Now that Barack Obama has won re-election, the parallels … to him and FDR seem stronger than ever. In terms of government spending, George W. Bush’s second term can now be viewed as Herbert Hoover redux, and Obama’s additional ramping up of the Bush spending explosion eerily mimics FDR’s post-Hoover strategy. Perhaps the most breathtaking parallel between FDR’s and Obama’s Big Government agendas is this: In his first five years in office, FDR spent more than the previous 31 presidents combined; in eight years as president, Obama will have doubled the national debt accumulated by all 43 of his predecessors (unless, of course, Uncle Sam’s farcical finances blow up before then).
Economist, Dr. Mark Hendrickson via Obama: The Second FDR Rather Than the Second Carter | Forbes
Nobody really knows what will work to get the economy back on course. And nobody-in fact, no central bank anywhere on the planet-has the experience of successfully navigating a return home from the place in which we now find ourselves. No central bank-not, at least, the Federal Reserve-has ever been on this cruise before.
Dallas Federal Reserve President Richard Fisher in a recent talk before a Harvard Club audience
September is Preparedness Month. Here are 10 headlines from the past few days on diverse topics to help keep you focused on your prepping:
As you have probably read in the mainstream media or noticed in the left column of this website, the U.S. National Debt has now surpassed $16,000,000,000,000!! Yes, that’s 16 TRILLION dollars, 16 followed by 12 zeros!! The number itself is staggering but the collective “shrug” of the populace concerning this outrageous profligacy is appalling and indicative of two things. First, it demonstrates how utterly incapable a very sizable majority of the populace is with fundamental mathematical and economic principles. Second, it emblazons the entitlement mentality across the sky in astronomical proportions!
A million seconds is 13 days.
A billion seconds is 31 years.
A trillion seconds is 31,688 years.
My conversations with a wide variety of people concerning federal spending make it abundantly and infuriatingly clear how pathetically inept people are with rudimentary mathematical concepts such as (gasp!) multiplication and exponents. Far too many “citizens” and “voters” the seem to think that the primary difference between a million, billion and trillion is merely a spelling issue involving the letters ‘M’, ‘B’, and ‘T’. There is little comprehension; much less appreciation, for the Reality of the thousand times each is multiplied to change that one little letter! Most people can grasp the impact that winning ‘The Lottery’ (Definition: a self imposed tax operating as a long-odds gambling scheme disguised as a ‘game’ to the “math challenged with the odds of winning roughly equivalent to the odds of being struck by a meteor) would have on their lives. However, very few comprehend that 16 BILLION equals 1,000 winners of such a jackpot. Assuming a two week cycle to reach a 16 million plus jackpot it would take ~40 years to have 1,000 jackpot winners in any game and pay out 16 billion. For our hypothetical winners to collectively win 16 Trillion dollars the game would have to go on for an additional ~40,000 years. This is just one way of trying to conceive of the number representing our current national debt. These are numbers that the “average voter” cannot comprehend and therefore has little concern about. Continue reading
Note from Andrew: The complete Why Prep Series has now been consolidated HERE.
Today we present the third article in our series on why to prepare for disaster. In the first article, ‘Why Prep, The Introduction’ we asked and answered the following question:
Question: Why Prep…why become more self-reliant?
Answer: Because it’s the only reasonable and logical response to an unknown future and even a cursory study of history.
In the second article, ‘Why Prep, Historical and Current Examples’ we discussed examples of places and periods where preparedness could have made the difference between survival and suffering (or worse) for you and your family. In this third installment we’ll discuss stressors and triggers for potential The End Of The World As We Know It (TEOTWAWKI) situations.
