Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

Economic Chaos Ahead
Townhall.com ^ | February 8, 2012 | Walter E Williams

Posted on 02/08/2012 4:16:52 AM PST by Kaslin

Let's think about the kind of mess that we're in. Federal 2010 Medicare and Medicaid expenditures totaled $800 billion. The projected annual growth of both programs is about 7 percent. Social Security expenditures are more than $700 billion a year. According to the 2009 Social Security and Medicare trustees reports, by 2030, 49 percent of federal revenues will go for Social Security and Medicare payments. The unfunded liability of both programs is already $106 trillion.

But not to worry. The Congressional Budget Office estimates that it's possible to sustain today's level of federal spending and even achieve a balanced budget. All that Congress would have to do is raise the lowest income tax bracket of 10 percent to 25 percent and the middle tax bracket of 25 percent to 66 percent and raise the 35 percent tax bracket to 92 percent. That's a static vision that assumes that people will have no response and they'll work just as hard and send more money to Washington. If Congress did legislate such tax increases, it would be the economic equivalent of committing national hara-kiri.

Professor Daniel Klein, editor of Econ Journal Watch, and Professor Tyler Cowen, general director of the Mercatus Center, both based at George Mason University, organized a symposium to promote a better understanding of the U.S. debt crisis. The symposium's title, "U.S. Sovereign Debt Crisis: Tipping-Point Scenarios and Crash Dynamics" (http://econjwatch.org), is a strong hint about the seriousness of our nation's plight.

Professor Cowen introduced the symposium pointing out that in 2011, the major crisis was in the eurozone, where Greece, Italy, Spain, Portugal and Ireland dealt with the risk of default. The survival of the eurozone is now seriously doubted. Cowen added: "When it comes to a sovereign debt crisis, it is no longer possible to say 'it can't happen here.' Right now, we are borrowing about 40 cents of every dollar the federal government spends, and the imbalance has no end in sight."

Jeffrey Rogers Hummel, associate professor of economics at San Jose State University, says that a default on Treasury securities appears inevitable. He says that the short-run consequences for the economy will be painful but that the long-run consequences, both political and economic, could be beneficial. That's because an economic collapse is the only way we will come to our senses. That's a tragic statement about the foresight of the American people.

Participant Garrett Jones, associate professor of economics at George Mason University, is a bit more optimistic, seeing default as being less likely. But he argues that "default is still possible, and the GOP offers a uniquely American path to default: an unwillingness to raise taxes."

Dr. Arnold Kling is a member of the Financial Market Working Group at the Mercatus Center and tells us that the "U.S. government has made a set of promises that it cannot keep." He says that the "promises that are most important to change are Social Security and Medicare."

Joseph J. Minarik is senior vice president and director of research at the Committee for Economic Development. He argues that a "U.S. financial meltdown today is eminently avoidable. The wealthiest nation on earth, despite a painful economic slowdown, maintains the wherewithal to pay its bills. The open question is whether it maintains the will and the wisdom."

Peter J. Wallison holds the Arthur F. Burns chair in financial policy studies at the American Enterprise Institute. He agrees with Kling that "the most likely source of a U.S. sovereign debt crisis ... is a failure of the U.S. political system to address the growth of the major entitlement programs -- Social Security, Medicare and Medicaid."

My translation of the symposium's conclusions is that it is by no means preordained that our nation must suffer the same decline as have other great nations of the past -- England, France, Spain, Portugal and the Ottoman and Roman empires. All evidence suggests that we will suffer a similar decline because, as Professor Cowen says, "the American electorate has dug in against both major tax increases and major spending cuts."


TOPICS: Business/Economy; Culture/Society; Editorial
KEYWORDS: currency; debt; deficits; dollar; economics; economy; euro; gold; goldbug; goldstandard; government; inflation; shibboleth; spending; value; walterewilliams; walterwilliams

1 posted on 02/08/2012 4:16:58 AM PST by Kaslin
[ Post Reply | Private Reply | View Replies]

To: Kaslin
I know that many of you think that we can grow our way out of this... cut spending and pay this debt off... but take a little time and work out some math. The only way out is to default and start over... this time permanently on the Gold Standard. We are going to have to do it regardless of what anyone says. When we do it is the question. The sooner we do it... the sooner we return to prosperity. The problem as I see it... there is no political will in either party to do the hard things... to paraphrase Kennedy ... and I am not praising him... just using something that he said was true... we must do this and the other things... not because they are easy... but because it is the only way out of depression.

LLS

2 posted on 02/08/2012 4:36:34 AM PST by LibLieSlayer (Hey repubic elite scumbags... jam mitt up your collective arses!)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Kaslin

Those levels of cost (Medicare and SS) are just not sustainable. It’s that simple. As a doc I am very, very concerned with what the future of health care will look like without some major changes. Unfortunately, everything the political class has thrown out there is not going to fix the problem. Plus, if every physician in the US worked for free it would not fix the problem or stop the increases in medical costs.


3 posted on 02/08/2012 4:43:56 AM PST by pieceofthepuzzle
[ Post Reply | Private Reply | To 1 | View Replies]

To: LibLieSlayer
That is correct. We cannot grow our way out. We have already reached the economic tipping point, where our Debt to GDP ratio is so high, any further increases in debt cause a corresponding contraction in the private sector.

They don't want to admit what a lot of folks are now starting to realize: unmanaged collapse is coming unless we drastically reduce the level of debt and public spending. Their choice, raising taxes, sucks even more money out of an anemic economy.

