YOUR Social Security

THE ONLY THING WRONG WITH THE GOVERNMENT'S CALCULATION OF AVAILABLE SOCIAL SECURITY IS THEY FORGOT TO FIGURE IN THE PEOPLE WHO DIED BEFORE THEY EVER COLLECTED A SOCIAL SECURITY CHECK!!!

WHERE DID THAT MONEY GO?

Remember, not only did you and I contribute to Social Security but your employer did, too. It totaled 15% of your income before taxes. If you averaged only $30K over your working life, that's close to $220,500. Read that again. Did you see where the Government paid in one single penny? We are talking about the money you and your employer put in a Government bank to insure you and I that we would have a retirement check from the money we put in, not the Government. Now they are calling the money we put in an entitlement when we reach the age to take it back. If you calculate the future invested value of $4,500 per year (yours & your employer's contribution) at a simple 5% interest (less than what the govt. pays on the money that it borrows), after 49 years of working you'd have $892,919.98.

If you took out only 3% per year, you'd receive $26,787.60 per year and it would last better than 30 years (until you're 95 if you retire at age 65) and that's with no interest paid on that final amount on deposit! If you bought an annuity and it paid 4% per year, you'd have a lifetime income of $2,976.40 per month.

Another thing with me.... I have two deceased husbands who died in their 50's, (one was 51 and the other one was 59 before one percent of their social security could be drawn. I worked all my life and am drawing 100% on my own social security). Their S.S. money will never have one cent drawn from what they paid into S.S. all their lives.

THE FOLKS IN WASHINGTON HAVE PULLED OFF A BIGGER PONZI SCHEME THAN BERNIE MADOFF EVER DID.

Entitlement my foot, I paid cash for my social security insurance! Just because they borrowed the money for other government spending, doesn't make my benefits some kind of charity or handout!!

Remember Congressional benefits? --- free healthcare, outrageous retirement packages, 67 paid holidays, three weeks paid vacation, unlimited paid sick days. Now that's welfare, and they have the nerve to call my social security retirement payments entitlements?

We're "broke" and we can't help our own Seniors, Veterans, Orphans, or Homeless. Yet in the last few months we have provided aid to Haiti, Chile and Turkey. And now Pakistan......home of bin Laden. Literally, BILLIONS of DOLLARS!!!  And they can't help our own citizens in New York and New Jersey!

Our retired seniors living on a 'fixed S.S. income' receive no additional federal aid nor do they get any financial breaks, while our government and religious organizations pour hundreds of billions of $$ and tons of food to foreign countries!

They call Social Security and Medicare an entitlement even though most of us have been paying for it all our working lives, and now, when it's time for us to collect, the government is running out of money. Why did the government borrow from it in the first place? It was supposed to be in a locked box, not part of the general fund.

Sad isn't it?

It’s Time to Tax the Trillionaires, never mind the others!

I had to put this up after my friend Sandra Jackson said something the other day! She is on the right track, but me thinks this is one better! So here it is folks, what's the chance of this passing? This is from a great thinker Daniel Greenfield

Politicians, public sector unions, crony capitalists and the rest of the rotten body politic

Obama says that it’s time to tax the rich. I agree, but while he wants to limit the tax to millionaires and billionaires—I want to advance it to trillionaires.

Forget Warren Buffett and his secretary and the rest of the small timers, let’s look at where the real money is going—to the trillionaires. Who are the trillionaires? They’re the people who spent and spent until we ended up with a 15 trillion dollar deficit. Now it’s time to make them pay their fair share.

Politicians, public sector unions, crony capitalists and the rest of the rotten body politic that left us with a debt so big that it can’t be repaid without selling an entire state. It’s time to make the trillionaires pay.

How do we make them pay. Obama has complained that unless we raisetaxes on the rich, there will be no money for Medicare. That’s a fair point, so let’s tax the trillionaires to recoup the costs. And let’s make it a whopping progressive tax too.


Forget taxing their take home pay from their non-profits and their dues—we know that like Buffett and half the cabinet, they just won’t pay. Let’s tax the taxman instead. Since the money that should have kept SocialSecurity solvent was spent by the trillionaires, it should be taken out of their spending. Forget taxing income—it’s time to tax Federal spending.


Got a new bill that calls for spending 10 billion dollars to make pogo sticks in low income neighborhoods more energy efficient or 400 million dollars in foreign aid to terrorists or 1 million to rum factories in the Cayman Islands (because who the hell knows why)? No problem, just get ready to pay your fair share of the bill first toward the national debt and all other obligations.

