Normally I pick my blog posts from other bloggers or news sources providing insights not generally found elsewhere. But this time I’m reposting an article by an investment advisor. And based on evidence that I’ve found elsewhere, his main theme is correct, namely that is that the U.S. is broke, and that all hell will break loose if and when our economy falls into deflation. (I have added the “if” because runaway inflation is the other possibility and would be just as devastating but for different reasons.) Read this investment advisor’s description of runaway deflation and prepare yourselves. One thing is for sure, when the criminal big banks crash this time the government can no longer bail them out. So they will do what happened in Cyprus a couple years ago, that is, do “bail IN”s, which is a cute euphemism for stealing the money of their depositors. So if, dear reader, you have a savings account in any of the big banks, take you money out NOW and put it in a credit union -- or even under you mattress – before it is too late.

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Deflation picking up even more momentum ...

by Larry Edelson

Dear Subscriber,

Some analysts seem to think inflation is making a big comeback. Their reasoning: Interest rates have started to move higher, hence, inflation is lurking out there.

But they're clueless. They are confusing declining bond prices (rising interest rates) with normal times — and the world is about as far away from normal times as I am of becoming the next Pope.

Yes, interest rates all over the globe are starting to rise, and bond prices are sliding — most notably in Europe.

But that doesn't mean inflation is coming back. It's not. In a minute I'll show you the evidence as to why.

Interest rates are rising and bond prices are falling because the SOVEREIGN DEBT CRISIS is rapidly approaching.

That final point in time — the final reckoning — where the majority of investors begin to realize that Europe, Japan and the biggest debtor of them all, the U.S., are patently bankrupt … will never make good on their debts …

And instead, will do everything they can to chase, track, tax and seize your wealth to help them keep their heads above water.

Government spying: They'll do everything
they can to chase, track, tax and seize your
wealth to help them keep their heads above water.

Which is precisely why the Western socialist governments of this world — Europe, Japan and the U.S. — are all acting like caged animals ...

 Raising taxes, throughout Europe ... a new proposed second hike in the sales tax in Japan ... Obamacare here and behind the curtain in Washington, even more income tax hikes coming.

 Spying on citizens — yes, it's still going on. To track your money, to tax it more, and not too far in the future, to nationalize and confiscate it.

 Enacting extensive capital controls throughout Europe, where in France, for instance, you can no longer conduct any business in cash, and where you cannot take out of the bank more than 1,000 euros at a time. Similar controls exist now in Greece, Cyprus, Italy and even Spain.

 Where economists like Harvard University's Ken Rogoff and Citibank's Willem Buiter are traipsing the globe telling governments it's time to abolish cash and replace it with electronic currency.

 And where governments are now so wrought with troubles that financial repression of their people is not enough and instead, they are moving to distract them by playing games with other countries.  Hence, the rising tide of wars around the world, from terrorism to outright international conflict. Where just recently Ukraine's President Petro Poroshenko warned his country to "prepare for a full-scale Russian invasion." 

Where China is ready to duke it out with Japan and other countries, including the United States, in the South China Sea.

Where the number of separatist, anarchist and neo-Nazi groups in Europe are at an all-time high.

This is NOT the stuff of solid economic growth and certainly not a formula for inflation.

To the contrary, it is the stuff of dying empires ...

Of deflationary contractions. Of hoarding and burying wealth.

So much so that stock and commodity market trading volumes are less than half what they were in 2007 and 2008.

Yes, all these things will eventually positively impact gold. But not because of inflation. But because empires of the West are dying.

If you don't believe the picture I paint for you above, as to the evidence that there's no inflation, all you have to do then is simply look at the facts on the ground ...

 The year-over-year change in U.S. retail sales peaked way back in July 2011, and has been declining ever since. 

 U.S. consumer confidence, measured by the widely respected polls of the University of Michigan, remains well below its peak in 1999.

 Quarterly U.S. GDP has been in declining mode since 1999 and this year's first quarter GDP declined a whopping 0.7 percent.

 U.S. industrial production has declined since June 2010, with factory orders plummeting for eight straight months including a 0.4 percent decline in April.

Those are just the gross economic figures that support the fact that there is no inflation on the horizon. Now turn to the markets, and the most inflation-sensitive of them all... commodities.

 Gold has now broken support at the $1,180 level. Its next move, perhaps after a bounce or two: below $1,100.

 Silver too is cracking, now dangerously positioned to fall below $14.50, then even lower.

 Copper is starting to slide once again, falling to the $2.70 level, with lower prices ahead.

 Platinum and palladium, both weak at the knees.

 Oil, unable to get back above $65 a barrel, and now poised to move lower again. Natural gas, barely above multi-year lows.

 The grain markets, all weak. Soybeans, sliding. Corn and wheat, ready to slide again from multi-month and multi-year highs. 

 Coffee, cocoa, sugar, all looking very weak.

 And more.

The U.S. dollar, near multi-year highs and about to take off like a rocket again. In itself, a major deflationary warning.

Prepare for inflation, as these blind analysts would have you do, and you will be on the wrong side of the markets.

Prepare for more deflation with inverse commodity ETFs and the like, and by staying invested in mostly U.S. dollars where they will buy you more and more over the next several months ...

And you will protect and grow your wealth.

And last, but certainly not least, when the time is right — not too far off in the future ...

You will be able to buy gold and silver on the cheap, when everyone else is dumping them ...

Not recognizing that the real crisis is in government, which is when gold and silver truly shine.

I rest my case.