Let's bleed the patient to feed the leeches. Dumb move.

4 posted on 02/08/2012 5:06:48 AM PST by TheWriterTX (All in now for Newt Gingrich)
[ Post Reply | Private Reply | To 2 | View Replies]

To: LibLieSlayer

A while back some FReeper posted an article about how the gold standard really wasn’t better than the fiat currency we have now. In fact the reason we have fiat currency was chicanery with the gold standard. Unfortunately, the real problem is as Shakespeare wrote ong ago, “not with our stars but ourselves”.

Samuel told the people they shouldn’t have a king but instead of the hard thing (telling Samuel that his sons were corrupt judges and doing something about it) they asked for a king. Same problem, same mistake. I am with Beck on this one. Jesus is and has always been the only answer. How we love one another is how we are known. Good or ill.

Of course He pointed out that we would need a “sword and a purse” in Luke 22. I have a feeling there is gonna be some serious zombie killing and that may have some impact on “how we are known” but I find nothing in His word that requires me to be a helpless victim.


5 posted on 02/08/2012 5:07:36 AM PST by wastoute (Government cannot redistribute wealth. Government can only redistribute poverty.)
[ Post Reply | Private Reply | To 2 | View Replies]

To: LibLieSlayer
I was a gold bug. I still have a goodly stash of gold and silver just in case - it keeps better than food. But I also have a stash of wine for the same reason, to retain wealth.

Another FReeper turned me on to this documentary and it was a revelation.

What is important is the quantity of money and the abolition of the Fed. Please watch all two hours, it's not cheesy or maniacal. It is the system proposed by Thomas Jefferson, Benjamin Franklin and Thomas Edison.

The Secret of Oz

6 posted on 02/08/2012 5:09:38 AM PST by Aevery_Freeman (Typed using <FONT STYLE=SARCASM> unless otherwise noted)
[ Post Reply | Private Reply | To 2 | View Replies]

To: LibLieSlayer
"the American electorate has dug in against both major tax increases and major spending cuts."

The Liberal morons of the American electorate have dug in against cuts. I, for one, am all for them! Cut them down to the nubby, bloodied, nerve-frayed, marrow-oozing bone! And for the love of God, reform our tax code. Flat tax, fair tax, whatever... just ensure that every citizen of this country is paying a share of the tax burden.

7 posted on 02/08/2012 5:10:46 AM PST by rarestia (It's time to water the Tree of Liberty.)
[ Post Reply | Private Reply | To 2 | View Replies]

To: Aevery_Freeman

Ferlater


8 posted on 02/08/2012 5:12:12 AM PST by vanilla swirl (We are the Patrick Henry we have been waiting for!)
[ Post Reply | Private Reply | To 6 | View Replies]

To: vanilla swirl

But but but but that doesn’t that doesn’t fit the MSM the economy is back.


9 posted on 02/08/2012 5:15:39 AM PST by scooby321
[ Post Reply | Private Reply | To 8 | View Replies]

To: Kaslin

$top $pending

DEFUND socialist collectives, foreign and domestic.

DISMANTLE UNaccountable bureaucracies, czars, NGOs, agencies, social-engineering programs operating under the auspices of “government”.

DEPOPULATE socialists (and totalitarian wannabees with their mandates) from the body politic.

(excerpts...CAPS mine)

How to Identify Legal Plunder

But how is this legal plunder to be identified? Quite simply. See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime.

Then abolish this law without delay, for it is not only an evil itself, but also it is a fertile source for further evils because it invites reprisals. IF SUCH A LAW — WHICH MAY BE AN ISOLATED CASE — IS NOT ABOLISHED IMMEDIATELY, IT WILL SPREAD, MULTIPLY, AND DEVELOP INTO A SYSTEM.

The person who profits from this law will complain bitterly, defending his acquired rights. He will claim that the state is obligated to protect and encourage his particular industry; that this procedure enriches the state because the protected industry is thus able to spend more and to pay higher wages to the poor workingmen.

Do not listen to this sophistry by vested interests. The acceptance of these arguments will build legal plunder into a whole system. IN FACT, THIS HAS ALREADY OCCURRED. THE PRESENT-DAY DELUSION IS AN ATTEMPT TO ENRICH EVERYONE AT THE EXPENSE OF EVERYONE ELSE; to make plunder universal under the pretense of organizing it.

Legal Plunder Has Many Names

Now, legal plunder can be committed in an infinite number of ways. Thus we have an infinite number of plans for organizing it: tariffs, protection, benefits, subsidies, encouragements, progressive taxation, public schools, guaranteed jobs, guaranteed profits, minimum wages, a right to relief, a right to the tools of labor, free credit, and so on, and so on. All these plans as a whole — with their common aim of legal plunder — constitute socialism.

Now, since under this definition socialism is a body of doctrine, what attack can be made against it other than a war of doctrine? If you find this socialistic doctrine to be false, absurd, and evil, then refute it. And the more false, the more absurd, and the more evil it is, the easier it will be to refute. Above all, if you wish to be strong, begin by rooting out every particle of socialism that may have crept into your legislation. This will be no light task.

