TODAY...Mr. President Barack Hussein Obama said extending tax cuts for the wealthy (defined as households who make more than $250,000) was a "bad idea" because it costs too much and that extending the tax breaks for the wealthy represent "probably the worst way to stimulate the economy."
Obama also said: "We can have a further conversation about how Republicans want to spend an additional $700 billion to give an average of $100,000 to millionaires," he said, emphasizing his position that "there are a lot better ways of spending it."
Let’s go to the NUMBERS, the STATISTICS, the GRAVY, the FACTS, the CHEESE or whatever you want to call it….
….apparently our President doesn’t look at the numbers that His own Treasury Department releases…
AFTER THE (BUSH) CUTS WERE IMPLEMENTED in 2001 - Individual income taxes collected by the US government rose from $858 billion during fiscal year 2002 to $1.16 trillion during fiscal year 2007. This was an increase of +35.5% or +6.3% per year (source: Treasury Department).
....insert my joke here: a republican and 3 democrats walk into a bar....run up a nice tab....republican leaves right before the bill comes....who pays???
Answer: the republican still pays because the 3 democrats are living off his tax dollars.
Question: If all republicans moved out of the U.S., how would the democrats pay themselves??? seriously this is an honest question....just ponder it for a bit...tax and spend, tax and spend...then the tax dissapears how do you spend???
Friday, September 10, 2010
Thursday, September 9, 2010
Government Report Card....You decide the Grade
Let's rehash the last 2 years of the unbelievably ridiculous spending binge this government has gone on and the impact that it has had on the economy....I will even use ALL Government released Numbers....I just won't spin them quite as nicely as they seem to do….
Timeline:
- Recession officially starts in beginning/middle of 2008 after two consecutive Quarters of Negative GDP Growh.
....Caused by massive amounts of debt being taken on by the private sector...thank-you Mr. Greenspan for your ridiculously bubbleicious monetary policy....and of-course the every American should own their own home and that wonderful slice of the American dream...thank-you Barney Frank and Co.
- 2008....the credit markets start to freeze, stock-market plunges and massive lay-offs take place.
...Now enters Govt's record stimulus package of $814 Billion promoted by the President's most trusted economic advisors...Summers, Romer and Bernstein saying this stimulus would carry a 1.5X multiplier effect and stave off unemployment from rocketing above 8%....and without this massive package we could see unemployment go to 10%! Ouch….according to the stats we hit 10.2% even with this massive spending spree….glad they aren't giving me advice....1.5X mulitiplier effect my pretty little A**
- During this same time the Federal Reserve buys a Trillion bucks of Mortgage-Backed Securities and lowers interest rates all the way down to 0%....don't need to say much here
-Who can forget that Cash-for-Clunkers program and the 1st time Home-buyer tax credit.
....all great ideas to pull demand forward for a one-time injection....but, did anyone think about what would happen after? …that maybe, just maybe sales might screech to a halt or land-slide…no pun intended.
-Unemployment benefits extended to 99 weeks....began at 26 weeks….no comment here
GRAND TOTAL of all these programs costs = almost $3 Trillion in Federal Debt in 2 years time!
Return on that investment = 14.9 million unemployed...a housing market that can't stabilize...auto-sales running at 21% below last year....and a now staggering 9.6% unemployment rate! Oh, but I don’t want to short change this return on investment….so I can't forget the nice equity stake in Goverment Motors, and CitiGoverment Bank....and A.I.G overnment....all top-notch investments of course....that's why the Gov't OutBid all suitors....wait I forgot there weren't any private suitors!!! ....I wonder why?
Never in United States history has any Government been responsible for a larger percentage of total American's income. The Government now tops the scales at accounting for 30% of Americans Income. The highest prior levels were in the '91 recession when this level hit 27% and back in 1975 it peaked at 28%. The most incredible stat is the amount of Transfer payments the Gov't is now responsible for. (Transfer payments is the very kind lingo or PC term for Welfare payments) These have smashed all previous marks at current clip of 18.4% of all INCOME in the U.S.A.! If you live on a small block of 5 houses….that means 1 of those households is FULLY supported by the Government….or YOUR HARD-EARNED TAX DOLLARS!
