Accountant Sheila Weinberg, founder of the Institute for Truth in Accounting, has done the accounting correctly and has come up with these numbers: Total US debt $61 trillion, which comes out to $534,000 per household.
These numbers provide a picture of why the debt is really such a big problem. No way, no how can it be paid off, given the simple fact that most households don't have $534,000 to turn over to the government.
Default is really the only long-term option. It will be done either in straightforward fashion, where the government pays pennies on the dollar for what it owes. Or it will be done in stealth fashion by the Fed printing up dollars to pay for the government obligations, which will create huge price inflation that will screw the average worker and also those on fixed incomes such as retirees.
Kiyosaki: The End is Near for Social Security and Medicare
Government lies continue to unravel from every direction, more and more are calling out the obvious. Best selling author Robert Kiyosaki thumbs:
We are nearing the end of the government Ponzi schemes, Medicare and Social Security. This generation may be the one left holding the bag.
There is nothing new in Kiyosaki's message for those who have been following the situation closely. What is of interest is that the message is being told by more and more.
We are nearing the end of the government Ponzi schemes, Medicare and Social Security. This generation may be the one left holding the bag.
There is nothing new in Kiyosaki's message for those who have been following the situation closely. What is of interest is that the message is being told by more and more.
Chicago's Magnificent Mile Is Now Mugger Mile
Janet Tavakoli emails her latest report from the epicenter of broke local governments and out of control roaming gangs. I am not in sync with all her recommend solutions, but the facts she presents are alarming:
This year, all hell has broken loose in downtown Chicago. Years of under-hiring have resulted in a police force that is unprepared for wildings and gang violence. Moreover, concealed carry in Chicago is illegal, unless one follows the Constitution.
Tourists and residents have been attacked by mobs of youths on buses, on beaches, on bicycle paths, near the shops of the Magnificent Mile, and outside their homes. Mobs of shoplifters plagued "Mug Mile" stores...
It is still technically spring in Chicago, and wildings have made Chicago and its beaches unsafe. Poorer neighborhoods have long been war zones. The murder rate and gang violence in Chicago has been unacceptable for years...
Mayor Rahm Emanuel, with less than a month in office, has called for the arrest of all the youths involved in last weekend's mob attack that included an attack on a shopper and on two middle-aged doctors -- in separate incidents -- visiting for an oncology convention. Yet there have been ongoing incidents of wildings that didn't make the front page of local papers as did this last attack on tourists...
Mainstream media has finally started to report crime in the more fashionable parts of town, but only because it has spun out of control into anarchy. The most reliable source of crime-wave information has been Second City Cop, a blog started by a member of the Chicago police force.
Based on my conversations with friends and neighbors, citizens of Chicago feel lied-to by Acting Police Superintendent Garry McCarthy. On Memorial Day, North Avenue beach, in one of Chicago's more affluent areas, was closed after gang violence. This is unprecedented. McCarthy repeatedly told the media it was due to people succumbing to the hot weather. Not true. Violence was out of control as beach-goers were harassed by mobs and cyclists were pulled off their bikes and beaten.
Mainstream media now contradicts McCarthy's feeble spin. One police officer told the media that 500 youths exited public transportation for the lakefront and while they were there, citizens were harassed.
CBS reported wilding incidents at this beach earlier in May, and police patrols had already been stepped-up. Two bike riders on the North Avenue Beach path had been mobbed by about 100 teens. They were knocked off their bikes and then thrown into Lake Michigan. Yet Near North District commander Kenneth Angarone said police responding at the scene did not find a "bona fide incident."
Mobs have swarmed local businesses, shoplifted and intimidated shoppers at high-end stores, attacked bus riders, attacked shoppers near Michigan Avenue, attacked tourists and more. Shortly after Mayor Rahm Emanuel said he would round up perpetrators of last week's mob attack, NBC reported that a mob of 15 to 20 youths beat and robbed two people in Chicago's downtown shopping area.
