest payments on the government’s debt will triple within 10 years.

While I’m sure traders are enjoying the recent rally in the U.S. dollar, that rally is simply a product of the Fed’s repeated announcements of higher rates ahead and the continued economic problems in the eurozone. The reality of the matter is that the projected massive increase in the U.S. national debt will have a material impact on the U.S. dollar.

Over the past five years, we have seen central banks around the world reduce the amount of U.S. dollars they hold as their reserve currency. The greater a country’s national debt, the more pressure on its currency. The U.S. will be no different.

(Read the rest of the story here…)

Reckless Federal Shopping Spree Could Squander $50 Billion

Money - Public Domain

Today marks the end of the federal government’s fiscal year. It’s also the biggest one-day shopping spree of the year– the day when federal agencies rush to spend the last of their money before October 1, before anything left over is returned to the Treasury.

Since agencies cannot carry over unspent funds, the idea is “use it or lose it.” If they don’t spend the money, Congress may not allocate as much the following year. The system typically creates panic for federal workers scrambling to spend millions of dollars before they run out of time. It also means a huge payday for contractors scoring big awards.

Last year, the government spent about $50 billion the week before October 1, according to NPR’s Shankar Vedantam. That total included apparent impulse buys like artwork worth $562,000 for the Department of Veterans Affairs, and toner cartridges worth $144,000 for the Department of Agriculture, as noted last year by The Washington Post. It also included $178,000 worth of “Cubicle Furniture Rehab” for the U.S. Coast Guard.

(Read the rest of the story here…)

The U.S. Government Is Borrowing About 8 Trillion Dollars A Year

National Debt - Public Domain

I know that headline sounds completely outrageous. But it is actually true. The U.S. government is borrowing about 8 trillion dollars a year, and you are about to see the hard numbers that prove this. When discussing the national debt, most people tend to only focus on the amount that it increases each 12 months. And as I wrote about recently, the U.S. national debt has increased by more than a trillion dollars in fiscal year 2014. But that does not count the huge amounts of U.S. Treasury securities that the federal government must redeem each year. When these debt instruments hit their maturity date, the U.S. government must pay them off. This is done by borrowing more money to pay off the previous debts. In fiscal year 2013, redemptions of U.S. Treasury securities totaled $7,546,726,000,000 and new debt totaling $8,323,949,000,000 was issued. The final numbers for fiscal year 2014 are likely to be significantly higher than that.

So why does so much government debt come due each year?

Well, in recent years government officials figured out that they could save a lot of money on interest payments by borrowing over shorter time frames. For example, it costs the government far more to borrow money for 10 years than it does for 1 year. So a strategy was hatched to borrow money for very short periods of time and to keep “rolling it over” again and again and again.

This strategy has indeed saved the federal government hundreds of billions of dollars in interest payments, but it has also created a situation where the federal government must borrow about 8 trillion dollars a year just to keep up with the game.

So what happens when the rest of the world decides that it does not want to loan us 8 trillion dollars a year at ultra-low interest rates?

Well, the game will be over and we will be in a massive amount of trouble.

I am about to share with you some numbers that were originally reported by CNS News. As you can see, far more debt is being redeemed and issued today than back during the middle part of the last decade…

2013

Redeemed: $7,546,726,000,000

Issued: $8,323,949,000,000

Increase: $777,223,000,000

2012

Redeemed: $6,804,956,000,000

Issued: $7,924,651,000,000

Increase: $1,119,695,000,000

2011

Redeemed: $7,026,617,000,000

Issued: $8,078,266,000,000

Increase: $1,051,649,000,000

2010

Redeemed: $7,206,965,000,000

Issued: $8,649,171,000,000

Increase: $1,442,206,000,000

2009

Redeemed: $7,306,512,000,000

Issued: $9,027,399,000,000

Increase: $1,720,887,000,000

2008

Redeemed: $4,898,607,000,000

Issued: $5,580,644,000,000

Increase: $682,037,000,000

2007

Redeemed: $4,402,395,000,000

Issued: $4,532,698,000,000

Increase: $130,303,000,000

2006

Redeemed: $4,297,869,000,000

Issued: $4,459,341,000,000

Increase: $161,472,000,000

The only way that this game can continue is if the U.S. government can continue to borrow gigantic piles of money at ridiculously low interest rates.

