Tag Archives: debt

Treasury Ran $98 Billion Deficit in July–But Debt Stayed Exactly $16,699,396,000,000

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Now you don’t think our government would violate the law would you? I mean if the number stays the same,That would mean the debt was just $25 million below the legal limit of $16,699,421,000,000 that was set in a law passed by Congress and signed by President Barack ObamaNa, they wouldn’t do that .

August 14, 2013 – 4:15 AM

By Terence P. Jeffrey

(CNSNews.com) – The Treasury Department‘s Financial Management Service (FMS), which publishes both the federal government‘s official Daily Treasury Statement and its official Monthly Treasury Statement, is reporting that in July the federal government ran a deficit of $98 billion but that the federal government’s debt remained exactly $16,699,396,000,000 for the entire month.

The FMS said that the deficit went up $98 billion ($97,594,000,000) in the Monthly Treasury Statment for July, which it released on Monday

The FMS said that the deficit went up $98 billion ($97,594,000,000) in the Monthly Treasury Statment for July, which it released on Monday.

At the same time, the FMS said the debt stayed at exactly $16,699,396,000,000

( Even David Copperfield is Impressed by this trick )

in its Daily Treasury Statements, which are published every business day. The Daily Treasury Statements show the daily value of the federal government debt that is subject to a legal limit set by Congress.

At the static $16,699,396,000,000 level that the Treasury reported for every day of July, the debt was just $25 million below the legal limit of $16,699,421,000,000 that was set in a law passed by Congress and signed by President Barack Obama.

If Treasury’s daily statements were to declare that the government had borrowed an additional net $98 billion to cover the $98 billion deficit the Treasury declared in its monthly statement for July, the Treasury would be conceding that the government had already surpassed the legal limit on the debt–and has been violating the law by continuing to borrowing additional money.


Instead, even as the Treasury was running up the $98-billion deficit it reported in the July Monthly Treasury Statement, every one of the 22 Daily Treasury Statements published for July said the Treasury had closed out the previous business day with exactly $16,699,396,000,000 in debt.

The Daily Treasury Statement for Aug. 12, released Tuesday afternoon, says the debt remained stuck at exactly $16,699,396,000,000 during the first 12 days of this month, too.

On May 17, the first day the Treasury reported that the debt had hit exactly $16,699,396,000,000–and was thus just $25 million below the legal limit–Treasury Secretary Lew sent a letter to House Speaker John Boehner saying he was beginning to implement what he called “the standard set of extraordinary measures” to prevent the Treasury from exceeding the legal limit on the federal debt.

Since Lew sent that letter–announcing that he would use “extraordinary measures“–the debt has remained stuck at exactly $16,699,396,000,000 for 87 straight days.

That includes all 31 days in July when Lew’s Treasury says it was running a $98 billion deficit.

When Lew stops using “extraordinary measures” to keep the debt at exactly $16,699,396,000,000, the government will have another debt-limit crisis.




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Barack and Michelle Have a History of Poor Money Management


The above video clip from last month shows the president hasn’t progressed from the magical thinking of financial reality he first practiced with MichelleIn August, 2011, Fellowship of the Minds published this “Magic Beans” financial strategy practiced by the newlywed Obamas. 

Would you believe the “smartest man in the room” and his lovely and talented helpmeet, Michelle, have a poor track record in budgeting family finances?  Their behavior as the “First Couple” confirms these people are clueless on the value of money and where it comes from.  Indeed, Michelle referred to the first substantial income they had as a couple as “magic beans”, (the royalties from “Dreams of My Father”).  Prior to that, it sounds like they would have qualified for a Dr. Phil-style intervention for profligate spending.


President Obama’s troubling mantra: In debt, we trust

By Richard Henry Lee

Friday, May 1st 2009, 4:36 PM

It is no surprise that President Obama supports unprecedented spending and borrowing in the federal budget since he has never suffered any consequences from the excessive spending and borrowing in his private life.

And I’m not just talking about the First Lady’s $540 sneakers.