In response to the weekend violence, my network of friends emailed around news articles. Mary McCarthy, a friend of a friend, emailed local papers about a mob pulling people from cars and taxis right outside her upscale apartment building. When the police arrived 15 minutes later, the crowd had scattered. Here's an excerpt:At about 11pm last Friday night, June 3rd, I heard shouting, screaming, horns blaring and tires screeching from my apartment...When I looked out my window to the street below I saw a crowd of about 20 young people...directly across the street from the entrance to my building. They were leaning on parked cars and clogging the street. They were screaming at people walking and driving by. I watched them stop vehicles, including taxi cabs, and pull people from the vehicles...It was a frightening scene and I was sure someone was going to be hurt.The Sun-Times wrote of Mary McCarthy's report and Police Near North District commander Kenneth Angarone said that police responded but did not find a "bona fide incident.'' I believe Ms. McCarthy.
After being subjected to a national financial crime wave with no meaningful consequences for white collar criminals, the middle class, the core of many cities and communities, is being subjected to a physical crime wave...
Illinois and Chicago are ground zero for the consequences of our local and national fiscal folly. Pension funds are woefully underfunded. Last minute sweetheart deals to crony-connected retirees have contributed to the problem along with bad investment decisions...
The State of Illinois is behind on many of its bills. Chicago's city budget is in dire straits...Illinois state income taxes rose this year from 3 percent to 5 percent, a 66.7 percent increase. That is in addition to sales taxes, utility taxes, phone taxes, various automobile taxes.Bottom line: The country is being destroyed from within. As money grubbing politicians cut deals with cronies, including unions that lobby for minimum wage laws that make it near impossible for many, especially black youth, to find jobs, the youth are now unemployed and roaming. This is another reason Bernanke will keep pumping money. He will want to prop up these local governments, so that they can keep paying some semblance of a police force. But Bernanke's money printing will only create price inflation, make the gangs more desperate and bold, and on top of it screw anybody that will be down the line in getting newly printed Fed funny money. The collapse has begun.
Chicago is not alone. Cities throughout the country recently experienced wildings, and it will get worse for them as it did for Chicago. Illinois may have the most severe budget crisis in the country, but states like California, New York, New Jersey and more are troubled.
Lies, Damn Lies and Krugman
Ben Bernanke makes an interesting point: never mind core inflation, basically the acceleration in headline inflation is all about just one good, gasoline. Take out gas prices, and inflation was only 1.2 percent over the past year.But Bernanke also said this, which Krugman did not report:
As I noted earlier, the rise in commodity prices has directly increased the rate of inflation while also adversely affecting consumer confidence and consumer spending. Let's look at these price increases in closer detail.
The basic facts are familiar. Oil prices have risen significantly, with the spot price of West Texas Intermediate crude oil near $100 per barrel as of the end of last week, up nearly 40 percent from a year ago. Proportionally, prices of corn and wheat have risen even more, roughly doubling over the past year. And prices of industrial metals have increased notably as well, with aluminum and copper prices up about one-third over the past 12 months.And as for the data Bernanke pointed to on gasoline prices, this is the footnote Bernanke included in the prepared part of his speech :
Through April, personal consumption expenditures (PCE) inflation over the previous six months was 3.6 percent at an annual rate; excluding gasoline, inflation over that period was 2 percent. Over a 12-month span, inflation through April was 2.2 percent; excluding gasoline, it was 1.2 percentSo Krugman is at best distorting the truth here, Bernanke did not say, as Krugman writes (my emphasis):
...basically the acceleration in headline inflation is all about just one good, gasoline.The data Bernanke provides shows that more than 50% of inflation is not caused by gasoline. Further, Bernanke said as much during his speech:
As you all know, over the past year, prices for many commodities have risen sharply, resulting in significantly higher consumer prices for gasoline and other energy products and, to a somewhat lesser extent, for food.Got that? Gasoline prices are leading the pack higher, but they are not alone. Gasoline prices are up 33.3% over the last year. No wonder they are a strong influence on the CPI. If all prices were climbing at that rate, we would be in Zimbabwe land. When Bernanke says that gasoline is having a huge impact on the CPI, it does not mean other prices are not going up. Over the last year consumer meat, poultry and fish prices are up 7.6%. Dairy is up 6.3%. These are obviously staples. This is why prices "feel" higher than the lowball CPI numbers, because the things we truly buy on a daily basis are going up! And to sluff this off as "only gasoline" is absurd.