And our current standard of living greatly depends on the continuation of this game.

If something comes along and rattles this Ponzi scheme, life in America could change radically almost overnight.

In the United States today, we have a heavily socialized system that hands out checks to nearly half the population. In fact, 49 percent of all Americans live in a home that gets direct monetary benefits from the federal government each month according to the U.S. Census Bureau. And it is hard to believe, but Americans received more than 2 trillion dollars in benefits from the federal government last year alone. At this point, the primary function of the federal government is taking money from some people and giving it to others. In fact, more than 70 percent of all federal spending goes to “dependence-creating programs”, and the government runs approximately 80 different “means-tested welfare programs” right now. But the big problem is that the government is giving out far more money than it is taking in, so it has to borrow the difference. As long as we can continue to borrow at super low interest rates, the status quo can continue.

But a Ponzi scheme like this can only last for so long.

It has been said that when the checks stop coming in, chaos will begin in the streets of America.

The looting that took place when a technical glitch caused the EBT system to go down for a short time in some areas last year and the rioting in the streets of Ferguson, Missouri this year were both small previews of what we will see in the future.

And there is no way that we will be able to “grow” our way out of this problem.

As the Baby Boomers continue to retire, the amount of money that the federal government is handing out each year is projected to absolutely skyrocket. Just consider the following numbers…

Back in 1965, only one out of every 50 Americans was on Medicaid. Today, more than 70 million Americans are on Medicaid, and it is being projected that Obamacare will add 16 million more Americans to the Medicaid rolls.

When Medicare was first established, we were told that it would cost about $12 billion a year by the time 1990 rolled around. Instead, the federal government ended up spending $110 billion on the program in 1990, and the federal government spent approximately $600 billion on the program in 2013.

It is being projected that the number of Americans on Medicare will grow from 50.7 million in 2012 to 73.2 million in 2025.

At this point, Medicare is facing unfunded liabilities of more than 38 trillion dollars over the next 75 years. That comes to approximately $328,404 for every single household in the United States.

In 1945, there were 42 workers for every retiree receiving Social Security benefits. Today, that number has fallen to 2.5 workers, and if you eliminate all government workers, that leaves only 1.6 private sector workers for every retiree receiving Social Security benefits.

Right now, there are approximately 63 million Americans collecting Social Security benefits. By 2035, that number is projected to soar to an astounding 91 million.

Overall, the Social Security system is facing a 134 trillion dollar shortfall over the next 75 years.

The U.S. government is facing a total of 222 trillion dollars in unfunded liabilities during the years ahead. Social Security and Medicare make up the bulk of that.

Yes, things seem somewhat stable for the moment in America today.

But the same thing could have been said about 2007. The stock market was soaring, the economy seemed like it was rolling right along and people were generally optimistic about the future.

Then the financial crisis of 2008 erupted and it seemed like the world was going to end.

Well, the truth is that another great crisis is rapidly approaching, and we are in far worse shape financially than we were back in 2008.

Don’t get blindsided by what is ahead. Evidence of the coming catastrophe is all around you.

(Originally posted at The Economic Collapse Blog)

The National Debt Has Increased By More Than A Trillion Dollars In The Last 12 Months

America Is Broke

The idea that the Obama administration has the budget deficit under control is a complete and total lie. According to the U.S. Treasury, the federal government has officially run a deficit of 589 billion dollars for the first 11 months of fiscal year 2014. But this number is just for public consumption and it relies on accounting tricks which massively understate how much debt is actually being accumulated. If you want to know what the real budget deficit is, all you have to do is go to a U.S. Treasury website which calculates the U.S. national debt to the penny. On September 30th, 2013 the U.S. national debt was sitting at $16,738,183,526,697.32. As I write this, the U.S. national debt is sitting at $17,742,108,970,073.37. That means that the U.S. national debt has actually grown by more than a trillion dollars in less than 12 months. We continue to wildly run up debt as if there is no tomorrow, and by doing so we are destroying the future of this nation.