Today we’re going to talk about stressor events and triggers. A stressor event is an occurrence that has the potential to change a system or society. Stressor events happen all the time and can vary dramatically in the amount of stress or influence they place on a system. Some examples of stressor events are election outcomes, legislation, trade wars, disease outbreaks, government spending programs, wars, acts of terror, social movements, development or loss of key infrastructure (like the internet you’re browsing), information releases (like the Watergate scandal) or changes to the physical environment (like drought or natural disasters). From a societal standpoint, stressors often manifest themselves in multiples and if significant enough disruption occurs…they can create a situation that cascades out of control. While it’s an overly simplified model think of these stressors from the last century:
This example from history led to TEOTWAWKI for much of the world from the mid 1930’s to the mid 1940’s and eventually ushered in the atomic age.
Andrew’s Note: Today we present another article by guest writer, Jay (Just Jay). Jay is a combat veteran, a knowledge manager by day and serial inventor by night. He’s had a number of interesting jobs through the years including collecting war trophies (like armored personnel carriers) in Iraq and a stint as a confidence course manager at a facility that used physical activity to build confidence in welfare recipients… to encourage them to work their way out of poverty. Yeah, that worked. Jay brings a sense of humor and a mug of coffee to everything he does including a discussion of the collapse of civilization and building a survival network. Enjoy.
Sometimes, as we develop and refine our preparedness plans, we can fall into the trap of isolationism and paranoia. While I’m a big fan of getting away from ‘them all’ (Paranoia=situational awareness), eschewing connections to others can be detrimental to your long-term survival. No, I’m not talking about using social media. I’m talking about the drinking habits of the Cahokia civilization about 900 years ago. Continue reading
As you can see from the Gross National Debt Counter to the left of this post (just under the Tags) the U.S. is rapidly approaching $16 Trillion in debt. That’s $16,000,000,000,000! If we take the National Debt and divide it by the population of the U.S. (311,591,917) then we have debt per capita of $51,349.21. That’s over a quarter million dollars owed for a family of five.
Note from Andrew: The complete Why Prep Series has now been consolidated HERE.
Last week in Why Prep, the Introduction we briefly discussed the fragility of the status quo and clarified that preparedness is not about getting ready for the ‘end of the world’… it’s about building the skills, resources and resilience to endure the transition periods following dramatic financial, environmental, societal or individual life changes. If you haven’t read the introduction yet, I recommend that you read it before continuing by clicking on the hyperlink near the start of this paragraph..
Today we’re going to take a look at some current and historical situations and events that are/were much more survivable (financial and otherwise) for those that took the time to prepare. For brevity’s sake I have chosen a small sampling of the historical examples available and have chosen not to include many areas of perpetual warfare (Cyprus, Rwanda, Sri Lanka, Palestine/Israel, Northern Ireland, etc.).
Note: The links included go to articles or preselected internet searches (to make results more timely) in case you’re interested in doing additional reading on that subject. For convenience, these examples are listed by continent although many of the events/situations spanned multiple continents. Continue reading
Note from Andrew: Today I’m pleased to introduce you to a new periodic column by my friend Roger Reality. Roger has been a key mentor in my life particularly with regard to critical thinking and analysis, and as you will see…he speaks with passion. Enjoy.
I have become increasingly irate at the insanely skewed tax code in this country. The more that I have researched the situation and discovered the facts the greater has become my ire with a “system” that is so patently unfair that it is almost difficult to believe!
Please take a close look at the facts as assembled and organized by the great folks at the nonpartisan Tax Foundation from the raw data available from the Internal Revenue Service (IRS).
For tax year 2006, the last year for which complete data is available, there were exactly 133,208,934 federal individual tax returns filed. That means the bottom 50% of filers constitute 66,604,467, roughly 67 million filers. So exactly how much of the federal government’s income tax revenue does the bottom 50%, those 67 MILLION “taxpayers”, put into the pot?? How about a mere 3.11%!! So does that sound “fair” to you? It does to a lot of people, particularly those in that 50% and those who pander to them. But before you decide, let’s look at some more numbers.
So a relative handful of taxpayers in each of four states paid more in taxes than the 67 MILLION did together! Continue reading
Governments are interested in unlimited spending. Bankers are interested in unlimited income. Understanding the first two sentences of this paragraph explains everything…What few of us have understood is that this has been the most profitable wealth creating mechanism in the history of the world.
