Debt Ceiling Breached

Now they will start stealing from the Government Employees G Fund to finance the government for the next few months which by law is illegal.

See story at http://thehill.com/blogs/on-the-money/economy/275051-government-to-reach-164-trillion-borrowing-cap

I thought this was a Democratic Republic

Can someone please tell me how two people can determine the fate of nearly 320 million Americans.  All day long only two people Biden and McConnell were putting a deal together to resolve the fiscal cliff.  Meanwhile the other 99% of  Congress was not involved in the discussions.  This is simply amazing.

Will the Ratings Agencies have any Balls

There are no spending cuts in the so called Fiscal Cliff Deal which by the way I said would be done at the last minute as usual.  Meanwhile the ratings agencies said they would downgrade the US if Spending Cuts weren't addressed and here we are 18 months later and nothing has been done.  So they should immediately downgrade the US on January 2nd but likely won't. 

Just STFU

I and likely many others are sick and tired of the rhetoric coming out of DC.  Saturday was a rather quite day but Sunday has seen several members of Congress and the President blame both sides that no deal has been made.  However it's always possible a last minute kick the can down the road measure will pass at 1159 pm EDT on December 31st.  Since everything these days is tied to the stock market if it drops 10% on Monday that will pretty much seal a last minute deal in my opinion. 

Just Plain Stupid

Friday Night Obama rescinded the pay freeze for government workers which will take place in late March.  Although most workers will only get a 0.5% raise the timing of this announcement was terrible based on the fiscal cliff, an unresolved budget for 2013 and the debt ceiling being breached soon. 

Plan B...Plan C...Plan D...Plan E?

You really have to hand it to the idiots in Washington.  However I still expect a last minute deal by Midnight on January 1st to kick the can down the road for another 3 months.  Then in March the whole fiasco will begun once again except this time they will have to deal with the debt ceiling and try to figure out an actual budget for 2013.  Keep in mind folks there hasn't been a budget agreement since 2009 so it's highly unlikely the clowns in DC will get one figured out for 2013.  Maybe they should start working on 2014 instead.      

Will the Ratings Agencies Pull the Trigger?

If there is a last minute Fiscal Cliff deal by January 1st I expect there will be no spending cuts at all.  Thus Fitch, Moody's and the other rating agencies should immediately downgrade the US on January 2nd.  The ratings agencies have given the US over a year to get it's deficit spending under control however the government has done nothing to cut spending and is on pace to have another year of 1 Trillion deficits. 

Last Minute Deals

Congress is notorious for last minute deals and the current fiscal cliff will be no different.  However last minute deals are usually not good since everybody panics at the last minute to get something done without thinking about the consequences.  This is pretty much how we got into this mess in the first place. 

Independence

As we near the Christmas Holiday all of us should read why this country became a nation in the first place.  I imagine many have never read the Declaration of Independence so here it is.

When in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature's God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.
We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.--That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, --That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn, that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.--Such has been the patient sufferance of these Colonies; and such is now the necessity which constrains them to alter their former Systems of Government. The history of the present King of Great Britain is a history of repeated injuries and usurpations, all having in direct object the establishment of an absolute Tyranny over these States. To prove this, let Facts be submitted to a candid world.

He has refused his Assent to Laws, the most wholesome and necessary for the public good.
He has forbidden his Governors to pass Laws of immediate and pressing importance, unless suspended in their operation till his Assent should be obtained; and when so suspended, he has utterly neglected to attend to them.
He has refused to pass other Laws for the accommodation of large districts of people, unless those people would relinquish the right of Representation in the Legislature, a right inestimable to them and formidable to tyrants only.
He has called together legislative bodies at places unusual, uncomfortable, and distant from the depository of their public Records, for the sole purpose of fatiguing them into compliance with his measures.
He has dissolved Representative Houses repeatedly, for opposing with manly firmness his invasions on the rights of the people.
He has refused for a long time, after such dissolutions, to cause others to be elected; whereby the Legislative powers, incapable of Annihilation, have returned to the People at large for their exercise; the State remaining in the mean time exposed to all the dangers of invasion from without, and convulsions within.
He has endeavoured to prevent the population of these States; for that purpose obstructing the Laws for Naturalization of Foreigners; refusing to pass others to encourage their migrations hither, and raising the conditions of new Appropriations of Lands.
He has obstructed the Administration of Justice, by refusing his Assent to Laws for establishing Judiciary powers.
He has made Judges dependent on his Will alone, for the tenure of their offices, and the amount and payment of their salaries.
He has erected a multitude of New Offices, and sent hither swarms of Officers to harrass our people, and eat out their substance.
He has kept among us, in times of peace, Standing Armies without the Consent of our legislatures.
He has affected to render the Military independent of and superior to the Civil power.
He has combined with others to subject us to a jurisdiction foreign to our constitution, and unacknowledged by our laws; giving his Assent to their Acts of pretended Legislation:
For Quartering large bodies of armed troops among us:
For protecting them, by a mock Trial, from punishment for any Murders which they should commit on the Inhabitants of these States:
For cutting off our Trade with all parts of the world:
For imposing Taxes on us without our Consent:
For depriving us in many cases, of the benefits of Trial by Jury:
For transporting us beyond Seas to be tried for pretended offences
For abolishing the free System of English Laws in a neighbouring Province, establishing therein an Arbitrary government, and enlarging its Boundaries so as to render it at once an example and fit instrument for introducing the same absolute rule into these Colonies:
For taking away our Charters, abolishing our most valuable Laws, and altering fundamentally the Forms of our Governments:
For suspending our own Legislatures, and declaring themselves invested with power to legislate for us in all cases whatsoever.
He has abdicated Government here, by declaring us out of his Protection and waging War against us.
He has plundered our seas, ravaged our Coasts, burnt our towns, and destroyed the lives of our people.
He is at this time transporting large Armies of foreign Mercenaries to compleat the works of death, desolation and tyranny, already begun with circumstances of Cruelty & perfidy scarcely paralleled in the most barbarous ages, and totally unworthy the Head of a civilized nation.
He has constrained our fellow Citizens taken Captive on the high Seas to bear Arms against their Country, to become the executioners of their friends and Brethren, or to fall themselves by their Hands.
He has excited domestic insurrections amongst us, and has endeavoured to bring on the inhabitants of our frontiers, the merciless Indian Savages, whose known rule of warfare, is an undistinguished destruction of all ages, sexes and conditions.

In every stage of these Oppressions We have Petitioned for Redress in the most humble terms: Our repeated Petitions have been answered only by repeated injury. A Prince whose character is thus marked by every act which may define a Tyrant, is unfit to be the ruler of a free people.
Nor have We been wanting in attentions to our Brittish brethren. We have warned them from time to time of attempts by their legislature to extend an unwarrantable jurisdiction over us. We have reminded them of the circumstances of our emigration and settlement here. We have appealed to their native justice and magnanimity, and we have conjured them by the ties of our common kindred to disavow these usurpations, which, would inevitably interrupt our connections and correspondence. They too have been deaf to the voice of justice and of consanguinity. We must, therefore, acquiesce in the necessity, which denounces our Separation, and hold them, as we hold the rest of mankind, Enemies in War, in Peace Friends.
We, therefore, the Representatives of the united States of America, in General Congress, Assembled, appealing to the Supreme Judge of the world for the rectitude of our intentions, do, in the Name, and by Authority of the good People of these Colonies, solemnly publish and declare, That these United Colonies are, and of Right ought to be Free and Independent States; that they are Absolved from all Allegiance to the British Crown, and that all political connection between them and the State of Great Britain, is and ought to be totally dissolved; and that as Free and Independent States, they have full Power to levy War, conclude Peace, contract Alliances, establish Commerce, and to do all other Acts and Things which Independent States may of right do. And for the support of this Declaration, with a firm reliance on the protection of divine Providence, we mutually pledge to each other our Lives, our Fortunes and our sacred Honor.

