federal debt

Government Gluttony & Debt: The Root Cause of ALL Economic Failures

Posted on by Helena

Economist jargon. The cause of inflation is threefold: demand-pull, cost-push, and inflation expectation.   Got it? Then there is this explanation: expanded welfare benefits and a labor shortage are driving inflation.   Then there is this whipit: Increasing costs are driving higher prices.   Or perhaps you prefer:   increasing money supply, devaluation and rising wages are the root cause of inflation. So who is right?

John Cochrane has a novel explanation – government debt causes prices to rise.

Why is the cause so important? Because the response to inflation is built on the theoretical ‘cause’.   Science loves this concept.   The cause of cancer was once determined to be mushrooms.   Or tomato sauce.   And the masses immediately tossed their mushrooms or tomato sauce diligently. Although neither foods caused cancer.

Jerome Powell claims to adhere to the economist jargon that wages and unemployment are the culprits that need to be abolished at all cost!   The means to reduce real wages is – inflation…   And unemployment is an algorithm – not a real number backed by – reality. Blithely, Powell raises the fed rate once again and promises pain and more hikes are on the horizon.

Powell answers to One Power – and that Power is NOT the US, it is Bank of International Settlements – BIS.   Powell is the Board Chair of not one but two BIS committees; Global Economy Meeting and Economic Consultative Committee. His term has been extended to January 31, 2026.

If we follow Cochranes explanation, then it becomes clear that ‘government’ causes inflation thru heady debt packages built on money laundering schematics.   Since 1960, the debt ceiling has been adjusted upward 78 times.   At some point that ceiling has absolutely no meaning whatsoever given that government simply raises it to meet their increased spending, ie debt.

As such, the only means of really reducing inflation would be to slash and reduce – government.   Everyone has their pet peeve agencies that seem wholly worthless, mine include;   Department of Education, Department of Commerce, Department of Housing, Department of State, Department of Interior…   But that is too simplistic.

For Example:   Within the Department of Interior there are twelve sub-agencies.   The Federal Consulting Group is one of the 12 sub-agencies. Their job definition states:   “specializes in organizational development, change, and strategy execution for federal organizations that are not doing their job”. Within this hierarchy, the Group has sub groups wherein every group requires 1-2 Project Managers.   The Coaching Manager is Fe Cheng who is native to China. With a degree in Accounting, her first job was with the DoD as a “Healthcare Specialist’…

Eliminating government agency girth would be a massive mission – albeit one that is a necessary good.   The percentage of our US labor working for the government is estimated to be about 15%.   It is an estimation because – no one knows!   No one even knows how many agencies operate within the government although ‘speculation’ puts the number at 438.

Then you have the NGO’s financed by the government, that are tax exempt.   Meaning our tax dollars are divvied among nongovernmental agencies based on their affiliations and power levied before they started their NGO.   Many of the NGO’s are stacked with executives and Board Members who were formerly government or CIA or FBI or NSA or….   Their funding comes from the government, but their employment status is deferred to ‘nongovernmental’.

The reasoning?   Because our government is incapable of actually governing, we need real nongovernmental agencies to govern and everyone gets PAID!   See how FUN it is?

According to the Department of State, these organizations need to be tax free, because it makes it easier for them to operate…

Some of the more prominent NGO’s that we pay for include: 1)   National Endowment for Democracy. Their job is coups.   2) Center for Strategic & International Studies. Their job is to conduct policy studies and strategic analyses of political, economic and security issues throughout the world.   In the vein of ‘transparency’ – the last time they reported their finances was in 2014.   3) There is The Cato Institute, The Carnegie Endowment, The Brookings Institute, Atlantic Council, Economic Policy Institute!  Etc…Etc…Etc…!

Our actual Government is a farcical Propaganda Headlamp.   They are bought in order to funnel more money to NGO’s which are running our country – into the GROUND!   While taxpayers funnel the money – and they pay no taxes… Brilliant!

