moonlightcowboy's WunderBlog

The Day GM Died

By: moonlightcowboy, 4:52 AM GMT on April 27, 2009

Of course we all know the story behind the Don McLean song, but there's a line in the song that I've always associated with General Motors - "Drove my Chevy to the levy but the levy was dry!" Well, it seems now, too, that Chevy or GM (at least as we've known it since the beginning of time) may be drying up as the company moves ever closer to government-controlled bankruptcy.

GM will soon close plants for nine weeks in addition to laying off more workers in an effort to get ready for re-structuring and hopefully returning to some sort of viable company. The certain death sign came Friday with the company's employee stock fund dumping all of its GM shares. That blatantly is the writing on the wall. LINK

GM stock chart

The fund's manager unloaded all the company's shares during March and April. (Notice the huge volumes in the downtrend of the stock price in the above chart). The share price ended up 7 cents up on Friday, closing at $1.69 per share. But, that essentially makes the stock worthless as not even the company's pension fund owns any shares now - in effect bailing out before it goes to near nothing or even zero with bankruptcy. In a regulatory filing late Friday GM announced that its employee stock-purchase plan had unloaded all shares of the company in favor of short-term and money market investments. GM said the trustee was authorized to sell the shares if it determined there was a serious question about GM's short-term viability as a going concern without resorting to bankruptcy or no possibility in the short term of recouping substantial proceeds from the sale of stock in bankruptcy proceedings.

The sales started on March 31, the day after the Obama administration rejected the automaker's restructuring plans, and concluded on Friday. Unfortunately, that comes way too little too late for GM employees whose stock is now worthless and many facing unemployment. And, there's speculation that GM's pension fund is going to end up in the Pension Benefit Guaranty Corporation (PBGC), leaving US taxpayers to foot the bill.

GM also drew another $2 billion from taxpayers last week in government aid and has been operating under $13.4 billion of emergency loans from the U.S. government. The draw adds working capital for the automaker and it could get another $3,000,000,000 from Treasury. GM says it will need $4.6 billion to operate during the second quarter. The company faces a June 1 deadline to complete viable, re-structuring tasks or enter bankruptcy protection. It has also placed Saturn, Saab, and Hummer up for sale.

Meanwhile, Chrysler faces an April 30 deadline to reach a merger deal with Fiat - a deal that's been cramped by union talks. Chrysler is struggling to meet the government mandate which calls for taking on Fiat as a partner, cutting debt, and reducing labor costs by Thursday if it wants an additional $6 billion - cash needed for its survival. NOTE: As I've said earlier - we'll be basically paying Fiat $6,000,000,000 to take Cerebus off our hands. I really wonder what kind of lobbying it takes to pull a deal like that off! Without the Fiat deal, Chrysler is toast.

On a side note, Ford only lost $1,400,000,000 in the 1st qtr, less than expected and says it's on track to "break even" by the end of the year! Really? Get ready for Auto Bailout ROUND 2 - it's coming. And, that's the good news! On top of that we still have the looming bank viability doubts still with rumors of a second bank bailout in the trillions. But, in addition to all of that, we now have the possible "swine flu pandemic!" If the whole prospect of that wasn't bad enough "healthwise", imagine the troubles it's going to add to the economy. Already, many US states have been put on a "non-import" list of meats to Russia, etc. That will mean more job losses. It'll also likely curb travel, especially air travel. More job losses nearing U6 depression-level statistics of 20 percent.



Combine all of that with expanding debt and a shrinking dollar, ol' Uncle Sam is getting beat up pretty good! And, the so-called "stimulus money" (borrowed money) is still nowhere in sight amidst the bureaucracy of administering (fancy word for partaking on the way down) the funds. Government is quick to legislate and tax, but awfully slow to implement - it's the nature of the beast. And, with GM gone and others following - the music may have indeed died!

..."glimmers" of hope? I think the President's vision may need checked! ;)


Sources: LINK, LINK and LINK.


BLOG RULES: Simple - Keep it absolutely civil, especially towards fellow bloggers. And, don't get heavy on the partisanship - it's quite obvious that corrupt, petty, inept, greedy, power-lustful politicians are plentiful on both sides of the aisle. It's ok to take jabs at them - either party, any official or candidate; but, leave the total "blame game" out of this - it's ALL of them, everyone! If you think otherwise, then you probably don't want to bring it in here! Additionally, if you don't like what you read in here and can't respect the rules, then start your own blog and run it and post in it the way you want. In here - it's my rules! :)

...see ya 'round the blogosphere! Have a good one!


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ooh, baby, luv ur tutu way

By: moonlightcowboy, 12:42 AM GMT on April 25, 2009

aub tutu

...the "Portlight" way...even if it takes tutu's! ;)

If you follow this blog at all now is the time to stop and put your money where the language is! Dig down and give, plz! Good folks that gets contributions where there is need, real need. In places where government is slow and often overlooks! Sometimes it may be for one, two or three or even a community (and even pets), but the helpful group has been and is trying to be there where it really counts! What a great thing, huh? Disaster is bad, anytime, and especially if you're on the end of it. I think Portlight makes an honest, integral, genuinely fiscal and humanitarian effort to help where help is often misunderstood and under-communicated. So, they get my attention and my contribution - I wish I could do more! :( God bless all that support! I (for one) appreciate it so much!

It's a dayum shame though that they couldn't get a better participant than Auburn to help their cause - evidently, budgets are short everywhere! ;) But, NOT this weekend. We ALL can give a lil extra. If Aub can make an extra effort - well, so can we! Thanks in advance for your contribution! BIG thanks to Aub, his family, Portlight and all that are helping to make the event - REALLY SPECIAL!

...uuuuhhhmm, did I say, "God Bless" - T H A N K S TONS!



WOW and WooOOoo! Whoa! ...a dayum pink tutu! Who'd have thunk it? That crazy Auburn!



ROTFLMAO!

I'd hoped to make it to actually witness and take part in the very charitable fun, but can't unfortunately. Instead, I'll vote "hell naw" - don't want to see no man in no tutu! So, I'll be sending my money. Thank you. Plz, plz, don't put that man in no tutu - even though I don't like him! ;P

...dayum, can't you just hear Auburn singing "Don't Mess With My Tutu!" (double dayum!)





BLOG RULES: Simple - Keep it absolutely civil, especially towards fellow bloggers. And, don't get heavy on the partisanship - it's quite obvious that corrupt, petty, inept, greedy, power-lustful politicians are plentiful on both sides of the aisle. It's ok to take jabs at them - either party, any official or candidate; but, leave the total "blame game" out of this - it's ALL of them, everyone! If you think otherwise, then you probably don't want to bring it in here!

...see ya 'round the blogosphere! Have a good one!


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Jobless nearing 20% D-Level

By: moonlightcowboy, 2:10 PM GMT on April 23, 2009

I'm reposting this blog entry since the lastest unemployment figures show another 640,000 people lost their jobs, now with over 6,100,000 drawing unemployment. Our unemployment situation now should be obvious that it's growing substantially worse with no recovery in sight for the job market anytime soon. So, things are indeed bleaker than we're being told even according to official numbers. But, when the U6 figures (already at 15.6) for unemployment come out, the nation will likely be growing ever closer to the 20 percent mark - depression level unemployment. The Great Depression had 25% unemployment.