Since the trillionaires in the government have lots of money—let’s make this an extremely progressive tax

And let’s do Sweden one better by making this a 90 percent tax.
Yes Barry, I know it’s hard, but it’s only fair—those who spend more should also have to pay more. It’s not class warfare, it’s simple math. And the simple math says that the only way to fix budget failures is by taking the money out of the budget. Sure we could hang around waiting for politicians to do the right thing, or we could tax their spending.


It makes no real sense to tax businesses and individuals in a tough economic climate, not when there’s less money for everyone—but in Washington D.C. the spending is still going strong which means they clearly have money to burn. Why burn it on habitats for owls and research projects to study how much television prison inmates can watch without going insane—when we can put it to better use by covering the government’s debts.


It’s simple math, we have to make those who spend more money pay their fair share. It’s up to the trillionaires in Washington D.C. and their allies around the country to start covering some of the losses. And since the definition of tax is fluid in this administration, call it a penalty or a slow repayment plan.


We can only spend so much time moving money around, using fake spending cuts to pay for separate programs, and then making fake cuts to those programs and claiming that spending cuts have been tripled, even as it’s the spending that has actually tripled. No more games, just a 90 percent tax on all Federal spending directed at the deficit and obligations on which the government has threatened to default.

No more games, no more dodges, just pay your fair share… back to the people you stole it from

No more games, no more dodges, just pay your fair share… back to the people you stole it from.
Of course an extended repayment program will take time and even with a very progressive tax, the debt will still take years to pay off. But that just calls for the trillionaires to find creative solutions to pitch in. What about the Barney Frank Acapella Choir Sings Jingle Cats or Obama’s Inspiring Birthday Greetings (Only Slightly Plagiarized From the Works of Maya Angelou.) There’s plenty of ideas out there and most of them are bound to at least earn some money. And they’ll need to work hard because that tax also applies to the salaries of Federal employees in decision making positions.


There’s no question that we can’t go on this way, but the hole problem can’t be solved by trying to fill it with shovels. Federal spending dug the hole and adding more shovels by raising taxes will just make a bigger hole. The only way we can fill the hole is if we take away the shovels and start putting the dirt back. That means taxing the spenders, not the earners.
The problem isn’t that we don’t tax the rich enough, it’s that we don’t tax the super-rich enough. Taxing the millionaires and billionaires will never raise enough money because the deficit isn’t caused by low taxes, it’s caused by uncontrolled spending. The only tax that will work is a tax on spending.


Now a tax on spending is the only kind of tax in the world that the progressive party is not on board with—because it’s a tax on them, a tax on their capacity to spend, a tax on the source of their power. The Federal budget amounts to a giant pile of money gathered from all over and then handed out to cronies and supporters. It’s a spoils system and a spoiled system and the deficit of trillions testifies to that.


The pile of money is our target because it feeds directly into the deficit, it’s why seniors are worried and have good reason to be. What was once set up as a safety net has become a big heaping platter of pork served up to everyone with access to a congressman, a protest sign or a checkbook. The only way out of this mess is by getting hold of that pile of money and taking it out of the hands of the people spending it, and what better way to do that then by using the mechanism that allowed them to create that pile of money in the first place.

Taxing the taxmen has a certain quality of poetic justice

Taxing the taxmen has a certain quality of poetic justice to it, but also pragmatism. It cuts up the credit cards of the D.C. establishment, puts them on a budget and them lets them have fun passing all sorts of ridiculous spending bills—which no matter what is in the bill will go not to the endangered macaws of Alaska, the teacher’s unions of Minnesota or forty agencies with their own SWAT teams, but toward repaying the debts they all accrued.


Of course there will be angry protests and lobbyists, but unfortunately the tax on angry protests by people who are paid with tax money during their work hours and the tax on lobbying to spend tax money should let even them do their part to pay down the debt. It’s only fair.
The newspapers will editorialize and they are free to do that, so long as they are willing to pay the tax on anyone calling for deficit spending. It’s only fair that those who promote spending money should pay their share of the costs of their policies.


Eliminating loopholes like these will help pay down our debts and protect our seniors even quicker, that is why I urge congress to pass this bill. Pass this bill, I say. Our children need it. Our grand-children need it, and our politicians will be locked up in fancy rooms with all the coffee they can drink and free blackberries which will be hooked up to treadmills and the energy of their motion will be used to provide sustainable environmentally friendly power.


Delaying much longer is not an option. Every day that goes by another politician gives a speech and proposes more spending that further inflates the deficit. If we keep this up, no amount of Nancy Pelosi workout tapes and Harry Reid Halloween masks will cover the cost of the money they’re spending.


