Thursday, April 28, 2016
The next government shutdown won’t be theoretical. It’ll be real.
Home values will plummet. Jobs will disappear. Credit will dry up. The dollar will crash. And the government cannot be depended upon to provide basic services like police and fire rescue.
We have an America of people who feel entitled and are dependent. When they first introduced welfare in the Great Depression, they called it relief.
People were embarrassed to take it. They didn’t even want to admit it. Some people actually paid the money back. They felt so guilty about having gotten money that they didn’t earn.
We don’t have that type of ethic, those type of rugged individuals, in America today.
“We’ve got a society that thinks that they’re owed a living.”
When this collapse comes, they’re going to be blaming somebody.
It’s going to be dangerous, especially in some of our cities. You see how they react to minor problems. You see how they celebrate when a team wins the Super Bowl or the World Series. You get rioting and looting.
Imagine what would happen if there was a genuine economic crisis.
Imagine what’s going to happen in our cities if the dollar collapses, and then we have shortages of goods – because the government imposes price controls.
Or what if there’s rolling blackouts because the government is rationing power. Because that’s what the government might do.
We had gas lines in the 1970s because the government didn’t allow the market to function – and they put in price controls. Well, do you think we’re any smarter now? No. We’re dumber! So we’re going to repeat those mistakes.
So imagine what’s going to happen in this country when there are shortages of basic goods, shortages of food, shortages of energy.
The national debt actually exceeds $100 trillion. Say, what you thought or were told twenty trillion. Really, wake up as things are soon to be a reality soon!
Do we do it honestly by admitting we’re broke and restructuring the debt? Meaning that people don’t get paid 100 cents on the dollar. That includes people who are expecting to get Social Security checks or government pensions. They’ll be told that they’re not going to get what they were promised – because the country is too broke to afford it.
Or are politicians going to try to paper over their inability to pay with a printing press?
Is the Federal Reserve going to monetize all this debt? Are they going to print all this money?
I believe that it’s going be the latter.
I think that that’s exactly what they’re going to do. They’ve laid a foundation for it. But they call it quantitative easing as if it’s a good thing. Well, I think we’re getting ready to have a lethal dose of quantitative easing.
Then I think we’re going to have a dollar crisis. The United States recently passed a very troubling milestone. The national debt now exceeds the value of the entire U.S. economy.
Any homeowner underwater on their mortgage knows what happens when you owe more than the value of your home, and none of the outcomes are good.
America has to borrow every month just to pay the $86-billion interest on its debt. More than 14% of all government revenue is now being sucked up by interest payments.
To keep up the government’s illusion of solvency, policymakers are quietly refinancing the debt to the tune of billions of dollars every week.
Imagine extending the mortgage on your house to 80 years.
Well, the Treasury’s secret rollover mission has extended the length of America’s debt to levels never witnessed before in history. Something I believe is unconstitutional.
We’re the world’s biggest debtor nation. We have the biggest trade deficits in the world, and we don’t promise to pay any gold for our dollars.
So this system is going to come to an end, and with it is going to be the artificially high standard of living that Americans have enjoyed.
Of course, our standard of living has declined over the decades. But it’s about to go over the edge of a cliff. What will you do without Social Security or a pension check? With a bankrupt government, what happens to entitlement programs like Social Security, Medicare, Medicaid, food stamps, unemployment benefits, Fannie and Freddie?
Gone? Well, those benefits, those entitlments, are the reason the country is bankrupt.
First of all, nobody is entitled to anything.
You’re not entitled to somebody else’s money. You’re entitled to what you earn yourself, but you’re not entitled to what somebody else earns.
Of course the government maintains the illusion that some of these entitlement programs are actually funded – the Society Security “trust fund.”
But there is no trust fund. There’s nothing there. Every dime that the government has ever collected in Social Security taxes has already been spent. They spent it going to the moon, fighting the war on poverty, fighting the Vietnam War, fighting the war on terror.
That money is gone.
Yes, the government has replaced it with an IOU to itself, but that’s not real. You can’t write yourself a check and then count your uncashed check as an asset.
If I buy a government bond, that’s an asset to me because it’s a liability to the government. But the government can’t own its own bond and claim it as an asset, because it’s also an offsetting liability.
So the trust funds have never been there.
The entitlement programs are run based on the same principles as a Ponzi scheme. That’s all it is.
You’re not entitled to the proceeds of a Ponzi scheme.
As long as the government can keep up the charade, it’s going to pretend that these are solvent programs. But eventually they are going to implode.
And ultimately, again, I think that in order to avoid the political embarrassment of having to admit that there’s no money – and that we can’t afford to make the payments – they’re just going to run the printing presses.
Meanwhile, a lot of people now – record numbers of people – are taking disability early from Social Security.
So the whole thing is broke.
In fact, right now the government is already paying out more in Social Security benefits than it collects in taxes. And that’s during this so-called recovery.
What’s going to happen in the next recession?
If you think this was a bad recovery and, of course, this was the weakest recovery ever – wait till you get a load of the next recession.
“If the recovery’s this bad, wait till you see what’s in store.”
So this whole thing is going to implode.
The government is trying to keep it going by pretending there’s no inflation. Cost-of-Living Adjustments (COLAs) didn’t go up at all. So last year people on Social Security – I think for the first time – didn’t get an increase in their benefits for inflation. Because the government claims there is none.
Well, that lie can only go on for so long.
But what they’re really doing by pretending there’s no inflation is cutting Social Security benefits. But they’re going to have to cut them a lot more.
In fact, they’re basically going to eliminate them completely – either honestly by not paying or means testing the program… or dishonestly by just printing so much money as to render the benefits worthless.
Now this is just about the government my friends. Just think what is going to happen when your not able to pay your state, city or county taxes? You think that police and firemen will work for free? Just a little bit to think about when SSI, Social Security and food stamps are taken away. Look at the Obama medical care. Have you paid your share this year? Of course you have, it was taken from your tax refund. You were warned and now get ready for the real thing in less time than you think.