Best wishes and stay safe …

Larry

Andrew Mazzone Interviews PCR: "Of all my interviews, this one is the best." -- Paul Craig Roberts

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SMART TALK

"I ask no one who may read this book to accept my views. I ask him to think for himself."
Henry George in Social Problems

Smart Talk with Andrew Mazzone and Dr. Paul Craig Roberts

Smart Talk is a series of discussions with leading economists around the world moderated by Andrew Mazzone.

This is an interview with Dr. Paul Craig Roberts.  Dr. Roberts has had careers in scholarship and academia, journalism, public service, and business. He is chairman of The Institute for Political Economy.

Dr. Roberts was awarded the Treasury Department’s Meritorious Service Award for “his outstanding contributions to the formulation of United States economic policy.”

In 1987 the French government recognized him as “the artisan of a renewal in economic science and policy after half a century of state interventionism” and inducted him into the Legion of Honor. 

He is listed in Who’s Who in America and Who’s Who in the World.

Transcript [PDF]

This is the best Paul Craig Roberts' recent interviews, and it's timely (dated today)! Become educated on issues the mainstream media deliberately obscures. (You may wish to skip directy to the interview 5 minutes from the beginning.)

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http://youtu.be/AOblgFwPUAY [92] Paul Craig Roberts: IMF loans will hand Ukraine over to private banks

Boom Bust 




Published on Apr 2, 2014

Our lead story: On Tuesday Mary Barra, the CEO of General Motors, testified in front of Congress as to why it took her company so long to recall millions of vehicles. Monday, GM recalled another 1.5 million vehicles worldwide in order to fix steering system problems. Erin brings you the details.

Our interview today is Dr. Paul Craig Roberts who talks about the US macroeconomy, Fed policy, the ongoing conflict in Ukraine, and the geopolitical approach of the West towards Russia. Take a listen.

For today's Big Deal, Edward Harrison and Erin sit down to talk about Cuba and a new law that allows for more foreign investment in the island.

Check us out on Facebook: 
http://www.facebook.com/BoomBustRT 
https://www.facebook.com/harrison.wri... 
https://www.facebook.com/erinade2020

Number 8 below: "According to The Economist, the United States was the best place in the world to be born into back in 1988. Today, the United States is only tied for 16th place." Were we a great country ...or what?

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Tuesday, May 28, 2013

40 Statistics About The Fall Of The U.S. Economy That Are Almost Too Crazy To Believe

By Michael Snyder (The Economic Collapse Blog | Original Link) May 28, 2013

If you know someone that actually believes that the U.S. economy is in good shape, just show them the statistics in this article. When you step back and look at the long-term trends, it is undeniable what is happening to us. We are in the midst of a horrifying economic decline that is the result of decades of very bad decisions. 30 years ago, the U.S. national debt was about one trillion dollars. Today, it is almost 17 trillion dollars. 40 years ago, the total amount of debt in the United States was about 2 trillion dollars. Today, it is more than 56 trillion dollars. At the same time that we have been running up all of this debt, our economic infrastructure and our ability to produce wealth has been absolutely gutted. Since 2001, the United States has lost more than 56,000 manufacturing facilities and millions of good jobs have been shipped overseas. Our share of global GDP declined from 31.8 percent in 2001 to 21.6 percent in 2011. The percentage of Americans that are self-employed is at a record low, and the percentage of Americans that are dependent on the government is at a record high. The U.S. economy is a complete and total mess, and it is time that we faced the truth.
The following are 40 statistics about the fall of the U.S. economy that are almost too crazy to believe…
#1 Back in 1980, the U.S. national debt was less than one trillion dollars. Today, it is rapidly approaching 17 trillion dollars… 

#2 During Obama’s first term, the federal government accumulated more debt than it did under the first 42 U.S presidents combined.
#3 The U.S. national debt is now more than 23 times larger than it was when Jimmy Carter became president.
#4 If you started paying off just the new debt that the U.S. has accumulated during the Obama administration at the rate of one dollar per second, it would take more than 184,000 years to pay it off.
#5 The federal government is stealing more than 100 million dollars from our children and our grandchildren every single hour of every single day.
#6 Back in 1970, the total amount of debt in the United States (government debt + business debt + consumer debt, etc.) was less than 2 trillion dollars. Today it is over 56 trillion dollars…

#7 According to the World Bank, U.S. GDP accounted for 31.8 percentof all global economic activity in 2001. That number dropped to 21.6 percent in 2011.
#8 The United States has fallen in the global economic competitiveness rankings compiled by the World Economic Forum for four years in a row.
#9 According to The Economist, the United States was the best place in the world to be born into back in 1988. Today, the United States is only tied for 16th place.
#10 Incredibly, more than 56,000 manufacturing facilities in the United States have been permanently shut down since 2001.
#11 There are less Americans working in manufacturing today than there was in 1950 even though the population of the country has more than doubled since then.
#12 According to the New York Times, there are now approximately 70,000 abandoned buildings in Detroit.
#13 When NAFTA was pushed through Congress in 1993, the United States had a trade surplus with Mexico of 1.6 billion dollars. By 2010, we had a trade deficit with Mexico of 61.6 billion dollars.
#14 Back in 1985, our trade deficit with China was approximately 6 million dollars (million with a little “m”) for the entire year. In 2012, our trade deficit with China was 315 billion dollars. That was the largest trade deficit that one nation has had with another nation in the history of the world.
#15 Overall, the United States has run a trade deficit of more than 8 trillion dollars with the rest of the world since 1975.
#16 According to the Economic Policy Institute, the United States is losing half a million jobs to China every single year.
#17 Back in 1950, more than 80 percent of all men in the United States had jobs. Today, less than 65 percent of all men in the United States have jobs.
#18 At this point, an astounding 53 percent of all American workers make less than $30,000 a year.
#19 Small business is rapidly dying in America. At this point, only about 7 percent of all non-farm workers in the United States are self-employed. That is an all-time record low.
#20 Back in 1983, the bottom 95 percent of all income earners in the United States had 62 cents of debt for every dollar that they earned. By 2007, that figure had soared to $1.48.
#21 In the United States today, the wealthiest one percent of all Americans have a greater net worth than the bottom 90 percent combined.
#22 According to Forbes, the 400 wealthiest Americans have more wealth than the bottom 150 million Americans combined.

