Taxes – Page 10 – The Burning Platform

A List Of 97 Taxes Americans Pay Every Year

I’m waiting for the blogger tax to be implemented by Obama and his minions, with exemptions for liberal bloggers, communist bloggers, and socialist bloggers. There will be an additional surtax for libertarian bloggers.

Submitted by Michael Snyder of The Economic Collapse blog,

If you are like most Americans, paying taxes is one of your pet peeves. The deadline to file your federal taxes is coming up, and this year Americans will spend more than 7 billion hours preparing their taxes and will hand over more than four trillion dollars to federal, state and local governments. Americans will fork over nearly 30 percent of what they earn to pay their income taxes, but that is only a small part of the story.

As you will see below, there are dozens of other taxes that Americans pay every year. Of course not everyone pays all of these taxes, but without a doubt we are all being taxed into oblivion. It is like death by a thousand paper cuts. Our politicians have become extremely creative in finding ways to extract money from all of us, and most Americans don’t even realize what is being done to them. By the time it is all said and done, a significant portion of the population ends up paying more than half of what they earn to the government. That is fundamentally wrong, but nothing will be done about it until people start demanding change. The following is a list of 97 taxes Americans pay every year…

#1 Air Transportation Taxes (just look at how much you were charged the last time you flew)

#2 Biodiesel Fuel Taxes

#3 Building Permit Taxes

#4 Business Registration Fees

#5 Capital Gains Taxes

#6 Cigarette Taxes

#7 Court Fines (indirect taxes)

#8 Disposal Fees

#9 Dog License Taxes

#10 Drivers License Fees (another form of taxation)

#11 Employer Health Insurance Mandate Tax

#12 Employer Medicare Taxes

#13 Employer Social Security Taxes

#14 Environmental Fees

#15 Estate Taxes

#16 Excise Taxes On Comprehensive Health Insurance Plans

#17 Federal Corporate Taxes

#18 Federal Income Taxes

#19 Federal Unemployment Taxes

#20 Fishing License Taxes

#21 Flush Taxes (yes, this actually exists in some areas)

#22 Food And Beverage License Fees

#23 Franchise Business Taxes

#24 Garbage Taxes

#25 Gasoline Taxes

#26 Gift Taxes

#27 Gun Ownership Permits

#28 Hazardous Material Disposal Fees

#29 Highway Access Fees

#30 Hotel Taxes (these are becoming quite large in some areas)

#31 Hunting License Taxes

#32 Import Taxes

#33 Individual Health Insurance Mandate Taxes

#34 Inheritance Taxes

#35 Insect Control Hazardous Materials Licenses

#36 Inspection Fees

#37 Insurance Premium Taxes

#38 Interstate User Diesel Fuel Taxes

#39 Inventory Taxes

#40 IRA Early Withdrawal Taxes

#41 IRS Interest Charges (tax on top of tax)

#42 IRS Penalties (tax on top of tax)

#43 Library Taxes

#44 License Plate Fees

#45 Liquor Taxes

#46 Local Corporate Taxes

#47 Local Income Taxes

#48 Local School Taxes

#49 Local Unemployment Taxes

#50 Luxury Taxes

#51 Marriage License Taxes

#52 Medicare Taxes

#53 Medicare Tax Surcharge On High Earning Americans Under Obamacare

#54 Obamacare Individual Mandate Excise Tax (if you don’t buy “qualifying” health insurance under Obamacare you will have to pay an additional tax)

#55 Obamacare Surtax On Investment Income (a new 3.8% surtax on investment income)

#56 Parking Meters

#57 Passport Fees

#58 Professional Licenses And Fees (another form of taxation)

#59 Property Taxes

#60 Real Estate Taxes

#61 Recreational Vehicle Taxes

#62 Registration Fees For New Businesses

#63 Toll Booth Taxes

#64 Sales Taxes

#65 Self-Employment Taxes

#66 Sewer & Water Taxes

#67 School Taxes

#68 Septic Permit Taxes

#69 Service Charge Taxes

#70 Social Security Taxes

#71 Special Assessments For Road Repairs Or Construction

#72 Sports Stadium Taxes

#73 State Corporate Taxes

#74 State Income Taxes

#75 State Park Entrance Fees

#76 State Unemployment Taxes (SUTA)

#77 Tanning Taxes (a new Obamacare tax on tanning services)

#78 Telephone 911 Service Taxes

#79 Telephone Federal Excise Taxes

#80 Telephone Federal Universal Service Fee Taxes

#81 Telephone Minimum Usage Surcharge Taxes

#82 Telephone State And Local Taxes

#83 Telephone Universal Access Taxes

#84 The Alternative Minimum Tax

#85 Tire Recycling Fees

#86 Tire Taxes

#87 Tolls (another form of taxation)

#88 Traffic Fines (indirect taxation)

#89 Use Taxes (Out of state purchases, etc.)

#90 Utility Taxes

#91 Vehicle Registration Taxes

#92 Waste Management Taxes

#93 Water Rights Fees

#94 Watercraft Registration & Licensing Fees

#95 Well Permit Fees

#96 Workers Compensation Taxes

#97 Zoning Permit Fees

Yet despite all of this oppressive taxation, our local governments, our state governments and our federal government are all absolutely drowning in debt.

When the federal income tax was originally introduced a little more than 100 years ago, most Americans were taxed at a rate of only 1 percent.

But once they get their feet in the door, the social planners always want more.

Since that time, tax rates have gone much higher and the tax code has exploded in size.

Why do we have to have the most convoluted tax system in the history of the planet?

Why can’t things be simpler?

In a previous article entitled “24 Outrageous Facts About Taxes In The United States That Will Blow Your Mind“, I listed a number of reasons why our federal income tax system has become a complete and utter abomination that is entirely out of control…

1 – The U.S. tax code is now 3.8 million words long. If you took all of William Shakespeare’s works and collected them together, the entire collection would only be about 900,000 words long.

2 – According to the National Taxpayers Union, U.S. taxpayers spend more than 7.6 billion hours complying with federal tax requirements. Imagine what our society would look like if all that time was spent on more economically profitable activities.

3 – 75 years ago, the instructions for Form 1040 were two pages long. Today, they are 189 pages long.

4 – There have been 4,428 changes to the tax code over the last decade. It is incredibly costly to change tax software, tax manuals and tax instruction booklets for all of those changes.

5 – According to the National Taxpayers Union, the IRS currently has 1,999 different publications, forms, and instruction sheets that you can download from the IRS website.

6 – Our tax system has become so complicated that it is almost impossible to file your taxes correctly. For example, back in 1998 Money Magazine had 46 different tax professionals complete a tax return for a hypothetical household. All 46 of them came up with a different result.

7 – In 2009, PC World had five of the most popular tax preparation software websites prepare a tax return for a hypothetical household. All five of them came up with a different result.

8 – The IRS spends $2.45 for every $100 that it collects in taxes.

9 – According to The Tax Foundation, the average American has to work until April 17th just to pay federal, state, and local taxes. Back in 1900, “Tax Freedom Day” came on January 22nd.

10 – When the U.S. government first implemented a personal income tax back in 1913, the vast majority of the population paid a rate of just 1 percent, and the highest marginal tax rate was just 7 percent.

If it was up to me, I would abolish the income tax and shut the IRS down.

But neither major political party in the United States is even willing to consider such a thing.

So the monstrous system that we have created will continue to get even bigger and even more complicated.

We are literally being taxed into oblivion, and most Americans don’t even seem to care.

THE FOURTEEN YEAR RECESSION

“When a government is dependent upon bankers for money, they and not the leaders of the government control the situation, since the hand that gives is above the hand that takes. Money has no motherland; financiers are without patriotism and without decency; their sole object is gain.” – Napoleon Bonaparte

“A great industrial nation is controlled by its system of credit. Our system of credit is privately concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men … [W]e have come to be one of the worst ruled, one of the most completely controlled and dominated, governments in the civilized world—no longer a government by free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and the duress of small groups of dominant men.”– Woodrow Wilson

When you ponder the implications of allowing a small group of powerful wealthy unaccountable men to control the currency of a nation over the last one hundred years, you understand why our public education system sucks. You understand why the government created Common Core curriculum teaches children that 3 x 4 = 13, as long as you feel good about your answer. George Carlin was right. The owners of this country (bankers, billionaires, corporate titans, politicians) want more for themselves and less for everyone else. They want an educational system that creates ignorant, obedient, vacuous, obese dullards who question nothing, consume mass quantities of corporate processed fast food, gaze at iGadgets, are easily susceptible to media propaganda and compliant to government regulations and directives. They don’t want highly educated, critical thinking, civil minded, well informed, questioning citizens understanding how badly they have been screwed over the last century. I’m sorry to say, your owners are winning in a landslide.

The government controlled public education system has flourished beyond all expectations of your owners. We’ve become a nation of techno-narcissistic, math challenged, reality TV distracted, welfare entitled, materialistic, gluttonous, indebted consumers of Chinese slave labor produced crap. There are more Americans who know the name of Kanye West and Kim Kardashian’s bastard child (North West) than know the name of our Secretary of State (Ketchup Kerry). Americans can generate a text or tweet with blinding speed but couldn’t give you change from a dollar bill if their life depended upon it. They are whizzes at buying crap on Amazon or Ebay with a credit card, but have never balanced their checkbook or figured out the concept of deferred gratification and saving for the future. While the ignorant masses are worked into a frenzy by the media propaganda machine over gay marriage, diversity, abortion, climate change, and never ending wars on poverty, drugs and terror, our owners use their complete capture of the financial, regulatory, political, judicial and economic systems to pillage the remaining national wealth they haven’t already extracted.

The financial illiteracy of the uneducated lower classes and the willful ignorance of the supposedly highly educated classes has never been more evident than when examining the concept of Federal Reserve created currency debasement – also known as inflation. The insidious central banker created monetary inflation is the cause of all the ills in our warped, deformed, rigged financialized economic system. The outright manipulation and falsity of government reported economic data is designed to obscure the truth and keep the populace unaware of the deception being executed by the owners of this country. They have utilized deceit, falsification, propaganda and outright lies to mislead the public about the true picture of the disastrous financial condition in this country. Since most people are already trapped in the mental state of normalcy bias, it is easy for those in control to reinforce that normalcy bias by manipulating economic data to appear normal and using their media mouthpieces to perpetuate the false storyline of recovery and a return to normalcy.

This is how feckless politicians and government apparatchiks are able to add $2.8 billion per day to the national debt; a central bank owned by Too Big To Trust Wall Street banks has been able to create $3.3 trillion out of thin air and pump it into the veins of its owners; and government controlled agencies report a declining unemployment rate, no inflation and a growing economy, without creating an iota of dissent or skepticism from the public. Americans want to be lied to because it allows them to continue living lives of delusion, where spending more than you make, consuming rather than saving, and believing stock market speculation and home price appreciation will make them rich are viable life strategies. Even though 90% of the population owns virtually no stocks, they are convinced record stock market highs are somehow beneficial to their lives. They actually believe Bernanke/Yellen when they bloviate about the dangers of deflation. Who would want to pay less for gasoline, food, rent, or tuition?

Unless you are beholden to the oligarchs, that sense of stress, discomfort, feeling that all in not well, and disturbing everyday visual observations is part of the cognitive dissonance engulfing the nation. Anyone who opens their eyes and honestly assesses their own financial condition, along with the obvious deterioration of our suburban sprawl retail paradise infrastructure, is confronted with information that is inconsistent with what they hear from their bought off politician leaders, highly compensated Ivy League trained economists, and millionaire talking heads in the corporate legacy media. Most people resolve this inconsistency by ignoring the facts, rejecting the obvious and refusing to use their common sense. To acknowledge the truth would require confronting your own part in this Ponzi debt charade disguised as an economic system. It is easier to believe a big lie than think critically and face up to decades of irrational behavior and reckless conduct.

What’s In Your GDP

“The Gross Domestic Product (GDP) is one of the broader measures of economic activity and is the most widely followed business indicator reported by the U.S. government. Upward growth biases built into GDP modeling since the early 1980s, however, have rendered this important series nearly worthless as an indicator of economic activity. The popularly followed number in each release is the seasonally adjusted, annualized quarterly growth rate of real (inflation-adjusted) GDP, where the current-dollar number is deflated by the BEA’s estimates of appropriate price changes. It is important to keep in mind that the lower the inflation rate used in the deflation process, the higher will be the resulting inflation-adjusted GDP growth.” – John Williams – Shadowstats

GDP is the economic statistic bankers, politicians and media pundits use to convince the masses the economy is growing and their lives are improving. Therefore, it is the statistic most likely to be manipulated, twisted and engineered in order to portray the storyline required by the oligarchs. Two consecutive quarters of negative GDP growth usually marks a recession. Those in power do not like to report recessions, so data “massaging” has been required over the last few decades to generate the required result. Prior to 1991 the government reported the broader GNP, which includes the GDP plus the balance of international flows of interest and dividend payments. Once we became a debtor nation, with massive interest payments to foreigners, reporting GNP became inconvenient. It is not reported because it is approximately $900 billion lower than GDP. The creativity of our keepers knows no bounds. In July of 2013 the government decided they had found a more “accurate” method for measuring GDP and simply retroactively increased GDP by $500 billion out of thin air. It’s amazing how every “more accurate” accounting adjustment improves the reported data. The economic growth didn’t change, but GDP was boosted by 3%. These adjustments pale in comparison to the decades long under-reporting of inflation baked into the GDP calculation.

As John Williams pointed out, GDP is adjusted for inflation. The higher inflation factored into the calculation, the lower reported GDP. The deflator used by the BEA in their GDP calculation is even lower than the already bastardized CPI. According to the BEA, there has only been 32% inflation since the year 2000. They have only found 1.4% inflation in the last year and only 7.1% in the last five years. You’d have to be a zombie from the Walking Dead or an Ivy League economist to believe those lies. Anyone living in the real world knows their cost of living has risen at a far greater rate. According to the government, and unquestioningly reported by the compliant co-conspirators in the the corporate media, GDP has grown from $10 trillion in 2000 to $17 trillion today. Even using the ridiculously low inflation BEA adjustment yields an increase from $12.4 trillion to only $15.9 trillion in real terms. That pitiful 28% growth over the last fourteen years is dramatically overstated, as revealed in the graph below. Using a true rate of inflation exposes the grand fraud being committed by those in power. The country has been in a never ending recession since 2000.

Your normalcy bias is telling you this is impossible. Your government tells you we have only experienced a recession from the third quarter of 2008 through the third quarter of 2009. So despite experiencing two stock market crashes, the greatest housing crash in history, and a worldwide financial system implosion the authorities insist we’ve had a growing economy 93% of the time over the last fourteen years. That mental anguish you are feeling is the cognitive dissonance of wanting to believe your government, but knowing they are lying. It is a known fact the government, in conspiracy with Greenspan, Congress and academia, have systematically reduced the reported CPI based upon hedonistic quality adjustments, geometric weighting alterations, substitution modifications, and the creation of incomprehensible owner’s equivalent rent calculations. Since the 1700s consumer inflation had been estimated by measuring price changes in a fixed-weight basket of goods, effectively measuring the cost of maintaining a constant standard of living. This began to change in the early 1980s with the Greenspan Commission to “save” Social Security and came to a head with the Boskin Commission in 1995.

Simply stated, the Greenspan/Boskin Commissions’ task was to reduce future Social Security payments to senior citizens by deceitfully reducing CPI and allowing politicians the easy way out. Politicians would lose votes if they ever had to directly address the unsustainability of Social Security. Therefore, they allowed academics to work their magic by understating the CPI and stealing $700 billion from retirees in the ten years ending in 2006. With 10,000 baby boomers per day turning 65 for the next eighteen years, understating CPI will rob them of trillions in payments. This is a cowardly dishonest method of extending the life of Social Security.

If CPI was calculated exactly as it was computed prior to 1983, it would have averaged between 5% and 10% over the last fourteen years. Even computing it based on the 1990 calculation prior to the Boskin Commission adjustments, would have produced annual inflation of 4% to 7%. A glance at an inflation chart from 1872 through today reveals the complete and utter failure of the Federal Reserve in achieving their stated mandate of price stability. They have managed to reduce the purchasing power of your dollar by 95% over the last 100 years. You may also notice the net deflation from 1872 until 1913, when the American economy was growing rapidly. It is almost as if the Federal Reserve’s true mandate has been to create inflation, finance wars, perpetuate the proliferation of debt, artificially create booms and busts, enrich their Wall Street owners, and impoverish the masses. Happy Birthday Federal Reserve!!!

When you connect the dots you realize the under-reporting of inflation benefits the corporate fascist surveillance state. If the government was reporting the true rate of inflation, mega-corporations would be forced to pay their workers higher wages, reducing profits, reducing corporate bonuses, and sticking a pin in their stock prices. The toady economists at the Federal Reserve would be unable to sustain their ludicrous ZIRP and absurd QEfinity stock market levitation policies. Reporting a true rate of inflation would force long-term interest rates higher. These higher rates, along with higher COLA increases to government entitlements, would blow a hole in the deficit and force our spineless politicians to address our unsustainable economic system. There would be no stock market or debt bubble. If the clueless dupes watching CNBC bimbos and shills on a daily basis were told the economy has been in fourteen year downturn, they might just wake up and demand accountability from their leaders and an overhaul of this corrupt system.

Mother Should I Trust the Government?

We know the BEA has deflated GDP by only 32% since 2000. We know the BLS reports the CPI has only risen by 37% since 2000. Should I trust the government or trust the facts and my own eyes? The data is available to see if the government figures pass the smell test. If you are reading this, you can remember your life in 2000. Americans know what it cost for food, energy, shelter, healthcare, transportation and entertainment in 2000, but they unquestioningly accept the falsified inflation figures produced by the propaganda machine known as our government. The chart below is a fairly comprehensive list of items most people might need to live in this world. A critical thinking individual might wonder how the government can proclaim inflation of 32% to 37% over the last fourteen years, when the true cost of living has grown by 50% to 100% for most daily living expenses. The huge increases in property taxes, sales taxes, government fees, tolls and income taxes aren’t even factored in the chart. It seems gold has smelled out the currency debasement and the lies of our leaders. This explains the concerted effort by the powers that be to suppress the price of gold by any means necessary.

Living Expense	Jan-00	Mar-14	% Increase
Gallon of gas	$1.27	$3.51	176.4%
Barrel of oil	$24.11	$100.00	314.8%
Fuel oil per gallon	$1.19	$4.07	242.0%
Electricity per Kwh	$0.084	$0.134	59.5%
Gas per therm	$0.712	$1.078	51.4%
Dozen eggs	$0.97	$2.00	106.2%
Coffee per lb	$3.40	$5.20	52.9%
Ground Beef per lb.	$1.90	$3.73	96.3%
Postage stamp	$0.33	$0.49	48.5%
Movie ticket	$5.25	$10.25	95.2%
New car	$20,300.00	$31,500.00	55.2%
Annual healthcare spending per capita	$4,550.00	$9,300.00	104.4%
Average private college tuition	$22,000.00	$37,000.00	68.2%
Avg home price (Case Shiller)	$161,000.00	$242,000.00	50.3%
Avg monthly rent (Case Shiller)	$635.00	$890.00	40.2%
Ounce of gold	$279.00	$1,334.00	378.1%

Mother, you should not trust the government. There is no doubt they have systematically under-reported inflation based on any impartial assessment of the facts. The reality that we remain stuck in a fourteen year recession is borne out by the continued decline in vehicle miles driven (at 1995 levels) due to declining commercial activity, the millions of shuttered small businesses, and the proliferation of Space Available signs in strip malls and office parks across the land. The fact there are only 8 million more people employed today than were employed in 2000, despite the working age population growing by 35 million, might be a clue that we remain in recession. If that isn’t enough proof for you, than maybe a glimpse at real median household income, retail sales and housing will put the final nail in the coffin of your cognitive dissonance.

The government and their media mouthpieces expect the ignorant masses to believe they have advanced their standard of living, with median household income growing from $40,800 to $52,500 since 2000. But, even using the badly flawed CPI to adjust these figures into real terms reveals real median household income to be 7.3% below the level of 2000. Using a true inflation figure would cause a CNBC talking head to have an epileptic seizure.

