But — but — but — I thought all who work in government are benevolent public servants? That they’re better than the rest of us? That they’re angels, working for the public good?
Twenty-four current and former Internal Revenue Service employees have been charged with stealing government benefits, federal prosecutors said Wednesday.
The IRS employees were indicted on charges that they illegally received more than $250,000 in benefits including unemployment insurance payments, food stamps, welfare, and housing vouchers, the U.S. attorney’s office in Memphis said in a news release.
Prosecutors say 13 of the IRS employees face federal charges of lying about being unemployed while applying for or recertifying their government benefits…
They each face up to five years in prison if convicted of making false statements to receive the benefits.
Eleven others face state charges of theft of property over $1,000, a felony that can carry a sentence of probation up to 12 years in prison if they are convicted.
Now take this fraud, multiply it by a million dollars or so, and you get your typical Senator.
It’s happening incrementally – the unwinding of the U.S. dollar as the world’s reserve currency. We’re seeing trading countries strike reciprocal alignments to exchange each others currencies and not deal in the USD. And it’s picking up speed. Not overnight – but the end of the USD’s dominance is coming faster than we’re prepared for as a nation. And the media is largely silent on the topic. Go figure.
Over the weekend, Australia appears to have come to the same conclusion, with the Australian reporting that the land down under is set to say goodbye to the world’s “reserve currency” in its trade dealings with the world’s biggest marginal economic power, China, and will enable the direct convertibility of the Australian dollar into Chinese yuan, without US Dollar intermediation, in the process “slashing costs for thousands of business” and also confirming speculation that China is fully intent on, little by little, chipping away at the dollar’s reserve currency status until one day it no longer is.
China and Brazil have agreed to trade the equivalent of up to $30 billion per year in their own currencies, moving to take almost half of their exchanges out of the dollar zone.
The three-year swap line agreement, signed before the start of a BRICS nations summit in South Africa, marked a step by the two largest economies in the group to change global trade flows long dominated by the US and Europe.
It was suggested as a goal early in the first Obama term when Tim Geithner let it slip (then backed off) that it wouldn’t be a bad thing to happen.
As a public service for businesses impacted by Obamacare’s Byzantine maze of penalties, fees, taxes, mandates and other regulations that will require you to shed workers, our enterprising Cub Reporter Biff Spackle offers the following Semi-Official Obamacare Pink Slip.
Feel free to reproduce anywhere, anytime as a reminder to the drones that they may want to think before they vote next time around. That is, if there is a next time.
The amount U.S. households have in bank deposits, savings bonds, fixed-income mutual-funds and municipal securities increased $500 billion last year, equaling the most since 2007, according to FTN Financial, based on Federal Reserve data, while net household debt increased $10 billion, the least since 2005, as the economy grows slower than historically.
Consumers have kept up the trend into 2013, according to strategists at FTN, helping to prevent a selloff in Treasuries and other debt assets after average annual gains of 6.3 percent since 2008. That helps explain while even as Congress debates ways to reduce record budget deficits exceeding $1 trillion, politicians such as President Barack Obama to House Speaker John Boehner say the U.S. doesn’t face an immediate debt crisis.
It says no such thing.
You have to be ignorant beyond words to believe that, and even more-so to be crazy enough to write it.
Let me explain by returning this to the the household.
Let’s assume that a few years ago you had $51,000 in annual income, about average.
You also, however, had $180,000 in debt, and most of your debt is in a baloon note mortgage that has to be rolled over every three years. That is, every three years you must find someone who will write you a new mortgage, or you’re out of your house (and will find it very difficult to maintain your income when you have no place to live!)
Now let’s step forward a few years to today.
Your income has dropped somewhat to $48,980, which is a bit below average, but not by too much. That’s a 4% reduction, incidentally.
But your debt is now $328,660, or very close to double what it was five years ago. The reason your debt has increased is that you spent $70,760 last year, and in fact have been doing this for the last five years — spending dramatically more than you took in. You had a couple of very bad years for income, but never cut back on your spending — and in fact you still aren’t back to where you were on income five years previous.