#23 The six heirs of Wal-Mart founder Sam Walton have as much wealth as the bottom one-third of all Americans combined.
#24 According to the U.S. Census Bureau, more than 146 million Americans are either “poor” or “low income”.
#25 According to the U.S. Census Bureau, 49 percent of all Americans live in a home that receives direct monetary benefits from the federal government. Back in 1983, less than a third of all Americans lived in a home that received direct monetary benefits from the federal government.
#26 Overall, the federal government runs nearly 80 different “means-tested welfare programs”, and at this point more than 100 million Americans are enrolled in at least one of them.
#27 Back in 1965, only one out of every 50 Americans was on Medicaid. Today, one out of every 6 Americans is on Medicaid, and things are about to get a whole lot worse. It is being projected that Obamacare will add 16 million more Americans to the Medicaid rolls.
#28 As I wrote recently, it is being projected that the number of Americans on Medicare will grow from 50.7 million in 2012 to 73.2 million in 2025.
#29 At this point, Medicare is facing unfunded liabilities of more than 38 trillion dollars over the next 75 years. That comes to approximately$328,404 for every single household in the United States.
#30 Right now, there are approximately 56 million Americans collecting Social Security benefits. By 2035, that number is projected to soar to an astounding 91 million.
#31 Overall, the Social Security system is facing a 134 trillion dollar shortfall over the next 75 years.
#32 Today, the number of Americans on Social Security Disability now exceeds the entire population of Greece, and the number of Americans on food stamps now exceeds the entire population of Spain.
#33 According to a report recently issued by the Pew Research Center, on average Americans over the age of 65 have 47 times as much wealth as Americans under the age of 35.
#34 U.S. families that have a head of household that is under the age of 30 have a poverty rate of 37 percent.
#35 As I mentioned recently, the homeownership rate in America is now at its lowest level in nearly 18 years.
#36 There are now 20.2 million Americans that spend more than half of their incomes on housing. That represents a 46 percent increase from 2001.
#37 45 percent of all children are living in poverty in Miami, more than 50 percent of all children are living in poverty in Cleveland, and about 60 percent of all children are living in poverty in Detroit.
#38 Today, more than a million public school students in the United States are homeless. This is the first time that has ever happened in our history.
#39 When Barack Obama first entered the White House, about 32 million Americans were on food stamps. Now, more than 47 million Americans are on food stamps.
#40 According to one calculation, the number of Americans on food stamps now exceeds the combined populations of “Alaska, Arkansas, Connecticut, Delaware, District of Columbia, Hawaii, Idaho, Iowa, Kansas, Maine, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Dakota, Oklahoma, Oregon, Rhode Island, South Dakota, Utah, Vermont, West Virginia, and Wyoming.”

SEVENTY-ONE PERCENT OF THE U.S. GROSS NATIONAL PRODUCT IS DUE TO AMERICAN CONSUMERS CONSUMING. HOWEVER, THE BEST PAYING JOBS IN THE U.S. HAVE BEEN OFFSHORED, AND MOST OF THOSE LUCKY ENOUGH TO HAVE A JOB OF ANY KIND ARE DEEPLY IN DEBT. THEY WILL SAVE RATHER THAN SPEND. SO THE U.S. GDP HAS NO WHERE TO GO BUT DOWN. RETIRED PERSONS ON SOCIAL SECURITY WOULD BE MORE INCLINED TO SPEND, BUT WING-NUTS ACROSS THE POLITICAL SPECTRUM HAVE INDOCTRINATED THEMSELVES TO BELIEVE THAT SOCIAL SECURITY AND MEDICARE ARE "PONZI SCHEMES" AND "UNFUNDED LIABILITIES" AND SO SHOULD BE CUT ...DESPITE THEIR HAVING BEEN PAID FOR BY INCOME TAX AND THE PAYROLL TAX. BELOW, PAUL CRAIG ROBERTS TELLS THE STORY OF HOW "THE AMERICAN WORK FORCE HAS BEEN FORSAKEN BY THE CORPORATIONS AND BY WASHINGTON" ...MEANING THAT "SOCIAL SECURITY AND MEDICARE HAVE ALSO BEEN FORESAKEN." THEN HE COMPARES THE SORRY STATE OF U.S. MANUFACTURING WITH THAT OF CHINA, WHICH 6 YEARS AGO WAS ALREADY 10 TIMES LARGER THAN CURRENT U.S. MANUFACTURING EMPLOYMENT ...THANKS TO OFFSHORING.

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America R.I.P.

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October 16, 2012 |  Original Here

During the second half of the 20th century the United States was an opportunity society. The ladders of upward mobility were plentiful, and the middle class expanded. Incomes rose, and ordinary people were able to achieve old-age security.