The picture is even bleaker when broken down into the age of households, with younger households suffering devastating real declines in household income since 2000. I guess all those retail clerk, cashier, waitress, waiter, food prep, and housekeeper jobs created over the last few years aren’t cutting the mustard. Maybe that explains the 30 million increase (175% increase) in food stamp recipients since 2000, encompassing 19% of all households in the U.S. Luckily the banking oligarchs were able to convince the pliable masses to increase their credit card, auto and student loan debt from $1.5 trillion to $3.1 trillion over the fourteen year descent into delusion.

When you get your head around this unprecedented decline in household income over the last fourteen years, along with the 50% to 100% rise in costs to live in the real world, as opposed to the theoretical world of the Federal Reserve and BLS, you will understand the long term decline in retail sales reflected in the following chart. When you adjust monthly retail sales for gasoline (an additional tax), inflation (understated), and population growth, you understand why retailers are closing thousands of stores and hurdling towards inevitable bankruptcy. Retail sales are 6.9% below the June 2005 peak and 4% below levels reached in 2000. And this is with millions of retail square feet added over this time frame. We know the dramatic surge from the 2009 lows was not prompted by an increase in household income. So how did the 11% proliferation of spending happen?

The up swell in retail spending began to accelerate in late 2010. Considering credit card debt outstanding is at exactly where it was in October 2010, it seems consumers playing with their own money turned off the spigot of speculation. It has been non-revolving debt that has skyrocketed from $1.63 trillion in February 2010 to $2.26 trillion today. This unprecedented 39% rise in four years has been engineered by the government, using your tax dollars and the tax dollars of unborn generations. The Federal government has complete control of the student loan market and with their 85% ownership of Ally Financial, the largest auto financing company, a dominant position in the auto loan market. The peddling of $400 billion of subprime student loan debt and $200 billion of subprime auto loan debt has created the illusion of a retail recovery. The student loan debt has been utilized by University of Phoenix MBA wannabes to buy iGadgets, the latest PS3 version of Grand Theft Auto and the latest glazed donut breakfast sandwich on the market. It’s nothing but another debt financed bubble that will end in tears for the American taxpayer, as hundreds of billions will be written off.

The fake retail recovery pales in comparison to the wolves of Wall Street produced housing recovery sham. They deserve an Academy Award for best fantasy production. The Federal Reserve fed Wall Street hedge fund purchase of millions of foreclosed shanties across the nation has produced media proclaimed home price increases of 10% to 30% in cities across the country. Withholding foreclosures from the market and creating artificial demand with free money provided by the Federal Reserve has temporarily added $4 trillion of housing net worth and reduced the number of underwater mortgages on the books of the Too Big To Trust Wall Street banks. The percentage of investor purchases and cash purchases is at all-time highs, while the percentage of first time buyers is at all-time lows. Anyone with an ounce of common sense can look at the long-term chart of mortgage applications and realize we are still in a recession. Applications are 35% below levels at the depths of the 2008/2009 recession. Applications are 65% below levels at the housing market peak in 2005. They are even 35% below 2000 levels. There is no real housing recovery, despite the propaganda peddled by the NAR, CNBC, and Wall Street. It’s a fraud.

It is the pinnacle of arrogance and hubris that a few Ivy League educated economists sitting in the Marriner Eccles Building in the swamps of Washington D.C., who have never worked a day in their lives at a real job, think they can create wealth and pull the levers of money creation to control the American and global financial systems. All they have done is perfect the art of bubble finance in order to enrich their owners at the expense of the rest of us. Their policies have induced unwarranted hope and speculation on a grand scale. Greenspan and Bernanke have provoked multiple bouts of extreme speculation in stocks and housing over the last 15 years, with the subsequent inevitable collapses. Fed encouraged gambling does not create wealth it just redistributes it from the peasants to the aristocracy. The Fed has again produced an epic bubble in stock and bond valuations which will result in another collapse. Normalcy bias keeps the majority from seeing the cliff straight ahead. Federal Reserve monetary policies have distorted financial markets, created extreme imbalances, encouraged excessive risk taking, and ruined the lives of working class people. Take a long hard look at the chart below and answer one question. Was QE designed to benefit Main Street or Wall Street?

The average American has experienced a fourteen year recession caused by the monetary policies of the Federal Reserve. Our leaders could have learned the lesson of two Fed induced collapses in the space of eight years and voluntarily abandoned the policies of reckless credit expansion, instead embracing policies encouraging saving, capital investment and balanced budgets. They have chosen the same cure as the disease, which will lead to crisis, catastrophe and collapse.

“There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.” – Ludwig von Mises

THE BROKEN LIMB & BURST PIPE FALLACIES

“Economics is haunted by more fallacies than any other study known to man. This is no accident. While certain public policies would in the long run benefit everybody, other policies would benefit one group only at the expense of all other groups. The group that would benefit by such policies, having such a direct interest in them, will argue for them plausibly and persistently. It will hire the best buyable minds to devote their whole time to presenting its case. And it will finally either convince the general public that its case is sound, or so befuddle it that clear thinking on the subject becomes next to impossible.

In addition to these endless pleadings of self-interest, there is a second main factor that spawns new economic fallacies every day. This is the persistent tendency of man to see only the immediate effects of a given policy, or its effects only on a special group, and to neglect to inquire what the long-run effects of that policy will be not only on that special group but on all groups. It is the fallacy of overlooking secondary consequences.” – Henry Hazlitt – Economics in One Lesson

Saturday was the first day since a double shot of snow and ice storms hit the Philadelphia metro area on Monday and Wednesday I had a chance to drive around Montgomery County and witness the devastation firsthand. Over 750,000 homes lost power at the height of the ice storm on Wednesday and over 100,000 remained without power this past weekend. The mainstream media has become such a farce and propaganda machine for vested interests, it is essential to verify with your own eyes everything they report as fact. Their purpose is to entertain the consciously ignorant, exaggerate threats to keep the low IQ multitudes fearful, and function as mouthpieces for the ruling class. Deceitful corporate executives, mendacious government apparatchiks, and oblivious teleprompter reading media talking heads have been utilizing cold weather as an excuse for every poor earnings announcement, horrific employment report, and dreadful decline in retail sales. It certainly has nothing to do with decades of stagnant household income, awful monetary and fiscal policies, or the consequences of Obamacare.

We have become a delusional state dependent upon fallacies to convince ourselves our foolhardy beliefs, ludicrous economic policies, corrupt captured political system, and preposterously fraudulent financial system are actually based on sound logic and reason. Some fallacies have been perpetrated intentionally by the ruling class to manipulate, sway and deceive the populace, while others have been willfully employed by millions of techno-narcissistic iGadget addicted zombies as a substitute for thinking, reasoning and taking responsibility for the course of our nation.

You have men who constitute the unseen true ruling power of the country making a conscious and intentional effort to peddle fallacies to the masses in order to manipulate, mold, and corral them in a manner beneficial to the ruling power, financially, politically, and socially. The ruling class has been hugely successful in their capture of the public mind, creating a vast majority of the willfully ignorant who desperately grasp at fallacious concepts, beliefs, and storylines in order to avoid dealing with reality and being accountable for their actions and the actions of their leaders.

The fallacy being flogged by government drones and the legacy media about companies not hiring new employees because it has been cold and snowy during the winter is beyond absurd, except to someone who lives in the cocoon of Washington D.C. or regurgitates words processed on a teleprompter by paid minions of the ruling class. If you live in the real world, run a business, or manage employees, you understand weather has absolutely nothing to do with your decision to hire an employee. An organization takes weeks or months to hire employees. They don’t stop hiring because it snowed on Wednesday or the temperature was below normal. The contention that hiring has been weak for the last two months due to weather is outlandish and based upon flawed logic and warped reasoning. It is so illogical, only an Ivy League economist could believe it.

The other fallacy being pontificated by retail executives in denial, cheerleaders on CNBC and the rest of the propaganda press is weather is to blame for terrible retail sales over the last quarter. Again, this argument is specious in its conception. The retail executives use weather as an excuse for their failure in execution, hubris in over-expanding, and arrogance in pursuit of quarterly earnings per share and bonuses. CNBC and the rest of the Wall Street media pawns must provide lame fallacies for the corporate fascists regarding our downward economic path or the masses my wake up to reality. Protecting and expanding the wealth of the parasitic oligarch class is the one and only purpose of the corporate media.

Think about whether cold and snow in the winter will really stop purchases by individuals. If you need a new shirt for work or a pair of sneakers and it snows on Wednesday, you will wait until Saturday to make the purchase. Groceries will be consumed and replenished whether it is cold and snowy, or not. If an appliance or car breaks down, weather will be a non-factor in the new purchase decision. The proliferation of on-line retailing allows everyone to shop from the warmth of their homes. If anything, bad winter weather often spurs stocking up of groceries and the purchase of items needed to contend with winter weather (salt, shovels, coats, hats, gloves). Only an asinine spokes-model bimbo on CNBC could non-questioningly report the press release excuses of retailers. Critical thinking skills and journalistic integrity are non-essential traits among the propaganda mainstream press today.

Revealing the truth about pitiful employment growth and dreadful retail sales would destroy the fallacy of economic recovery stimulated by the monetary policies of the Federal Reserve and fiscal policies of the Federal government. The ruling class must perpetuate the myth that central bankers pumping $3.2 trillion of debt into the veins Wall Street banks and Obama dumping $6.7 trillion of debt onto the shoulders of future generations in order to cure a cancerous disease created by debt, has revived our economy and cured the disease. The unseen governing class cannot admit their traitorous actions have impoverished the working middle class, destroyed small businesses, depleted senior citizens of their savings, and warped our economic system to such an extent that recovery in now impossible. If the ignorant masses were to become sentient, the ruling class would become lamppost decorations.

After discovering water pipes at my rental property had burst due to the extreme cold weather and witnessing the widespread damage caused by the mid-week ice storm, I immediately thought how overjoyed my favorite Keynesian, Ivy League, Nobel Prize winning, New York Times scribbler, Paul (destruction is good) Krugman must be. All this destruction and devastation will be a tremendous boost to the economy according to Krugman and his ilk. This intellectually deceitful, morally bankrupt, despicable excuse for a human being spoke these words of wisdom three days after the 9/11 attacks:

“Ghastly as it may seem to say this, the terror attack – like the original day of infamy, which brought an end to the Great Depression – could even do some economic good. So the direct economic impact of the attacks will probably not be that bad. And there will, potentially, be two favorable effects. First, the driving force behind the economic slowdown has been a plunge in business investment. Now, all of a sudden, we need some new office buildings. As I’ve already indicated, the destruction isn’t big compared with the economy, but rebuilding will generate at least some increase in business spending.”

He had expanded his broken window beliefs to broken buildings, broken nations, and a broken people. You can’t keep a cunning Keynesian down when they need to propagate discredited fallacies in order to feed their own ego and promote foolish debt fueled spending by government, consumers and corporations as a solution to all economic ills. It makes no difference to a statist like Krugman that Frederic Bastiat had obliterated the preposterous notion that destruction and the money spent to repair the destruction was a net benefit to society, 164 years ago in his essay – That Which is Seen, and That Which is Not Seen. Bastiat’s logic is unassailable. Only the most highly educated Princeton economists don’t get it.

Have you ever witnessed the anger of the good shopkeeper, James B., when his careless son has happened to break a pane of glass? If you have been present at such a scene, you will most assuredly bear witness to the fact that every one of the spectators, were there even thirty of them, by common consent apparently, offered the unfortunate owner this invariable consolation – “It is an ill wind that blows nobody good. Everybody must live, and what would become of the glaziers if panes of glass were never broken?”

Now, this form of condolence contains an entire theory, which it will be well to show up in this simple case, seeing that it is precisely the same as that which, unhappily, regulates the greater part of our economical institutions.

Suppose it cost six francs to repair the damage, and you say that the accident brings six francs to the glazier’s trade – that it encourages that trade to the amount of six francs – I grant it; I have not a word to say against it; you reason justly. The glazier comes, performs his task, receives his six francs, rubs his hands, and, in his heart, blesses the careless child. All this is that which is seen.

But if, on the other hand, you come to the conclusion, as is too often the case, that it is a good thing to break windows, that it causes money to circulate, and that the encouragement of industry in general will be the result of it, you will oblige me to call out, “Stop there! Your theory is confined to that which is seen; it takes no account of that which is not seen.”

It is not seen that as our shopkeeper has spent six francs upon one thing, he cannot spend them upon another. It is not seen that if he had not had a window to replace, he would, perhaps, have replaced his old shoes, or added another book to his library. In short, he would have employed his six francs in some way, which this accident has prevented.

I wonder whether the myopic focus on only immediate impacts and inability of ideologues to understand unintended consequences is premeditated or just erroneous reasoning. The broken window fallacy can now be extended to broken limbs and burst pipes across the Northeast. Huge trees have been toppled, limbs and branches are strewn on the properties of homeowners across the region, homes and businesses have been physically damaged, and power outages wrecked profits at small businesses. Society has gained no benefit whatsoever from the mass destruction wrought by these storms. Thi

s weather induced ruin exposes GDP calculations as useless and misleading regarding the true economic health of the nation. The hundreds of millions in destruction will not be factored into the GDP calculation, but the spending by homeowners and businesses to remove downed trees, fix broken roofs, replace burst pipes and clean-up debris will be factored positively in the GDP calculation. The inevitable politician response will be increased government spending to repair damage to infrastructure. This will also be additive to GDP. Krugman will get a tingle up his leg.

CNBC’s Cramer & Liesman will rave about the unexpectedly strong GDP in the first quarter as proof the economy is doing great. The fallacy that GDP growth and stock market gains are beneficial to the average American will be flogged by the propaganda press at the behest of the ruling class until the last vestiges of national wealth are confiscated by the oligarchs. In the real world, the destruction caused by the harsh winter weather will not benefit society one iota. GDP will reflect the immediate short-term seen impact of the cleanup and repair of property damage. GDP will ignore the unseen opportunity costs which were lost and the long-term consequences of expenditures made to put property back in the condition in which it started. Destruction does not create profit, except in the Keynesian world of Krugman and his Ivy League educated sycophant cronies.

There are 2.5 million households in the Philadelphia metro area. There are hundreds of thousands with trees down, pipes frozen, gutters smashed, roofs leaking and electrical infrastructure damaged. An individual homeowner with a couple of large trees down will need to pay $500 to $1,000 for a tree service to remove the debris from their property. Considering the median household income in Montgomery County, PA is $75,000, that is not an insubstantial sum.

The homeowner did not anticipate this expenditure and will react by not dining out, taking a shorter vacation, not buying that new couch, or not investing in their small business. A landlord who has to repair busted pipes will incur added expense, resulting in less profit. Less profit means less taxes paid to the state and federal government, exacerbating their budget deficits. The landlord will defer replacing that old air conditioner for at least another year. Multiply these scenarios across the entire Northeastern United States and you have the long-term negative financial implications outweighing the short-term boost to GDP.

The Keynesian fallacy of increased economic activity being beneficial is annihilated by the fact homeowners and business owners are left in the same condition as they were prior to the storms, while the money spent to achieve the same property condition was not spent on other goods and services that would have truly expanded the economy. The fallacious government engineered GDP calculation will portray destruction as an economic boost. Keynesian worshiping economists and government bureaucrats observe this tragedy as only between two parties, the consumer who is forced to repair their property and is denied the pleasure of spending their money on something more enjoyable and the tree service company who experiences a positive impact to their business. They exclude the appliance store, restaurant, or hotel that did not receive the money spent on repairing the property. It is this third unseen party who is left out of the equation. It is this third party that shows the absurdity of believing destruction leads to profit and economic advancement. The national economic output is not increased, but highly educated government drones and Wall Street captured economists will point to GDP and disseminate the fallacy.

This leads us to government in general and the fallacy that government spending, government borrowing, and government programs are beneficial to society and the economy. Legalized plunder of the populace through income taxes, real estate taxes, sales taxes, gasoline taxes, cigarette taxes, license fees, sewer fees, tolls, and a myriad of other ass raping techniques is used to subsidize crony capitalist special interests, the military industrial complex, faux wars on poverty, drugs and terror, a failed public education system, vote buying entitlement programs, and a tax code written to benefit those who pay the biggest bribes to the corrupt politicians slithering around the halls of congress.

Government is a criminal enterprise designed to take from the weak and powerless while benefitting the connected and powerful. The government extracts the earnings of citizens and businesses at the point of a gun and redistributes those funds to special interests; funding boondoggles, wars of choice, foreign dictators, and the corporate and banking interests who control the puppet strings of Washington politicians. State organized and legal plunder designed to enrich everyone at the expense of everyone else is the delusional fallacy permeating our cultural mindset today.

President Obama declared my region a disaster area, allowing for government funds to supposedly help in the cleanup efforts. Again, the fallacy of government intervention benefiting society is unquestioned by the ignorant masses. Local and State governments are required by law to balance their budgets. The never ending progression of storms and record cold temperatures has already blown the winter storm budgets of transportation departments across the region. Gaping potholes are swallowing vehicles and will need to be repaired.

Government spokespersons and politicians tell the public not to worry. The government will come to the rescue, even when the funds officially run out. They won’t react the way a family would react to a budget overage, by cutting spending in another area. We have had mild winters in the recent past when the winter road budgets were far under. Did the government set aside this surplus for winters like the one we are currently experiencing? Of course not – they spent it on some other boondoggle program or useless shovel ready bridge to nowhere. Government politicians and their lackeys do not look beyond their 2 year election cycle.

The government budget overages due to winter storms will show up in the GDP calculation as a positive impact. A snowplow pushing snow to the side of the road and a crew filing a pothole has put the roadway back into the condition it was prior to the bad weather. The roadway is exactly the same. The money spent could have been used to pay down debt, fund the government pension shortfalls which will overwhelm taxpayers in the foreseeable future, or be given back to citizens to spend as they choose. There has been no net benefit to society.

No government spending provides a net benefit to society. Every government program, law, regulation, subsidy, tax or fee gives rise to a series of effects. The immediate seen effect may be favorable in the eyes of myopic politicians and an ignorant populace, but most government intervention in our lives proves to be fatal and unsustainable in the long-term. Whatever short-term benefits might accrue is far outweighed by the long-term negative implications on future generations. All government expenditures are foisted upon the public either through increased taxation or state created surreptitious inflation.

We have a country built on a Himalayan mountain of fallacies. We are a short-term oriented people who only care about our present situation, giving no thought about long-term consequences of our policies, programs, laws or actions. Critical thinking skills, reasoning abilities, and a basic understanding of mathematical concepts appear to be beyond our grasp. We’d rather believe falsehoods than deal with the harsh lessons of reality. We choose to experience the severe penalties of burying our heads in the sand over using our God given ability to think and foresee the future consequences of our irrational choices. We suffer from the ultimately fatal disease of ignorance, as described by Bastiat.

This explains the fatally grievous condition of mankind. Ignorance surrounds its cradle: then its actions are determined by their first consequences, the only ones which, in its first stage, it can see. It is only in the long run that it learns to take account of the others. It has to learn this lesson from two very different masters – experience and foresight. Experience teaches effectually, but brutally. It makes us acquainted with all the effects of an action, by causing us to feel them; and we cannot fail to finish by knowing that fire burns, if we have burned ourselves. For this rough teacher, I should like, if possible, to substitute a more gentle one. I mean Foresight.

It’s a big country and one fallacy doesn’t fit all. Some fallacies are committed purposefully by evil men with evil intent. The Wall Street financial elite, big corporations, big media and their politician puppets fall into this category. Other fallacies are executed by people whose salary depends upon the fallacies being believed by the masses. Middle level bankers, managers, journalists, and bureaucrats fall into this category. And lastly you have the willfully ignorant masses who would rather believe fallacies than look up from their iGadgets, Facebook, and Twitter and think. The thing about fallacies is they eventually are buried under an avalanche of reality. If you listen closely you can hear the rumble of snow beginning to give way on the mountaintop. Fallacies are about to be crushed and swept away by the real world of consequences.

