Is This The Generation That Is Going To Financially Destroy America?

Tyler Durden's picture

Authored by Michael Snyder via The Economic Collapse blog,

Did you know that the federal government is going to spend more than 4 trillion dollars this year?  To put that into perspective, U.S. GDP for the entire year of 2017 is going to be somewhere between 18 and 19 trillion dollars.  So when you are talking about 4 trillion dollars you are talking about a huge chunk of our economy.  But of course the federal government doesn’t bring in 4 trillion dollars a year.  At the beginning of Barack Obama’s first term, we were 10.6 trillion dollars in debt, and now we are nearly 20 trillion dollars in debt.  That means that we have been adding more than a trillion dollars a year to the national debt.  When you break that down, that means that we have essentially been stealing more than a hundred million dollars from future generations of Americans every single hour of every single day to pay for our debt-fueled lifestyle.  Even Federal Reserve Chair Janet Yellen is warning that this is not sustainable, and yet we just keep on doing it.

Nobody can pretend that what we have today is the kind of limited federal government that our founders intended.  When federal spending accounts for more than 20 percent of GDP, it is hard to argue that we haven’t moved very far down the road toward socialism.  As I mentioned above, total federal spending will surpass 4 trillion dollars for the first time ever in 2017…

Both the Congressional Budget Office and the White House Office of Management and Budget project that federal spending will top $4 trillion for the first time in fiscal 2017, which began on Oct. 1, 2016 and will end on Sept. 30.

 

In its “Update to the Budget and Economic Outlook: 2017 to 2027” published last week, CBO projected that total federal spending in fiscal 2017 will hit $4,008,000,000,000.

I was recently asked how we are going to pay for a 4 trillion dollar government if we abolish the income tax like I am proposing.

Well, the truth is that we would have to dramatically reduce the size and scope of the federal government Our founders always intended for the individual state governments to be much stronger than they are right now, and it is time for us to restore that constitutional balance.

Something desperately needs to be done, because we have a federal government that is completely and totally out of control.  Even the Congressional Budget Office agrees that we are headed toward absolute disaster if our leaders in Washington don’t start displaying some fiscal responsibility…

A large and continuously growing federal debt would increase the chance of a fiscal crisis in the United States. Specifically, investors might become less willing to finance federal borrowing unless they were compensated with high returns. If so, interest rates on federal debt would rise abruptly, dramatically increasing the cost of government borrowing. That increase would reduce the market value of outstanding government securities, and investors could lose money. The resulting losses for mutual funds, pension funds, insurance companies, banks, and other holders of government debt might be large enough to cause some financial institutions to fail, creating a fiscal crisis. An additional result would be a higher cost for private-sector borrowing because uncertainty about the government’s responses could reduce confidence in the viability of private-sector enterprises.

 

It is impossible for anyone to accurately predict whether or when such a fiscal crisis might occur in the United States. In particular, the debt-to-GDP ratio has no identifiable tipping point to indicate that a crisis is likely or imminent. All else being equal, however, the larger a government’s debt, the greater the risk of a fiscal crisis.

 

The likelihood of such a crisis also depends on conditions in the economy. If investors expect continued growth, they are generally less concerned about the government’s debt burden. Conversely, substantial debt can reinforce more generalized concern about an economy. Thus, fiscal crises around the world often have begun during recessions and, in turn, have exacerbated them.

I get so frustrated with Republicans in Congress, because they are supposed to be watching out for us.

During the 2010 elections, one of the biggest mid-term landslides of all time gave Republicans control of the House of Representatives and they have had it ever since.  One of the pillars of the “Tea Party revolution” was fiscal responsibility, but the national debt has just continued to explode.

When the Republicans took control of the House in early 2011, we were about 14 trillion dollars in debt, and now we are nearly 20 trillion dollars in debt.

We have been betrayed, and those that have done this to us need to be held accountable.

Of course the big reason why our politicians never want to control spending is because they know what it will do to our economy.

During the Obama years, we spent more than 9 trillion dollars that we didn’t have.  If we could somehow go back and take 9 trillion dollars out of the economy over those 8 years, we would be in the worst depression in U.S. history right now.