Except, there is no longer enough money to go around – so Congress passes more and more pork to be refunneled to the money grubbers while demanding raises for the privilege.

IF we were to pass a flat tax – individuals 10% – ALL Charities, Corporations, and Foundations – 20% , the net effect would be that the NGO’s would slowly fade into obscurity.   In a previous blog I discussed the hugely negative impacts a Federal Sales Tax would have on the economy…

We are still left with Government Agency gluttony.

The first slices would be from the sub-agencies.   A hiring freeze for the next decade or two.   Elimination of ‘most’ committees.   And a spending freeze on any agency that is NOT part and parcel of the current Federal Government.   Including the CIA, among others.   We currently have 17 organizations tasked with ‘security’.

FYI: I am reminded of a man I knew who was taking 22 different meds daily.   When I looked up the meds, 3 were for blood pressure.   I asked why 3?   His response was indicative of our Federal Government:   ‘the doctor determined that the first 2 he prescribed were not working so he prescribed a third.’   Then why not drop the other 2 that were not working?   ‘Because the doctor said they might do something…’

17 Agencies ALL tasked with the exact same thing – all funded separately, all employing fools and idiots.

IF we abolished these agencies we would also no longer ‘require’ the false existence of The Federal Reserve – whose sole purpose is to prevent inflation, prevent a weakened dollar, prevent bank failures, prevent stagflation, recessions, and depressions.   NONE of which they have EVER ACCOMPLISHED!

Federal BUDGET & DEBT: Interest to Reach $8Trillion

Posted on by Helena

With the debt ceiling breached, once again, Biden declares another $2.5 billion for Ukraine military assistance.   Where is the money supposed to come from?   Why is the US government continuing the funding despite the taxpayers demanding, “NO!”.   The $1.7 trillion 4100 page Bill passed recently includes the litany of ‘earmarks’ to send money to pet projects of various porky pig pugnacious piglet palettes.   But these ‘pretty please give me money’ priorities have been the mainstay for decades. 

In 2022 –   The Oinker awards included:

*$500,000 to preserve an historic ski jump in New Hampshire.

*$2million for a National Atomic Museum

*$350million to restore south Florida’s ecosystem.

*$4million for the Sheep Experiment Station

*$765,000 to study lobster’s future

*$38 million to fund broadband projects that already have funding

Etc…Etc…Etc…  And The King Said To I – Balderdash!

Military Assistance classified as discretionary & mandatory is typically the top of the list.   Paying bribes, hiring mercenaries, and the cost of coups is a heady business.  Albeit a second set of books.   Leaders don’t come without their hand extended – so the US pays for their ‘insertions’ into power.   This would include;  Brazil’s Lula, Pakistan’s Sharif, Colombia’s President Petro, Iraq, Nepal, Philippines, Kenya, Algeria, Ireland, Italy, Slovenia, Sweden, and many more prime ministers and/or presidents who were replaced in 2022.

COUPS are NOT FREE.

BEFORE Ukraine, the US foreign aide totals ranged in the arena of $40 billion with Afghanistan, Israel and Jordan topping the list.   Aide to Ukraine is now pushing the envelop nearing $200 billion, and Congress just keeps finding funds.   Not surprising, the democrats are waking up to this wokeness and stating the obvious,  “we need more tax revenue”…!

Who to Tax?   How to Tax?

The proposal of a flat federal sales tax was considered.   The tax would eliminate the IRS and instead shift government funding to a flat 30% on every consumable.   In 2021, GDP was measured as $23.3 trillion, but that includes exports.   If we use Retail Sales as the measurement for the 30% – that would allocate roughly $2.1Trillion to the feds.   The baseline would be our present inflationary cost – plus 30%.   Example:   In 2017 the average price for a carton of eggs was .85.   Today a carton of eggs at Walmart sells for $5.20.   Tack an additional 30% on the carton and it now costs $6.76.  