“Wall Street had been doing business with pieces of paper; and now someone asked for a dollar, and it was discovered that the dollar had been mislaid. It was an experience for which the captains of industry were not entirely prepared; they had forgotten the public. It was like some great convulsion of nature, which made mockery of all the powers of men, and left the beholder dazed and terrified. In Wall Street men stood as if in a valley, and saw far above them the starting of an avalanche; they stood fascinated with horror, and watched it gathering headway; saw the clouds of dust rising up, and heard the roar of it swelling, and realized it was only a matter of time before it swept them to their destruction…

But it is difficult to get a man to understand something when his salary depends upon him not understanding it.”

Upton Sinclair – The Moneychangers

THEY’RE COMING FOR YOUR SUPERBOWL POOL MONEY

The Federal, State and local government leeches are in desperate need of more blood to fund their bloated bureaucracies, gold plated pensions, vote bribing entitlement schemes, and overall crony machinery. The State of PA is effectively insolvent if they used GAAP accounting . So is virtually every state and municipality in the country. The PA government pension liability alone will drive the state into bankruptcy. Rather than address the real problem with honesty and courage, the weasel politicians and bureaucrats solution is to defer, delay, tax and pretend. The weasels increase the gas tax, tolls, fees, and anything else they control to pay for their incompetence.

Earlier in the week, I heard another story about PA expanding gambling to fill their gaping budget hole. The Phila Inquirer described the situation:

As budget discussions unfold over the next few months, it is widely expected that the GOP-controlled House and Senate, along with the Corbett administration, will seriously consider a proposal to expand lottery gambling and, possibly, one to legalize online gambling. Both measures could mean hundreds of millions in annual tax revenue at a time when the state is in the red. The administration says Pennsylvania could be facing at least a $1.2 billion budget gap for the fiscal year that begins July 1.

These bozos already have a $1.2 billion budget shortage, COMPLETELY due to the mandatory government pension payments required to fund the retirements of government drones who retire at 50 years old. Instead of addressing that issue, they milk the cows for more revenue. The morons think they can generate another $200 million from keno and on-line gambling. Of course, all the other states have the same plan. You can’t get blood from a stone. The real people living in real houses across the state are making less real money than they did in 1989. But the clowns in Harrisburg think they can extract another $200 million per year from these people. None of these lowlife politicians mention the FACT that it is mostly senior citizens, the poor and the ignorant who are lonely, bored, and stupid enough to gamble. PA is taxing the poor and stupid to fund their pensions.

And now they are coming for your Superbowl pool. The Pennsylvania State Police are out to get you.

Two government drone politicians crafted Act 92 to, among other things, allow nonprofit clubs to run pools, as long as it is structured so any wager is an entry fee, not a bet on a specific outcome, with the house taking the other side. Wagers are capped at $20. But State Police Commissioner Frank Noonan said Act 92 specifically says it cannot conflict with federal law, and Noonan said placing any kind of wager on sports violates the federal Professional and Amateur Sports Protection Act. State Police had its legal team review Act 92, and found the federal law doesn’t leave any wiggle room for Super Bowl or March Madness pools, Noonan said.

We are seeing the heavy hand of government getting heavier by the day. Every State and municipality will be growing increasingly desperate as their un-payable entitlement promises come due. Everyone is seeing gas taxes, sales taxes, income taxes, real estate taxes, car registration fees, sewer fees, water fees, utility fees, cell phone fees, cable fees, and tolls increased. Government is bleeding us to death. The time is coming when we say we’ve had enough.

Reduce your footprint. Drive less. Cancel services that are taxed. Work for cash under the table. Barter. Buy less stuff. Don’t ever participate in state sanctioned gambling. Starve the beast until it collapses.

TAXMAN COMETH

(If you drive a car ), I’ll tax the street,
(If you try to sit ), I’ll tax your seat,
(If you get too cold ), I’ll tax the heat,
(If you take a walk ), I’ll tax your feet.
Taxman.

The Beatles

The desperate government drones are flailing about in their death throes, frantically trying to milk the taxpayer cow for every last drop before they die of thirst. These feckless politicians have wasted your money for decades on worthless programs and projects. The do gooders have pissed away your money on public education and the union government drones running the education system. The result has been millions of clueless dupes who can’t think for themselves.

Politicians have destroyed our major cities by taxing the citizens and businesses to the point that producers leave. They have made entitlement promises that can never be honored. Detroit was the 1st domino to fall. The idiots running the City of Philadelphia are too stupid to see they are on the exact same path as Detroit. The tax base is gone. They are left with hordes of free shit army privates. Rather than deal with reality and cut expenses, they try the same old solution – create new taxes, new regulations and new laws.

It seems the job of government drones is to crush entrepreneurial spirit, deter innovation, restrict freedom, and tax the shit out of anything the moves, breathes or helps others. Three young dudes, fresh out of college created an idea called Air Bed & Breakfast, now called Airbnb.com, in 2008. The idea was for individuals with spare rooms to be matched up with other individuals in need of a room. Two individual people coming to a mutually beneficial agreement and eliminating corporate hotels, ridiculous rules, regulations and taxes does not sit well with the oligarchs and politicians. They aren’t getting their slice of the pie. Of course, their slice would amount to nine-tenths of the pie.

These three entrepreneurs have grown their business to $2.5 billion in five years. It’s amazing what individuals with a great idea can accomplish without Obama subsidies, the government deciding winners and losers, and control freak do-gooders imposing rules, regulations and taxes to stop the business dead in its tracks.

Airbnb epitomizes the sharing economy, in which folks rent or swap all kinds of underused assets – spare rooms, cars, parking spots, lawnmowers, children’s clothes or their time.The new sector inspires almost messianic devotees who say it’s an engine of innovation that creates value out of thin air, conserves resources, empowers ordinary people to be entrepreneurs, and disrupts industries and corporations.

The slumlords, corporate hotel chains, and tax & spend politicians are outraged at this dreadful act of liberty and freedom by people across the country. And they are going to do something about it. Democratic councilman Bill Green of Philadelphia is going to stop these entrepreneurial terrorists before they make too many people satisfied. He is so impressed by their service he wants to tax and regulate the shit out of them.

“It’s a product that I use when I travel. And its something that’s clearly being used here, and we’re not enforcing the law. So we might as well figure out a way to create a registration process, and tax it, [so] that [it] works with our zoning code.”

“Right now, it’s underground, so we have to figure out how to make the sharing economy, whether its ride sharing, car sharing, Airbnb or other things like that that work with Philadelphia’s zoning code.”

What would we possibly do without politicians protecting us from ourselves and creating taxes to crush new businesses? We truly need to starve the beast. We need to expand the underground economy and starve these bastards of their taxes. Barter with people. Conduct as many transactions in cash as possible. The laws and tax regulations were written by the corporate fascists to benefit the corporate fascists. Their kingdom built on a foundation of lies and false promises is crumbling. Let’s give it a push by starving them of their tax and fee revenues.

TAXING THE POOR & ELDERLY TO DEATH, TO PAY BLOATED GOVERNMENT UNION PENSIONS

The morons running the state capitol of Pennsylvania – Harrisburg – already had to file bankruptcy due to their incompetent management of city finances. Now the brain surgeons running the city of Scranton have decided that dramatically raising taxes and fees on the elderly, poor population of Scranton will solve their budget woes. The government pension obligations haven’t even really kicked in yet. The required pension payments for government workers will skyrocket in the next three years. The real unemployment rate in Scranton is north of 15%. Businesses have closed. The population has declined by 7.5% since 1990. It is a decaying, dying city with only the college supporting the few remaining residents. The government drones running Scranton and other towns across PA are delusional if they think they can raise taxes and fees on aging and unemployed people with no income to pay the bloated pensions of government workers. Math is hard for idiots. Scranton will declare bankruptcy. Book it Dano.

Scranton Residents Plead for Bankruptcy vs. Higher Taxes; Different Than Detroit

City officials in Scranton Pennsylvania have ignored pleas from residents pleading for bankruptcy.

Instead, the city raised property taxes and trash fees nearly 60% and tripled rental registration fees. The city’s school district, which faced a $4-million deficit, raised taxes 2.4%. The City Council, which in 2012 passed a 5% amusement tax on live entertainment, is now discussing a 10% drink tax.

As a result, taxpayer who can are fleeing the city.

The LA Times reports For Scranton residents, bankruptcy is an inviting option

When Detroit filed for bankruptcy, hundreds of residents took to the streets to protest what they saw as a drastic approach to fixing the city’s budget problems.

But in this hilly town of 76,000 in northeastern Pennsylvania, residents have a different view of Chapter 9: They want the city to declare bankruptcy. And soon.

“The silent majority would like to see bankruptcy,” said Bob “Ozzie” Quinn, president of the Scranton and Lackawanna County Taxpayers Assn. “Basically, it’s down to a point where people cannot afford to pay the taxes and are moving out of town.”

The City Council, which in 2012 passed a 5% amusement tax on live entertainment, is now discussing a 10% drink tax. The city’s parking authority is in receivership, and it recently privatized its parking meters: The company in charge upped rates and extended meter hours to 6 p.m., which bar owner Mert Gavin says has motivated workers to skip happy hour and head home to the suburbs straight after work.

“I am one of the last two bars that’s still downtown. Tink’s is gone. Whistle’s is gone, Banshee’s is gone, Molly Brannigan’s is gone,” said Gavin, who runs Mert’s. “Do they expect I’m going to bail the city of Scranton out myself?”

The taxes are especially egregious to some because so many of the city’s residents are elderly and living on fixed incomes. The median household income in Scranton is $37,000, and nearly one-fifth of residents live below the poverty line.

The city’s financial problems were accelerated by a 2011 Pennsylvania Supreme Court decision that found that the city owed its police and firefighters unions back pay — about $21 million. The settlement money became due in 2013, but the city bickered over how to come up with the funds for so long that Moody’s warned in November that Scranton faced the threat of default.

“It’s been nonstop. They raised the water fees, the electric, the gas,” said Richard Laytos, a Scranton native who moved back to the city to retire in 1997 after 44 years in New Jersey.

Gary Lewis, who once ran a blog, scrantonisbroke, that urged city leaders to consider bankruptcy, took a drastic step when they failed to do so: He moved out of the city where he’d spent his whole life.

“I did the math — realized how much it was costing me to live in the city,” said Lewis, who now lives in Indiana, where he says he makes $2,500 more a year because of lower taxes. “That’s the story of my generation. There’s a lot of kids like me, who grew up, went to college at Scranton, but they turn 22 and move out of the city, and they don’t move back because it’s not a financially attractive proposition.”

bankruptcy won’t solve the city’s financial woes, said John Judge, president of the local firefighters union. “It’s a horrible idea — you take local control out of the hands of policymakers, and put it in some judge’s hand,” he said.

Neither the city’s new mayor nor his predecessor, Chris Doherty, returned calls for comment, but former City Council President Janet Evans said she and Doherty had been determined to avoid bankruptcy.

“We are in a different situation than Detroit,” she said. “We were willing and able to do everything within the scope of our authority to continue the recovery of the city of Scranton until it sits once again on sound financial ground.”

My Thoughts

Officials in city hall are either complete financial-morons, beholden to the unions, or beholden to their own pension plans that would take a hit if the city declared bankruptcy.

I suspect a combination.

Different Than Detroit

“We are in a different situation than Detroit,” says former City Council President Janet Evans.

Indeed.

Detroit is better off.

In bankruptcy, Detroit has a chance to dump union contracts and onerous pension promises. Detroit may have hit bottom.

The economic-jackasses in Scranton are going to extract every ounce of blood they can from taxpayers, then eventually declare bankruptcy anyway.

Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com

THE MATH DOESN’T WORK

Below are two charts that tell a story of an unsustainable trend. Here are the facts:

There are 144 million Americans employed, with 115 million employed full-time and 29 million employed part-time.
There are 246 million working age Americans, of which 91 million are supposedly not in the work force and 11 million are officially unemployed.
Approximately 68 million of these workers are in the top two income quintiles.
The bottom three quintiles receive more government entitlements than they pay in taxes. That means the top two quintiles pay 106% of all the taxes, while the bottom 60% of income producers get money back.
There are 68 million workers paying taxes to support the 76 million lower income workers, the 11 million unemployed workers, the 91 million working age Americans who have supposedly “chosen” not to work, and the 70 million people either too young or too old to work.
The workers in the top two quintiles represent 28% of the working age population and are paying 106% of the taxes to fund our welfare/warfare state.

What is shown on these charts is just the entitlement side of the equation. The taxes paid by 68 million people also have to fund our wars of choice in the Middle East, our ever growing surveillance state, prisons for the excess population, and the various other boondoggles that our beloved leaders pay for with our money. Do you understand why we are adding $1 trillion per year to the national debt? Today’s current scenario is a disaster.

We are only at the cusp of the Baby Boomers retiring and collecting what they are “owed”. Entitlement outlays are on automatic pilot and will soar, as 10,000 people per day turn 65 for the next 17 years. The math in this equation does not add up. It is simply unsustainable. The people in the 4th quintile making $88,000 per year can barely call themselves middle class in this hunger games society. Are the politicians in D.C. going to tax them more to cover the fiscal gap? Are the top .1% who write the tax laws going to allow themselves to be shaken down to pay for the bottom 72% who are net recipients of government goodies?

Can 68 million people pay the load for the other 248 million people, along with running a world empire? There is no solution to this dynamic. It’s a train wreck happening in slow motion. We are too far down the track and the bridge is out. Disaster beckons.

MAIN STREET VERSUS WALL STREET

Do small businesses, which account for 65% of all the new hiring in the country, become less optimistic during an economic recovery?

“After another false start, small business confidence has sputtered and stalled again. For the sector that produces half the private GDP and employs half the private sector workforce -— the fact that they are not growing, not hiring, not borrowing and not expanding like they should be, is evidence enough that uncertainty is slowing the economy. Virtually no owners think the current period is a good time to expand, because they simply don’t know what the future holds. So why invest? And with the lack of any sustainable fiscal policy or a federal budget, no one’s banking that Washington will be at forefront of any meaningful change. Overall, it appears that there will be little growth coming from the small business half of the economy; as the world economy slows, even big business may suffer.” — NFIB chief economist Bill Dunkelberg

Small Business Optimism Down in March

The March NFIB Index of Small Business Optimism ended its slow climb, declining 1.3 points and landing at 89.5. In the 44 months of economic expansion since the beginning of the recovery in July 2009, the Index has averaged 90.7, putting the March reading below the mean for this period. Of the ten Index components, two increased, two were unchanged and six declined. Among the greatest declines were labor market indicators, inventory investment plans and sales expectations.

Small business owners are on the ground near the real people. They aren’t sitting in ivory towers at Princeton playing with regression models. They aren’t programming their high frequency trading computers to buy the dip. They aren’t calculating their bonuses and stock option compensation. They are trying to make payroll. They are trying to sell products. They are trying to understand how badly Obamacare will screw them. They are trying to navigate through the hundreds of thousands of rules, regulations and laws that are passed by politicians. They are paying experts thousands of dollars to decipher and comply with the IRS tax code. Well guess what? They have no plans to hire anyone and they expect sales to go lower.

Ben Bernanke’s money printing is not benefitting them in any way. His policies are not generating jobs. His policies are impoverishing savers, who now have less money to spend at small businesses. Ben Bernanke’s policies are designed to benefit Wall Street banks and mega-corporations. His policies are designed to drive stock prices higher and enrich the connected crony capitalists that control the country. Meanwhile, small businesses and small people are dying on the vine. The real economy is withering away under the weight of massive debt, crushing taxation, and ponderous government regulations and red tape.

There has never been a greater disconnect between Main Street America and Wall Street in our history. It will not end well. Bill Dunkelberg seems to be an economist with common sense, as opposed to the Keynesian morons like Krugman and the other Wall Street shills paraded on CNBC.

COMMENTARY BY CHIEF ECONOMIST BILL DUNKELBERG

NFIB Chief Economist
William Dunkelberg

Small business produces half the private GDP and employs half the private sector workforce. But it is not growing, not hiring, not borrowing and not expanding enough. Small business owners have been depressed since 2007 and that has not changed. In the March survey of NFIB’s 350,000 member firms, 77% expect the economy to be no better or even worse 6 months from now that it is currently. Only 4% think the current period is a good time to expand substantially, compared to an average of 17% for the period 1973 to 2007. More owners plan to reduce employment in the coming months than plan to create new jobs. More owners plan to reduce their inventories than plan to order new stocks. The bulk of growth comes from the increase in our population of about 3 million people and the growing need to simply replace stuff that is wearing out, not enough to get the economy back to trend growth much less the strong growth needed to restore employment to 2007 levels.

The Federal Reserve continues to assert its intention to purchase a trillion dollars of Treasury securities and mortgages, adding a trillion dollars to its portfolio and stuffing a trillion dollars of new liquidity into the banking system, until the unemployment rate falls below 6.5% or inflation breaks out. Then it will “consider” changing policy. Unless something really bad happens, this is a winning strategy for the Fed because eventually the private sector will improve, the labor force will shrink (as boomers leave), the unemployment rate will fall and the Fed can claim its policies “worked”, even if their policies made no contribution to the improvement or even slowed it down by creating uncertainty and fear among investors and business owners.

This is a risky strategy. The evidence that “uncertainty” is slowing the economy is pretty clear now (research at the San Francisco Federal Reserve for example) and uncertainty probably increases with the size of the Fed’s portfolio (as has the price of gold). The real economy is hardly growing yet the stock market and corporate profits are at record high levels. How do we make a record amount of money without producing more output and employing more workers? Such contradictions breed uncertainty.

In the meantime, a record low percentage of small business owners claim that credit is their top business problem (3%) while taxes get the most votes (23%). Record numbers of owners have no interest in a loan (over 60%), because they have no use for the funds that have a high probability of successfully generating a return so the loan can be repaid. The Fed has made sure that there is plenty of money to lend, but in the process may have reduced the confidence that borrows need to take risks, borrow, spend and expand. And then there’s the impact of fiscal policy (or the lack of a policy). The President is flying around the country doing fund-raisers and stumping for gun control, but he still has presented no budget proposal. Enough said.

CITIES WITH HIGHEST & LOWEST TAXES

I hate finishing in 2nd place. Maybe Philadelphia can finish 1st next year if Mayor Nutter can just jack up those real estate taxes a little more. There sure does seem to be a number of Democratically run urban shitholes on the list of highest tax cities. According to liberal ideology, higher taxes should be more beneficial to a community. Higher taxes allows government to pay union teachers and union policemen more money to make our kids smarter and cities safer. How is that working out in Detroit, Philly, Chicago, Newark and Baltimore?

American Cities with the Highest (and Lowest) Taxes

February 25, 2013 by Michael B. Sauter, Alexander E.M. Hess, Samuel Weigley

Tax season is here and, according to a recent report, American families in the nation’s largest cities will be shelling out 15% or more of their income, and that doesn’t even include federal taxes.

The report, released by the Office of Revenue Analysis of the Government of Washington, D.C., reviewed the estimated property, sales, auto and income taxes a family paid in 2011 in the largest city in each state. The differences were stark. A family of three earning $75,000 in Cheyenne, Wy., paid just $2,808, or 3.7% of its income. In Bridgeport, Conn., that same family would have paid $16,105, or 21.5% of its income. Again, this is excluding federal taxes.

Click here to see the cities with the highest taxes

Click here to see the cities with the lowest taxes

One of the biggest factors in how much a family can expect to pay is the state and local tax rates affecting their city. In Bridgeport, Conn., the effective property tax rate, or how much people pay per $100 of property, is among the highest of the large cities reviewed, and property values are higher, meaning a family earning $100,000 per year can expect to spend $11,299 in property taxes alone.

According to Edward Wyatt, fiscal analyst for the Office of Revenue Analysis, while tax rates are certainly a factor in the tax burden on families, it is more the existence of certain kinds of taxes that determines whether families pay through the nose or barely at all come mid-April.