Nobody in Washington wants to be responsible for plunging us into an economic depression, and so they just keep stealing from the future in order to prop things up in the short-term.

And a similar thing could be said about central bank intervention.  If the Federal Reserve and other global central banks had not pumped trillions upon trillions of dollars into the financial system over the past 8 years, we would be in the midst of a horrific economic nightmare right now.

But now all of that “hot money” has created epic financial bubbles all over the planet, and when they finally burst the ensuing crisis will be far, far worse than if they had never intervened in the first place.

Global central banks now have more than 20 trillion dollars in assets on their balance sheets and the world is more than 217 trillion dollars in debt.  The desperate measures that national governments and central banks have been taking have delayed the coming crisis, but they have also guaranteed that it will be far worse than it could have otherwise been.

The stage is set for the worst financial crisis in world history, and the only way that it can continue to be delayed is for our leaders to continue to inflate the bubbles larger and larger and larger.

But of course no bubble can last forever, and the bigger they become the harder they burst.

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D Nyle's picture

Too Late, they already did

Praetorian Guard's picture

You are absolutely correct. I have been reading Putrids books, and although I knew pretty much what was going on, these were a real eye opener. Me thinks we are fucked no matter what. I would guess we have maybe 5 years if not sooner, before everything rots to the ground...

 

Come join us at www.gunsgrubandgold.com

Praetorian Guard's picture

What other choice is there if capitalism DEMANDS year over year, and month over month growth, in an environment that has NO growth? You either artificially create growth through WAR or massive DISEASE. Either way, we would be fucked. This is not the beginning of the 20th century where people actually had compassion for their fellow, and tried to work with each other - job and food lines of the 30's show men in suits, and hat, and everyone standing inline peacefully.

 

Today, not so much, it has devolved into a me-ISM culture...

Praetorian Guard's picture

I don't believe in that voodoo bullshit. It is just another mechanism of the machine to control peoples thoughts, emotions, and deeds towards the betterment of the govt...

False_Profit's picture

Remember that all this voodoo (I agree) can be undone with debt free treasury issued currency...

END THE F:N FED ALREADY!

Sonny Brakes's picture

Are we going to assign blame for the Federal Reserve Act on just one generation?

J S Bach's picture

Amen, Sonny.  The day of doom bomb was lit 104 years ago by a (((tiny cabal))) of international usurers who saw in America the ripest sucker plums in all of their sordid history of nation wrecking.  Our ignorance, trust and selfishness has perpetuated what many learned people knew long ago to be the most dishonest and unConstitutional scam ever perpetrated upon this country.  This generation will merely be the one that suffers most when it all comes crumbling down.  Our job is to inform them exactly who and what is to blame.  Honest debt-free money must be the brick and mortar of any ensuing rebirth.

Chupacabra-322's picture

"Well the City of London set this whole thing up. JP Morgan was simply an agent for the Bank of England when he organized this meeting down in a... Jekyll Island Georgia and a, the Federal Reserve bank of New York... the stock is principally owned by five merchant banks in London chartered by the Bank of England. So you see every decision of the Federal Reserve Bank of New York a... comes out of London."
~ Quote Eustace Mullins.

bamawatson's picture

"you didn't build that"

-- b hussein homobama

MEFOBILLS's picture

If you see the name "City" or "Citi" in a bank name, that is insider code for city of london, which in turn is Rothschild/Bank of England corporations.

meditate_vigorously's picture

Not sure why Israel had to be created when the City State of City of London already existed.

Gardentoolnumber5's picture

Do you remember back when any who dared to call the Fed Res a central back were shouted down by other panelists and moderators combined? It wasn't that long ago they started openly calling the Fed a central bank; unmasking the great lie perpetrated on the American people.

Ham-bone's picture

The proportions that make up America's Service, Goods Producing, and Governmental employment have fundamentally changed since WWII.  The link below outlines that nearly all US job growth since 1939 has come from the service sector, with an assist from government jobs.  And as for the Goods producing sector, it currently employs the same number as it did in March of 1953 and nearly five million fewer than at it's peak in 1979.  The goods producing sector has been outnumbered by the government sector since 2009, another inglorious milestone for America.

