The True Cause of the Impending Collapse of the US Economy

With the economy in increasingly dire straits, blame has been variously assigned to an unending list of culprits all the way from the President himself to the Rothschild and Rockefellers with an secret underground military/alien base or two and perhaps a dozen elite-embezzlers who are accused of living higher and higher off the hog while the commoners (us) continue to struggle and tread the rising water level of financial collapse.

Even the pundits and critical commentators seem unable to decide who, or what, is truly causing the unemployment rate to rise and household incomes to fall no matter what measures are attempted at all levels of government.

Now, please understand…this thread is NOT about the current President or the past President's ability, or lack thereof, to keep promises made or to draw up a balanced budget…it is not about whether or not the Elephants or Donkeys are smarter, braver, wiser, prettier, more noble, or any of that…it is not about taking sides AT ALL. It is about sharing information of which EVERY American, no matter their political leanings or interest/disinterest in government, should…and must…be made aware. Because it affects everyone…everyone has to eat and have a roof of some sort over his or her head. A job is nice, too…not to slave at but just to feel useful and of a benefit to self and community. In addition, if the American economic system collapses, not a single citizen will remain unaffected somehow. I am not saying it will be good or bad but that if we gain understanding NOW, it will not be so hard to get through. I do think some sort of radical change is inevitable. Better, that it be foreseen and somewhat manageable than to wreak havoc for which we have no idea how to ameliorate.

There is actually a simple root cause for ALL our economic issues and woes and it is not a person or a group or any sort of thing that we can point to as being at fault while exempting ourselves from having a part in it. Even if we simply did not inform ourselves…we have a responsibility now to change that. WE THE PEOPLE is not negotiable.

This cause is something that this country has been involved with since its inception and its economic effect on this country began at the same. It is something that we have been born into and have been taught and conditioned to believe is necessary to maintain the founding fathers' ideal of this country being the beacon of freedom for the whole world to follow as example. Sadly, this has been counterproductive not only to our nation's goal for society but also catastrophically damaging to the financial aspect of our lives even down to the personal individual level.

The cause of all our troubles is simply WAR.

We have been told time and time again that 'defense' is necessary to maintain our so-called national freedom…but after the American Revolution was over and won, this really can not be proven as true in any fashion. On May 5, 1862, the victory of the Mexican Army over the invading French forces at the battle of Puebla marked, effectively, the last time ANY country in the Americas was invaded from overseas factions.

Secondly, it was significant in that, since the Battle of Puebla, no country in the Americas has subsequently been invaded by any other European military force.

en.wikipedia.org...

The logical argument to this might is directly because of our staunch and persistent defense of our borders. However, the idea of needing to 'defend' ourselves is a modern idea more than a historical one and our current concerns about terrorists and other aggression coming from elsewhere to put our freedom in jeopardy is not justified by omitting all the details and circumstances leading up to the terrorist attacks of recent decades. These are details and circumstances we have been fed selectively and not entirely, the same as we are given the annual budget reports and pie charts and other details relating to our national economy. This is because the two ideas are inherently tied together and the survival of the war machine depends on obfuscation to continue to exist and grow year by year…as the war machine grows…the national economy slows and stumbles and eventually will fall.

That is the only danger to our freedom that truly exists…our inability to remain sovereign due to insurmountable growing debt is the only thing that will destroy this country and it will be no one person's fault yet we will all have had a part in it if we let it continue.

The only other time there was an attempt to invade our borders was in WWII when the Japanese did manage to take a few of the Aleutian Islands, but that foot-hold was short-lived and unsuccessful, thanks largely to the skills and fortitude of the Inuit soldiers who had the best advantage over even the Japanese navy and intense determination of the troops…a lifetime of experiential knowledge of the territory being fought over.

That is my introduction…now for some facts and data to back up my claim....

First, let us start out with some figures and facts on the national economy and federal budget at present.