A close examination of their finances shows that the Obamas were living off lines of credit along with other income for several years until 2005, when Obama’s book royalties came through and Michelle received her 260% pay raise at the University of Chicago. This was also the year Obama started serving in the U.S. Senate.

During the presidential primary campaign, Michelle Obama complained how tough it was to make ends meet. During a stop in Ohio, she said, “I know we’re spending – I added it up for the first time – we spend between the two kids, on extracurriculars outside the classroom, we’re spending about $10,000 a year on piano and dance and sports supplements and so on and so forth.”

Let’s examine how tough things were for this couple using various public records.

In April 1999, they purchased a Chicago condo and obtained a mortgage for $159,250. In May 1999, they took out a line of credit for $20,750. Then, in 2002, they refinanced the condo with a $210,000 mortgage, which means they took out about $50,000 in equity. Finally, in 2004, they took out another line of credit for $100,000 on top of the mortgage.

Tax returns for 2004 reveal $14,395 in mortgage deductions. If we assume an effective interest rate of 6%, then they owed about $240,000 on a home they purchased for about $159,250.

This means they spent perhaps $80,000 beyond their income from 1999 to 2004.

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12 Yr Old Canadian Lays It on the Line about Corrupt Banking

H/T Roger Fredinburg

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Now pay attention. This is how a Stimulus Package works.

This will make your head hurt..Promise. 😀

One day in the small town of Pumphandle the streets are deserted. Times are tough, everybody is in debt, and everybody is living on credit. A tourist visiting the area drives through town, stops at The Hotel and lays a $100 bill on the desk saying he wants to inspect the rooms upstairs to pick one for the night. As soon as he walks upstairs, the motel owner grabs the bill and runs next door to pay his debt to the butcher.
(Stay with this…..and pay attention)
The butcher takes the $100 and runs down the street to retire his debt to the pig farmer. The pig farmer takes the $100 and heads off to pay his bill
to his supplier, the Co-op. The guy at the Co-op takes the $100 and runs to pay his debt to the local prostitute, who has also been facing hard times and has had to offer her”services” on credit. The hooker rushes to the hotel and pays off her room bill with the hotel owner.
(Almost done…keep reading)
The hotel proprietor then places the $100 back on the counter so the traveler will not suspect anything. At that moment the traveler comes down the stairs, states that the rooms are not satisfactory, picks up the $100 bill and leaves.
No one produced anything. No one earned anything. However, the whole town now thinks that they are out of debt and there is a false atmosphere of optimism and glee.
And that, my friends, is how a “stimulus package”
~Steve~        H/T Richard

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Why Eurozone's Fiscal Crisis Should Concern You

For several weeks now, the government leaders of West Europe grappled with what to do as, beginning with Greece, country after country approaches insolvency, buried under mountains of debt.  But Americans seem oblivious, with half of the U.S. population going on a giddy buying spree on Black Friday after Thanksgiving, in stubborn denial of the European fiscal meteor that can and will impact the United States.
One after another, alarm bells are sounded.
The Economist says on Nov. 26, 2011:

A euro break-up would cause a global bust worse even than the one in 2008-09. The world’s most financially integrated region would be ripped apart by defaults, bank failures and the imposition of capital controls (see article). […] The survival of the EU itself would be in doubt.[…]

The panic engulfing Europe’s banks is no less alarming. Their access to wholesale funding markets has dried up, and the interbank market is increasingly stressed, as banks refuse to lend to each other. Firms are pulling deposits from peripheral countries’ banks. This backdoor run is forcing banks to sell assets and squeeze lending; the credit crunch could be deeper than the one Europe suffered after Lehman Brothers collapsed.

Add the ever greater fiscal austerity being imposed across Europe and a collapse in business and consumer confidence, and there is little doubt that the euro zone will see a deep recession in 2012—with a fall in output of perhaps as much as 2%. That will lead to a vicious feedback loop in which recession widens budget deficits, swells government debts and feeds popular opposition to austerity and reform. Fear of the consequences will then drive investors even faster towards the exits.”