The following is a repost of last month's numbers. I'll be looking for the updated figures to repost soon, but this will give you an idea of what's going on with the job market.

I have trouble drawing similarities between the two economic crisis' since finance, trade, technology, politics and manipulated numbers such as the nations unemployment figures are far more complex now than then. The Great Depression is dissimilar from the current economic crisis (a "recession" as it's still being officially called) which has continued to slide, moving from U-shaped, to V-shaped, to L-shaped and quite possibly to D-shaped (note the new info below here about unemployment). And, I think comparing the two periods are more like apples are to oranges - very different even and far more serious, potentially effecting billions more people and countries than the Great Depression. We've no "real" reference to this situation. And, the US cannot sustain this gargantuan borrowing, printing and spending money forever and probably not far into the future either, especially not without putting more pressure on the dollar and without risk of eventual default. Yes, it's global. Yes, it's systemic. But, no, we haven't been here before - this is new and it appears that it will get considerably worse before it gets better!

First, it's completely, hugely different if in only the sure scale of population:


US 1929 = 121,767,000
US 2009 = 305,000,000
(or increased about 250%)

WLD 1929 = 1,800,000,000
WLD 2009 = 6,800,000,000
(or increased about 378%)

Ok, let's look at unemployment and make some raw comparisons:

US 1929 - unemployment rate averaged 3.0%
US 1930 - unemployment rate averaged 8.7%
US 1933 - unemployment rate averaged 25.0%

US 2007 - unemployment rate averaged 4.5%
US 2009 - unemployment rate averaged 8.5%
US 2013 - using same ratios average 37.5% (?) At least one view has us already reaching 20% unemployment - depression-level statistics and growing.

With those same ratios could one reasonably assume that it's entirely possible things could get worse, especially with this new unemployment discernment? Well, maybe they already are and moving exponentially worse(read the unemployment post below). What's remarkably striking is that a young nation (relatively still) with such a small population comparatively, has produced more GDP than most of the world. With the various stories about US crop cutbacks because of these pressures, it appears very likely there could be massive food shortages throughout the world. Will their be soup lines? Less? Perhaps in certain parts of the world and perhaps even here in the US.

Fiscal responsibility must be restored and that can not be accomplished by continuing to support policies that grow government while stifling domestic business expansion and entrepreneurship. Our corporate tax rates are too high compared to much of the world and we are allowing newer, ever-expanding foreign control over our own economy. In addition, entitlements consume the lion's share of domestic tax revenues, leaving us at the mercy of China and other countries to fund government operations. New policies have to be adopted to secure an expanding domestic tax base while shrinking the size of government - this has and will be the purest solution to our exponentially growing problems. Right now, we're doing the opposite of that and it's a bitter recipe for disaster. If we continue down this path, we're at grave risk of losing our sovereignty, our way of life as we've known it for decades, centuries. Eventually, debts have to be paid or default occurs - plain and simple. Yet, no one is talking about a plan like that, least of all the "BaRockStar" who has been busy on foreign soil saying we're no longer a Christian nation, calling the US arrogant, apologizing and giving away the farm as fast as he possibly can!

Please, read the post below on unemployment - I think you'll begin to draw similar conclusions, but hey, I'd like your opinion and civil response.

Oh, and GetReal pointed that site out to me and suggested posting the unemployment numbers. GR8 site and thanks, GR.


THANKS! :)
MLC






Close Look at the Accelerating Rate of Unemployment


The trend in unemployment is unmistakably up and accelerating. Let's start with a discussion of widely followed data followed by many additional charts that you may not have seen before.

Here is a closeup from Jobs Contract 15th Straight Month; Unemployment Rate Soars to 8.5% courtesy of the BLS.

Photobucket

The official unemployment number is known as U-3. It does not count discouraged workers, marginally attached workers, or those working part time for economic reasons. The BLS highlights those other numbers in Table A-12.

Table A-12

Table A-12 is where one can find a better approximation of what the unemployment rate really is. Let's take a look

Photobucket

click on chart for sharper image

Grim Statistics

The official unemployment rate is 8.5% and rising sharply. However, if you start counting all the people that want a job but gave up, all the people with part-time jobs that want a full-time job, all the people who dropped off the unemployment rolls because their unemployment benefits ran out, etc., you get a closer picture of what the unemployment rate is. That number is in the last row labeled U-6.

U-6 Minus U-3 Accelerating



The above table shows that U-6 is accelerating faster than U-3. This is important because U-6 is a far better approximation of unemployment than U-3 (the "official" number).

I asked my friend Chris Puplava at Financial Sense if he could produce historical charts of the above trend. Chris was happy to oblige. He even added some additional charts to discuss as well.

U-6 Vs. U-3 Historical



U-6, U-3 and Median Weeks Unemployed



Note that U-6 is an artifact of the Clinton administration. It did not exist prior to 1994.

Photobucket

Using U-6 as our measure, unemployment easily exceeds the unemployment rate in the 70, 8o's and early Clinton years as well.

Part Time Workers as a Percentage of Total Employment



Photobucket

Salman Khan on Unemployment



Consumer Sentiment vs. Unemployment



The above chart shows U-3 unemployment vs. the consumer conference board survey of how hard it is to find jobs. The year over year survey results suggests consumers believe jobs are increasingly hard to get.

Note that the survey is a leading or coincident indicator while unemployment itself is a lagging indicator. This portends more job weakness for quite some time even after the peak in "hard to find" sentiment is reached.

Unemployment (U-6) is well on its way to 20%. These are depression conditions. For more on a comparison between unemployment today and that during the Great Depression, please see Census Hiring To Create 1.4 Million Jobs, and scroll down to the section called Depression Statistics.






A Tale of Two Depressions - a good read!

expect to pay more taxes

You don't have to take my word for it that your taxes are about to go up tremendously under the "Messiah" - the Congressional Budget Office explains it quite clearly. Families well below the president's 'no-tax' threshold will get a six-figure bill. A MUST READ - Obama's $163,000 Tax Bomb


NOTE: I think it's important that we don't lose track of the size of these figures being thrown around as they are so casually now! So, consequently, I'm extending them out in long form instead of abbreviated to not trivialize them. THESE ARE HUGE, HUGE NUMBERS! And, imo, need to be taken considerably more seriously!

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(There are links to the right under "Recommended Links" to help you contact your Representatives and Senators. Tell them to renegotiate or revoke our trade agreements which have robbed us of our jobs and really, our sovereignty!)


BLOG RULES: Simple - Keep it absolutely civil, especially towards fellow bloggers. And, don't get heavy on the partisanship - it's quite obvious that corrupt, petty, inept, greedy, power-lustful politicians are plentiful on both sides of the aisle. It's ok to take jabs at them - either party, any official or candidate; but, leave the total "blame game" out of this - it's ALL of them, everyone! If you think otherwise, then you probably don't want to bring it in here!

...see ya 'round the blogosphere! Have a good one!


visitor stats
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EUROPA day...

By: moonlightcowboy, 5:16 AM GMT on April 17, 2009

(Oh, and turn it up!) ;)



BLOG RULES: Simple - Keep it absolutely civil, especially towards fellow bloggers. And, don't get heavy on the partisanship - it's quite obvious that corrupt, petty, inept, greedy, power-lustful politicians are plentiful on both sides of the aisle. It's ok to take jabs at them - either party, any official or candidate; but, leave the total "blame game" out of this - it's ALL of them, everyone! If you think otherwise, then you probably don't want to bring it in here!