By comparison, a flat tax on income at the rate of 10% with zero deductions would generate $1.5 trillion for the government.   Other tax revenue generates roughly $700billion.   In either instance based on a $5.8 Trillion Biden Budget for 2023 – NEITHER consideration will do anything for a Balanced Budget. 

However, the largess difference between a flat income tax and the Retail Sales tax is the cost to the middle and lower classes.   A 30% Sales Tax would increase poverty, welfare, health crises, and destroy the housing market as homelessness would exponentiate exponentially!  Taxing the poor and middle class into oblivion.

Another differential caveat bears mention:   Sales taxes are subject to incremental increases – a flat income tax would not be.   The Feds could simply ‘approve’ an increase and suddenly 30% is 35% or 50%.   EXAMPLE:   California’s sales & use tax was 6% in 2000 – today it is 10.25% an increase of over 70%.

SCAM ALERT!

The IRS budget is $14.1 billion.   This is NOT about helping American citizens – it is about an infinite Federal Budget without a debt ceiling ever coming into play.   Because we would thus be tasked with paying off the inflated interest and principle that has been leveraged by a corrupt government to destroy American citizens wealth.  WHILE – redistributing that wealth to – Big Government.

A continuation of inflation would be incentivized by a Sales Tax because the value of goods would rise continuously and as those rises hit 8% a year, that would create more money in the government coffers – and LESS for The Peasants as costs become ‘unsustainable’!

This concept tax was proposed by Kevin McCarthy with the approval of Republican’s & Rhino’s.  It was certainly not ‘written’ by McCarthy, it is far beyond his acumen and likely required some funnymen in black.   To add insult to injury, Rep Buddy Carter argues, “If you don’t want to pay the tax don’t buy it, it’s as simple as that.”    But then Buddy Carter’s net worth is over $66.5 million – so the price of a gallon of milk or loaf of bread doesn’t phase him in the slightest!

The Problem with giving a bunch of lawyers in Congress who have no understanding of finance, numbers, or accounting, the ability to push financial reforms is like having your barber represent you at  a murder trial…  

It has been determined that the CoVid “pandemic” cost the globe $16 trillion, the brunt born by the US.   But the continued debt is the true death march with Interest payments consuming tax revenues.   Interest payments alone are expected to rise to over $8 trillion within the next decade.

The ONLY means to pull down the Budget is to eliminate entire agencies.  According to USA.gov there are 137 independent agencies within the Federal government with 268 units within the Cabinet.   As of 2016 the Federal Register claimed there were 440 agencies and sub-agencies in the Federal Government.   However, there is NO LIST.  The Government does not account for the agencies and has no idea the actual number…   Accounting is NOT their strong point.

Draining the Swamp would entail the elimination of the vast majority of these gluttonous overrides!  Or simply – starting over.   While the likes of Robert Reich thinks that debt is meaningless, it bears noting he is an attorney, NOT a financial expert or economist.   Somehow individual debt is considered a drag on the economy, but oddly government is no big deal…   The Legal Strategy?   SPEND MORE!

US DEBT: The Good, The Bad, the Ugly – AND The Solution

Posted on by Helena

On the face of it, Dave Ramsey is the go-to king for helping people pull out of their personal debt crisis.   Typically it involves restructuring the current debt, forgiveness of some of the debt, and the creation of a revised budget.

But that type of approach is not as effective when it comes to the debt of a country, and what has now become the debt of the globe. They are not comparable as apples to apples.   In the Ramsey scenario – the typical analysis reveals the person/household is in a negative to assets and income. The US debt is typically compared to GDP, which is loosely defined as income – not assets. The GDP of the US currently stands at just over $22 trillion.

Global debt is estimated to be between $250-335 trillion.   Is it even possible to ever pay that amount of money, to be debt free, or even close? Is it even necessary?

The short answer – NO and NO.

