Archive for the ‘Inflation’ Category
Welcome to the “new normal” under Obamanomics. In Europe, where Keynesian economics and Democratic Socialism has dominated for decades, unemployment rates are in the 20′s. For the younger generation, they’re even higher. Yet, instead of learning from their mistakes, Obama and the Democrats insist on repeating them. Millions of innocent people are being hurt in the process.
After a full year of fruitless job hunting, Natasha Baebler just gave up.
She’d already abandoned hope of getting work in her field, working with the disabled. But she couldn’t land anything else, either — not even a job interview at a telephone call center.
Until she feels confident enough to send out resumes again, she’ll get by on food stamps and disability checks from Social Security and live with her parents in St. Louis.
“I’m not proud of it,” says Baebler, who is in her mid-30s and is blind. “The only way I’m able to sustain any semblance of self-preservation is to rely on government programs that I have no desire to be on.”
Baebler’s frustrating experience has become all too common nearly four years after the Great Recession ended: Many Americans are still so discouraged that they’ve given up on the job market.
Older Americans have retired early. Younger ones have enrolled in school. Others have suspended their job hunt until the employment landscape brightens. Some, like Baebler, are collecting disability checks.
It isn’t supposed to be this way. After a recession, an improving economy is supposed to bring people back into the job market.
Sadly, until we get rid of Obamanomics, the jobs won’t be coming back. Business aren’t hiring because they never know when they’re going to be hit with a costly new regulation or tax. Entrepreneurs aren’t willing to take the risk to start a new business in such a hostile business climate.
Donald Lambro at Human Events predicts that we’re in for “Four More Years of Pain“:
President Obama heads into the third month of his second term, still unable to find a cure for a sluggish economy, weak employment numbers and his own slipping job approval scores.
Second terms are usually challenging for presidents who have won re-election without having the slightest idea about what they will do over the next four years. And that’s what we are witnessing now with Obama, whose biggest problem is the anemic, job-challenged economy.
[...] The depressing headlines of the past few days tell a sad tale of what the economy is like under his presidency:
– “Weekly Jobless Claims Get Weaker as Outlook Dims” was the gloomy headline over a Reuters news wire story Thursday morning on the CNBC website.
“The number of Americans filing new claims for unemployment benefits rose to its highest level in four months last week, suggesting the labor market recovery lost some steam in March,” Reuters reported.
– “Hiring Is Weaker at Private Companies,” a Washington Post headline blared Thursday.
“Companies hired at the weakest pace in five months in March as recent strong demand for construction jobs evaporated and growth in the vast services sector slowed, signs that the economic recovery could be hitting a soft patch,” the newspaper reported.
That’s the conclusion of the ADP National Employment Report Wednesday, which showed “that private employers added 158,000 jobs last month.” The ADP job survey said “the gain was the smallest since October.”
A separate report Wednesday on the services industry, the economy’s largest job sector, showed that employment growth “pulled back in March.”
You do not hear any of these reports on the nightly TV news because the networks cherry-pick reports that feed the White House line of a continuing economic recovery.
[...] Thankfully, there are economic reporters who resist touting the White House line that everything is rosier under Obama’s policies.
“We’re approaching the four-year anniversary of the economic recovery, and it still doesn’t feel like much of one, what with the unemployment rate at 7.7 percent and wages stagnant over the past five years,” Neil Irwin, the Post’s veteran economic analyst, recently reported.
Obama is so blinded by ideology that the tragic results of his policies on display all around him aren’t enough to convince him that his policies need to change.
Even as the Obama White House prepares for a star-studded White House concert featuring Queen Latifah, Cyndi Lauper, and Justin Timberlake, figures from the U.S. Census Bureau reveal that roughly 50 million Americans—one in six—now live below the poverty line.
Additionally, one in five American children have fallen below the poverty line; the last time poverty levels were this high, Lyndon Baines Johnson was president.
“In the last three years, there’s been a great change in the kinds of people we are serving,” said Director of Community Services at Catholic Charities of Baltimore Mary Anne O’Donnell. “There are increasing numbers of people who owned a home, lost their jobs, end up living in their car and are coming with children to our soup kitchen.”