Depending upon where one sources their information, the 'facts' of the 'defense' budget and other financial obligations of the United States Government is highly malleable. Factors include the reason for sharing the information, who is publishing it, and how it is presented in relative terms. It is easier to find information in the form of percentages related to GDP and federal budget and debt/deficit than it is to get some cold hard dollar figures. When one does manage to locate this kind of data, it is very selectively shared and rarely presented all together as a whole, thereby making it hardly worth the time necessary to sketch together the bigger picture for the average joe. We have too many things to worry about on our own levels, such as keeping the lights in our home. to delve very far into why the White House is worried about much the same thing. Whether this is by design or circumstance, I cannot say for sure although I personally suspect a combination of the two.

Therefore, most of what we have to go on…and what we tend to find ourselves debating and even arguing about, is more statistical than literal in nature and statistics are not objective like numbers are.

The common belief is that what is costing us most are entitlement programs which include Social Security, Medicare, and Medicaid. When presented with a pie chart of total federal budget spending, it does appear that they are the most costly portions of our failing economy. HOWEVER…there are two kinds of spending in the federal budget…mandatory and discretionary. Mandatory spending is set for much longer time periods than discretionary, which is more or less done on a yearly basis; as well as in between when emergencies call for appropriations to be made in order to fund unforeseen contingencies.

It is also assumed by many, it seems, that our income tax dollars go to the entire federal budget to be apportioned out in all the programs you see on a pie chart such as I mentioned. This is not true. The entitlement programs, which are mandatory spending, are funded through trust funds that earn interest on the contributions deposited into those funds such as the FICA and other taxes you see as payroll deductions every time your employer pays you…or which you deduct and match if you, yourself, are an employer. These are called mandatory programs because there are guidelines and requirements that determine who can receive those entitlements and so everyone that meets the requirements must be given their 'entitlement' and therefore there is no discretion involved in that the President or congress do not, on a yearly basis, decide how much will be spent (outlays) for these payments. They are determined by demographics and other factors influencing the economy.

en.wikipedia.org...

When unemployment rises, less people are paying into these trust funds and yet more people are qualifying to receive benefits. This is not a root cause but rather an effect of the root cause. And while it might seem logical to some to just tighten and restrict the requirements for receiving these benefits, that will not eliminate the underlying fact that people need to eat to live…and whether or not they are able to work or even if they refuse to work or contribute, if they are an American citizen, they have certain 'inalienable rights' and those rights are impossible to ensure without a reasonable level of health.

But the point relative to the subject at hand is that looking at these pie charts, we see what looks like empirical evidence showing that defense and military is NOT our biggest expenditure and therefore focus is directed elsewhere and the problem continues to grow as it remains hidden in the statistics and percentages, helped along by the average citizen's lack of knowledge (and understandable and reasonable lack, but a lack nonetheless) of budgeting at the highest level of government.

We are also given most of our information under the heading of 'defense spending;' which is, categorically, only the amount that the Federal budget marks for spending by the Department of Defense. However, there are many other costs that can only be categorized as military-related or caused, that are cached in other places in the budget, in other departments and under other headings. That is, all spending that goes toward military…or has originated because of military…but that does not fall under the DoD allocated spending.

costsofwar.org...


(...continued...)

Furthermore, the costs of the wars in Iraq and Afghanistan are NOT included in any federal budget or departmental allocations even while ongoing…historically in the US, war is funded in only three ways: war bonds, taxes, and/or borrowing. The world wars depended largely on the investment of citizens through war bonds and paying higher taxes while in the recent decades, especially the last, most all of it has been funded through borrowing from various sources. Regardless of to whom, or what, the debt is owed…it must eventually be paid back. The US borrows from its future and from its people by borrowing from the surplus available in the trust funds of the entitlement programs already discussed. All that is borrowed to finance our current wars is to be paid back with interest, and this interest, both past and present, is another hidden cost undeniably linked to, and caused by, war.

For a shocking real-time look at what the wars are costing us, in dollars and cents, up to the minute, go here:
costofwar.com...

The skyrocketing national debt and yearly deficits are both directly attributable to the wars in Iraq and Afghanistan and our economy will be affected for many decades after the wars are over (if they ever end!) because of the borrowing and interest payments owed when repaid.
en.wikipedia.org...

The cost of these two wars is not limited to present ground operations and troop supply…there will be financial obligations for the remainder of the veteran's lives in addition to the above mentioned debt repayments.
www.foreignpolicyjournal.com...