You believe there is no “debt crisis” because the cost of borrowing all that money has gone down in interest rate terms. But this is a chimera, because you didn’t borrow all the money for 30 years, locking in your cost — instead, in order to make your spending better than it would otherwise be, you have borrowed a huge percentage of this money on a short-term basis which still must be rolled over every couple of years!
Your debt:income ratio has deteriorated by about a factor of two in the last five years.
“No immediate crisis”? Says who? That’s not under your control because you neither control your income nor can you compel anyone to roll that debt over at a favorable cost.
You are currently enjoying this cheap lending because people are scared, in fact, that all of their other options for the use of their capital will result in huge losses, while they believe you are “safer” in this regard.
This is not good, it’s bad.
It’s bad because the only way your income can grow is if people are confident, not fearful. If they’re fearful they will not invest, they will not spend, and they will not create jobs. But since you refuse to spend within your means the longer this goes on the more your debt:income ratio deteriorates.
This is how you go bankrupt “all at once” and utterly without warning. You financially die with certainty by following your path because there are only two possible outcomes:
The economy does not improve and people continue to lend you money cheaply due to their fear. In this case your income never goes up but since you are spending more than you make eventually you must reach the point where confidence in you is lost. On the day that happens you now cannot roll over your debt at all and you instantly go bankrupt. That is not a “crisis” it is your financial death — with certainty.
The economy does improve and people start demanding more to lend you money. In this case your income starts to rise but since your debt:income ratio is so high the interest costs rise faster than your income does. Again, because you have refused to spend within your means you are screwed because as the demanded interest rate goes up your cost of interest goes up and yet your income does not rise as quickly as does the interest requirement. This is a crisis rather than instant financial death.
These numbers, incidentally, are the United States federal budget and debt numbers with a few zeros whacked off and then multiplied by 2 so as to square against the average American’s household income. But most average Americans aren’t crazy enough to try to finance their house with a balloon note.
To not do that, incidentally, was a lesson learned by Americans in the 1920s when most mortgages were in fact balloon notes. Most of those Americans lost their house in the 1930s when they could not roll over their mortgages and as a result balloon notes are essentially extinct as a financing option among American households today.
The usual retort is that a nation that is a “currency issuer” cannot go bankrupt. That’s technically true but irrelevant. Currency debasement leaves the public with less money to spend which in turn means that your net income goes down. This makes any attempt to get out of the hole using “tools” like ZIRP or “QE” not only a mistake but a self-defeating act because the amount of income you have does not rise, it instead falls, while the spending demanded of you continues to go up.
This is our United States today. Federal income (according to the MTS) has not risen from 2007 to today. But spending has skyrocketed on food stamps, welfare, medical care and similar. At the same time employment, which is how the government obtains tax revenues in the end, hasn’t recovered in real terms at all.
Not a crisis, eh? Well, I suppose it’s not today, much like having a hole in the bottom of your boat 100 miles offshore isn’t a “crisis” even if you have no bilge pump so long as the water level inside hasn’t reached the gunwale.
But if there is 2’ of freeboard and the water is rising at 1” every five minutes, it is simply a matter of time before you run out of freeboard and sink.
You may choose not to call that a “crisis” and decide to sit back and have a beer instead of attending to plugging the hole, but only a fool turns around and drills another hole below the waterline in a bid to let the water out.
And while you’re contemplating this fact please observe that the 12’ Tiger Shark is patiently circling your vessel; unlike you he has done the math and is willing to wait a couple of hours for lunch to be served.
A caller to Thursday’s Mark Levin Show [MP3] had an interesting question regarding the inevitable result of the Obama Democrats’ outrageous deficit spending.
Curtis: We talk about all of this out-of-control spending, we have the CBO reports, the GAO, the Medicare Trustees, I mean how much time do we really have before…
Levin: Well, the Social Security Trustees report that we have only 11 years, that’s all.
Curtis: But the government… the government bubble… the government collapse?
Levin: It’s hard to know. Hard to know, but at some point… you can see, Curtis, how they’re struggling now. They’re having to do these little Continuing Resolutions, they have to lie about how much we’re in debt and the yearly deficit.