Personal income tax is one of the key factors. Seven states have no income tax, and six of the 10 cities with the lowest tax burdens are in these states. Two more cities in the bottom 10 — Memphis, N.H., and Manchester, Tenn. — only tax nonwage income, such as dividends and interest. None of the cities with high tax burdens are in income tax-exempt states.

The cities with the highest tax burdens tend to be much larger ones, like New York, Philadelphia and Los Angeles, while the low tax burden cities are smaller and in more rural areas, including Fargo, Anchorage and Cheyenne. Wyatt suggested this may have to do with the cost of running these larger cities, as they have to spend less per capita on programs like social services.

Another interesting trend was that cities with higher tax burdens tended to have higher unemployment, while lower-taxed cities tended to have among the lowest unemployment. While this is often a product of the state economy, in some cases, the city’s rate is much higher than the state. Bridgeport, the city with the highest tax burden among the 51 cities studied, also had the highest unemployment rate, at 11.7% in December. The state of Connecticut’s rate that month was just 8.6%.

Also read: The States with the Strongest and Weakest Unions

Based on the local government report: Tax Rates and Tax Burdens in the District of Columbia — A Nationwide Comparison, 24/7 Wall St. reviewed the cities where a family of three in different income brackets would spend the largest and smallest percentages of their income on state and local taxes. In order to reflect the respective rank in all income levels measured by the report, we considered all of them for the purposes of the ranking. The report covers the largest city in each state, as well as Washington, D.C. All estimates are for the 2011 fiscal year. 24/7 Wall St. also reviewed data for these cities from the U.S. Census Bureau, including the occupational breakdown of the city’s workforce, and income, poverty and home value data, all for 2011. From the Bureau of Labor Statistics, we reviewed the unemployment rates for these cities as of December 2012.

Cities with the Lowest Tax Burdens

10. Las Vegas, Nev.
> Taxes for family earning $25,000: $3,027 (24th highest)
> Taxes for family earning $150,000: $6,305 (3rd lowest)
> Unemployment rate: 10.2% (9th highest)

Las Vegas had no state or local income tax in 2011, which saved a hypothetical family of three earning $25,000 a year $266 over the average city, and a family earning $150,000 per year an estimated $6,835. Also, the city’s effective residential property tax rate was just $1.15 per $100 of assessed value, a rate lower than most of the cities reviewed. Although the city had an especially high 7.75% sales tax, it also had one of the nation’s lowest sales tax burdens. Among the reasons why, in Nevada only 37.4% of goods are taxed at sale, and food and other consumer goods are exempted. Currently state and local sales tax payments are also tax deductible in Nevada.

9. Manchester, N.H.
> Taxes for family earning $25,000: $2,357 (4th lowest)
> Taxes for family earning $150,000: $6,582 (7th lowest)
> Unemployment rate: 6.0% (16th lowest)

Manchester was one of just five cities reviewed with no state or local sales tax. Additionally, neither the city nor state had an income tax on personal wages, with state income taxes limited to sources such as interest and dividend payments, inheritance and business profits. However, the city is heavily dependent on property taxes, which its website describes as “the principal tax of the City.” In 2011, for a hypothetical family of three, Manchester’s property tax burden was among the highest for all cities observed at all levels of income. Property taxes also comprised the majority of any family’s state and local tax burden: A Manchester family earning $75,000 would have paid $5,134 in state and local taxes in 2011. Of this, $4,645 would have been property taxes.

Also Read: The Six States (and D.C.) with the Highest Gas Prices

8. Sioux Falls, S.D.
> Taxes for family earning $25,000: $2,565 (7th lowest)
> Taxes for family earning $150,000: $7,127 (8th lowest)
> Unemployment rate: 4.2% (4th lowest)

Sioux Falls residents benefit from lower than average taxes. Helping to significantly alleviate the total tax burden, Sioux Falls is one of just a few cities where residents are not required to pay any income taxes. In addition, auto taxes are among the lowest of all cities. The one downside for taxpayers is the sales tax burden, which is among the top third of all cities measured. The unemployment rate of 4.2% as of December 2012 was the fourth lowest of all cities measures. The surplus in the city’s 2013 budget is expected to be about $1.7 million.

7. Memphis, Tenn.
> Taxes for family earning $25,000: $2,941 (23rd lowest)
> Taxes for family earning $150,000: $6,450 (5th lowest)
> Unemployment rate: 9.8% (11th highest)

Memphis charged no city-level personal income tax in 2011. Neither did the state of Tennessee, where only income from dividends or interest payments, as well as corporate income, are taxed. However, residents did pay a total of 9.25 cents per dollar in sales taxes, higher than all but three other cities. All of these cities have higher incomes than Memphis, where more than 27% of the population lives below the poverty level, compared with 15.9% nationwide. Partly because of sales taxes, a hypothetical family earning $25,000 paid 11.8% of its income in state and local taxes, while a family earning $150,000 paid just 4.3%.

6. Billings, Mont.
> Taxes for family earning $25,000: $2,223 (the lowest)
> Taxes for family earning $150,000: $11,036 (14th lowest)
> Unemployment rate: 4.1% (3rd lowest)

In 2011, residents of Billings did not have to pay any sales tax, either to the city or their state. Sales taxes cost a family of three earning $25,000 a year $728 and a family earning $150,000 a year $2,194. Additionally, Montana is a low income tax state. At all income levels, Billings had a lower income tax burden than all observed cities where such a tax was in effect. However, not all taxes in Billings were low; gas taxes were more than four cents per gallon higher than the nationwide average in 2011. The state also provides oil and gas companies with a controversial tax holiday, which allows production at new wells to be taxed at a rate of less than 1% during their first 12 to 18 months of operations.

5. Jacksonville, Fla.
> Taxes for family earning $25,000: $2,956 (26th lowest)
> Taxes for family earning $150,000: $6,429 (4th lowest)
> Unemployment rate: 7.7% (21st highest)

As residents of Florida, individuals and families living in Jacksonville pay neither a state nor local income tax. Partly because of this, the tax burden for wealthier families remained low in 2011. A typical family of three with two sources of income, earning $150,000 per year, would have paid 4.3% of its income on state and local taxes — less than all but four other cities. However, a family earning just $25,000 per year would have had to pay 11.8% of its annual income in taxes. Florida’s 6% sales tax accounts for the majority of the state’s tax revenue.

4. Fargo, N.D.
> Taxes for family earning $25,000: $2,228 (2nd lowest)
> Taxes for family earning $150,000: $7,908 (10th lowest)
> Unemployment rate: 3.2% (the lowest)

Fargo has a very low tax burden compared to most large cities, especially for families who make little money. For a family of three making just $25,000, the tax burden was just $2,280 in 2011, the second lowest of all cities. Although both the city and the state do not collect as much in total tax revenue from households, the 3.2% unemployment rate means that more people are likely to own homes, spend more money when shopping, and purchase cars, driving up tax payments in those categories. In addition, North Dakota collects revenue through various oil and gas taxes, such as the oil gross production tax, the gas gross production tax and the oil extraction tax.

Also Read: States Where People Cannot Get a Mortgage

3. Houston, Tex.
> Taxes for family earning $25,000: $2,709 (14th lowest)
> Taxes for family earning $150,000: $6,571 (6th lowest)
> Unemployment rate: 6.1% (17th lowest)

Houston is one of just eight cities in which a family of three earning $150,000 a year paid less than 5% of its annual income in taxes in 2011. One major reason is the absence of any state income or local income tax, which cost a similar family an average of $6,835 in the cities where income taxes are levied. However, residents did pay one of the nation’s highest sales taxes, at 8.25%. This cost a family earning $150,000 in Houston almost $2,500 in sales taxes — higher than in two-thirds of cities surveyed. Additionally, the city had one of the nation’s highest property tax rates, at $2.53 per $100 of assessed property value.

2. Anchorage, Alaska
> Taxes for family earning $25,000: $2,236 (3rd lowest)
> Taxes for family earning $150,000: $5,095 (2nd lowest)
> Unemployment rate: 5.2% (tied for 10th lowest)

Anchorage has a tax rate lower than all but one major city in the United States. The low taxes are even better given that the city’s median household income of $72,813 in 2011 was higher than all other cities. Anchorage’s one weak spot is its property tax burden, which is generally among the top quarter of all cities measured. The city is just one of a handful where residents are not required to pay any sales taxes. In addition, the auto tax burden is among the lowest of all cities. This week, the Anchorage Chamber of Commerce will host a debate on the pros and cons of changing the state’s oil tax law.

1. Cheyenne, Wyo.
> Taxes for family earning $25,000: $2,424 (5th lowest)
> Taxes for family earning $150,000: $4,702 (2nd lowest)
> Median household income:
> Unemployment rate: 5.2% (tied for 10th lowest)

No city measured has a lower burden on families than Cheyenne. A family of three earning $25,000 would have had a 9.7% tax burden in 2011, the fifth lowest of all cities. The tax burden becomes even lighter as someone moves up the income ladder. A family of three earning $150,000 had a tax burden of just 3.1%, lower than any other city. For a family of three making $75,000 to $150,000, the city has the second lowest property tax burden behind Birmingham, Alabama.

Cities with the Highest Tax Burdens

10. Baltimore, Md.
> Taxes for family earning $25,000: $2,703 (13th lowest)
> Taxes for family earning $150,000: $17,134 (6th highest)
> Unemployment rate: 9.9% (10th highest)

Baltimore has one of the highest income tax burdens of all the cities. In 2011, a family of three earning $50,000 would have paid $1,818 in income taxes, the ninth highest burden of all largest cities. For a family earning $100,000, the income tax burden was $5,511, the sixth highest. In addition, property taxes in the city were higher than most other largest cities, especially for higher-income families. It is also the largest property tax in the state. According to The Baltimore Sun, mayor Stephanie Rawlings-Blake has expressed interest in lowering the city’s property tax rate to make it more competitive.

9. Detroit, Mich.
> Taxes for family earning $25,000: $3,270 (17th highest)
> Taxes for family earning $150,000: $15,522 (10th highest)
> Unemployment rate: 18.2% (the highest)

Detroit residents have among the highest tax burdens of all cities, but it is especially high for those with higher incomes. For families of three earning over $75,000, Detroit’s income taxes are among the top five of all the cities reviewed. The high tax burden on its residents has not translated into a healthy economy — Detroit’s finances are still in havoc. A state review found that the city has more than $14 billion in long-term liabilities and a budget deficit of at least $327 million annually. Michigan Governor Rick Snyder will decide in the coming weeks whether to have the state intervene to help rebuild the city, with options including Chapter 9 bankruptcy on the table.

Also Read: Cities Where People Can’t Find Work

8. Los Angeles, Calif.
> Taxes for family earning $25,000: $3,425 ( highest)
> Taxes for family earning $150,000: $15,764 (9th highest)
> Unemployment rate: 11.3% (4th highest)

For all levels of income, Los Angeles has one of the highest property tax burdens on its residents among the largest cities. This is despite the city’s low effective property tax rate, which at $1.13 per $100 was one of the lowest for all cities. In 2011, Los Angeles had the highest assumed home value — used to calculate property tax payments — for each income bracket between $50,000 and $150,000. In addition to high property taxes, Angelenos also pay one of the highest total sales tax rates, at 8.75 cents on the dollar — more than two cents over the average city sales tax.

7. New York, N.Y.
> Taxes for family earning $25,000: $3,273 (16th highest)
> Taxes for family earning $150,000: $18,8111 (3rd highest)
> Unemployment rate: 8.8% (16th highest)

Among the cities measured, only New York City had graduated state and local income tax rates as of 2011. This means that the income tax rate rises as individuals’ earnings rise. In 2011, a family of three with two working parents earning $25,000 a year paid no income tax while a similar family earning $150,000 per year paid $12,464 in income tax — more than such a family would pay in any other city reviewed. No other city measured had a higher city-level sales tax than New York City’s 4.5%. This contributes to an effective sales tax rate of 8.875%, among the nation’s highest. According to the Nelson A. Rockefeller Institute of Government, in the fiscal year 2009-2010 New York City residents paid about $4.1 billion more in taxes than they received in government services.

6. Newark, N.J.
> Taxes for family earning $25,000: $2,999 (25th highest)
> Taxes for family earning $150,000: $16,032 (8th highest)
> Unemployment rate: 7.6% (23rd highest)

Newark residents can expect to pay a substantial share of their income to the government. Not all taxes are high in the city. Newark residents do not pay state or local income tax. Newark also has either the lowest or second lowest auto taxes of all cities measured, depending on a family’s income, and is also in the lower half of cities in terms of sales tax. However, Newark residents are hammered through property taxes — for families making more than $50,000 a year in 2011, property taxes were the second-highest among all cities measured.

5. Chicago, Ill.
> Taxes for family earning $25,000: $3,898 (4th highest)
> Taxes for family earning $150,000: $14,814 (14th highest)
> Unemployment rate: 9.7% (12th highest)

As of 2011, Chicago residents paid the highest effective sales tax rate of any city studied, at 9.75%. This increased the tax burden for lower-income earners, who paid a higher percentage of their income in sales taxes. Partly because of the city’s sales tax, a Chicago family earning $25,000 had a state and local tax burden equal to 15.6% of their income, while for a family earning $150,000, the figure was just 9.9%. Poorer residents are also burdened by the state-level flat income tax, which was raised from 3% to 5% in 2011.

Also Read: The States with the Most Homes in Foreclosure

4. Louisville, Ky.
> Taxes for family earning $25,000: $3,594 (8th highest)
> Taxes for family earning $150,000: $18,008 (5th highest)
> Unemployment rate: 7.9% (20th highest)

For a family of three that earned between $100,000 and $150,000, the average tax burden was 12%, higher than all but four other cities reviewed. The tax burden for people earning $25,000 to $50,000, although higher at 14.4%, is less of jump compared to most of the cities on this list. The 14.4% tax burden is the eighth highest out of all the cities measured. The biggest tax burden comes from income taxes. Depending on a family’s income, Louisville has either the second or third highest income tax among all cities measured.

3. Columbus, Ohio
> Taxes for family earning $25,000: $3,369 (12th highest)
> Taxes for family earning $150,000: $18,241 (4th highest)
> Unemployment rate: 6.5% (23rd lowest)

Columbus residents are hit by the one-two punch of sales and property taxes that are higher than most. For instance, a family of three earning $50,000 in 2011 had to fork over $2,116.50 in income taxes and had to pay an additional $4,025 in property taxes. The income tax burden was higher than all but four cities, while the property tax burden was higher than all but five. Not all is bad, though. The sales tax and auto tax burden across all incomes were in the lower half of cities reviewed.

2. Philadelphia, Penn.
> Taxes for family earning $25,000: $4,513 (2nd highest)
> Taxes for family earning $150,000: $19,951 (2nd highest)
> Unemployment rate: 10.6% (7th highest)

A family of three that made just $25,000 a year in 2011 would have been stuck with a tax burden worth a whopping 18.1% of their income, tied with Birmingham, Ala., for the highest of all cities. Taxes did ease a bit as one moved down the sliding scale, although burdens were still near the top. For a family of three making $150,000 in 2011, the total tax burden was 13.3% — the second highest of all cities measured by the report.

1. Bridgeport, Conn.
> Taxes for family earning $25,000: $3,708 (5th highest)
> Taxes for family earning $150,000: $23,501 (the highest)
> Unemployment rate: 11.7% (3rd highest)

No city taxed its residents more heavily than Bridgeport in 2011. In 2011, its effective residential property tax rate was $2.77 per every $100 in assessed home value — the sixth highest in the nation. Citizens are also paying more in property taxes, due to the high value of homes in the area, at over $434,000 for a person earning $150,000 a year. In defending his city to the Connecticut Post, Bridgeport Mayor Bill Finch noted the average resident paid only $6,431 in taxes a year and notes that the city’s residents are “of modest means” and that residents’ tax rates are also affected by the close proximity of far wealthier cities. The median household income in Bridgeport is just $35,379, more than $15,000 below than the national median.

MATH IS HARD – THAT IS WHY WE’RE SCREWED

Did you ever wonder where the term FISCAL CLIFF came from? All of a sudden it was immediately adopted by the entire MSM and all the politicians and corporate CEOs as the mantra to scare Americans into believing it must be avoided. It is clear to me that the powers that be did focus group testing to develop the proper term that would strike fear into the hearts of non-critical thinking ignorant Americans across the land. Nevermind that this fake crisis was created by the very people who are running around like chickens with their heads cut off warning of the dire consequences. The fiscal cliff is just another diversion created by the ruling oligarchs to keep the masses distracted. If we did nothing, taxes would go up, the arms industry would lose some profits, and Federal spending would be modestly cut all the way back to 2010 levels. The economy would suffer a short recession and would be growing again by the 4th quarter of 2013. Sounds horrific. The truth is that the lowlife politicians, their corporate puppeteers, and the Wall Street cabal don’t want to cut spending, pay more taxes or see their profits reduced. Therefore, a grand bullshit compromise will ultimately be announced to great fanfare and a 500 point stock rally will ensue.

But, as the story below clearly and factually details, nothing will be solved. The entitlement can will be kicked down the road like it has been for 30 years. No one in Washington DC gives a shit about the long-term future or unborn generations. They care about the next election. They depend on the fact that 99% of the public don’t understand deficits, debt, unfunded liabilities or accrual accounting. The American public wants to be lied to and mislead. They don’t want to think. They don’t want to do the math. It’s hard and won’t give them the answer they want. I wonder what percentage of Americans actually understand the concept of net present value? If you stopped a person on the street, they would probably think you were asking about net pleasant value. Our politicians have promised the American people $86 trillion more in entitlements than they have the money for. And this is based on an unrealistic discount rate of 8%. If we use a realistic discount rate of 4%, the unfunded liability will be north of $150 trillion for Medicare and Social Security. When you add in all the State and local unfunded liabilities, you approach $200 trillion. These figures are so mind numbingly large, that Americans just tune it out. This is what the oligarchs depend upon. They will slowly destroy your lives through their man made inflation and eventual decision to not honor their entitlement promises.

The sheeple will not rise up. They will passively be led to slaughter. Math is hard.

Cox and Archer: Why $16 Trillion Only Hints at the True U.S. Debt

Hiding the government’s liabilities from the public makes it seem that we can tax our way out of mounting deficits. We can’t.

By CHRIS COX AND BILL ARCHER

A decade and a half ago, both of us served on President Clinton’s Bipartisan Commission on Entitlement and Tax Reform, the forerunner to President Obama’s recent National Commission on Fiscal Responsibility and Reform. In 1994 we predicted that, unless something was done to control runaway entitlement spending, Medicare and Social Security would eventually go bankrupt or confront severe benefit cuts.

Eighteen years later, nothing has been done. Why? The usual reason is that entitlement reform is the third rail of American politics. That explanation presupposes voter demand for entitlements at any cost, even if it means bankrupting the nation.

A better explanation is that the full extent of the problem has remained hidden from policy makers and the public because of less than transparent government financial statements. How else could responsible officials claim that Medicare and Social Security have the resources they need to fulfill their commitments for years to come?

As Washington wrestles with the roughly $600 billion “fiscal cliff” and the 2013 budget, the far greater fiscal challenge of the U.S. government’s unfunded pension and health-care liabilities remains offstage. The truly important figures would appear on the federal balance sheet—if the government prepared an accurate one.

But it hasn’t. For years, the government has gotten by without having to produce the kind of financial statements that are required of most significant for-profit and nonprofit enterprises. The U.S. Treasury “balance sheet” does list liabilities such as Treasury debt issued to the public, federal employee pensions, and post-retirement health benefits. But it does not include the unfunded liabilities of Medicare, Social Security and other outsized and very real obligations.

As a result, fiscal policy discussions generally focus on current-year budget deficits, the accumulated national debt, and the relationships between these two items and gross domestic product. We most often hear about the alarming $15.96 trillion national debt (more than 100% of GDP), and the 2012 budget deficit of $1.1 trillion (6.97% of GDP). As dangerous as those numbers are, they do not begin to tell the story of the federal government’s true liabilities.

