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The Magnitude of the Mess We're In
The Wall Street Journal ^ | 9/16/12 | George P. Shultz

Posted on 09/17/2012 3:04:01 AM PDT by Evil Slayer

Sometimes a few facts tell important stories. The American economy now is full of facts that tell stories that you really don't want, but need, to hear.

Where are we now?

Did you know that annual spending by the federal government now exceeds the 2007 level by about $1 trillion? With a slow economy, revenues are little changed. The result is an unprecedented string of federal budget deficits, $1.4 trillion in 2009, $1.3 trillion in 2010, $1.3 trillion in 2011, and another $1.2 trillion on the way this year. The four-year increase in borrowing amounts to $55,000 per U.S. household.

The amount of debt is one thing. The burden of interest payments is another. The Treasury now has a preponderance of its debt issued in very short-term durations, to take advantage of low short-term interest rates. It must frequently refinance this debt which, when added to the current deficit, means Treasury must raise $4 trillion this year alone. So the debt burden will explode when interest rates go up.

The government has to get the money to finance its spending by taxing or borrowing. While it might be tempting to conclude that we can just tax upper-income people, did you know that the U.S. income tax system is already very progressive? The top 1% pay 37% of all income taxes and 50% pay none.

Did you know that, during the last fiscal year, around three-quarters of the deficit was financed by the Federal Reserve? Foreign governments accounted for most of the rest, as American citizens' and institutions' purchases and sales netted to about zero. The Fed now owns one in six dollars of the national debt, the largest percentage of GDP in history, larger than even at the end of World War II.

The Fed has effectively replaced the entire

(Excerpt) Read more at online.wsj.com ...


TOPICS: Business/Economy; Editorial; Government; News/Current Events; Politics/Elections
KEYWORDS: debt; debtcrisis; economy; fedbudget; fedspending; georgeshultz; obamageddon; qe3; uscrisis

1 posted on 09/17/2012 3:04:03 AM PDT by Evil Slayer
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To: Evil Slayer
LSM keeps pushing ZERO
The "NON PARTISIAN" (what a joke that is) AARP distorts the facts about everything it reports.
And the band plays on. . . . . . . . . . . .
2 posted on 09/17/2012 3:17:11 AM PDT by DeaconRed (If Mitt screws this up I will NEVER forgive Him.)
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To: Evil Slayer

SHTF/WROL just around the corner.


3 posted on 09/17/2012 3:22:54 AM PDT by MachIV
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To: MachIV

WROL ?

I have never seen that before...

What’s it mean ?


4 posted on 09/17/2012 3:33:00 AM PDT by Popman (In a place you only dream of Where your soul is always free)
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To: Evil Slayer

What a freaking mess.


5 posted on 09/17/2012 3:33:27 AM PDT by SueRae (See it? Hell, I can TASTE November from my house!)
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To: Popman

It’s a term I only came to learn of about 3 years ago. Apparently, it’s an acronym used by law enforcement that stands for Without Rule of Law. In otherwords, chaos, riots in the streets, total mayhem. Examples would be the Watts Riots of ‘68, LA riots of ‘92, New Orleans after hurricane Katrina, etc.


6 posted on 09/17/2012 3:36:44 AM PDT by MachIV
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To: Evil Slayer

bookmark...


7 posted on 09/17/2012 3:40:42 AM PDT by DouglasKC
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To: DeaconRed

Wait until the Fed starts unwinding that toxic debt. Subtract 35% from the GDP. We have an anchor around our necks for the next 50 years, that is to say we are done as an economic power.


