By Michael Snyder
Economic Collapse Blog
January 4, 2013
Do you believe that economic trouble is coming in 2013? If so, you have a lot of company.
According to a brand new Gallup poll that was just released, 65 percent of Americans believe that 2013 will be a year of “economic difficulty” while only 33 percent of Americans believe that 2013 will be a year of “economic prosperity”.
Gallup has been asking this question for a lot of years, and the percentage of Americans that are anticipating economic difficulty in the year ahead has not been this high since the early 1980s. And without a doubt, there are a whole lot of reasons to be deeply concerned about the economy as we head into the new year. But it isn’t just 2013 that Americans are pessimistic about.
According to the new Gallup poll, 50 percent of all Americans believe that the best days of America are behind us, and only 47 percent of all Americans believe that the best days of America are ahead of us.
Those are very sobering numbers. Half the country believes that it is only downhill from here for the United States.
Unfortunately, they are exactly right. Things are rapidly going to get worse for our economy and for our nation as a whole.
We are going to start reaping the consequences of decades of very foolish decisions, and the pain is going to be immense.
Gallup asked some other very interesting questions as well. The following are some of the other results from the poll…
-68 percent of Americans believe that 2013 will be a year of rising crime rates.
-57 percent of Americans believe that 2013 will be a year in which American power will decline in the world.
-82 percent of Americans believe that 2013 will be a year in which taxes in the United States will rise.
So why are so many people so pessimistic as we enter 2013?
That is a good question. I think that a lot of people are starting to wake up and are realizing the gigantic problems that are staring the U.S. right in the face.
Even our friends over in Europe can see what is happening to us. We are like a former athletic champion that is now clearly on the wrong side of “middle age” and is exhibiting obvious signs of decline. We still like to think of ourselves as “the champ”, but the truth is that we are fat, lazy, broken down and bankrupt.
The following is a brief excerpt from an article that appeared in a major UK news source the other day…
The rest of the world — dangerously reliant on a buoyant U.S. — should note one thing above all: the fundamentals of America’s economy are, frankly, terrible, and its international dominance is not nearly as assured as it once was.
Its economic culture has started to change since President Obama entered the White House four years ago this month.
America more closely resembles Europe in living beyond its means and in the President’s determination to build a massive welfare state.
The mainstream media and most of our politicians endlessly proclaim that things are about to turn around and that a “recovery” is on the way, but that is not even close to the truth.
Fortunately, a few of our politicians realize what is really happening and are willing to talk about it. Unfortunately, not enough people are listening to them.
For example, Ron Paul has a really good grasp on how destructive the U.S. national debt is and how we are literally destroying the bright future that our children and our grandchildren should have had. The following is what he posted on his Facebook page the other day about the “fiscal cliff deal” that just got pushed through Congress…
We Are Already Over the Fiscal Cliff
2 January 2013
Despite claims that the Administration and Congress saved America from the fiscal cliff with an early morning vote today, the fact is that government spending has already pushed Americans over the cliff. Only serious reductions in federal spending will stop the cliff dive from ending in a crash landing, yet the events of this past month show that most elected officials remain committed to expanding the welfare-warfare state.
While there was much hand-wringing over the “draconian” cuts that would be imposed by sequestration, in fact sequestration does not cut spending at all. Under the sequestration plan, government spending will increase by 1.6 trillion over the next eight years. Congress calls this a cut because without sequestration spending will increase by 1.7 trillion over the same time frame. Either way it is an increase in spending.
Yet even these minuscule cuts in the “projected rate of spending” were too much for Washington politicians to bear. The last minute “deal” was the worst of both worlds: higher taxes on nearly all Americans now and a promise to revisit these modest reductions in spending growth two months down the road. We were here before, when in 2011 Republicans demanded these automatic modest decreases in government growth down the road in exchange for a massive increase in the debt ceiling. As the time drew closer, both parties clamored to avoid even these modest moves.
Make no mistake: the spending addiction is a bipartisan problem. It is generally believed that one party refuses to accept any reductions in military spending while the other party refuses to accept any serious reductions in domestic welfare programs. In fact, both parties support increases in both military and domestic welfare spending. The two parties may disagree on some details of what kind of military or domestic welfare spending they favor, but they do agree that they both need to increase. This is what is called “bipartisanship” in Washington.