David Klein

The actual liabilities of the federal government—including Social Security, Medicare, and federal employees’ future retirement benefits—already exceed $86.8 trillion, or 550% of GDP. For the year ending Dec. 31, 2011, the annual accrued expense of Medicare and Social Security was $7 trillion. Nothing like that figure is used in calculating the deficit. In reality, the reported budget deficit is less than one-fifth of the more accurate figure.

Why haven’t Americans heard about the titanic $86.8 trillion liability from these programs? One reason: The actual figures do not appear in black and white on any balance sheet. But it is possible to discover them. Included in the annual Medicare Trustees’ report are separate actuarial estimates of the unfunded liability for Medicare Part A (the hospital portion), Part B (medical insurance) and Part D (prescription drug coverage).

As of the most recent Trustees’ report in April, the net present value of the unfunded liability of Medicare was $42.8 trillion. The comparable balance sheet liability for Social Security is $20.5 trillion.

Were American policy makers to have the benefit of transparent financial statements prepared the way public companies must report their pension liabilities, they would see clearly the magnitude of the future borrowing that these liabilities imply. Borrowing on this scale could eclipse the capacity of global capital markets—and bankrupt not only the programs themselves but the entire federal government.

These real-world impacts will be felt when currently unfunded liabilities need to be paid. In theory, the Medicare and Social Security trust funds have at least some money to pay a portion of the bills that are coming due. In actuality, the cupboard is bare: 100% of the payroll taxes for these programs were spent in the same year they were collected.

In exchange for the payroll taxes that aren’t paid out in benefits to current retirees in any given year, the trust funds got nonmarketable Treasury debt. Now, as the baby boomers’ promised benefits swamp the payroll-tax collections from today’s workers, the government has to swap the trust funds’ nonmarketable securities for marketable Treasury debt. The Treasury will then have to sell not only this debt, but far more, in order to pay the benefits as they come due.

When combined with funding the general cash deficits, these multitrillion-dollar Treasury operations will dominate the capital markets in the years ahead, particularly given China’s de-emphasis of new investment in U.S. Treasurys in favor of increasing foreign direct investment, and Japan’s and Europe’s own sovereign-debt challenges.

When the accrued expenses of the government’s entitlement programs are counted, it becomes clear that to collect enough tax revenue just to avoid going deeper into debt would require over $8 trillion in tax collections annually. That is the total of the average annual accrued liabilities of just the two largest entitlement programs, plus the annual cash deficit.

Nothing like that $8 trillion amount is available for the IRS to target. According to the most recent tax data, all individuals filing tax returns in America and earning more than $66,193 per year have a total adjusted gross income of $5.1 trillion. In 2006, when corporate taxable income peaked before the recession, all corporations in the U.S. had total income for tax purposes of $1.6 trillion. That comes to $6.7 trillion available to tax from these individuals and corporations under existing tax laws.

In short, if the government confiscated the entire adjusted gross income of these American taxpayers, plus all of the corporate taxable income in the year before the recession, it wouldn’t be nearly enough to fund the over $8 trillion per year in the growth of U.S. liabilities. Some public officials and pundits claim we can dig our way out through tax increases on upper-income earners, or even all taxpayers. In reality, that would amount to bailing out the Pacific Ocean with a teaspoon. Only by addressing these unsustainable spending commitments can the nation’s debt and deficit problems be solved.

Neither the public nor policy makers will be able to fully understand and deal with these issues unless the government publishes financial statements that present the government’s largest financial liabilities in accordance with well-established norms in the private sector. When the new Congress convenes in January, making the numbers clear—and establishing policies that finally address them before it is too late—should be a top order of business.

Mr. Cox, a former chairman of the House Republican Policy Committee and the Securities and Exchange Commission, is president of Bingham Consulting LLC. Mr. Archer, a former chairman of the House Ways & Means Committee, is a senior policy adviser at PricewaterhouseCoopers LLP.

WILL A PROPHET ASSUME COMMAND?

“The next Fourth Turning is due to begin shortly after the new millennium, midway through the Oh-Oh decade. Around the year 2005, a sudden spark will catalyze a Crisis mood. Remnants of the old social order will disintegrate. Political and economic trust will implode. Real hardship will beset the land, with severe distress that could involve questions of class, race, nation and empire. The very survival of the nation will feel at stake. Sometime before the year 2025, America will pass through a great gate in history, commensurate with the American Revolution, Civil War, and twin emergencies of the Great Depression and World War II.” – Strauss & Howe – The Fourth Turning

Strauss & Howe wrote these words in 1997. They had predicted the arrival of another Crisis in this time frame in their previous book Generations, written in 1990. This wasn’t guesswork on their part. They understood the dynamics of how generations interact and how the mood of the country shifts every twenty or so years based upon the generational alignment that occurs as predictably as the turning of the seasons. The last generation that lived through the entire previous Crisis from 1929 through 1946 has virtually died off. This always signals the onset of the next Fourth Turning. The housing bubble and its ultimate implosion created the spark for the current Crisis that began in September 2008, with the near meltdown of the worldwide financial system. Just as the stock market crash of 1929, the election of Lincoln in 1860, and the Boston Tea Party in 1773 catalyzed a dramatic mood change in the country, the Wall Street created financial collapse in 2008 has ushered in a twenty year period of agony, suffering, war and ultimately the annihilation of the existing social order.

We have experienced the American High (Spring) from 1946 until 1964, witnessing America’s ascendancy as a global superpower. We survived the turbulent Consciousness Revolution Awakening (Summer) from 1964 until 1984, as Vietnam era protests morphed into yuppie era greed. The Long Boom/Culture Wars Unraveling (Fall) lasted from Reagan’s Morning in America in 1984 until the 2008 Wall Street/Federal Reserve spawned crash. The pessimism built to a crescendo as worry about rising violence and incivility, widening wealth inequality, and the splitting of the national consensus into extremes on the left and right, led the country into a winter of discontent. The Global Financial Crisis (Winter) has arrived in full fury and is likely to last until the late 2020’s. It will be an era of upheaval, financial turbulence, economic collapse, war, and the complete redefinition of society, as the existing corrupt status quo is swept away in the fury of powerful hurricane winds of change. History is cyclical and we’ve entered the most dangerous season, when the choices we make as a nation will have profound long lasting implications to the lives of future unborn generations.

The linear thinkers and so called progressives who believe that history charges relentlessly forward and human ingenuity overcomes all obstacles as the world becomes progressively richer, advanced, and humane ignore the lessons of history that have been re-written every 80 to 100 years for centuries. Generational theory is so simple that even an Ivy League intellectual economist, corrupt congressman, or CNBC anchor bimbo could grasp the basic concept. The four turnings in the ongoing cycle of history match a long human life. There is a reason we forget the lessons of the past. Those who remember the lessons die off after 80 years. The linear thinking status quo keep predicting an improving economy based upon their beliefs that the next fifteen years will proceed in a similar fashion to the last fifteen years. They refuse to acknowledge we’ve entered a new era that cannot be reversed to a previous point in time. Once you’ve experienced the harsh bitter winds of the Winter, you have to deal with months of depressing darkness, harsh conditions, and stormy weather before experiencing the return of the warm breezes of Spring. The tranquil days of autumn are long gone. This dynamic can be clearly visualized by comparing our economic situation in 2007, prior to entering this Fourth Turning, to our economic situation today:

End of Unraveling in 2007 versus fourth year of Crisis in 2012

In 2007, the unemployment rate was 4.6%; 146 million people, or 63% of the working age population, were employed; and 78 million Americans were not in the labor force. Today, after three years of “recovery”, the unemployment rate is 7.9%; 143 million people, or 58.8% of the working age population are employed; and 88 million Americans are not in the labor force.
Real median household income was $55,039 in 2007. It has fallen by 8.2% to $50,502 today.
BLS reported inflation has risen by 12% since 2007. True inflation has risen at twice that rate.
Median net worth in 2007 was $126,400. By 2010 it had fallen to $77,300, a 39% drop in three years. As of today, it may be a few thousand dollars higher as stock prices have risen and home prices have stopped falling.
In 2007 there were 5.7 million existing homes sold at a median price of $218,900. Today there are 4.3 million existing homes being sold at a median price of $183,900. Over 1 million of these home sales are foreclosures or short sales, as 30% of all the homes with a mortgage in the country owe more than their house is worth.
Federal government spending in 2007 was $2.73 trillion. Federal government spending today is $3.8 trillion, a 39% increase in five years. GDP in 2007 was $14.2 trillion. Today GDP is $15.8 trillion, an 11% increase in five years. Approximately 25% of the GDP increase is due to increased government spending.
Government entitlement transfers totaled $1.7 trillion in 2007. Today they total $2.4 trillion, a 41% increase in five years. Interest income paid to senior citizens and savers totaled $1.25 trillion in 2007. Today interest income totals $985 billion, a 21% decrease in five years. Wall Street bankers needed the money to pay themselves bonuses, so Ben Bernanke obliged.
The annual deficit in 2007 totaled $161 billion. Today, the annual deficit is $1.1 trillion. We add $3 billion per day to the national debt as a gift to unborn generations.
The national debt in 2007 was $9 trillion. Today the national debt is $16.3 trillion, an 81% increase in five years. The national debt will reach $20 trillion during the next presidential term. Normalization of interest rates to 2007 levels would result in annual interest expense of $1 trillion, or 40% of current government revenues.

There is nothing normal about our current economic situation. The unfunded liabilities at the Federal, State and local levels of government accumulate to over $200 trillion. Do the facts detailed above lead you to believe we can return to pre-2007 normal in the near future, or ever? Not only has the economic situation of the country deteriorated enormously, the very culprits who created the disaster are more powerful than they were before the global catastrophe caused by their criminal risk taking. The largest Wall Street banks control 74% of all the deposits in the country, up from 66% in 2007, and double the levels from the mid-1990’s. These bastions of capitalism wield all of the power in this country, dictating who wins elections, who writes the laws, and who benefits from the distribution of wealth. Only in a corrupt, crony-capitalist, citadel of kleptocracy could the perpetrators of the greatest theft of national wealth in the history of mankind be rewarded with taxpayer financed bailouts, the ability to borrow an unlimited amount of fiat currency at 0% from a Central Bank they control, write the new banking regulations and be applauded by their corporate mainstream media for becoming even Too Bigger to Fail. This Fourth Turning will ultimately come down to a clash between the people and the Wall Street filth.

Those in power today are using their ample wealth and control over the legal, economic and political systems to pretend that an epic crisis does not beckon at our doorstep. Propaganda and media spin cannot avert the brutally hard choices that must be made over the next fifteen years. The existing system is unsustainable. It can either be changed by choice or after a complete collapse. We haven’t reached the point of regeneracy yet when civic purpose begins to strengthen. The outcome of this presidential election will determine the next phase of this Crisis. Strauss & Howe described the normal course of a crisis in 1997:

“A CRISIS arises in response to sudden threats that previously would have been ignored or deferred, but which are now perceived as dire. Great worldly perils boil off the clutter and complexity of life, leaving behind one simple imperative: The society must prevail. This requires a solid public consensus, aggressive institutions, and personal sacrifice. People support new efforts to wield public authority, whose perceived successes soon justify more of the same. Government governs, community obstacles are removed, and laws and customs that resisted change for decades are swiftly shunted aside. A grim preoccupation with civic peril causes spiritual curiosity to decline. Public order tightens, private risk-taking abates, and crime and substance abuse decline. Families strengthen, gender distinctions widen, and child-rearing reaches a smothering degree of protection and structure. The young focus their energy on worldly achievements, leaving values in the hands of the old. Wars are fought with fury and for maximum result.” – The Fourth Turning – Strauss & Howe

Clearly this country has not reached a common consensus and is split 50%/50% on most important issues. Debates about the role of government are waged with vitriolic passion, but the reality is that, as in past Fourth Turnings, the government has already assumed a greater level of power and control over our lives. The majority believe that government can protect them, provide for them, and pay their way. This is a delusion which will be revealed as fraudulent and mathematically impossible. The incompetent government preparation prior to Superstorm Sandy and the dysfunctional, bureaucratic and painfully slow response afterward are opening the eyes of many people. The decisions which are yet to be made are what kind of society shall we be and who will be required to sacrifice to achieve a positive outcome at the end of this Crisis. Turnings are driven by a mood change in the country and the constellation of generations at that point in time. The generations are now aligned as they always are during a Crisis:

Boomers entering elderhood
Gen-Xers entering midlife
Millennials entering young adulthood
Homelanders entering childhood

History does not repeat but it does rhyme, because of the cyclical nature of human experience. The specific events that drive this Crisis are unknowable, but the generational response to these events can be predicted with uncanny accuracy. Each generation will play its assigned role during this Crisis. The current generational configuration will propel events and create a feedback loop that will change the course of human history on a scale consistent with the Depression/World War II, the Civil War and the American Revolution.

“What will propel these events? As the saeculum turns, each of today’s generations will enter a new phase of life, producing a Crisis constellation of Boomer elders, midlife 13ers, young adult Millennials, and children from the new Silent Generation. As each archetype asserts its new social role, American society will reach its peak of potency. The natural order givers will be elder Prophets, the natural order takers young Heroes. The no-nonsense bosses will be midlife Nomads, the sensitive souls the child Artists. No archetypal constellation can match the gravitational of this one – nor its power to congeal the natural dynamic of human history into new civic purposes. And none can match its potential power to condense countless arguments, anxieties, cynicisms, and pessimisms into one apocalyptic storm.” – The Fourth Turning – Strauss & Howe

The mood of the country continues to blacken. A simmering anger boils beneath the surface of an everyday façade of normalcy. The middle class majority is being squeezed in a vice, with the rich powerful plutocrats on Wall Street and in Washington DC stealing their hard earned net worth through financial scams, the gutting of our industrial base and a tax system designed to benefit those who write the laws on one side and the parasitic willfully ignorant underclass that is sustained only through the extraction of taxes from the working middle class on the other side. Our society has become a hunger games tournament, with the few benefitting while the many scramble to survive. The stench of class warfare is in the air. The generational resentment and rage is palatable as the Millenial generation has taken on a trillion dollars of student loan debt at the behest of the Federal government, Wall Street and older generations, only to graduate into a jobless economy. The generational contract has been broken, as the older generations will not or cannot leave the workforce due to their own financial missteps. Younger generations are being denied entry level positions, even as the older generations expect them to fund their retirements and healthcare. This presidential election will only exacerbate the anger, disappointment, bitterness and fury among the populace, no matter who wins.

Prophets & Nomads

Can generational theory predict who will win the presidential election? Probably not, but based upon historical precedent, during times of Crisis the country usually turns to a Prophet generation leader who provides a new vision and summons the moral authority to lead. This leader may not have the right vision or have the backing of the entire population, but he is not afraid to take bold action. Franklin Delano Roosevelt was despised by many, but he boldly led the country during the last Crisis. Abraham Lincoln won the 1860 election with only 39.8% of the popular vote, but he unflinchingly did whatever he thought was necessary to achieve victory and preserve the union. Prophet leaders like Samuel Adams and Benjamin Franklin offered the sense of moral urgency required to sustain the American Revolution. Strauss & Howe give a historical perspective on Prophet generations.

“Prophet generations are born after a great war or other crisis, during a time of rejuvenated community life and consensus around a new societal order. Prophets grow up as the increasingly indulged children of this post-crisis era, come of age as narcissistic young crusaders of a spiritual awakening, cultivate principle as moralistic mid-lifers, and emerge as wise elders guiding another historical crisis. By virtue of this location in history, such generations tend to be remembered for their coming-of-age passion and their principled elder stewardship. Their principle endowments are often in the domain of vision, values, and religion. Their best-known historical leaders include John Winthrop, William Berkeley, Samuel Adams, Benjamin Franklin, James Polk, Abraham Lincoln, Herbert Hoover, and Franklin Roosevelt. These were principled moralists, summoners of human sacrifice, and wagers of righteous wars. Early in life, few saw combat in uniform; later in life, most came to be revered more for their inspiring words than for their grand deeds.” – The Fourth Turning – Strauss & Howe

Barack Obama was born in 1961. According to the Strauss & Howe generational distinctions, this makes him an early Gen-Xer. His life story matches that of the Nomad archetype. His chaotic early life, confused upbringing by an array of elders, frenetic alienated early adulthood as a community organizer, and his rise to power through his public speaking talent and pragmatic ability to achieve his agenda is a blueprint for a Nomad. Mitt Romney was born in 1947 and grew up during the American High. His childhood was idyllic and privileged. His moral Mormon youth as a missionary eventually devolved into his yuppie “greed is good” career at Bain Capital acquiring companies, making them more efficient (firing Americans & hiring Asians), and spinning them off, while siphoning millions in fees. He has tried to convince Americans to vote for him, based upon his business acumen and moral lifestyle, as the cure for what ails America. With the continued downward spiral of societal mood, record low trust in Congress and 60% of Americans thinking the country is on the wrong track, the odds should favor the Prophet candidate. The 40% of Americans who think the country is on the right track are a tribute to our awful government run public education system or are smoking crack.

The Barack Obama presidency has many similarities to the one-term presidencies of Herbert Hoover and James Buchanan. Both men were overwhelmed by rapidly deteriorating events, an inability to understand the true nature of the Crisis, and failure to inspire the American people to rally behind a common cause. Both men drifted off into obscurity and are overwhelmingly acknowledged as two of the least successful presidents. The men who succeeded them are ranked by historians at the top of the list, even though they are both despised by more libertarian minded citizens as proponents of big government solutions and control. Libertarians will not be happy with developments over the next fifteen years. This Crisis is an era in which America’s corrupt social order will be torn down and reconstructed from the ground as a reaction to the unsustainable financial pyramid scheme which is an existential threat to the nation’s very survival. Civic authority will revive, cultural manifestation will find a community resolution, and citizens will begin to associate themselves as adherents of a larger cluster.

Barack Obama has fallen short as a Crisis leader, just as Buchanan and Hoover fell short. Buchanan also tried to maintain the status quo and not address the key issues of the day – secession and slavery. His handling of the financial Panic of 1857 led to annual deficits that exceeded 13% of GDP during his entire presidency. His legacy is one of failure and hesitation. Hoover was a technocrat with an engineering background who failed to recognize the extent of the suffering by the American people during the early stages of the Great Depression. It is a false storyline that he did not attempt to use the power of the Federal government to address the economic crisis. Federal spending increased by over 20% during his term and he was running a deficit when Roosevelt assumed power. Hoover was an activist president who began the public works programs that FDR expanded and dramatically increased taxes on the rich and corporations in 1932.

Obama inherited a plunging economic situation and proceeded to make choices that will make this Crisis far worse than it needed to be. He has failed miserably in addressing the core elements of this Crisis that were foreseen by Strauss and Howe over a decade before the initial spark in 2008. Debt, civic decay, rising wealth inequality due to the rise of our plutocracy, and global disorder are the underlying basis for this Crisis. Obama’s response was to run record deficits driving the national debt skyward, failing to address the unfunded entitlement liabilities that loom on the horizon, bowing down before the Wall Street mobsters and paying their ransom demands, layering on more complexity and unfunded healthcare liabilities to an already teetering government system, and extending our policing the world foreign policy at a cost of $1 trillion per year. A Crisis requires a bold leader who makes tough choices and leads. Obama has proven to not be that leader. Based on historical precedent and the rapidly deteriorating mood of the country, it would be logical for the country to select Romney, a Prophet generation leader.

No Escape

“Don’t think you can escape the Fourth Turning the way you might today distance yourself from news, national politics, or even taxes you don’t feel like paying. History warns that a Crisis will reshape the basic social and economic environment that you now take for granted. The Fourth Turning necessitates the death and rebirth of the social order. It is the ultimate rite of passage for an entire people, requiring a luminal state of sheer chaos whose nature and duration no one can predict in advance.” – Strauss & Howe – The Fourth Turning

No matter who wins the election, there will be no turning back. It isn’t Morning in America anymore. It is more like Midnight in America on a bitterly cold dark February night as the gale force winds begin to gust, foretelling the approach of an epic winter blizzard. There are no easy solutions. The opportunity to alleviate the impact of this Crisis was during the late 1990’s and early 2000’s, and we made all the wrong choices. Now we will pay the price. An era of depression and violence will be ushered in by an economic calamity that will make 2008 look like a minor blip. The next president will still be presiding over a country divided 50%/50%, with little or no common ground on most of the key issues that must be confronted. But, as we’ve seen in previous Crisis periods, bold leadership and history making decisions did not require consensus or even majority support. Only 10% of the colonial population drove the American Revolution. Lincoln was despised by half the country and not exactly loved by everyone in the North. FDR’s popular support progressively declined during his four terms in office. It is the Fourth Turning events, not the nation, which elevates the person to the apex of power. The regeneracy of the nation will occur during the next presidential term.