Will Raising Taxes Help Much in 2013

The data below is from the CBO website and are estimates for 2013.  Keep in mind this is a baseline scenario and I believe assumes the Bush Tax Cuts are not extended for anyone.  If CBO's estimates are close to reality the 2013 Deficit will still be around 900 Billion Dollars.  Thus to make any headway on the deficit government needs to cut spending. 

Thank You President Obama

Although I'm not the biggest fan of President Obama it was just announced that Federal Employees will get Monday off (Christmas Eve).  Since Feds haven't had a pay raise in 3 years, and likely won't get one in 2014 as well, it was nice of the President to give all of us at least one extra day off (except for those who are emergency employees like me but we do get compensated for having to work).

Federal Receipts vs Federal Spending

The chart below shows yearly Federal Receipts and Federal Spending from 1977 through 2012.  Based on data from 1977-2011 the Average Annual Growth of Federal Receipts has been 5.9% while the Average Growth of Federal Spending has been 6.7%.  If we apply these averages out in time through 2025 you can see there will continue to be a huge difference between Federal Receipts and Federal Spending as the gap will continue to grow.  In fact by the end of 2023 Federal Deficits will be nearing 2 Trillion Dollars a year if the current long term averages for Federal Receipts and Federal Spending continue over the next 10 years.  To balance this out you have to Cut Federal Spending and Raise Taxes as there is no other way to do it.  Otherwise at some point the whole system will eventually collapse much like we have seen in Greece.

Alternative Minimum Tax

The idiots in Congress better get the AMT fixed or a bunch of Americans are going to get screwed big time for taxes in 2012 and 2013.  This was talked about by Bruce Krasting back in November.  I encourage you to closely read the article at http://brucekrasting.com/irs-to-back-value-heinous-amt-to-2012/

Federal Government Spending by Department

It doesn't take a rocket scientist to figure out why the Government is broke.  Here are spending changes by each department from 2000 through 2011 in millions of dollars.  Note I used 2001 for the Department of Commerce since 2000 would have included money to do the census which would have skewed the results substantially to the downside.  Also the Small Business Administration is from 2002 since both 2000 and 2001 had negative outflows.  Congratulations to GSA for having the largest % increase in spending since 2000.

Let's Screw Federal Employees even More

The Republicans want Federal Employees to contribute 5% more towards their retirement.  Let's see we haven't seen a raise in 3 years which may turn into 4 years before all is said and done.  Meanwhile the cost of living continues to rise each year as well and yet they want us to pay more towards retirement.     

See story at http://www.fedsmith.com/2012/12/20/house-bill-would-increase-retirement-contributions-by-5/

As Rome Burns the Emperors Fiddle

You would think the American public would be tired of the games played in Washington.  As Emperors Obama and Boehner fiddle around with the so called Fiscal Cliff, so far they can't seem to come to a compromise. As a result the rest of us are going to suffer with massive tax hikes in 2013.  Now it's still possible these two will come to their senses and stop playing their fiddles yielding a compromise by 12/29 but it doesn't appear likely at this point.  

Once again "3" Easy Steps to Balance the Budget

According to the Brookings Tax Policy center in 2011 the Top 20% Wage Group paid 76% of all Individual Income Tax.  In 2011 the Government collected 1.1 Trillion in Individual Income Tax so 836 Billion of that number came from the Top 20% Wage Group.

Let's say we raise taxes on the Top 20% Wage Group by 4% in 2013.  Based on 2011 numbers that would increase Government Revenue by roughly 50 Billion.

As I mentioned in a previous post the CBO Projects Government Spending in 2013 at 3.5 Trillion with a forecast Deficit of 640 Billion (of course they are way off on this but we will still use it as a baseline).  Now if we reduce Government Spending by 10% that leaves a savings of 350 Billion.  Meanwhile if we add in the extra 50 Billion from Taxing the Top 20% Wage Group we have now decreased the Deficit by 400 Billion so we still have another 240 Billion to go.  Based on Consumer Spending in 2011 which was 11 Trillion for Goods and Services, if we implement a 2% National Sales Tax, that would generate an additional 220 Billion in Government Revenue which would basically bring the forecast Deficit to near Zero and lead to a Balanced Budget based on the baseline scenario.

So there you have a balanced approach in "3" Easy Steps which allows every single American to have a part in reducing the Deficit for 2013.

1.  Decrease Government Spending by 10%
2.  Increase Taxes on the Top 20% Wage Group by 4%.
3.  Implement a National Sales Tax of 2.0%

Once again I have presented another rather easy approach Congress could implement to Balance the Budget in 2013.     

Why the Fiscal Cliff is a Big Joke

During the past 4 years the Federal Government has spent on average $100 Billion more a month than it brings in.  What is amusing too me is that even if an agreement is done Federal Revenues will likely not exceed an extra 100 Billion per year for the next 10 years.  Thus unless significant spending cuts are made  Federal Deficits will continue to grow substantially in the years ahead.   

Fitch...Moody's and S&P Wake Up!!!

Where are the US Downgrades Fitch...Moody's and S&P ?  It's obvious the US Government has no desire to save any money by making necessary spending cuts.  Thus over a year ago the ratings agencies said if nothing was accomplished in 2012 to reign in spending they would downgrade the US.  Well here we are and so far not a peep.

The end of the "2" Party System

The Republican Party will be the first to break apart which is already beginning.  The Democratic Party will eventually follow as their policies will fail leading to massive problems in the future.  When the masses wake up a new political party will emerge and likely win the next election in 2016.     

Obama's 1.6 Trillion Revenue Increase

Okay let's say we actually do increase Federal Revenue by 1.6 Trillion over a 10 year period which comes out to 160 Billion a year.  At the current time the government ran up a spending deficit of 172 Billion just in November alone.  So how in the hell is raising tax revenue by 100 Billion a year going to solve anything when the government is spending money like crazy.    

Second Worst Start to Federal Deficit Spending

Nearly 300 Billion Dollars has been added to the deficit in the first "2" months of Fiscal year 2013.  This is an astounding accomplishment by both the President and Congress who are spending tax payer money like the world is going to end on 12/21/12. 

Federal Deficits Explode

Once again it's all Bush's fault as we start the 2013 Federal Fiscal Year with nearly a $300 Billion Dollar Deficit for the 1st two months.  Thus it appears we are well on our way to another 1 Trillion Dollar Deficit year.  Bush has been out of office for 4 years now so he can no longer be blamed for the Federal Government's Overspending as it's now in Obama's court.