Agustino Fontevecchia writes in Forbes, Nov. 28, 2011, that the Eurozone crisis is spreading to the private sector:

“The European situation continues to deteriorate and has now spread even to Germany, the eurozone’s economic engine, as evidenced by a failed bond auction last week.  As sovereign debt markets deteriorates, the risk of a credit crunch looms, raising the stakes for policymakers and the private sector alike.”

Wolfgang Münchau warns in the Financial Times, Nov. 27, 2011, that the Eurozone has only days to avoid a collapse:

“With the spectacular flop of the German bond auction and the alarming rise in short-term rates in Spain and Italy, the government bond market across the eurozone has ceased to function. The banking sector, too, is broken. Important parts of the eurozone economy are cut off from credit. The eurozone is now subject to a run by global investors, and a quiet bank run among its citizens.”

As a matter of fact, quiet or not, there was a bank run in the Baltic country of Latvia on September 24, 2011.
The event that triggered the bank run was the arrest of two former shareholders of Bankas Snoras AB, for embezzlement, document forgery, accounting fraud and abuse of authority. Kinda like what New Jersey’s former Democratic governor and senator Jon Corzine did as CEO of MF Global.
In Latvia, the arrests precipitated a bank run. The Latvian government stepped in. Depositors could withdraw only 50 lati (about $95) a day, as the government moved to liquidate the bank.

Indeed, Europe’s banking sector is broken.
More than a month ago, on September 21, 2011, just when European banks and their regulators were trying to reassure investors and customers that lenders have enough capital to withstand a default by Greece and slowing economic growth caused by governments’ austerity measures, Lloyd’s of London, the world’s oldest insurance market, abandoned those banks.
Lloyd’s pulled deposits from European banks because of concerns that European governments may be unable to support lenders in a worsening debt crisis. As Lloyd’s finance director Luke Savage explained,

“There are a lot of banks who, because of the uncertainty around Europe, the market has stopped using to place deposits with. If you’re worried the government itself might be at risk, then you’re certainly worried the banks could be taken down with them.”

I didn’t know about that, did you? I only learnt of what Lloyd’s of London did, two days ago. Some news media we have in the United States!
And if you think what happens in the Eurozone doesn’t affect us, think again.
Already, the Eurozone debt and banking crisis has led to the 8th biggest bankruptcy in U.S. history — that of the giant financial derivatives broker MF Global. The brokerage had used its clients’ funds to invest in European government bonds. But the investments went bust and MF Global went bankrupt, taking hundreds of millions of its clients’ dollars with it.
Who knows how many other U.S. brokerages, banks, and credit unions have invested in European government bonds?
Meanwhile, we in the United States have our own humongous national debt to worry about. The news today is that Fitch, the credit-ratings company, just downgraded its outlook for the United States to “negative.”

Update (Nov. 29, 2011):

Fox Business reports that yesterday, Standard & Poor’s cut its credit ratings (from A to A-) for many of the world’s largest banks, including Citigroup, Goldman Sachs, Bank of America, JPMorgan Chase, Wells Fargo, and Morgan Stanley.
The move follows S&P’s shift, announced earlier this month, in the methods it uses for rating the banks. Dozens of other banks were also affected by S&P’s new criteria and many of the downgrades stemmed from the affected banks’ exposure to the European debt crisis. S&P cited weaker confidence in governments’ ability to bail out struggling banks.

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Quartzsite-La Paz County: Microcosm of the State of the Nation?

Demographics are everything, so the MSM and pollsters say.  I’ll give them that and not argue with my “betters.”   My Dad always said, let everything be an object lesson.  So, I take the La Paz County/Quartzsite situation very seriously and compare it to the current Debt Ceiling standoff. 

The LaPaz County situation in a nutshell appears to be:

In past years of relative prosperity, elected officials signed a contract with a private company to provide a service they thought would be beneficial on some level.  Subsequently, there was a parting of the ways and the resulting court of appeals judgement of $9.5 Million was laid on the people of La Paz County.

The elected officials of La Paz County have run out the clock with bickering, blustering, politicking, cronyism and partisan wrangling in town meeetings to the point the judgement has now reached $14 Million and continues to climb.  

The citizens are coming unglued for very a understandable reason. It’s the same reason the Tea Parties formed. 