In the 21st century the opportunity society has disappeared. Middle class jobs are scarce. Indeed, jobs of any kind are scarce. To stay even with population growth from 2002 through 2011, the economy needed about 14 million new jobs. However, at the end of 2011 there were only 1 million more jobs than in 2002. http://www.bls.gov/webapps/legacy/cesbtab1.htm

Only 426,000 of these jobs are in the private sector. The bulk of the net new jobs consist of waitresses and bartenders and health care and social assistance. According to the Bureau of Labor Statistics, over the 9 years, employment for waitresses and bartenders increased by 1,188,000. Employment in health care and social assistance increased 3,087,000. These two categories accounted for 1,000% of the net private sector job growth.

As for manufacturing jobs, they not only did not grow with the population but declined absolutely. During these nine years, 3.5 million middle class manufacturing jobs were lost.

Over the entire nine years, only 48,000 new jobs were created for architects and engineers.

In the 21st century the US economy has been able to create only a few new jobs and these are in lowly paid domestic services that cannot be offshored, such as waitresses and bartenders.

The lack of jobs, especially high value-added, high productivity jobs, is the reason real median household income has declined and the distribution of income has worsened. Without rising real household income, there cannot be a consumer economy.

In the early years of the 21st century, the Federal Reserve substituted a rise in consumer debt to drive the economy in place of the missing rise in consumer incomes. Low interest rates drove up housing prices, and people refinanced their mortgages and spent the equity. The Federal Reserve kept the economy alive by loading up consumers with debt that housing prices and consumer incomes would soon be unable to support.

When debt and real estate prices reached unsustainable levels, the bubble popped, and the ongoing financial crisis was upon us.

The cause of all of the problems is the offshoring of Americans’ jobs. When jobs are moved offshore, consumers’ careers and incomes, and the GDP and payroll and income tax base associated with those jobs, go with them. When the goods and services produced for American markets by offshored labor are brought into the US to be sold, the trade deficit rises, and downward pressure is put on the dollar, pushing up domestic inflation. (On October 12, statistician John Williams (shadowstats.com) reported that “third-quarter wholesale inflation jumped to an annualized 6.2%.”)

Jobs offshoring is driven by Wall Street, “shareholder advocates,” the threat of takeovers, and by large retailers, such as Walmart. By cutting labor costs, profits go up.It is that simple. However, as a result of sending American jobs to cheap labor countries, US consumer incomes go down. The end result is to destroy the domestic consumer market. What would have been US consumer income growth becomes instead profit growth for US corporations.

Keynesian economists use in their textbooks the example of how the aggregate effect of individual saving could be the opposite of the effect intended by the individuals. Whereas each saver seeks to improve his position by building wealth, in the aggregate saving could exceed investment, resulting in a decline in aggregate demand and a fall in income for all. Offshoring has the same logic. Each corporation can expect to gain more profits from moving US jobs offshore, but the aggregate effect is a fall in American consumer incomes and a reduction in the American consumer market.

I have told this story many times. But policymakers, the media, and economists seem unable to connect the dots.

Jobs offshoring has substantial implications for Social Security and Medicare. The US has the least adequate social safety net of any developed country. The two major components of the US social safety net are Social Security and Medicare for the elderly. Social Security and Medicare are financed by a payroll tax. The combined tax is 15.3% of payrolls. For the past quarter of a century the Social Security portion of the payroll tax has built up a surplus of over $2 trillion. Recently, the Medicare portion began running in the red.

Right-wing Republicans, free market ideologues, and the left-wing have all indoctrinated themselves with incorrect beliefs about Social Security and Medicare. The right-wing claims that a safety net financed with 15.3% of payrolls is a “Ponzi scheme” and an “unfunded liability.” If that is the case, then so are veterans benefits, military pensions, and federal pensions, all of which are financed by the income tax, the basis for the payroll tax.

The left-wing claims that the rich do not pay high enough payroll taxes, because the income subject to Social Security payroll tax is capped at about $110,000. But the benefits are also capped. Social Security is not supposed to be an income redistribution scheme from rich to poor, and it is not supposed to be a pension system for the rich. The pension paid is supposed to correlate with the pre-retirement income level of the retiree. Those who had higher wages or salaries and consequently paid more in payroll taxes receive a larger Social Security check than those who had lower wages and salaries and paid less payroll taxes, although there is favoritism toward the lower income earners who receive proportionally more in respect to their payroll taxes than higher income earners.

There is no cap on income subject to the Medicare portion of the payroll tax. Moreover, Medicare charges a Medicare Part B premium that is deducted from the Social Security monthly check. In addition, there is a further Part B premium based on retirement age income. For example, someone working beyond retirement age and making $250,000 per year pays about $3,800 in Medicare Part B premium in addition to the Medicare portion of the payroll tax of about $7,500. The annual premium he pays for his “free” Medicare for which he has paid all his working life with a payroll tax is about $11,300.

Moreover, Medicare by itself is insufficient coverage. To actually have medical coverage, those covered by Medicare have to purchase a supplementary private policy to cover the large gaps in Medicare. Depending on the range of coverage, a supplementary policy costs approximately $100 to $300 per month.

As the person making $250,000 per year is likely to go for the most coverage, he will be paying about $14,900 (excluding deductions and co-payments) per year for his “free” Medicare. This is despite having paid the Medicare payroll tax each year of his working life. A person who made $250,000 in taxable income per year for 30 years would have paid $217,500 into Medicare at the current Medicare payroll tax rate.

