Monday, December 31, 2012

The Keynesian Legacy Unravels.........AN ABSOLUTE MUST READ!

The Keynesian Legacy Unravels

"Those who cannot remember the past, are condemned to repeat it." 

                                                                                                  George Santayana

Ideology is powerful, capable of masking unpleasant facts. 

Whether we recognize it or not, we are all slaves to ideology.

Economists are no different in that regard than other people. They hold preconceived ideas which affect the interpretation of data and facts. 

In the extreme, ideology is capable of blocking the recognition of contradictory information, effectively blinding a person to valuable evidence.

Keynesian economists believe, regardless of logic and data, that economies can be managed from the top down. In their world, economies are little different than machines. Change some inputs here, speed them up over there, add some lubrication, etc. and the machine will respond in the fashion desired. Output can be "managed" to whatever level needed purely by adjusting the parts of the machine.

Austrian economists on the other hand do not see a machine. They see millions of individuals all making decisions to improve their own lives. The price system provides the coordination among these separate pieces, performing a function no human, supercomputer or government could ever accomplish. For Austrians, economics is a bottom up approach. To effect change, you must change the incentives and disincentives that individual decision makers are afforded.

The following graphic, which I have highlighted before, provides a wonderful comparison between the two approaches:



No matter how good someone in Washington believes his grand plan is, it comes down to how individuals perceive it. While this graphic refers to ObamaCare, it could just as easily refer to any other grandiose (or not so grandiose) scheme dreamed up by central planners. Quite simply, if government were to offer constructive ideas and options, there would be no need for coercion and violence on its part to force people into behavior they are uninterested in.

Likewise, if government would leave the economy alone rather than continue to intervene to prevent necessary corrections, the economy would recover rather quickly and return to its normal growth path. But that is not what activist government does and it is the reason why this Great Recession drags on and on. In 2004, before the Great Recession hit, two economists discussed the Great Depression and why it lasted so long. Not surprisingly, they concluded that government had made matters worse:

Two UCLA economists say they have figured out why the Great Depression dragged on for almost 15 years, and they blame a suspect previously thought to be beyond reproach: President Franklin D. Roosevelt.

After scrutinizing Roosevelt's record for four years, Harold L. Cole and Lee E. Ohanian conclude in a new study that New Deal policies signed into law 71 years ago thwarted economic recovery for seven long years.

"Why the Great Depression lasted so long has always been a great mystery, and because we never really knew the reason, we have always worried whether we would have another 10- to 15-year economic slump," said Ohanian, vice chair of UCLA's Department of Economics. "We found that a relapse isn't likely unless lawmakers gum up a recovery with ill-conceived stimulus policies."

These findings would not surprise anyone of the Austrian persuasion. Nor would they register with anyone of the Keynesian persuasion which includes most Washington policy makers. As a result these (and many other findings with similar conclusions) were ignored by policymakers and we are repeating the mistakes of the Great Depression.

The reasons we are still in this deep recession are the same ones that accounted for the Great Depression lasting as long. If we continue on the same intervention/stimulus path, economic conditions will only deteriorate from here. 

Japan has been in their economic malaise for more than two decades. The US cannot last that long before falling into what history will call The Greater Depression.

The governments series of short-run "solutions" is killing the long run. 

When we finally succumb to Depression it will be with a much more dysfunctional and hollowed out economy than the one you experienced in the 1930s. There will be no player large enough to forestall or eliminate the economic pain and stimulate a recovery!

This is not economic recovery.................. This is long term economic stagnation.

The current economic recovery is a fraud

For those who would see recovery in current economic data, there are these facts to ponder.

The first is that most of the decline in the unemployment rate has been a result not of more people working, but of more people leaving the labor force.

In November, unemployment went down to 7.7 from 7.9 percent in October, the lowest unemployment rate since late 2008. But at the same time unemployment declined, so did labor force participation--which fell to 63.6 in November from 63.8 percent in October. Half a million Americans have left the labor market in recent months.

The decline in the unemployment rate has been a result not of more people working, but of more people leaving the labor force.

Long term economic growth--and even growth in the short run--depends on an expanding labor force. Since January 2009, the labor force participation rate has declined by almost two percentage points.

That's huge.

