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As we enter these turbulent economic times, remember why we are where we are. It may seem easy to just put the blame on the Housing bubble, it may be easier still to call it debt bubble, but it really represents the degradation of the of America, its collapse and its inevitable demise. I ask you why was it that the US sought desparatelly to become debt free, independent of foreigners and free in the full sense of the word? WHY? Well, it is common sense, If you can produce goods than you own the market, if you are not in debt, you are not at the mercy of foreign powers for anything. Sadly the tradition of Hamilton, the American System and the protective tariff have died. Along with it went jobs, technology and freedom. China's rise is a copy of the system we mock and ignore, even though it is what built our economy. Great Britain used it, but after 50 years of dumping it, by WW I, they were dependent of goods from other countries and by WWII they almost died from German wolf packs. Germany rose form a newly unified coutry to a massive power, under Bismark. Japan grew under aprotective system form a defeated, nuked country to a industrial powerhouse. The same was true of the US, which is now on the decline. Accordingly, in 2017, the US will be total dependent on the world for its goods, and subsequintly it shall crumble in the following years to a second rate power like the former Soviet Union,

Alright, relax, if you don't want to here about how to have strong economy I understand, after all this is about what went wrong. I'll tell you what went wrong, the government went free trade, the government overtaxed, the government borrowed and so did the people to make up for the lame wage growth and debt they had. as a result, wages have stagnated, goods have infalted, the dollar has lost 96% of its value since 1913 alone, and Americas total debt, from the government, to the states, to the people to businesses has surged to $53 TRILLION. Thats $175,000 for every man woman and child!

Total Debt in 2007 $ 

 

US Debt Ratios

  

US Debt VS income

   

Debt and Income

 

It shows that in 1957 there was $1.86 of outstanding debt for each dollar of national income.

But, today's economy needs $4.70 in outstanding debt for each dollar of national income.

 Components of the Debt

  

WOW, we are in debt over eyeballs even if we were 2 times as tall as we are. Lets not forget our commitment to the medicare/medicade, and additional 60 Trillion, making the total $113 Trillion +, 8.7x more than our GDP, Thats madness. And you wonder why Americas economy is  int he tubes.

BOTTOM-LINE - - DEBT SUMMARY TABLE
AMERICA'S TOTAL DEBT (as of Jan. 1, 2008)
- $53 Trillion -

- add another $60 trillion for other contingencies such as Social Security/Medicare/Medicaid -

Our Federal Government Debt Report shows $9.2 Trillion of debt as of end CY 2007, the State & Local Government Report shows debt of $2.2 Trillion, and $41.6 Trillion of private (household, business and financial sector) debt is revealed in America's Total Debt Report.

These sum to $53 Trillion - - equivalent to $175,154 per capita, or $700,616 per family of 4.
(This sum does not include the federal government's un-funded contingent liabilities such as social security/Medicare/Medicaid estimated at $57 trillion, plus additional unknown amounts(?) for other contingencies listed below.)

The following table summarizes Total Debt in America - - as of December 31, 2007

DEBT TYPE

DEBT AMOUNT

Debt Per Child 
(per capita)

GOVERNMENT SECTOR DEBT:

Federal Government Sector debt - a record high as of year end 2007.
(Treasury data and Federal Government Debt Report, (includes $2.4 trillion federal govt. owes foreigners, plus $2.7 trillion debt owed U.S. domestic public, plus $4.1 trillion surplus siphoned from and owed to trust funds) - total $9.2 trillion

$9.2 Trillion

$30,559State & Local Government Sector debt - a record high 
(State & Local Government Spending Report)$2.2 Trillion$ 7,285Un-funded Social Security contingent liabilities estimated looking forward$7 Trillion$23,648Un-funded Medicare/Medicaid contingent liabilities *$50 Trillion$166,677Un-funded federal employee pension contingent liabilities (incl. Postal service)

? $4 Trillion

?

Un-funded federal employee medical contingent liabilities?

?

Un-funded state & local government employee pension & medical contingent liabilities

? $2.7 Trillion

?

Other off-budget Federal Govt. borrowings

?

?

SUM above Government Debt

$75.1 Trillion + ?

$248,675+?

PRIVATE SECTOR DEBT:

(see America's Total Debt Report)Household Sector debt - soaring record high$13.8 Trillion$45,695Business Sector debt - record high$10.1 Trillion$33,444Financial Sector debt (domestic) - explosive record high$15.8 Trillion$52,317Other (extra foreign debt in addition to such included in numbers above sectors)$1.8 Trillion$  5,960Un-funded business sector employee pension contingent liabilities

?  $0.5 Tril. ?

?

Un-funded business sector employee medical contingent liabilities

?

?

Impact trillions of dollars of derivatives (+ off balance sheet debt) on above business & financial sectors

?

?

SUM above Private Debt

$42 Trillion +?

$137,416 + ?

SUM ALL DEBT

SUM Government + Private Sector Debt (including Contingent liability items)

$117.1 Trillion+?

$386,091 +?

SUM All Government and Private Sector Debt (exclude contingent liability items)

$52.9 Trillion

$175,154

We don't 'owe it to ourselves' -
-  we owe $12.5 Trillion (24%) of above debt to international entities,
($2.4 Trillion owed by federal government plus $10.1 Trillion by private sector) >

[$12.5 Trillion]

[$41,391]

? = No reliable estimate available, or preliminary estimate only, or there may be other contingencies
For discussion see the Federal Government Debt ReportAmerica's Total Debt ReportTrust Fund Report articles, the State & Local Government Spending Report, the International Trade &  Debt Report and the Grandfather Social Security Report. (Debt Data Sources: Federal Govt. Treasury Dept.; Private Sector and State & Local Govt. from Federal Reserve flow of funds accounts, table D.3; International Monetary Fund; *Medicare/Medicaid per David Walker, US Comptroller General 7/22/07)

 Remmember, America is no longer Capitalist, its a Socialist Debt trap.

