In the month of March, the U.S. government spent more than eight times its monthly tax receipts, including money spent for maturing U.S. treasuries.
The U.S. treasury cleared $128.18 billion in tax receipts during the month of March, but paid out a total of $1.05 trillion, which included $49.8 billion in Social Security benefits, $47.4 billion in Medicare benefits, $22.58 billion in Medicaid benefits and $37.9 billion in defense spending. The real financial beating springs from maturing U.S. treasuries where the U.S. paid out $705.3 billion.
In order for the U.S. government to stay afloat with only $128.18 billion in tax receipts, it had to spend $72.5 billion from the balance of cash on hand. This closed the month at $118.1 billion, including the sales of $18 billion worth of TARP assets. Most importantly, the U.S. treasury had to sell $786.5 billion in new treasury bonds, which it will be required to mature at a still higher in the future in order to keep the shirt of its’ back. Surely this is the greatest Ponzi scheme ever executed on the world as the government endlessly seeks to outrun the debt that it creates. The nation is able to fund government expenditures and pay off maturing debt instruments by issuing new and larger amounts of debt. Up to now the Federal Reserve interest has made this debacle survivable.
At this time the interest payments on the United States national debt is the government’s largest monthly expenditure. The world is waking up to the fact that the U.S. government is truly insolvent and that the benefits of propping up the U.S. dollar will no longer be worth the expense to foreign creditors. The U.S. government Ponzi scheme is being exposed for the world to see.
China is becoming more reluctant to continue buying U.S. treasuries as it positions the yuan to be the world’s new reserve currency. Japan needs to raise $300 billion to rebuild parts of their country that were destroyed by the earthquake, tsunami, and nuclear disaster. They will be unable to invest handily in the U.S. or may opt to invest outright in China as money is available. The U.S. desperately needs Japan and the Arab world to roll over national treasuries into larger amounts of new ones. With Arab revolutions taking place across major Saudi states and the U.S. occupying Libya for no good reason at all, the nation is likely see a global disdain for its previously valued treasures that it must sell to cope with the runaway spending and deficits of Congress.
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Did you know that a proposed amendment to U.S. surveillance law leaves even lawmakers guessing on privacy implications for internet users? Now why would this be? Invasion of privacy in the United States has been ongoing since Bush and 911. With this amendment, many fear the unlimited reach of the FBI where email and internet surfing are concerned. The royal question is being credited against the Obama administration over the responsibility of the lawmakers in the Senate and House. Last I heard, the Senate and House had little to do with the President. Since the Senate and House have more to say with the construction and final wording of this amendment, clearly a visit to your local lawmakers is in order if you care about such things.
Anyone that has been keeping track of digital privacy and security knows that A.T.&T. is already working in collaboration with the federal government to store and rake through all the data that comes into and leaves the States. Suddenly, fear is rampant about the FBI having free access to all that data without a court order, judge approval or oversight. Suspicion or wrongdoing doesn’t enter the picture, just being relevant to an intelligence or terrorism investigation. This amounts to a free season on personal information, as well as all that spam that you get in your email daily. In effect, little has changed in technical terms.
The FBI has already engaged in widespread and serious misuse of its privilege so far. They illegally collect data from both Americans and foreigners, based on a report by the Justice Department’s inspector general that was concluded in 2007. FBI officials issued 192,499 national security letter requests from 2003 to 2006.
The FBI and other internal agencies like the NSA, have come to rely on free access to your personal email and the like. They have free access to information from telephone providers, banks, credit bureau and business, already holding wide powers where personal information is concerned.
The law already requires Internet service providers to produce the records. The want the power to get whatever details they need from internet sources without litigation or preview by judges. A few lawmakers like Patrick Leahy of Vermont have suddenly become concerned about privacy issues and civil liberties, as if these have not already been violated. It’s all about having the necessary tools to “keep Americans safe.”
If you are wondering why anyone should be concerned, all you to do is to examine the vagueness that “law” is written with. The interpretation is often left to the user or implementing agency to decide. Proponents of this amendment say that it is merely clarifying what Congress intended back in 1993. Oh really?