Sure we can take more from the small timers like Bill Gates and Warren Buffett who are eager to pay their share, so long as their share ends up coming out of the Federal budget, as it did with the Oracle of Crony Capitalism’s latest fantabulous investment. But why waste our time with mere billionaires, when the trillionaires are waiting?

Is Gold going up or Fiat currency coming down?

We should never have come off the gold standard! If we didn't, we wouldn't be in this global financial mess and medicare, Social Security and peoples retirement savings would all be in tact! Nixon was the criminal that took us off the gold standard so he could finance his war in Vietnam! If he didn't, we couldn't have afforded to continue waging that war. On the bright side, we wouldn't have the FOREX market [Currency trading exchange]. Let me explain this in greater detail in layman's terms:

The Four Characteristics
of Real Money

I long for the day when gold is once again selling at $300 or $400 an ounce.

I know that sounds sacrilegious coming from a gold bug. But it’s the truth. A world where gold is no longer front page news, and where gold prices have sunk deeply relative to the dollar, will be a sure sign that the world’s economies, and America’s currency in particular, are back on solid footing.

Sadly, that moment remains many - many - a day away.

Until American politicians fashion an honest plan to reorganize our economically bankrupt nation, the dollar will continue falling in value against the only true money that remains - gold.

Go back and note the construction of that last sentence... the dollar is falling in value against gold. What every financial commentator thinks is a bull market in gold is really a bear market in currencies. Gold isn’t moving in value. It is stationary, like the sun, with all other assets - most importantly, the dollar - revolving around it.

Unlike a stock that moves in relation to itself, currencies move in relation to each other. As one goes up, the other must go down. Currencies everywhere are heading down relative to gold because Western politicians and presidents are incompetent in managing their economies, while central bankers imprudently flood the world with increasingly worthless paper.

So a falling dollar means gold’s value must rise in relative terms. That relationship will only change when the consumers of money - we the people - no longer accept that gold has value and that the dollar does.

But as long as central bankers continue their global assault on currencies, gold is the only money you can rely on to preserve your purchasing power and your sovereignty.

Good Money Must Meet Four
Essential Criteria

At one point in man’s agrarian past, cows and goats were a form of money. The Chinese traded cowry shells before moving on to swatches of deerskin. Native Americans used beads made from clamshells. They were all an accepted medium of exchange. But were they good money?

No.

Good money, as Aristotle first laid out in the 300s B.C., must meet four criteria: divisibility, durability, portability and scarcity (another word for Aristotle’s “intrinsic value”).

Cows and goats are divisible to the degree that you could exchange a side of beef for, say, a bushel of wheat. And they were portable in that you could walk your goat over to the chap selling you the wheat. But pestilence and drought limited the durability of livestock, and it’s not like cows and goats have ever been terribly scarce.

While deerskins are divisible, clamshells and cowry shells aren’t. More important, all you have to do to increase your personal money supply is go out and kill a few deer or stroll along a beach... and suddenly you’re rolling in riches! Easy access to more currency doesn’t make for sound money.

Today’s Western central bankers operate much like beachcombers — only they’re dredging the shoreline with an armada of backhoes and dumping the shells into a wampum economy. The dollars, euros and yen they create are about as scarce as fleas on an outdoor cat. Their value is based solely on faith that the pieces of paper — for the time being at least — are tradable for groceries, gas and bubble gum.

But what about gold?

Divisibility certainly is possible. Durability and portability are unquestioned. As for scarcity... well, miners around the world produced just 76.8 million ounces of gold in 2010, according to the U.S. Geologic Survey — the equivalent of about a quarter ounce of gold for every American.

Fed Chairman Ben Bernanke with his double-barreled quantitative easing campaigns created through fiat a combined 1.7 trillion dollar units — enough to fatten every American wallet with an additional 5,452 dollar bills.

Which is scarcer?

The Difference between Money and Currency

Money is real because its scarcity gives it intrinsic value.

Currency, however, is not so real.

Currency is not a tangible item you can physically hold. It is an invention of the mind we use as a stand in for something else — money. Currency can be an excellent stand in for money, so long as real money always stands behind the currency.

The U.S. dollar, British pound, French franc and German mark (before the invention of the doomed euro) were all at one point backed by gold — the so-called gold standard. But monetary authorities removed the gold. What remained were currency shells.

That’s why today’s currency looks like money. And smells like money.