But Krugman is only warming up. He then writes after his "it's only gasoline" proclamation:
This raises the question, how often do we see gas price rises on the scale we’ve experienced lately? So here’s a chart; I start in 1985 so that the energy crises of the 70s and early 80s don’t make more recent swings invisible:He then smugly writes after posting this chart:
The answer is, they happen all the time.But somehow this one — unlike the five comparable price spikes that have taken place recently — is all the Fed’s fault, and is an omen of runaway inflation.But what is this chart? It's a chart of the volatility of the gasoline price. Krugman is implying that the volatility in the gasoline price means there is no significant climb in the price of gasoline. It's just all about volatility. Well, here's the price of gasoline over the same period that Krugman uses for his the volatility chart. It shows clearly the uptrend in the gasoline price (aside from expected dips during recessions):
Bottom line, Krugman completely distorts the price inflation picture. When he, Bernanke and others say, "Well it's mostly about gasoline," one better hope so, since gasoline is up 33%. Compared to that, spike meat and fish hikes of 7.6% and dairy price climbs of 6.3% are relatively smaller. But there is nothing small about absolute year-over-year price increases of 7.6% and 6.3%.
Yes, Krugman is quite the magician, but when the tape is rewound and slowed down a bit, Krugman's sleight of hand becomes obvious. The man is a shill for the Fed. He plays down the price inflation that is here and the accelerating trend in price inflation that is developing.
VIDEO: Steve Jobs Explains Spaceship Apple
On Tuesday in Cupertino, California, Steve Jobs unveiled plans for Apple's new headquarters: a four-story circle of glass big enough to house 13,000 employees. Jobs' presentation provides a glimpse into the visionary that Jobs is. The building has many unique features.
What's most interesting is that it appears that Jobs has a very strong libertarian streak. At one point Jobs shows an overview of the property and notes that at one corner adjacent to the property are some buildings that Apple wanted to buy but Jobs noted were not for sale. I can think of several firms that would have attempted to go to the City Council and take the property via eminent domain "for the good of the people". There is no indication that Jobs attempted this.
Further, it is instructive that City Council members try to shake Jobs down for free Wi-Fi and an Apple Store in Cupertino. He will have none of it. There's something very Randian, about the icy way he shuts off conversation on these topics.
Warning Signs that Plans May Be in the Works for the Government to Prevent You From Buying an Expensive Health Plan with Your Own Money
Chills went down my spine a few days ago when I read the following proposal from the Center for American Progress, a think tank with strong ties to the Democratic party:As I have said before, if you are a physician you need to start thinking about leaving the country. Price controls on your wages are coming and you will be working for peanuts treating patients in a cattle line.Thus we also include a failsafe mechanism that would ensure significant savings. Our failsafe would be triggered if, starting in 2020, total economywide health care expenditures grow at a rate faster than the economy. Should that happen, we would empower the IPAB [the panel of experts set up by President Obama's health care law] to extend successful reforms in Medicare and other public programs to insurance plans offered in the health care exchanges and then potentially to all health care plans, such that the target is met. This will ensure that costs are constrained across the health care sector, preventing cost-shifting and maintaining access for all.*That is, under the likely scenario that healthcare spending keeps rising faster than GDP, the Center for American Progress would give government the power to prohibit people from buying expensive health plans with their own money. That is not my idea of progress. -----
*Source: Page 43-44 of this document. I put the crucial phrase in bold.