“Soon after the catalyst, a national election will produce a sweeping political realignment, as one faction or coalition capitalizes on a new public demand for decisive action. Republicans, Democrats, or perhaps a new party will decisively win the long partisan tug of war. This new regime will enthrone itself for the duration of the Crisis. Regardless of its ideology, that new leadership will assert public authority and demand private sacrifice. Regardless of its ideology, that new leadership will assert public authority and demand private sacrifice. Where leaders had once been inclined to alleviate societal pressures, they will now aggravate them to command the nation’s attention. The regeneracy will be solidly under way.” – Strauss & Howe – The Fourth Turning

The Millenial generation is coming of age faced with the burdens of $1 trillion of student loan debt, a stagnant job market clogged by the Boomer generation that can’t afford to retire because they never got around to saving, ever increasing taxes to fund the promises made to their elders by politicians, and an unfunded entitlement liability of $100 trillion for healthcare and pension benefits they will never see. The mathematical impossibility of sustaining our economic system is absolute. It will require courage, sacrifice, fortitude and a dramatic shift of our egocentric selfish culture to a culture of sustainability and caring about future generations. We’ve made many bad choices over the last few decades. Choices matter. These are the times that will try men’s souls. The choices we make as a nation over the next few years will determine whether this Fourth Turning ends in a renewal of our founding principles or tragedy. Glory or ruin – the choice is ours.

“Thus might the next Fourth Turning end in apocalypse – or glory. The nation could be ruined, its democracy destroyed, and millions of people scattered or killed. Or America could enter a new golden age, triumphantly applying shared values to improve the human condition. The rhythms of history do not reveal the outcome of the coming Crisis; all they suggest is the timing and dimension.” – Strauss & Howe – The Fourth Turning

The next stage of this Crisis is likely to be ignited by a downward spiral of societal trust caused by the next financial implosion, which is certain to occur. A world built upon debt, false promises, interconnected webs of deceitful derivatives, fiat currency backed only by the promises of lying politicians and captured central bankers, and a diminishing supply of easy to access natural resources, is hopelessly dependent upon the willful ignorance of the masses. As long as people want to be lied to rather than facing the truth, those in power can maintain the status quo. Once the jarring realization of reality overwhelms the propaganda and lies of the oligarchs, the battle for middle earth will begin. What will trigger the next phase of this Crisis? No one knows for sure, but based on the fault lines already evident, these are a possibility:

The inevitable breakup of the European Union with the consequences of massive bank defaults in Europe triggering worldwide bank defaults as the interconnected trillions of derivatives are lit like a string of firecrackers.
A sudden Greece like surge in interest rates on Japanese bonds results in a collapse of their debt ridden economic system, with reverberations throughout the world.
The Middle East tinderbox explodes as Israel attacks Iran and the law of unintended consequences takes hold. Alliances and treaties would draw Turkey into war with Syria and Iran. Russia and China could side against the U.S. Iran and their vassals would unleash terrorist attacks and disruption of Middle Eastern oil would drive prices over $200 per barrel, crushing the American economy.
A showdown on the debt ceiling and/or fiscal cliff results in a stock market crash, derailing the pitiful fledgling recovery created by Ben Bernanke’s QE to infinity measures.
A tipping point is reached with regards to the amount of debt that can be accumulated by our Federal, State and Local governments. A cascade of defaults could lead to a loss of faith in the U.S. dollar and a surge in interest rates. The defaults and increased interest on the national debt could lead to mass depression or in a worst case scenario – hyperinflation.
A large terrorist attack in one or more American cities would cause chaos, panic and fear, leading to more government control over our daily lives. This could trigger a counter response by those fed up with an overbearing government presence.
A catastrophic natural disaster or series of natural disasters would reveal the fragile nature of our just in time economic system. A breakdown of our logistical and infrastructure systems would lead to chaos and mass hysteria as the citizens who believed their government leaders would keep them safe, secure, warm, and fed realized it was all a sham. Their leaders were in it for the power and riches, not looking out for the best interests of the common folk.

No one knows for sure what will trigger the next leg down during this Crisis, but I can guarantee you that things will not be getting better in the near future. Don’t believe the mainstream media or politicians who tell us life in the good old U.S. of A will be back to normal in the near future. And those who predict a long slow gentle decline of the American Empire that can be managed by the oligarchs are badly mistaken. That is not how things roll in a Fourth Turning. Transformative change, chaos, desperate measures, and total war will propel our nation through this cataclysmic saeculum and a positive outcome is not assured. An armed conflict – class war, sectional war, religious war, or war for oil – will be waged at some point and fought to the finish. Fourth Turning wars do not end inconclusively. Each Fourth Turning war has resulted in greater destruction and more horrendous numbers of human casualties. The trials and tribulations that await this nation over the next fifteen years will challenge every living generation to play their roles and bravely confront the tasks needed to reach a new High, just as their ancestors did.

“History offers no guarantees. Obviously, things could go horribly wrong – the possibilities ranging from a nuclear exchange to incurable plagues, from terrorist anarchy to high-tech dictatorship. We should not assume that Providence will always exempt our nation from the irreversible tragedies that have overtaken so many others: not just temporary hardship, but debasement and total ruin. Losing in the next Fourth Turning could mean something incomparably worse. It could mean a lasting defeat from which our national innocence – perhaps even our nation – might never recover.” – Strauss & Howe – The Fourth Turning

For those who doubt generational theory and believe history is a linear path of human progress, I would point to the last week of chaos, disarray, government dysfunction, and misery of those who didn’t prepare for Superstorm Sandy, as a prelude to the worst of this Crisis. The lack of preparation by government officials and citizens, death, destruction, panic, anger, helplessness and realization of how fragile our system has become is a perfect analogy to our preparation for this Fourth Turning. The brittleness of our infrastructure and lack of redundancy in our systems has left us vulnerable to any large storm. Building mansions yards from a dangerous unpredictable sea is akin to allowing Wall Street bankers to create interconnected financial derivatives which will ultimately result in a great worldwide flood that will obliterate billions of wealth. Going decades without upgrading our power grid, transportation systems, or storm protection is akin to allowing our unfunded entitlement liabilities to accumulate to such an extreme level that it will be impossible to honor and the coming storm will swamp those depending on those promises. The lack of foresight by citizens in having food, water, and backup sources of power and heat in case of an emergency is akin to the millions of people that have lived the good life in debt up to their eyeballs while never saving for a rainy day or their retirement. When the rainy day arrives they panic and demand to be saved by an inept bureaucratic government.

Winter has arrived. The gathering storm is about to strike. Are you prepared?

“Reflect on what happens when a terrible winter blizzard strikes. You hear the weather warning but probably fail to act on it. The sky darkens. Then the storm hits with full fury, and the air is a howling whiteness. One by one, your links to the machine age break down. Electricity flickers out, cutting off the TV. Batteries fade, cutting off the radio. Phones go dead. Roads become impossible, and cars get stuck. Food supplies dwindle. Day to day vestiges of modern civilization – bank machines, mutual funds, mass retailers, computers, satellites, airplanes, governments – all recede into irrelevance. Picture yourself and your loved ones in the midst of a howling blizzard that lasts several years. Think about what you would need, who could help you, and why your fate might matter to anybody other than yourself. That is how to plan for a saecular winter. Don’t think you can escape the Fourth Turning. History warns that a Crisis will reshape the basic social and economic environment that you now take for granted.” – Strauss & Howe – The Fourth Turning

TO REBUILD OR NOT TO REBUILD, THAT IS THE QUESTION

Sorry rich people with McMansions on the beach. You are no different than the Free Shit Army that marches around West Philly collecting their Section 8 housing vouchers, food stamps, Obama phones, subsidized cable and SSDI. If you want to build a house 50 yards from the ocean, tough shit when it gets washed away. The taxpayers in Iowa and Nebraska should not be subsidizing your dumbass decision with their tax dollars so you can rebuild. The free shit has to stop because it isn’t free. You are going to see politicians across the land fork over your money by the billions without hesitiation over the next few weeks because who could possibly not help the multi-millionaire victims in Avalon and Stone Harbor.

No government entity had these costs factored into their budgets. They never do, even though natural disasters happen every year. Government drones never put money away for a rainy day. Neither do the American people. It’s the American way. Just add it to the bill and let future generations worry about the consequences of un-payable liabilities and interest on the debt. We’ll fork over the dough and homes will be rebuilt right on the ocean and bays. Nothing will change until our unsustainable economic system collapses under the immense weight of the debt. Then you’ll see what a real disaster looks like.

Battered NJ agonizes over whether to rebuild shore

LONG BEACH TOWNSHIP, N.J. — In its tear of destruction, the megastorm Sandy left parts of New Jersey’s beloved shore in tatters, sweeping away beaches, homes, boardwalks and amusement parks.

The devastation left the state a blank canvas to redevelop its prized vacation towns. But environmentalists and shoreline planners urged the state to think about how — and if — to redevelop the shoreline as it faces an even greater threat of extreme weather.

“The next 50 to 100 years are going to be very different than what we’ve seen in the past 50 years,” said S. Jeffress Williams, a scientist emeritus at the U.S. Geological Survey’s Woods Hole Science Center in Massachusetts.

The sea level is rising fast, and destructive storms are occurring more frequently, said Williams, who expects things to get even worse.

He and other shoreline advocates say the state should consider how to protect coastal areas from furious storms when they rebuild it, such as relocating homes and businesses farther from the shore, building more seawalls and keeping sand dunes high.

How to rebuild after the disaster is becoming an issue even as New Jersey assesses its damage.

The state’s death toll from Sandy climbed to at least 14, 2 million customers remained without electricity and earth-moving equipment made its way for the first time to hard-hit barrier island communities.

National Guard members went door-to-door on Long Beach Island to check on survivors and delivered supplies to heavily flooded Hoboken. President Barack Obama, skipping campaign appearances, came to New Jersey to see the damage.

In Hoboken, a one-square-mile city on the other side of the Hudson River from New York City, at least 25 percent of the community was flooded and 90 percent was without power. National Guard troops delivered food and water as officials sent out a plea for boats and generators.

Most passenger trains were still suspended, lines were long at gas pumps, and Halloween celebrations were postponed. But there were some steps toward normalcy: many schools planned to open on Thursday, state workers were told to return to work and most New Jersey Transit buses were to resume service.

The state’s main focus was at the storied Jersey Shore, where houses were thrown from their foundations and parks and beaches were partially destroyed.

In his evening briefing Wednesday, Gov. Chris Christie reiterated that he wants to rebuild.

“I don’t believe in a state like ours, where the Jersey Shore is such a part of life, that you just pick up and walk away,” he said.

But the governor said homeowners in hard-hit areas should decide for themselves whether they want to rebuild or sell their property to the state for conservation.

The government, the Republican governor said, should not decide where rebuilding is and is not allowed.

New York Gov. Andrew Cuomo, a Democrat, disagreed Wednesday, saying that rebuilding after Sandy should include new ways to prevent damage from future hurricanes and storms.

Shoreline advocates say there are three ways to protect the shore from extreme weather: build more jetties and seawalls, keep beaches replenished and relocate homes and businesses.

The physical solutions can help protect homes and roads, but also cut off access to the beaches or water. New Jersey is known for having a lot of protective barriers.

The U.S. Army Corps of Engineers says it’s moved more than 65 million cubic yards of sand for replenishment projects in New Jersey. The state government has done additional projects without federal assistance.

Environmentalists say moving sand can cause harm to the areas it’s moved from, and might not be a good match for its new location. The supply of usable sand also is limited, they say.

“It’s like a bad drug habit,” said Chad Nelsen, the environmental director of the Surfrider Foundation, a national organization dedicated to preserving beaches and oceans. “Once you start, you can’t stop.”

Still, it seems to work. Some residents on Long Beach Island on Wednesday credited high dunes and wide beaches built as part of replenishment efforts there for keeping destruction from being even worse.

The northern barrier island that suffered the worst damage from Sandy is the longest developed stretch of New Jersey’s 127-mile coastline without the help of federal replenishment projects.

The federal government pays for much of the beach protection programs. Including state and local contributions, shore protection programs with federal involvement from Manasquan to Cape May have cost taxpayers $475 million since 1988.

Peter Kasabach, executive director of the planning advocacy group New Jersey Future, says that subsidy, along with federal flood insurance that encourages rebuilding, is problematic.

“We’ve built in places that we shouldn’t have built and now those places are becoming even more hazardous and more expensive to stay in,” he said. “As we grow and develop, we should make sure we don’t continue to invest in those places.”

He suggested bans on building in some sensitive beach areas, or requirements that homes be built farther from the ocean.

The Surfrider Foundation’s Nelsen said he hopes that New Jersey communities at least consider rebuilding in different places, which he said has never been done on a large scale in a U.S. oceanfront.

“We’re about to spend some ungodly sum of money to restore the coast,” he said. “Let’s make sure we spent it wisely.”

UNFORGIVEN – PART FIVE

“You’d be William Munny out of Missouri, killer of women and children”. – Little Bill Daggett – Unforgiven

“That’s right, I’ve killed women and children, I’ve killed just about everything that walked or crawled at one time or another, and I’m here to kill you Little Bill, for what you did to Ned” – Willam Munny – Unforgiven

Funny thing, killin’ a man. You take away everything he’s got and everything he’s gonna have. – William Munny – Unforgiven

Clint Eastwood’s final western was one of the darkest, most violent, vicious westerns ever made. Much of the film takes place in darkness. The tone of the film is depressing, with a drained wintery look reminiscent of High Plains Drifter. The script had been written in 1976 during our last Awakening, but Eastwood held off making the movie until 1991 when he was old enough to play the lead role. Age, stages of life, and mood are key elements in the movie, as they are in the plot playing out in the world today. Unforgiven is a story of atonement, justice and retribution. The cold forbidding atmosphere reflects a Fourth Turning mood. We’ve entered our hibernal Crisis, with its violent struggles and compulsory sacrifices in an era of maximum danger and ultimately a fight for survival. This decisive test of human strength and fortitude was as predictable as the change in seasons. Strauss and Howe understood the generational dynamics of the country would align to create the mood change which would usher in the third Fourth Turning in American history:

Unforgiven follows the journey of William Munny, a cold blooded vicious bandit in his youth, turned peaceful farmer in his old age. As a widower with two kids and a failing farm, he agrees to kill two cowboys who had disfigured a prostitute in the town of Big Whiskey, in return for a reward of $1,000. In his youth he drank heavily and murdered for fun, now he was killing for money. The town is run with an iron fist by an aging gunfighter, turned sheriff, named Little Bill Daggett, who doesn’t allow guns in his town. Munny and his two companions arrive amidst a driving rain storm in the middle of the night. They proceed to execute the two cowboys, but both of Munny’s companions reveal they don’t have a stomach for killing anymore. After collecting the reward, Munny finds out that his friend Ned was captured, tortured, and murdered by Little Bill Daggett. He takes a drink of whiskey and the tale turns into a story of retribution and atonement. He arrives back in town in the pitch black of night and enters the saloon where Little Bill and his men are gathered. He guns down six men, including Little Bill. As he lies on the floor wounded, Bill laments that he doesn’t deserve to die this way. Munny declares:

“deserves got nothin’ to do with it.”

Bill tells Munny he will “see him in hell”, a sentiment which Munny agrees with. Munny then kills him. There is no rousing ending. No cheers from the audience. The ugliness of violence is portrayed realistically and myths of the Old West are demolished. You are left to meditate about the concepts of age, repute, courage, heroism and the fine line between good and evil.

The themes, atmosphere, violence, brutality and finale of this eulogy to the western genre are a perfect representation of our current dire circumstances. The town of Big Whiskey represents the United States. The sheriff rules with an iron fist over the population, but his cronies can get away with murder. Hypocrisy abounds across the U.S. as politicians use the rule of law to keep the masses controlled while rewarding their corporate and banker cronies with government handouts, tax breaks, and free money. I see Munny, his companions and the prostitutes as symbols of the flawed citizens of the United States. They’ve made mistakes, committed crimes, made poor life choices, but they ultimately tried to make an honest living as upstanding citizens. When the authorities pushed them to the brink with their overbearing regulations, brazen criminal actions and blatant institutional corruption, each constituent reacted differently. Some responded with defiance, most rolled over, some ran away, and Munny responded with viciousness and retribution.

This is how it will play out over the next ten to fifteen years. Cynicism about solutions put forth by corrupt politicians, distrust of government bureaucrats and crooked bankers, and a society wide demoralization, as widespread unemployment and declining living standards for middle class Americans has darkened the landscape like an approaching winter storm. The disillusionment of average Americans is reflected in poll after poll, with only 20% of the population satisfied with the direction of the country versus 70% just prior to 9/11. The mood change in the country since 2005 is palpable. The gap between the Haves and the Have Nots has never been greater and continues to widen. The middle class has floundered for decades, while bankers, politicians and corporate titans have reaped vast riches through peddling debt and gaming a system rigged in their favor.

Recent data from the Pew Foundation finds that Americans are sick of being the world’s policeman. Even conservative Republicans are becoming more isolationist in their views. This was also the case during the 1930’s in the last Fourth Turning. The vast majority of Americans want to keep our noses out of other countries’ affairs because they realize the trillions spent are bankrupting the country.

Even though Americans, by a large majority, favor slashing foreign aid, ending our three foreign wars of aggression, and no longer allowing the super rich and mega-corporations to use the 60,000 page tax code as their means to avoid taxes, our leaders increase war spending, continue to meddle in the affairs of foreign countries, and seek further tax benefits for the super rich and mega-conglomerates. The will of the people is ignored because the government has been bought by the financial and military industrial complex, with funding by the Federal Reserve and the banking cartel that pulls the strings on their puppet – Ben Bernanke.

I’ve previously detailed how the baby boom generation contributed to our financial quandary in Part One – For a Few Dollars More, how the traitorous deeds of the Federal Reserve over the last few decades have ruined the middle class and placed the country on the precipice of disintegration in Part Two – Fistful of Dollars, addressed the nefarious conception of a central bank in Part Three – The Good, the Bad, and the Ugly and revealed how the super rich have used the tax code and their control of politicians to pillage the nation in Part Four – Outlaw Josey Wales. Now I will detail the likely result of years of frivolous consumerism, creation of a debt tsunami, corrupt myopic leadership, crooked bankers, and a angry despondent populace. The lack of preparation by government and individuals ensures this Crisis will be far worse than it had to be. The violent clash between competing forces will be extreme, bloody and result in retribution dished out to the guilty. Ultimately, the country will need to atone for its sins.

Preparation

This Fourth Turning was as predictable as the seasons. The American Revolution Crisis ended in 1794. The Civil War Crisis arrived 66 years later in 1860. That abbreviated vicious Crisis ended in 1865. The Depression/World War II Crisis arrived 64 years later in 1929. Our current Crisis arrived in the 2008/2009 time frame, exactly 64 years after the end of the last Crisis. Strauss and Howe wrote their book in 1996. They knew we had about a decade to prepare for the looming winter ahead. We had time to fortify, prepare, save, not waste our seed corn on foreign adventures, and reduce all non-essential spending. Not only did we not do what needed to be done, we did the exact opposite of what needed to be done.

The reason is the country has been run by ideologue linear thinkers. Believers in linear history are constantly blindsided by the fact that history is cyclical and periods of progress are counterbalanced by periods of regression. As neo-con Republicans continue to push their lowering taxes on the rich, Christian fundamentalism, drill drill drill energy plan, bowing down to Wall Street bankers and wars on Muslims, drugs, and immigrant agenda, the mood of the country has shifted away from their falsehoods and fabrications. As ultra-liberal Democrats continue to push their agenda of ever increasing entitlements, ridiculous Keynesian stimulus, disengenuous green energy plans, blind support of corrupt unions, wars to prove they’re as tough as Republicans, pushing for gay marriage and rolling over for Wall Street bankers the people of the country have tired of their lies and deceit.