Look at the demographics of  La Paz County according to the 2010 Census to understand the mountain of local debt they’re facing   — piled on top of all the state and federal taxes they’re already burdened with:

Total Population                                                                                                    20,489   

Persons under 18 years old      24.5 %   (not in full time workforce)                          Persons 65 and older                 33.1 %  (not in full time workforce)                                                                 57.6% of people not in full time workforce

 Total Households between 2004-2009                                                         9,530         

Median Income Per Household                                                                      $ 30,939          Per Capita Income                                                                                                $ 20,050

In a depressed economy with lowered wage expectations, few job opportunites and increasing debt obligations, any population is a powderkeg waiting to explode.   With a median income of less than $31,000 per household to cover federal, state and local taxes plus housing, transportation, utilities, clothing and food; how are less than ten thousand households going to come up with the money to pay off the additonal $14 Million that resulted from the bad decisions and dithering of their incompetent elected officials ?

Like La Paz County, Arizona; every state, county, city and town has elected officials who’ve signed contracts heaping their citizens in greater and greater indebtedness…. and that’s not counting the federal debt ceiling Obama wants to raise.  Like LaPaz County, the federal government has us in bondage to all the nations that hold our promissory notes.

To quote Bette Davis as Margot Channing in ALL ABOUT EVE, “Fasten your seatbelts, it’s going to be a bumpy night.” 

This is fair warning to every candidate seeking office at every level of government.  ~LTG

Quartzsite: Where the Sh#t Hit the Fan

Mayor Comments on Quartzsite State of Emergency

Tyrannical Arizona City Council Declare State of Emergency

Town in Arizona Run By Wolves

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Paul Ryan Responds to Obama's SOTU

Here’s the transcript of Congressman Paul Ryan’s response to Obama’s 2011 State of the Union speech (h/t Charlie Speering, SFExaminer.com).