The right-wing’s notion that Social Security and Medicare are handouts, part of the welfare state’s bread and circuses, and the left-wing’s idea that the rich get a free ride are equally untrue.

(Note: $250,000 is the politicians’ dividing line between the rich and the rest of us. For a person making $50,000 a year, an income five times larger can seem rich. However, a $250,000 annual income leaves a family or person far distant from the lifestyle of the rich. Upper middle class incomes are generally associated with high-tax, high-cost urban areas in states with high income taxes. After federal income and payroll taxes, state income and sales taxes, and property taxes, what appears to many as a large income disappears. In New York City, the federal income tax will take about 25% of the $250,000, New York state will take about 9%, and New York City will take about 3.65%. The combined city and state sales tax is 8.875%. The property tax is high. The conclusion is that in New York City a $250,000 income is reduced to $125,000 or thereabouts. Those who claim “the rich don’t pay taxes” are not talking about $250,000 incomes.)

Social Security and Medicare have served the country well. They protect the individual from his own mistakes, from crooked and incompetent money managers, and from financial crises, and they protect society from the moral dilemma of confronting large numbers of fellow citizens who through fault or no fault of their own cannot provide for their livelihood and medical care. After the financial scandals and crisis of the past five years, it is a stretch to believe that any but the astute can manage their personal wealth, whether small or large, in today’s situation of unregulated financial markets, zero interest rates, currency uncertainty, and highly complex investment instruments with computers programmed with mathematical models dominating equity trades.

The argument that conceptually a person could do better by investing his payroll taxes in the stock market is a poor basis for old age security policy. The person can do better as long as he or she doesn’t fall into the hands of a Bernie Madoff or a Goldman Sachs, doesn’t receive zero interest on his bonds because the Federal Reserve has to bail out the “too big to fail banks,” doesn’t experience a decline in currency value due to monetization of enormous federal deficits, and doesn’t experience a bear market as he approaches retirement.

The right-wing ideologues who try to scare old age security out of existence go on and on about rising medical costs, about an aging population living longer, declining birthrates and a worsening ratio of workers to retirees, about people learning to rely on handouts rather than their own means, and about Washington’s rising unfunded liabilities.

Scare projections are designed to scare, and most are untenable. For example, longevity was a product of rising incomes, good diet, and antibiotics. Today only the upper crust have rising incomes. Antibiotics are wearing out from abuse and rising immunity of bacteria. Diet is compromised in ways still poorly understood as a result of GMOs, pesticides, herbicides, pumping chicken, pork, and beef full of antibiotics and hormones and feeding the animals GMO grains and also possibly infected animal byproducts, and pumping our water full of fluoride. A variety of destructive activities and behaviors are causing ecological damage. Longevity might have been a short-term benefit of irreproducible conditions considering the mounting ecological damage and the rise of superbugs, stress, and tainted food and water production.

The projection of an aging population might also be wrong. Clearly, the post-World War II baby boomers are aging, but do the projections take into account the legislated 1965 immigration increases plus the illegal influx from Mexico and points south of young people with high birth rates? How can it be that a country with allegedly 30 million illegal immigrants, whose children born in the US are citizens, has a declining birth rate? How do we know that the illegal population will not continue to increase?

There are so many Spanish speaking people in the US today that if a person calls any of his utility companies, whether telephone, Internet, water, electricity, TV, or any of his credit card companies, or his bank, he has to select English or Spanish. Obviously, as anti-immigration sites make clear, the US population is changing in its national origin, and there appears to be no sign of an aging Hispanic population. How many old Spanish speaking people do you see in the US compared to the young?

When confronted with this apparent fact, the response is: “why will the Hispanics pay for the aging white population?” The answer is: because they are in the same payroll tax system and the taxes will be withheld from their wages and salaries just as they are from everyone else’s.

It is possible that if Hispanics in the US have suffered years of hostility, accusations, and hatred from “the ice people,” once Hispanics are sufficiently numerous to control the legislature, assuming one still exists, or to take over the executive branch, the only seat of power, they may in retribution cut off the aging whites. But if so, the whites will have brought it on themselves.

Whatever the scare projections that are mustered to undermine the public provision of old age security, the real financial danger is never mentioned. The only significant financial danger to Social Security and Medicare is the offshoring of American jobs and GDP. A country without a job base is without a payroll tax base. If the only jobs that the 21st century “world’s only superpower” economy can create are for waitresses, bartenders, and health care and social assistance (hospital orderlies and practical nurses), payroll tax revenues will be less than if the US still had 20 million workers and rising in well-paid manufacturing jobs instead of 11 million.

Regardless of Medicare’s financing, the death knell for the elderly was the legality of abortion. If the yet to be born are an insufferable burden, imagine the cost of the elderly. As far as the state is concerned, once you stop producing income and payroll tax revenues for the state, it is time for you to die. Washington would rather enact euthanasia than to pay back the $2+ trillion in the Social Security trust fund that Washington spent, leaving only non-marketable IOUs in the account.

Readers might think that Americans would never stand for death by injection for the elderly once the qualified age is reached. But why would they not? They have accepted millions of aborted babies, and Americans, including the elderly, have stood for Washington’s murder, maiming and displacement of millions of Muslim men, women, and children in 7 countries over the past 11 years and are yet to show any signs of remorse for their complicity in mass murder. Next month tens of millions of Americans will vote for Mitt Romney who believes Obama isn’t killing Muslims fast enough.