This page shows the scattered and cubby-holed, hidden, details wherein the actual picture begins to be revealed:
costsofwar.org...

Here is another page that tells the same story only not just in numbers:
newsjunkiepost.com...

Some good data at: www.warresisters.org...

Overall, then, evidence shows that the actual amount spent on the present wars is around $3 to $4 TRILLION

costsofwar.org...


I didn't cut and paste quotes from these pages I'm linking to mainly because the information is abundant on these pages and it is explained in a far better way that I could ever cobble together with a bunch of selected quotes that were relevant yet brief. This information is important to warrant reading the articles in their entirety...at least a few...I've tried to pick out the best ones that have the most information in the least amount of words.

The cause of all our troubles is simply WAR.

and maybe,...... the solution to all of your troubles is simply WAR. - Civil War.

reply to post by queenannie38


Very well written and researched. And, I must say I totally agree with all you've said here in these words.

I'm surprised the trolls haven't descended yet!

S & F for a great post!

Yeah the war budget has some affect on the overall yearly deficit but it’s not as big as your portray here. Estimates I hear for the two wars are in is 1 trillion dollars spent total in the last 10 years.

What the major problems are entitlements! Let me ask you a question. How is Greece going bankrupt and they having little to no army? How is Spain going bankrupt with little to no army? How is Italy going bankrupt with little to no army? It’s because of the entitlement spending.

Social security is a Ponzi scheme, Medicare is a ponzi scheme and Obama care will be the same. All these entitlements are paid by the young and use by the old. When Social security started it was 38 people paid into it for every 1 person receiving benefits. Now it’s 3 to 1! Its said there is now more money being withdrawn then deposited into social security. By the year 2030 Social Security will have NO MONEY LEFT!!!

Unfinded liabilities are in the total of 118 TRILLION dollars!!! If you include the governments GAAP accounting with the unfunded liabilities, in 2011 the USA spent 11TRILLION dollars!!!!

www.usdebtclock.org...

reply to post by camaro68ss

What the major problems are entitlements!

From what I understand, the wars comprise 25% of our current budget, including what could be considered "defense spending" and makes up the costliest item in our budget.. "Entitlements" make up less than 15%.



Are we trying to say that war is better to spend money on than helping out people in need?

USfederalbudget

Originally posted by sheepslayer247
reply to post by camaro68ss

 

What the major problems are entitlements!

From what I understand is that the wars comprise of 25% of our current budget, including what could be considered "defense spending" and makes up the costliest item in our budget.. "Entitlements" make up less than 15%.

Are we trying to say that war is better to spend money on than helping out people in need?

USfederalbudget

edit on 10-8-2012 by sheepslayer247 because: (no reason given)

sorry dude, your little chart fails to show us the amount spend in medicare and SS and where did i ever advicate i want to spend more money on wars and not helping people?

U.S. federal government guarantees are not included in the public debt total, until such time as there is a call on the guarantees. For example, the U.S. federal government in late-2008 guaranteed large amounts of obligations of mutual funds, banks, and corporations under several programs designed to deal with the problems arising from the late-2000s financial crisis. The funding of direct investments made in response to the crisis, such as those made under the Troubled Assets Relief Program, are included in the debt.

[edit] Unfunded obligations excludedThe U.S. government is obligated under current law to mandatory payments for programs such as Medicare, Medicaid and Social Security. The Government Accountability Office (GAO) projects that payouts for these programs will significantly exceed tax revenues over the next 75 years. The Medicare Part A (hospital insurance) payouts already exceed program tax revenues, and social security payouts exceeded payroll taxes in fiscal 2010. These deficits require funding from other tax sources or borrowing.
ex]
en.wikipedia.org...

edit on 10-8-2012 by camaro68ss because: (no reason given)

reply to post by camaro68ss


Follow the link brother. It breaks down everything from unemployment, family and children programs and more. In fact, medicare is counted in the healthcare section.

Please read.

where did i ever advicate (sp) i want to spend more money on wars and not helping people?

When you say this:

What the major problems are entitlements!