Republican Address to the Nation 8:30pm
Remarks of Congressman Paul Ryan (R-WI) – As Prepared for Delivery, Washington, Jan 25
Good evening. I’m Congressman Paul Ryan from Janesville, Wisconsin – and Chairman here at the House Budget Committee.
President Obama just addressed a Congressional chamber filled with many new faces. One face we did not see tonight was that of our friend and colleague, Congresswoman Gabrielle Giffords of Arizona. We all miss Gabby and her cheerful spirit; and we are praying for her return to the House Chamber.
Earlier this month, President Obama spoke movingly at a memorial event for the six people who died on that violent morning in Tucson. Still, there are no words that can lift the sorrow that now engulfs the families and friends of the fallen.
What we can do is assure them that the nation is praying for them; that, in the words of the Psalmist, the Lord heals the broken hearted and binds up their wounds; and that over time grace will replace grief. As Gabby continues to make encouraging progress, we must keep her and the others in our thoughts as we attend to the work now before us.
Tonight, the President focused a lot of attention on our economy in general – and on our deficit and debt in particular.
He was right to do so, and some of his words were reassuring. As Chairman of the House Budget Committee, I assure you that we want to work with the President to restrain federal spending.
In one of our first acts in the new majority, House Republicans voted to cut Congress’s own budget. And just today, the House voted to restore the spending discipline that Washington sorely needs.The reason is simple.
A few years ago, reducing spending was important. Today, it’s imperative. Here’s why.
We face a crushing burden of debt. The debt will soon eclipse our entire economy, and grow to catastrophic levels in the years ahead. On this current path, when my three children – who are now 6, 7, and 8 years old – are raising their own children, the Federal government will double in size, and so will the taxes they pay. No economy can sustain such high levels of debt and taxation. The next generation will inherit a stagnant economy and a diminished country.Frankly, it’s one of my greatest concerns as a parent – and I know many of you feel the same way.
Our debt is the product of acts by many presidents and many Congresses over many years. No one person or party is responsible for it. There is no doubt the President came into office facing a severe fiscal and economic situation. Unfortunately, instead of restoring the fundamentals of economic growth, he engaged in a stimulus spending spree that not only failed to deliver on its promise to create jobs, but also plunged us even deeper into debt.
The facts are clear: Since taking office, President Obama has signed into law spending increases of nearly 25% for domestic government agencies – an 84% increase when you include the failed stimulus. All of this new government spending was sold as “investment.” Yet after two years, the unemployment rate remains above 9% and government has added over $3 trillion to our debt.
Then the President and his party made matters even worse, by creating a new open-ended health care entitlement. What we already know about the President’s health care law is this: Costs are going up, premiums are rising, and millions of people will lose the coverage they currently have. Job creation is being stifled by all of its taxes, penalties, mandates and fees. Businesses and unions from around the country are asking the Obama Administration for waivers from the mandates. Washington should not be in the business of picking winners and losers. The President mentioned the need for regulatory reform to ease the burden on American businesses. We agree – and we think his health care law would be a great place to start.
Last week, House Republicans voted for a full repeal of this law, as we pledged to do, and we will work to replace it with fiscally responsible, patient-centered reforms that actually reduce costs and expand coverage. Health care spending is driving the explosive growth of our debt. And the President’s law is accelerating our country toward bankruptcy.
Our debt is out of control. What was a fiscal challenge is now a fiscal crisis. We cannot deny it; instead we must, as Americans, confront it responsibly. And that is exactly what Republicans pledge to do.
Americans are skeptical of both political parties, and that skepticism is justified – especially when it comes to spending. So hold all of us accountable. In this very room, the House will produce, debate, and advance a budget. Last year – in an unprecedented failure – Congress chose not to pass, or even propose a budget. The spending spree continued unchecked.
We owe you a better choice and a different vision.
Our forthcoming budget is our obligation to you – to show you how we intend to do things differently … how we will cut spending to get the debt down… help create jobs and prosperity … and reform government programs. If we act soon, and if we act responsibly, people in and near retirement will be protected.
These budget debates are not just about the programs of government; they’re also about the purpose of government. So I’d like to share with you the principles that guide us. They are anchored in the wisdom of the founders; in the spirit of the Declaration of Independence; and in the words of the American Constitution. They have to do with the importance of limited government; and with the blessing of self-government.
We believe government’s role is both vital and limited – to defend the nation from attack and provide for the common defense … to secure our borders… to protect innocent life… to uphold our laws and Constitutional rights … to ensure domestic tranquility and equal opportunity … and to help provide a safety net for those who cannot provide for themselves.
We believe that the government has an important role to create the conditions that promote entrepreneurship, upward mobility, and individual responsibility.
We believe, as our founders did, that “the pursuit of happiness” depends upon individual liberty; and individual liberty requires limited government.­ Limited government also means effective government. When government takes on too many tasks, it usually doesn’t do any of them very well. It’s no coincidence that trust in government is at an all-time low now that the size of government is at an all-time high.
The President and the Democratic Leadership have shown, by their actions, that they believe government needs to increase its size and its reach, its price tag and its power. Whether sold as “stimulus” or repackaged as “investment,” their actions show they want a Federal government that controls too much; taxes too much; and spends too much in order to do too much. And during the last two years, that is exactly what we have gotten – along with record deficits and debt – to the point where the President is now urging Congress to increase the debt limit.
We believe the days of business as usual must come to an end. We hold to a couple of simple convictions: Endless borrowing is not a strategy; spending cuts have to come first.
Our nation is approaching a tipping point. We are at a moment, where if government’s growth is left unchecked and unchallenged, America’s best century will be considered our past century. This is a future in which we will transform our social safety net into a hammock, which lulls able-bodied people into lives of complacency and dependency.
Depending on bureaucracy to foster innovation, competitiveness, and wise consumer choices has never worked – and it won’t work now. We need to chart a new course.­­
Speaking candidly, as one citizen to another: We still have time… but not much time. If we continue down our current path, we know what our future will be. Just take a look at what’s happening to Greece, Ireland, the United Kingdom and other nations in Europe. They didn’t act soon enough; and now their governments have been forced to impose painful austerity measures: large benefit cuts to seniors and huge tax increases on everybody. Their day of reckoning has arrived. Ours is around the corner. That is why we must act now.­­­­
Some people will back away from this challenge. But I see this challenge as an opportunity to rebuild what Lincoln called the “central ideas” of the Republic. We believe a renewed commitment to limited government will unshackle our economy and create millions of new jobs and opportunities for all people, of every background, to succeed and prosper. Under this approach, the spirit of initiative – not political clout – determines who succeeds. Millions of families have fallen on hard times not because of our ideals of free enterprise – but because our leaders failed to live up to those ideals; because of poor decisions made in Washington and Wall Street that caused a financial crisis, squandered our savings, broke our trust, and crippled our economy. Today, a similar kind of irresponsibility threatens not only our livelihoods but our way of life.
We need to reclaim our American system of limited government, low taxes, reasonable regulations, and sound money, which has blessed us with unprecedented prosperity. And it has done more to help the poor than any other economic system ever designed. That’s the real secret to job creation – not borrowing and spending more money in Washington.
Limited government and free enterprise have helped make America the greatest nation on earth. These are not easy times, but America is an exceptional nation. In all the chapters of human history, there has never been anything quite like America. The American story has been cherished, advanced, and defended over the centuries. And it now falls to this generation to pass on to our children a nation that is stronger, more vibrant, more decent, and better than the one we inherited.
Thank you and good night.
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Zombies For Stuff