Our country had a decade to prepare for the coming tempest. All generations should have worked to elevate the moral and cultural standards of the country. Instead the decadence, selfishness, materialism and profligacy of the nation were taken to new heights. The complete lack of self control exercised by the media and the public has allowed government bureaucrats to impose despotic laws and regulations to protect us from ourselves and phantom terrorists. The Federal government needed to cut back its size and scope so that it would be nimble in the face of the Crisis. Politicians needed to prevent further civic decay by speaking bluntly and honestly to the American people about the future challenges, while stressing collective duties over personal rights. We needed a revival of citizenship over individualism, with a focus on future generations who would be left with the fallout of thirty years of debt induced societal degradation. The government should have shifted its budgetary focus away from the non-needy old to the young people of our once great Republic. The future of the country depends on the young, not the old. The preparation scorecard on all these accounts is a miserable failure:

Since 9/11 the American public has willingly allowed the government to strip liberties and freedoms away in the name of safety and security through passage of the Patriot Act, spying on US citizens, and wars of aggression in Iraq, Afghanistan and Libya.
The government wolves control the sheep through the use of fear and misinformation. The War on Terrorism is used at every opportunity to keep the sheep-like populace under control in their holding pens.
The corporate owned mainstream media glorifies wealth, celebrity, and sensationalism while infecting the culture with a vapid mind numbing array of TV shows and spewing toxic levels of filth and porn across the airwaves and internet.
The Federal government cut back its scope by increasing its annual spending to $3.8 trillion in 2011 versus the $1.6 trillion it spent in 1996, a 138% increase in fifteen years. Meanwhile, GDP only increased by 92% over this same time frame.

Our leaders prepared for the tough times ahead by increasing the National Debt from $5.2 trillion to $14.3 trillion in fifteen years, a 175% increase, or almost twice the rate of GDP growth. Rational leaders always triple their debt level when knowing harsh times are coming.
The blunt talk coming from politicians since 1996 included: buy an SUV with 0% financing to defeat terrorism; sure we can pay for your drug costs with Medicare Part D; home prices never fall and everyone deserves a house; free market capitalism always works; cutting taxes on the rich will increase tax revenue; they have weapons of mass destruction; debt doesn’t matter; giving bankers $700 billion will save our economy; spending $800 billion will generate 3.5 million jobs; and QE2 will reduce mortgage rates and jump start the economy.
Our leaders have thrown the Millenial generation under the bus, while promising to never cut Medicare, Medicaid, or Social Security for the 76 million Boomers that make up the largest voting bloc in the country. The collective long-term survival of the country has been cast aside in the name of the selfish desires of the generations in power.

The lack of cultural and civic preparation has been far outdone by the extraordinarily deficient amount of preparation in the economic and military areas. Everyone knows that when you discern tumultuous times are on the horizon, you conserve, save, and marshal your forces for the coming storm. Our leaders needed to level with Americans and tell them the entitlements they were promised could never be honored. Americans needed to ramp up their savings and become more self reliant in preparing for their old age. Federal, state and local governments needed to shift their employees from defined benefit plans to defined contribution plans. Americans needed to pare back their debt and stop over-consuming. The government needed to balance budgets, reform the tax code shifting toward consumption, and reduce entitlement promises. America needed to gird for a possible war whose scale, cost, manpower and casualties would seem impossible in 1996 (every prior Fourth Turning led to all encompassing war). The preparation scorecard for these areas was dreadful:

The most damning data in proving how delusional the government, consumers, businesses and banks has approached the future is the rise in total credit market debt from $18 trillion in 1996 to an all-time high of $52.6 trillion today, or 350% of GDP.

Rather than level with people and explain that entitlement promises could not be fulfilled, a supposedly fiscal conservative Republican President added another $15 trillion unfunded liability to our $100 trillion obligation.

Our current socialist president rammed through a national healthcare bill that will filter 30 million people into the system and will add in excess of $1 trillion of unpaid for costs, further burying the hopes and dreams of our youth under a mountain of un-payable obligations.
Americans, who used to save 10% of their disposable income, were only saving 5.5% in 1996. Rather than prepare for the future by saving more, they put their faith in housing values growing 10% per year for infinity, and let their savings rate drop below 1% by 2005. The current level of 4.9% is not sufficient and is reflected in the fact that two-thirds of all workers have less than $50,000 in total savings.

States have unfunded pension liabilities approaching $3 trillion, with the Federal government carrying a $1 trillion pension liability. Unfunded liabilities are really future tax increases on unborn generations.
The one area that seemed under control in the late 1990s was budget deficits. Budget surpluses in the late 1990s turned into $1.5 trillion annual deficits today and as far as the eye can see. The national debt at 95% of GDP has past the point of no return.
The price for a barrel of oil was $12 in 1998. Rather than take advantage of this Indian summer and creating a plan to transition from depleting oil to other energy sources, our leaders did nothing. The American people bought massive SUVs, minivans and pickups and moved further into the suburban countryside, miles from civilization. The bumpy plateau of peak oil has arrived and oil prices have ranged between $70 and $140 a barrel for the last few years. We will long for these prices in a few short years.

Rather than conserving our military forces and preparing for a future major confrontation we have overextended our limited forces, spent $1.2 trillion on wars of choice, killed 7,300 American soldiers, and wounded another 43,000 soldiers.

The complete lack of preparation, indeed the choice to actively do the opposite of prepare, has insured this Fourth Turning Crisis will be that much more destructive.

“History offers no guarantees. If America plunges into an era of depression or violence which by then has not lifted, we will likely look back on the 1990s as the decade when we valued all the wrong things and made all the wrong choices.” – Strauss & Howe – The Fourth Turning

Retribution

“The refusal of the political class to imposes losses on large bank creditors since the collapse of Lehman Brothers and Washington Mutual in 2008 illustrates the extent to which the financialization of the western industrial economies has turned into a gradual coup d’état by the banks and the global speculators who dominate their client base.” – Chris Whalen

“We’re not moving toward Hitler-type fascism, but we’re moving toward a softer fascism: Loss of civil liberties, corporations running the show, big government in bed with big business. So you have the military-industrial complex, you have the medical-industrial complex, you have the financial industry, you have the communications industry. They go to Washington and spend hundreds of millions of dollars. That’s where the control is. I call that a soft form of fascism — something that’s very dangerous.” – Ron Paul

As the average American continues their epic struggle to stay afloat in these turbulent times it is clear to those with critical thinking skills, like Chris Whalen and Ron Paul, that the game is rigged in favor of those with enormous wealth and power. There is no doubt the levers of government and finance have been seized by a super rich minority of men, willing to use all means necessary to increase their wealth and power at the expense of those they consider lowly expendable peasants. The myth perpetuated by those in control of the system is that everyone in America has ample opportunity to move up the ladder, even as they push the ladders away from the parapet surrounding their castle.

The talking points of the super rich, which are pounded into the brains of slumbering Americans, are they pay all the taxes, create all the jobs, create all the wealth, and drive innovation. The facts say otherwise. The super rich aren’t creators, they are destroyers. The top 0.1% richest Americans didn’t get rich by creating new companies and letting their entrepreneurial talents shine. These 152,000 people, with an average income of $5.6 million per year are overwhelmingly executives at large corporations, banks, law firms, and real estate firms. These people account for 68% of the richest of the rich. Entrepreneurial creators and producers account for less than 10% of the richest Americans. The executives that make up the 68% are masters of creating debt, wealth for themselves by peddling debt to the middle class, and creating jobs in China and India by outsourcing U.S. jobs.

The average income of the 137 million people that sit at the bottom of the income pyramid has declined by 1% since 1970. The people at the top of the pyramid saw their average income rise by 385%. Was this because they worked harder? No. It was because they used their existing wealth to buy politicians and pay lobbyists to write laws, create loopholes, reduce regulations, and alter the tax code in their favor. This was not a conspiracy. It was human nature. Humans are driven by greed and fear. Lusting for power and wealth is a common human frailty. Those who are able to acquire wealth and power through their superior abilities and intellect are usually driven individuals. It is built into their DNA to seek more wealth and power. There are 310 million Americans and based on the chart below, only 1.5 million would be classified as very rich or extremely rich. Many of these people associate in the same circles. This incestuous relationship is what breeds the growing inequality in our country. The game is rigged in favor of these 1.5 million people because they run the corporations, occupy the halls of Congress, peddle the debt products to the bottom 90%, and use their mass media to control the message to the under-educated, over-medicated, gadget distracted masses.

The problem with humans is they always push the envelope too far. The rich and powerful have methodically accumulated more wealth and more power since their glorious coup in 1913 with the creation of the Federal Reserve and the personal income tax. They have used inflation and the tax code to further their agenda. The rate of their pillaging has waxed and waned over the last century as the mood of the country has oscillated during the five turnings between crisis and triumph. The rate of looting has accelerated in the last thirty years as their false message of free market capitalism, lower tax rates for the rich, and the issuance of unparalleled amounts of debt was bought hook line and sinker by the American public. Their plundering of the national wealth reached a sickening crescendo in the last ten years, as their internet bubble was replaced by their housing bubble, which has been replaced by their debt bubble of immense proportions. As the middle class has been impoverished, 30 million people are unemployed or underemployed, senior citizens have been sacrificed at the altar of Wall Street and 45 million people are forced to use food stamps, the top 1% has done fabulously. They continue to rake in a greater proportion of the national income every year. In 2009, in the midst of an epic financial crisis, the number of millionaires in the United States soared by 16% to 7.8 million as despair and hopelessness spread across the land and fearful Americans were railroaded into bailing out the bankers that initiated the crisis and believing the Obama’s Keynesian solutions would actually trickle down to them.

As the game approaches its inevitable termination those in control have become increasingly audacious and frantic in their attempts to embezzle what remains of middle class wealth. The anger and disillusionment grows by the day. The mood of the country darkens like the sky before an approaching blizzard. The intensity and violence during a Fourth Turning hastens as events spiral toward a climax. The extreme actions taken by those in power since September 2008 have set in motion a chain of events that will lead to civil war. The powerful elite in government (Bush, Paulson, Bernanke, Congress) chose to bail out the powerful elite on Wall Street (Blankfein, Dimon, Pandit, Lewis) on the backs of the American middle class. TARP, QE1, QE2, and the $800 billion stimulus package were all created by the ruling elite to benefit the ruling elite, who control the vast amount of financial wealth in the country. Savers and seniors have been thrown under the wheels of a Lamborghini driven by the profligate Wall Street gamblers.

Average Americans feel betrayed by politicians, bankers and corporate America. The Tea party movement is a reflection of that anger. Fourth Turnings always sweep away the old order and replace it with a new order. The old order isn’t ready to be swept away, but their time is coming. The U.S. economic model is unsustainable and is guaranteed to collapse in the near future. Those in power are trying to engineer a controlled collapse, but they will lose control just as they did in 2008. Panic and depression will ensue. Vast amounts of wealth will be destroyed. When the middle class realizes they have been screwed again by Wall Street and K Street, and they no longer have anything left to lose, they will lose it.

The welfare class will only riot if their EBT cards stop working and the monthly welfare direct deposit ceases. It’s the critical thinkers in the middle class that will lead a revolution. There are 250 million guns owned by Americans. With this amount of firepower and millions of Americans with nothing left to lose, those attempting to retain power will be at a distinct disadvantage. I believe armed vigilantes will hunt down those responsible for the destruction of the American economy and invoke their own justice. Their gated communities and penthouse suite doormen will not protect them. No politician, banker, or corporate executive will be safe. Some will escape in their Lear jets to foreign lands, but the rest of the world will be equally chaotic and unsafe for those who committed crimes against humanity. Innocent people will die. Deserve will have nothing to do with it. The very existence of our country will hang in the balance.

Atonement

“The seasons of time offer no guarantees. For modern societies, no less than for all forms of life, transformative change is discontinuous. For what seems an eternity, history goes nowhere – and then it suddenly flings us forward across some vast chaos that defies any mortal effort to plan our way there. The Fourth Turning will try our souls – and the saecular rhythm tells us that much will depend on how we face up to that trial. The saeculum does not reveal whether the story will have a happy ending, but it does tell us how and when our choices will make a difference.” – Strauss & Howe – The Fourth Turning

No one can predict the exact events (debt ceiling, Euro collapse, Middle East war) that will propel this Fourth Turning. But, the underlying drivers are clear: public debt, private debt, banker coup, military overreach, corporate fascism, Federal Reserve created inflation, an oil dependent society with depleting oil and rampant corruption across all levels of government. The fingers of instability grow longer as we add $4 billion per day to the national debt. A grain of sand will fall on the wrong part of the sand pile triggering a collapse of our currency. The event is unknown, the timing unclear, but the destination is certain. A dollar collapse will trigger a surge in interest rates, which will be fatal to our debt bloated society. Every previous Fourth Turning involved revolutionary aspects. The American Revolution and Civil War were wars of revolution. The stirrings of revolution were rampant in the early 1930s, with a plot foiled by General Smedley Butler. The New Deal was a response designed to quell discontent among the masses. Enough people are becoming aware of who to blame for the ills in our society that Henry Ford’s prediction is ever closer to being realized:

“It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before morning.”

An uprising against the super rich and their banking cartel partners in crime is in the cards over the next ten years. Our society has degenerated and has been ransacked by sociopaths in suits as Jesse from Jesse’s Café Americain so eloquently states:

“Not all sociopaths wield knives and knotted cords. Some wear suits, and are exceptionally intelligent and articulate, obsessively driven, and are able to use and undermine the law and the rules for their advantage, like weapons. It is never about the win, never about the money. It is about the kill, the expression of their hatred, about elevating themselves with the suffering of others. Bind, torture, kill. Not only with ropes and knives, but also with power and money, and the subversion of law. Lawlessness is their addiction, their will to power.

When societies become lax and complacent, these sociopaths can possess great political power through great amounts of unprincipled money. And over time they become almost anti-human, destroyers of all that is good, all that is life, all that offends their insatiable sickness with its goodness. They twist the public against itself, and turn a broad sweep of society into their killing grounds. This is the undeniable lesson of the last century. There are monsters, and they walk among us.”

Human beings are a flawed species. We are often driven by emotion rather than reason. We are easily convinced of things we want to be convinced about. Those with superior intelligence often take advantage of those with inferior intelligence. We are prone to mass hysteria and believing things that, in retrospect, were utterly ridiculous. We can be swayed by fear and greed in alternating degrees of delusion. History teaches us that this time isn’t different. We’ve experienced depression, war and social upheaval on an epic scale three times since the founding of this country. With only three data points it is tough to discern patterns that would reveal exactly how this Fourth Turning will play out. But it is apparent to me that each Fourth Turning alternates between a mostly external struggle and a mostly internal struggle. The American Revolution was a struggle against an external oppressor – Great Britain. The Civil War was an internal struggle between the industrial North and the agrarian South. The Depression/World War II struggle was mainly against an external threat – Germany, Japan, and Italy.

The Fourth Turnings that centered upon an external threat ended with a glorious High. The Civil War Fourth Turning resolution felt more like defeat, with the country exhausted, bitter and angry. All indications are this Fourth Turning will be mainly an internal struggle between the ruling class of bankers, business elites, and politicians and the downtrodden middle class. The lying, cheating, fraud, theft and other wrongs committed by those in power will need to be atoned for. The generational dynamics in place will drive the reactions of the country moving forward. We have been badly led. A vast swath of the populace has lived beyond their means. The existing system is unsustainable. The Boomer generation does not want to yield on their perceived entitlements. The Millenial generation will be saddled with un-payable debts. Generation X is caught in the middle of this generational struggle. The huge imbalances in our society have built up over decades like flood waters behind a weakening levee. When the levee breaks the existing order will be swept away in the raging torrent that will follow.

The ruling class will be stripped of their unseemly acquired wealth; the Boomer generation will be scorned for their reckless disregard for future generations and stripped of their entitlements; Generation X will resign themselves to a lower standard of living, knowing full well by doing so, their children will not be saddled with crushing levels of debt; Millenials will have borne the burden of the revolution and violence which will be inevitable as the ruling class fights to retain their dominating position in society. Darkness descends upon our land. Storm clouds gather on the horizon. We’ve all played a part in the catastrophe that lies before us. Everyone in our crumbling society will need to atone for its sins, whether they deserve to or not. Will Munney was not an innocent man, but he ultimately atoned for his sins by digging deep into his soul and finding the strength and fortitude to fight the evil establishment. Each generation’s rendezvous with destiny awaits. There are no guarantees. The myth of American Exceptionalism will not protect us from the choices we’ve made. God will not shield us from the consequences of our actions. The American Empire hangs in the balance. As the ghosts of Roman emperors whisper – Glory is fleeting.

“The risk of catastrophe will be very high. The nation could erupt into insurrection or civil violence, crack up geographically, or succumb to authoritarian rule. If there is a war, it is likely to be one of maximum risk and effort – in other words, a total war. Every Fourth Turning has registered an upward ratchet in the technology of destruction, and in mankind’s willingness to use it.” – Strauss & Howe – The Fourth Turning

THE ROCKETSHIP TO RUIN

The really bad news is that most of these pension funds are assuming an 8% annual return. Bwaaaahhhhaaaaa!!!!

Insert a realistic 4% into those little models and the unfunded liability shoots through the top of this little chart like a rocket ship.

Math is hard. Check out your state. Are you willing to have your state tax rates tripled in order to pay the pensions and healthcare benefits of state government workers? It’s really that simple.

WAR PIGS – THE FALL OF A GLOBAL EMPIRE

“We will bankrupt ourselves in the vain search for absolute security.” -Dwight D. Eisenhower

“How far can you go without destroying from within what you are trying to defend from without?” –Dwight D. Eisenhower

Generals gathered in their masses
Just like witches at black masses
Evil minds that plot destruction
Sorcerers of deaths construction

In the fields the bodies burning
As the war machine keeps turning
Death and hatred to mankind
Poisoning their brainwashed minds, oh lord yeah!
Black Sabbath – War Pigs

As Americans mindlessly celebrate another Memorial Day with cookouts, beer and burgers, the U.S. war machine keeps churning. As we brutally enforce our will on foreign countries, we create more people that hate us. They don’t hate us for our freedom. They hate us because we have invaded and occupied their countries. They hate us because we kill innocent people with predator drones. They hate us for our hypocrisy regarding democracy and freedom. Just when we had the opportunity to make a sensible decision by leaving Iraq and exiting the Middle East quagmire, Obama made the abysmal choice to casually sacrifice more troops in the Afghan shithole. We have thrown over $1.3 trillion down Middle East rat holes over the last 11 years with no discernible benefit to the citizens of the United States. George Bush and Barack Obama did this to prove they were true statesmen. The Soviet Union killed over 1 million Afghans, while driving another 5 million out of the country and retreated as a bankrupted and defeated shell after ten years. Young Americans continue to die, for whom and for what? Our foreign policy during the last eleven years can be summed up in one military term, SNAFU – Situation Normal All Fucked Up. These endless foreign interventions under the guise of a War on Terror are a smoke screen for what is really going on in this country. When a government has unsolvable domestic problems, they try to distract the willfully ignorant masses by proactively creating foreign conflicts based upon false pretenses. General Douglas MacArthur understood this danger to our liberty.

“I am concerned for the security of our great Nation; not so much because of any threat from without, but because of the insidious forces working from within.”

Economic Opportunity Cost

“You can’t say civilization don’t advance… in every war they kill you in a new way.” – Will Rogers

Any doubt that the Military Industrial Complex is as strong as ever should be removed after examining Obama’s 2012 Budget which has $900 billion dedicated to our military machine. We spent $370 billion in 2001, $620 billion in 2006, and now this liberal anti-war Democrat from Illinois is spending 45% more than that war monger Bush who was burned in effigy by the anti-war Democrats during Iraq War protests. It seems both parties are war pigs.