The new “Obamneycare” health legislation does have “death panels.” They are not called that, and they do not make formal decisions to terminate lives. But it comes to almost the same thing. Various panels, committees, or bureaucratic departments are empowered to make decisions about “effective care.” It has long been known that most health care costs are associated with the last year of life. Cost and age will be elements in determining standards of care. The greater the weight assigned to cost, the more care will be withheld. In effect, the “effective care” panel is a “death panel.”

Prior to the advent of the new “health care” system, Medicare and or hospitals are already shifting costs to Medicare patients. To avoid penalties and fraud allegations for “medically unnecessary hospitalizations,” rather than formally admit Medicare patients as inpatients, hospital administrators classify them as outpatients “under observation.”

According to a Brown University analysis of Medicare records in 2007, 2008, and 2009, the ratio of Medicare observation patients to those admitted as inpatients rose by 34 percent.

Being classified an outpatient under observation eliminates medicare coverages, especially for post-operative or post-accident rehabilitation care, leaving Medicare patients with bills in the tens of thousands of dollars (AARP Bulletin, October 2012).

Other costs are being shifted to doctors and to hospitals. Medicare pays fixed prices for each covered procedure or test, and these prices can be as low as half of the billed prices. During a period when costs incurred by providers of health care have been rising, Medicare has been cutting the amounts it pays providers.

As the payroll tax is commingled with general tax revenues, Social Security and Medicare payroll tax collections can be diverted to other purposes and, thus, are always subject to competing budgetary demands, such as the previous 11 years of gratuitous wars and the bailouts of “banks too big to fail,” or to deficit reduction demands as the government consistently overspends all revenue sources.

A national health service is the only way to control health costs and provide the population with health care coverage. A national health system takes the many levels of profits out of the system and also reams of compliance and liability costs. A national health system can coexist with a private system for those who can afford it or whose employers are sufficiently profitable to provide it.

As Jarad Diamond reveals in his book, Collapse: How Societies Choose to Fail or Succeed, societies fail, if not because of their moral bankruptcy, then because their rulers are only capable of short-term thinking. The future is beyond their interest. The US offshored its economy, because it worked short-term for corporate executives (rewarded with multi-million dollar performance bonuses), Wall Street (rewarded with profits), shareholders (rewarded with capital gains), and politicians (rewarded with corporate and Wall Street campaign contributions).

Incompetent free market economists confused jobs offshoring with free trade. They said the country would and was benefiting by giving its manufacturing, industrial, and tradable professional service jobs to China and India, that the US was ridding itself of “dirty fingernail jobs” and would soon be flush with highly paid high-tech jobs and highly paid financial service jobs.

None of these promises or predictions were true. Nowhere in the government’s jobs statistics are there any of these promised replacement jobs. The economists who provided cover for the destruction of the US economy were rewarded by the corporations with speaking fees, grants for their university departments, and newspaper columns paid for by corporate advertisers. Those few who told the truth were expelled from the corporate media that Bill and Hilary Clinton allowed to be monopolized (for campaign contributions, of course).

The future of old age security in the United States has been lost, because the job base has been given away to foreigners in order to maximize incomes in the short-run for the few decision-makers.

The misrepresentation of jobs offshoring as free trade has destroyed the prospects of cities, counties, and states along with those of unions and millions of Americans who once had a secure future. It has destroyed the prospects of class after class of university graduates burdened with student loans who expected to step into the jobs that have been offshored or filled by H-1B visa holders from abroad.

The American work force has been forsaken by the corporations and by Washington, and this means that Social Security and Medicare have also been forsaken.

As I predicted in the early years of this new century, “the United States will be a third world country in 20 years.” We might get there even sooner as Washington exhausts what little is left of American wealth in gratuitous wars in service to Israel and the US Military/Security Complex, in unaffordable military buildups in futile hopes of establishing hegemony over China and Russia, and in negative interest rates from the Federal Reserve’s effort to drive up the book value of debt instruments on the balance sheets of financial institutions.

In 1817 Percy Bysshe Shelly forecast America’s future:

“I met a traveler from an antique land
Who said: “Two vast and trunkless legs of stone
Stand in the desert. Near them, on the sand,
Half sunk, a shattered visage lies, whose frown,
And wrinkled lip and sneer of cold command,
Tell that its sculptor well those passions read,
Which yet survive, stampt on these lifeless things,
The hand that mockt them and the heart that fed:
On the pedestal these words appear:
‘My name is Ozymandias, king of kings:
Look on my works, ye Mighty, and despair!’
Nothing beside remains. Round the decay
Of that colossal wreck, boundless and bare
The lone and level sands stretch far away.”

Writing in the October 15 online CounterPunch, John V. Walsh, relying on charts prepared by economics professor Mark J. Perry at the University of Michigan and blogger John Hunter, concludes that it is a myth that US manufacturing is in decline.

Walsh says that the loss of US manufacturing jobs is due to automation, not to offshoring. Think about this for a moment. Perry’s graph on which Walsh relies shows the sharp drop in US manufacturing employment to be a 21st century experience. However, automation has been around for a long time. The notion that its effect on employment only showed up recently needs an explanation that is not provided. The steep drop in US manufacturing employment that began in 2000 does correspond with the date at which jobs offshoring began to bite hard.

Why does automation not also affect Chinese manufacturing, especially as most of the Chinese manufacturing technology came from the US as US corporations offshored their production for the US market? If Chinese manufacturing is not up to date with automation, like the US is assumed to be, how do the Chinese, even with cheap labor, undersell US automated factories? How did Chinese manufacturing employment increase in a mere four years by an amount equal to the total manufacturing employment in the US?