That's three and a half million Americans who have given up looking for work. If the labor force participation rate were now at its January 2009 level, unemployment would be 10.7 percent. That's higher than unemployment was in 2009, when the recession was at its most severe.

Moreover, more than 70 percent of new civilian jobs created in the United States in recent months are in government. Since June, according to the Bureau of Labor Statistics, the economy has added about 847,000 jobs. About 621,000 of these are in local, state and federal government.

Economic growth in the long run cannot be sustained by a declining labor force participation rate and more government jobs. 

The current recovery is a fraud, a deceit. There remain about four million fewer private sector jobs in the economy than there were in 2008.

More Americans are worse off each month than the month before. The African American unemployment rate is 14.3 percent, up from 13.4 percent just a few months ago. The length of time that people remain unemployed is twice what is was in 2008. The number of Americans on food stamps continues its inexorable rise.

Concerning food stamps, the most recent monthly data show that 47.7 million Americans use them, close to one in six Americans. About 30 percent of children under eighteen in the United States are on food stamps. Use of food stamps has continued to grow in recent months, up 600,000 between August and September 2012. Since 2009, spending on food stamps has approximately doubled.

Real average hourly earnings are declining. These increased 1.7 percent nominally in the past year, but inflation was 2.2 percent. This means that, during this "recovery," real hourly earnings have declined about half a percent.  

Typically, coming out of a recession--particularly a sharp recession--recovery and employment are booming and buoyantly expansionary. This is certainly not the case today. Though many economists believe the rate of economic growth has sped up in recent months, this is very misleading. Rather, more adults than ever are not working and the length of time they are not working has become longer. Meanwhile, government has added jobs while the use of social services is increasing and real earnings are declining.

This is not economic recovery. This is long term economic stagnation.  

YOU HAVE TO BE A FOOL TO THINK ANYTHING IS GETTING BETTER! 

YOU SHOULD BE AWARE OF THE RING OF FIRE IN 2013........

15 Signs That The Ring Of Fire Is Waking Up As We Head Into 2013

Ring Of Fire

While most of the world has been focused on other things, the Ring of Fire has been quietly waking up.  Over the past couple of months, there has been a steady string of noteworthy volcanic eruptions and earthquakes that have occurred along the perimeter of the Pacific Ocean.  But because none of them have happened near a highly populated area, we really haven't heard much about them in the news.

But if activity along the Ring of Fire continues to increase, it is inevitable that a major event will happen near a major city at some point. When that happens, the entire world will be focused on the Ring of Fire once again.  Most people don't realize that approximately 90 percent of all earthquakes and approximately 75 percent of all volcanic eruptions occur along the Ring of Fire. 

The entire west coast of the United States sits along the Ring of Fire and a massive network of faults runs underneath California, Oregon and Washington. Fortunately, the west coast has not experienced any devastating seismic events in recent years, but scientists assure us that will change at some point.  So it is important to sit up and take notice when there are reports of increasing activity along the Ring of Fire.

Unfortunately, most Americans cannot even tell you what the Ring of Fire is. The following is how Wikipedia defines the "Ring of Fire"…

The Pacific Ring of Fire (or sometimes just the Ring of Fire) is an area where large numbers of earthquakes and volcanic eruptions occur in the basin of the Pacific Ocean. In a 40,000 km (25,000 mi) horseshoe shape, it is associated with a nearly continuous series of oceanic trenches, volcanic arcs, and volcanic belts and/or plate movements.

It runs roughly along the rim of the Pacific Ocean.  Coastal residents of four different continents realize that a major event along the Ring of Fire could fundamentally change their lives in a single moment.

Nearly all of the worst earthquakes in modern history have occurred along the Ring of Fire. When the Ring of Fire is very active, it is a very big deal.  That is why so many people are alarmed that the Ring of Fire seems to be entering a period of increased activity.

The following are 15 signs that the Ring of Fire is waking up as we head into 2013…

#1 Mount Lokon, which is located in Indonesia, has erupted more than 800 times since July.  On Monday, volcanic ash from the volcano reached heights of up to 10,000 feet.

#2 An "orange alert" had been issued for towns and villages near the Tungurahua volcano in Ecuador.  On Tuesday it erupted and shot lava up to a half mile above its crater.