While the media played up the drama of the down-to-the-wire negotiations, there was never any real chance that a deal would not be worked out. It was just drama. That is how Washington operates. As it happened, a small handful of Congressional and Administration leaders gathered in the dark of the night behind closed doors to hammer out a deal that would be shoved down the throats of Members whose constituents had been told repeatedly that the world would end if this miniscule decrease in the rate of government spending was allowed to go through.
While many on both sides express satisfaction that this deal only increases taxes on the “rich,” most Americans will see more of their paycheck going to Washington because of the deal. The Tax Policy Center has estimated that 77 percent of Americans would see higher taxes because of the elimination of the payroll tax cut.
The arguments against the automatic “cuts” in military spending were particularly dishonest. Hawks on both sides warned of doom and gloom if, as the plan called for, the defense budget would have returned to 2007 levels of spending! Does anybody really believe that our defense spending was woefully inadequate just five years ago? And since 2007 we have been told that the wars in Iraq and Afghanistan are winding down. According to the Congressional Budget Office, over the next eight years military spending would increase 20 percent without the sequester and would increase 18 percent with the sequester. And this is what is called a dangerous reduction in defense spending?
Ironically, some of the members who are most vocal against tax increases and in favor of cuts to domestic spending are the biggest opponents of cutting a penny from the Pentagon budget. Over and over we were told of the hundreds of thousands of jobs that would be lost should military spending be returned to 2007 levels. Is it really healthy to think of our defense budget as a jobs program? Many of these allegedly free-market members sound more Keynesian than Paul Krugman when they praise the economic “stimulus” created by militarism.
As Chris Preble of the Cato Institute wrote recently, “It’s easy to focus exclusively on the companies and individuals hurt by the cuts and forget that the taxed wealth that funded them is being employed elsewhere.”
While Congress ultimately bears responsibility for deficit spending, we must never forget that the Federal Reserve is the chief enabler of deficit spending. Without a central bank eager to monetize the debt, Congress would be unable to fund the welfare-warfare state without imposing unacceptable levels of taxation on the American people. Of course, the Federal Reserve’s policies do impose an “inflation” tax on the American people; however, since this tax is hidden Congress does not fear the same public backlash it would experience if it directly raised income taxes.
I have little hope that a majority of Congress and the President will change their ways and support real spending reductions unless forced to by an economic crisis or by a change in people’s attitudes toward government. Fortunately, increasing numbers of Americans are awakening to the dangers posed by the growth of the welfare-warfare state. Hopefully this movement will continue to grow and force the politicians to reverse course before government spending, taxing, and inflation destroys our economy entirely.
It was good that Ron Paul placed blame on both political parties and on the Federal Reserve for our debt problems.
The Federal Reserve is not often talked about much when it comes to assigning blame for the debt, but it truly is one of the primary reasons why our debt is so enormous today.
The Federal Reserve system was designed to be a perpetual government debt machine, and it has accomplished that task very well.
When the Federal Reserve was first created, the total U.S. national debt was less than 3 billion dollars.
That is about as much as we add to the U.S. national debt every single day at this point.
And since Ben Bernanke took the reigns at the Fed, our debt problems have greatly accelerated.
But disaster has not struck yet, so most Americans think that everything must be okay.
Well, if you want to ignore all of the evidence of our impending economic demise, go ahead and do that. Go on lots of expensive vacations, run up your credit cards, buy a new boat and party like its 1999. Enjoy every minute of our debt-fueled prosperity while you still can. You only live once, right?
But if you are wise, you will try to understand what is coming and you will make preparations so that you and your family will be able to withstand the storm that is coming. Here are some basic steps that I suggest…
-Use this time of relative prosperity to work hard and make money while you still can. You want to store up your finances during the good times to help you get through the lean times.
-Get out of debt. You don’t want massive amounts of debt weighing you down when things get really hard.
-Get more independent of the world system. Start a side business in the evenings and the weekends. Learn how to grow your own food. Get your house off of the grid if possible. Anything you can do to become more independent and more self-sufficient is good.
-Store food and other essential supplies. Right now we take for granted that the supermarkets and the big box stores will always be packed with mountains of quality goods at affordable prices. That may not always be the case. You want to be prepared for whatever may happen.
For even more tips, please see my previous article entitled “How To Prepare For The Difficult Years Ahead“.
All bubbles eventually burst.
Our national debt bubble will eventually burst.
The derivatives bubble will eventually burst.