Once upon a time there was a country called Q that was the richest in human history.
Despite its recent bout of economic downtown, the people of Q still were awash in money and material possessions, as measured by average per capita income and just plain accumulated “stuff” that far exceeded what each person actually needed.
Even Q’s poor people were not absolutely poor, for Q’s government defined “poverty” in relative terms, which means the government calls you”poor” simply because you have less stuff than others. Absolute poverty means a person is without the food, clothing, and shelter for survival.
And so, as the country of Q became richer and its average per capita income increased, so too did the poverty threshold, which in turn meant that Q would always have “the poor” even when Q’s poor had indoor heating, television, microwave ovens, cell phones, and other amenities and goods that were considered by the world’s really poor countries to be only possessed by the rich. That was why many of Q’s “poor” were not just fat, but clinically obese, unlike the starving emaciated poor of the rest of the world.
Despite their being awash in oceans of stuff, the people of Q wanted more, more, and ever more stuff. To feed their insatiable hunger for more stuff, they even went into debt with double-digit interest rates — which meant most of them would never be freed of debt but would be bound in life-long servitude to their debtors.
Special days, called “holidays,” were set aside for the people of Q to buy more stuff for their families and friends — all of whom also were awash in oceans of stuff.
There was one special day in the year when the people of Q went into a stuff-buying frenzy.
It was called Black Friday, the day after a holiday called “Thanksgiving.” On that day, Q’s people would line up for hours –some camped in the bitter cold the night before — to be “the first” to buy stuff when stores opened.
On Black Friday in the year 2010, even though the people of Q already were neck-deep in debt and even though Q had a record and persistent official unemployment rate of nearly 10%, they still turned out like zombies to buy yet more stuff. There were even reports of violence [Source: The Economic Collapse]:

  • At a Target store in Buffalo, New York, the crowds that were waiting impatiently outside suddenly became a chaotic mob when the doors opened at 4 AM. Shoppers trampled each other in a mad dash. One man who was lying on the ground thought “I don’t want to die here” while he was being trampled by the other shoppers.
  • At a Wal-Mart store in Sacramento, California, the crowds became so violent that the police had to evacuate the store.
  • In West Palm Beach, Florida, three women reported to the police that $1,000 in presents they had just bought at Best Buy were stolen from their vehicle within minutes of being purchased.
  • In eastern Georgia, a U.S. Marine reservist who was collecting donated toys for children was stabbed with a knife when he tried to stop a shoplifter.
  • At a popular convenience store in Garden City, police were brought in to break up a huge brawlA group of customers were pulling and tugging at products and punched each other in their faces and stomach.
  • In Middleton, Wisconsin, a 21-year-old woman was arrested when she threatened to shoot other shoppers when they objected to her moving to the front of line to get into a Toys R Us store.
  • In Douglasville, Georgia, customers tore apart a store display at a Wal-Mart store, as they pushed and shoved each other in an attempt to grab the best deals.
  • In a shopping mall in Cerritos, California, the police locked down a section of the mall after a wild fight broke out in the food court, with people flinging chairs at other customers.
  • In Texas, a near-riot broke out in the middle of a Wal-Mart store as a huge crowd of customers pushed and shoved each other to get special deals that were being wheeled out onto the floor.