  

Term Limits should be Implemented

It's obviously there are major issues with Congress and the only way at least some of the issues can be fixed is for term limits to be implemented.  I would limit any senate position to two terms (8 years) and representatives to 3 terms (6 years).  Naturally term limits won't solve all of the issues but at least it would be a start.   

Food Stamp Usage

The number of people on Food Stamps continues to soar and now is nearing 48 Million people.  At the end of 2002 the number was at 19 Million so in the past 10 years the number has gone up 153%.  If this trend continues for another 10 years by 2022 the number of people on Food Stamps would be around 120 Million or roughly 30% of the projected population.  If the so called economy is improving why is Food Stamp usage soaring? 

 

Teen Employment is Shocking

I got my first job as a 16 year old teen in 1978 making $2.65 an hour busing tables in a restaurant. What is shocking to me is that teen employment (16-19 years of age) has dropped substantially after peaking in the late 1970's around 12 million.  Today the number of teens in the workforce has dropped below 6 million which is a 50% decrease since the late 1970's. 

Social Security is in Big Trouble

The chart below shows the number of US Workers in the 25-54 age group.  Notice this number steadily rose from the late 1940's through the late 1990's.  However there was  quite a drop from the early 2008 high and has been going sideways the past two years.  If another substantial drop occurs in the coming years this spells big trouble for the Social Security Trust Fund as far more money will be going out than will be coming in.

Emperor Obama

Here you go:

OBAMA PLAN CALLS FOR END OF LAWMAKER APPROVAL OF DEBT LIMIT

So the Emperor (I mean President) wants to have a blank check to spend as much money as they see fit.  

Who was against raising the Debt Ceiling in 2006?

Who made this speech back in 2006?

"The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies... That is money that we have borrowed from the Social Security trust fund, borrowed from China and Japan, borrowed from American taxpayers. This rising debt is a hidden domestic enemy, robbing our cities and States of critical investments in infrastructure like bridges, ports, and levees; robbing our families and our children of critical investments in education and health care reform; robbing our seniors of the retirement and health security they have counted on. Every dollar we pay in interest is a dollar that is not going to investment in America’s priorities."

My name is Barack Obama and I approved this speech back in 2006

Debt Ceiling will be Reached Soon

Debt to the Penny reports the Real National Debt which on November 30th stood at 16.370 Trillion (underlined in purple) which is roughly 24 Billion below the Debt Ceiling of 16.394.  However due to some accounting tricks by the Government they typically subtract out around 31 Billion (underlined in blue) to keep the reported numbers lower than they actually are.

Josh McDaniels needs to Address Congress

For those in Denver who remember the football game on NFL Network a few years back McDaniels was caught live screaming at his offensive lineman.  His exact quote was "Just Do Your Fu..ing Job!!"

Since neither the President or Congress seem to be much interested in solving much of anything with regards to the so called Fiscal Cliff maybe McDaniels should go to Congress and scream out loud "JUST DO YOUR FU..ING JOB!!!".

401K Tax Deductions being Targeted

Yep let's screw those who save for retirement by getting rid of the deductions now and taxing it all right up front.  If Congress starts messing around with retirement savings say goodbye to 401K's and ROTH's as well.  See story below.

http://business.time.com/2012/11/28/fiscal-cliff-why-congress-might-have-to-mess-with-the-401k/

How much Government can we Afford?

I agree with Denninger in his latest post at http://market-ticker.org/akcs-www?post=214407 with his comments posted below in quotations.

"The truth is quite simple -- we all agree, other than hard-core anarchists, that some amount of government is appropriate.  Since that's the case we are now arguing for (1) how much government we want, (2) what we want it to do, and (3) what we're all willing to pay for it."

This folks is what Congress has to figure out because deficit spending can't go on forever despite what they may think.  Greece has already found this out the hard way and more European countries (France, Italy, Spain and etc) are going to experience it as well.    

Four Words for Congress

STFU and quit pandering to the media.  Lock yourselves in a room and stay there until you get a deal done which includes both taxes increases and substantial spending cuts as well. 

Is Powerball Fair?

Okay let's look at the winners by state since 1998.  Notice in the chart below some states have had a lot more winners than others since 1998.  Those states with a disproportionate amount of winners (10 or more) include Indiana, Louisiana, Minnesota, Missouri and Pennsylvania.   Meanwhile several states have had 1 or no winners since 1998 which include Arkansas, Colorado, Illinois, Massachusetts, Maine, North Dakota, Tennessee, Texas, Virginia, Vermont and Washington.  (California, Nevada, Utah, Wyoming, Alabama and Mississippi do not have Powerball at this time)  Thus the question is why do Indiana and Pennsylvania have considerably more winners than other states?

Is the Middle Class Doomed?

If we look at a chart of Real Medium Income Adjusted for Inflation going back to 1967, as reported by the Census Bureau in 2011, you can clearly see Real Income has been declining since the peak in the late 1990's.  In fact most Americans have seen at least a 10% Drop in Real Income based on Inflation.  If this trend continues the Middle Class is doomed and there will be an extremely large divergence between the Poor and the Rich which will spell big trouble in the future. 

December 22nd

December 22nd is really the last day the so called "Fiscal Cliff" can be avoided.  Keep in mind starting on December 23rd any income earned by Federal Employees will be taxed based on 2013 rates.  Thus if nothing is agreed to by 12/22 then the Bush Tax Cuts go away and the Social Security Tax will go back to 6.2%.  So all Federal Employees will their take home pay drop substantially with the first paycheck in 2013. 

Total Amount of Student Loans

Right now Student Loan Debt has surged to over 950 Billion Dollars.  Keep in mind back in 2003 it was around 250 Billion so in 9 years Student Debt has increased by 280%.  Remember folks Student Loans aren't dismissed in Bankruptcy and really you can't get out of them unless you have a significant disability.  Since a majority of Student Loans involve Government Money you can see where this is heading.  I expect a significant amount of this Student Debt will never be paid off and the Government will be on the hook for over 1 Trillion Dollars before this is all said and done.

Delinquent Student Loans

The next bailout crisis is rearing it's ugly head which are Student Loans.  This past quarter those students who are 90 Days or more Delinquent on paying there loans jumped over 2%.  Overall nearly 11% of Student Loans are now 90 Days or more Delinquent and look for that number to skyrocket during the next few years.  Meanwhile the total dollar value of current Student Loan Debt is a staggering 956 billion dollars.  By the end of 2013 it will easily surpass 1 Trillion Dollars.

   

How to Balance the Budget in "3" Easy Steps

According to the Brookings Tax Policy center in 2011 the Top 20% Wage Group paid 76% of all Individual Income Tax.  In 2011 the Government collected 1.1 Trillion in Individual Income Tax so 836 Billion of that number came from the Top 20% Wage Group.

Let's say we raise taxes on the Top 20% Wage Group by 5% in 2013.  Based on 2011 numbers that would increase Government Revenue by roughly 55 Billion.

As I mentioned in a previous post the CBO Projects Government Spending in 2013 at 3.5 Trillion with a forecast Deficit of 640 Billion.  Now if we reduce Government Spending by 10% that leaves a savings of 350 Billion.  Meanwhile if we add in the extra 55 Billion from Taxing the Top 20% Wage Group we have now decreased the Deficit by 405 Billion so we still have another 235 Billion to go.  Based on Consumer Spending in 2011 which was 11 Trillion for Goods and Services, if we implement a 2.1% National Sales Tax, that would generate an additional 231 Billion in Government Revenue which would basically bring the forecast Deficit to Zero and lead to a Balanced Budget.