I just want to make very clear, when the Government says we are headed in the right direction...I want to highlight that it certainly is a direction this great country has never headed in....but right direction? Well I'll leave that for you to decide. We have been told that the economy avoided the Great Depression 2 right? Well at least that's what we are told....I argue that when you look at these numbers we’ve seen a Controlled Depression….only staved off because of the highest Gov’t support of ALL-TIME…The government was only responsible for 16% of all Personal income during the Great Depression….And today this number is almost DOUBLE at 30%....no depression right?
The most difficult part to stomach is that as far as I can see, there is no exit package to wean off of this support…no incentives being taken seriously to hand-off to the private sector....just more talk about another bloody stimulus package and Gov't support...there has to be a time when the Gov’t support level reaches a point of no return…where if they were to reduce the support it would be devastating to the economy….I’m afraid we are going that route....it is defined as unsustainable.
Timeline:
- Recession officially starts in beginning/middle of 2008 after two consecutive Quarters of Negative GDP Growh.
....Caused by massive amounts of debt being taken on by the private sector...thank-you Mr. Greenspan for your ridiculously bubbleicious monetary policy....and of-course the every American should own their own home and that wonderful slice of the American dream...thank-you Barney Frank and Co.
- 2008....the credit markets start to freeze, stock-market plunges and massive lay-offs take place.
...Now enters Govt's record stimulus package of $814 Billion promoted by the President's most trusted economic advisors...Summers, Romer and Bernstein saying this stimulus would carry a 1.5X multiplier effect and stave off unemployment from rocketing above 8%....and without this massive package we could see unemployment go to 10%! Ouch….according to the stats we hit 10.2% even with this massive spending spree….glad they aren't giving me advice....1.5X mulitiplier effect my pretty little A**
- During this same time the Federal Reserve buys a Trillion bucks of Mortgage-Backed Securities and lowers interest rates all the way down to 0%....don't need to say much here
-Who can forget that Cash-for-Clunkers program and the 1st time Home-buyer tax credit.
....all great ideas to pull demand forward for a one-time injection....but, did anyone think about what would happen after? …that maybe, just maybe sales might screech to a halt or land-slide…no pun intended.
-Unemployment benefits extended to 99 weeks....began at 26 weeks….no comment here
GRAND TOTAL of all these programs costs = almost $3 Trillion in Federal Debt in 2 years time!
Return on that investment = 14.9 million unemployed...a housing market that can't stabilize...auto-sales running at 21% below last year....and a now staggering 9.6% unemployment rate! Oh, but I don’t want to short change this return on investment….so I can't forget the nice equity stake in Goverment Motors, and CitiGoverment Bank....and A.I.G overnment....all top-notch investments of course....that's why the Gov't OutBid all suitors....wait I forgot there weren't any private suitors!!! ....I wonder why?
Never in United States history has any Government been responsible for a larger percentage of total American's income. The Government now tops the scales at accounting for 30% of Americans Income. The highest prior levels were in the '91 recession when this level hit 27% and back in 1975 it peaked at 28%. The most incredible stat is the amount of Transfer payments the Gov't is now responsible for. (Transfer payments is the very kind lingo or PC term for Welfare payments) These have smashed all previous marks at current clip of 18.4% of all INCOME in the U.S.A.! If you live on a small block of 5 houses….that means 1 of those households is FULLY supported by the Government….or YOUR HARD-EARNED TAX DOLLARS!
I just want to make very clear, when the Government says we are headed in the right direction...I want to highlight that it certainly is a direction this great country has never headed in....but right direction? Well I'll leave that for you to decide. We have been told that the economy avoided the Great Depression 2 right? Well at least that's what we are told....I argue that when you look at these numbers we’ve seen a Controlled Depression….only staved off because of the highest Gov’t support of ALL-TIME…The government was only responsible for 16% of all Personal income during the Great Depression….And today this number is almost DOUBLE at 30%....no depression right?
The most difficult part to stomach is that as far as I can see, there is no exit package to wean off of this support…no incentives being taken seriously to hand-off to the private sector....just more talk about another bloody stimulus package and Gov't support...there has to be a time when the Gov’t support level reaches a point of no return…where if they were to reduce the support it would be devastating to the economy….I’m afraid we are going that route....it is defined as unsustainable.