“The Law” Frederic Bastiat 1801-1850


10 posted on 02/08/2012 5:16:34 AM PST by PGalt
[ Post Reply | Private Reply | To 1 | View Replies]

To: Kaslin; ding_dong_daddy_from_dumas; stephenjohnbanker; DoughtyOne; calcowgirl; Gilbo_3; NFHale; ...
RE :”Let's think about the kind of mess that we're in. Federal 2010 Medicare and Medicaid expenditures totaled $800 billion. The projected annual growth of both programs is about 7 percent. Social Security expenditures are more than $700 billion a year. According to the 2009 Social Security and Medicare trustees reports, by 2030, 49 percent of federal revenues will go for Social Security and Medicare payments. The unfunded liability of both programs is already $106 trillion.
But not to worry. The Congressional Budget Office estimates that it's possible to sustain today's level of federal spending and even achieve a balanced budget. All that Congress would have to do is raise the lowest income tax bracket of 10 percent to 25 percent and the middle tax bracket of 25 percent to 66 percent and raise the 35 percent tax bracket to 92 percent. That's a static vision that assumes that people will have no response and they'll work just as hard and send more money to Washington. If Congress did legislate such tax increases, it would be the economic equivalent of committing national hara-kiri.

Raising taxes to keep retiree senior benefits ar current levels might work, as long as all of those taxes raised are on the retirees themselves and-force them to go back to work to continue to pay entitlement taxes.

He forgets the $2T SS trust fund piggy bank saved by our trustworthy representatives all these years. Honest Tim Geitner is watching that to make sure it's safe as Democrats assure us it is.

11 posted on 02/08/2012 5:19:26 AM PST by sickoflibs (You MUST support the lesser of two RINOs or we all die!)
[ Post Reply | Private Reply | To 1 | View Replies]

To: LibLieSlayer
Growth is but one prong of a multi pronged solution

It can be argued that the decline in the value of the US$ correlates directly with the price of gold. A projection of the Kittco 10 year chart gives a pretty good picture of the future declining value of the US$. It can be argued that we are presently on a gold standard imposed by the markets.

In a recent e letter John Maudlin advised that Europe is already on the gold standard with the €uro being the proxy for gold.

The other prong to tie it together is inflation. Inflation of the prices of stuff including gold and oil, inflated valuation added to actual growth, all compounded, will be the only solution All that is presently under way.

12 posted on 02/08/2012 5:27:43 AM PST by bert (K.E. N.P. +12 ..... Crucifixion is coming)
[ Post Reply | Private Reply | To 2 | View Replies]

To: LibLieSlayer

I favor default. Heck, I favor a Jubilee. I think the world’s entire economic model is completely tainted. I would not burn it all down overnight, but I think we need to cancel the debts and start over on firmer ground.


13 posted on 02/08/2012 5:32:59 AM PST by ClearCase_guy (I am pro-Jesus, anti-abortion, pro-limited government, anti-GOP.)
[ Post Reply | Private Reply | To 2 | View Replies]

To: wastoute
The article was wrong... the gold standard prevents printing up money or creating cyber cash and monetizing our debt... and that is why the deficit is skyrocketing... they spend money as fast as they create it... and every dollar created lessens the value of a dollar in circulation.

LLS

14 posted on 02/08/2012 5:41:06 AM PST by LibLieSlayer (Hey repubic elite scumbags... jam mitt up your collective arses!)
[ Post Reply | Private Reply | To 5 | View Replies]

To: Kaslin

That’s because an economic collapse is the only way we will come to our senses.


That’s essentially the “Atlas Shrugged” scenario. Unfortunately, that seems more and more likely. Our political system seems incapable of electing “leaders” who have the will to solve this problem. In large part, this is the fault of the American people. Whenever a politician shows some spine and takes the first tentative steps, they get crucified in the polls. The American people say they want deficit reduction, but they oppose the specifics. Not all of the American people think like this (not FReepers), but sadly a majority do.

A combination of prosperity and technology has eroded our common sense. This is gradually leading us to a hard fall. And it will take a hard fall to restore it.


15 posted on 02/08/2012 5:41:59 AM PST by rbg81 (scillian's)
[ Post Reply | Private Reply | To 1 | View Replies]

To: LibLieSlayer
Actually, the way out is to stuff the Federal genie back in its Constitutional bottle, which would eliminate a huge number of programs and Departments.

Not gonna happen.

People don't want to be free. They don't want to grow up, be responsible for their lot in life, and act like adults.

We have a neotenic population,and that will be our demise.

16 posted on 02/08/2012 5:43:21 AM PST by Smokin' Joe (How often God must weep at humans' folly. Stand fast. God knows what He is doing)
[ Post Reply | Private Reply | To 2 | View Replies]

To: Aevery_Freeman
Thanks for the link... I will check back on thread when I get to work... still a practicing Capitalist... until they put me out of business... and they are doing that in spades.

LLS

17 posted on 02/08/2012 5:43:52 AM PST by LibLieSlayer (Hey repubic elite scumbags... jam mitt up your collective arses!)
[ Post Reply | Private Reply | To 6 | View Replies]

To: Smokin' Joe

When the cardhouse collapses, they’re gonna be “free” whether they want to be or not.

When I bring up the idea of an inevitable economic collapse with my libinlaws, the curious response I get is “well, we’ll all be in the same boat”...

I fail to gain any solace in such a situation...
I’m not even sure why they respond that way, unless it is that they are so into the “collective” that they can’t think any other way.