...see ya 'round the blogosphere! Have a good one!


visitor stats
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W A N T E D

By: moonlightcowboy, 2:38 PM GMT on April 15, 2009

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Well, following yesterday's announcement by Obama's Homeland Security team, it appears that the government is now profiling its own citizens. I've been classified as a "right-wing extremist" and I should be watched! This is how the report labeled myself and others that voice our opinion about our current government and plight: "Rightwing extremist chatter on the Internet continues to focus on the economy, the perceived loss of U.S. jobs in the manufacturing and construction sectors, and home foreclosures. These “accusatory” tactics are employed to draw new recruits into rightwing extremist groups and further radicalize those already subscribing to extremist beliefs. DHS/I&A assesses this trend is likely to accelerate if the economy is perceived to worsen."

Further, the report went on to discredit the honor and integrity of our returning veterans by saying this: "Returning veterans possess combat skills and experience that are attractive to rightwing extremists. DHS/I&A is concerned that rightwing extremists will attempt to recruit and radicalize returning veterans in order to boost their violent capabilities."

What happened to free speech? Did I miss when this constitutionally-guaranteed right was revoked? It's one thing for HS to discredit me and paint some faux pas picture, but it's entirely another, unforgivable action, for them to discredit our brave men and women in uniform! Obama should show genuine presidential leadership by promptly firing Secretary Janet Napolitano from HS unless he plans on standing by the message this report clearly sends of creating division and placing government in the position to quell any disruption of their liberal, socialistic agenda. Be warned, the document is real and blog chatter such as mine and others are being profiled!


Jobless at 15.6 percent, growing worse.

A Tale of Two Depressions - a good read!


Where are the the good ol' days?

As far back as I can remember, "cowboys" were always the "real thing!" Day after day we'd play "cowboys and indians." We dreamed of wearing cowboy hats, strapping a six-gun on our waists and riding the ponies! We watched Roy Rogers and Gabby, the Duke, Tonto and the Lone Ranger, Davy Crockett, Daniel Boone, 'Adam, Hoss and Little Joe', Matt Dillon and Festus, Lucas McCain, Trampus and the Virginian, Jason McCord, and Cimmaron Strip with Marshal Jim Crown. There was Wagon Train, Rawhide, Paladin (have gun, will travel), Trinity (that guy was fast), Josey Wales, the Wild West, Jeremiah Johnson, and even Cochise, Sitting Bull and Geronimo. There was Laramie, Laredo, Cheyenne, High Chapparal, Jesse James, Wyatt Earp and the OK Corral.

There were great movies and wow, to see one of them on the big screen with some fresh popcorn - well, it just didn't get any better than that! It was larger than life itself, and so were we. We stood tall in the saddle with the likes of Roy Rogers, Hopalong Cassidy, Gene Autry and John Wayne. We wanted to be just like them! We wanted to ride and shoot, have round-ups, cattle drives, and campfires. We'd take our ropes and make lariats, lasso a fence post and pretend we'd roped a big steer. We built forts and teepees. Our bows and arrows were fierce, sharp and deadly. We painted our faces, and held war dances, complete with all the Indian language we could muster - mostly a lot of "hi-yas" and "woo-woos" with our hands wavering over our mouths!

Sure, there were good guys and bad guys. Inherently, you knew why they were good and bad, and you rooted for the wrongs to be righted! Our boots were heavy, but they were the "real thing" like our hats. We usually broke our "fake" spurs, but we just chaulked that up to being "tough" and that was ok by us. We hated running out of caps to shoot, because it made our six-guns sound real. We'd get hot and sweaty. My gosh, I haven't heard the term "Caesar's beads" in years!!! (anyone know what they are? lol) We played for hours, got dirty and tired, but we had fun! We dreamed of conquering the wild west with great adventure and fame. A trip to the 5 & 10 cent store for new caps was something we looked forward to. Afterall, we just "had" to have them. Wow, I can still smell them and hear them!

Those were the days! I'm not sure we knew what we were learning, but I think somehow we knew it was good. The fun and imagination catapulted us into believing that we were just as special as our heroes. Somehow, I know, that was an integral part of my life and who I am today. I hate to think of what kind of person I'd be without them, without those days! Eventually, us cowboys became more interested in other things: baseball, football, music, cars, jobs and of course - cowgirls! I'll always be a cowboy at heart and one day I know I'll ride off into the sunset of my life with the bruises and the joys of the years!



John Wayne tells Dean Martin (above left) what he wants in life for his daughter. - a gotta see video and, imo, hits the nail right on the head! That's the kind of thing we need more of these days! And, (above right) "The Electric Horesmean" is where I think I first heard this song. So, there you have it - a toast to the cowboys! If you'd like to share a picture, a story, a memory, a song, a great adventure, please do!

Yippee, ki, yay! Meet you at the Longbranch afterwards!


expect to pay more taxes

You don't have to take my word for it that your taxes are about to go up tremendously under the "Messiah" - the Congressional Budget Office explains it quite clearly. Families well below the president's 'no-tax' threshold will get a six-figure bill. A MUST READ - Obama's $163,000 Tax Bomb


NOTE: I think it's important that we don't lose track of the size of these figures being thrown around as they are so casually now! So, consequently, I'm extending them out in long form instead of abbreviated to not trivialize them. THESE ARE HUGE, HUGE NUMBERS! And, imo, need to be taken considerably more seriously!

Photobucket
(There are links to the right under "Recommended Links" to help you contact your Representatives and Senators. Tell them to renegotiate or revoke our trade agreements which have robbed us of our jobs and really, our sovereignty!)


BLOG RULES: Simple - Keep it absolutely civil, especially towards fellow bloggers. And, don't get heavy on the partisanship - it's quite obvious that corrupt, petty, inept, greedy, power-lustful politicians are plentiful on both sides of the aisle. It's ok to take jabs at them - either party, any official or candidate; but, leave the total "blame game" out of this - it's ALL of them, everyone! If you think otherwise, then you probably don't want to bring it in here!

...see ya 'round the blogosphere! Have a good one!


visitor stats
Photobucket

Jobless at 15.6, growing worse.

By: moonlightcowboy, 4:08 AM GMT on April 13, 2009

I trust all enjoyed their Easter weekend and unfortunatly it's back to work on ol' Stormy Monday. I'm reposting this blog entry since it was kind of fresh going into the weekend and had started getting some interesting debate and information. Our unemployment situation is worse than we're being told according to official numbers. And, even though officials are claiming "glimmers" of improvement in the economy, employment is expected to lag. Personally, I have a difficult time seeing "improvement" when more and more are expected to lose their jobs before the end of 2009.

Unemployment is growing faster than we're being led to believe and we are now beginning to reach "depression-level" unemployment. The U6 figures for unemployment are at 15.6 percent and approaching 20 percent at a quickening rate. The Great Depression had 25% unemployment. And, yesterday, with the FED's "backtrack" through the rest of the year combined with their lack of transparency on the recent banks stress tests, our plight may be more serious than is being told.