So there you have a balanced approach in "3" Easy Steps which allows every single American to have a part in reducing the Deficit for 2013.

1.  Decrease Government Spending by 10%
2.  Increase Taxes on the Top 20% Wage Group by 5%.
3.  Implement a National Sales Tax of 2.1%

Once again I have presented another rather easy approach Congress could implement to Balance the Budget in 2013.   

Get ready America to get Screwed by Congress

Most Americans pay little attention to Congress but these people literally control your life in one way or another.  Pay close attention to those who want to rewrite the tax code because all they are doing is trying to get more hard earned dollars from Americans without raising taxes.  What most Americans don't realize is that by reducing many deductions that will increase the amount of money you pay to the government substantially without having to raise taxes.       

Nearing Debt Ceiling

Based on November 20th data US Debt is closing in on 16.3 Trillion which is just $100 billion below the Debt Ceiling of 16.394 Trillion.  Keep in mind the Federal Reserve will probably add at least 50 Billion by the end of the month so in reality we are probably less than 50 Billion away from reaching the ceiling.

Turbo Timmy Part 2

I'm sorry but this guy has lost his mind.  Geithner says there should be no Debt Ceiling.  So let me ask you something Turbo Timmy?  I can't run up my debts to infinity but the US Government should be allowed to do it.

Fiscal Cliff...Look for the Fiscal Fluff Compromise

There will be a deal right before the deadline as Congress is great at last minute deals.  Look for a bunch of fluff with a little give and take but nothing substantial.  If Fitch and Moody's have any balls then they will downgrade the US shortly thereafter in the early part of 2013..

Excellent Show on History Channel

For those who haven't seen "The Men Who Built America" on the history channel it's an excellent show.  It follows the lives of  John Rockefeller, Cornelius Vanderbilt, Andrew Carnegie, Henry Ford and J.P. Morgan.  Granted these men helped build America into a world leader, however, the ways they did it were not admirable in most cases and led to many of the work laws we have today. Based on the way the show was done the only person that seemed to care about the common people was Ford.  However as they got older eventually Carnegie and Rockefeller gave away considerable sums of their wealth to charity so in my view that helped balance out some of their actions when they were younger.   What is amazing is that Rockefeller's wealth at one point was over 600 Billion Dollars based on today's dollar.   

Bailouts Galore

Well here we go the Federal Housing Authority needs another bailout and the United State Postal Service is Bankrupt as well.  This is just the start folks as there will be more coming.

A Warning to Unions

For those that like Ding Dongs , Ho Ho's and etc, Hostess Brands has filed for bankruptcy after their Union wouldn't take a pay cut.  As a result 18,000 workers are now out of work.  Unions this is a clear sign what is coming. 

Let's Tax the Rich

According to the Brookings Tax Policy center in 2011 the Top 20% Wage Group paid 76% of all Individual Income Tax.  In 2011 the Government collected 1.1 Trillion in Individual Income Tax so 836 Billion of that number came from the Top 20% Wage Group.

Let's say we raise taxes on the Top 20% Wage Group by 5% in 2013.  Based on 2011 numbers that would increase Government Revenue by roughly 55 Billion.

As I mentioned in a previous post the CBO Projects Government Spending in 2013 at 3.5 Trillion with a forecast Deficit of 640 Billion.  Now if we reduce Government Spending by 10% that leaves a savings of 350 Billion.  Meanwhile if we add in the extra 55 Billion from Taxing the Top 20% Wage Group we have now decreased the Deficit by 405 Billion so we still have another 235 Billion to go.  Based on Consumer Spending in 2011 which was 11 Trillion for Goods and Services, if we implement just a 2.1% National Sales Tax, that would generate an additional 231 Billion in Government Revenue which would basically bring the forecast Deficit to Zero and lead to a Balanced Budget.

So there you have a balanced approach in "3" Easy Steps which allows every single American to have a part in reducing the Deficit for 2013.

1.  Decrease Government Spending by 10%
2.  Increase Taxes on the Top 20% Wage Group by 5%.
3.  Implement a National Sales Tax of 2.1%

Once again I have presented another rather easy approach Congress could implement to Balance the Budget in 2013. 

How to Balance the Budget in "2" Easy Steps

The CBO is projecting a deficit of 640 billion dollars for 2013.  The Government is supposed to spend 3.5 Trillion in 2013.  If the Government spends 10% less that saves 350 Billion.  Meanwhile US Consumers spent 11 Trillion Dollars on Goods and Services in 2011.  If a National Sales Tax of 3% was enacted and Consumer Spending was the same in 2013 that would generate 330 Billion in Revenue for the Government.

Thus add 350 Billion (10% Reduction in Federal Spending) + 330 Billion (National Sales Tax) equals 680 Billion so that gives you a balanced budget for 2013 with a 40 Billion Dollar Surplus.  Yep it's that simple.  Reduce Government Spending in 2013 by 10% and implement a National Sales Tax of 3% would Balance the Budget for 2013 if the CBO Numbers are correct.  Thus all Federal and Social Security Taxes could remain as they were in 2012.

For all of the Congressman who read this blog it's really that simple.  You are making things much harder than they really have to be.

Does Obama have a Mandate?

I will preface this by saying I didn't vote for either Obama or Romney and voted for a third party.  Obama won 50% to 48% which means 48% voted for Romney while the other 2% voted for a third party like me.  That means 50% of the country didn't vote for Obama so he has no mandate. 

Everything was Coordinated before the Election

Isn't it amazing how everything has erupted after the election.

1.  Fitch Warns the day after the election it will downgrade the US if it's deficit spending isn't dealt with.
2.  The Petraeus Scandal occurs a few days later.
3.  Israel begins the first step towards another War in the Middle East on Wednesday.

Keep in mind all of these could have easily occurred before the election.

Obama: 1.6 Trillion Tax Increase over 10 Years

Let's see he wants to raise Taxes by 1.5 Trillion over 10 Years but no mention of decreasing Government Spending by the same amount.  You can't have it both ways.

Turbo Timmy Strikes Again

Geithner says Middle Class should pay higher taxes.  Remember he is the same guy who got caught cheating on his taxes but was still appointed Treasury Secretary.  That pretty much sums up how screwed up the government is.   

See article at http://www.reuters.com/article/2012/11/13/us-usa-fiscal-geithner-idUSBRE8AC17120121113

Military Retirement Trust Fund

The Military Retirement System is protected by law while Social Security and FERS is not.  Currently the Military Trust Fund has an unfunded liability of 650 Billion Dollars and by 2026 its projected to be over 1 Trillion Dollars.  However since this Trust Fund is protected by law the government has to make up the difference.  So by 2026 the government will have to come up with at least 1 Trillion Dollars just to get it back to even.  However thus assumes a projected return of 5.75% each year which isn't going to happen unless Interest Rates rise substantially in the coming years.  Thus by the time 2026 arrives this could
easily end up costing the government nearly 2 Trillion Dollars to bailout the Military Trust Fund. 