 

https://econimica.blogspot.com/2017/04/us-jobsare-us-goods-producing-jobs.html

nmewn's picture

Hey! Here's an idea!

Lets use wages stolen from society as it goes about producing things for society and then add those stolen monies back in the form of government expenditures into the GDP formula!

Theoretically, we could confiscate all the wages of society through taxation and double GDP! ;-) 

D Nyle's picture

Thats Revolutionary /s

nmewn's picture

lol...they all do it.

Remember when (I think it was France or Belgium) was batting around the idea of adding black market activity to their GDP? That would be "criminal activity" to the snowflakes playing along at home...so naturally, it would have to be estimated.

Its like a central planners wet dream..."I can make the GDP be anything I want!"

Yes...but...when the "rampant crime numbers" don't add up you're kinda back to square one mathematically OR you can say your "law enforcement" sucks which is great for tourism...LMAO!

Ahhh well, back to the ole drawing board, they stay busy with this kind of BS ;-)

Stan522's picture

Is this another article about the gimmie-dat party.....?

rf80412's picture

Republicans have no objection to deficit spending in and of itself or do they have any objection to the scale of it.  They only ever complain about what it gets spent on.

nmewn's picture

I think .gov should seize everyone's assets and issue every citizen a million dollar check to fix it. Think about it, no one would have to work, a life of full leisure.

Pure nirvana ;-)

Cardinal Fang's picture

Exactly my thought here, the Republicans aren't concerned about govt spending on the economy... they just want control of the $4 Trillion themselves...

Sonny Brakes's picture

The more efficiencies that are found the less leakage there is and the less leakage there is the fewer jobs they'll be. Try it at home. Cut back on everything that you can think of that you're wasting. The money you save is money not spent into the economy. Money not spent into the economy causes the economy to contract.

brushhog's picture

Thats a misconception. The money I save will back investments in the future and insure that I pay my bills tomorrow should I run into a misfortune. Spending it all today is reckless and guarantees that my finances will eventually crash, I go bankrupt, and default on my obligations. Savings provides the backstop to growth. Spending it all up now creates the illusion of prosperity at the expense of tomorrow.

Sonny Brakes's picture

If I'm wrong then where are the new jobs that we were told would replace the old jobs? We're continually told that automation won't kill jobs because someone will have to fix the robots. When can we expect those jobs to show up?

I contend that your investments in the future aren't designed to ensure a prosperous future, but instead only buys you, and you alone, more time. Sooner or later it'll catch up to you too.

TuPhat's picture

Those jobs are all around you.  They just aren't called, 'robot fixers'.  They are called maintenance, Insrumentation and controls technicians, IT support, etc.  There are actually a lot of them.  You might say those jobs don't involve actual robots but that would mean that you are thinking of articficial intelligent robots.  There aren't any of those in existence as of yet.  It might be many years or even never before that happens.  Elon Musk will still be willing to sell you one today and you can possession someday.

Sonny Brakes's picture

Well please tell me how I can get one of them. I have an electromechanical technician's college diploma and there aren't any jobs like that where I live. Most jobs ask for an engineering degree.

mary mary's picture

I'm not in that industry, but everyone on the planet is just 4 people away from everyone else.  You might have to move.  I moved to where jobs were.  The USA was founded by people who moved to where jobs were.

mary mary's picture

Nobody ever said automation wouldn't kill jobs.  The only reason for robots is to do the same amount of work with fewer jobs.  Just like every other human invention, ever: the bow and arrow, the wheel, the plow, the internal combustion engine, the assembly line....  Every invention, ever, was purposed to reduce work, which translates immediately into killing jobs.

Sonny Brakes's picture

What do you say to the guy who gave up a lucrative movie career to work in a factory now that the factory's closed and his matinee idol good looks are also gone?

mary mary's picture

I don't know.  Maybe, well at least you have real-life experience now, and maybe that will make you a better actor, and don't forget, looks aren't everything, including in acting.

mary mary's picture

Come on!  Lots of successful actors are homely.  Too many to name.  Walter Matthau.  Peter Falk.  Here's a list of 25.