The World Bank, the IMF, the UN, always suggest that wealthier countries simply forgive the debt of the poorer countries, particularly in Africa, so that they can borrow more money that they will never be able to repay.   As a result, those poor countries sell their assets whether it is land or the resources on/within the land.   Until they have nothing left to sell – and the creditor takes control of the country.   Which is similar to the micro-lending Ponzi schematic.

The IMF advocates for “voluntary sovereign debt buybacks’.   And cites corporations as a model example.  That too is a blah economics understanding.

Assuming the number that is dangled in the atmosphere is correct and the US debt is roughly $26 trillion, the US would have to sell something, given the available cash on hand is inadequate.   In order to sell anything, the US would need a buyer with cash on hand, or at least a sufficient portion to give the deal credence.   So you have to sweeten the deal.  How does that work?  Ask a businessman/woman.

Only 30% of the debt is foreign owned – $7.8 trillion. Of the foreign holdings, the two largest holders are: China which owns about $1 trillion and Japan $1.3 trillion.   The remainder is disproportionately lumped into retirement obligations including Social Security which is $2.9 trillion, military pensions, government pensions and Medicare which account for an additional $2.1 trillion. Much of these funds are pushed into the General Fund so that they can be disbursed for emergency use and invested for liquid gains. Which is why these moneys are not sitting in a proverbial bank account earning zero percent interest and doing nothing.  HELLO!

While there is no point in buying back treasuries that are not linked to retirement, if we simply wanted to buy back foreign debt that would only amount to selling assets worth $8 trillion (rounded).

What does the federal government own?

The government assets are divided between those above ground and those below ground. Above ground includes:   land, buildings, levees, dams and hydroelectric facilities. Nothing that we ‘want’ to sell. Below Ground includes:   mineral and oil rights and leaseholds.   The asset that would generate the most cash is oil and gas resources valued at roughly $128 trillion.

That means if we sold reserves valued at $8 trillion, we would only be shorting our asset reserve by 6%. Both China and Japan are oil poor. In 2019, Japans oil imports came predominantly from Saudi Arabia and UAE. The value of those imports to Japan totaled $130 billion in 2019.   The value of oil usage annually in China is roughly $150 billion.   That would give them a breakeven on the purchase of US reserves/debt exchange of roughly 8 years.

The internal debt for pensions and such is a constant flowchart.   In other words, an expanding workforce creates the wealth to support the annual debt load.   If you contract the workforce and their paycheck volume, then Houston – you have a problem.

Everything in this world is based on one core premise:   Expansion – more people. It is the reasoning behind the mass migration of refugee illegal immigrants into Europe.   Their expansion had become a negative growth with birth rates plummeting given abortion rates rising exponentially.   People wanted more money to hoard on themselves – and children sopped up that hoarding.   So birth rates dropped to such an extreme that the very core basis of continuation as an economy began a backpedal that gained speed!

Soros convinced Merkel that allowing massive migration would help that economic curve as these immigrants contributed to society and were productive.   Obviously, that was a lie, and as soon as the unchecked immigration flooded Germany, Soros declared that Merkel had made a ‘fatal mistake’.

Merkel’s legacy will be rife with ugly regard.

And so, the Shadow Ingrates discussed how they could destroy the global economy in the shortest span of time given all of Europe was already precariously in a recession.   And they devised a pandemic.

Locking down the global economy, this was their final arrow.   Their quiver was thus empty.   They believed they had won.   The EU caved, the respective governments wholly willing to support a further indebted destruction.

But there was – One Man.   President Trump.   And despite all our allies foaming against the US, President Trump, America, and The People, our President defied what NO OTHER government dared.

Make America Great is about realigning our economy with the people.   It is about NOT giving up.   It is about curbing our deficits so as to curb our debt.   And I believe, if we were left to our own resources under a Trump presidency – we would be An Economical Power House working For The People – instead of For the Corporate Cabal/Mafia.  

And THAT is what they fear – the most!