The consumer debt bubble will eventually burst.
When those bubbles burst, will you be ready?
I hope and pray that you will.
Touching upon the recent tax law and spending cuts in the United States, Max Keiser noted in a Thursday interview with Press TV that when America takes on more debt than it is able to repay by collecting taxes, the difference is paid for and financed by China.
China’s support for the US debts has turned America into the worst G20 economy in terms of the gap between its spending and revenues, he pointed out.
Keiser noted that in 2013 “…the US dollar will collapse because China won’t finance it anymore and that is the risk that we are talking about, the risk that [the US President Barack] Obama does not tell his population and that is unconscionable; that is a lack of leadership.”
The analyst stated that US is heading into a “hyperinflationary economy” as a consequence of the catastrophe caused by “the very rich in America.”
He also warned of an imminent neo-feudalism in the global economy where there is an “incredible disparity” between the economic titans and the ordinary public.
On Wednesday, Obama signed into law the ‘American Taxpayer Relief Act of 2012’ to avert the so-called fiscal cliff.
On January 1, the House of Representatives voted 257 to 167, approving the bill, which entails raising taxes on the wealthiest Americans, while exempting others who earn less than $450,000 a year. It will also put off USD109 billion in budget cuts for two months.
The Congressional Budget Office has criticized the bill, saying it would add almost four trillion dollars to the federal deficit over a decade, since the deal continues to entitle nearly all Americans with low tax rates.
The International Monetary Fund said the bill was too limited to deal with the financial problems of the United States.
From YouTube – Max Keiser
In this episode, Max Keiser and Stacy Herbert argue over whether things are looking better or worse for the American worker.
While Stacy argues that the return of some manufacturing is a sign that wealth creating jobs may return to the US, Max counters that the system is so corrupt that the chances of labor getting any cut of the wealth is nil and that the Internet giants will prevent the rise of a powerful decentralized economy online.
In the second half, Max Keiser talks to Professor Jonathan Feldman about the Global Teach-In and about a boycott and short sale campaign and creating an industrial policy for America because right now the US even outsources some military production to China.
By JG Vibes
January 4, 2012
For years activists and researchers have been predicting that the ruling class would begin coming out of the shadows when the world was on the verge of economic collapse, to offer the preplanned solution to the problem that they themselves created.
Interestingly enough, in the past week two different members of the Rothschild family have come forward in rare media appearances and editorials to give their comments on the global financial crisis and its implications. They have not yet announced the establishment of a one world currency or massive tax hikes yet, but that’s what many are expecting. Right now though, it seems as if they are just getting warmed up to the media and setting the tone for future political action.
Just afew days ago I reported on an interview that Sir Evelyn de Rothschild had with a well established British news source. In the interview, Rothschild discussed the need to “reinvent capitalism”, referencing the work of John Maynard Keynes and Karl Marx in a positive light. As I mentioned in my article earlier this week, the aristocrats favor the expansion and centralization of political control, so these are the sorts of “solutions” that we can expect them to offer in the coming months and years.
Now less than a week later Lynn Forester de Rothschild has written an editorial that has gone viral through financial news circuits, with the same general plan and rhetoric that we heard from Sir Evelyn De Rothschild, as if both media announcements were a part of a planned public relations campaign.
According to her Wikipedia page:
“Lynn Forester de Rothschild was introduced to Sir Evelyn de Rothschild by Henry Kissinger at the 1998 Bilderberg Group conference in Scotland, and they married on November 30, 2000 in London, England, after Rothschild (almost 23 years older than Forester) had left his wife and three children. She is his third wife. On the announcement of the marriage, the de Rothschild couple were invited to spend their honeymoon at the White House. The couple splits their time between New York and London.”
Her article is titled “How Capitalism Can Repair Its Bruised Image”, but before we get too deep into that, it is important to address their use of the word capitalism, and to do so I am going to cite my article from last year, “Has Capitalism Ever Existed in America”. Therein i pick apart the semantics of the term, saying that:
“Recently there has been a lot of discussion about capitalism in the news and among activists. Many people are taking stances on either one side of the issue or the other, but very few are stopping to consider the fact that capitalism may have never even existed. This concept may come as a surprise to some, but it shouldn’t. If you examine most of the words used to describe our society such as democracy, freedom, representative or capitalism, you will find that these words are simply abstract euphemisms which are used to disguise the true nature of authoritarian civilization.