I have trouble drawing similarities between the two economic crisis' since finance, trade, technology, politics and manipulated numbers such as the nations unemployment figures are far more complex now than then. The Great Depression is dissimilar from the current economic crisis (a "recession" as it's still being officially called) which has continued to slide, moving from U-shaped, to V-shaped, to L-shaped and quite possibly to D-shaped (note the new info below here about unemployment). And, I think comparing the two periods are more like apples are to oranges - very different even and far more serious, potentially effecting billions more people and countries than the Great Depression. We've no "real" reference to this situation. And, the US cannot sustain this gargantuan borrowing, printing and spending money forever and probably not far into the future either, espcially not without putting more pressure on the dollar and without risk of eventual default. Yes, it's global. Yes, it's systemic. But, no, we haven't been here before - this is new and it appears that it will get considerably worse before it gets better!

First, it's completely, hugely different if in only the sure scale of population:


US 1929 = 121,767,000
US 2009 = 305,000,000
(or increased about 250%)

WLD 1929 = 1,800,000,000
WLD 2009 = 6,800,000,000
(or increased about 378%)

Ok, let's look at unemployment and make some raw comparisons:

US 1929 - unemployment rate averaged 3.0%
US 1930 - unemployment rate averaged 8.7%
US 1933 - unemployment rate averaged 25.0%

US 2007 - unemployment rate averaged 4.5%
US 2009 - unemployment rate averaged 8.5%
US 2013 - using same ratios average 37.5% (?) At least one view has us already reaching 20% unemployment - depression-level statistics and growing.

With those same ratios could one reasonably assume that it's entirely possible things could get worse, especially with this new unemployment discernment? Well, maybe they already are and moving exponentially worse(read the unemployment post below). What's remarkably striking is that a young nation (relatively still) with such a small population comparatively, has produced more GDP than most of the world. With the various stories about US crop cutbacks because of these pressures, it appears very likely there could be massive food shortages throughout the world. Will their be soup lines? Less? Perhaps in certain parts of the world and perhaps even here in the US.

Fiscal responsibility must be restored and that can not be accomplished by continuing to support policies that grow government while stifling domestic business expansion and entrepreneurship. Our corporate tax rates are too high compared to much of the world and we are allowing newer, ever-expanding foreign control over our own economy. In addition, entitlements consume the lion's share of domestic tax revenues, leaving us at the mercy of China and other countries to fund government operations. New policies have to be adopted to secure an expanding domestic tax base while shrinking the size of government - this has and will be the purest solution to our exponentially growing problems. Right now, we're doing the opposite of that and it's a bitter recipe for disaster. If we continue down this path, we're at grave risk of losing our sovereignty, our way of life as we've known it for decades, centuries. Eventually, debts have to be paid or default occurs - plain and simple. Yet, no one is talking about a plan like that, least of all the "BaRockStar" who has been busy on foreign soil saying we're no longer a Christian nation, calling the US arrogant, apologizing and giving away the farm as fast as he possibly can!

Please, read the post below on unemployment - I think you'll begin to draw similar conclusions, but hey, I'd like your opinion and civil response.

Oh, and GetReal pointed that site out to me and suggested posting the unemployment numbers. GR8 site and thanks, GR.


THANKS! :)
MLC






Close Look at the Accelerating Rate of Unemployment


The trend in unemployment is unmistakably up and accelerating. Let's start with a discussion of widely followed data followed by many additional charts that you may not have seen before.

Here is a closeup from Jobs Contract 15th Straight Month; Unemployment Rate Soars to 8.5% courtesy of the BLS.

Photobucket

The official unemployment number is known as U-3. It does not count discouraged workers, marginally attached workers, or those working part time for economic reasons. The BLS highlights those other numbers in Table A-12.

Table A-12

Table A-12 is where one can find a better approximation of what the unemployment rate really is. Let's take a look

Photobucket

click on chart for sharper image

Grim Statistics

The official unemployment rate is 8.5% and rising sharply. However, if you start counting all the people that want a job but gave up, all the people with part-time jobs that want a full-time job, all the people who dropped off the unemployment rolls because their unemployment benefits ran out, etc., you get a closer picture of what the unemployment rate is. That number is in the last row labeled U-6.

U-6 Minus U-3 Accelerating



The above table shows that U-6 is accelerating faster than U-3. This is important because U-6 is a far better approximation of unemployment than U-3 (the "official" number).

I asked my friend Chris Puplava at Financial Sense if he could produce historical charts of the above trend. Chris was happy to oblige. He even added some additional charts to discuss as well.

U-6 Vs. U-3 Historical



U-6, U-3 and Median Weeks Unemployed



Note that U-6 is an artifact of the Clinton administration. It did not exist prior to 1994.

Photobucket

Using U-6 as our measure, unemployment easily exceeds the unemployment rate in the 70, 8o's and early Clinton years as well.

Part Time Workers as a Percentage of Total Employment



Photobucket

Salman Khan on Unemployment



Consumer Sentiment vs. Unemployment



The above chart shows U-3 unemployment vs. the consumer conference board survey of how hard it is to find jobs. The year over year survey results suggests consumers believe jobs are increasingly hard to get.

Note that the survey is a leading or coincident indicator while unemployment itself is a lagging indicator. This portends more job weakness for quite some time even after the peak in "hard to find" sentiment is reached.

Unemployment (U-6) is well on its way to 20%. These are depression conditions. For more on a comparison between unemployment today and that during the Great Depression, please see Census Hiring To Create 1.4 Million Jobs, and scroll down to the section called Depression Statistics.






A Tale of Two Depressions - a good read!

expect to pay more taxes

You don't have to take my word for it that your taxes are about to go up tremendously under the "Messiah" - the Congressional Budget Office explains it quite clearly. Families well below the president's 'no-tax' threshold will get a six-figure bill. A MUST READ - Obama's $163,000 Tax Bomb


NOTE: I think it's important that we don't lose track of the size of these figures being thrown around as they are so casually now! So, consequently, I'm extending them out in long form instead of abbreviated to not trivialize them. THESE ARE HUGE, HUGE NUMBERS! And, imo, need to be taken considerably more seriously!

Photobucket
(There are links to the right under "Recommended Links" to help you contact your Representatives and Senators. Tell them to renegotiate or revoke our trade agreements which have robbed us of our jobs and really, our sovereignty!)


BLOG RULES: Simple - Keep it absolutely civil, especially towards fellow bloggers. And, don't get heavy on the partisanship - it's quite obvious that corrupt, petty, inept, greedy, power-lustful politicians are plentiful on both sides of the aisle. It's ok to take jabs at them - either party, any official or candidate; but, leave the total "blame game" out of this - it's ALL of them, everyone! If you think otherwise, then you probably don't want to bring it in here!

...see ya 'round the blogosphere! Have a good one!


visitor stats
Photobucket

IT IS FINISHED...

By: moonlightcowboy, 12:59 PM GMT on April 10, 2009

...an Easter prayer

God our Father,
by raising Christ your Son
you conquered the power of death
and opened for us the way to eternal life.
Let our celebration today
raise us up and renew our lives
by the Spirit that is within us.
Grant this through our Lord Jesus Christ, your Son,
who lives and reigns with you and Holy Spirit,
one God, forever and ever.