The U.S. government defines a family of four earning under $23,021 as living in poverty. Income used to compute poverty status does not include non-cash benefits, such as food stamps and housing subsidies.
Welfare program enrollments have exploded under President Barack Obama. Americans on food stamps now outnumber the combined populations of 24 U.S. states, costing taxpayers more than double the amount spent on food stamps five years ago. In January 2009, 31.9 million Americans received food stamps. Today, that figure is 47.79 million.
Obama Proclaims April ‘Financial Capability Month,’ Plans To Teach Young People ‘How to Budget Responsibly’
You can’t make this stuff up! And no, it wasn’t an April Fools joke!
President Barack Obama, who has increased the national debt by $53,377 per household, has proclaimed April“National Financial Capability Month,” during which his administration will do things such as teach young people “how to budget responsibly.”
“I call upon all Americans to observe this month with programs and activities to improve their understanding of financial principles and practices,” Obama said in an official proclamation released Friday.
[...] The proclamation on the White House website links to two other government websites: the site for the Consumer Financial Protection Bureau, and MyMoney.gov, which includes materials from 21 federal agencies.
Listed among the “popular topics” on MyMoney.gov is “Managing Debt and Credit,” which includes a link to a page on the Federal Reserve’s website called “Getting the most from your credit card.” Tip 2 on that page is: “Stay Below Your Credit Limit.”
When Obama was inaugurated on Jan. 20, 2009, the total debt of the federal government was $10,626,877,048,913.08. As of the close of business on March 28, 2013, the total debt of the federal government was $16,766,988,432,792.62—an increase of $6,140,111,383,879.54 since Obama took office.
That means that under Obama the federal debt has increased $53,377 for each one of the 115,031,000 households the Census Bureau says there are now in the United States. The president is required by law to submit a budget proposal for the next fiscal year by the first Monday in February.
Thus far, Obama has not submitted his budget proposal for fiscal 2014.
It’s the liberal way to perceive yourself as diametrically opposed to what and who you actually are. Therefore, Barack Obama being a financially incapable liberal is precisely the reason why the man who has yet to submit a budget proposal for 2014 feels he’s qualified to teach young people “how to budget responsibly.”
What’s next, Bill and Hillary Clinton running a Marital Cohesiveness and Fidelity Seminar? How about first daughters Sasha and Malia, who took not one but two spring break vacations, sharing with the younger set how to spend a week at the Atlantis in the Bahamas and River Run in Sun Valley, Idaho on a limited budget? Sorry, but if Barack Obama is financially capable, then outgoing MSNBC host Ed Schultz is qualified to host a new “Eradicate Bias in the Media” show.
Then again, this is the president who is expert at exempting himself from what he insists others do. That is why a person who clearly has no understanding of sound financial principles can say with a straight face: “I call upon all Americans to observe this month with programs and activities to improve their understanding of financial principles and practices.”
Wait! When Obama says “all Americans” does “all” include himself and the $10 million dollar vacationer he’s married to, or does “all” just mean everybody except Mr. and Mrs. Obama?
Either way, the president must truly believe that he’s an authority on stretching a dollar, because in his “National Financial Capability Month” proclamation, he said that his “[a]dministration is dedicated to helping people make sound decisions in the marketplace.” That marketplace, by the way, is the same marketplace that he’s currently in the process of destroying. It could be that President Obama thinks that the soundest way to save money in the marketplace is to exchange the marketplace for something altogether different.
In Cyprus, politicians are trying to bail themselves out by stealing directly from people’s bank accounts. In America, the government is more subtle.
It’s been stealing from us for years – through inflation. Thomas Sowell explains:
One of the big differences between the United States and Cyprus is that the U.S. government can simply print more money to get out of a financial crisis. But Cyprus cannot print more euros, which are controlled by international institutions.
Does that mean that Americans’ money is safe in banks? Yes and no.
The U.S. government is very unlikely to just seize money wholesale from people’s bank accounts, as is being done in Cyprus.