#3 Lava is still flowing out of the Tolbachik volcano which is located on the Kamchatka Peninsula.  Anyone that has ever played the board game "Risk" knows where Kamchatka is located.

#4 Lava also continues to flow and ash also continues to rise from the Fuego volcano in Guatemala.

#5 On Tuesday, an ash plume more than 2.5 kilometers high had risen from the Paluweh volcano in Indonesia.

#6 There was an average of about 4 seismic events per hour at the Popocat├ępetl volcano in Mexico on Tuesday.

#7 Scientists recently discovered "one of the world's weirdest volcanoes" on the floor of the ocean just off the coast of Baja, Mexico.

#8 Mt. Fuji (located not too far from Tokyo, Japan) has been dormant for about 300 years, but in recent months there have been increasing signs of activity there.  One study recently found that a "magma chamber under the mountain has come under immense pressure", and one prominent scientist is warning that Mt. Fuji is due for "a big-scale explosive eruption".  Authorities were alarmed when a tunnel leading to Mt. Fuji collapsed on December 2nd, killing 9 people.

#9 Scientists are now warning that there is a very dangerous build up of magma at a large number of Japan's 110 active volcanoes.

#10 A magnitude-6.1 earthquake struck off the coast of Sulawesi, Indonesia on Monday.

#11 A magnitude-6.0 earthquake hit the New Britain region of Papua New Guinea on Saturday.

#12 A magnitude-6.5 earthquake struck the Gulf of Alaska in mid-November.

#13 A magnitude-7.3 earthquake hit Japan earlier this month.

#14 There has been a substantial increase in earthquake activity in the Long Valley caldera region of California, and authorities tell us that "magma is indeed moving down there".

#15 Over one recent five week period, more than 170 significant earthquakes were detected in one town in Chile.  That town is now being called "one of the shakiest places on earth".

All of those events occurred along the Ring of Fire.

So why is all of this happening?

Well, there are certainly a lot of theories out there.

In the United States, a large percentage of the population is convinced that an increase in natural disasters is evidence that we are in the "last days" described in the Bible.  In fact, one recent survey found that a whopping 36 percent of all Americans believe that the increase in natural disasters that we have seen in recent years is an indication that we are in the end times…

More than a third of Americans believe the severity of recent natural disasters is evidence that we are in the "end times" described in the New Testament — a period of turmoil preceding Jesus' Second Coming and the end of the world.

"There is a significant proportion of Americans who see these phenomena through a theological lens," said Daniel Cox, research director at the Public Religion Research Institute, which released a poll on religion and climate change on Thursday (Dec. 13) in partnership with Religion News Service.

"It's hardly a fringe belief. It's nearly four in 10 Americans who are embracing this," Cox said.

Other Americans believe that there are other causes for all of these natural disasters, and a large number of Americans are absolutely convinced that nothing unusual is happening at all. THOSE ARE THE ONES DRINKING BEER, SMOKING DOPE, READING TABLOIDS AND WATCHING REALITY TV!

The Ring Of Fire

Sunday, December 30, 2012

Eternity . . .

Eternity

"That whosoever believeth in Him should not perish, but have eternal life." 

                                                                                                                   John 3:16

Your soul, made in the image of God, will exist forever. 

I think Billy Sunday, the evangelist, said it this way: "Imagine a little bird taking a grain of sand and flying to a distant planet. It would take him a million years to fly to that distant planet. Then he would drop that grain of sand. Then the little bird would fly back to the earth taking another million years. He gets another grain of sand and flies back to the distant planet.

"Back and forth, back and forth it goes. When he will have transplanted every speck of earth to that distant planet, it will only be breakfast time in eternity."

Your soul will go on, and on, and on.

Where do you plan on spending eternity? 

Where do your loved ones plan on spending it? 

If you don't know, ask God to forgive you today and find salvation and get on the right side of eternity.

Investing in Others for God's Glory..........

Investing in Others for God's Glory

"I will mention the lovingkindnesses of the Lord, and the praises of the Lord." 

                                                                                                                   Isaiah 63:7

One time a man came into a village and asked an old man living there, "Any great men born here?" The old man said, "No, just babies."