The US Bureau of Economic Analysis shows only 11.2 million full time US manufacturing jobs in 2010. The US Bureau of Labor Statistics shows 11.7 million US manufacturing jobs in 2011, down from 15.3 million in 2002.

In contrast, China, an industrial and manufacturing backwater for most of my life, had 112 million manufacturing jobs in 2006. In a mere four years (2002-2006), the increase in China’s manufacturing employment was as large as today’s total employment in US manufacturing. As long ago as 2006, China’s manufacturing employment was about 10 times the current US manufacturing employment. The Chinese population is about 4 times larger than the US population, but China’s manufacturing population is proportionately greater–10 times larger. Indeed, Chinese manufacturing employees almost equal the total number of employees in all occupations in the US (Manufacturing and Technology News, December 15, 2009).

Obviously, something is wrong with Walsh’s article or the graphs on which he relied.

America’s manufacturing prowess cannot be found in the statistical data. The US is primarily an exporter of Agricultural commodities. The US imports almost twice the amount of manufactured goods as it exports. Indeed, according to the US Census Bureau Statistical Abstract of the US http://www.census.gov/compendia/statab/2012/tables/12s1308.pdf US imports of manufactured goods are 5.5 times larger than US imports of crude oil and 4 times larger than all imports of mineral fuel. Yet, we hear about energy dependency, not manufacturing dependency.

As of 2010 the “superpower” US economy still had a trade surplus in airplanes and airplane parts and a small $6 billion surplus in scientific instruments, but that is about all.

In ADP equipment and office machinery, the US exported $22.2 billion in 2010 (latest information at time of writing), down from $44.6 billion in 2000. US imports in 2010 of ADP equipment and office machinery were $113.5 billion, or 5.1 times exports.

The US cannot even make its own clothes and shoes. In 2010 footwear imports are 28.7 times exports. Clothing imports are 24.6 times exports.

Electrical machinery exports were $77 billion; imports were $120 billion.

Exports of power generating machinery were $33 billion; imports were $42 billion.

Exports of television, VCRs were $21.5 billion; imports were $137 billion.

US exports of vehicles was $88 billion; imports were $179 billion.

US news reports of thousands upon thousands of discharged US workers never cite their replacement by automation. The news story is always that the plant is being closed and the jobs moved abroad. Any review of America’s former manufacturing centers verifies this. Boarded up plants and cities and towns in decline are the remains of America’s formerly world dominant manufacturing economy.

The loss of the US post-war trade surplus in manufacturing has left the US with a huge trade deficit. The charts on which Walsh relied left him unaware of the fact that China has a large trade surplus with the US, and the US has a large trade deficit not only with China but with the world.

The fact that the US has to import not only manufactured goods, but also high-technology products from China, an inconceivable outcome during the second half of the 20th century, is powerful testimony to the decline of the US as a manufacturing powerhouse.

It took some doing to obscure the facts and to present the US as a rival to China in manufacturing prowess. How did it happen?

The fault might lie in the way statistical information is collected and presented. Apple, for example, is a US corporation. It reports its worldwide earnings to the IRS. Its manufacturing is counted as US manufacturing as it is a US corporation. However, Apple doesn’t produce a single computer in the US. They are produced in China. The employment that Apple reports is in China. The Chinese are employed by an American company, but they are not Americans. The Chinese incomes that Apple provides do not support the American consumer market or provide the tax base for cities and states. The Chinese incomes do not provide ladders of upward mobility or careers for Americans.

The wages Apple pays are in China. The consumer incomes and GDP that it generates are in China. When Apple’s computers come back to America to be sold they come in as imports. But Apple’s manufacturing and employment are reported as the output and employment of an American company.

When statistics and the methods by which they are compiled were put into effect, countries did not offshore their production for their domestic markets. Foreign investments were made for selling abroad, not for selling in the home market. With the advent of offshoring, counting the employment and output of US firms that are producing abroad for their domestic market as an indication of the strength of US manufacturing is very misleading. Apple, for example, has done more to boost China’s GDP than to boost America’s GDP. This is true of every US corporation that offshores its production for US consumers.

In recent years the percentage of the work forces of large US corporations that is foreign sourced has risen rapidly. Some of the overseas hiring reflects traditional foreign investment in which a company builds abroad in order to sell abroad, but much of the hiring reflects offshored production for US markets.

The US has been able to survive the large trade deficits produced by jobs offshoring, because the US dollar is the world reserve currency. Being the world reserve currency, the US does not have to earn foreign currencies with exports in order to pay for its imports. However, as these trade deficits persist and the buildup of foreign holdings of dollar paper assets rises, there is a diminishing willingness of foreigners to trade real goods and services for financial assets denominated in a fiat currency whose value is diminishing with the ever-growing supply.

Thus, the basic notion of globalism–that a country’s corporations can produce goods and services in any country for home markets–is false.

Walsh is correct that China is not to blame for the decline in US manufacturing. Offshoring is to blame, and, thus, the blame lies with US corporations, policymakers, and the economists and financial media who shill for “globalism.” The decision was made to sacrifice the US economy to the short-term profits of the few. A country so poorly led can do nothing but decline.

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AWARD-WINNING INVESTIGATIVE REPORTERS DONALD BARTLETT AND JAMES STEELE EXPLAIN HOW AMERICA'S MIDDLE CLASS HAS BEEN DECIMATED OVER THE YEARS DUE TO POLICIES GOVERNING NOT ONLY TAXES BUT ALSO BANK REGULATIONS, TRADE DEFICITS, AND PENSION FUNDS.