You can see that they’re in full cover-up mode like Ponzi or Madoff. But it’s hard to know exactly when [it all comes crumbling down]…
Curtis: What will this collapse look like [when it occurs]? What will we experience?
Levin: I can give some indicators. I don’t know exactly what it will look llike. But some indicators will be:
- the seizing of assets… oh, they’ll say it’s done legally, to get “the rich”, to close some “unfair loophole”. Including, I believe, and I’ve talked about this extensively, 401(k) plans and private pensions. There’s trillions of dollars sitting there and, in the view of the government, you have that money sitting there because they gave you certain tax advantages that they choose to take away.
- also in terms of programs the government offers, those programs will dry up. You’ll start to see that.
- you’ll start to see hyper-inflation, where the Fed — through monetary policy — will try to keep apace with [Obama’s] disastrous fiscal policies.
- you’ll see promises that the government made, such as Social Security and Medicare, start to disappear.
What you’ll see in a more theoretical sense is a breakdown in the social contract. You’ll see that all of these welfare programs were not social service and insurance programs, those were just facades. So all of the false premises and pretexts that were used to develop these massive entitlements, all of the borrowing and printing, will have an enormously devastating effect on our financial system.
And what is our financial system? What is the currency? The currency is not just a means of exchange. It represents the fruits of your labor. It’s your paycheck. It’s your savings. It’s your pension. It’s your investment. It’s what you use to purchase food and clothing and the basics, energy. The government’s in charge of the currency. The government’s in charge of valuing it devaluing it.
And so my point is, you will see signs… of more and more aggressive central government… this is one of the reasons you hear me, on and on and on, attack class warfare. Because it’s not about class warfare. If they can break down the most successful and productive elements of our society, they’re going to break you down.
And when they break you down, you’re going to ask for help. From whom? The government. Not all of you, but you get the point. When the thing begins to unravel, it collapses.
I’m not Nostradamus here, but the Constitution was set up the way it was set up to prevent this sort of thing. The people in public office today, the president, almost all of the members of his party in DC, reject limited constitutional government.
“…it wasn’t until I stepped away from the corporate track and worked in city government and eventually helped to found the Chicago chapter of Public Allies, an AmeriCorps program, a national service program, that I realized how important public service and community service was to my own development… And now that the two of us have moved to Washington, our new home — (applause) — we both have continued to stress the value of national and community service…” —Michelle Obama, 17 March 2009
A March survey from Pew shows just how broad the unemployment pain has been felt. When you hear of 10% unemployment, you might imagine 1/10th of Americans experiencing extreme financial stress from the recent recession.
Yet given the unemployment rate’s odd methodology whereby it drops people who stop looking for work out of the data, and the fact that American households usually have more than one person, the real ‘pain’ number is 54% — over half of American households felt the direct impact of job losses:
A majority now says that someone in their household has been without a job or looking for work (54%); just 39% said this in February 2009. Only a quarter reports receiving a pay raise or a better job in the past year (24%), while almost an equal number say they have been laid off or lost a job (21%).
Basically, if your household didn’t experience un- or under-employment, then you are in the minority. Moreover, as shown above, fully 70% of American households experienced one of the serious financial problems above. Basically, the vast majority of American households was hit extremely hard.
DO follow these simple rules in calculating your tax liability:
• Are you a member of a union? If yes, deduct $4,500 from your tax balance on Line 19. If no, add $4,500 to your balance on Line 19.
• Are you a legal resident of Nebraska? If yes, place a zero by your estimated Medicare tax liability on Line 48(b). If no, add $3,000 to Line 48(b).
• Are you a member of a federally appointed Community Health Organizing Organization (CHOO)? If yes, place a zero by your estimated federal tax total on Line 63.
• Are you a member of the trial bar specializing in malpractice lawsuits? If yes, place a zero by your estimated federal tax total on Line 63.
• Are you a member of a Designated Indigent Minority (see Appendix D for complete list including African-American, Buddhist-American, Franco-American, Somali-American, Yemeni-American, Nordic-American or simply an illegal alien)? If yes, check the box on line 192 to receive a Diversity Reparations Credit of $5,000.00.
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Obamacare: thousands of pages of backroom, partisan deals; I can’t wait to see how they decide who actually gets treatment.