Great men are not born; great men are made, investing in the lives of others, sharing God's love, and showing His mercies.

There is not a magic formula that instantly makes us sanctified. 

Sanctification is a process. Our calling is to be poured out into the lives of others for His glory. IF YOU ARE CONFORMED TO THE WAYS OF THE WORLD THIS WILL NEVER HAPPEN!

How can you show His mercies to a lost and troubled world today? 

Be an Encourager ..........

FALSE HOPE IS THE GREATEST DISCOURAGEMENT OF ALL! THE DELUSION OF FALSE OPTIMISM AND HOPE IN THE LIES OF THIS WORLD ARE A TRAP. THE PROMISES AND PURPOSES OF GOD ARE OUR ONLY HOPE!
 
Be an Encourager

"Blessed be God, even the Father of our Lord Jesus Christ, the Father of mercies, and the God of all comfort;  Who comforts us in all our tribulation, that we may be able to comfort them which are in any trouble, by the comfort wherewith we ourselves are comforted of God." 

                                                                                                      2 Corinthians 1:3-4

Someone has well said that discouragement is a darkroom where the negatives of fear and failure are developed.

Some people are encouragers and others are discouragers. Have you ever met a discourager? They're like a drink of water to a drowning man. They can brighten up a room by leaving it. They leave you drained and depressed.

But an encourager leaves you full and refreshed. God has cornered the market on encouragement. All encouragement comes from God. You're never more like God than when you're encouraging people and never more like the devil than when you are discouraging people.

Find a needy person and enrich him; a lonely person and include him; a misunderstood person and affirm him; an undiscovered person and develop him; a failing person and restore him.



Anticipation of an Even Greater Day..........

Anticipation of an Even Greater Day

"And if I go and prepare a place for you, I will come again, and receive you unto Myself; that where I am, there ye may be also." 

                                     John 14:3

It's the day after Christmas. The glow on the tree is just a little dimmer because the anticipation of the day is now past. Ever feel that way about your walk with the Lord? Well, let me give you some good news, my friend. The best is yet to be!

That's right. Christmas Day is past, but Resurrection Day is coming soon, and I don't mean Easter. I mean first the Rapture, then the Tribulation and finally the Second Coming of Our Lord. These are all imminently on the horizon.

He is coming again, first for HIS church and then to set things straight for all eternity. Jesus is coming again!

THIS IS A PROMISE THAT JESUS MADE TO THE WORLD; I will come again!

John 14:3

King James Version (KJV)

3 And if I go and prepare a place for you, I will come again, and receive you unto myself; that where I am, there ye may be also. JESUS IS IN HEAVEN SITTING AT THE RIGHT HAND OF ALMIGHTY GOD AND HE IS COMING FOR HIS CHURCH IN AN EVENT CALLED THE RAPTURE, SO THAT BELIEVERS CAN BE TAKEN WHERE HE IS. THE RAPTURE IS REAL AND IT IS A PRETRIB EVENT, ONLY A FOOL COULD MISS THE TRUTH OF THIS! 

AFTER THE RAPTURE, SEVEN YEARS OF HELL BREAKS OUT ON EARTH, THE TRIBULATION, AS MANKIND'S SOLUTIONS CONTINUE TO FAIL, ONLY NOW THERE IS NO HOLY SPIRIT OR CHURCH ON EARTH TO EXPRESS ANY KIND OF TRUTH. THIS COMING HELL IS CLEARLY BEING FORESHADOWED IN THE POLITICS, ECONOMICS AND THE SILENCE OF CHURCHES TODAY. AFTER THIS SEVEN YEAR PERIOD, JESUS RETURNS TO EARTH AND WILL SET THINGS STRAIGHT FOR ETERNITY.

DON'T LET THE CORRUPT THEOLOGY OF RELIGION AND MEN, KEEP YOU FROM THE TRUTH OF GOD!

JESUS IS COMING, FIRST FOR HIS BRIDE THE CHURCH AND THEN TO SET THINGS STRAIGHT FOR ETERNITY!    

We are living on the defensive instead of the offensive.............

"And He said unto them, Go ye into all the world, and preach the gospel to every creature."

                                                                                                                                         Mark 16:15

If I had to identify the major misconception about believers today, it would be that they spend too much time getting out of trouble with God, instead of getting into righteousness!