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MONDAY, JULY 30, 2012 

Pulitzer-Winning Reporting Duo Don Barlett and James Steele on "The Betrayal of the American Dream" (Part 1) 

http://www.democracynow.org/2012/7/30/pulitzer_winning_reporting_duo_don_barlett

The famed award-winning investigative reporting team of Donald Barlett and James Steele have just published a new book, "The Betrayal of the American Dream," a followup to their landmark bestseller, "America: What Went Wrong?" As Republicans and Democrats continue disputing who should bear the brunt of the tax burden, Barlett and Steele argue that America’s middle class has been decimated over the years due to policies governing not only taxes but also bank regulations, trade deficits and pension funds. Their book chronicles how the American middle class has been systematically impoverished and its prospects thwarted in favor of a new ruling elite. Barlett and Steele have worked together for more than 40 years, sharing two Pulitzer Prizes and two National Magazine Awards. The duo join us for the hour to discuss the assault on the middle class, the great tax heist, deregulation, the outsourcing of U.S. jobs by companies like Boeing and Apple, and the end of retirement. "People are going to have to work forever, and yet what are those jobs going to be? What are they going to pay? And it also puts pressure then on people coming into the workforce. How are they going to get a job if people are having to work between 65 and 75 years old?," Steele says. The duo also discuss their past reporting on the 2002 Olympics in Salt Lake City, headed by the Republican presidential candidate, Mitt Romney, and note he headed "an Olympic committee where that entire operation raided the federal Treasury like no other Olympics in history." Click here to see part two of this interview. [Original includes rush transcript]

Guests:

James Steele, contributing editor at Vanity Fair. Steele and his reporting partner Donald Barlett have won virtually every major national journalism award, including two Pulitzer Prizes and two National Magazine Awards. Their latest book is The Betrayal of the American Dream.

Donald Barlett, contributing editor at Vanity Fair. Barlett and his reporting partner James Steele have won virtually every major national journalism award, including two Pulitzer Prizes and two National Magazine Awards. Their latest book is The Betrayal of the American Dream.

A HISTORY OF BANK OF AMERICA, HOW IT LOANED BILLIONS OF DOLLARS TO OUTFITS LIKE COUNTRYWIDE WHICH MADE LOANS TO HOME BUYERS WHO THEY KNEW COULD NOT REPAY THEM. BUT THE *REAL* FRAUD BEGAN WHEN THE BANK WENT TO A UNION AND SAID "HERE'S A BUNCH OF MORTGAGES WE WANT YOU TO BUY. THEY'RE AAA-RATED." IN THIS WAY, THE BANKERS WERE STEALING FROM THE POCKETS OF OLD PEOPLE AND RETIREES, WHO ARE NOW "LOOKING AT 30, 40, 50 PERCENT LOSSES." THE SETTLEMENTS WON BY NEW YORK AND NYC AMOUNT TO ONLY A FEW PENNIES ON THE DOLLAR.

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MARCH 22, 2012                                                                                                         Permalink

"Too Crooked to Fail": Matt Taibbi Says Bailouts, Fraud are the Secrets to Bank of America’s Success

In his new article, "Bank of America: Too Crooked to Fail," Rolling Stone reporter Matt Taibbi chronicles the remarkable history of the rise of Bank of America, an institution he says has defrauded "everyone from investors and insurers to homeowners and the unemployed." Taibbi describes how the Bush and Obama administrations have repeatedly propped up the financial institution, which received a $45 billion taxpayer bailout in 2008. Bank of America has also received billions in what could be described as shadow bailouts. The bank now owns more than 12 percent of the nation’s bank deposits and 17 percent of all home mortgages. Taibbi also recounts how fraudulent practices by Bank of America and other companies ravaged pension funds. "Most people think of [the mortgage crisis] as some airy abstraction — you know, bankers ripping off bankers," Taibbi says. "That’s not what it is. It’s bankers stealing from old ladies and retirees." [original includes rush transcript]

Guest:

Matt Taibbi, contributing editor for Rolling Stone. He is the author of five books, most recently, Griftopia: Bubble Machines, Vampire Squids, and the Long Con That Is Breaking America. His latest article in Rolling Stone is titled "Bank of America: Too Crooked to Fail."

MARCH 22, 2012                                                                                                          Permalink

Matt Taibbi on the Explosive Resignation of Goldman Sachs Executive Greg Smith

Financial reporter Matt Taibbi talks about Goldman Sach’s history of denigrating its own clients, as recently highlighted by former Goldman executive Greg Smith’s explosive resignation letter in the New York Times. Decrying what he called Goldman’s "toxic" culture, Smith said bosses at the firm called their clients "muppets" and strove to maximize profits at the expense of client interests, adding: "It makes me ill how callously people talk about ripping their clients off." Goldman Sachs is now reportedly scanning internal emails for the term "muppet" and other evidence that employees referred to clients in derogatory ways. "This gives ... people in the industry, institutional investors, tremendous pause: why would I want to do business with this company if this is their attitude towards me?" says Taibbi. "They’re thinking how much can they get out of me, and not how much money they can make for me." [original includes rush transcript]

Guest:

Matt Taibbi, contributing editor for Rolling Stone. He is the author of five books, most recently, Griftopia: Bubble Machines, Vampire Squids, and the Long Con That Is Breaking America. His latest article in Rolling Stone is titled "Bank of America: Too Crooked to Fail."