Since a 2008 justice department opinion, some providers have refused access to internet records and web surfing histories. What do you think? If you aren’t watching what you say in your emails and where you browse, you might think twice.
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We live in exciting times. The stock market is up 100 points… or who knows what goodness corporate investors are blessed with today. Wall Street mavens and financial wizards are feeling giddy with delight. They want good times so badly that they are already deluding themselves that the recession is over and that runaway prosperity is in the wings. It’s time to start making money all over again the way “we” used to. After all, nothing has changed beyond massive cast infusions to hold up the system. Multitudes of banks, corporate mongers, financial wizards and wishful investors are convinced that we are about to relive heady good times without an ounce of reform or correction in the system that jack built. They may be right.
The longer reform takes, the less likely reform is to happen, at least if financial and corporate simple simons have their way. It’s time to stop pretending that the Wall Street economy is the same as the real economy that everyone lives in. Wall Street hasn’t met with total and final meltdown because the Wall Street economy has been rescued. They have lived to see another day because of government bailout, presumably at taxpayer expense. Yep, Wall Street seems to be showing signs of life along with the giddiness that goes along with having a future without any reform or consequences. A real party is set to ensue at the expense of all. The real economy that the rest of America lives is another matter altogether.
What is truly important where the economy is concerned is whether real Americans can find work. If Americans can’t find work or create work that they use to survive, the country is in trouble, pure and simple. 539,000 Americans lost their jobs last month after many months of ongoing successive unemployment disaster. Since the recession officially began in December 2007, 5.7 million jobs have been given the write off by government employment statistics. The reality is actually even worse.
Still, there has been plenty of impressive talk about the new world of reform that America will enjoy, but little has been done beyond the talk. Regulatory reform is dying on the government vine of important projects.
Geithner has quipped, “We are being dramatically more aggressive than I believe any serious government has ever been, certainly in generations, in responding to financial crises. So if you look at the scale of action, look at the quality of initiative we’ve taken, I think it dramatically exceeds even the best-managed crises we’ve seen before.” Ple-e-ze. The system continues just as before, but without any reform or any real ideas for reform that hold any substance. The Masters of the Economy can’t seem to wrap their minds around the banking deluge that has brought us to our knees, much less figure out a way to reform it. They just don’t want to rock the boat of monetary largess. Geithner told Congress that fixing the system would be accomplished not by “modest repairs”, but by “new rules of the game.” I agree that what is playing out between government, corporate bankers and central bankers is a game. That much is obvious.
People are watching. Are you? ~ E. Manning
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“Greed is good. Greed is right. Greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit.” Michael Douglas was privileged to echo those memorable words in a timeless Hollywood movie that resounds the philosophy of much of the financial world without apology. Those words now cut into the souls of mainstream Americans.
The corollary of banking greed dictates that financial greed is opportunity and entitlement magnified by lack of authority. Wall Street has reveled in this truth for decades and the results of this unpleasant law have come to roost. AIG, once held to be the bastion of risk management, has proved the effect of this corollary as they continue to mandate runaway bonuses for what amounts to the summary destruction of everything that America holds dear where money is concerned. Americans are taking their authority back.
Government is apparently into the payoff. We now have a mystery amendment in the recent stimulus package. Senate Banking Committee Chairman Chris Dodd added a compensation restriction to the bill. The Dodd Amendment provides an exception for contractually obligated bonuses agreed on before Feb. 11, 2009.
The Senate Chairman has egg on his face. He claims that the original amendment did not include that exemption and he denied inserting the provision. “I can’t point a finger at someone who was responsible for putting those dates in. I can tell you this much, when my language left the senate, it did not include it. When it came back, it did.” One of AIG’s key offices resides in Connecticut. Connecticut Senator Dodd was AIG’s largest single recipient of campaign donations during the 2008 election year totaling more than $100K. Heck, it’s just more convoluted behind-the-scenes favoritism and payola in the highest ranks of federal government.
The good news is that this writer does not need to rail about the entitlement attitude of AIG, Wall Street or Senator Dodd. The good people of America have this issue firmly in hand. The uproar of the public has brought threat of injury and permanent demise to what used to be seen as harmless financial types. America isn’t waiting on Senators and Representatives to utter their glib proclamations about how they are preparing to tax the bonuses to get your money back. How is that for ‘in the box’ thinking? We are now taxing our own money back?