We are living on the defensive instead of the offensive. We need to move beyond the defensive line of Christianity, and move on to the offense--advancing the Kingdom, fulfilling the Great Commission, and telling others about Jesus. 

Our Shepherd will never lead us where His strength cannot keep us. He will never lead us down a path that He hasn't first walked down Himself.

Paradoxes of Scripture............

Paradoxes of Scripture

"There is that scattereth, and yet increaseth; and there is that withholdeth more than is meet, but it tendeth to poverty." (Proverbs 11:24)
 
"To get, we must give." This is not the world's method for attaining prosperity, but it is the paradoxical message of today's verse, as well as that of Christianity in general.
 
Note some of the many other paradoxes in the Bible related to this basic truth.

1. To really live, we must die. "I am crucified with Christ: nevertheless I live; yet not I, but Christ liveth in me" (Galatians 2:20).

2. To save one's life, he or she must lose it. "Whosoever shall seek to save his life shall lose it; and whosoever shall lose his life shall preserve it" (Luke 17:33).

3. To be wise, we must become fools. "If any man among you seemeth to be wise in this world, let him become a fool, that he may be wise" (1 Corinthians 3:18).

4. To reign, we must serve. "Well done, thou good and faithful servant: thou hast been faithful over a few things, I will make thee ruler over many things" (Matthew 25:21).

5. To be exalted, we must become humble. "And whosoever shall exalt himself shall be abased; and he that shall humble himself shall be exalted" (Matthew 23:12).

6. To be first, we must be last. "So the last shall be first, and the first last" (Matthew 20:16).

Finally, note the ninefold paradox of a truly Christian ministry: "In all things approving ourselves as the ministers of God. . . . By honour and dishonour, by evil report and good report: as deceivers, and yet true; As unknown, and yet well known; as dying, and, behold, we live; as chastened, and not killed; As sorrowful, yet alway rejoicing; as poor, yet making many rich; as having nothing, and yet possessing all things" (2 Corinthians 6:4, 8-10).

Saturday, December 29, 2012

Total Home Security ..............


How is this for total HOME Security and "peace of mind?"
 
 
 
 
 
 
 
 
 
 
 
 
 
OKit's lock-up time
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Yes, it's all bulletproof and bombproof too!  Someone is either very paranoid Or knows something we don't!
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

ALWAYS WORTH REPEATING...... The 100/0 Principle

The 100/0 Principle


The holidays have finally arrived. And with them, come family gatherings—a chance for all of us to share the joys of the season with those closest to us. But, sometimes, as we all know, family gatherings can magnify issues which may go unresolved the rest of the year.

"Eighty percent of life's satisfaction comes from meaningful relationships." 

Think about it...when you look back at the end of your life what will really matter?

Five words...the quality of your relationships.

The 100/0 Principle

What is the most effective way to create and sustain great relationships with others? It's The 100/0 Principle: You take full responsibility (the 100) for the relationship, expecting nothing (the 0) in return.

Implementing The 100/0 Principle is not natural for most of us. It takes real commitment to the relationship and a good dose of self-discipline to think, act and give 100 percent.

The 100/0 Principle applies to those people in your life where the relationships are too important to react automatically or judgmentally. Each of us must determine the relationships to which this principle should apply. For most of us, it applies to work associates, customers, suppliers, family and friends.

STEP 1  

Determine what you can do to make the relationship work...then do it. Demonstrate respect and kindness to the other person, whether he/she deserves it or not.

STEP 2 

Do not expect anything in return. Zero, zip, nada.

STEP 3 

Do not allow anything the other person says or does (no matter how annoying!) to affect you. In other words, don't take the bait.

STEP 4 

Be persistent with your graciousness and kindness. Often we give up too soon, especially when others don't respond in kind. Remember to expect nothing in return.

At times (usually few), the relationship can remain challenging, even toxic, despite your 100 percent commitment and self-discipline. When this occurs, you need to avoid being the "Knower" and shift to being the "Learner." Avoid Knower statements/thoughts like "that won't work," "I'm right, you are wrong," "I know it and you don't," "I'll teach you," "that's just the way it is," "I need to tell you what I know," etc.