8 posted on 09/17/2012 3:41:05 AM PDT by gotribe (WTF?)
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To: Evil Slayer

Bump for later


9 posted on 09/17/2012 3:51:03 AM PDT by Senator_Blutarski
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To: gotribe
You are right.
A very small part of me wants ZERO to win reelection.
Why? Mitt might have also figured this out.
Our economy is already doomed. No fix possible.
If ZERO wins its his and his alone. . . . . . No more blaming Bush. . . . . Well he will try.
10 posted on 09/17/2012 3:56:46 AM PDT by DeaconRed (If Mitt screws this up I will NEVER forgive Him.)
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To: Evil Slayer
PUHLESE! THERE IS NO DEFICIT SPENDING. IN ORDER TO HAVE A DEFICIT THERE MUST BE A

BUDGET!

sark off

11 posted on 09/17/2012 4:07:42 AM PDT by Young Werther (Julius Caesar said "Quae cum ita sunt. Since these things are so.".)
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To: Evil Slayer

This was news to me. It’s overwhelming to try to keep up and it is intentional to overwhelm the citizens.

“The Consumer Financial Protection Bureau is also being financed by the Federal Reserve rather than by appropriations, severing the checks and balances needed for good government. And the Fed’s Operation Twist, buying long-term and selling short-term debt, is substituting for the Treasury’s traditional debt management.”


12 posted on 09/17/2012 4:08:28 AM PDT by listenhillary (Courts, law enforcement, roads and national defense should be the extent of government)
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To: MachIV

Thanks....I will be using that


13 posted on 09/17/2012 4:16:50 AM PDT by Popman (In a place you only dream of Where your soul is always free)
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To: MachIV
It’s a term I only came to learn of about 3 years ago. Apparently, it’s an acronym used by law enforcement that stands for Without Rule of Law. In otherwords, chaos, riots in the streets, total mayhem. Examples would be the Watts Riots of ‘68, LA riots of ‘92, New Orleans after hurricane Katrina, etc.

What we need is WROO. (Without Rule of Obama)

14 posted on 09/17/2012 4:17:12 AM PDT by arasina (Communism is EVIL. So there.)
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To: Evil Slayer

Well THAT was a depressing read first thing on a Monday morning.


15 posted on 09/17/2012 4:40:23 AM PDT by LuvFreeRepublic
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To: Evil Slayer

The 110 million of us who are supported by some sort of Government check (no SS or Medicare $ here) are oblivious in the realization of the magnitude of what they are causing.

They simply don’t care, nor want to - as long as the checks keep coming. They won’t care until the magnitude has reached such proportions as their checks become in jeopardy. And, when they realize this, they won’t tighten their belts - or get a job. They will riot.


16 posted on 09/17/2012 4:49:59 AM PDT by Gaffer
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To: LuvFreeRepublic
Well THAT was a depressing read first thing on a Monday morning.

Don't worry about it. Just do what the libtard voters do. Go back to sleep by staring at your Iphone all day. I mean, things will be fine no matter what, right?
17 posted on 09/17/2012 4:56:41 AM PDT by ZX12R (FUBO GTFO 2012 !)
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To: Gaffer

...”The 110 million of us who are supported by some sort of Government check (no SS or Medicare $ here) are oblivious in the realization of the magnitude of what they are causing.

They simply don’t care, nor want to - as long as the checks keep coming. They won’t care until the magnitude has reached such proportions as their checks become in jeopardy. And, when they realize this, they won’t tighten their belts - or get a job. They will riot”...

You know, I hear talking heads on TV say, “It’s about the economy, Stupid!”... I cringe when I hear that because my guess in that 75% of Americans, college educated and otherwise, know almost nothing about what has happened to the US economically during the past 4 years. They do not have the education or the inclination to understand it..In fact, it involves such numbers and is so complicated, even the experts have trouble with it. We do know one thing. Our dollar is soon going to be worthless. Then, what will we do for money?..Will we resort to bartering?..The chaos brewing out there, God forbid, could bring on Civil War. I think of the families I know who have adopted little children from foreign lands, thinking they were giving those babies a chance at a loving home in a free land..Now, it could be that those families would be better off in the original homelands of their children. We have already fallen off the cliff..It is just a matter of how slick the slide is to the bottom. Those political figures responsible for these economic crimes against the American people should be in prison and we have not seen a single one go there yet.