Tuesday, September 7, 2010
The Good, the Bad and the Ugly of Consumer Debt....minus the Good
I talked a little bit about the American Consumer in my first blog post...so I thought I'd go into more detail about just how bad the average american is hurting right now...just got done reading the 40 page report titled "Household Debt and Credit" written by the Federal Reserve of New York and wanted to reiterate the STRUCTURAL shift we will continue to see...simply put, the consumer is SPENT!
The United States consumer has a whopping $11.7 Trillion worth of Total DEBT. This Debt level in '99 was $4.6 Trillion...so it's roughly tripled in 10 years....okay great well that $11.7 Trillion sure sounds like a lot, but how much is it really???
Let's put this number in perspective because it is tough to really comprehend. The entire U.S. GDP or all the money our Economy generated in 2009 was $14 Trillion. Sinking in a little yet? So theoretically, if you took almost all of everything we produced in a year you could pay this debt off.
Let's look at it another way. If you took the 4 largest banks in the United States...the banks who seemingly everybody gets their loans from....JP Morgan, Bank of America, Citigroup, & Wells Fargo....you add up EVERY single LOAN they have outstanding, it only equates to $3 Trillion or 25% of all debt outstanding. Now remember how the "credit crisis" wreaked havoc on our financial system...well sorry to say, but it really hasn't gone away. If 25%, or just 1 out of 4 Americans decided to walk away from their Debt...it could theoretically wipe out all these institutions...yes I know if you walked away from your house these banks theoretically have an asset against their liability, but what if they can't sell that asset? Then they have to mark that asset down, which in-turn causes them to raise capital, and a vicious circle ensues.
Currently, new mortgages are being originated at 50% what they were from 2003-2007. So another words, if these banks get the houses put on them due to the delinquent loans....these Banks have 50% the market to try and sell the house back into....can you say S...O...L???
Okay, now the truly frightening part. According to the Federal Reserve, 11.4% of ALL Debt is Delinquent. That equates to $1.3 Trillion...enough to wipe out Wells Fargo ($750 Billion in loans) and CITI ($650 billion in loans)...oh ya, I forget to mention the Seriously delinquent loans which are "defined" as over 90+ days late....that's another $1 Trillion which would wipe out B of A ($950 billion in loans).
The consumer simply ain't gonna lead us outta this slow-down....sorry, but the numbers don't lie!
The United States consumer has a whopping $11.7 Trillion worth of Total DEBT. This Debt level in '99 was $4.6 Trillion...so it's roughly tripled in 10 years....okay great well that $11.7 Trillion sure sounds like a lot, but how much is it really???
Let's put this number in perspective because it is tough to really comprehend. The entire U.S. GDP or all the money our Economy generated in 2009 was $14 Trillion. Sinking in a little yet? So theoretically, if you took almost all of everything we produced in a year you could pay this debt off.
Let's look at it another way. If you took the 4 largest banks in the United States...the banks who seemingly everybody gets their loans from....JP Morgan, Bank of America, Citigroup, & Wells Fargo....you add up EVERY single LOAN they have outstanding, it only equates to $3 Trillion or 25% of all debt outstanding. Now remember how the "credit crisis" wreaked havoc on our financial system...well sorry to say, but it really hasn't gone away. If 25%, or just 1 out of 4 Americans decided to walk away from their Debt...it could theoretically wipe out all these institutions...yes I know if you walked away from your house these banks theoretically have an asset against their liability, but what if they can't sell that asset? Then they have to mark that asset down, which in-turn causes them to raise capital, and a vicious circle ensues.
Currently, new mortgages are being originated at 50% what they were from 2003-2007. So another words, if these banks get the houses put on them due to the delinquent loans....these Banks have 50% the market to try and sell the house back into....can you say S...O...L???
Okay, now the truly frightening part. According to the Federal Reserve, 11.4% of ALL Debt is Delinquent. That equates to $1.3 Trillion...enough to wipe out Wells Fargo ($750 Billion in loans) and CITI ($650 billion in loans)...oh ya, I forget to mention the Seriously delinquent loans which are "defined" as over 90+ days late....that's another $1 Trillion which would wipe out B of A ($950 billion in loans).
The consumer simply ain't gonna lead us outta this slow-down....sorry, but the numbers don't lie!
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