But it is not money. It is a shell that we ascribe value to at the moment, but then again today’s U.S. dollar bills could just as easily be tomorrow’s cows and goats.

Money — gold, a tangible item — has not lost any value. But the currency — dollars, pounds, yen — most certainly has. The dollar’s spending power has eroded by 50% since gold was freed entirely from government price manipulation in 1973. In the last decade alone, the period in which Congress began spending with criminal disregard for the country, the dollar has lost 4.2% each year on average.

In terms of gold, however, the dollar has lost nearly 85% of its value.

And why? Because U.S. monetary officials have printed dollars at will... and none of those bills are backed by anything but the creditworthiness of a fundamentally bankrupt nation.

People need to recognize that currencies in their current form are nothing more than government IOUs that we trade amongst one another, effectively bartering green and white paper for whatever goods we happen to want. But it is not, by any stretch, money. They have no intrinsic value that is unquestioned.

Gold as money is unquestioned; it’s been the uninterrupted standard bearer of money for thousands of years.

Paper currency erodes in value every time the central banks dump more into circulation. And since currencies move like a see-saw - as one goes up, another goes down - smart people the world over realize that they can exploit the government’s fiat system by trading one piece of paper against another for profit... currency trading. As the currencies fluctuate against one another, you ride them up or down for short-term gains.

It’s a great way to make real money because if you generate more currency units than you started with, you can cash out and buy a little gold.

In the end, money vs. currency boils down to a question of scarcity. Which is scarcer - the money that takes time to produce like an ounce of gold? Or the currency that government mass produces instantly? Determine that answer and you will know where the real intrinsic value resides in the world’s competing currency systems... where the real safety lies for those who watch in disbelief at the financial folly of monetary officials.

If the dollar goes away tomorrow or next year or in the next generation, gold will still remain.

"We'll fix the economy by stealing more from your retirement!"

Well numnuts has given this very same speech each year since he has been in office! Nothing has changed and he is paying for it by raisng taxes and closing loopholes! Most agree that closing loopholes [Taking away tax incentives for business' that can't make it on their own], those loopholes also include a write-off for your mortgage, any money you give to charity, incentives to go green with solar/wind or rebates for buying energy star marked appliances! You will now pay full price. Just to let you know before jumping on the "close the loophole wagon! Well there is more, so read on as it affects EVERYONE:If you read my column with any regularity, you have a good idea of where I stand on the Social Security program. But in a nutshell: I believe the way in which it was initially constructed — and, more importantly, continually expanded over the years — makes it unsustainable in its current form. And that's especially true given the current state of our economy and changing demographics, too.
Yet I'm continually amazed at just how clueless our politicians seem to be on the rather basic equations involved here.
I mean, really: Obama's latest jobs plan involves yet another REDUCTION in the amount Americans will be contributing to the program? Plus, it now ALSO reduces the amount that most American employers will also be paying into the system?
Yowza! To me, this simply sounds like another case of robbing additional money from American retirement coffers to "fix" some other problem that Washington finds more immediate.
Moreover, it's absolutely astounding how many poor projections, half-truths, and outright lies we've been getting fed about this program.
Just look at the sequence of events over the last couple years and you'll see what I mean!
Let's sort the facts out one by one, in chronological order ...
Fact #1. As recently as 2009, the Social Security Administration was predicting that the program would begin taking in less than it paid out in 2017.
Fact #2. Then, just one year later in 2010, the Social Security program took in less money than it paid out. (The first time since the 1980s.)
Fact #3. This annual shortfall was blamed on the poor economy — i.e. fewer employed people paying in and others choosing to retire early, thus increasing the amount of money being paid in benefits.
Fact #4. At the time, the Social Security Administration said it would only be a temporary slip and that a permanent state of deficits would actually begin in 2016. (Note revision from previous estimate.)
Fact #5. In 2011, the Congressional Budget Office came out and said that the Social Security program had already entered a permanent state of annual deficits. (Woops again.)
Fact #6. Despite the idea that Social Security had already reached a permanent state of underfunding, politicians decided to "stimulate the economy" by LOWERING the amount of money each employed American pays into the system in 2011 — from 6.2 percent of the first $106,800 in earnings down to 4.2 percent.
Fact #7. This change was said to be a temporary measure for the year 2011 only.
Fact #8. Last week, President Obama said we should further stimulate the economy and create more jobs by having working Americans pay even less into Social Security in 2012 — i.e. 3.1 percent vs. this year's already-reduced 4.2 percent and the previous full rate of 6.2 percent.
Fact #9. President Obama went one step further by proposing that American employers should also see their part of Social Security contributions slashed in half for the first $5 million in their payrolls for 2012. Please note that this year's reduction did NOT cover employers at all. They have continued to put in 6.2 percent on as much as $106,800 for each of their employees.
Fact #10. It was reiterated that these would be temporary measures, and lawmakers would totally offset the costs with new cost cuts by 2014. Yes, the same lawmakers who took us to the brink of default just a few months ago because they couldn't agree on cost cuts before this new proposal was in play.
All told, these new cuts to Social Security payments will total about $240 billion (out of the $447 billion proposed in Obama's jobs plan). So that's another quarter of a trillion dollars in retirement money we'll have to make up some other time, I guess.
You know, if it weren't such a serious topic, this would make for some great slapstick comedy. Can't you just imagine Abbott and Costello doing a little routine?