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“Do not be afraid, for I know that you are looking for Jesus, who was crucified. He is not here; he has risen, just as he said.” – Matthew 28:5-6



(Matthew 27:57-60) And when even was come, there came a rich man from Arimathaea, named Joseph, who also himself was Jesus' disciple: this man went to Pilate, and asked for the body of Jesus. Then Pilate commanded it to be given up. And Joseph took the body, and wrapped it in a clean linen cloth, and laid it in his own new tomb, which he had hewn out in the rock: and he rolled a great stone to the door of the tomb, and departed.




The day Jesus Christ was crucified

The Friday before Easter Sunday is known as Good Friday or Dark Friday. In this day we remember the cruel death of Jesus Christ on the Cross. He loved us so much that he was willing to take on the sin of the world and die for us, so whom ever belives in Him can have eternal life. Jesus was Crucified on Good Friday and died on the Cross for the Sin of the World. He rose from dead on Easter Sunday.








Jobless NEARS 15% already - "D" levels coming?

By: moonlightcowboy, 3:05 AM GMT on April 08, 2009

Unemployment is growing faster than we're being led to believe and we are now beginning to reach "depression-level" unemployment. The U6 figures for unemployment are at 15.6 percent and approaching 20 percent quickly. The Great Depression had 25% unemployment. And, yesterday, with the FED's "backtrack" through the rest of the year combined with their lack of transparency on the recent banks stress tests, and I believe our plight could be more serious than is being told.

I have trouble comparing the two economic crisis' since finance, trade, technology, politics and manipulated numbers such as the nations unemployment figures are far more complex now than then. The Great Depression is dissimilar from the current economic crisis (a "recession" as it's still being officially called) which has continued to slide, moving from U-shaped, to V-shaped, to L-shaped and quite possibly to D-shaped (note the new info below here about unemployment). And, I think comparing the two periods are more like apples are to oranges - very different even and far more serious, potentially effecting billions more people and countries than the Great Depression. We've no "real" reference to this situation. And, the US cannot sustain this gargantuan borrowing, printing and spending money forever and probably not far into the future either. Yes, it's global. Yes, it's systemic. But, no, we haven't been here before - this is new and it appears that it will get considerably worse before it gets better!

First, it's completely, hugely different if in only the sure scale of population:


US 1929 = 121,767,000
US 2009 = 305,000,000
(or increased about 250%)

WLD 1929 = 1,800,000,000
WLD 2009 = 6,800,000,000
(or increased about 378%)

Ok, let's look at unemployment and make some raw comparisons:

US 1929 - unemployment rate averaged 3.0%
US 1930 - unemployment rate averaged 8.7%
US 1933 - unemployment rate averaged 25.0%

US 2007 - unemployment rate averaged 4.5%
US 2009 - unemployment rate averaged 8.5%
US 2013 - using same ratios average 37.5% (?) At least one view has us already reaching 20% unemployment - depression-level statistics and growing.

With those same ratios could one reasonably assume that it's entirely possible things could get worse, especially with this new unemployment discernment? Well, maybe they already are and moving exponentially worse(read the unemployment post below). What's remarkably striking is that a young nation (relatively still) with such a small population comparatively, has produced more GDP than most of the world. With the various stories about US crop cutbacks because of these pressures, it appears very likely there could be massive food shortages throughout the world. Will their be soup lines? Less? Perhaps in certain parts of the world and perhaps even here in the US.

Fiscal responsibility must be restored and that can not be accomplished by continuing to support policies that grow government while stifling domestic business expansion and entrepreneurship. Our corporate tax rates are too high compared to much of the world and we are allowing newer, ever-expanding foreign control over our own economy. In addition, entitlements consume the lion's share of domestic tax revenues, leaving us at the mercy of China and other countries to fund government operations. New policies have to be adopted to secure an expanding domestic tax base while shrinking the size of government - this has and will be the purest solution to our exponentially growing problems. Right now, we're doing the opposite of that and it's a bitter recipe for disaster. If we continue down this path, we're at grave risk of losing our sovereignty, our way of life as we've known it for decades, centuries. Eventually, debts have to be paid or default occurs - plain and simple. Yet, no one is talking about a plan like that, least of all the "BaRockStar" who has been busy on foreign soil saying we're no longer a Christian nation, calling the US arrogant, apologizing and giving away the farm as fast as he possibly can!

Please, read the post below on unemployment - I think you'll begin to draw similar conclusions, but hey, I'd like your opinion and civil response.

Oh, and GetReal pointed that site out to me and suggested posting the unemployment numbers. GR8 site and thanks, GR.


THANKS! :)
MLC






Close Look at the Accelerating Rate of Unemployment


The trend in unemployment is unmistakably up and accelerating. Let's start with a discussion of widely followed data followed by many additional charts that you may not have seen before.

Here is a closeup from Jobs Contract 15th Straight Month; Unemployment Rate Soars to 8.5% courtesy of the BLS.

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The official unemployment number is known as U-3. It does not count discouraged workers, marginally attached workers, or those working part time for economic reasons. The BLS highlights those other numbers in Table A-12.

Table A-12

Table A-12 is where one can find a better approximation of what the unemployment rate really is. Let's take a look

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click on chart for sharper image

Grim Statistics

The official unemployment rate is 8.5% and rising sharply. However, if you start counting all the people that want a job but gave up, all the people with part-time jobs that want a full-time job, all the people who dropped off the unemployment rolls because their unemployment benefits ran out, etc., you get a closer picture of what the unemployment rate is. That number is in the last row labeled U-6.

U-6 Minus U-3 Accelerating



The above table shows that U-6 is accelerating faster than U-3. This is important because U-6 is a far better approximation of unemployment than U-3 (the "official" number).

I asked my friend Chris Puplava at Financial Sense if he could produce historical charts of the above trend. Chris was happy to oblige. He even added some additional charts to discuss as well.

U-6 Vs. U-3 Historical



U-6, U-3 and Median Weeks Unemployed



Note that U-6 is an artifact of the Clinton administration. It did not exist prior to 1994.

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Using U-6 as our measure, unemployment easily exceeds the unemployment rate in the 70, 8o's and early Clinton years as well.

Part Time Workers as a Percentage of Total Employment



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Salman Khan on Unemployment



Consumer Sentiment vs. Unemployment



The above chart shows U-3 unemployment vs. the consumer conference board survey of how hard it is to find jobs. The year over year survey results suggests consumers believe jobs are increasingly hard to get.

Note that the survey is a leading or coincident indicator while unemployment itself is a lagging indicator. This portends more job weakness for quite some time even after the peak in "hard to find" sentiment is reached.

Unemployment (U-6) is well on its way to 20%. These are depression conditions. For more on a comparison between unemployment today and that during the Great Depression, please see Census Hiring To Create 1.4 Million Jobs, and scroll down to the section called Depression Statistics.






A Tale of Two Depressions - a good read!

expect to pay more taxes

You don't have to take my word for it that your taxes are about to go up tremendously under the "Messiah" - the Congressional Budget Office explains it quite clearly. Families well below the president's 'no-tax' threshold will get a six-figure bill. A MUST READ - Obama's $163,000 Tax Bomb


NOTE: I think it's important that we don't lose track of the size of these figures being thrown around as they are so casually now! So, consequently, I'm extending them out in long form instead of abbreviated to not trivialize them. THESE ARE HUGE, HUGE NUMBERS! And, imo, need to be taken considerably more seriously!

