The U.S. Formula for Economic Collapse

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Branco cartoon via Comically Incorrect

For every person working in this country, there are 1.7 people receiving government benefits. Incomes are going down, taxes are going up, our debt in increasing and entitlements are unsustainable. Worse yet, no one is doing a thing about it.

CNS News reports that the U.S. Census Bureau found that 86,429,000 went to work in this country each day in 2012. Welfare and non-welfare recipients in the fourth quarter of 2011 – minus 3,212,000 veterans – came to 147,802,000 people on government benefits.

Of that number, 49,901,000 people received Social Security and 46,440,000 received Medicare; many of the people receiving those benefits paid into the system but at yesterday’s dollars. It’s a Pyramid Scheme and we all know how they end up.

As much as we might want to do all these things for people, how can 86,429,000 people pay for 147,802,000 non-veterans?

That is a 1.7 to 1 ratio. Our president has refused to do anything to make Social Security and Medicare sustainable for the future and has added entitlements such as ObamaCare while increasing welfare and food stamps.

Since taking office, President Obama’s solution has been mostly to raise taxes. Americans for Tax Reform tells us that he has proposed 442 total tax increases since ObamaCare became law.

The number of proposed tax increases per year is as follows:

  • 79 tax increases for FY 2010
  • 52 tax increases for FY 2011
  • 47 tax increases for FY 2012
  • 34 tax increases for FY 2013
  • 137 tax increases for FY 2014
  • 93 tax increases for FY 2015

He was at his best during the 2012 election year. Wonder why!

According to a Tax Foundation Study, the average American pays more for taxes (federal, state, local) than food, clothing, and shelter.

In 2014, Americans will pay $3 trillion in federal taxes and $1.5 trillion in state taxes for a total of $4.5 trillion or 30.2 percent of income.

In 1900, Americans paid only 5.9 percent of their income in taxes.

The demonized “greedy” rich pay a disproportionate amount in taxes. The top percent of wage earners paid 71% of federal taxes in 2010 but earned only 45% of all federal income. The bottom 50% earned 12% of income yet paid just 2% of federal income taxes.

The bottom 50% have no stake in federal spending and it helps make all this federal spending doable without too much backlash.

The CBO said federal revenues are expected to grow by about 9 percent this year so why are they taxing us to death? The expiration of tax breaks is one reason.

We aren’t using the money to pay down the debt. The CBO says that federal outlays will increase by 2.6 percent this year to 20.5 percent of the GDP.

Spending on Social Security, Medicare, Medicaid, the Children’s Health Insurance Program and subsidies for ObamaCare will rise from 9.7 percent of GDP in 2014 to 11.7 percent in 2024. Interest payments by the federal government will grow rapidly from 1.3 percent of GDP in 2014 to 3.3 percent in 2024.

Billionaire Donald Trump has warned us of financial ruin. Newsmax quoted him:

The United States is no longer a rich country. “When you’re not rich, you have to go out and borrow money. We’re borrowing from the Chinese and others. We’re up to $16 trillion in debt.”

Trump pointed out that the downgrade of U.S. debt is inevitable. “We are going up to $16 trillion [in debt] very soon, and it’s going to be a lot higher than that before he gets finished. When you have [debt] in the $21-$22 trillion, you are talking about a downgrade no matter how you cut it.”

Ballooning debt and a credit downgrade aren’t Trump’s only worries for this country. He says that the official unemployment rate of 8.2 percent “isn’t a real number” and that the real figure is closer to 15 percent to 16 percent. He even mentioned that some believe the unemployment rate to be as high as 21 percent.

“Right now, frankly, the country isn’t doing well,” Trump added, “Recession may be a nice word.”

Russia, China and other countries continually threaten to drop the dollar as the world’s exchange currency. It would deal a devastating blow to the U.S.

We’ve been warned.

Estimates quoted by The Weekly Standard say that income has dropped twice as much during the recovery as during the recession.

The Census Bureau has the average income in the U.S. falling by 4.4 percent during the recovery after having fallen by 1.8 percent during the recession.

Incomes fell on an average from $55,480 to $54,478 during the recession but they went from $54,478 to $52,098 during the recovery (from the end of 2009 to June 2013).

While all this is going on, Mr. Obama is raising the debt and deficit, increasing entitlements, and cutting almost nothing unless it’s defense, but that’s a whole other conversation.

Hey, the important thing is we’re spending more and more money on Obama’s cronies in the green energy industry to solve the problems arising from the unsettled science of global warming.

Never mind that the earth has barely warmed in more than 17 years. We shouldn’t let that get in the way by investigating further. As Al Gore says, if we don’t spend our wealth trying to change the weather, we’re immoral, unethical and despicable.

Al Gore has no background in science by the way. His degree is in business and finance which might explain how he’s managed to turn global warming into an enormous wealth portfolio for himself and his friends.

 

 

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