Heck, America isn’t waiting on government reaction or platitudes. Americans are ready to take this matter into their own hands. A few choice folks are willing to go into AIG gun’s-a-blazing to stop the abuse of trust in a company that is now 80 per cent owned by the American taxpayer, while millions sit idled at home with recent job losses. AIG employees now fear to go to work. Extra guards are posted at the door. Chaos is in the ranks as the corrupt corporation structure reels at the public reaction. Americans are prepared to take matters into their own hands. The federal government isn’t prepared for a lynching. Congress is exploring the possibilities in hearings. ~ E. Manning
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A sarcastic Charles Schumer impales the American intelligence with some condesending irreverence. Houston, economy or no economy, digital or not, we have an attitude problem in Congress. Americans don’t need this kind of ‘help.’
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“By now, it’s clear to everyone that we have inherited an economic crisis as deep and dire as any since the days of the Great Depression.”
—————————– President Barack Obama
Obama has painted a bleak picture of the future of the economy without stimulus, predicting an additional 5 million jobs lost and unemployment approaching 10 percent.
The Media is spotlighting a irreversible recession per the words of President Obama. President Obama warned today that the United States is facing a recession so deep that, without action, it could turn into one that “we may not be able to reverse.” The idea of a recession cycle that will “linger for years” is nothing new to a few of us (certainly not at Digital Economy), but now President Obama is highlighting this idea in the effort to urge Congress to pass his economic recovery act.
“What Americans expect from Washington is action that matches the urgency they feel in their daily lives — action that’s swift, bold and wise enough for us to climb out of this crisis,” Obama added. What Americans actually expect is support that could actually help with the economic crisis for the average American, like job stimulus, not simply free giveaways and government bailout.
President Obama is selling his plan as “more than a prescription for short-term spending — it’s a strategy for America’s long-term growth and opportunity in areas such as renewable energy, health care and education,… it’s a strategy that will be implemented with unprecedented transparency and accountability, so Americans know where their tax dollars are going and how they are being spent.”
A recession is not usually seen as an ‘end time event’ or irreversible, but that is how politics is painting the scenario as panic sets in. The nation faces economic collapse, but the current ‘stimulus’ is simply the beginning of a list of government action that will be required to keep the economy from collapse. The real problem remains the toxic banking derivatives that threaten the banking system. There is no resolution to that problem while the rest of the economy sinks into the mire. Meanwhile the President of the United States publicly entertains the idea the our recession is possibly irreversible, which accurately put, places the United States at an untimely demise. What do you think? ~ E. Manning
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As Digital Economy has previously noted, the heralded stimulus plan is mostly a safety net for government services, government jobs and the disadvantaged, including the recently unemployed. What is the current ‘$825 billion’ stimulus plan going to do for the recent numbers of jobless Americans?
• $43 billion for increased unemployment benefits. Weekly benefits will go up by $25 a week and the amount of time the unemployed may claim them will be extended by at least 20 weeks, plus another 13 weeks for those in high-unemployment states.
• $39 billion for expanded health care benefits for the unemployed. The federal government will reimburse states to extend Medicaid coverage for the jobless through Dec. 31, 2010. For those who want to keep their old employer’s insurance plan, the government will subsidize their Cobra payments – paying 65% up to 12 months. Cobra eligibility will be extended for some groups of workers.
• $20 billion to increase food stamp payments by 13%. For a family of four, that means an average increase of $79 a month – from $588 now to $667 if the current legislation passes.
The largest opportunity for economic growth, especially for small business and the individual in these times, remains on the internet segment of the digital economy. In other words, Americans need to get creative and found a personal small business based on solid business principles while employing creativity. I am not referring to internet hype or ‘affiliate business’ that has become the rage and plague of the internet. The fact remains that you cannot depend on Wall Street or Main Street Corporate America for your livelihood. Counter to the intuition of business activity and the economy, the internet remains a bright spot for many, Amazon.com among them. ~ E. Manning
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