Most Americans know the economy is in bad shape even if a majority voted to reelect the man most responsible for making a bad economy worse. And, no, it was not George W. Bush who is responsible for the 2008 financial crash. It was the government with its housing programs that encouraged giving mortgage loans to those who could not afford them and then bundling those “toxic assets”, and selling them to banks who then found themselves in trouble for investing in them.
Another partner in the nation’s financial woes has been the Federal Reserve, a banking cartel given the right to literally print money. The Fed recently released the fact that its holdings in U.S. government debt has increased by 257 percent since President Obama took office! Those holdings are at an all-time record of $1,696,691,000,000 at the close of business on Wednesday, January 23. The other major holder of our debt is China at $1,170,100,000.000.
It’s worth taking a few minutes to see how the policies of President Obama, whether a deliberate effort to ruin the economy or just the result a lack of understanding of how the U.S. economy works, has put the U.S. on the precipice of failure comparable to what is occurring in Europe. It is a global, as well as national problem as the central banks of the EU desperately transfer billions among themselves to stave off a catastrophe that will destroy the wealth of their citizens.
The federal government ran a deficit (the difference between what it owes and what revenues it takes in) of $292 billion for the first two months of fiscal year 2013—October and November 2012—amounting to $4.8 billion of borrowed money every day. The Congressional Budget Office reported that federal revenues rose by $30 billion—a ten percent increase over last year—but spending increased even more, going up by $87 billion (16%).
Spending on Medicare, Medicaid, and Social Security was about 7% higher--$8 billion than last year. For years, Congress has resisted reforming these “entitlement” programs and Obamacare has only exacerbated the problem. In order to fund its establishment, the Obama administration took $716 billion from the Medicare funds. The Social Security funds have been “borrowed” by Congress for years while the numbers of eligible senior citizens has steadily increased as “baby boomers” come of age.
The call for higher taxes on “millionaires and billionaires” has fallen hardest on the middle class, in reality increasing taxes on them. The reality is that the middle class taxpayer pays 25% of their income in federal income tax these days, but when you add in 13.3% in the federal Social Security and Medicare payroll taxes, it adds up to 38.3%. According to the Tax Foundation, the average state’s income tax rate on the middle class is 4.82% (not all states have an income tax in addition to the federal government.) That brings the total to $43.12% of middle class income drained off to pay taxes.
Add in all the other taxes we pay on gasoline, telephones, and other necessities, and the middle class is being tapped for half their earnings.
The Republican Party, in power in the House of Representatives, has offered legislation to bring some relief to middle class and other taxpayers. It has sent annual budgets to the Senate where they have died for the past three years.
All this has been happening during the first term of the Obama administration. In a January 25th commentary posted on AmericanThinker.com, Steve McCann noted that “As of the end of 2012, the United States has experienced the worst five-year period—which includes, as the end of the final four years, Obama’s first full term—since 1928-1932 and the start of the Great Depression.”
McCann cited that fact that, since January 2008, the employment age population has increased by 11.7 million, yet there are 3.0 million fewer Americans employed. “Factoring in the population growth and 2008 labor participation rate, the unemployment rate for December 2012 would be 11.4% as compared to 4.9% in December of 2007.”
“At the end of 2007, the median household income was $54,489 (inflation adjusted); at the beginning of 2012, it had dropped to $50,020—a decline of nearly 9%.” During this same time, while incomes were eroding, the cost of living increased 20% from December 2007 to September 2012.
There are other stark statistics that the mainstream media tends to under-report. In December 2007, there were 26.5 million Americans on food stamps at a cost of $30 billion. By December 2012, 47.4 million were using this program and the federal government was running advertising to get more to apply for it. During Obama’s first term, food stamp recipients increased at a rate of 11,133 per day!
No matter how one measures the U.S. economy, the news is bad and holds little promise of improving. Economic growth is anemic as Obama increased debt $50,521 per household in his first term, more than the first 42 presidents in 53 terms combined.
An excellent monthly publication, Budget and Tax News, published by The Heartland Institute, is a very good way to gain the information and insight you need to understand these issues.
No need to wonder why Obama wants to increase the debt ceiling and no need to wonder why his policies continue to cripple the economy, whether it’s the failure to approve the Keystone XL pipeline or to rein in an avalanche of economy-killing regulations from the Environmental Protection Agency. Obamacare contained 18 hidden taxes when it was passed by a Democrat-controlled Congress that didn’t even read its more than 2,000 pages.