 

 

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ATWD Limited, your alarmist BS is hilarious and wrong.

 

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Whew!  I'm glad the first person to criticize this blog is a person with a high rating on here.
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FYI - 

If you own an Investment Bank or Bank, I would avoid these

Warren Buffett predicted of financial derivatives: they are proving to be “weapons of mass financial destruction".

Taken from Mike "Mish" Shedlock at: http://globaleconomicanalysis.blogspot.com

Look at the level of derevatives in these banks.

JPM $91 TRILLION in derevatives

C $34 TRILLION in  in derevatives

BAC $31 TRILLION in derevatives 

W $5 TRILLION in derevatives 

To big to fail? We will see... to big to rescue makes more sense to me.
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It made a lot of money for corporations and business owners, but it raped the masses.  If the corporations are so quick to rape the masses there is no reason to ever believe they have anyone's interest at heart beside's their own, but they consistently succeed at controling the system.

I think it was also about caving to what is not realistic, like all the handouts people constantly demand and expect from government.  Used to be charity and welfare came from the heart. 

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Protective tariffs are what caused the great depression via the Smoot Hawley act. I don't think we want to go there.

As far as getting out of debt, that would be a wonderful thing for this country to do, but it would require maturity that we sadly lack.

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Austrian theorists who wrote about the Depression include Hayek and Murray Rothbard, who wrote "America's Great Depression". In their view, the key cause of the Depression was the expansion of the money supply in the 1920s that lead to an unsustainable credit driven boom. In their view, the Federal Reserve, which was created in 1913, shoulders much of the blame.

In fact, Hayek, writing for the Austrian Institute of Economic Research Report in February 1929 [13] predicted the economic downturn, stating that "the boom will collapse within the next few months."

Ludwig von Mises also expected this financial catastrophe, and is quoted as stating "A great crash is coming, and I don't want my name in any way connected with it" [14] when he turned down an important job at the Kreditanstalt Bank in early 1929.

One reason for the monetary inflation was to help Great Britain, which, in the 1920s, was struggling with its plans to return to the gold standard at pre-war (World War I) parity.

In the Austrian view it was this inflation of the money supply that led to an unsustainable boom in both asset prices (stocks and bonds) and in capital goods. By the time the Fed belatedly tightened in 1928, it was far too late and, in the Austrian view, a depression was inevitable.

The artificial interference in the economy was a disaster prior to the Depression, and government efforts to prop up the economy after the crash of 1929 only made things worse.

 

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The BS part I was referring to was in regards to protectionism being necessary. I dont think you understand that pollution and harm caused to the general population to extract the natural resources in the United States and allow for self sufficiency will be coming back.

One of the reasons we can't produce and don't want to produce the goods that china et al produces is because of the very real damage it does to our environment. I for one don't want to go back to having steel mills, rivers that catch on fire, shorter life expectancy, etc etc

 

 

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And how anyone can look to japan as evidence of protectionism working, I dont think anyone pro japan will aknowledge that the country has some very serious growth issues and a lot of it can be blamed on protectionism of various stripes.
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I don't think post-WWII Japan is a good example of protectionism.

However, it is ironic that the U.S. is ranked 65th in Public Debt-GDP according to the CIA World Fact Book. Since, Medicare is bound for bankruptcy by 2019 I find it very interesting and  very contrary to what you would think.

Becasue we all know the CIA is an unbiased source of information without any agenda.

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Look, Smoot Hawsley did not cause the depression, it was credit, housing and food prices. Check out the chart on tariff rates and you can see it was at a historic normal, not really that high, although it was not the solution at all, it made it worse, but that does not mean the tariffs in place before it were bad.

  As for not wanting to pollute, China is going to make the air for the whole world bad, send us tainted food medicine and other toys/products, and shorten our life spans any way. We have better regulations on the environment, so we can grow a green industrial base, that does not harm us. And why not be self sufficient, is tit not desirable to control your home market and export your goods to other countries and have power over them. PLus it promotes technology and science, something you need to stay a world power economically and militarily.

Think about this US went from an agrarian nothing to an industrial power under tariffs, not free trade. From 1865 to 1910, we had 7% growth, an expanding labor pool, higher wages and a better standard of living. The us went from importer debtor to exporter creditor.

Japan was protectionist post WW 2, they made it hard in the 60s and 70s for Us goods to get in. They built up their industries and flooded the US market. In fact they even sold below cost, its called dumping. For example tvs, US made tvs that were fine, Japan comes floods the market and Us business dies, jobs leave, technology leaves.

And why not use our own oil, it makes it cheaper, lowers fuel prices promotes growth etc, so your logic of just let the rest of the world do all our work is how to create an economy similar to this one we are in now, frail, in debt and dependent on foreigners for our goods, our energy and almost everything. In fact that is the retarded new mentality, free handouts from the government, my job and from the rich, because I am entitled to it, instead of working, lets depend  on the welfare and good will of other nations, heck lets just hand over control of the army to the  UN.

So don't say protectionism is all bad, you need some, don't be a lazy American debtor and welfare collector, get off your behind and work!

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Additional info on us currency, M3 supply is 13.1 trillion, and the total economy is 13.84 trillion and the debt is 53 trillion. well the ratio of debt to capital is 3.82, that means the US currency is 3.8x leveraged, thats pretty high, and the ratio of GDP-debts/M3 means that for every dollar in existence, there is $1.05  of GDP and $4.01 of debt. In total that means there is -$4.01+$1.05=$-2.96 for every dollar, so basically each dollar is net backed by 4x more debt than value, so its way over valued.
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