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(There are links to the right under "Recommended Links" to help you contact your Representatives and Senators. Tell them to renegotiate or revoke our trade agreements which have robbed us of our jobs and really, our sovereignty!)


BLOG RULES: Simple - Keep it absolutely civil, especially towards fellow bloggers. And, don't get heavy on the partisanship - it's quite obvious that corrupt, petty, inept, greedy, power-lustful politicians are plentiful on both sides of the aisle. It's ok to take jabs at them - either party, any official or candidate; but, leave the total "blame game" out of this - it's ALL of them, everyone! If you think otherwise, then you probably don't want to bring it in here!

...see ya 'round the blogosphere! Have a good one!


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Popcorn or tums, u'll need em

By: moonlightcowboy, 11:38 PM GMT on April 05, 2009

Ok, folks! Strap in your seatbelts - this is gonna be a hulluva ride! The reading is a bit lengthy so, please, have some popcorn and soak it all in. When you're through ingesting this you may need some Tums. After reading, I strongly advise taking a long walk and then calling your friends, loved ones and folks you work with and tell them it's time to get involved in taking back our country!

Global Derivatives - $1.4 QUADRILLION, Up 22% Worldwide…

While it may seem intuitive that the world’s stack of derivatives has shrunk during this crisis, in fact it is still growing on its exponential curve according to mi2g a London based digital banking, security, and risk management company.

G20 Summit must focus on Derivatives, Off-Balance-Sheet Vehicles.


8 Bubbles Quadrillion Play Grows 22% to $206k per person-on-planet

London, UK - 19th March 2009, 10:30 GMT
[Please note that the views presented by individual contributors are not necessarily representative of the views of ATCA, which is neutral. ATCA conducts collective Socratic dialogue on global opportunities and threats.]
As the April G20 summit in London approaches, it is worth noting that the trans-national play of derivatives has grown from USD 1.144 Quadrillion to USD 1.405 Quadrillion, ie, +22% worldwide. This is a staggering increase and most of it is seen in the Over-The-Counter (OTC) category as opposed to exchange traded derivatives. As a result, the global size of the derivatives bubble which was calculated last year at USD 190k per person-on-planet, has risen to USD 206k per person-on-planet. The ever rising commitment of governments for the repeated bailouts of financial institutions is partially linked to various flavours of derivatives exposure settlements and “black hole” losses emanating from off-balance-sheet vehicles.
The traditional argument has been to discount derivatives altogether: “On one side of the equation there is a loss, on the other side there is a gain. Nothing disappears. It is just one big shuffle of wealth and assets.” However, if this is the case, why has the US tax-payer had to bail out AIG repeatedly in excess of a hundred and fifty billion dollars so that AIG could settle the Credit Default Swap (CDS) and other derivatives claims of the largest trans-national financial institutions in the world?
In the ATCA briefing, "The Invisible One Quadrillion Dollar Equation" published in September 2008 we discussed the main categories of the quadrillion dollar derivatives market as quoted by the Bank for International Settlements in Basel, Switzerland. Since then the quantum has grown significantly in certain crucial categories and the latest revised numbers follow:

1. Listed credit derivatives stood at USD 542 trillion, about the same as before; however
2. Over-The-Counter (OTC) derivatives stood in notional or face value at USD 863 trillion (UP +44%) and include:

a. Interest Rate Derivatives at about USD 458+ trillion (UP +16%);
b. Credit Default Swaps at about USD 57+ trillion (DOWN -1%);
c. Foreign Exchange Derivatives at about USD 62+ trillion (UP +10%);
d. Commodity Derivatives at about USD 13+ trillion (UP +44%);
e. Equity Linked Derivatives at about USD 10+ trillion (UP +17%); and
f. Unallocated Derivatives at about USD 81+ trillion (UP +14%).

The myth of the single bubble behind The Great Unwind -- manifest as the global credit crunch -- has essentially been dumped in the last few months and subprime mortgage default, a USD 1.5 trillion challenge within the USD 5 trillion mortgage based assets envelope, is seen as a component of a much larger overwhelming global crisis with unprecedented scale, speed, severity and synchronicity. The global crisis has wiped a staggering USD 50 trillion off the value of financial assets ­ currency, equity and bond markets worldwide ­ last year, according to the Asian Development Bank.

The truth that there are as many as "Eight Bubbles" [ATCA] at play and in the process of bursting together is understood to a greater extent now than in the past. We have gone from being able to “rescue the world” with less than USD 1 trillion in October 2008 to USD 11.6 trillion commitments in the US alone along with a further announcement of USD 1.2 trillion of quantitative easing by the US Fed in March 2009. There is a realisation worldwide including the G7 + BRIC + MISSAT that this is a USD 20 trillion problem and growing. As time goes by, the full extent of the collateral damage from the Quadrillion Play and 8 Bubbles burst is being revealed.
The bursting process is taking the form of deleverage on an unprecedented scale. Even 1929 pales in comparison because the industrial production collapse witnessed over five successive years in the 1930s in the US is now taking place in five to six months, most notably in Japan. At a follow on recent ATCA roundtable we posed the following questions for Socratic dialogue:

I. If the Dow Jones Industrial Average has fallen from above 14,000 to below 7,500 as a result of some of the 8 bubbles collapsing, ie a 6,500 points drop or 46% decline, where will the equities market reach by 2010 as other larger bubbles burst?
II. If the world government bond market is around USD 35 trillion, how can governments rescue the eight bubbles bursting step by step with an ever larger quantum and momentum?
III. How can Quantitative Easing (QE) defy the laws of financial gravity without devaluing paper currencies significantly?
IV. What ought to be the focus at the G20 Summit in April to bring about stability in regard to the rising derivatives exposures and use of off-balance-sheet vehicles?

We discussed “Eight Bubbles” in play worldwide in November 2008 and their approximate scale, based on latest information in 2009, is as follows:

1. Subprime Mortgage linked Loans & Assets (USD 1.5 trillion) within Mortgage backed Assets (USD 5 trillion);
2. China, India, Eastern Europe and other Emerging Market Loans (USD 5 trillion);
3. Commodities (Commodity Derivatives at about USD 13 trillion);
4. Corporate bonds (USD 18 trillion);
5. Commercial (USD 22 trillion) and Residential property (USD 45 trillion);
6. Credit Cards Outstanding Debt (USD 4.5 trillion);
7. Currencies (Foreign Exchange Derivatives at about USD 62 trillion); and
8. Credit Default Swaps (USD 57 trillion) as a subset of all Derivatives (USD 1,405 Trillion).

The relative scale of the world's financial engine is as follows:

1. The entire GDP of the US is about USD 14 trillion and falling.
2. The entire US money supply is also about USD 14 trillion with rising Quantitative Easing in trillions.
3. The GDP of the entire world is USD 45 trillion and falling. USD 1,405 trillion is 31 times world GDP.
4. The real estate of the entire world is valued at about USD 65 trillion.
5. The world stock and bond markets are valued at about USD 70 trillion.
6. The trans-national universal model financial institutions own about USD 150 trillion in derivatives.
7. The population of the whole planet is 6.8 billion people. So the derivatives market represents about USD 206,000 per person on the planet. .