Finally for those of us under FERS it's not protected by law so keep that in mind for the future.  FERS can be changed at any time and there is nothing we can do about it since it's not protected by law.

Federal Government Starts 2013 with a Bang in Spending

The 2013 Spending Spree has started in the Federal Government as they spent 120 Billion more than they collected in October.  This is the 4th largest October deficit going back to 1990 and was up over 20 Billion from October of 2011.  Remember the budget year for the Feds starts in October and runs through September.

Final Election Map by County

The majority of the country by county vote supported Romney however the largest cities favored Obama which won the election for him in the end.   As we can clearly see the country is extremely divided.   In 2008 Obama carried many more counties than he did in 2012.  Here is some advice for the next group of Presidential Candidates...focus on the biggest cities and you will win the next election no matter what the rest of the country thinks of you.

  

Ball is in your Court Rating Agencies

Based on the latest CBO Report which says no spending cuts are needed the next few years it's now up to Fitch, Moody's and S&P to downgrade the US.

CBO gives Obama greenlight to Kick the Can for Another 2 Years

The CBO just gave Obama the all clear to kick the can for another two years with no spending cuts and no tax increases as within two years the economy will be just humming right along.  Once again we have a government that is totally clueless. Read the latest CBO post at http://www.cbo.gov/publication/43694

Ron Paul is right we have already gone over the fiscal cliff.

Ron Paul is 100% Correct

Mr Paul is right on the money why Obama got reelected and that the US has already fallen off the Fiscal Cliff.  You can read more of his comments at the link below.

http://www.washingtontimes.com/blog/inside-politics/2012/nov/8/ron-paul-election-shows-us-far-gone/

Extend and Pretend Will be the Solution

The media is all over a Fiscal Cliff scenario.  Looks folks your Congress is great at last minute deals so I expect one right at crunch time which will be an Extend and Pretend scenario.  Watch for a slight increase in taxes for the wealthy making above 250,000, no extension of the Social Security Tax Cut, an extension of the Bush Tax Cuts for those making under 250,000 and a barely noticeable drop in Government Spending (my guess less than 5%).

Debt Ceiling shouldn't be Raised

If the President and Congress are serious about a balanced budget then the Debt Ceiling which could be reached by the end of the month shouldn't be raised.  Think about it everyone do the banks let you keep on borrowing money (credit cards, loans and etc) until you are a million dollars in debt?  No they will cut you off well before you ever get to that number.  So here we have the Federal Government who over the past four years have run up Trillion Dollar deficits each year but there is nobody that can cut off the Government from spending more than it takes in.  The problem is nobody in Congress or the President has the backbone to say enough is enough and do what is right.   When the time comes, which will be much sooner than most think, the US will undergo a similar process that is now occurring in Greece and Spain in which other countries will dictate how the US will be bailed out.   

Downgrades Coming

Fitch finally gets some balls and warns US to get it's deficits under control or it will downgrade the US.  Funny how this comes out the day after the election isn't it.  It's not a coincidence folks.

Please Vote

Even if you don't like either candidate at least vote for someone.  My belief is if you don't vote then you shouldn't bitch about who is president.

Why the US Stock Market is a ticking Time Bomb!!!

For those that follow the stock market a trader that worked for Rochdale Securities bought 750 million to 1 Billion Dollars in shares of Apple last month.  Keep in mind Rochdale only had 3.44 Million of capital at the end of 2011.  So one trader bought 750 million to 1 billion dollars of  Apple on margin leveraged over 200:1
    
Meanwhile Apple has dropped considerably the past month so now Rochdale is in big trouble because they have a large loss on the books and are asking for a bailout.  One has to wonder how many other trading firms out there are leveraged big time to the upside in the market.  This market is a ticking time bomb and when it explodes look out below.       

Romney and Obama Tied going into the Election

Latest Rasmussen Poll on Sunday shows both Romney and Obama with 49% each heading into the election on Tuesday.  Should be an interesting day based on the Electoral College which could go either way at this point.  It's certainly possible we could see a repeat of the 2000 election.

Rapidly nearing Debt Ceiling

Here it is based on numbers for the end of October.  Right now we are only 133 billion away from reaching the Debt Ceiling of 16.394 Trillion.  This could easily be reached by the end of the month.

5 Days to Election Day

Right now Rasmussen has an extremely tight race as 8 states could go either way.

Slightly Romney:  Colorado, Florida, Iowa, New Hampshire, Ohio and Virginia
Slightly Obama:  Nevada
Tie:  Wisconsin

Naturally if Romney were to take all of the slight leans he would take the Electoral College.

Ohio has shifted slightly to Romney

Rasmussen poll shows Romney up by 2% in latest Ohio poll.  A few weeks ago he was down by 2% to Obama in Ohio.  If Romney takes both Ohio and Florida which didn't seem likely a month ago then he will take the Electoral College.  Things could easily change leading up to next Tuesday's election so it will be interesting to watch. 

Closing in on Debt Ceiling

Right now we are near 16.2 Trillion in Debt with the ceiling at 16.394 Trillion.  It looks like by the end of November the Debt Ceiling will be reached.

Ohio now tied

Latest Rasmussen Poll shows Ohio now a tie.  If Romney takes Ohio, Florida and Colorado then he will have enough electoral votes to win the election .

Split Electorate Certainly Possible

Based on the latest data from Rasmussen there are only 66 electoral votes rated as a toss up with Colorado, Iowa, Nevada, New Hampshire, Ohio, Virginia and Wisconsin to close to call.   Right now Romney is winning in Colorado and Virginia while Obama is slightly ahead in Nevada, New Hampshire, Ohio and Wisconsin.  In Iowa it's a tie.

Right now Obama has 237 electoral votes while Romney has 235.  If Obama takes Nevada, New Hampshire, Ohio and Wisconsin that gives him 275 votes while Romney would end up with 263 by taking Colorado, Iowa and Virginia.

Once again I believe Ohio's 18 electoral votes is the key state in this election.  Obama has a 1 point lead in Ohio so Romney really needs to take Ohio to have a chance to win the election in the Electoral College.  Finally don't be surprised if Romney wins the national vote but loses the Electoral Vote just like we saw in 2000 with Bush and Gore.  

OHIO...OHIO...OHIO

Based on polling from Rasmussen...Romney will need to win Ohio to either take the Electoral Vote outright or force a situation where neither candidate has enough Electoral Votes to win.  It would be fascinating to see neither candidate have enough Electoral Votes to win the election.  In the end it looks like in all of the swing states, OHIO, will be the determining factor as I mentioned a few days ago.

A Repeat of the 2000 Election

Back in 2000 Gore won the National Vote by a narrow margin however Bush won the Electoral College by winning narrowly in Florida.  It appears we may see the same result in 2012 as one candidate will win the National Vote while the other carries the Electoral Vote.  Right now Obama is closer to winning the Electoral College with Ohio being the key state to watch.  Ohio may end being the Florida of 2000 as election day approaches. 

No Questions about Disability Insurance?

The first government program that will be bankrupt in less than 3 years is the Social Security Disability Insurance Fund (SDI).  So far nobody has asked Obama or Romney how they will handle this?  In 2016 whoever is president will have to find over 160 billion dollars (and likely much more) just to fund this program alone.    