Instead use Learner statements/thoughts like "Let me find out what is going on and try to understand the situation," "I could be wrong," "I wonder if there is anything of value here," "I wonder if..." etc. In other words, as a Learner, be curious!

Principle Paradox

This may strike you as strange, but here's the paradox: When you take authentic responsibility for a relationship, more often than not the other person quickly chooses to take responsibility as well. Consequently, the 100/0 relationship quickly transforms into something approaching 100/100. When that occurs, true breakthroughs happen for the individuals involved, their teams, their organizations and their families.




LIFE EXPLAINED.........

LIFE EXPLAINED

On the first day, God created the dog and said, "Sit all day by the door of your house and bark at anyone who comes in or walks past. For this, I will give you a life span of twenty years."

The dog said, "That's a long time to be barking.. How about only ten years and I'll give you back the other ten?"

So God agreed......

On the second day, God created the monkey and said, "Entertain people, do tricks, and make them laugh. For this, I'll give you a twenty-year life span."

The monkey said, "Monkey tricks for twenty years? That's a pretty long time to perform. How about I give you back ten like the dog did?"

And God agreed......

On the third day, God created the cow and said, "You must go into the field with the farmer all day long and suffer under the sun, have calves and give milk to support the farmer's family. For this, I will give you a life span of sixty years."

The cow said, "That's kind of a tough life you want me to live for sixty years. How about twenty and I'll give back the other forty?"

And God agreed again......

On the fourth day, God created humans and said, "Eat, sleep, play, marry and enjoy your life. For this, I'll give you twenty years."

But the human said, "Only twenty years? Could you possibly give me my twenty, the forty the cow gave back, the ten the monkey gave back, and the ten the dog gave back; that makes eighty, okay?"

"Okay," said God. "You asked for it."

That's why for our first twenty years, we eat, sleep, play and enjoy ourselves. 

For the next forty years, we slave in the sun to support our family.. 

For the next ten years, we do monkey tricks to entertain the grandchildren. 

And for the last ten years, we sit on the front porch and bark at everyone.

Deer Hunting After the Obama Gun Ban..............

 
 

Pictures are worth 1000's of words...........

 

 

IRAN 1970






IRAN 2012






AFGHANISTAN






EGYPT ( Cairo University ) 1959






EGYPT ( Cairo University ) 2012






NETHERLANDS ( Amsterdam ) 1980






NETHERLANDS ( Amsterdam ) 2012






... and some people still do not see a reason to worry ?!?!?





 

 


You know you live in a Country run by idiots if...



You know you live in a Country run by idiots if...

You can get arrested for expired tags on your car but not for being in the country illegally.


====================================
You know you live in a Country run by idiots if... 
Your government believes that the best way to eradicate trillions of dollars of debt is to spend trillions more of our money.

====================================
You know you live in a Country run by idiots if... 
A seven year old boy can be thrown out of school for calling his teacher "cute" but hosting a sexual exploration or diversity class in grade school is perfectly acceptable.

====================================
You know you live in a Country run by idiots if... 
The Supreme Court of the United States can rule that lower courts cannot display the 10 Commandments in their courtroom, while sitting in front of a display of the 10 Commandments.

====================================
You know you live in a Country run by idiots if... 
Children are forcibly removed from parents who appropriately discipline them while children of "underprivileged" drug addicts are left to rot in filth infested cesspools of a "home".

====================================
You know you live in a Country run by idiots if... 
Hard work and success are rewarded with higher taxes and government intrusion, while some slothful, lazy behavior is rewarded with EBT cards, WIC checks, Medicaid, subsidized housing, and free cell phones.


====================================
You know you live in a Country run by idiots if... 
The government's plan for getting people back to work is to provide 99 weeks of unemployment checks (to not work).


====================================
You know you live in a Country run by idiots if... 
Being self-sufficient is considered a threat to the government.

====================================
You know you live in a Country run by idiots if... 
Politicians think that stripping away the amendments to the constitution is really protecting the rights of the people.


====================================
You know you live in a Country run by idiots if... 
The rights of the Government come before the rights of the individual.

====================================
You know you live in a Country run by idiots if... 
You can write a post like this just by reading the news headlines.