18 posted on 02/08/2012 5:57:08 AM PST by MrB (The difference between a Humanist and a Satanist - the latter knows whom he's working for)
[ Post Reply | Private Reply | To 16 | View Replies]

To: LibLieSlayer
You are correct sir. That is why I chuckle at times when Freepers wonder what the GOP is doing.

You see...these guys in DC..both the dims and the GOP...AREN'T stupid (OK...some are...). They may be crazy...they may be self-serving hypocrites and liars...but they are NOT stupid. To do what they CONTINUE to do (And this means the GOP) is idiocy...and they are NOT idiots.

They understand that they only way out of this mess IS to crash the system.

Now the PROBLEM is what are they going to REBUILD from the ashes? Therein lies the rub. I know the dims are trying to deliberatly crash the system as to bring about a socialist state. I have yet to figure out the GOP agenda. I'm afraid many of them are on the same team.

19 posted on 02/08/2012 5:57:14 AM PST by NELSON111
[ Post Reply | Private Reply | To 2 | View Replies]

To: LibLieSlayer

I’m thinking I’m going to stop using the language of commies to describe the free market system.

“Capitalist” is an epithet in their vernacular, and was a word invented by Marxists.


20 posted on 02/08/2012 6:03:26 AM PST by MrB (The difference between a Humanist and a Satanist - the latter knows whom he's working for)
[ Post Reply | Private Reply | To 17 | View Replies]

To: pieceofthepuzzle

What if Obama made you work for free and then made you pay taxes on what you would have made if you were paid?


21 posted on 02/08/2012 6:05:07 AM PST by Kartographer ("We mutually pledge to each other our lives, our fortunes and our sacred honor.")
[ Post Reply | Private Reply | To 3 | View Replies]

To: Kaslin
We don't exactly have an economic crisis - we have national character problem. We've decided that paying the costs of politicians' re-election promises so that the people will not riot and the banks will not jerk away campaign cash outstrips everything. The demands of the Holy Mother Welfare State are given priority over every other facet of human existence. Just suffer through your local TV news some night - an endless docu-drama on why hypothetical mean rich white people aren't contributing enough to the "less fortunate".

If Americans had good character the "crisis" would end immediately, and government would smoothly ratchet spending back down to the levels of a decade ago. The world wouldn't end. Maybe a few politicians might deservedly lose their seats over their failure to buy off certain pressure groups. Maybe a few carrier battle groups would go away. Maybe old people would have to use Advil instead of some $500/dose prescription drug that's only marginally more effective. Maybe high speed rail would remain a European fetish. Maybe some rioters would end up taking a bullet when they try to burn down their cities. And maybe the best among us would be free to be great again.

22 posted on 02/08/2012 6:10:54 AM PST by Mr. Jeeves (CTRL-GALT-DELETE)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Smokin' Joe; sickoflibs; thouworm; CutePuppy; ken5050; Grampa Dave; TADSLOS; rintense
......the way out of thos economic morass is to stuff the Federal genie back in its Constitutional bottle, which would eliminate a huge number of programs and Departments.....

The downfall of Greece is eerily similar----it was recently revealed that the "all-knowing" GREEK govt was hollowed out from within----with some 535 fully-staffed govt departments that had no discernible purpose.

More economic nightmares below.

23 posted on 02/08/2012 6:12:47 AM PST by Liz (<img src="http://t2.gstatic.com/images?)
[ Post Reply | Private Reply | To 16 | View Replies]

To: All
The Stimulus Bombshell
MyGovCost.org ^ | 1/24/12 | Craig Eyermann
FR Posted January 31, 2012 by GSWarrior

Stunning.

That’s really the only word we can use to describe the release of a “sensitive and confidential” 57 page memo, written by then soon-to-be U.S. Treasury Secretary Larry Summers in December 2008, about what became President Obama’s signature economic program in the first year of his presidency: the “stimulus package”.

James Pethokoukis has summarized some of the most significant aspects of the memo, which we’ve excerpted below, and which reveals the Obama administration’s thinking behind what became an over 821 billion dollar boondoggle. The bold text represents Pethokoukis’ summary of that thinking, which is directly followed by a supporting quotation from Larry Summers’ memo:

1. The stimulus was about implementing the Obama agenda. The short-run economic imperative was to identify as many campaign promises or high priority items that would spend out quickly and be inherently temporary.... The stimulus package is a key tool for advancing clean energy goals and fulfilling a number of campaign commitments.

2. Team Obama knows these deficits are dangerous (although it has offered no long-term plan to deal with them). Closing the gap between what the campaign proposed and the estimates of the campaign offsets would require scaling back proposals by about $100 billion annually or adding new offsets totaling the same. Even this, however, would leave an average deficit over the next decade that would be worse than any post-World War II decade. This would be entirely unsustainable and could cause serious economic problems in the both the short run and the long run.

3. Obamanomics was pricier than advertised. Your campaign proposals add about $100 billion per year to the deficit largely because rescoring indicates that some of your revenue raisers do not raise as much as the campaign assumed and some of your proposals cost more than the campaign assumed.... Treasury estimates that repealing the tax cuts above $250,000 would raise about $40 billion less than the campaign assumed.... The health plan is about $10 billion more costly than the campaign estimated and the health savings are about $25 billion lower than the campaign estimated.

4. Even Washington can only spend so much money so fast. Constructing a package of this size, or even in the $500 billion range, is a major challenge. While the most effective stimulus is government investment, it is difficult to identify feasible spending projects on the scale that is needed to stabilize the macroeconomy. Moreover, there is a tension between the need to spend the money quickly and the desire to spend the money wisely. To get the package to the requisite size, and also to address other problems, we recommend combining it with substantial state fiscal relief and tax cuts for individuals and businesses.

