Thursday, April 15, 2010
It’s All Play Money Now
Things to think about on Tax Deadline Day:
1. The U.S. national debt is approximately $12 trillion.
2. The approximate yearly GDP of the U.S. (entire economic output) is around $14 trillion.
3. The “M0” money supply (total of all physical bills and currency, plus the money on hand in bank vaults and all of the deposits those banks have at reserve banks, according to the Fed, was about $908 billion, as of mid-2009 [or about 7-1/2% of $12 trillion].
4. Since the start of the recession, the U.S. has lost $17.5 trillion in household wealth, according to a report from the Secretary of the Treasury.
5. According to the 2008 Financial Report of the United States Government, the total liabilities of the United States government, including future social security and medicare payments that the U.S. government is already committed to pay out, now exceed $65 Trillion, close to the GDP of the entire world. Does anyone else wonder where this money will come from?
6. Subsequent to the report, congress and the president passed the health care reform bill, which will become the biggest tax increase in American history.
7. According to the same report, the budget deficit for 2008 was not $455 billion, which was derived by cash accounting, but $5.1 trillion dollars using the government’s (and Wall Street’s) GAAP accounting. That’s a spending deficit of $5.1 trillion for the one year of 2008!
8. According to the Government Accounting Office, “Absent a change in policy…the interest costs on the growing debt together with spending on major entitlement programs could absorb 92 cents of every dollar of federal revenue in 2019" (nine years from now).
9. In 2008, banks were holding $62 trillion dollars outstanding in credit default swaps alone (I don’t have the current figure).
10. With the fractional reserve banking rules in the U.S. banks have lent out many times more money than they have on deposit or that the FDIC can cover should there be a wave of defaults. As of early this month 41 banks had failed since the beginning of this year.
11. Late last month, Fox News reported that 79% of voters polled (72% of Democrats, 84% of Republicans and 80% of independents) believed it possible that the U.S. economy could collapse.
12. When the Federal Reserve (an elite, private, international banking cartel) creates money (introduces more money into the economy), it is loaned to the U.S. government at interest. To pay for the interest, the U.S. government must borrow more money from the Fed at interest. Every time the U.S. does this, the debt gets bigger. This is, by the Fed’s intention, a perpetual cycle of increasing debt.
The question is when can the debt to the Fed be retired? The answer is NEVER. It is mathematically impossible! The house of debt cards will continue to be built higher and higher until it collapses under its own weight – unless the debt is forgiven by the Fed, or repudiated by the U.S. government. There are no other ways.