Abbott: "Okay, how do we fix Social Security?"
Costello: "Get more money into the system."
Abbott: "Great. How do we do that?"
Costello: "Simple. Create more jobs."
Abbott: "Okay, so how do we do that?"
Costello: "Just stimulate the economy, stupid."
Abbott: "Got it. Just one more question then. What would stimulate the economy?"
Costello: "Putting less money into Social Security, obviously!"

Please bear in mind that you can start the above dialogue at any point — with jobs, the economy, or the Social Security system's state of disrepair. It really doesn't matter because the circular logic will just keep taking you round and round all the same.
Seriously, It's Amazing Just How Bad
This Entire Situation Has Become!
Hey, I'm as glad as anyone to pay less into Social Security for as long as possible. (Or to join the Amish in opting out of the program entirely!)
At the same time, I recognize that the beast that Washington has created is now the retirement lifeblood for tens of millions of Americans. They paid their fair share into the system and are counting on getting their fair share back out.
So I simply have to shake my head at how far off the rails things are getting.
It was bad enough that Washington begged, borrowed and stole from the surpluses that had built up after the last major overhaul ...
It was worse that we were approaching systemic shortfalls going into the second decade of the new millennium ...
And it's absolutely appalling that we are now bankrupting the program even further with new legislation in the name of jump-starting the economy.

Democrat Senators Say They Will Refuse to Stop Spending

Despite any and all protestations from the American people—and just as they forced ObamaCare down our throats—Democrat Senators (each and every one of them) have declared they will NOT stop spending We-the-People’s money…period!  In fact, in a Wednesday letter sent to Speaker of the House John Boehner, all 53 Marxist-Democrat Senators said they will refuse to pass the House debt ceiling increase ($900 Billions) and spending reductions of about the same amount proposal, even before the revised effort (more spending cuts are now appropriately included in the first year) has been read.

Instead, they are demanding Sen. Harry Reid’s (and apparently also RINO Sen. Mitch McConnell’s) proposal be swallowed; a bill that demands the debt ceiling be raised by $2.7 Trillions!  Please note that the spending “cuts” referred to as in the proposal and neither visible nor itemized.  By the way, when was the last time a Marxist-Democrat cut out any spending at all?  And, yet, the CBO is said to favor the Marxist plan?  Only the Marxists claim the now wholly-owned Obama CBO is “non-partisan.”

With no additional doubts—whatsoever—Democrat Senators have now come out into the open and are shouting that they rule over us all, they have ended our Republic and that we’d better shut up and get used to taking anything they and their Emperor-and-usurper-in-Chief Obama decide to employ against us.  In other words, these beings have openly announced that they now own We-the-People “body and soul,” we can’t do anything about it and “if you want us to be benevolent slave masters, you’d better smile and say ‘Yes Massa’ when we speak and give you one of our new commandments!”

Marxist-Leninist Sen. Harry Reid and Sen. John McCain (with childish Lord of the Rings references) continue to blame the various TEA Parties—who now actually represent the majority of the American people—for not compromising with the aging totalitarian Senate.  These reprobates also quietly blame the TEA Parties for the increased political knowledge and savvy of the American people. 

It’s now much harder for the degenerates to pull the proverbial wool over our eyes.  After McCain’s comments on the Senate floor Wednesday, I think this majority wishes that he would return to “middle earth.”  This “Armageddon” is totally manufactured by our overseers.  As a country, we take in approximately $200Billions/month and can well afford to pay all of our debts and responsibilities.  The lies Obama & Co have been spewing about “no Social Security checks” and “no Medicare” (Obama and the Congressional Democrats have already stolen $500Billions from Medicare to pay for their “We now control your bodies” ObamaCare program) are only due to the fact that the Tyrant Obama can opt NOT to pay them if he so desires.  And, a recent poll suggests that at least 40% of polled Americans believe he would do it.  Even the majority of those who voted for Obama probably didn’t see this coming. 