We are supposed to believe that we are represented by people who don’t represent us, that we are somehow “free” in a situation where we are constantly being exploited and ordered around. Much in the same way that we are told we are “free” in our personal lives, we are also told that we are “free” in our financial lives. The word “democracy” is used to make our oppressive political system seem more benevolent and legitimate, while the term “capitalism” is used to give the impression that we operate under a “free market” economy. Obviously, neither are true.
Capitalism itself has been defined many different ways, but the rights to private property, as well as private production of goods and a free market economy, cross over between all of these definitions. Currently none of the above rights are being fully respected in the United States and most Western countries that claim to be capitalist. Sure, at face value it may seem like these ideas are prevalent in Western culture, but when you take a look at property taxes, government subsidies for big corporations and the mountain of red tape faced by entrepreneurs it should become painfully obvious that capitalism has probably never existed in this country; perhaps it has never even existed in this world.
The system that we have in place today could more accurately be called fascism, mercantilism or cartelism. These words describe a system where the elite use their power in government to control the rest of society, as well as prop up their businesses by eliminating competition through the political system. The monolithic corporations that now exist would have never been able to grow into what they are today without the help of government intervention and protection. Without government intervention, the infamous lobbyists in Washington would become obsolete because there would no longer be any ability to manipulate the marketplace through bribes or coercion. Government intervention and protection is the primary means by which the world’s biggest corporations have devastated their competition and developed massive monopolies.
In a system of true free market capitalism there would be absolutely no need for a government, because any “service” that is apparently provided by the government can actually be better handled by entrepreneurs. In today’s system we don’t have independent businesses working on a level playing field, instead we are left with a few massive corporations and cartels that use their power in government to maintain their monopolies and stomp out their competition. This is the very definition of fascism — the merger of state and corporate power — this is the dominant economic system in the world, and has been for centuries, in various different forms.”
In this new article from Lynn Forester de Rothschild she attempts to scapegoat business owners for the collapse and unrest that the ruling class which she is a part of has created. In the article she points out that:
“The need is acute, because the general public’s sense of disenfranchisement goes well beyond the Occupy Wall Street movement or protesters on the streets of Athens and Madrid. A recent poll by the Public Religion Research Institute found that 70 percent of white working-class Americans, 78 percent of blacks, and 69 percent of Hispanics believe that the US economic system “unfairly favors the wealthy.””
We have a system that favors the wealthy for many reasons, and it has very little to do with average business owners. One of the primary reasons that a system such as this exists is because ruling class families like the Rothschilds use their control of the money supply to manipulate the marketplace and use the government to write their crimes into law.
Yet in the next paragraph, Lynn Forester suggests that the class struggle that we face today falls under the responsibility of the business owners. It is important to mention that when a Rothschild talks about business owners, they are certainly not speaking of themselves, but rather of their competition, the competition that they use government to force out of the market.
In the next paragraph she says that:
“Businesses can help combat such views—and help themselves in the process—by taking specific steps to make capitalism more inclusive. Yes, “inclusiveness” has been invoked in pursuit of dubious social-engineering ends, but in this case it is appropriate to describe what businesses can do to better share the fruits of capitalism with those who have been excluded.”
The article goes on to suggest a variation of investment strategies that she feels larger businesses should take with smaller businesses to enrich the workplace, and suggests that workers should have more access to available jobs, but really fails to draw any comparison to the ruling class or the forced monopolization of the marketplace. Not that anyone would have expected her on any other Rothschild to reveal such a truth.
The Rothschilds are one of the wealthiest of the ruling class bloodlines and share the biggest piece of the global tax and land plunder with the Merovingian bloodline, then with the Rockefellers following close behind.
The hierarchy of these families is still heavily debated, but many agree that these three specific bloodlines have significant global influence.
These family lines can be traced back to the feudal nobility of the middle ages and they are still in control of the majority of the world’s attainable wealth. They also own most of earths land surface and they continue to influence global policy in many ways.
The primary way that the Rothschild bloodline has maintained their control, is through monopolizing the money supplies of entire countries. This allows them to covertly extract wealth from billions of people through their governments without them even realizing it.
It is likely that we will see a more public involvement in economic debates from these families as the fiat currencies of the world begin their implosion.
By Agence France-Presse
Friday, January 4, 2013 10:37 EST
The US economy added a modest 155,000 net new jobs in December, the Labor Department said Friday, and the unemployment rate held steady at 7.8 percent.