For the rest of America, it will be declining healthcare and declining life expectancy.
BTW: Mankiw correctly titles his post,The Next Step on the Road to Serfdom
Tuesday, June 7, 2011
Why We Need More Congressional Sex Scandals
Reporters who would never dare challenge powerful political figures who torture, illegally eavesdrop, wage illegal wars or feed at the trough of sleazy legalized bribery suddenly walk upright -- like proud peacocks with their feathers extended -- pretending to be hard-core adversarial journalists as they collectively kick a sexually humiliated figure stripped of all importance.He then unfortunately goes on to say, in an attempt to smother the practice of exposing political sexual scandal:
...the private sexual activities of public figures -- down to the most intimate details -- are now inherently newsworthy, without the need for any pretense of other relevanceI vehemently disagree with his objections. Political leaders are not private individuals, they are power hungry bastards trying to control my life in a multitude of ways, mostly to expand their own power.
I certainly would object to the treatment given Weiner, if it was done to a private individual who was not attempting to interfere in my life, but this treatment for a political leader is a completely different situation.
If a man is putting a gun at me and I can throw him off for just a minute by creating a sex scandal to distract him, I am going to do it. In Chicago once, in the wee small hours of the morning, a punk tried to mug me, I fought back and I think that dude is still running.
Weiner and his gang, the Congress of the United States, are harassing me with rules and regulations everyday, trying to control my life. They have guns, more guns and, if needed nuclear weapons. I can't make then run like I can a punk mugger.
No one who might have seen me take down the mugger would have ever thought, "Oh my, how terrible. Why can't Wenzel debate this guy over the merits of mugging. Fighting is so crude, you should never do it. At Harvard, they simply debate the ethics of theft."
When I see a member of Congress, I think of muggers on steroids (Except, Ron Paul,who does fight for less governmnet coercion in my life). Does anyone seriously think that Weiner is going to sit and debate the merits of freedom, when he has worked to increase coercion for his personal gain? The man is a punk, as are almost all members of Congress. If I can help take him out of the game, by a sex scandal, well I'm going to do it. I want him back on the ropes. I want his wife throwing shoes and lamps at him. I want him to be laughed at and scorned. I want him exhausted. I want him thinking every minute of what else the public doesn't know and how it might come out, so that he has no time to focus on advancing more coercive regulations on all of us.
Donald Trump gets this one right:
Greenwald is correct in his implication that in the long run ideas are how the battle will be won. But, in the meantime, there are a bunch of power hungry mad men that should be slowed and humiliated in every way possible, so that we all can get a little breathing room.
Greenwald is also correct that mainstream media doesn't challenge powerful political leaders over torture, illegal eavesdrops, and illegal wars, but that doesn't mean we should call for the mainstream media to stop in the one area they can be useful, political scandal. Their focus on scandal should be tactically encouraged by freedom lovers.
Specifically, at present,continued harrasment of Weiner should be encouraged. If he resigns, we should all start looking for dirt on his replacement and, always, on other members of Congress. And we need to heap more regulations on them. We need these guys walking on egg shells. There is an advantage gained to the person going up against someone walking on egg shells. I have seen it in a couple of instances, when someone is heavily regulated and walking on egg shells, they are afraid to make what otherwise would be normal moves, because they don't know how all the rules they are required to follow will apply in a given situation and what the ramifications are if they make a move. The more self conscious congressmen are about making any type move the better off the rest of us are.
The more Congressmen that we can get into a Weiner type scandal the better. Let's keeping these characters moving in and out of Congress, so they don't have time to form a lot of long-term alliances and get their plotting games down cold.
Further, and probably most important, a lot of decent people still look up to these power hungry bastards. The more we can expose their conniving, evil ways, the better off we are. Hayek taught us that the worst get to the top, the more often we can demonstrate this fact to the masses the better. Suspicion of political leaders is the first step on the road to freedom. Let's encourage it.
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