Federal Pay Raises

The chart below shows how much of a raise Federal Workers should have received each year based on Inflation.  In 2012 the raise should have been 3.1% and for 2013 it should be 1.5% based on current numbers. 

Does your Department Waste Money?

I would truly like to here from individuals about waste in their departments.  It's hard to explain to Federal Employees that they haven't received a raise in 3 years while their office is remodeled costing thousands of dollars.  

Food Stamps Usage continues to Rise

Based on the latest data from SNAP, 15% of Americans are now on Food Stamps.  This is a 100% increase since 2003.  If the economy is doing so well then why does food stamp usage continue to rise.  This continues to be a disturbing trend.  For example of food stamp usage were to rise another 100% in the next 10 years that would mean 30% of Americans (over 100 million people) would be using them.

 

Ask Obama and Romney how they are going to Handle Disability Insurance?

The data in the chart below is taken from CBO's baseline scenario involving Disability Insurance through 2022.  Notice the Trust Fund is forecast to run our of money by then end of 2015 and it could be even sooner if the CBO baseline scenario is overly optimistic .  Thus the government will have to find at least 160 billion dollars to fund Disability Insurance in 2016 and a whopping 1.28 Trillion Dollars through 2022 based on this baseline scenario.   So Mr. Obama and Mr. Romney how are you going to handle this problem?

Rapidly approaching Debt Ceiling

The new numbers are in for the month of September and we are now only 235 billion from hitting the Debt Ceiling which was set at 16.394 Trillion last year.  Based on the current run rate we should reach the Debt Ceiling by late November at the latest.

What is wrong with society

High Schools in New York City are giving out morning after pills and other birth control drugs to students as young as 14.  This is nuts. 

Ross Perot is Right

There was a recent interview with Ross Perot.  He said if the US didn't get it's financial house in order that another country would eventually control the US.  I agree 100% with this statement.  My guess would be it won't be a single country but will end up being a combination of Oil Rich nations of the Middle East.  The day of reckoning is much closer than most believe and will likely occur before 2020.  We still have time to avoid a fiscal disaster like is occurring in Europe but time is quickly running out..     

Health Insurrance

Health Premiums for Feds will increase by an average of 3.4% in 2013 which is a little lower than the 3.8% increase for 2012.

Will the Debates sway the Election?

At this point those that are hardcore Democrats or Republicans will never change their minds no matter what is said.  I know people who will not vote for either party even if the devil himself was running for President.  I believe this thinking is idiotic but that is how they are.  Thus the election will come down to those like me who are Independents.  At this point I would imagine many Independent voters have probably made up their minds as well unless Obama or Romney really screw up one of the debates and causes voters to change their minds. 

What did we get for 3 Trillion spent on Iraq?

It has been estimated the Iraq War may have cost at least 3 Trillion Dollars.  Since the US has left guess what is happening.  Iran has been flying soldiers and weapons into Syria across Iraqi airspace.  Thus the US spent 3 Trillion Dollars for nothing as the powers that be in Iraq certainly look like they are now in good relations with Iran. 

Yep, All is Well in China

You didn't see this in the main stream media did you. 

http://www.debka.com/newsupdatepopup/2301/

Does anyone really want Obama or Romney

Right now neither Obama or Romney have 50% or more of the vote based on independent polling.  It's obvious many people in this country would prefer a different candidate.

War between China and Japan

Let's fact it China and Japan don't like each other.  The current Islands in dispute have vast Oil Deposits near them so that is what this dispute is all about.

For picture of the protests in China see the following link:

http://www.zerohedge.com/news/postcards-furious-china

It's all Bush's Fault

Obama is near the end of his first term in office and the Deficits keep piling up.  He is the first President in modern history to have only one month with a surplus.  Of course this was all due to Bush's policies.  Nearly 4 years after Obama has taken office the 12 Month Moving Average of Deficits (red line) is now rolling over again so I expect Trillion Dollar Yearly Deficits will be the norm if he gets reelected.

  

Teen Employment

There has been a dramatic drop in teen employment since the late 1970's.  In the late 1970's nearly 60% of all teens between 16 and 19 worked at least part time.  Recently this number has dropped to as low as 33%.  This is a staggering drop.  Thus either older people are taking the jobs that teens used to work or teens just aren't seeking work.

Moody's Finally Warns

Moody's finally gets some balls and warns US to either get the debt under control in 2013 or it will be downgraded.  See link below.

http://www.bloomberg.com/news/2012-09-11/u-s-rating-may-be-cut-by-moody-s-if-debt-to-gdp-not-reduced-1-.html

US Debt Change by President

Since 1900 here is the US Debt Change by President.  During the past decade things have really gotten out of control and this can't continue in the future or the country will implode.

Both Obama and Romney will Win

Yesterday I talked about the outdated Electoral College.  Based on current projections it's certainly possible Romney will win the Popular Vote while Obama gets voted in due to his edge in the Electoral College.

Electoral College

The Electoral College should be eliminated.   All Presidential Elections should be determined by popular vote and not determined by a few states which have a substantial number of Electoral Votes.   

Food Stamps

The number of people on Food Stamps continues to increase as 15% of the population (nearly 47 million people) receives them.  Back in 2000 the % on Food Stamps was only 6%.  If the economy is doing so well why has there been a surge in Food Stamp usage the past 4 years?

 

16 Trillion and Counting

August closed the month with just over 16 Trillion Dollars in Public Debt.  By the end of 2013 we should be well on our way to over 17 Trillion no matter who is President.  

Grid Lock

At this point no matter who is elected President they will likely have to deal with a divided Congress.  Thus expect more gridlock as we move into 2013 and beyond.   In order to remove the gridlock there will probably have to be some type of event to force them to act.  What that will be is anyone's guess, however, the kick the can down the road solution is not going to work much longer. 

Pay Raise in 2013 tied to Budget Deal

Does it surprise anyone that the President has backtracked on his promise to give Federal Workers a whopping 0.5% raise in 2013.  Now he wants it tied to having a Budget passed in 2013.  Since the Senate hasn't passed a Budget in 3 years what do you think the odds are that one will be passed in 2013?  My guess is 0.00000000000000000000000000000000000000000000000000000000000000001%. 

US Debt by Year since 1790

Here is a long term Debt Chart going back to 1790.  Currently the US is nearing 16 Trillion in Debt. 

The 2 Party System

I'm amazed the 2 Party System has lasted as long as it has as many people are fed up with both parties.  You really have to wonder how long it will be before somebody comes along and finds a way to galvanize the disenchanted voters and form a new party that is stronger than either of the current two in place.  However maybe it will never happen. 

Quickly approaching 16 Trillion in Debt

Based on August 21st numbers Government Debt is approaching 16 Trillion.  The Debt Ceiling is at 16.394 Trillion so I expect by November we will be nearing the Debt Ceiling,

The Perfect Mix

Commodity Prices have been soaring especially those food related.  Also Gasoline Futures are rising again so we have the perfect mix with rising Food Prices coming as well.  If things flare up in the Middle East Gasoline Futures will soar in the months ahead which will not be good for consumers.