18 posted on 09/17/2012 5:33:13 AM PDT by jazzlite (esat)
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To: arasina

Excellent!


19 posted on 09/17/2012 6:17:06 AM PDT by MachIV
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To: jazzlite

Thank you for your comment. It’s a sobering expose on the seriousness of our national situation and you are right about many Americans having no clue what has happened.


20 posted on 09/17/2012 6:35:22 AM PDT by MachIV
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To: Evil Slayer

bump


21 posted on 09/17/2012 6:43:58 AM PDT by GeronL (The Right to Life came before the Right to Pursue Happiness)
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To: Gaffer
The 110 million of us who are supported by some sort of Government check (no SS or Medicare $ here) are oblivious in the realization of the magnitude of what they are causing.

They simply don’t care, nor want to - as long as the checks keep coming. They won’t care until the magnitude has reached such proportions as their checks become in jeopardy. And, when they realize this, they won’t tighten their belts - or get a job. They will riot.

They are incapable of getting a job or tightening their belts.
They have no job skills, are largely not only uneducated, but uneducable.
Their average IQ is 80 - virtually useless in a modern economy - combine that with no education, no job skills, no work ethic and no ability to learn, the only thing they can do is riot or wage war.

Should they choose to wage war, no mercy must be shown them and they should be removed as a threat without prejudice.

22 posted on 09/17/2012 6:57:53 AM PDT by Bon mots (When seconds count, the police are just minutes away...)
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To: MachIV

“Without Rule of Law”

That’s when you invoke Rule 308, sub-paragraph 7.62


23 posted on 09/17/2012 7:00:32 AM PDT by PLMerite (Shut the Beyotch Down! Burn, baby, burn!)
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To: Evil Slayer

The first rule of rhetoric is REMEMBER YOUR AUDIENCE. This is a well thought out and well written article, but the majority of people who vote can’t understand it. The audience is American voters. They have to be able to understand this message. The Democrats have a very simple message VOTE FOR US AND WE WILL GIVE YOU MONEY. The Republicans have to have an equally strong and simple message. VOTE FOR US OR THERE WON’T BE ANY MONEY LEFT TO GIVE YOU.


24 posted on 09/17/2012 7:07:21 AM PDT by blueunicorn6 ("A crack shot and a good dancer")
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To: jazzlite
You know, I hear talking heads on TV say, “It’s about the economy, Stupid!”... I cringe when I hear that because my guess in that 75% of Americans, college educated and otherwise, know almost nothing about what has happened to the US economically during the past 4 years.

To be fair, this has not been happening over just the last 4 years, it has been happening since the late 1970's.

It has accelerated and gotten much worse since Obozo has taken office, but factories have been closing since the 1970s and industries have been moving offshore for at least as long.
The decline in education has been going on since then as well, and has never recovered.
Recovery is virtually impossible under the current circumstances no matter who wins the election. Collapse must come first. Nobody can or will build a new factory in any American city... when is the last time you saw such a thing built? Why would any sane businessperson build a factory in America with its high level of taxation, regulation, affirmative action that requires you to hire imbeciles and the multitude of rules imposed upon business by the ruling class...

Then look at the tax and 'entitlements' disaster. Entitlements eat up the entire amount collected by the IRS each year now. So how will the debt get paid down?
It won't, it cannot be done.
This means either default or hyperinflation. Hyperinflation has been the standard solution over the last millennia and the likeliest outcome from this sad, downward spiral.




Total taxes collected by the IRS in 2011: $2,332,754 million and falling...
25 posted on 09/17/2012 7:13:16 AM PDT by Bon mots (When seconds count, the police are just minutes away...)
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To: PLMerite

Excellent. I have plenty stock of that “subparagraph” too.


26 posted on 09/18/2012 9:38:56 AM PDT by MachIV
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To: Evil Slayer

27 posted on 09/18/2012 9:45:54 AM PDT by timestax (Why not drug tests for the President AND all White Hut staff ? ? ?)
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