Folks, we’re quickly approaching—actually being unmercifully pushed into by those we elected to office who now contend they are our “betters”—the time when we will have to actively and physically fight back at our oppressors or live in a police state that we allowed to take us over.  Chillingly, we’re almost there, and Congress and the dictator-in-chief are working on driving the final nails into our coffin.  Be both forewarned and as prepared as possible for yourselves and your families.  Unless we stop it, the deep darkness will continue to descend upon us…

What the Government Will Never Tell You About the Debt Crisis

After sifting through the government's numbers and mindless claims of "Armageddon," I believe it should not worry you as an investor. And I'm convinced as ever the "debt ceiling" debate is a dog and pony show that distracts Americans from our country's biggest problem.

Politicians like Barack Obama and Tim Geithner tell us that a failure to raise the debt ceiling by August 2 will result in catastrophe. They say many government employees and vendors will not get paid starting on August 3. I doubt this is true. The government will always find a way around the rules to borrow and spend.

But let's take the government at its word for a moment…

The Bipartisan Policy Center (the "BPC") – a non-profit group that studies solutions to political problems – has published a report on the debt ceiling "crisis." The report's conclusion is generally in agreement with Obama and Geithner: If we do not raise the debt ceiling by August 2, we could cause serious trouble for our economy. That's not surprising. The BPC was created by members of Congress, so it will toe the political line to keep us scared.

According to the BPC, if the debt ceiling isn't raised by August 2, the U.S. government will wake up on August 3, and find itself unable to pay about 45% of the bills due between August 3 and August 31.

In its debt ceiling report, the BPC considers two broad scenarios under which the Treasury Department might pay some agencies and not pay others. Imagine, for example, all IRS refunds not being disbursed starting on August 3. Imagine $14.2 billion in federal salaries and benefits not getting paid. Imagine nearly $32 billion in defense vendor payments not being made. Defense-related stocks would be cut in half instantly. Imagine the lights going out at Veterans Hospitals and active military duty pay not going out.

I have no illusions about the turmoil of a real government shut down. It's ugly. For some period of time, it would be hell for millions of people. I don't want that. I'm sure you don't, either. No one wants mass economic hardship. I'm fully aware we're talking about people's lives here…

But if the government shrinks 45% starting August 3 and remains permanently smaller, the hardship would be temporary. We'd come out the other side of it a better, stronger, wealthier, and maybe even less arrogant nation.

Simply reducing the deficit wouldn't mean you'd pay less in taxes – so it's not that we'd all have more money in our pockets starting August 3. It's that there'd be less government, which means less government meddling in the economy. There'd be fewer parasites and more potential producers. We'd be freer to create new wealth and grow new businesses. A little more freedom would go a long way.

It would be good to have more productive minds looking for ways to create new wealth with fewer government impediments to doing so. It's much better than having those same productive minds rotting behind government desks, meddling in other people's lives, and destroying wealth instead of creating it.

But I do think the debt ceiling will be raised by August 2. Among other reasons for this belief, there's something you'd learn in the ensuing crisis if the ceiling was not raised, something nobody wants you to learn…

You'd find out government is the problem not the solution, and that we'd all be better off with a lot less of it.

That's why Treasury Secretary Geithner says it would be a "catastrophe" not to raise the debt ceiling. It's why Fed Chairman Ben Bernanke says it would be "calamitous." It's why Komrade Obama says it would be "financial Armageddon." They're all trying to scare you.

Everybody thinks people would starve without the big, strong government to feed them. It's not true. We'd be a more productive, dynamic, and wealthy society. You'd see this happen right before your eyes if a large portion of the government shut down permanently.

But nobody in government wants you to see that.

Our economy doesn't suffer from a lack of government intervention. It suffers from too much government intervention. The solution to too much government intervention in the economy isn't more government intervention. It's less government. That's what you'd get on August 3, without a higher debt ceiling.

Laying all my cards on the table, I freely admit that I relish the potential shutdown of huge swaths of our bloated, oppressive federal bureaucracy. And I relish the prospect of hundreds of thousands of government employees, people with perfectly productive minds, some of them quite brilliant, making the change from parasites to producers… though I realize it's unlikely to happen.

Imagine for a minute the unleashing of entrepreneurial energy in the wake of a shutdown of 45% of the federal government. The U.S. government is filled with intelligent, highly educated, highly trained people. Many are experienced leaders. Many are more than capable of positively heroic feats of entrepreneurship, feats we'll never witness if they don't leave their government jobs and get to work.