I will cut the Deficit in half by the end of my 1st Term

Who made this famous quote on February 23, 2009 you may ask?  Why the President did.  So where are we at today after that promise.  Well based on data from August 20, 2012 the debt has increased by just over 5.1 Trillion dollars since February 23, 2009.  I'm sure he was misquoted and meant he would actually increase the debt by 50%. 

How Would You Respond?

Back in World War 2 millions of Jews were executed by Hitler.  Before World War 2 began Hitler made it very clear how he felt about the Jews and what he would do to them.  Now in the 21st Century another leader President Mahmoud Ahmadinejad of Iran has made it very clear how he views Israel as he has stated on several occasions that Israel should be wiped off the face of the earth.  Before World War 2 began world leaders ignored Hitler's threats and believed he was blowing smoke in the wind, however, we all know how that turned out.   80 years later here we are again as many world leaders appear to be ignoring Ahmadinejad's threats as they believe he is just saying these things to increase his popularity in Iran.

If you were living in Israel and knew what happened back in World War 2 would you consider Ahmadinejad's threats as nothing more than bolstering his regime or would you consider his threats as legitimate?   Let's face it if the roles had been reversed and millions of Americans had been executed by Hitler and not Jews would the US be standing idly by if Ahmadinejad had said the US should be wiped off the face of the earth.  

Medicare and Medicaid

Based on the baseline scenario from the CBO total Medicare and Medicaid Spending will double in the next 10 years.  Current Spending is just over 800 billion and is forecast to exceed 1.6 trillion by 2022.

 

Disability Insurance to go Bankrupt in 2016

The data in the chart below is taken from CBO's baseline scenario involving Disability Insurance through 2022.  Notice the Trust Fund is forecast to run our of money by then end of 2015 and it could be even sooner if the CBO baseline scenario is overly optimistic .  Thus the government will have to find at least 160 billion dollars to fund Disability Insurance in 2016 and a whopping 1.28 Trillion Dollars through 2022 based on this baseline scenario.  

  

USA Today Article Full of Lies

This article claims Federal Employees make way too much in retirement.  USA today focuses on the old retirement system for their biased analysis.  It would be nice if these people would do their research without a biased agenda.

See the article at  http://www.usatoday.com/money/perfi/retirement/story/2012-07-19/federal-pensions-in-excess-of-100-thousand/57059716/1

Vice President Quote "Biden-on-Romney-theyre-going-to-put-yall-back-in-chains"

An amazing quote from the Vice President:

"Biden-on-Romney:  Theyre-going-to-put-yall-back-in-chains"
 
 How is this remark not considered racist?

See article below at

http://freebeacon.com/biden-on-romney-theyre-going-to-put-yall-back-in-chains/

Where are Moody's and S&P?

One year ago the credit rating agencies downgraded the United States ability to pay off its debt.  Furthermore  they stated if the US didn't address the debt problem over the next 12 months additional downgrades would be possible.  Well here we are one year later and the US Government has done nothing to address the debt problems yet there is not one peep out of the ratings agencies.

Should all members of the Senate Resign

The last federal budget that passed was in 2009.  Since then the senate has been using a bunch of continuing resolutions and is set to use another one as there will be no agreement by October 1st.  One of the main jobs of the senate is to pass a budget every year.  Since they have failed to do so for the last 3 years then they all should resign in my opinion.

Quickly approaching Debt Ceiling

As of July 31st the government is now within 460 billion of the debt ceiling which may be reached near election time.  Last year at this time Total Public Dept Outstanding was 14,342,369,000,000 so we have see seen an increase of nearly 1.6 Trillion in debt the past 12 months.   

Another Continuing Resolution

With it being an election year naturally it wouldn't be a good idea to get a budget passed by October 1st would it.  There hasn't been a budget passed by the Senate since 2009 so I don't expect one to be signed into law in 2013 either.  Once again where are the downgrades from the Credit Agencies who just a year ago said if the US didn't get its spending in order would lead to downgrades.

Whare are the US Downgrades

In the Summer of 2011 the US was warned by Moody's and the S&P that if the US didn't get it's financial house in order by reducing the amount of debt they would downgrade the US even further.  Here we are a year later and nothing has been done by Congress to address the debt issue.  So my question is where are the downgrades?

How did Colorado Shooter get Tear Gas?

I was asked by fellow co workers wouldn't it be difficult for someone to get tear gas?  Unfortunately it's not as you can see at http://www.keepshooting.com/clear-out-2oz-tear-gas-grenade.html

For $10 you can buy a tear gas grenade if you are 21 years of age?  The tear gas grenade contains 2oz of military grade OC/CS in a 1%/1% solution which will deliver a fog to incapacitate a large crowd.  The 2oz. units disperses in 8-10 seconds and covers an area approximately 9300 cubic feet in 30 seconds.

It's troubling to me that as long as you are over 21 years of age you can buy tear gas grenades it appears.  The site doesn't say whether they do background checks or not.
 

Federal Deficits

The long term chart of Monthly Federal Deficits is shown below which are in millions of dollars.  Obama finally got a positive month in April (point A) however the last two months have trended negative again.

The President and Congress Just Don't Get It

Over 1 Trillion Dollars has been used to bailout the Banks but nothing is being done to help people who are underwater in their homes or are in substantial debt.  To be fair a plan should be implemented that helps everyone not just those who are underwater or in substantial debt.  I would propose a plan that includes  the following:

1. If a homeowner is severely underwater let the loan be refinanced at fair value with a 30 Year Fixed Rate not to exceed 4%.
2. Allow every homeowner who isn't severely underwater to refinance at a 30% Fixed Rate of  2% based on what they currently owe (No Cashouts are allowed).
3.  For those with non-collateral debt (including Student Loans) allow a one time write off not to exceed $100,000.  Also if you take the one time write off you will adhere to strict credit restrictions over a 10 Year Period such that you will not be allowed to have more than 2 credit cards with a combined maximum amount available of $2000.  Also if you want to get a car or a home you must be able to document your income and not buy something you can't afford.    
4.  For those who have no debt there has to be some reward.  I would propose that you get a $10,000 Tax Deduction for each year over the next 5 Years which adds up to $50,000.  After this you will get a $5,000 Tax Deduction each year thereafter for an additional 5 Years which adds another $25,000.  Thus over a 10 Year Period you will be given a total of $75,000 in Tax Deductions for not being in substantial Debt.

I know this is a rather simple plan but nobody in Congress or the President has proposed any type of major plan to help everyone in this country.

Social Security is in Big Trouble!!!

There is an excellent article by Bruce Krasting on how Social Security may blow up much faster than most think.  Read his article at http://brucekrasting.blogspot.com/2012/07/bernanke-my-goal-is-to-destroy-social.html

The key quote from the article states "Based on current law, all Social Security benefit payments must be cut by (approximately) 25% when the Social Security Trust Fund (SSTF) is exhausted"

Debt Ceiling will be reached before the end of the Year

Based on the latest data the US is now only 538 Billion from the Debt Ceiling.   Thus it's entirely possible the Debt Ceiling of 16,394,000 will be reached by November leading to another showdown in Congress.

 

Americans getting Ripped Off at the Pump!!!