It's just an assumption, but when someone would rather address entitlements than the war budget it is a given. Would you rather save the money from the wars or would you rather take away entitlements?

reply to post by camaro68ss


Sounds like typical right-wing talking points. I suggest you go here, download the data and play around with it for a bit. The whole 'entitlements' issue is brought to you by a group of people whose friends are mostly plugged into the military industrial complex.

Wars, except in the case where we are defending our homeland, we can mostly do without. Research wars going back to at least Vietnam and you will quickly find that the pretexts for just about every one was either fabricated in the worst or based on bad judgement and equally bad information in the best case. Beyond the actual out-of-pocket spendding related to the wars you also have to account for the debt service created to finance these cluster-fracks. On the other hand, some of these 'entitlements' that you speak of are humanitarian necessities --- unless of course you are prepared to just allow people to die on the streets.

Originally posted by sheepslayer247
reply to post by camaro68ss

 

Follow the link brother. It breaks down everything from unemployment, family and children programs and more. In fact, medicare is counted in the healthcare section.

Please read.

where did i ever advicate (sp) i want to spend more money on wars and not helping people?

When you say this:

What the major problems are entitlements!

It's just an assumption, but when someone would rather address entitlements than the war budget it is a given. Would you rather save the money from the wars or would you rather take away entitlements?

edit on 10-8-2012 by sheepslayer247 because: (no reason given)

I did look, SS and medicare are not there! there off budget accounts

reply to post by camaro68ss


Use the link in my post and you will find everything you need. Don't forget to expand the line items by clicking the happy little [+]. Also, make note of the interest line item.

Why pay your bills or get a job when the worlds about to end.

This is the reason the US economy is failing... to many idiots with self-fullfilling prophecys.

reply to post by camaro68ss

Social security is a Ponzi scheme, Medicare is a ponzi scheme and Obama care will be the same. All these entitlements are paid by the young and use by the old.

I just wanted to add that these programs (excluding Obamcare) are not Ponzi schemes, unless by that you mean the money allocated to each program was raided by politicians, then you are right.

The problem is not that it is a give away to people, it's that we let the federal government run the program. It should have been administered by the states and regulated by watchdogs to keep an eye on corrupt people in office.

Can you imagine what would of happened if SS was privatized? Wall Street would have lost all of the money in a heartbeat. Privatization of the SS program IS the definition of a Ponzi scheme!

reply to post by camaro68ss

I did look, SS and medicare are not there! there off budget accounts

Look under health care. Medicaire is listed under senior medical services.

Under pensions, SS is listed as "Old Age". What a horrible name.

reply to post by camaro68ss

Did you read any of the pages I linked to?

You say 'estimates I hear' and that is exactly the kind of assumptive reasoning that we must overcome or else face the consequences of both ignorance and denial. I don't mean that at you personally, but just using what you've said as an example of what is the norm...we must inform ourselves with the facts that are discoverable rather than the so-called estimates of the experts who are choosing to contribute to our ignorance with their active reluctance toward transparency. This is OUR money. But we are not being told honestly how it is being spent.

As far as bankruptcy threatening Greece, Spain, or any other country, I cannot say and frankly, it is superfluous to me, personally, right now, to worry about the economies of other countries when I live in the US.

You say Social Security and other entitlement programs are 'Ponzi schemes.' Do you have any references or evidence to support your statement?

Wikipedia defines a Ponzi scheme as:

A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from profit earned by the individual or organization running the operation.

In contrast, Social Security, for example, is funded by a Trust:

In the United States, the Social Security Trust Fund is a fund operated by the Social Security Administration into which are paid payroll tax contributions from workers and employers under the Social Security system and out of which benefit payments are made to retirees, survivors, and the disabled, and for general administrative expenses. The fund also earns interest. There technically are two component funds, the Old-Age and Survivors Insurance (OASI) and Disability Insurance (DI) Trust Funds, referred to collectively as the OASDI funds.

When program revenues exceed payments (i.e., the program is in surplus) the extra funds are borrowed and used by the government for other purposes, but a legal obligation to program recipients is created to the extent this occurs. These surpluses add to the Trust Fund. At the end of 2011, the Trust Fund contained (or alternatively, was owed) $2.7 trillion, up $69 billion from 2010.[1] The fund is required by law to be invested in non-marketable securities issued and guaranteed by the "full faith and credit" of the federal government.