The chart that I have posted below shows the exponential growth of the U.S. national debt over the past several decades. Anyone that would characterize this as “under control” is lying to you…

National Debt 2014

This is the greatest government debt bubble in the history of the world, but very few people seem to have any desire to do anything about this anymore. We are literally gorging on debt, and most Americans seem to think that it is just fine and dandy.

Perhaps that it is because we have never really experienced any serious consequences for going into so much debt yet.

But when it comes to running up debt, a day of reckoning always comes eventually.

Just ask Greece.

And the absolutely insane spending policies of this administration and this Congress are hastening the day when our day of reckoning will arrive.

Consider the following facts…

-The U.S. national debt has increased by more than 7 trillion dollars since Barack Obama has been in the White House. By the time Obama’s second term is over, we will have accumulated about as much new debt under his leadership than we did under all of the other U.S. presidents in all of U.S. history combined.

-The U.S. national debt is now more than 5000 times larger than it was when the Federal Reserve was first established in 1913.

-If the U.S. national debt was reduced to a stack of one dollar bills it would circle the earth at the equator 45 times.

-Right now, the United States already has more government debt per capita than Greece, Portugal, Italy, Ireland or Spain.

-In August, the average rate of interest on the government’s marketable debt was 2.028 percent. In January 2000, the average rate of interest on the government’s marketable debt was 6.620 percent. If we got back to that level today, we would be paying well over a trillion dollars a year just in interest on the national debt.

-At this point the U.S. government has accumulated more than 200 trillion dollars of unfunded liabilities that will need to be paid in future years. In other words, we have made more than 200 trillion dollars worth of promises that we do not have money for yet.

Thomas Jefferson once said that “the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.”

What we are doing to future generations is absolutely unconscionable. We are stealing trillions upon trillions of dollars from our children and our grandchildren, and we are willingly consigning them to a lifetime of debt slavery.

I have said this before, but it bears repeating. If future generations get the chance, they will look back and curse us for what we have done to them.

And shame on anyone that would dare to suggest that we should continue to run up more debt that future generations will be expected to repay.

But government debt is far from the only massive debt bubble that we are dealing with as a country.

40 years ago, the total amount of debt in our nation (all government debt plus all business debt plus all individual debt) was sitting at a grand total of about 2.3 trillion dollars.

Today, that total has grown to 59.4 trillion dollars.

As the chart posted below shows, our total debt bubble is now more than 25 times larger than it was just 40 years ago…

Total Credit Market Debt 2014

If you were to take all forms of debt in our country and divide it up equally to each person, the average family of four would owe approximately $735,000.

This is not anywhere close to being sustainable, but most Americans don’t seem to care. They just continue to recklessly run up even more debt.

However, there are signs that we are starting to hit a wall with all of this debt.

For example, an astounding 35 percent of all Americans have debts that are so overdue that they have been referred to collection agencies.

Our nation has become an ocean of red ink from sea to shining sea, and the only way to keep the bubble from bursting is for the total amount of debt to continue to grow much faster than the overall economy is growing.

Obviously this cannot happen indefinitely, and when this house of cards comes crashing down it is going to be absolutely horrific. For much more on all of this please see my previous article entitled “The United States Of Debt: Total Debt In America Hits A New Record High Of Nearly 60 Trillion Dollars“.

The big question is how long our “bubble economy” can keep going before it finally collapses.

It has gotten to the point where even some of the biggest banks in the world are admitting that what we have been doing is completely and totally unsustainable. Just consider the following excerpt from a recent article by Joshua Krause

*****

Recently, strategists for Deutsche Bank released a startling study in regards to government debt. They decided to investigate whether or not the bond market is currently in a bubble. What they found was, unlike previous eras, the past 20 years has seen no lag between economic booms and busts:

It has long been our view that over the last couple of decades the global economy has rolled from bubble to bubble with excesses never fully being allowed to unravel. Instead aggressive policy responses have encouraged them to roll into new bubbles.

This has arguably kept the modern financial system as we know it a going concern. Clearly there have always been bubbles formed through history but has there been a period like the last 20 years where the bursting of one bubble has consistently led directly to the formation of the next?

Essentially, our current system has been dying a very slow death. It’s running out of steam.