The Soviet Union collapsed in 1989, leaving the United States as the only remaining superpower on earth. Since 1990, the United States has depleted the U.S. Treasury of $11.5 trillion for spending on War. With no military on earth capable of challenging us why would there be a need to spend this much on the military? Over this same time frame the U.S. spent $500 billion on science, space & technology and $70 billion on energy, a mere 6% of the spending on invading sovereign countries. Military expenditures benefit humanity in no way. If these trillions had been invested by the private sector or devoted to energy and scientific research, our economy might not be a hollowed out shell, dependent on China for financing and oil exporting countries for energy. Neo-Cons argue the Arms Industry employs millions and benefits the country. These companies employ brilliant engineers and scientists who spend their days developing weapons that kill people more efficiently. If they had been employed manufacturing high tech goods to export around the world, inventing new technologies that didn’t obliterate human beings, newer safer nuclear power plants, a more efficient electric grid, upgrading our deteriorating infrastructure, or finding a cure for Alzheimer’s, would the United States be better off today?

The National Debt in 1990 was $3.2 trillion. Today, it is $15.7 trillion. This is a 500% increase in twenty-two years. What benefit has $11.5 trillion of spending on War produced for the United States or the world? In 2001, spending on Defense was 17% of total governmental spending. In 2012, Defense, Homeland Security, and war spending account for 25% of government spending. In the meantime, major cities experience blackouts due to an overloaded electrical grid, our 156,000 structurally deficient bridges crumble, one hundred year old water pipes burst under our streets every day, and we transfer over $300 billion per year to foreign countries for our precious oil. The 19 terrorist hijackers who implemented their plan with box cutters, spent less than $500,000 to pull off their 9/11 acts of terror – not war. The United States will directly spend at least $3 trillion on our wars of choice in response, while turning our country into a prison camp and stripping our citizens of their freedoms and liberties for perceived security and safety.

You would think we must be trying to keep up with our enemies by spending $900 billion per year on past and present military adventures. But one look at the following chart reveals the United States is spending almost as much as the rest of the world combined. The two countries considered potential rivals, China and Russia, spent $200 billion combined in 2010. This is 22% of U.S. spending. From a foreign viewpoint, one must wonder why the U.S. is spending such vast sums on our military. They can only conclude that it is for offensive intentions rather than defensive. The United States soil has not been attacked by a foreign power since December 7, 1941. Prior to that surprise attack, a foreign power hadn’t attacked the U.S. since the War of 1812. With this stupendous level of wasteful spending, our leaders feel compelled to interfere in the business of sovereign states and dictate how they should govern their nations . When you have an enormous hammer, every country looks like a nail.

Laughably, the neo-con hawks and Fox News pundits declare that our military is a hollow shell and needs much greater funding to insure our safety from attack by our many enemies. Other countries, such as China and Russia, feel they have no choice but to increase their expenditures on the military. On a percentage basis, they have more than doubled their expenditures in the last ten years, and still are a drop in the ocean compared to American Empire spending. The fact is that the U.S., China and Russia all have enough nuclear weapons to obliterate the world – mutually assured destruction. The United States could realistically protect itself from attack with only the 18 ballistic missile nuclear submarines we have in commission.

When did Americans lose their ability to distinguish between intellectual and moral pygmies like George Bush, Barack Obama and Mitt Romney versus statesmen like Dwight D. Eisenhower? The Bush Doctrine of pre-emptive war when our country was not threatened has proven to be financially and diplomatically disastrous and his blueprint is being followed by our Nobel Peace Prize President in his saber rattling with Iran. Following this policy puts them in fine company.

“Preventive war was an invention of Hitler. Frankly, I would not even listen to anyone seriously that came and talked about such a thing.” –Dwight D. Eisenhower

The U.S. borrowed $807 billion from China, Japan and oil exporting countries to wage a war in Iraq that was based on false pretenses. None of the terrorist hijackers on 9/11 were Iraqis, they had no links to Al Qaeda, and Iraq had no weapons of mass destruction. Historian Barbara Tuchman description of “war as the unfolding of miscalculations” was never so fitting. In 2002, Secretary of Defense Rumsfeld estimated the costs of the war in the range of $50 to $60 billion, a portion of which he believed would be financed by other countries. The United States invaded Iraq to secure the 115 billion barrels of oil reserves, pure and simple. We traded the blood of young Americans for oil because we chose to not develop a cohesive logical energy policy in the last 30 years. Americans, not in the military, sacrificed nothing in the last 11 years of war. We bought BMW SUVs, 6,000 square foot McMansions, flat screen HDTVs, iPads, iPhones and Rolexes while less than 1% of Americans fought and died, with the cost passed to future unborn generations. We are a country of chickenhawks, willing to sacrifice the few so the ruling class can comfortably relax on their decks sipping wine, believing Fox News propaganda about terrorists lurking behind every bush, and filling up their Mercedes convertibles for their excursions to the summer cottage in the Hamptons.

“Every gun that is made, every warship launched, every rocket fired, signifies in the final sense a theft from those who hunger and are not fed, those who are cold and are not clothed.” – Dwight D. Eisenhower

As we spend $900 billion per year on instruments of destruction, 49 million Americans live in poverty, with 46 million on food stamps. There are 3 to 4 million people homeless in any given year. Military Veterans, who make up 13% of the population, account for 23% of the homeless. This is another example of Federal government politicians using young Americans to fulfill their agenda and then tossing them away like pieces of garbage. With the country supposedly three years into an economic recovery, tent cities of homeless dot the landscape across the nation. We pour billions into killing technology while millions of American families are forced to live in tents or sleep in their cars.

As the world spends $1.7 trillion per year on new methods of killing, millions die the old fashioned way.

13 million people per year die from starvation in the world.
The FAO says that 925 million people worldwide are undernourished.
For the price of one missile, a school full of hungry children could eat lunch every day for 5 years.
One child dies every 5 seconds as a result of hunger – 700 every hour – 16 000 each day – 6 million each year – 60% of all child deaths (2002-2008 estimates)

What kind of a civilized society allocates 44% of the taxes taken from its people to war? Only 2.5% of your taxes go to science, energy, and environment. Only 2.2% of your taxes go to education and jobs. You produce the results that you would expect from your investments. A full 13% of our population doesn’t have a high school diploma (20% of African Americans & 43% of Latinos) and only 30% have a college degree. How do we expect to lead the world in technology and research with these figures? We do lead the world in government issued student loan debt with $1 trillion and rising.

Human Cost

Politicians hide themselves away
They only started the war
Why should they go out to fight?
They leave that role to the poor

Time will tell on their power minds
Making war just for fun
Treating people just like pawns in chess
Wait till their judgment day comes, yeah!

Black Sabbath – War Pigs

George Bush, Dick Cheney, Donald Rumsfeld, and Barack Obama are cowardly politicians who never had the “pleasure” of coming under fire in battle. The brilliant anti-war novel Catch-22 describes these men perfectly.

“Some men are born mediocre, some men achieve mediocrity, and some men have mediocrity thrust upon them. With Major Major it had been all three.”

The world has been a huge game of Risk for these warmongers, with young Americans as the game pieces. Instead of conquering Kamchatka in a board game, these non-veterans sent 6,470 Americans to their deaths in Iraq and Afghanistan for a false cause. Their ideology of empire convinced them they could change the world into their image of how it should be, and their re-election campaigns were funded with millions from the purveyors of death – the arms industry.

“In modern war… you will die like a dog for no good reason.” – Ernest Hemingway

Another 47,545 Americans have been badly wounded in Iraq and Afghanistan. Three of these despicable politicians have written their memoirs, raking in millions for telling lies and half-truths. The 6,470 dead Americans won’t have a chance to write their memoirs or get rich. They will never get a chance to see their kids’ graduate college or walk their daughter down the aisle at her wedding. Their children will grow up with a giant hole in their hearts. Their widows will never recover from their endless heartache.

Politician chickenhawks who send our young people to their deaths for oil and ideology will receive their reward on judgment day if there is a just God.

As National Guard troops have been deployed over and over again to Iraq and Afghanistan, they must realize that Catch-22 is alive and well in today’s military.

“There was only one catch and that was Catch-22, which specified that a concern for one’s own safety in the face of dangers that were real and immediate was the process of a rational mind. Orr was crazy and could be grounded. All he had to do was ask; and as soon as he did, he would no longer be crazy and would have to fly more missions. Orr would be crazy to fly more missions and sane if he didn’t, but if he was sane he had to fly them. If he flew them he was crazy and didn’t have to; but if he didn’t want to he was sane and had to. Yossarian was moved very deeply by the absolute simplicity of this clause of Catch-22 and let out a respectful whistle.”

“That’s some catch, that catch-22,” he observed.

“It’s the best there is,” Doc Daneeka agreed

American soldiers, who have completed their duty to country, have been lied to and had the rules of the game changed again and again. Their politician leaders have reneged on their promises by sending men and women back to the war zone or not letting them come home on the timeline that was agreed to. Meanwhile, their families have gone bankrupt, lost their houses, and saw their marriages dissolve. Politicians started these wars and are too cowardly and prideful to accept failure.

“The military don’t start wars. Politicians start wars.” – General William Westmoreland

Over 1,300 more Americans died needlessly when Barack Obama, winner of the Nobel Peace Prize, chose to double down in Afghanistan to prove he was as tough as Bush and McCain. Another man who has never been under fire needed to prove his manliness to his opponents and his constituency. He should have studied the words of former Presidents who were under fire.

“I hate war as only a soldier who has lived it can, only as one who has seen its brutality, its futility, its stupidity.” – Dwight D. Eisenhower

“My first wish is to see this plague of mankind, war, banished from the earth.” – George Washington

President Obama follows the standard Presidential game plan and dutifully gives patriotic speeches at military bases proclaiming the bravery and sacrifice of our troops. These are the words of politicians. The brutal reality for troops is much different. Representative Ron Paul in November 2003 described the early mistreatment of our soldiers:

Fort Stewart, Georgia housed hundreds of injured reserve and National Guard soldiers in deplorable conditions who were forced to wait months just to see a doctor. These soldiers made huge sacrifices, leaving their families and jobs to fight in Iraq. They found themselves living in hot, crowded, unsanitary barracks and waiting far too long to see overworked doctors. This was hardly the heroes’ welcome they might have expected. Only an exposé in a major newspaper brought attention to their plight, prompting an embarrassed Defense department to rush additional doctors to the base.
Some wounded soldiers convalescing at Walter Reed hospital in Washington were forced to pay for hospital meals from their own pockets. Other soldiers returning stateside for a two-week liberty had to buy their own airfare home from the east coast. Still others paid for desert boots, night vision goggles, and other military necessities with personal funds.
Existing federal rules forced disabled veterans to give up their military retirement pay in order to receive VA disability benefits. This meant that every VA disability dollar paid to a veteran was deducted from his retirement pay, effectively creating a “disabled veterans tax.” No other group of federal employees is subject to this unfair standard; in every other case disability pay is viewed as distinct from standard retirement pay.

The Humvees that soldiers were forced to drive did not have enough protective armor. In December 2004, Secretary of Defense Rumsfeld was giving one of his usual inspirational speeches when Army Spc. Thomas Wilson of the 278th Regimental Combat Team, a unit that consisted mainly of reservists from the Tennessee Army National Guard asked him a question:

“Why do we soldiers have to dig through local landfills for pieces of scrap metal and compromised ballistic glass to up-armor our vehicles?”

This set off what the AP described as “a big cheer” from his comrades in arms. Rumsfeld paused, asked Wilson to repeat the question, then finally replied, “You go to war with the army you have.” Besides, he added, “You can have all the armor in the world on a tank and it can be blown up.” I’m glad Donald Rumsfeld has a clear conscience. History will not be kind to this despicable excuse for a human being.

Rumsfeld also sent Americans into battle without protective body armor. Only after bad publicity did the proper protection reach the troops. The blood of dead soldiers is on Rumsfeld’s hands. While President Bush sacrificed by not golfing, terribly wounded soldiers were sent to Walter Reed Hospital to recover. Instead they entered hell on earth. Outpatient mistreatment was reported in 2004, but nothing was done. In 2004 and 2005, articles appeared in the Washington Post and in Salon interviewing First Lt. Julian Goodrum about his court martial for seeking medical care elsewhere due to poor conditions at WRAMC. A Washington Post expose in 2007 finally revealed the horrible mistreatment of our brave wounded soldiers. These reporters uncovered the following conditions:

WRAMC’s Building 18 was described in the article as rat- and cockroach-infested, with stained carpets, cheap mattresses, and black mold, with no heat and water reported by some soldiers at the facility. The unmonitored entrance created security problems, including reports of drug dealers in front of the facility. Injured soldiers stated they are forced to “pull guard duty” to obtain a level of security.
The typical soldier was required to file 22 documents with eight different commands – most of them off-post – to enter and exit the medical processing world, according to government investigators. Sixteen different information systems were used to process the forms, but few of them could communicate with one another. This complicated system has required some soldiers to prove they were in the Iraq War or the War in Afghanistan in order to obtain medical treatment and benefits because Walter Reed employees were unable to locate their records.

There was a tremendous surge in suicides by soldiers who have been pushed beyond their limits as they increased by 80% between 2004 and 2008. There are almost as many deaths by suicide as deaths in combat:

Overall, the services reported 434 suicides by personnel on active duty, significantly more than the 381 suicides by active-duty personnel reported in 2009. The 2010 total is below the 462 deaths in combat, excluding accidents and illness. In 2009, active-duty suicides exceeded deaths in battle.
Soldiers returning from long tours in Iraq or Afghanistan suffering from combat stress were sometimes met with scorn from their superiors and something bordering on neglect from some medical officials. As their largely untreated problems deteriorated, their marriages unraveled under the strain. They turned to alcohol and drugs and in some cases saw no other way out than suicide.
Healthcare officials at various installations who are struggling to help say they’re overwhelmed by huge numbers of troops returning from two, three or even four deployments with acute mental problems from combat.
Statistics on Iraq and Afghanistan veterans, obtained in 2011 through a Freedom of Information Act request by a San Francisco newspaper, found that more than 2,200 soldiers died within two years of leaving the service, and about half had been undergoing treatment for post-traumatic stress or other combat-induced mental disorders at the time.
For five years, beginning in 2005, a service member died by suicide every 36 hours, according to the report by the Center for New American Security.

Nearly 20% of military service members who have returned from Iraq and Afghanistan — 300,000 in all — report symptoms of post-traumatic stress disorder or major depression, yet only slightly more than half have sought treatment, according to a RAND Corporation report. Many service members said they do not seek treatment for psychological illnesses because they fear it will harm their careers. But even among those who do seek help for PTSD or major depression, only about half receive treatment that researchers consider “minimally adequate” for their illnesses. Recent studies expect PTSD to affect 30% of all returning veterans.

For all the glory and accolades of dying for chickenhawks like Dick Cheney, enlisted soldiers make between $17,000 and $32,000 per year. The military evidently does not prepare them well for the outside world as their unemployment rate is 12.1% versus the national rate of 8.2%. The pandering Obama gives speeches and the criminal bankers at JP Morgan have their PR maggots create TV commercials about hiring veterans, but the numbers don’t lie. A country can be measured by how well it treats its veterans. Our leaders talk a good game, but their actions prove they don’t care about the human costs of war. They are busy planning their next move in their game of Risk.

Moral Cost

Now in darkness, world stops turning
As the war machine keeps burning
No more war pigs of the power

Hand of God has struck the hour
Day of Judgment, God is calling
On their knees, the war pigs crawling
Begging mercy for their sins
Satan, laughing, spreads his wings
All right now!

Black Sabbath – War Pigs

Omar Bradley, the last five star General in the U.S. military, was known as the “soldier’s general” during World War II. He was portrayed by Karl Malden in the movie Patton as a thoughtful man who cared about his troops. He was one of the key architects of the Normandy invasion and led the 12th Army Group consisting of 900,000 men until the end of the war. After the war, Bradley headed the Veterans Administration for two years. He is credited with doing much to improve its health care system and with helping veterans receive their educational benefits under the G.I. Bill of Rights. He ultimately rose to Chairman of the Joint Chiefs. Contrast the words of the fictional Colonel Kilgore from the movie Apocalypse Now, with the words of General Bradley:

Kilgore: I love the smell of napalm in the morning. You know, one time we had a hill bombed, for 12 hours. When it was all over, I walked up. We didn’t find one of ’em, not one stinkin’ dink body. The smell, you know that gasoline smell, the whole hill. Smelled like
[ sniffing, pondering ]
victory. Someday this war’s gonna end…
[ suddenly walks off ]

“The world has achieved brilliance without wisdom, power without conscience. Ours is a world of nuclear giants and ethical infants. We know more about war than we know about peace, more about killing than we know about living.” – Omar Bradley

We need giants like Omar Bradley and Dwight D. Eisenhower to lead our country through the difficult times ahead. These men knew the horrors of war and didn’t act like it was a game of chess. Instead we will be led by intellectual and ethical infants, Obama or Romney. There are no wise men with a conscience and high moral standards in power today. Only those with no conscience and a willingness to lie are able to gain power in today’s world. General Bradley understood that morality was ultimately more important than power and strength in determining the progress of a country. His words are those of someone who knew we had failed in our moral duty:

“We have grasped the mystery of the atom and rejected the Sermon on the Mount.”

Peacemakers are ridiculed and shunned in America today. Those who preach diplomacy and non-interventionism, like Ron Paul, are scorned and ignored. Old men who care more about their own power than the human race are willing to sacrifice the blood of young people for precious oil, phony nationalism, their own strategic interests or corporate interests disguised as philosophical agendas. The world is a game for these old men. They care about their personal legacy and rigid ideologies. War and militarism are a failure of passion over reason. Albert Einstein, whose discovery brought about this age of potential world destruction, had no love for these blind warriors.

“He who joyfully marches to music in rank and file has already earned my contempt. He has been given a large brain by mistake, since for him the spinal cord would suffice.”

The overwhelming cost of maintaining a global empire eventually bankrupted Rome and Great Britain. Treasures were wasted, young men were needlessly sacrificed in the name of the flag, and the morality of leaders sank to unprecedented levels. The U.S. had advanced financially and technologically for more than a century, but since the takeover of our economic system by private banking and corporate interests in 1913 we have seen continuous war, continuous currency debasement, and continuous moral decay. How far will we decline before a sufficient number of Americans are outraged enough to lead a new American Revolution?

Our current situation reminds me of the movie Planet of the Apes. The apes are divided into a strict class system: the gorillas as police, military, and hunters; the orangutans as administrators, politicians and lawyers; and the chimpanzees as intellectuals and scientists. Humans, who cannot talk, are considered feral vermin and are hunted and used for scientific experimentation. The United States is now in the control of gorillas and orangutans. If we continue down the current path of financial and moral decay, allowing the Military Industrial Complex, criminal bankers and corrupt politicians to push us into further world conflicts, we will experience the shock and horror that George Taylor, played by Charlton Heston, displayed in the final scene of Planet of the Apes .

George Taylor: Oh my God. I’m back. I’m home. All the time, it was… We finally really did it.

[ screaming ]

You Maniacs! You blew it up! Ah, damn you! God damn you all to hell!

The War Pigs must be stopped before it’s too late. The Military Industrial Complex, with the unwavering support of central bankers printing unlimited amounts of fiat currency, while controlling the scoundrel puppets in Washington DC, will destroy this country in their never ending quest for power and profits. One man fights a lonely battle against these forces of oppression. We must join his legion and take this country back from the war pigs.

“As many frustrated Americans who have joined the Tea Party realize, we cannot stand against big government at home while supporting it abroad. We cannot talk about fiscal responsibility while spending trillions on occupying and bullying the rest of the world. We cannot talk about the budget deficit and spiraling domestic spending without looking at the costs of maintaining an American empire of more than 700 military bases in more than 120 foreign countries. We cannot pat ourselves on the back for cutting a few thousand dollars from a nature preserve or an inner-city swimming pool at home while turning a blind eye to a Pentagon budget that nearly equals those of the rest of the world combined.” – Ron Paul

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