But does that mean that your life savings are safe?
No. There are more sophisticated ways for governments to take what you have put aside for yourself and use it for whatever the politicians feel like using it for.
If they do it slowly but steadily, they can take a big chunk of what you have sacrificed for years to save, before you are even aware, much less alarmed.
That is in fact already happening.
When officials of the Federal Reserve System speak in vague and lofty terms about “quantitative easing,” what they are talking about is creating more money out of thin air, as the Federal Reserve is authorized to do — and has been doing in recent years, to the tune of tens of billions of dollars a month.
When the federal government spends far beyond the tax revenues it has, it gets the extra money by selling bonds. The Federal Reserve has become the biggest buyer of these bonds, since it costs them nothing to create more money.
This new money buys just as much as the money you sacrificed to save for years. But more money in circulation, without a corresponding increase in output, means rising prices.
Although the numbers in your bank book may remain the same, part of the purchasing power of your money is transferred to the government. Is that really different from what Cyprus has done?
Through the centuries – in historic cultures like that of Yap Island who used giant, immovable stone disks for commerce, to today’s United States, whose Dollar fiat currency exists primarily in digital form – “money” is able to be exchanged for goods and services because society agrees to accept it (at a certain rate of exchange).
But what happens when a society starts doubting the value of its money?
Fed, the Great & Powerful
The podcast goes into the mind-blowingly simple process by which new money is created in America by the Federal Reserve (or the “Fed”). That is to say:
- The Fed holds a meeting
- Those in the room decide how many more dollars they think the world needs
- Someone walks over to a computer and adds that many dollars to the banks, with a few clicks of the keyboard
The banks then, if they want to, lend this new money out into the economy on a fractional basis, adding even more “thin air” dollars to the nation’s money supply.
This unique ability in America lends the Fed enormous power. The power to create new money from nothing. With no limit.
And with that power, the Fed can control and/or influence economies and markets the world over.
Should such power exist? And if so, should a single private entity owned by the major players in the banking system be allowed to wield it?
Such power certainly has its dangers.
[...] Money is not wealth. It is merely a claim on wealth.
You can’t print your way to prosperity. History is abundantly clear on that.
With the clarity of hindsight, it’s now obvious how the Fed has now painted itself into a corner.
[...] Cyprus has awakened the world to the reality that central planners can appropriate their money with the bang of a gavel. And while we don’t yet know with certainty how things will unfold in Cyprus, we can project that events there have shaken society’s confidence in the soundness of fiat currency in general. If we know it can be confiscated or devalued overnight, we are less likely to unquestioningly accept its stated value. This doubt that strikes at the very foundation of modern monetary systems.
Cyprus is meaningful in the way that it shines a light on both the importance of hard assets and the risk it poses to market stability. It certainly increases the risk of our prediction of a 40%+ stock-market correction by September, as investors begin to realize that current high values are simply the ephemeral effect of too much money, instead of a sign of true value.
At this point, prudence suggests we prepare for the worst (by parking capital on the sidelines, investing in our personal resilience, etc.) and add to our hard asset holdings (like precious metals bullion, productive real estate, etc.) as insurance to protect our purchasing power. The dollar may strengthen for a bit versus other currencies and perhaps the financial markets, but the long-term trend is a safer and surer bet: Dollars will be inflated. There will be more of them in the future than there are today. So, while our dollars still have the purchasing power they do, we should use the window of time we have now to exchange paper money for tangible wealth at today’s prices.
Cyprus is only the first domino.
Cypriot President Nicos Anastasiades has struck a deal with the European Union and International Monetary Fund that will seize up to 40% of uninsured funds from wealthier depositors with over 100,000 euros and will not siphon funds from those below that amount.
The 10 billion euros ($13 billion) bailout plan calls for the Cyprus Popular Bank to be dissolved and all its viable assets transferred to the country’s biggest bank, Bank of Cyprus.
Presently, Cypriot banks have imposed a 100 euros ATM withdraw limit, and Cyprus border officials at air and sea ports have been ordered to confiscate the funds of any traveler attempting to leave with over 10,000 euros.