Frightened children like Obama, Bernanke, and Geithner see scary monsters everywhere. Adults with vision and experience see opportunities. I promise you those opportunities are real. They exist. If the government wakes up August 3 and can't pay 45% of its bills, it won't be long until many of those opportunities are seized and exploited, to the benefit of us all.

Where your money goes and why?

This is a well done article and sums it up nicely! Learn a little history here:

 Dr. Ileana Johnson Paugh 
 The total federal budget for 2012 is $3.68 trillion. The interest on debt is $242 billion. The rest constitutes mandatory and discretionary spending.
Discretionary spending refers to the budget appropriated each year. The discretionary budget is one third of the federal budget. Congress directly sets the level of discretionary spending ($1.24 trillion) and can choose to increase or decrease any programs.

In 2012, 57 percent of the federal discretionary budget will be national defense. The rest will include education, health programs, and housing assistance.
Mandatory spending ($2.44 trillion) includes entitlement programs, funded by eligibility rules or payment rules. Congress decides to create a program, determines who is eligible for the program, various criteria, and then estimates how much is appropriated for the program each year based on how many people will be eligible and will apply for benefits.


Social Security, Medicare, and Medicaid are the most costly entitlement programs. Veterans Administration programs, federal employee and military retirement plans, unemployment compensation, food stamps, and agricultural price supports are also included in entitlement programs.


Congress periodically reviews the eligibility rules and may change them in order to exclude or include more people.
Mandatory spending makes up about two-thirds of the total federal budget. The largest mandatory program is Social Security, about one-third of mandatory spending. As the age demographic of the country shifts towards an older population, mandatory spending increases.


The controversial national debt or public debt is $14 trillion to $100 trillion, depending on how many variables are considered. Nobody disputes the fact that, over the years, U.S. ran more deficits than surpluses because of recessions, inflation, sluggish growth, wars, oil price shocks, and a steady growth in entitlements.


Two American presidents are largely responsible for entitlements, Franklin D. Roosevelt and Lyndon B. Johnson with the “New Deal” and the “Great Society.” All politicians recognized the popularity of the programs and considered it political suicide to reduce or repeal the benefits once extended. Tip O’Neill called entitlements the “third rail of politics.”
Promising costly benefits to individuals predicated on an unsustainable Ponzi scheme eventually caught up with countries like Portugal, Italy, Greece, and Spain (PIGS), especially since their governments gave up their sovereignty and could no longer control their monetary policies, they were at the mercy of the European Union and its currency, the euro. It is heading in that direction for the United States. Right now, our temporary salvation is the fact that we can print our dollar.


Several administrations changed tax policies, thus altering revenue; new unregulated financial instruments were invented and sold as debt securities to financial markets, creating the capability to finance large debt, and the capability to create dangerous bubbles that could burst.


To service a debt, you must have enough cash over a period to repay the interest and the principal. Normal operating expenses of our country should be fully funded with current tax revenues in order to preserve borrowing capacity for future crises.


If the president tells Social Security recipients that they may not get their checks by August 2 if the debt ceiling is not raised, he is in essence telling them that he does not have any Social Security lock box money, it has been spent long time ago and he must borrow from the Chinese in order to make payments on the Social Security Ponzi scheme. This should give Americans great pause.


For the past three decades, the government has used deficit spending (spending more money than it receives in taxes) in order to cover operating expenses, stealing from Peter to pay Paul. Some economists argue that deficit spending is necessary during recessionary periods. We can all agree that it cannot be sustained indefinitely if it exceeds the growth rate of the economy.


How does the government raise money in order to finance the debt? The Department of the Treasury’s Bureau of Public Debt attracts buyers and arranges for the sale of debt instruments: Treasury bills, notes, bonds, and inflation protected securities. Bills mature in less than a year, notes in two to ten years, and bonds mature in twenty to thirty years. Inflation protected securities (TIPS) are sold in various maturities and are indexed to the rate of inflation. Said securities are sold directly or on secondary markets.


As the U.S. runs more and more debt, the Treasury must find new sources of financing or enforce stricter revenue collection (taxes). Sealed bid auctions are held to finance new debt and to roll over existing debt that has matured and is still outstanding.
About 36 percent of public debt will come due within a year ($1.6 trillion) and another $3.5 trillion over the next three years. In 2009, the Treasury held an auction on average more than once a day to finance $7 trillion of new and maturing debt.