My friend and investment guru, “L” suggested this interview with Robert Fitzwilson, founder of The Portola Group. It’s a short, very quick read on the development of the fractional reserve banking system and its relationship with government.
Fitzwilson goes on to say that because the “demands of debt are vastly outstripping the supply of labor and resources” the current system will eventually fail… and be replaced by a similar system. I guess the goal is to not be holding the financial ‘hot potato’ when the music stops.
Note: Tally Sticks were pieces of wood used as early currency. Click on the hyperlink above to read the entire article and learn more.
For most of American history, government was tiny. But since Lyndon Johnson’s Great Society and the promise that government would cure poverty, spending has gone up nonstop. This is not sustainable.
Progressives say: If you’re so worried about the deficit, raise taxes! But it’s a fantasy to imagine that taxing the rich will solve our deficit problem. If the IRS grabbed 100 percent of income over $1 million, the take would be just $616 billion. That’s only a third of this year’s deficit.
It’s the spending, stupid.
Even if you could balance the budget by taxing the rich, it wouldn’t be right. Progressives say it’s wrong for the rich to be “given” more money. But money earned belongs to those who earn it, not to government. Lower taxes are not a handout.
That’s the moral side of the matter. There’s a practical side, too. Taxes discourage wealth creation.
Even if you think — despite all evidence — that government spends money more usefully than people in the private sector, there is a limit to how much government can tax before people work less or flee.
Progressives claim a small increase in tax rates won’t stop the wealthy from producing. But some would stop. When the top marginal rate was 90 percent, actor Ronald Reagan worked just half the year. He said that woke him up to the damage that high taxes impose.
Higher taxes give rich people and politicians more reasons to collude. The rich make contributions, and politicians pay the rich back by giving them tax loopholes.
That’s a big loss to America. That money and creative energy spent on figuring out taxes might have gone to build new products, make music, cure cancer or … who knows what?
There’s an economics principle I learned in college called ‘Opportunity Cost.’ Simply put the opportunity cost of an economic activity is the next best use you would have put that money to if you had not spent your money on that activity. For example, if you spend $100 fixing your car that you would have rather spend going to a baseball game than the opportunity cost of fixing your car was going to the game.
Whenever I hear politicians talking about increasing taxes I think of the opportunity cost of all that money. Don’t get me wrong, I don’t mind paying my fair share but the more our government spending has gone out of control in relation to our tax and fee income the more I resent calls for more taxes…on anybody. That money spent on taxes to fund increased government spending could have been spent on education (improving someone’s ability to create, build, teach or earn), consumer products or vacations (improving our economy), invested (funding further growth) or convinced an older worker that she had enough saved to retire (opening up a job for someone currently out of work). The true cost of taxes can only be measured in the opportunity cost of lost benefits that tax money would have been spent on as John Stossel describes in the last sentence of the quote above.
In my small business the recent and proposed tax increases have kept me from hiring additional full time workers that we desperately need to cover the workload and I hear the same story over and over from my friends who are entrepreneurs.
In the article I quoted above Stossel added:
Amazingly, we could grow our way out of debt if Congress simply froze spending at today’s levels. That would balance the budget by 2017. If spending growth were limited to just 2 percent per year, the budget would balance by 2020!
Not a bad start…but how about we actually pass a budget, freeze spending for the remainder of this year and begin reducing the budget by 5% per year (5% of government spending not GDP) until we go from spending 49% of our GDP on the federal, state & local government down to a more manageable 20%. Can you imagine what our economy would be capable of if only 20% was siphoned off for essential (arguably) but non-productive government services…before we knew it our economy would grow to the extent that our 20% in real dollar terms would be as big or bigger than our economy stifling 49% of GDP spending is now. I know…it’s an election year and the devil’s in the details…but if we don’t start taking dramatic steps we’re going to have a federal government going the way of Stockton, CA or Detroit, MI…broke.