====================================
You know you live in a Country run by idiots if... 
You pay your mortgage faithfully, denying yourself the newest big screen TV while your neighbor defaults on his mortgage (while buying iPhones, TV's and new cars) and the government forgives his debt and reduces his mortgage (with your tax dollars).

====================================
You know you live in a Country run by idiots if... 
Being stripped of the ability to defend yourself makes you "safe". 

====================================
You know you live in a Country run by idiots if... 
You have to have your parents signature to go on a school field trip but not to get an abortion.

====================================
You know you live in a Country run by idiots if... 
An 80 year old woman can be stripped searched by the TSA but a Muslim woman in a burka is only subject to having her neck and head searched.


====================================
You know you live in a Country run by idiots if... 
Using the "N" word is considered "hate speech" but writing and singing songs about raping women and killing cops is considered "art".

Friday, December 28, 2012

THE END GAME...........AN ABSOLUTE MUST READ!

THE END GAME

To understand this endgame, we need to start with the financial and political basics of wealth and power in the U.S.

1.  Wealth and thus political power are highly concentrated.  The dynamics of rising wealth disparity and the increasing concentration of wealth are debatable; the disparity is not.  Roughly 70% of all financial wealth is held by the top 5%; within this top layer of ownership, the top ½ of 1% hold an outsized share.

2.  This preponderance of wealth in the hands of a few translates into an equivalent preponderance of political power, as there are no real limits on the purchase of political influence, favors and power.

3.  The U.S. income tax is highly progressive; most Federal taxes are paid by a minority of the citizenry.  The top 1% of taxpayers reported almost 17% of all taxable income and paid 37% of all income taxes.  The top 5% reported 32% of all income and paid 59% of the taxes, and the top 10% earned 43% of the income and paid 70% of the taxes.

The top 25% (those earning more than $66,193) paid 87% of the taxes.  The bottom 50% of taxpayers, roughly 70 million people, earned 13% of the income and paid 2% of the income taxes collected.

4.  There are roughly 127 million people who receive government transfers or benefits.  Sixty-one million recipients of Social Security and Medicare and 66 million people receiving welfare (SNAP food stamps, housing credits, Medicaid, etc.)  Since there are about 115 million full-time jobs in the U.S., this means there are 1.1 government dependents for every full-time worker in the U.S.  (For context, there are 315 million Americans and roughly 142 million jobs.  About 38 million of these jobs are part-time that pay less than $10,000 annually.  Fifty million wage earners earn less than $15,000 a year, and 61 million earn less than $20,000 annually.)

The Federal government counts a person who is self-employed and earns $100 a year as "employed" and a person who works one hour a week as "employed."  As a result, the only meaningful metric is full-time employment.

The top 25% who pay most of the taxes, roughly 30 million people, are a political minority compared to the 127 million people drawing direct payments/benefits from the Federal government and the 65+ million who pay essentially no income taxes (though they do pay the 7.65% Social Security/Medicare payroll tax).

5.  This progressive tax structure is based largely on earned income; i.e., wages and self-employed income.  Unearned income (rents, dividends, stock options, hedge fund management fees, etc.) is treated much differently than earned income.  Unearned (rentier) income is governed by highly complex tax codes that lend themselves to politically controlled loopholes, subsidies, and exclusions. As a result, some profitable corporations not only pay no tax but actually receive subsidy payments from the government.  In other cases, politically powerful enterprises have tax laws written specifically to limit or erase their tax burden.

The tax code treats unearned income quite differently from earned income in many other ways.  For example, all unearned income is excluded from the Social Security/Medicare payroll taxes.  A self-employed person pays 15.3% of their earnings in Social Security/Medicare payroll taxes; a person receiving the equivalent sum in rents and dividends pays zero Social Security/Medicare payroll taxes.

6.  The assets that generate unearned income are highly concentrated, and as a result so is the unearned income.  The top 1% owns twice as much stock-market wealth as the bottom 90%.  This income-producing wealth enables the top 1% to act as a financial aristocracy, buying influence and favors from equivalently concentrated political Elites.