How much more debt will international and domestic investors absorb before reaching a tipping point since the Federal Reserve has kept interest rates so low over an extended period? The more debt U.S. amasses, the more pressure will be put on the Fed to raise interest rates.
Central banks hold reserves in U.S. dollars as a hedge against their own currencies. The price of oil is quoted in U.S. dollars. There is pressure to change that as the economic and political strength of the United States wanes.


The sheer scale of borrowing necessary to sustain growing U.S. deficits, the possibility of default, and the bleak outlook of U.S. economic prosperity because of the recent housing collapse “could well exceed the absorption capacity of Asian central banks for dollar holdings.”
International trade deficits could contribute to the devaluation of the dollar, driving interest rates upward in order to attract more foreign and domestic investment that would sustain our insatiable spending appetite.


As long as investor confidence in the U.S. government exists, there is no danger that investors will dump the dollar in favor of some other currency or gold, triggering a stampede sell-off in U.S. stocks and bonds. Rising interest rates alone could plunge the world into a global financial crisis.
Voracious government demand for credit can “crowd out” private sector investment, causing high unemployment and lack of capital formation. Available pool of creditors choose to lend their money to the government instead of buying corporate stocks and bonds.


If business confidence is low because small business owners see higher taxes in the future or are uncertain about future government regulations, private investment will be “crowded out” resulting in more unemployment or lack of new job creation. The industrial base will weaken, the competition will diminish, research and development will dwindle, and acquisition costs will go up.


“America is like no other dominant power in modern history – because it depends on other countries to sustain its military and economic dominance.” A strong economy supports a strong military, and a strong military supports statecraft.


Past decisions on debt increasingly limit the ability of the government to maneuver economically and to deal with national emergencies such as war by running large deficits. The government runs large deficits now just to maintain the status quo. This “leaves the country more exposed to shocks and more vulnerable to the financial leverage of its creditors.”


Thomas Jefferson summed up the quandary best when he said, “The laws of nature made it unfair to impose the debts of one generation upon another.” Perhaps, instead of nation building in Iraq, Afghanistan, Libya, and other countries that do not understand nor want democracy, who are not grateful nor thankful for our help, we should concentrate on our nation’s needs, our infrastructure, creating attractive investment opportunities in the process. We should also return our government to fiscal responsibility and our own citizens to self-reliance, not handouts and entitled cradle-to-grave welfare.


4 Little Charts Show the Coming Depression

I can't believe for the life of me why the dems can't see the writing on the wall. Folks this is about math 101, not politics on either side of the isle and these charts are the easiest way I have found to show you how much trouble we are really in;

You don’t have to be a conservative or a liberal, or anything at all, to understand that America is about to be flattened by a tidal wave of debt. 

Just consider the following chart ...

Pretty bad, huh? Now consider a second chart:

That’s right, folks.  If Obama’s latest proposed budget passes, he takes that debt up to 90.4 percent of GDP.  At that level, debt held by the public will be nearly as high as thehighest it’s ever been in U.S. history. 

(Note: The projected blue line above, “Current Law,” projects where our debt would be if no changes were made to President Bush’s last budget, which includes spending for TARP and other initiatives related to the financial crisis.)

Now I want you to look at a third chart:

There you have it.  It’s a graphic picture of a freight train, and it’s headed right towardyou.

It doesn’t matter whether you prefer the CBO’s figures or Obama’s.  We’re merely talking about different shades of disaster.  When you’re dead you’re dead.  There aren’t some people who are “more dead” than others.  

That means that, by 2020, half of all income tax revenues will go toward paying interest on a $23 trillion national debt.  Very shortly, it will take all of our income taxes to pay the interest.

All reasonable projections show the debt curve going straight up.  But of course that isn’t going to happen.  

Long before your debt reaches “infinity”, you go broke.  You are unable to pay even the interest on your debt, much less the principal, and nobody will lend you money anymore.  That’s what happens to people like you or me. 

If you’re the government, you have another choice.  You can print money to get out of your fix.  Then inflation takes off, interest rates take off, and the dollar becomes worthless.

That’s what we did with the debt we had after World War II.  Did we pay it back?  Yes, in part -- but the biggest contribution to paying the debt was massive inflation.  50 percent of the value of the dollars borrowed during the war was inflated away.

At most, we’re a few years away from one of these grim scenarios.  It is too late now to reverse the situation. 

Either the government will be forced to default on such obligations as Social Security, Medicare and military pensions.  Or the government will pay everything in full -- with worthless money. 

Those unprepared will be hit the hardest.