Currently the Gasoline Futures are just above $2.50 a gallon.  Typically the price of regular unleaded gas will be 30 to 40 cents above the Futures value.  According to the latest data from GasBuddy the average price of regular unleaded is around $3.40.  Thus Americans are paying on average 50 to 60 cents above what they should be based on the Gasoline Futures.

Where are the Leaders

I'm getting so tired of the political ads being run by Obama and Romney and it's only going to get worse as the election nears.  It's time for someone to step up who has no ties to the political system to be President.  I know this would be a shock to the political system but that is want is needed.   Nothing will change much if Obama is reelected or Romney gets voted in.   

No Raise in 2013

It appears likely there will be no pay raise in 2013 so that will make it 3 years in a row.

Monthly Federal Deficits

Well at least Obama avoided being the only President in modern history to never have one Monthly Surplus as April ended up being positive.  However it didn't last long as May came in with a $100 Billion + deficit.

CBO Grows a Pair

If you haven't read the latest CBO Budget Outlook you can see it at http://www.cbo.gov/publication/43288

Here are their main conclusions:

What Is the Impact of Growing Deficits and Debt?
In particular, large budget deficits and growing debt would reduce national saving, leading to higher interest rates, more borrowing from abroad, and less domestic investment—which in turn would lower the growth of incomes in the United States.

Rising debt also would have other negative consequences beyond those estimated effects on output.
It would:

1. Result in higher interest payments on that debt, which would eventually require higher taxes, a reduction in government benefits and services, or some combination of the two.

2. Restrict policymakers’ ability to use tax and spending policies to respond to unexpected challenges, such as  economic downturns or financial crises.
 
3. Increase the probability of a sudden fiscal crisis, during which the government would lose its ability to borrow at affordable rates.

This pretty much says it all.  Either the US gets it house in order or major problems will occur in the coming years. 

National Weather Service could Furlough Employee's

Interesting Article at http://www.washingtonpost.com/politics/weather-service-says-furloughs-possible-if-no-deal-struck/2012/06/07/gJQAGMyTMV_story.html?wpisrc=nl_fedinsider#

I know where they can get 33 million real quick by getting rid of AWIPS 2 which is supposed to be better than AWIPS 1 and isn't.  Let's see Raytheon gets a 333 million dollar contract for 10 years and AWIPS 2 ends up being a disaster. 

623 Billion until Debt Ceiling Reached

Based on the end on May data the US is only 623 Billion from reaching the debt ceiling which will likely be reached before the end of the year.  

Does it really matter who gets elected Preisdent?

I really don't think it will matter much if Obama or Romney gets elected in the Fall.  Sure there will be some  policy differences between the two however keep in mind "BIG BUSINESS" runs this country, and the rest of the world as well, and not politicians.   Maybe this is how the Founding Fathers really wanted it as the 1% get richer while the other 99% become even more poor in the long run.   If you are the 1% you fell great...however if you are in the 99% crowd you struggle every day to make ends meat.   How much longer this disparity can last is anyone's guess..           

House wants Fed Employees to subsidize Student Loans

This is totally uncalled for as Federal Employees shouldn't be subsidizing the Student Loan Program by having their Retirement Contributions increased.  See link at http://www.fedsmith.com/article/3451/house-republicans-propose-increasing-retirement-contributions.html

These people should be voted out of office:  House Speaker John Boehner, Senate Republican Leader Mitch McConnell, House Majority Leader Eric Cantor, and Senate Republican Whip Jon Kyl.

The Walking Dead

I'm sure there is an explanation for this but it does make you wonder.

Naked man killed by Police near MacArthur Causeway was ‘eating’ face of victim

ead more here: http://www.miamiherald.com/2012/05/26/2818832/naked-man-shot-killed-on-macarthur.html#storylink=cpy

Facebook IPO

The Facebook IPO was a flop however since it has fallen from $45 to $31 in 3 days everyone is now crying foul and saying they were ripped off in the process.  However back in late 1999 VA LINUX (LNUX) came out as an IPO and reached just over $300 it's first day of trading.  It has never gotten close to that price since then and now trades just over $14 as GKNT.  However keep in mind it did a 1:10 reverse stock split in 2010 so in reality the late 1999 price in real dollars was over $3000 a share.  Nothing is a given in the market so those that were looking to make a quick profit off of the overvalued Facebook IPO got what they deserved just like those who bought LNUX at the open back in late 1999.        

Weekend Stock Market Analysis

The latest Weekend Market Analysis provided by Amateur Investors is
at http://www.amateur-investor.net/Weekend_Market_Analysis_May_19_2012.htm

Price of Gasoline

The Gasoline Futures have dropped 55 cents since the peak back in April however the national price of  regular unleaded has only fallen 21 cents.  Thus based on the latest Futures Contract the average price of regular unleaded should be falling under $3.40 a gallon at some point.

House screws Federal Employees

Here you go...House approves increase in pension contributions

Let's hope the Senate has some balls and doesn't pass this.

Are there any viable Presidential Candidates?

Personally I see no difference between Obama and Romney.  Romney is a closest Democrat while Obama caters to the far left.  Ron Paul has some good qualities but will he follow through on attacking the Establishment which includes Big Business and Wall street.

Is the Stock Market Undervalued?

Recently Alan Greenspan said the stock market was way undervalued.  However based on research done by Robert Shiller the Cyclical Adjusted PE Ratio (CAPE) indicates the market is not undervalued.  The chart below shows the long term average CAPE is at 16.4 which means the market would be fairly valued at that level.  Back in March of 2009 the CAPE dropped to 13.3 so it was undervalued by roughly 19%.  However in April of 2012 the CAPE has risen back to 22 so the S&P 500 is now overvalued by 34%.

Finally previous historical major market bottoms (points B) haven't occurred until the CAPE has dropped to a value of  7 (points A).  The last time the CAPE dropped to around 7 was back in 1982 which preceded the Secular Bull Market from 1983 through 1999.   Thus the question is will the CAPE eventually have to drop down to the 7 level before a major market bottom occurs?

Food Stamp Usage increases by 171% since 2000

Food Stamp Usage has soared by 171% since 2000.  In fact 1 out of 7  US residents are now on Food Stamps according to the CBO.  For the full story see below.

http://www.cbo.gov/publication/43173

Romney: Federal Pay Unfair

Coming from a guy who sheltered all of his investments overseas so he didn't have to pay taxes and he says Federal Pay is unfair. 

Voting them all out won't change anything

I know many of you are fed up with Congress.  However even if you could vote them all out they will just be replaced by other rich people whose votes will be bought out by Big Business.  The only way to change how Congress does business is by doing what I mentioned last week at
http://www.blogger.com/blogger.g?blogID=4674884197796452409#editor/target=post;postID=3116244565661116676

As Rome burns...Congress ignores the major problems with Social Security

There is an excellent article written by Bruce Krasting involving Social Security at the link below.

http://brucekrasting.blogspot.com/2012/04/on-social-security-2012-report-to.html

As pointed out by Bruce The Drop Dead Rate for Social Security Benefits is now forecast to be in 2033 while the Drop Dead Rate for the Disability Fund is now set at 2016.  What this means is that the Government will have to bailout the Disability Fund beginning in 2016.  For those below the age of 50 you are basically going to be screwed when you retire and try to get benefits at age 62 as there is a very good chance it will be severely limited by then.