The number of jobs created was slightly lower than November’s 161,000, showing the economy still was generating enough fresh positions only to slowly pull down the jobless rate.
The rate has been hovering at 7.8 percent since September, and the total number of officially unemployed people was little changed at 12.2 million.
By JG Vibes
January 3, 2013
Many people believe that the Federal Reserve is an organization that operates as a public service, there are not many out there who realize that this is a for profit business.
Of course, there is nothing wrong with providing a service and turning a profit, but there is something wrong with using the government to monopolize a vital aspect of society, forcing the whole society to use a particular service whether they like to or not.
It turns out that The Federal Reserve makes billions per year through this coercive monopoly, and this much activists and researchers have known for a long time. However, until now there has been very little hard evidence or sources to reference, which tell us exactly how much money they really do make. Recently, some numbers were revealed that can at least shed some light on a portion of their income, and these preliminary figures amount to at least $90 Billion per year.
“While leaders in Washington stare down the fiscal cliff, let’s not forget the fiscal fact that brought us to the edge: The annual U.S. government deficit of more than a trillion dollars. But through it all, one government-related entity has been hauling in record surpluses. New data capture the scope of profits at the U.S. Federal Reserve, estimated to be $90 billion this year.”
“The last five or six years their profits have roughly tripled,” says Allan Sloan, senior editor-at-large at Fortune Magazine.
According to Sloan, the Federal Reserve owes its success to its practice of buying securities with newly printed money.
“If you go out an buy $2 or $3 trillion of securities that pay interest and you don’t have to pay any interest on the money used to buy the securities, you make a lot of money,” says Sloan.
Not only that, but a great deal of the national debt is actually “owed” to the Fed, due to their charging of interest on every dollar that they print and loan to the US government.
It is likely that this revelation will be swept under the rug by the mainstream media, and it is also highly probable the $90 billion figure is merely scratching the surface.
The Economic Collapse
Jan 3, 2012
The fiscal cliff deal contains more bad news than it does good news. Yes, the tax increases on the middle class could have been much worse, and we should be thankful that Congress at least did something for the middle class. Unfortunately, they didn’t do enough. Every American worker is going to pay higher taxes next year as a result of this deal. The fiscal cliff deal represents the biggest tax increase in 20 years, and it is also projected to increase the U.S. national debt by an additional 4 trillion dollars over the next decade. In the final analysis, U.S. government finances are still wildly out of control and we are all going to be paying higher taxes. Not a whole lot to be excited about, and nothing has really been fixed for the long-term. Our politicians have kicked the can down the road once again, but someday they will run out of road and all of this debt will absolutely crush us. And of course a lot of our politicians didn’t even really know what they were voting for. The fiscal cliff bill was more than 150 pages long, and our Senators got the bill into their hands just 3 minutes before they voted on it. So none of them actually read the bill. But that is the way things work in America today. The blind are leading the blind and everyone is mindlessly hoping that everything will turn out okay somehow.
For a few moments, let’s take a closer look at the fiscal cliff deal. There are some good things in there, there are some bad things in there, and there are some things about the deal that are downright ugly.
-One of the best things about the fiscal cliff deal is that income tax rates did not rise on the poor and the middle class. This is great news for millions of families that are struggling to make ends meet each month. A significant rise in income tax rates would have been crippling.
-The Alternative Minimum Tax will now be permanently adjusted for inflation. This is something that I had screamed about in previous articles. If an AMT fix had not been passed, approximately 28 million households would have been hammered with the Alternative Minimum Tax on their 2012 earnings.
-Millions of unemployed workers will continue to receive extended federal unemployment benefits. We probably cannot really afford to keep doing this, but at least now there won’t be millions of unemployed workers that suddenly have their only source of income shut off. The next trick will be to find jobs for all of those workers. Unfortunately, millions of our jobs continue to be shipped to the other side of the world.
January 3, 2012
We are sad to bring you the tragic news that Tim “TuboTax” Geithner, who has long made clear his plans to leave some time in early 2012, will be out before March, and in fact before the end of January as it turns out. From Bloomberg:
GEITHNER SAID TO PLAN DEPARTURE BEFORE DEBT CEILING RECKONING
We are also confident readers will somehow be able to overcome the unprecedented sadness at this particular rat’s departure from the Titanic, metaphorically speaking of course.