5. Liberals can complain about the stimulus having too many tax cuts, but even Team Obama thought more spending was unrealistic. As noted above, it is not possible to spend out much more than $225 billion in the next two years with high-priority investments and protections for the most vulnerable. This total, however, falls well short of what economists believe is needed for the economy, both in total and especially in 2009. As a result, to achieve our macroeconomic objectives—minimally the 2.5 million job goal—will require other sources of stimulus including state fiscal relief, tax cuts for individuals, or tax cuts for businesses.

6. Team Obama thought a stimulus plan of more than $1 trillion would spook financial markets and send interest rates climbing. To accomplish a more significant reduction in the output gap would require stimulus of well over $1 trillion based on purely mechanical assumptions—which would likely not accomplish the goal because of the impact it would have on markets.

24 posted on 02/08/2012 6:19:03 AM PST by Liz
[ Post Reply | Private Reply | To 23 | View Replies]

To: All
Candidate Barack Obama told us on the campaign trail: " The problem is, that the way Bush has done it over the last eight years is to take out a credit card from the Bank of China in the name of our children, driving up our national debt from $5 trillion for the first 42 presidents, # 43 added $4 trillion by his lonesome so that now we have over $9 trillion of debt that we are going to have to pay back, $30,000 for every man woman and child. That’s irresponsible. It’s unpatriotic."

REALITY CHECK Obama presided over the biggest political heist in US history. The Obamanations (insiders and politicians) sucked up trillions under the guise of inheriting the "Bush financial crisis."

THIS MADE ME LAUGH OUT LOUD Obama COS Rahm Emanuel "suddenly" discovered he wanted to be Chicago's mayor---the little turn went before the mics and announced his campaign "raised $10 million in just a few weeks." Rahm also controlled the US Treasury as COS.

================================================

What the so-called "collapse" of the banking system wrought under Obama:

FOURTEEN TRILLION DOLLARS Behind The Real Size of the Bailout; A guide to the abbreviations, acronyms, and obscure programs that make up the $14 trillion federal bailout of Wall Street
SOURCE motherjones.com
Mon Dec. 21, 2009 12:23 PM PST

The price tag for the Wall Street bailout is often put at $700 billion—the size of the Troubled Assets Relief Program. But TARP is just the best known program in an array of more than 30 overseen by Treasury Department and Federal Reserve that have paid out or put aside money to bail out financial firms and inject money into the markets.

To get a sense of the size of the real $14 trillion bailout, see our chart at web site. Below, a guide to the pieces of the puzzle:

Treasury Department bailout programs
(Remember that Obama's Treasury Dept was controlled by his then-COS Rahm Emanuel---a G/S lobbyist in the WH)

Money Market Mutual Fund: In September 2008, the Treasury announced that it would insure the holdings of publicly offered money market mutual funds. According to the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), these guarantees could have potentially cost the federal government more than $3 trillion [PDF].

Public-Private Investment Fund: This joint Treasury-Federal Reserve program bought toxic assets from banks and brokerages—as much as $5 billion of assets per firm. According to SIGTARP, the government's potential exposure from the PPIF is between $500 million and $1 trillion [PDF].

TARP: As part of the Troubled Asset Relief Program, the Treasury has made loans to or investments more than 750 banks and financial institutions. $650 billion has been paid out (not including HAMP; see below). As of December 21, 2009, $117.5 billion of that has been repaid.

Government-sponsored enterprise (GSE) stock purchase: The Treasury has bought $200 million in preferred stock from Fannie Mae and another $200 million from Freddie Mac [PDF] to show that they "will remain viable entities critical to the functioning of the housing and mortgage markets."

GSE mortgage-backed securities purchase: Under the Housing and Economic Recovery Act of 2008, the Treasury may buy mortgage-backed securities from Fannie Mae and Freddie Mac. According to SIGTARP, these purchases could cost as much as $314 billion ---SNIP---.

LONG READ---go to web site to read more and checkout the shocking financial charts.

SOURCE http://motherjones.com/politics/2009/12/behind-real-size-bailout

25 posted on 02/08/2012 6:23:11 AM PST by Liz
[ Post Reply | Private Reply | To 24 | View Replies]

To: All
Government assistance expands
CNN Money | February 7, 2012
FR posted by rightwingintelligentsia

New York (CNNMoney) - More than one in three Americans lived in households that received Medicaid, food stamps or other means-based government assistance, according to a new report. And when Social Security, Medicare and unemployment benefits are included, nearly half of the nation lived in a household that received a government check, according to the analysis of third-quarter 2010 Census data done by the Mercatus Center at George Washington University. That's more than 148 million Americans.(Excerpt) Read more at money.cnn.com ...

==========================================

Unemployment checks are said to be contributing to Greece's downfall. People get jobs and work 6 mos----just to qualify---then sit back and collect UI for a year.

===========================================

US GETTING BILKED BIGTIME

Illegal Manuel Mejia Ordonez ordered to repay $3M in Calif employment fraud
San Francisco Chronicle | June 26, 2010
FR Posted June 26, 2010 by artichokegrower

A former Marysville resident has been sentenced to prison and ordered to pay back $3 million in fraudulently obtained unemployment compensation.