People love homely actors who can express the suffering we all experience and manage it some way, serving as an example.

http://www.boxofficescoop.com/ten-successful-actors-who-arent-very-attractive/

brushhog's picture

I'd say you should have saved money to see you through that personal transition.

Sonny Brakes's picture

I don't care about the job. I just want the money. Let's call it a royalty for having stood in place of the robot for all those years. Heck, there wouldn't even be a need for a robot if I hadn't been there doing the job in the first place. No one cares about the job, we work because we get money. I don't understand why you all focus on the wrong thing. We just want the money.

mary mary's picture

Well, not every invention.  The hula hoop is an invention, but not to reduce work.  Just to have fun.  I guess we could put the surfboard, the still, the bong, and the dildo in that class, too.

brushhog's picture

Nothing to do with the role of savings in the economy. Whether or not robots take our jobs, savings is a necessary element to growth/security in both your personal finance and macro-economic models.

Golden Showers's picture

That's what I'm talking about, Sonny. The economy is like old man pampers. I wear mine until they have absorbed all the piss and shit they can and almost, well, you never know what will happen... spill out the sides. Depending on how much I'm drinking. Also good for road trips. Say I can get two, three days out of one. I also use a lot less toilet paper. I have also stopped eating breakfast and lunch and instead stare at the sun for photosynthesis. It does a body.

It's time to stop wasting and stop using: put the brakes on the private sector. Kill job growth. Save the landfills for our future.

When the economy contracts it will form a diamond of the old lump of coal from Santa and we will all become rich again.

I keep a sun dial on my bicycle and a compass to save on watch batteries. Shit is pretty accurate. Good enough. I'm also working on a stillsuit prototype to correct the afformentioned inefficiencies of diapers. Goes pretty good with the foil reflector ovens I made out of shoeboxes to cook hot dogs with. Fuck, I'm saving some phat cash now. Prolly one hundred bucks a month. But it's a bonus when I'm homeless. No bills, no rent. Those are the salad days, my friend.

 

mary mary's picture

Economists confuse the economy with money. 

An economist would say that if you spent $1000 on a hooker, that expanded the economy, but if you stayed at home with your wife, that contracted the economy.

Economists do not make that mistake innocently.  They work for people who extract commissions every time money changes hands.  (And a larger commission at the moment when those people "create" the money out of thin air in the first place.)

mary mary's picture

You might try this, Sonny.  It's a version of the "broken window theory of economics".  Go to your local Police Station and throw rocks through the windows.  They will put you in jail.  While you are in jail you can make thousands of automobile license plates, and the State can sell them, and every sale helps the economy.

Mena Arkansas's picture

Social Security, Unemployment & Labor - $1.39T - 33%

Medicare & Health - $1.17T - 28%

Everything Else - $.71T - 17%

Military - $.63T - 15%

Interest on Debt - $.30T - 7%

https://www.nationalpriorities.org/analysis/2016/presidents-2017-budget-...

rejected's picture

The military is much, much higher than that. There is a lot of 'off book' crap. And the wars aren't included.

moorewasthebestbond's picture

Where can I find the two-ply flushable version of this article?

TuPhat's picture

Just print it out yourself.  I'm sure there's an app for that.

WillyGroper's picture

snyder is running for office.

he was on CTM the other nite.

never addressed how he's going to dissolve the corporation or frb.

too religion centric to address that big fat elephant in the room.

Golden Showers's picture

Are you talking about Schneider from one day at a time?

God damn that show was a hoot!

https://www.youtube.com/watch?v=IPqXOuuKMMs

And, I mean, who didn't want to get up in Vallerie Bertanelli's pants in the day? We can thank Bud Wiser for producing this amazing series. They don't make shit like this no mo.

GoldRulesPaperDrools's picture

Republicrats are Swamp Creatures just like the Demonrats; they just play the tune of `loyal opposition`.  They all need to be put on buses for a short ride to the quarry where they will all be summarily executed.

WolfgangCire's picture

it is a dirty trick by the criminal elite to blame our problems on the people and so called socialism. the source of our problems are the elite, the military complex, banks and corporations. this article = complete bullshit