This preponderance of ownership of income-producing assets is reflected in the income stream flowing to the top 5%:

7. Those without meaningful unearned income have seen their real incomes drop substantially.  Real household income has declined almost 10% since 2000:

Net worth has also declined as serial bubbles in stocks and housing popped:  American Households Hit 43-Year Low In Net Worth

Here is another look at the data.  Note that the drop in all household income is less than the decline in working-age households.  This is the result of Federal transfer payments to retirees, those on disability, aid to low-income households, etc., paid for with unprecedented deficit spending ($1.3 trillion annually).

8.  Federal spending has followed an exponential trajectory.

Social Security costs over $800 billion, Medicare and Medicaid costs total about $800 billion annually, and the Pentagon/National Security budget is around $800 billion.  These three consume all Federal tax revenues.  Add in interest on the ballooning national debt ($220 billion to owners of so-called external Treasury debt) and the nation is running a $200 billion deficit even if the rest of the $1.1 trillion Federal spending were to magically vanish.

Federal expenditures have skyrocketed in the past 12 years, far exceeding inflation: http://globaleconomicanalysis.blogspot.com/2012/12/congressional-spending-problem-in-easy.html

9.  Tax receipts topped out at $2.4 trillion, leaving a structural gap of $1.3 trillion.

Put these structural dynamics together and the endgame becomes clearly visible: Politically, a Tyranny of the Majority comprised of those who draw direct transfers/benefits from the Federal government, is ruled by the top ½ of 1% financial aristocracy who own the majority of income-generating assets.  The minority, who pay most of the taxes (the 24.5% between the majority and aristocracy), will see their taxes rise as the aristocracy buys loopholes and exclusions while the bottom 50% pay no income tax.

Financially, the Federal government's spending has outrun the tax revenues being collected.  Structurally, Federal expenditures for entitlements (Medicare, Medicaid, Social Security, Veterans Administration, etc.) will rise as Baby Boomers retire en masse over the next 15 years, while tax revenues will stagnate along with earned income.

There is no way to square these circles.

The political foundation of America is starkly unjust.  An entrenched financial Aristocracy buys the complicity of the bottom 50% and retirees with Federal transfers – a Tyranny of the Majority.  The 24.5% below the Aristocracy who pay most of the Federal taxes are dominated by this alliance. This may be legal, but is it just? Even more critically, is it sustainable?

The Status Quo rests on this Grand Political Bargain:

We in the Aristocracy will pay significant taxes as long as we control the levers of financial and political power. We in the top 24% will pay the rest of the income taxes as long as we and our children can continue to live well and accumulate wealth. We in the "middle class" will continue to work hard as long as we have hope of bettering our lifestyle and the lives of our children. We in the bottom 50% and retirees agree not to threaten the top 0.5%'s power as long as we continue to get our government transfers and benefits.

This Grand Bargain is coming apart as the promises made to everyone cannot possibly be met.  Claims on welfare and disability programs are skyrocketing at the same time that the demographics of an aging populace are causing 10,000 people a day to enter Social Security and Medicare, the two costliest government programs.  Meanwhile, the upper middle class that pays most of the taxes has been slammed with lower income and a devastating drop in their housing-based net worth.

According to former Congress members Chris Cox and Bill Archer, writing in the Wall Street Journal:

That is roughly double the entire annual Federal budget.

They go on to note that "to collect enough tax revenue to avoid going deeper into debt would require over $8 trillion in tax collections annually."  Expropriating the entire income of the top 25% of households that pay almost 90% of the tax and all corporate taxes would only bring in $6.7 trillion.

Clearly, the promises that have been made to 315 million Americans cannot be met, and the current strategies of financial repression (zero-interest rate policy, etc.) and massive fiscal deficits that subsidize favored cartels in defense, housing, education, and healthcare are unsustainable. The politically expedient "fixes" to the Fiscal Cliff (a slight increase in the tax rate on earned income above $250,000, etc.) will not fill the $86 trillion gap between what has been promised and what can be collected in taxes.

What few dare admit, much less state publicly, is that the Constitutional limits on the financial Aristocracy and the Tyranny of the Majority have failed.  This guarantees a future Constitutional crisis as each political class – the financial Aristocracy, the top 24% who pay most of the taxes, the dwindling middle class and the bottom 50% who depend on Federal transfers – will battle for control as the Status Quo collapses under the weight of its unsustainable promises.