US Attorney Benjamin B. Wagner said 31-year-old Manuel Mejia Ordonez was sentenced to eight years and one month in prison for conspiracy to commit mail fraud and identity theft. (Excerpt) Read more at sfgate.com ...

QUESTION How does a citizen of Mexico make $3 million in unemployment claims? A. By establishing multiple identities. The fraudster, Manuel Mejia Ordonez, got eight years for conspiracy to commit mail fraud........and identity theft.

=============================================

A common practice among "impoverished" illegals is to buy several forged identities for several thousand dollars each---- to vote and to ride the US gravy train under several names.

Jose Madrigal---the Washington state rapist---had some 30 identities.

====================================================

THE "JUST HERE FOR A BETTER LIFE" SCAM "Impoverished" illegals buy multiple fake identities for several thousand dollars each. Jose Madrigal---the Washington State rapist---had some 30 identities.

A family of four can have an income of $30,000 a year and still qualify for food stamps----with just one identity. A single mother, with two children who has a full time job that pays $7.25 an hour has an effective income of $48,000 a year when you add all the benefits she and her children receive from the government: food stamps, Medicaid coverage, subsidized child care, school lunch program, “Temporary” Assistance to Needy Families, subsidized housing, Earned Income Tax Credit, etc......with just one identity.

REFERENCE The Federal ID that Pays Illegal Aliens Billions -----November 28, 2011

......a recent analysis entitled, “Treasury Department Says Illegal Aliens Collection Billions in Tax Credits,” revealed that according to the Department of Treasury’s Inspector General, more than $4.2 billion in additional child credits were paid out in 2010 to illegal immigrants. In 2005, the pay outs totaled $924 million. This program allows low income earners to claim a $1,000 per child credit.

EITC claims---can run up to over $3000 per claim. $20 billion is estimated to have been paid out to these cunning "impoverished" illegals. Most of them are collecting over and over again-----using multiple identities-----falsifying apps---claiming children they do not have and/or falsely stating kids are back in their homelands.

26 posted on 02/08/2012 6:29:49 AM PST by Liz
[ Post Reply | Private Reply | To 25 | View Replies]

To: Liz; Smokin' Joe; thouworm; CutePuppy; ken5050; Grampa Dave; TADSLOS; rintense
I believe Obama says just that his 1% surcharge on the rich will balance the budget, fully fund medicare and SS, feed the poor, heal the sick, educate the illiterates (ie teach them that same-sex marriage is protected by the US constitution because the founders were bi-sexual.)
27 posted on 02/08/2012 6:30:59 AM PST by sickoflibs (You MUST support the lesser of two RINOs or we all die!)
[ Post Reply | Private Reply | To 23 | View Replies]

To: rarestia

You are singing my song!

LLS


28 posted on 02/08/2012 6:33:56 AM PST by LibLieSlayer (Hey repubic elite scumbags... jam mitt up your collective arses!)
[ Post Reply | Private Reply | To 7 | View Replies]

To: LibLieSlayer

The fairtax concept, a major rethinking of how we pay for government, would spur saving and investment and repatriation of money to America!


29 posted on 02/08/2012 6:35:55 AM PST by outofsalt ("If History teaches us anything it's that history rarely teaches us anything")
[ Post Reply | Private Reply | To 2 | View Replies]

To: bert
It can be argued that the increase in Gold prices can be directly tied to the decrease in the value of a dollar... it takes more dollars today to buy oil, food and energy. Four years ago the Japanese Yen value (Japan has been in the dumps for more than a decade) was 120 Yen to buy a dollar... today it takes only 80 Yen to buy a dollar... not due to the price of gold but due to monetizing of our debt and the devaluation of every dollar in circulation by every new deficit dollar created.

LLS

30 posted on 02/08/2012 6:39:46 AM PST by LibLieSlayer (Hey repubic elite scumbags... jam mitt up your collective arses!)
[ Post Reply | Private Reply | To 12 | View Replies]

To: ClearCase_guy

That is what is coming... one way or the other.

LLS


31 posted on 02/08/2012 6:56:55 AM PST by LibLieSlayer (Hey repubic elite scumbags... jam mitt up your collective arses!)
[ Post Reply | Private Reply | To 13 | View Replies]

To: Smokin' Joe
I agree... but even if we did that... we still cannot possibly pay off the debt we owe now... unless we make payments for centuries. When interest rates rise with inflation... the debt multiplies exponentially... we are never going to pay off what we owe... we could have 10 years ago... but we have gone too far and that is our inevitable reality.

LLS

32 posted on 02/08/2012 7:07:25 AM PST by LibLieSlayer (Hey repubic elite scumbags... jam mitt up your collective arses!)
[ Post Reply | Private Reply | To 16 | View Replies]

To: NELSON111
You are correct and the dims and the republican leadership are working in tandem... nothing new... just look to the Super Committee and that entire debacle for proof.

LLS

33 posted on 02/08/2012 7:13:11 AM PST by LibLieSlayer (Hey repubic elite scumbags... jam mitt up your collective arses!)
[ Post Reply | Private Reply | To 19 | View Replies]

To: MrB
Screw them... I am a Capitalist and a Christian... they cannot have either definition... they belong to me when I use it to describe myself or to word my opinion and thoughts. Don't let them steal your language. The root of a word matters not... only the definition of that word... the proper definition and not some ideological warfare version... for instance we have surrendered much of our language... gay for example. No more.