How dare they try to keep the money they worked so hard for and saved AFTER taxes were already paid on it? Don’t they know that private property is an illusion under Socialism? That the government is free to spend as irresponsibly as it wants, and can steal your money at will to pay the tab? That’s what they’ve been voting for all this time, right? Or didn’t they realize it?
Understandably, Cypriots are desperately trying to get their money out, but it’s too late:
The president of Cyprus assured his people a bailout deal he struck with the European Union was in their best interests, but banks will remain closed until Thursday – and even then subject to capital controls to prevent a run on deposits.
The ruling class insists that stealing money out of their bank accounts is “in their best interests.” Doesn’t that make them feel better? They’ll be patriotic and happy to “share the sacrifice” for the greater good, right? Of course not!
Tyler Durden reports that there is a “Cash Exodus From Cyprus Surges Despite Bank Closures, Capital Controls“:
From FAZ, google translation edited:
Despite the closed banks and a lock for payments in the past week, more money flowed out of Cyprus than in previous weeks, Frankfurter experts report for payments. Prior to the escalation of the crisis in Cyprus accruing on the payment system Target liabilities of Cypriot central bank to the European Central Bank (ECB) had increased daily at approximately 100 to 200 million euros. In recent days was after Parliament the stabilization program initially had to fail, the daily has risen to more than double. Just in the last week so could cash assets have been withdrawn from Cyprus in the billions, although the Cypriot central bank has actually issued a lock.
How is it possible that cash is leaving the country even with a bank halt? It isn’t, unless of course, the banks aren’t really halted, and some outbound wire transfers, which are permitted, are more equal than other wire transfers which are stuck on the island. Of course, that would imply an “Europe Farm” type of arrangement, which in the bastion of fairness, equality and honesty which is Europe, would be absolutely impossible.
On the other hand, if indeed the drain of the Cypriot banking system has continued despite all the enacted halts during the past week, then it’s game over for Cyprus, which will soon have only the ECB to thank for providing liquidity, an arrangement that may not be the best long-term outcome for a nation whose economy has basically been gutted in the span of one week.
It also means game over for the bailout as envisioned, as the EUR17 billion is history, and much more cash will have to be injected to cover for the stealth outflows.
Cyprus won’t be the only one affected, of course. An unusually honest Eurozone official has made it clear that the EU will use the same confiscation tactics as Cyprus if things get worse (which of course they will):
Savings accounts in Spain, Italy and other European countries will be raided if needed to preserve Europe’s single currency by propping up failing banks, a senior eurozone official has announced.
The new policy will alarm hundreds of thousands of British expatriates who live and have transferred their savings, proceeds from house sales and other assets to eurozone bank accounts in countries such as France, Spain and Italy.
The euro fell on global markets after Jeroen Dijsselbloem, the Dutch chairman of the eurozone, told the FT and Reuters that the heavy losses inflicted on depositors in Cyprus would be the template for future banking crises across Europe.
Dijsselbloem tried to retract the statement after investors started panicking, but the damage is already done. Now the cat is out of the bag:
Translation: it now officially sucks to be an unsecured creditor in Europe. In other words: an uninsured depositor.
Why this ad hoc dramatic shift in the European approach to bank solvency, which if anything makes the link between bank and sovereign closer than ever, and crushes all that Draghi achieved in the summer of 2012?
Simple: because what Cyprus allowed was the effective usurpation of democracy - the only reason the Cypriot bailout “passed” (at least so far) is because it was structured as a bank restructuring, a financial system “resolution”, not a tax,and thus not in need of a parliamentary, democratic vote. Because as Cyprus also showed, votes to deprive depositors of cash, whether insured or uninsured, simply won’t fly.
Hence the shift.
However, there is a problem: it means that depositors are now fair game everywhere, and that the ESM or EFSF, with their unlimited scope but “democratic” impleention pathway, are on the backburner.
And now, the scramble to pull uninsured deposits out of banks everywhere begins. Thanks to the new Eurogroup head.