At some point this combination of increased taxes, low employment, and stagnant economic growth has to implode. That outcome can be avoided, but the nation is running out of time.
© Alan Caruba, 2013
There is no doubt that the economy is in the toilet. Obama loves his illegals. And Hillary does intend to run in 2016. We have to stop this she devil.
One thing we can do is take whatever actions we can to bring down the economy even more. If people own companies they could fire 10% of their workers to drive up unemployment or move operations to China. According to the latest ABC News poll 57% of voters support Hillary for President so this is nothing to fool around about. The stock market is near an all-time high, so if you own stock you should sell it now. This will drive the price down. All we need is for Wall Street to think Obama is good for it. Additionally companies and investors are sitting on huge amounts of cash until all the debt limit, default on the debt stuff is decided. Once that is settled they will invest in new hires and expanding operations. If we can keep this “confidence crisis” going in the mind of investors until 2016 it will hurt Hillary’s chances.
Carter ... you are 100% spot on! Once interest rates go up, and they will, all hell is going to break lose on our economy. Inflation has already set in. Food prices have skyrocketed, and, if you pay close attention to the size/quantity of most products they have greatly reduced them. It's the retailers way of passing their higher prices on to the consumer without much notice. A half gallon of Ice Cream is no more and the price is the same if not higher. As to Hillary ... yep, count on the Rino voter assisting with ushering her in very easily. They love her.
Thank you of mentioning inflation, Sue. But, as bad as it already is, its going to get much worse in the not too distant future because of the billions upon billions of dollars the Fed has been printing. I already bought my wheelbarrow to cart the cash I'll need to buy a loaf of bread.
And it will also hurt other Americans who need jobs to support their families. If you believe that hurting Hillary's chances is worth sacrificing the well being of other fellow Republicans, then you are going to lose my support permanently. People that think along the same lines that you do are one of the main reasons that Obama is in the whitehouse and you are outside looking in.
Politics is never simple and to protect Freedom we all have to make sacrifices. Rest assured that if the economy improves in the next 4 years Obama and Hilary will claim credit. We need to do everything we can to keep the economy from improving while there is still time.
I believe Hillary and Obama and his bunch wants the economy to go down more. I think that maybe Obama want his illegals here. They work for nothing. China is buying up the United States land, natural resources (coal, oil, natural gas and minerals) as our Nation is one of the last richest left on earth. China can make and sell products cheaply because their people work for nothing. They need more land to produce food and America has some of the best. China is also pushing for Gun Control of the US, because they (China's leaders) are afraid that Americans will figure out what is going on and turn their guns on their people here in the US who are buy up large acreage for their sustainable communities. China is buying companies that make major technology thru the US Treasury. This is how China is recovering the money that the US has borrowed from them. There is plenty of reading on the internet and not of regular media. They just need to get rid of guns, control the people especially unproductive elderly, bring in cheep illegal immigrants who are easily controlled and work for nothing, get rid of Constitution and Bill of Rights, cause riots, call Martial Law, Obama claim himself the leader of a Country who left God behind and forgotten.
I think our Country is over unless we fight for her. I think we are whining and not figuring out what to do. Why is Congress going around the people and getting by with it? I read today drones are flying in our skies watching us, how will we plant gardens we know we are now importing food as we can plant enough due to EPA and FDA and all the regulations and laws daily (GMO'S kill) our Military is being asked if they will fire on Americans and if they say NO they are out of the Military. Our Government has bought lots of bullets and now buying guns and bought lots of survival food, built Fema Camps while we watch. I am scared but I think our way of life is over. I hope we have some heroes. God Bless the People and this Great Country because I believe the Devil is HERE......
The first thing that is needed, is to do something with congress. we have an overwelming amount of self proclaimed communist and scocialist that have nothing more in mind than to destroy this country and tie the hands of the American people so we cannot stop their advancement. Gun control and confiscation should be the #1 on the agenda of the people and the imprisonment for those who support the overthrow of our government. That would take care of most who would strive to take us down. We are at war be it a silent one but war all the same. American blood has been spilled by our own government and payment for that crime must be persued with out fail.
Running out of time, Alan, is an understatement, and at this point, I am not so sure "That outcome" can be avoided.
The great conjunction of unsustainable economic numbers should be occuring just about 2016. There will not be sufficient funds for obama to begin collecting his retirement. So,.... Perhaps the economies of Kenya or Indonesia will be sufficient for the obama family to exist on. He may be able to convinence one of those countries that he is in fact their king; after all, how would they know; his records will all be sealed...............