LLS

34 posted on 02/08/2012 7:18:02 AM PST by LibLieSlayer (Hey repubic elite scumbags... jam mitt up your collective arses!)
[ Post Reply | Private Reply | To 20 | View Replies]

To: LibLieSlayer

I guess being called a “Capitalist” is like being called a “cracker”...

it just doesn’t sting.


35 posted on 02/08/2012 7:21:14 AM PST by MrB (The difference between a Humanist and a Satanist - the latter knows whom he's working for)
[ Post Reply | Private Reply | To 34 | View Replies]

To: LibLieSlayer

Quite right, Sir. They’re playing at King of the Hill. Lead hyena gets the heart and liver.


36 posted on 02/08/2012 7:26:36 AM PST by combat_boots (The Lion of Judah cometh. Hallelujah. Gloria Patri, Filio et Spiritui Sancto.)
[ Post Reply | Private Reply | To 33 | View Replies]

To: LibLieSlayer

We’d have to cut federal spending 50% across the board to pay this debt off in 30 years.
Ain’t no way recipients of gov’t spending would stand for it.

Next step is hyperinflation, then war. Stock up, folks.


37 posted on 02/08/2012 7:36:22 AM PST by ctdonath2 ($1 meals: http://abuckaplate.blogspot.com/)
[ Post Reply | Private Reply | To 2 | View Replies]

To: LibLieSlayer
every dollar created lessens the value of a dollar in circulation.

Yes - in terms of "taxation by teleportation". When a new dollar is created by fiat, its value is extracted from all other dollars. Trivial for a single dollar, huge impact when issuing a trillion of 'em. (BTW: there's less than US$3T cash in circulation, hoarding included.)

38 posted on 02/08/2012 7:41:38 AM PST by ctdonath2 ($1 meals: http://abuckaplate.blogspot.com/)
[ Post Reply | Private Reply | To 14 | View Replies]

To: Kartographer

Taxable imputed income.

An evil concept whose time is just about here.


39 posted on 02/08/2012 7:50:08 AM PST by ctdonath2 ($1 meals: http://abuckaplate.blogspot.com/)
[ Post Reply | Private Reply | To 21 | View Replies]

To: Kaslin

BFL


40 posted on 02/08/2012 8:27:29 AM PST by blam
[ Post Reply | Private Reply | To 1 | View Replies]

To: MrB

Exactly.

LLS


41 posted on 02/08/2012 8:32:11 AM PST by LibLieSlayer (Hey repubic elite scumbags... jam mitt up your collective arses!)
[ Post Reply | Private Reply | To 35 | View Replies]

To: LibLieSlayer

I just remembered -

“Christian” was a Roman epithet used against the early Christians.
It meant “little Christs”.

I don’t deserve that honor... but I’ll gladly be thought of that way.


42 posted on 02/08/2012 8:35:58 AM PST by MrB (The difference between a Humanist and a Satanist - the latter knows whom he's working for)
[ Post Reply | Private Reply | To 41 | View Replies]

To: ctdonath2

Check this out... no way we pay off the deficit in 10 times 30 years. Interest is why.

http://governmentgonewild.org/brothercanyouspareatrillion


43 posted on 02/08/2012 9:50:21 AM PST by LibLieSlayer (Hey repubic elite scumbags... jam mitt up your collective arses!)
[ Post Reply | Private Reply | To 37 | View Replies]

To: Liz; Kaslin; sickoflibs; Mr. Jeeves; bert; wastoute; All
Greece had 30 years of socialist ("PASOK") governments, it can destroy the nations (Portugal got to the same point in much shorter time, Spain is getting there fast). One third of the Greeks work for the government, even more are dependent on the government.

See The State of Greek Business - FR post #52, 2010 February 10, (GreekCentral, by Tom Mazarakis)

The U.S. also now has the highest index of dependency on government (Kaslin, you could post the article and enlarged chart on a separate thread, if you like):
Dependency Index Surges 23% Under President Obama - IBD, by John Merline, 2012 February 08

Dependency Index on the Rise. Source: IBD

If you look at the chart, it shows only two short dependency slowdowns (dips in percentage terms) - one when Reagan was President and one when Gingrich was a Speaker of the House, and one brief dip during the height of speculative housing bubble.

Combination of economic growth, through a mix of accommodating sane tax regime and removal of stifling laws and regulations, and actual cuts or freeze in government spending has always been a true and tried economic solution to these challenges, the problem, as usual, is not the absence of economic solution but the will, or lack of it, of the political class and the people themselves, who are more than willing to be dependent on the "government," i.e., on Other People's Money.

Going back to the "gold standard" is a phony "solution" to the phony and real problems. There have been recessions, depressions, periods of inflation and, even worse, deflation during the "gold standard" in the U.S. and other parts of the world. "Gold standard" has never prevented governments from overspending and running the deficits and doesn't make them economically and/or fiscally responsible. It's a feel-good, ineffective, wrong mechanism to the wrong problem.

"Gold standard" is not much different from the diamond, silver, art or wine "standard" - almost anything can be considered "unit of exchange" and "store of value." Most of Europe is not on gold standard, it's on Euro (, a "fiat currency") and the eurozone nations have the same central monetary authority - the European Central Bank (ECB). Yet there is a vast difference between economies and fiscal governance of Germany and that of Greece and other PIIGS. Same currency (Euro), which is not tied to the "gold standard," same central bank, but huge difference in the standard of living and government spending and fiscal accountability and responsibility, even after spending $1 trillion on West-East reunification.

