Thursday, October 28, 2010


"U.S. House Republicans plan to try to slash $100 billion from the federal budget as early as January if they wrest power from Democrats in this year’s midterm elections, setting up possible early showdowns with President Barack Obama on taxes and spending.

A Republican House takeover would thrust new committee heads, such as Representative Dave Camp on the Ways and Means panel, into the spotlight within weeks -- or days -- of seizing their gavels in early January. They would confront quick political tests that could alienate independent voters and Tea Party activists alike, analysts said.

“The major issues are going to be fiscal, and fiscal issues are always contentious,” said Jack Pitney, a political science professor at Claremont McKenna College in Claremont, California.

Carrying out spending cuts that Republicans have pledged to seek -- which would amount to 21 percent of the government’s so-called discretionary money pot -- could prove politically difficult. Reducing funds for programs such as college loans for low-income students or medical research at the National Institutes of Health is harder than promising to do that on the campaign trail."

I don't know anything about the guy in this video but I think what he says plays right into the article above.

If the Republicans win big, as everyone believe they will, and if they do what they've promised, and how often does that happen, pain and suffering on an incredible scale is right around the corner. Of course, if they don't do what they promised the same result will happen; it'll just take a bit longer.

Here's the deal. We are backed into a corner. Regardless of the feel good propaganda that Washington keeps putting out and no matter how they twist and distort the economic reports, we ARE in a depression, one at least as bad as the depression in the '30's and fixin' to get a whole lot worse.

Anyone with any sense of history has to ask, "But, where are the bread lines and the families on the street, and all the suffering we see in those old black and white pictures?" It's all being hidden by massive government spending. In the '30's we didn't have food stamps, unemployment insurance, AFDC, TARP and all the other giant personal and corporate welfare systems. When you failed, you failed.

All those people that should be out on the streets are getting a check from the government, written on an empty bank account which is allowing them to at least stay off the streets. If that money is withdrawn the bread lines will start the very next day.

So what are the Republicans to do? If they do as they've promised, and as I believe they have to, people will be on the streets and starving. Unless of course they're willing to start the cutting with all the pork in the private sector and the military and the corporate welfare to offset the cost of feeding people. In other words, to avoid starvation America's age of empire will have to stop.

That's fine by me and I suspect most other Americans but the friends of the politicians won't be happy, on either side of the aisle.

They need to stop propping up banks and insurance companies, car makers or any other business, those bastions of the free market that come running to mommy as soon as things get bad. Let them fail.

If they do this the level of joblessness will rise and the pain will become greater. Our fragile economic system will grind to a halt and quite possibly collapse.

But if the government quits pissing away money on things it was never intended to do, and if it lets the market work in a free and unencumbered state, maybe, just maybe we can get through this thing. Use the little we have to help the people and keep our defenses up because, believe me, our enemies have been waiting for this.

So, do you think that the Republicans have the courage to do all these things? Me either. So they'll continue on with Quantitative Easing and bailouts and all the other programs that ball-less politicians so love. And we'll collapse anyway.

Or perhaps, in a move worthy of Machiavelli himself, the Democrats will purposefully cause things to come unglued during the lame duck session, just so they can blame the inevitable on the Republicans and try to sidestep their own role in the matter.

Either way, hard times are coming, harder than anything we've seen in a long, long time.

Prepare. And spread the word. Most people don't understand just how bad things are going to be and how close we are to the real ugliness. Hell, we're in a depression and most can't even see that!

And pray. More important than anything else is to develop a line to God so you are open to hear what's being said. He won't leave us but so many have left Him. And they are the people that will truly suffer.

"Boston University economist Laurence Kotlikoff says U.S. government debt is not $13.5-trillion (U.S.), which is 60 per cent of current gross domestic product, as global investors and American taxpayers think, but rather 14-fold higher: $200-trillion – 840 per cent of current GDP. “Let’s get real,” Prof. Kotlikoff says. “The U.S. is bankrupt.”

Writing in the September issue of Finance and Development, a journal of the International Monetary Fund, Prof. Kotlikoff says the IMF itself has quietly confirmed that the U.S. is in terrible fiscal trouble – far worse than the Washington-based lender of last resort has previously acknowledged. “The U.S. fiscal gap is huge,” the IMF asserted in a June report. “Closing the fiscal gap requires a permanent annual fiscal adjustment equal to about 14 per cent of U.S. GDP.”

This sum is equal to all current U.S. federal taxes combined. The consequences of the IMF’s fiscal fix, a doubling of federal taxes in perpetuity, would be appalling – and possibly worse than appalling.

Prof. Kotlikoff says: “The IMF is saying that, to close this fiscal gap [by taxation], would require an immediate and permanent doubling of our personal income taxes, our corporate taxes and all other federal taxes.

“America’s fiscal gap is enormous – so massive that closing it appears impossible without immediate and radical reforms to its health care, tax and Social Security systems – as well as military and other discretionary spending cuts.”

He cites earlier calculations by the Congressional Budget Office (CBO) that concluded that the United States would need to increase tax revenue by 12 percentage points of GDP to bring revenue into line with spending commitments. But the CBO calculations assumed that the growth of government programs (including Medicare) would be cut by one-third in the short term and by two-thirds in the long term. This assumption, Prof. Kotlikoff notes, is politically implausible – if not politically impossible.

One way or another, the fiscal gap must be closed. If not, the country’s spending will forever exceed its revenue growth, and no one’s real debt can increase faster than his real income forever.

...He says the U.S. cannot end its fiscal crisis by increasing taxes. He opposes further stimulus spending because it will simply increase the debt. But he does suggest reforms that would help – most of which would require a significant withering away of the state."
Globe and Mail

"It’s truly hard to believe that it was just over two years ago that we invoked the Four Horsemen as our investment theme regarding the headwinds facing the consumer. The Four Horsemen being:

• Energy
• Employment
• Credit
• Housing

When you think about it, these constraints are still very much in play. The only supporting factors are government handouts, which now make up over 20% of personal disposable income."
Business Insider

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