“You ask for miracles, Theo. I give you Diesel-BOOM”
And now, every European depositor is going to their local financial dictionary to look up the definition of General Unsecured Claims, only to see a picture of… themselves.
Simon Black at Sovereign Man blog tells readers to “Expect These Eight Steps From The Government’s Playbook“:
To anyone paying attention, reality is now painfully obvious. These bankrupt, insolvent governments have just about run out of fingers to plug the dikes. And history shows that, once this happens, governments fall back on a very limited playbook:
As Cyprus showed us, bankrupt governments are quite happy to plunder people’s bank accounts, especially if it’s a wealthy minority.
Aside from bank levies, though, this also includes things like seizing retirement accounts (Argentina), increases in civil asset forfeiture (United States), and gold criminalization.
Just another form of confiscation, taxation plunders the hard work and talent of the citizenry. But thanks to decades of brainwashing, it’s more socially acceptable. We’ve come to regard taxes as a ‘necessary evil,’ not realizing that the country existed for decades, even centuries, without an income tax.
Yet when bankrupt governments get desperate enough, they begin imposing new taxes… primarily WEALTH taxes (Argentina) or windfall profits taxes (United States in the 1970s).
This is indirect confiscation– the slow, gradual plundering of people’s savings. Again, governments have been quite successful at inculcating a belief that inflation is also a necessary evil. They’re also adept at fooling people with phony inflation statistics.
Governments can, do, and will restrict the free-flow of capital across borders. They’ll prevent you from moving your own money to a safer jurisdiction, forcing you to keep your hard earned savings at home where it can be plundered and devalued.
We’re seeing this everywhere in the developed world… from withdrawal limits in Europe to cash-sniffing dogs at border checkpoints. And it certainly doesn’t help when everyone from the IMF to Nobel laureate Paul Krugman argue in favor of Capital Controls.
Wage and Price controls
When even the lowest common denominator in society realizes that prices are getting higher, governments step in and ‘fix’ things by imposing price controls.
Occasionally this also includes wage controls… though wage increases tend to be vastly outpaced by price increases.
Of course, as any basic economics textbook can illustrate, price controls never work and typically lead to shortages and massive misallocations.
Wage and Price controls– on STEROIDS
When the first round of price controls don’t work, the next step is to impose severe penalties for not abiding by the terms.
In the days of Diocletian’s Edict on Prices in the 4th century AD, any Roman caught violating the price controls was put to death.
In post-revolutionary France, shopkeepers who violated the “Law of Maximum” were fleeced of their private property… and a national spy system was put into place to enforce the measures.
Despite being completely broke, governments will dramatically expand their ranks in a last desperate gasp to envelop the problem in sheer size.
In the early 1920s, for example, the number of bureaucratic officials in the Weimar Republic increased 242%, even though the country was flat broke from its Great War reparation payments and hyperinflation episode.
The increase in both regulations and government officials criminalizes and/or controls almost every aspect of our existence… from what we can/cannot put in our bodies to how we are allowed to raise our own children.
War and National Emergency
When all else fails, just invade another country. Pick a fight. Keep people distracted by work them into a frenzy over men in caves… or some completely irrelevant island.
Why do we have such massive deficits? Because if the government actually tried to collect the amount it needs to cover its current spending levels and unfunded liabilities, it would trigger a revolt – and that’s not a metaphor.
The truth is that our politicians have been very careful in their labeling of government receipts and payments so as to keep most of the coming bills associated with ‘Take As You Go’ off the books. Consider, for example, Uncle Sam’s promises to pay me my Social Security and Medicare benefits starting in roughly 10 years. The present value (the value in the present) of these promises is $400,000. How does this differ from my holding a Treasury bond valued at $400,000?
Fundamentally, it differs not at all, which means that the government has a lot more debt than it’s reporting.
How much more?
I’m not sure you want to know. I recently calculated the fiscal gap using the CBO’s AFS forecast. The fiscal gap measures the present value difference between all projected future federal expenditures (including servicing official debt) and all projected future taxes. The fiscal gap is thus the true measure of our government’s total indebtedness and the true measure of fiscal sustainability.