See Germany Resists Austerity in Budget - FR, post #29 / WSJ, 2011 November 12
"..... Berlin is enjoying its lowest unemployment in decades and the government is still finding money to spend on infrastructure and income tax cuts ......" -

Switzerland has its own currency (Swiss Mark, SM) and went off the "gold standard" in 2000. Contrary to all "fiat money always depreciates" (against what?) theorists, the Swiss Mark has appreciated so much and recently so fast against the Euro and most other currencies (because it's bought more, as a "store of value" since it is deemed safer) that Bank of Switzerland decided to peg it to the [potentially "unsafe" and depreciating] Euro, as part of general "competitive devaluation" of their currencies that many countries in the world (including the U.S., Japan, China etc.) have engaged in lately.

Obviously, going off "gold standard" didn't create a "common" problem for Swiss Mark because country is fiscally managed better than other countries. Sound government fiscal policies make for sound money, not feel-good gimmicks like "gold standard" (whether it's a "gold specie standard" or "gold exchange standard" or "gold bullion standard") or abolishing / "auditing" central bank.

As long as one can freely trade gold (physical or "paper") one can be on his/her own "gold standard" or any other standard, for that matter.

Really free economies should not be constrained by artificial dependence on the amount of particular metal or substance that can be available at any given time, but neither they should be constrained by the artificial limitations imposed by the capricious and fiscally irresponsible "vampire" governments that drain resources from private economy to benefit themselves and, marginally, the dependent class at the expense of productive class.

44 posted on 02/08/2012 12:12:06 PM PST by CutePuppy (If you don't ask the right questions you may not get the right answers)
[ Post Reply | Private Reply | To 23 | View Replies]

To: Kartographer
“What if Obama made you work for free and then made you pay taxes on what you would have made if you were paid?”

I would thank him for making me do what Jesus wants us to do... (sarc)..

45 posted on 02/08/2012 12:23:21 PM PST by pieceofthepuzzle
[ Post Reply | Private Reply | To 21 | View Replies]

To: CutePuppy

That all sounds good but overlooks one supremely important fact.

We have been off the gold standard for only a very few years. The world was on a gold standard for thousands of years.

The current failed system is anomaly. The Gold Standard is the historical standard and the basis for civilization and all world trade uo to the near present.


46 posted on 02/08/2012 12:37:00 PM PST by bert (K.E. N.P. +12 ..... Crucifixion is coming)
[ Post Reply | Private Reply | To 44 | View Replies]

To: Aevery_Freeman

Unbelievable. So much to take in. I always wondered how Lincoln just issued money, and how that was any different from today’s “fiat” money. The quantity is what matters.
Now it makes a little more sense.

I also knew about the panics prior to the Great Depression and always wondered what the answers would be from the return-to-gold standard types.

It’s also interesting that Peter Schiff is in this. Isn’t he a Gold Standard guy?

What I still can’t seem to wrap my head around is, if Congress borrows money to create as much as they want, then why borrow it? If they have the power to coin money why not just make as much as they want. Wouldn’t that be easier?


47 posted on 02/08/2012 7:18:20 PM PST by CommieCutter
[ Post Reply | Private Reply | To 6 | View Replies]

To: MrB

Without CHRIST... I am nothing... I am HIS to with as HE wills. Good point.

LLS


48 posted on 02/09/2012 3:21:57 AM PST by LibLieSlayer (Hey repubic elite scumbags... jam mitt up your collective arses!)
[ Post Reply | Private Reply | To 42 | View Replies]

To: CommieCutter
If they have the power to coin money why not just make as much as they want. Wouldn’t that be easier?

That is the point...Don't borrow the money, just create it. Create it as cheaply as possible so as to not waste money while still limiting counterfeiting. Paper money is good because it wears out.

The issue then becomes quantity of money (think transactional lubricant). There is no national debt created that way and inflation is easily identifiable and has an immediate consequence to the profligate spenders in Washington.

I can't believe that the big money bankers have kept this simple thought from the people. I read the recent biography of Andrew Jackson and was astonished that he was and is considered a kook for paying off the national debt. I live "out of debt." It saves a lot of money.

49 posted on 02/09/2012 5:03:37 AM PST by Aevery_Freeman (Typed using <FONT STYLE=SARCASM> unless otherwise noted)
[ Post Reply | Private Reply | To 47 | View Replies]

To: Kaslin

Re: Economic Chaos Ahead

This author and the “experts” he quotes all display an invincible blindness and a lack of any attempt systems analysis.

Adjusting taxes and spending are only two of the means to attack the problems (plural).

Of first importance is the evil twin; our trade deficit and its Siamese twin, the practice of shipping jobs out of the country. Tax revenues come from these jobs, duh!.
Commerce with China is immoral, to begin with. We are getting what we deserve in the matter in trade with China. It is the prime cause of our problems.

Other possibly more important factors are illegal immigration (the wrong immigrants) and their huge net drain on our economy, the declining birth rate,
the deterioration of the family and religions, and the lack of a robust and healthy American tribalism.

Proposing fixing things by the taxes and spending route while not even mentioning these possibly more important factors is simplistic.


50 posted on 02/09/2012 7:20:26 AM PST by De La Marche (Suggestion for Debates)
[ Post Reply | Private Reply | To 1 | View Replies]

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson