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Washington D.C. Is Essentially Just A Gigantic Money Machine July 19, 2017

If you have ever wondered why our leaders in Washington D.C. seem to act so strangely, the truth is that it almost always comes down to just one thing.  It has been said that “money makes the world go round”, and that is definitely true in Washington.  This year the federal government will spend more than 4 trillion dollars, and that represents well over one-fifth of our national GDP.  With so much money coming in and so much money going out, the stakes are incredibly high, and that is why so much money is poured into political campaigns on the national level.

And it shouldn’t surprise anyone that those that live the closest to this gigantic money machine have benefited greatly.  Forbes just released their brand new rankings for 2017, and they found that five out of the top 10 wealthiest counties in the entire country are suburbs of Washington D.C.

Virginia’s Loudoun County holds the title of the nation’s richest county with a median household income of $125,900. While nearly 10,000 residents commute to the District, according to Forbes, about 11,700 businesses employ 161,000 county residents, with Dulles International Airport, Loudoun County Public Schools and the Department of Homeland Security leading that charge.

The nearby city of Falls Church, Fairfax and Arlington counties in Virginia and Howard County in Maryland also lead the nation based on wealth.

In general, salaries for federal workers are significantly higher than in the private sector, and benefit packages are usually much better.

But in addition to having a very high concentration of federal workers, the D.C. area is also home to hordes of lawyers, lobbyists, defense contractors and other government vendors.  Big government means big business for those guys, and business has been very good in recent years…

The federal government has a lot to do with this: The Capitol and the economy orbiting around it (including lawyers, defense contractors, computer engineers along the Dulles Corridor, and doctors near NIH) attract college graduates who reliably contribute to six-figure households. Crucially, there was a $1.7 billion increase in lobbying between 1998 and 2010, as Dylan Matthews explained. With each $1 million of lobbying “associated with a $3.70 increase in the D.C. wage premium,” the money pouring into Washington wound up in the pockets of its residents.

This certainly isn’t the limited government that our founders intended.

So where did we go wrong?

One of the big turning points came in 1913.  That is the year when the Federal Reserve and the modern version of the income tax were established.  The Federal Reserve was designed by the elite to get the federal government very deeply into debt, and an income tax was needed to help service that debt and to help pay for the much larger government that the progressives were wanting.

Back then, D.C. was nothing like it is today.  In fact, even in the 1970s there were still large farms inside the Beltway.  But the federal government just kept getting bigger and bigger and bigger, and now it is a four trillion dollar monstrosity.

What I believe we should do is to dismantle as much of that monstrosity as we possibly can.  Instead of asking which government agencies we should close, I believe that we should be asking which government agencies we really need to leave open.

A great place to start would be by abolishing the Federal Reserve, the IRS and the income tax.  Those institutions are at the very core of the Washington money machine, and so it would essentially be like tearing the heart out of big government.

And don’t worry, the federal government would still have plenty of money coming in.  The individual income tax only accounts for about 46 percent of all federal revenue, and theoretically we could still have an absolutely enormous federal government without an income tax.  I once wrote an article that listed 97 different ways that various levels of government get money out of us each year, and so getting rid of the federal income tax would still leave 96 ways for the politicians to extract money from us.

As I remind my readers so frequently, the greatest period of economic growth in U.S. history was when there was no income tax and no central bank.  But I know that a lot of people out there love the 1.33 percent average yearly GDP growth rate that we have been experiencing over the past decade and would have a really hard time giving that up.

Unfortunately, it would actually be a very tough transition to a much more limited federal government because so much of our society is geared around the enormous money machine in Washington.  In 2018, more than a billion dollars will be spent on the mid-term elections, and most of that money will be going to incumbents that are committed to maintaining the status quo.

If we ever want things to really start changing in Washington, we have got to start sending people there that haven’t been bought off by the big money interests.

In my congressional district there is no incumbent running in 2018, and nobody else in the race is nearly as conservative as I am.  But since I can’t be bought by the special interests, I am going to have to rely on grassroots support.

Donald Trump showed us that anything is possible in American politics.  When Jeb Bush decided to run for president, he had an extremely long list of endorsements and a hundred million dollars behind him, and he still got trounced by Trump because Trump had a much stronger message.

If we stand united, we can take our government back and there won’t be anything that the establishment will be able to do about it.

But if we sit back and do nothing, the cesspool of corruption in Washington D.C. will just continue to get deeper and deeper.

Michael Snyder is a Republican candidate for Congress in Idaho’s First Congressional District, and you can learn how you can get involved in the campaign on his official website. His new book entitled “Living A Life That Really Matters” is available in paperback and for the Kindle on Amazon.com.

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Dying Middle Class: The Number Of Americans That Can’t Afford Their Own Homes Has More Than Doubled July 9, 2017

Have you lost your spot in the middle class yet?  For years I have been documenting all of the numbers that show that the middle class in America has been steadily shrinking, and we just got another one.  According to a report that was produced by researchers at Harvard University, the number of Americans that spend more than 30 percent of their incomes on housing has more than doubled.  In 2001, nearly 16 million Americans couldn’t afford the homes that they were currently living in, but by 2015 that figure had jumped to 38 million.

When I write about “economic collapse”, I am writing about a process that has been unfolding for decades in this country.  Back in the early 1970s, well over 60 percent of all Americans were considered to be “middle class”, but now that number has fallen below 50 percent.  Never before in our history has the middle class been a minority of the population, but that is where we are at now, and the middle class continues to get even smaller with each passing day.

So these new numbers saddened me, but they didn’t exactly surprise me.  The following comes from NBC News

Over 38 million American households can’t afford their housing, an increase of 146 percent in the past 16 years, according to a recent Harvard housing report.

Under federal guidelines, households that spend more than 30 percent of their income on housing costs are considered “cost burdened” and will have difficulty affording basic necessities like food, clothing, transportation and medical care.

But the number of Americans struggling with their housing costs has risen from almost 16 million in 2001 to 38 million in 2015, according to the Census data crunched in the report. That’s more than double.

Sometimes people try to convince me that the economy is doing “well”, but when I ask them how they are doing personally the news is almost always dreary.  I know so many people that are working for close to minimum wage that used to be solidly in the middle class.

One of the biggest reasons why the middle class is shrinking is because paychecks are staying about the same while the cost of living continues to rise steadily.  Of course one of the biggest factors in the rise of the cost of living is health insurance.

There are many people out there that have seen their health insurance premiums double since Obamacare went into effect.  And one health insurance company actually tried to do this to me and my family too, and so at that time I immediately switched carriers.

But even though virtually every single Republican in Congress campaigned on repealing Obamacare, it doesn’t look like it is going to happen.  In fact, on Sunday Senator John McCain told Face the Nation that the effort to repeal Obamacare is “probably going to be dead”

Sen. John McCain, R-Ariz., said Sunday the Republican bill to repeal and replace Obamacare is “probably going to be dead.”

“My view is that it’s probably going to be dead,” he said on CBS’s Face the Nation.

Support for the bill has been eroding over the July 4th recess, and McCain said he believes Republicans should work with Democrats to craft health care legislation.

As a voter, this greatly frustrates me.  The Republicans got a bill to repeal Obamacare through the House and through the Senate and on to Barack Obama’s desk in early 2016.  So why can’t they get that exact same bill to Donald Trump’s desk now?

We worked really hard to give the Republicans control of the White House, the Senate and the House, and now they are stabbing us in the back once again.

This is just one example of why I intend to be a “wrecking ball” if I get the chance to go to Washington.

We have got to lower health care costs on the middle class.  There is no other option.  Millions of families all over the country are being absolutely suffocated by rising health insurance premiums.  Sometimes I get so frustrated with these RINOs (Republicans In Name Only) that I want to scream.

So many families are living on the edge right now.  Various surveys have discovered that somewhere around two-thirds of the entire nation is living paycheck to paycheck at least part of the time, and one study found that 69 percent of all Americans do not have an adequate emergency fund.

But when you are living on the edge, there is always a danger that you could go over.

Every month, more Americans fall out of the middle class and into poverty.  Even during this so-called “economic recovery”, we are seeing alarming spikes in poverty all over the nation.  For example, the number of homeless people living on the street in New York City has increased by 39 percent over the past year…

Street homelessness in New York increased by 39 percent in 2017, according to the latest annual survey by the Department of Homeless Services.

There were 3,892 homeless and unsheltered people on the night of February 6, 2017, up from 2,794 people at the same time last year, said the report, which is conducted on one night of the year. This is the highest increase since 2005, when Michael Bloomberg was mayor.

And bankruptcies continue to rise as well.  Consumer bankruptcies were up once again last month, and commercial bankruptcies continue their very disturbing climb

Commercial Chapter 11 bankruptcies – an effort to restructure the business, rather than liquidating it – jumped 16% year-over-year in June to 581 filings across the US. Total commercial bankruptcies of all types, by large corporations to tiny sole proprietorships, rose 2% year-over-year to 3,385 filings, according to the American Bankruptcy Institute. This was up 39% from June 2015 and up 18% from June 2014.

Since the end of the last recession, the middle class has continued to get smaller and smaller in this country, and now it appears that another economic downturn is upon us.

Are we just going to stand aside and do nothing as the middle class in America dies?

The Democrats don’t seem to care.

The Republicans don’t seem to care.

If we continue to do the same things that we have been doing, we are going to continue to get the same results.

In other words, unless we start doing things differently the middle class in America is going to continue to be systematically eviscerated.

Wake up America.  The middle class is dying and if we want to save it we have to take action now.

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12 Signs The Economic Slowdown The Experts Have Been Warning About Is Now Here June 1, 2017

Since the election there has been this perception among the American public that the economy is improving, but that has not been the case at all.  U.S. GDP growth for the first quarter was just revised up to 1.2 percent, but that is even lower than the average growth of just 1.33 percent that we saw over the previous ten years.  But when you look even deeper into the numbers a much more alarming picture emerges.  Commercial and industrial loan growth is declining, auto loan defaults are rising, bankruptcies are absolutely surging and we are on pace to break the all-time record for most store closings in a single year in the United States by more than 20 percent.  All of these are points that I have covered before, but today I have 12 new facts to share with you.  The following are 12 signs that the economic slowdown that the experts have been warning about is now here…

#1 According to Challenger, the number of job cuts in May was 71 percent higher than it was in May 2016.

#2 We just witnessed the third worst drop in U.S. construction spending in the last six years.

#3 U.S. manufacturing PMI fell to an 8 month low in May.

#4 Financial stocks have lost all of their gains for the year, and some analysts are saying that this is “a terrible sign”.

#5 One new survey has found that 39 percent of all millionaires “plan to avoid investing in the coming month”.  That is the highest that figure has been since December 2013.

#6 Jobless claims just shot up to a five week high of 248,000.

#7 General Motors just reported another sales decline in May, and it is being reported that the company may be preparing for “more job cuts at its American factories”.

#8 After an initial bump after Donald Trump’s surprise election victory, U.S. consumer confidence is starting to fall.

#9 Since Memorial Day, Radio Shack has officially shut down more than 1,000 stores.

#10 Payless has just increased the number of stores that it plans to close to about 800.

#11 According to the Los Angeles Times, it is being projected that 25 percent of all shopping malls in the United States may close within the next five years.

#12 Over the past 12 months, the number of homeless people living in Los Angeles County has risen by a  staggering 23 percent.

And in case those numbers have not persuaded you that the U.S. economy is heading for rough times, I would encourage you to go check out my previous article entitled “11 Facts That Prove That The U.S. Economy In 2017 Is In Far Worse Shape Than It Was In 2016” for even more eye-popping statistics.

During a bubble, it can feel like the good times are just going to keep rolling forever.

But that never actually happens in reality.

The truth is that we are in the terminal phase of the greatest debt bubble of all time, and the evidence is starting to mount that this debt bubble has just about run its course.  The following comes from Zero Hedge

A recurring theme on this website has been to periodically highlight the tremendous build up in US corporate debt, most recently in April when we showed that “Corporate Debt To EBITDA Hits All Time High.” The relentless debt build up is something which even the IMF recently noted, when in April it released a special report on financial stability, according to which 20% of US corporations were at risk of default should rates rise. It is also the topic of the latest piece by SocGen’s strategist Andrew Lapthorne who uses even more colorful adjectives to describe what has happened since the financial crisis, noting that “the debt build-up during this cycle has been incredible, particularly when compared to the stagnant progression of EBITDA.”

Lapthorne calculates that S&P1500 ex financial net debt has risen by almost $2 trillion in five years, a 150% increase, but this mild in comparison to the tripling of the debt pile in the Russell 2000 in six years. He also notes, as shown he previously, that as a result of this debt surge, interest payments cost the smallest 50% of stocks in the US fully 30% of their EBIT compared with just 10% of profits for the largest 10% and states that “clearly the sensitivity to higher interest rates is then going to be with this smallest 50%, while the dominance and financial strength of the largest 10% disguises this problem in the aggregate index measures.”

The same report noted that net debt growth in the U.S. is quickly headed toward negative territory, and the last time that happened was during the last recession.

We see similar things when we look at the 2nd largest economy on the entire planet.  According to Jim Rickards, China “has multiple bubbles, and they’re all getting ready to burst”…

China is in the greatest financial bubble in history. Yet, calling China a bubble does not do justice to the situation. This story has been touched on periodically over the last year.

China has multiple bubbles, and they’re all getting ready to burst. If you make the right moves now, you could be well positioned even as Chinese credit and currency crash and burn.

The first and most obvious bubble is credit. The combined Chinese government and corporate debt-to-equity ratio is over 300-to-1 after hidden liabilities, such as provincial guarantees and shadow banking system liabilities, are taken into account.

We just got the worst Chinese manufacturing number in about a year, and it looks like economic conditions over there are really starting to slow down as well.

Just like 2008, the coming crisis is going to be truly global in scope.

It is funny how our perspective colors our reality.  Just like in 2007, many are mocking those that are warning that a crisis is coming, but just like in 2009, after the crisis strikes many will be complaining that nobody warned them in advance about what was ahead.

And at this moment it may seem like we have all the time in the world to get prepared for the approaching storm, but once it is here people will be talking about how it seemed to hit us so quickly.

My hope is that many Americans will finally be fed up with our fundamentally flawed financial system once they realize that we are facing another horrendous economic crisis, and that in the aftermath they will finally be ready for the dramatic solutions that are necessary in order to permanently fix things.

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