Assuming a 10% conservative default or decline in asset value, this could be a USD 100 trillion challenge on the base of a Quadrillion. USD 50 trillion of asset decline is already manifest. What are the likely outcomes? "Four Scenarios” have already been suggested by ATCA. We are keen to receive your answers and solutions. Please note that the numbers quoted are a rough guide.


$1.4 quadrillion equals $206,000 in derivative exposure for every man, woman, and child on the planet. We’re not just talking about us relatively rich and spoiled Americans, we’re talking about the true masses.

Is it just me or does that figure seem INSANE? As in WHY would the people of the planet allow so much derivative exposure? What it the need? What is the purpose?

I think I can answer that in one word – GREED.

Or I can give you the lengthier but still condensed version that goes thusly:

In the old, old days when blacksmiths stored gold for people and issued “gold receipts,” they figured out that they could issue more “receipts” than they had gold in their possession, thus effectively printing their own money in excess of their actual holdings. This worked as long as not everyone came to claim their gold at once, and thus the fractional reserve banking concept was born.

Eventually the gold was completely done away with (President Nixon 1971 in the U.S.) and a fiat money (by decree) fractional reserve system has survived so far, now only 38 years young. Over the years the reserve requirement has gone down. This has allowed LEVERAGE to increase. But recently the largest banks have virtually done away with reserves altogether (now even barrowed reserves) and thus fractional reserve lending had reached its limits. What’s a central banker to do? Create derivatives that in essence move some of the leverage off their balance sheets.

As the world now knows, there are many types of derivatives. Many are derived from debt, a lot are credit default swaps (an unregulated form of insurance), and many are based upon interest rates. To be fair, although we are talking unfathomable sums of notional value, it is true that if they all were to go bad at once that the NET result would be a loss far less than the notional value. But what would happen is that some players would be protected while many others would not. Those who are not, like AIG, would not survive.

So, how much money are we talking about here? Well, the latest figures I have show Global GDP is running a little more than $60 trillion a year, so $1.4 quadrillion would equate to about 23 times world GDP (they show $45 trillion and 31 times GDP... I do not know which is correct - either way is unbelievable).

I know that those numbers sound meaningless, but mi2G did a nice graphic showing how how much a trillion dollars in 100 dollar bills would look, How big is $1 Trillion?

They also did an even better series of graphics to visualize how large a stack of pennies would be if there were a quadrillion of them! How big is 1 Quadrillion? Make sure you flip through the series.

The OCC (Comptroller of the Currency) just released their 4th quarter derivatives report for the United States. I did an article on that, but want to show a couple of the many outrageous charts illustrating how many of these derivatives are located in our top banks, and the leverage found within.

Below is a current chart of the holdings of our largest banks:

bank derivative chart

That's $87 TRILLION that JPMorgan holds in derivatives, many times their net worth. And that's more than $30 TRILLION that Goldman Sachs holds, they are leveraged to extreme proportions.

This next chart shows the holdings for the 5 largest U.S. banks. Note that each category derivative is multiples of their Risk Based Capital:

Risk based capital

The leverage deployed is absolutely insane and guaranteed to fail. The central bankers will tell you they have it all under control – they do not. They have created such a monster that they have permeated the entire globe with credit (debt). Every nook and cranny that can be filled with debt has been (Death by Numbers). We have pulled ALL our future earnings into the here and now and this shadow banking system is how they did it – all at arms length.

Those who follow my work know how exponential growth ends. If you need a refresher, please Spend some Time with the Good Dr. Bartlett…

Since they can’t keep it under control, they keep it out of sight, hiding as “level 3 assets” which they get to mark to THEIR model of value (wish I could do that – and pay myself large bonuses for my fantasy). Their latest? Change the accounting rules so that they are not forced to mark-to-market. Change the rules, hide and obscure – get the taxpayer on the hook for their sins. They use their “money” to buy and control politicians, thus they are safe… for now.


expect to pay more taxes

You don't have to take my word for it that your taxes are about to go up tremendously under the "Messiah" - the Congressional Budget Office explains it quite clearly. Families well below the president's 'no-tax' threshold will get a six-figure bill. A MUST READ - Obama's $163,000 Tax Bomb

The CBO baseline cumulative deficit for the Obama 2010-2019 budget is $9.3 trillion. How much additional deficit and debt does Mr. Obama add relative to a do-nothing budget with none of his programs? Mr. Obama's "debt difference" is $4.829 trillion -- i.e., his tax and spending proposals add $4.829 trillion to the CBO do-nothing baseline deficit. The Obama budget also adds $177 billion to the fiscal year 2009 budget. To this must be added the $195 billion of 2009 legislated add-ons (e.g., the stimulus bill) since Mr. Obama's election that were already incorporated in the CBO baseline and the corresponding $1.267 trillion in add-ons for 2010-2019. This brings Mr. Obama's total additional debt to $6.5 trillion, not his claimed $2 trillion reduction. That was mostly a phantom cut from an imagined 10-year continuation of peak Iraq war spending.

What does $6.5 trillion of additional debt imply for the typical family? If spread evenly over all those paying income taxes (which under Mr. Obama's plan would shrink to a little over 50% of the population), every income-tax paying family would get a tax bill for $163,000. (In ten years, interest would bring the total to well over $200,000, if paid all at once. If paid annually over the succeeding ten years, the tax hike per year would average almost $26,000.) That's in addition to his explicit tax hikes. Obama's massive additional debt implies a tax hike, if paid today, of well over $100,000 for people with incomes of $150,000, far below Mr. Obama's tax-hike cut-off of $250,000 (over $130,000 in ten years and over $16,000 a year if paid annually over the following ten years). In other words, a middle-aged two-career couple in New York or California could get a future tax bill as big as their mortgage.

But what is not just worrisome but dangerous are the growing trillion dollar deficits in the latter years of the Obama budget. These deficits are so large for a prosperous nation in peacetime -- three times safe levels -- that they would cause the debt burden to soar toward banana republic levels. That's a recipe for a permanent drag on growth and serious pressure on the Federal Reserve to inflate, not the new era of rising prosperity that Mr. Obama and his advisers foresee.


NOTE: I think it's important that we don't lose track of the size of these figures being thrown around as they are so casually now! So, consequently, I'm extending them out in long form instead of abbreviated to not trivialize them. THESE ARE HUGE, HUGE NUMBERS! And, imo, need to be taken considerably more seriously!

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(There are links to the right under "Recommended Links" to help you contact your Representatives and Senators. Tell them to renegotiate or revoke our trade agreements which have robbed us of our jobs and really, our sovereignty!)


BLOG RULES: Simple - Keep it absolutely civil, especially towards fellow bloggers. And, don't get heavy on the partisanship - it's quite obvious that corrupt, petty, inept, greedy, power-lustful politicians are plentiful on both sides of the aisle. It's ok to take jabs at them - either party, any official or candidate; but, leave the total "blame game" out of this - it's ALL of them, everyone! If you think otherwise, then you probably don't want to bring it in here!

...see ya 'round the blogosphere! Have a good one!


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UR getting new 6-figure tax bill

By: moonlightcowboy, 6:20 AM GMT on April 04, 2009

C A U T I O N: This is probably very alarming to those who really just haven't been paying attention. This post will give some of you a nosebleed while it will make others puke! More of the Obama cult will abandon their praise for the "do-no-wrong", liberal, inexperienced, tax-n-spend idiot in exchange for a burning desire to get a new POTUS and new Congress elected quickly.