And while Timmy’s replacement (assuming it is of the Homo Sapiens genus and species) is still unknown, we know what some of the prospects think about serving the public:
American Express Kenneth Chenault had been approached for job, has indicated he isn’t interested
Administration officials had approached American Express Co. Chief Executive Officer Kenneth Chenault about joining Obama’s second-term cabinet, possibly as Treasury secretary. Chenault isn’t interested in leaving his private sector job, according to a spokesman.
More from Bloomberg
Economic Policy Journal
January 3, 2012
Section 4191 of the Internal Revenue Code now imposes an excise tax on the sale of certain medical devices.
The tax applies to sales of taxable medical devices after Dec. 31, 2012.
The tax is 2.3 percent of the sale price of the taxable medical device. See Chapter 5 of IRS Publication 510, Excise Taxes, and Notice 2012-77 for additional information on the determination of sale price.
January 3, 2012
Not until after the clock ran out on 2012 did the Senate cobble together a “fiscal cliff” deal that finally passed the House late on Jan. 1, in a 257-167 vote. This deal amounts to a kind of “bungee cord” that has snapped us back to the top edge of the cliff again. That we should get a deal instead of a solution should come as no surprise. The entire process has been focused on the wrong problem all along.
The president, the House speaker, the Senate majority and minority leaders and, for that matter, Mitt Romney all have done the nation a major disservice by focusing almost exclusively on taxes for the top 1 percent or 2 percent of income earners for the past six months or so. Speaker John A. Boehner tried to talk about cutting spending, but the other side and its obsequious media are deaf to the subject. Democrats and Republicans alike have argued tenaciously that raising taxes on the rich, or not, is the heart of the problem. It’s not. The problem is overspending, not insufficient revenue from taxes.
January 2, 2013
First – it is no longer the “Bush (temporary) tax cut” – it is now the “Obama (permanent) tax cut“, with a loophole for the 1%ers (whose big picture “impact” we showed previously)
Second – according to the just released scoring by the CBO, the total impact on the US budget deficit of said permanent tax cuts, will be a $4 trillion increase in the deficit over the next decade.
In reality, due to the CBO’s perpetual optimistic bias, this number will likely be orders of magnitude lower than what it actually ends up being.
Maybe the US can just increase the taxes on the uber wealthy some more, and pray that unlikeObelix, they have never heard of Belgium.
In other news, perhaps it is time for the CBO to come up with an Extended Extended Alternative Alternative Fiscal Scenario.
Because the baseline Extended Alternative, as demonstrated previously and as shown below, may now be just a smidgeon optimistic.
I myself can’t believe this is happening as one of the final blows to the American people has been dealt.
By way of another executive order signed by the Commander-In-Chief himself, President Obama now forces all Americans to work even harder, requiring $11 billion in taxpayer dollars over the next 10 years to pay for the federal workers pension fund that the government itself will not honor.
By Shepard Ambellas
January 2, 2012
WASHINGTON — Last Friday President Obama signed an executive order ending the pay freeze on certain pension funds, mandating that US tax dollars be put to work to pay for the pension funds that the government has looted from its own federal workers.
And if that is not enough, the President is trying to add to the siphoning by proposing pay increases for the Vice President and members of Congress. However, the motion for pay raises was blocked in a Tuesday session.
Has Congress really tried to sell out the American people?
Erica Ritz reported, “Unbelievably, in the middle of talks this week on tax rates and sequestration revision, in the midst of high deficits and a growing national debt, the president has proposed pay increases for members of Congress,” Rep. Mike Fitzpatrick (R-Pa.) summarized. “I have to say that nobody in this town saw this coming, and very few think it is warranted.”
By James Hall
January 2, 2012
Hold your breath, the race to the bottom is ready to escalate. The consequence of the corporate consumerism economy has reached the tipping point. The old rules that mainstream spending will dig the way back to prosperity are permanently dead. The one sure implication that is indisputable is that taxes are set to rise at unprecedented levels. With Obamacare revenue obligations coming into effect, the latest phase of centralized medical socialism spreads like a virus. Under such circumstances, how can the patient regain their health?
The Rino Republicans have proven again their slimy deceit, as demonstrated in Highlights of Senate bill averting ‘fiscal cliff’. The bipartisan house is poised to make another deal with the devil. Such legislation that refuses to enact meaningful and significant spending cuts exemplifies the depth of the efforts to dismantle the economic wellbeing of the average taxpayer.