So what is this hunger that is insatiable?
At the same time as the people of Q acquired more and more stuff, their families broke down, divorces and single parenthood increased, along with a decline in religiosity and church attendance. And as the people of Q became increasingly atomized and alienated, their yawning maw for more stuff became a bottomless chasm.
The more self-aware (or honest) among Q’s citizens said that when they felt blue, they would anesthetize themselves by buying stuff much as a drug addict seeks a fix. But the feeling of elation was fleeting, lasting mere minutes. Some of Q’s more learned denizens maintained that owning a lot of expensive stuff was a way for the rich upper classes to distinguish themselves from the rest, and that the masses’ consumerism was their attempt at class mimicry — though at the cost of their increasing indebtedness.
When the people of Q behaved like this, all to buy stuff, how do you think they’ll behave when things really go bad and they are desperate for food or shelter?
[H/t Igor for the video]

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How to Reduce America's Humongous Deficit

You heard/read about it in the news — as sound bites.
I’m referring to that deficit-reduction report issued by the bipartisan National Commission on Fiscal Responsibility and Reform.
But do you know what the report actually says?
Over the weekend, I had e-mailed the report to fellow Anonymous and got this response from him:
“Uh-oh. Read it (sobering on the face of it, just by itself). With the track record of the current administration, I don’t know whether they’ll:

  1. Just say this and do the opposite; or
  2. Use an “interpretation” of this to eliminate defense spending, cut Medicare, etc. to the point where painkillers, euthanasia and abortions-on-demand will be all that “healthcare reform” will eventually allow, and jack-up entitlement spending for loyal Democratic voters.”

Here’s the link to the 66-page report, The Moment of Truth. It’s worth your read. Remember Thomas Jefferson’s warning:

“If once they [the people] become inattentive to the public affairs, you and I, and Congress, and Assemblies, Judges, and Governors, shall all become wolves.”
-Thomas Jefferson, letter to Edward Carrington, 1787.


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Governments of Ireland and France Seize Private Pensions

Following Argentina and Hungary, the governments of Ireland and France have also seized private pension funds as a partial fix for their debt problem.
George Coats of Financial News reports on November 29, 2010, that last week:

  • Ireland announced it would use the country’s €24 billion National Pensions Reserve Fund “to support the exchequer’s funding programme.” 
  • The French parliament, via a change made to the social security law, seized the €36 billion French reserve pension fund, the Fonds de Réserve pour les Retraites (FRR), to pay off the debts of France’s welfare system.

Coats explains what happened in France:

The assets [of FRR] have been transferred into the state’s social debt sinking fund Cades. The FRR will continue to control the assets, but as a third-party manager on behalf of Cades….
The transfer of the FRR’s assets to Cades is controversial. Force Ouvrière, a trade union confederation, accused the government of “provoking the clinical death” of the FRR.
The [French parliament’s] decision was taken within the context of this year’s pension reform, which provoked riots with its decision to raise the retirement age. The state old-age pension system, the Cnav, is in deficit, and responsibility for financing the deficit rests with Cades.
The government is requiring the FRR to pay €2.1bn a year to Cades to meet this obligation.The government claims that the rise in retirement age will return Cnav to balance by 2018, so the FRR is expected to pay this sum for the next eight years. The FRR will then be wound down. It is expected to cease operations by 2024.

Coats concludes that “The move [by Ireland and France] reflects a willingness by governments to use long-term assets to fill short-term deficits.”
The U.S. national debt is now nearly $14 trillion. Don’t think that what happened in France, Ireland, Hungary, and Argentina can’t happen here.

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