*****

Sadly, most Americans have no idea that we are living in a giant debt-fueled bubble that has a limited lifespan.

Most Americans just assume that since the politicians tell them that everything is going to be okay that they don’t need to be concerned about any of this.

But every single day our debts get even larger and our long-term financial problems get even worse.

Someday this bubble is going to burst and then all hell will break loose.

It is just a matter of time.

(Originally posted at The Economic Collapse Blog)

Foreign Ownership of U.S. Government Debt Passes The 6 Trillion Dollar Mark

America Is Broke

For the first time in the nation’s history, foreign interests now own more than $6 trillion in U.S. government debt, according to the most recent Treasury Department report on major foreign holders of the debt, which includes the numbers through the end of June.

As of the end of June, foreign owners held $6,013,200,000,000 in U.S. Treasury securities, up from $5,976,500,000,000 as of the end of May.

Fourteen years ago, at the end of June 2001, the foreign-held U.S. government debt was $983,300,000,000—and had been trending downward for four months. Since then, it has grown more than six-fold.

(Read the rest of the story here…)

US is Bankrupt: $89.5 Trillion in US Liabilities vs. $82 Trillion in Household Net Worth & The Gap is Growing

Debt - Public Domain

There are many ways to look at the United States government debt, obligations, and assets.  Liabilities include Treasury debt held by the public or more broadly total Treasury debt outstanding.  There’s unfunded liabilities like Medicare and Social Security.  And then the assets of all the real estate, all the equities, all the bonds, all the deposits…all at today’s valuations.  But let’s cut straight to the bottom line and add it all up…$89.5 trillion in liabilities and $82 trillion in assets.  There.  It’s not a secret anymore…and although these are all government numbers, for some strange reason the government never adds them all together or explains them…but we will.

The $89.5 trillion in liabilities include:

  • $20.69 trillion
    • $12.65 trillion public Treasury debt (interest rate sensitive bonds sold to finance government spending)
      • Fyi – $5.35 trillion of “intra-governmental” Treasury debt are not included as they are considered an asset of the particular programs (SS, etc.) and simultaneously a liability of the Treasury
  • $6.54 trillion civilian and Military Pensions and Benefits payable
  • $1.5 trillion in “other” liabilities http://www.fms.treas.gov/finrep13/note_finstmts/fr_notes_fin_stmts_note13.html.
  • $69 trillion (present value terms what should be saved now to make up the present and future anticipated tax shortfalls vs. present and future payouts).
    • $3.7 trillion SMI (Supplemental Medical Insurance)
    • $39.5 trillion Medicare or HI (Hospital Insurance) Part B / D
    • $25.8 trillion Social Security or OASDI (Old Age Survivors Disability Insurance)
      • Fyi – $5+ trillion of additional unfunded state liabilities not included.

Source: 2013 OASDI and Medicare Trustees’ Reports. (pg. 183), http://www.gao.gov/assets/670/661234.p

These needs can be satisfied only through increased borrowing, higher taxes, reduced program spending, or some combination.

(Read the rest of the story here…)

U.S. Government To Spend 194K To Study Skill-Building For Male Sex Workers In Peru

Toilet - Photo by Tenzinx3

The federal government has awarded the University of California Los Angeles $193,989 in taxpayer funds to study skill-building as HIV prevention for male sex workers in Peru.

The grant was issued by the National Institute of Mental Health, a part of the National Institutes of Health, and proposes “a pilot study for a group that has been neglected in the Peruvian HIV epidemic, namely male sex workers (fletes).”

Men having sex with men in Peru have a “high burden of HIV” at 10 to 15 percent, compared to male sex workers, who have a 23 percent prevalence, researchers found.

(Read the rest of the story here…)

The U.S. National Debt Has Increased By More Than 7 Trillion Dollars Under Obama

National Debt

The total federal debt of the U.S. government has now increased more than $7 trillion during the slightly more than five and a half years Barack Obama has been president.

That is more than the debt increased under all U.S. presidents from George Washington through Bill Clinton combined, and it is more debt than was accumulated in the first 227 years of this nation’s existence–from 1776 through 2003.

(Read the rest of the story here…)

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