The only beneficiary out of the tax bill from hell will be the corporate/state axis. By setting aside the automatic sequestration program reductions for a typical irresponsible useless promise the McConnell, Biden reach tentative deal on sequester, con insults the intelligence of any rational taxpayer.
“The negotiating parties reached an agreement to delay it by two months with some spending cuts to offset the delay.”
Without a serious reduction in the rate of growth, much less a real shrinking in federal expenditures, deficit spending will shoot up higher than an addicted junkie. Examine the mess.
“According to the Congressional Budget Office, the last-minute fiscal cliff deal reached by congressional leaders and President Barack Obama cuts only $15 billion in spending while increasing tax revenues by $620 billion—a 41:1 ratio of tax increases to spending cuts.”
This factor alone provides ample evidence that the economy will sustain another substantial hit. Treading water is no way to save yourself when you are swimming inside a whirlpool of spiraling intensity or diving into a pool drained of water.
2013 is likely to be another generous year for the financial vultures. Mergers and acquisitions may well come back ‘with a vengeance’, as international corporatists push hard for even greater consolidation. The suspect “Free Trade” cabal has enormous support and protection from the selected public officials that administer a plutocrat economy. Even under the distractions of higher taxes on the super affluent, their wealth will grow dramatically, as public subsistence becomes more dependent on government handouts.
Business is very good for the governing bureaucrat. This New Year provides immense promises for government expansion. The crowding out of the credit markets for private business will continue as an inevitable result of public sector borrowing hitting new highs.
Private firms will struggle as disposable funds become rarer. The consumer has shown remarkable restrains since the 2008 meltdown, but the internal built up demand for lifestyle replacement standards will not generate the economic activity that so many financial experts tout.
Prospects of an intensified reoccurrence of the persistent recession are far more likely. The sustainability of Federal Reserve monetization has limits. The crucial test of this desperate repurchase of debt created obligations will play out in the bond market.
Another down grade of the U.S. credit status over the next political battle of raising the borrowing limit is a major concern. The potential free fall of the Dollar and international abandonment of the reserve currency standing is probably the greatest risk to the economy.
Any credit-based economy is at the mercy of the central banksters. Disregarding the phony political rhetoric of the governance ideologues, the basic constructs of economic facts cannot be separated from the harsh reality of a credit crunch.
Inflation is embedded in the underreported consumer pricing statistics. Grocery prices will rise, while food stamps proliferate. This SNAP economy is a telltale gauge of the wellness of the basic consumer. How can anyone believe that the prospects for a healthy economy are in the cards for 2013?
The one unassailable conclusion that is born out with every turn of the financial page is that the rich become richer, while the middle class struggles even harder to make ends meet.
Many will fall into the trap that rich people are the cause of the problem. Such social envy misses a proper perspective on wealth creation. The real reason why the economy scrambles to democratize medium affluence is that the monopolists of politically protected conglomerates suppress initiative and originative employment entrepreneurial enterprises.
The entire political and tax system operates to diminish the chances of small business to compete against the virtual unrestricted capital access of major public companies. 2013 will be a watershed year that regretfully will see the systemic demise of privately held endeavors.
The replacement of free enterprise, with state/capitalism has produced a fascist economy.
When the establishment operates under the favoritism principle, the inevitable result is that crony capitalists dig the graves of independent business operators, with publicly funded shovels. How under this formula can the ordinary citizen expect to prosper when the supplanting of individual intuitive is intentionally marginalized?
The financial markets reflect uncertainty in the face of record corporate receipts. The balance sheets of companies have been rebuilt from the depth of the housing implosion, with much assistance from public indebtedness. The globalist banks practice distress acquisitions, deliberately designed to solidify interdependency at the price of personal autonomy.
With this acceleration of financial austerity for the average citizen, the gap between the corporate economy and the main street market grows exponentially. Whatever degree of cash flow that the country enjoys in this New Year, the price that will be paid to stretch out one last celebration of former fortune, will inescapably result in national poverty.
Just blaming the one percent ignores the institutional corruption that perpetrates the war against the middle class. Hoping for a thriving 2013 dismisses the abject State of the Nation. The only relevant question unanswered is whether the beleaguered taxpayer will revolt or just swallow another dose of Obama collectivism.
James Hall writes for BATR
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