( from Wikipedia also )

As far as there now being a 3 to 1 ratio of recipients to contributors, this is because of a couple of things...one being the baby boomer generation population increase following the wars and the inception of the Social Security program and the other is one I mentioned already. The fact that there are more and more people qualifying for benefits both because of the baby boomers reaching retirement age as well as the increasing unemployment rate which increases people eligible for other assistance...this is a two-fold impact because there are less contributors and more recipients. This isn't because of a 'ponzi scheme' but the effects of both demographics and economics due to the nature of the way these programs were designed....and these things are in a great deal attributable to....once again...the astronomical expense of waging war.

I also covered the reason that there is concern about the funds being there in 20 years...the borrowing against the surplus that has been done in recent years to finance the wars and the military. However, it is not that there will be 'no money' there at all, but that program payouts will forcibly have to be decreased by 25%. You can find this information on that Wikipedia page or at the source cited which is www.ssa.gov...

Wiki also says:

The government has borrowed nearly $2.7 trillion as of 2011 from the trust fund and used the money for other purposes.

These 'other purposes' are exactly what this thread is about.

Also

The trust fund is expected to peak in 2021 at approximately $3.0 trillion.[21] This means that from 2022 through 2033, the government will have to find approximately $3 trillion in other funding to pay beneficiaries beyond program revenues.

This is an amount, $3 trillion, which has already been spent on the two wars we are involved in...so in essence, we have already spent $6 trillion on war...$3 trillion outright and accounted for and $3 trillion that must be repaid back to the people who it belongs to...every American citizen. And the repayment of these funds borrowed against the surplus interest in this trust fund is JUST one portion of the huge national debt being incurred by war, even as I write this!

reply to post by queenannie38


The reason our economy is crumbling is very simple: The government spends entirely too damn much of our money on BS - and - their policies are killing rather than creating jobs. They are spending increasingly more money while destroying the very people and entities that provide that money via taxes; this is completely unsustainable.

Originally posted by jtma508
reply to post by camaro68ss

 

Sounds like typical right-wing talking points. I suggest you go here, download the data and play around with it for a bit. The whole 'entitlements' issue is brought to you by a group of people whose friends are mostly plugged into the military industrial complex.

Wars, except in the case where we are defending our homeland, we can mostly do without. Research wars going back to at least Vietnam and you will quickly find that the pretexts for just about every one was either fabricated in the worst or based on bad judgement and equally bad information in the best case. Beyond the actual out-of-pocket spendding related to the wars you also have to account for the debt service created to finance these cluster-fracks. On the other hand, some of these 'entitlements' that you speak of are humanitarian necessities --- unless of course you are prepared to just allow people to die on the streets.

Funny the liberal tactic is to dumb down there audience and belittle any Opposition

The total or gross national debt is the sum of the "debt held by the public" and "intragovernmental" debt. As of March 2012, the "debt held by the public" was $10.85 trillion and the "intragovernmental debt" was $4.74 trillion, for a total of $15.6 trillion

Only debt held by the public is reported as a liability on the consolidated financial statements of the United States government. Debt held by government accounts is an asset to those accounts but a liability to the Treasury; they offset each other in the consolidated financial statements.
en.wikipedia.org...

The links you guys provied are the "public debt"


SS and Medicare are held in government accounts, they count these as assets hahaha 9.7 Trillion dollars was spent on SS and Medicare in 2011

reply to post by camaro68ss


Ok, let's assume that what you say is true.

Now please justify the reasoning to take away SS and medical programs before we stop spending money on murder?

This is a terrific series of posts and should be mandatory reading for all voters. Nothing to argue with here. We kid ourselves by calling it the "Department of Defense." That's so Orwellian. We have not had to wage a real defensive war since 1812 (though had we not entered WWII it would have hit our shores eventually and there remains an excellent moral case for our actions in Europe and the Pacific).

Along with the military budget is all the bogus "intelligence" spending, which accounts to $100s of billions annually, most of it to spy and monitor citizens.