You don't have to take my word for it that your taxes are going to go up tremendously under the "Messiah" - the Congressional Budget Office explains it quite clearly.

Obama's $163,000 Tax Bomb

Families well below the president's 'no-tax' threshold will get a six-figure bill.




The House and Senate are preparing to pass President Barack Obama's radical budget blueprint, with only minor modifications, by using (abusing would be more accurate) the budget "reconciliation" process. This process circumvents the Senate's normal rules requiring 60 votes to prevent a filibuster. Reconciliation was created by Congress in the mid-1970s to enforce deficit reduction, the opposite of what the president and his party are aiming for.

The immense increase in nondefense spending and taxes, and the tripling of the national debt in Mr. Obama's budget, have been the subject of considerable scrutiny since it was announced. Mr. Obama and his economic officials respond, not without justification, that he inherited an enormous economic and financial crisis and a large deficit. All presidents present the best possible case for their budgets, but a mind-numbing array of numbers offers innumerable opportunities to conjure up misleading comparisons. Mr. Obama's characterizations of his budget unfortunately fall into this pattern. He claims to reduce the deficit by half, to shave $2 trillion off the debt (the cumulative deficit over his 10-year budget horizon), and not to raise taxes on anyone making less than $250,000 a year. While in a Clintonian sense correct (depends on what the definition of "is" is), it is far more accurate to describe Mr. Obama's budget as almost tripling the deficit. It adds $6.5 trillion to the national debt, and leaves future U.S. taxpayers (many of whom will make far less than $250,000) with the tab. And all this before dealing with the looming Medicare and Social Security cost explosion.

Some have laid the total estimated deficits and debt projections (as more realistically tallied by the Congressional Budget Office) on Mr. Obama's doorstep. But on this score the president is correct. He cannot rightly be blamed for what he inherited. A more accurate comparison calculates what he has already added and proposes to add by his policies, compared to a "do-nothing" baseline (see above chart). The CBO baseline cumulative deficit for the Obama 2010-2019 budget is $9.3 trillion. How much additional deficit and debt does Mr. Obama add relative to a do-nothing budget with none of his programs? Mr. Obama's "debt difference" is $4.829 trillion -- i.e., his tax and spending proposals add $4.829 trillion to the CBO do-nothing baseline deficit. The Obama budget also adds $177 billion to the fiscal year 2009 budget. To this must be added the $195 billion of 2009 legislated add-ons (e.g., the stimulus bill) since Mr. Obama's election that were already incorporated in the CBO baseline and the corresponding $1.267 trillion in add-ons for 2010-2019. This brings Mr. Obama's total additional debt to $6.5 trillion, not his claimed $2 trillion reduction. That was mostly a phantom cut from an imagined 10-year continuation of peak Iraq war spending.

The claim to reduce the deficit by half compares this year's immense (mostly inherited) deficit to the projected fiscal year 2013 deficit, the last of his current term. While it is technically correct that the deficit would be less than half this year's engorged level, a do-nothing budget would reduce it by 84%. Compared to do-nothing, Mr. Obama's deficit is more than two and a half times larger in fiscal year 2013. Just his addition to the budget deficit, $459 billion, is bigger than any deficit in the nation's history. And the 2013 deficit is supposed to be after several years of economic recovery, funds are being returned from the financial bailouts, and we are out of Iraq.

Finally, what of the claim not to raise taxes on anyone earning less than $250,000 a year? Even ignoring his large energy taxes, Mr. Obama must reconcile his arithmetic. Every dollar of debt he runs up means that future taxes must be $1 higher in present-value terms. Mr. Obama is going to leave a discounted present-value legacy of $6.5 trillion of additional future taxes, unless he dramatically cuts spending. (With interest the future tax hikes would be much larger later on.) Call it a stealth tax increase or ticking tax time-bomb. What does $6.5 trillion of additional debt imply for the typical family? If spread evenly over all those paying income taxes (which under Mr. Obama's plan would shrink to a little over 50% of the population), every income-tax paying family would get a tax bill for $163,000. (In ten years, interest would bring the total to well over $200,000, if paid all at once. If paid annually over the succeeding ten years, the tax hike per year would average almost $26,000.) That's in addition to his explicit tax hikes. While the future tax time-bomb is pushed beyond Mr. Obama's budget horizon, and future presidents and Congresses will decide how it will be paid, it is likely to be paid by future income tax hikes as these are general fund deficits.

We can get a rough idea of who is likely to pay them by distributing this $6.5 trillion of future taxes according to the most recent distribution of income-tax burdens. We know the top 1% or 5% of income-taxpayers pay vastly disproportionate shares of taxes, and much larger shares than their shares of income. But it also turns out that Mr. Obama's massive additional debt implies a tax hike, if paid today, of well over $100,000 for people with incomes of $150,000, far below Mr. Obama's tax-hike cut-off of $250,000 (over $130,000 in ten years and over $16,000 a year if paid annually over the following ten years). In other words, a middle-aged two-career couple in New York or California could get a future tax bill as big as their mortgage.

While Mr. Obama's higher tax rates are economically harmful, some of his tax policies deserve wide support, e.g., permanently indexing the alternative minimum tax. Ditto some of the spending increases, including the extension of unemployment benefits, given the severe recession. Neither a large deficit in a recession nor a small increase from the current modest level in the debt to GDP ratio is worrisome. And at a 50% debt-to-GDP ratio, with nominal GDP growing 4% (the CBO out-year forecast), deficits of 2% of GDP would not be increasing the debt burden relative to income.

But what is not just worrisome but dangerous are the growing trillion dollar deficits in the latter years of the Obama budget. These deficits are so large for a prosperous nation in peacetime -- three times safe levels -- that they would cause the debt burden to soar toward banana republic levels. That's a recipe for a permanent drag on growth and serious pressure on the Federal Reserve to inflate, not the new era of rising prosperity that Mr. Obama and his advisers foresee.


NOTE: I think it's important that we don't lose track of the size of these figures being thrown around as they are so casually now! So, consequently, I'm extending them out in long form instead of abbreviated to not trivialize them. THESE ARE HUGE, HUGE NUMBERS! And, imo, need to be taken considerably more seriously!

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(There are links to the right under "Recommended Links" to help you contact your Representatives and Senators. Tell them to renegotiate or revoke our trade agreements which have robbed us of our jobs and really, our sovereignty!)


BLOG RULES: Simple - Keep it absolutely civil, especially towards fellow bloggers. And, don't get heavy on the partisanship - it's quite obvious that corrupt, petty, inept, greedy, power-lustful politicians are plentiful on both sides of the aisle. It's ok to take jabs at them - either party, any official or candidate; but, leave the total "blame game" out of this - it's ALL of them, everyone! If you think otherwise, then you probably don't want to bring it in here!

...see ya 'round the blogosphere! Have a good one!


visitor stats
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The views of the author are his/her own and do not necessarily represent the position of The Weather Company or its parent, IBM.

moonlightcowboy's WunderBlog

About moonlightcowboy

"There is no heavier burden than a great potential." - Charles Schultz, in the Peanut's character of Linus.