How big is the fiscal gap?
Brace yourself. It’s $222 trillion large! In comparison, official debt in the public’s hands is only $11 trillion.
Here’s one way to wrap your head around our $222 trillion fiscal hole: closing it via tax hikes would require an immediate and permanent 64 percent increase in all federal taxes. Alternatively, the government could cut all transfer payments, e.g., Social Security benefits, and discretionary federal expenditures, e.g., defense expenditures, by 40 percent. Waiting to raise taxes or cut spending makes these figures worse.
In short, our government is totally broke. And it’s not broke in 30 years or in 20 years or in 10 years. It’s broke today.
How do we know that a dollar bust is upcoming? The interest we pay on our national debt indicates our future. The interest the United States pays on its debt is now above $350 billion per year. Because more than 43 cents of every dollar the United States spends is now borrowed — and plans are in place to add about a trillion dollars more in debt each year — the interest payment on U.S. debt is expected to climb to a trillion dollars per year in 2017.
In other words, in four years, the interest on the debt will consume almost half of all revenue that the government collects, and each year after that it will get progressively worse — until it consumes all revenues.
As the interest on the debt grows, we won’t be able to borrow enough to pay our bills, and the government will have to either simply print more money to pay up or default. It will likely at least try printing money, and this is when inflation will zoom atmospherically. Even Ben Bernanke, the head of the Federal Reserve, acknowledged this scenario last year.
The chance that the United States will avoid this path in our near future is infinitesimal, but there is a chance. An unexpected business boom could spare us — socialist Norway stays solvent via exploiting oil revenues, and the United States has some of the biggest oil reserves in the world — or a massive downsizing of government could spark a boom — as happened during the Harding administration and at the end of WWII— but there’s little chance of either happening.
The government is issuing smothering business regulations and taxes, and the government will likely run higher debts than projected, not lower.
Debts will likely be higher for many reasons: Not only did the administration fight the minuscule sequester cuts tooth and nail,ObamaCare is much more expensive than promised and will only reduce costs if the death panel lives down to its name, as well as devastating the small businesses that most influence employment. Also, year-in and year-out, Congressional Budget Office figures used to project future tax revenues have predicted a rapidly growing economy and been consistently wrong; the federal flood insurance fund is empty; the Social Security Disability fund is almost empty; etc.
The great majority of U.S. spending is claimed to promote “fairness,” while critics have argued that it is immoral for Baby Boomers — the group mainly responsible for electing political spendthrifts — to heap devastating debt on their children and grandchildren. Ironically, the imminent demise of the dollar has accelerated to where the dollar will almost certainly crash during most Boomers’ lifetimes, so they will have to suffer along with their offspring.
I guess that’s fair.
Every year, the federal government spends well over a trillion dollars more than it takes in. As a result, it has racked up seventeen trillion dollars in debt, most of it in the last decade. In seven years at current rates, the U.S. will need almost a fifth of the GDP from the rest of the world just to finance our national debt.
Just two of our federal entitlements, Medicare and Social Security, have “unfunded future liabilities” of $46.2 trillion. Total liabilities are $86.8 trillion or more. Entitlements and other mandatory spending will burden more and more of the federal budget in the coming years. At today’s burn rate, before long no realistic amount of tax revenue will be able to service the debt and fund the government’s basic functions.
We need not worry about the federal government defaulting, since, unlike U.S. states or private citizens, it can print the money it needs to pay the bills. It can and will do so if we don’t make a course correction fast. Massive monetary expansion will ultimately devalue every dollar in circulation and trigger the sort of hyperinflation that flattens entire societies in short order. That’s bad enough, but when government borrows and spends for our supposed benefit, somebody else will have to foot some or all of the bill. If our faith applies to every aspect of life, then it must have something to say about this moral outrage.
[...] In the twentieth century, more than a hundred million people were murdered by their own governments. And that was just in communist countries. History and scripture agree: because of sin, governments with too much power become propagators of evil and destruction.
This speaks directly to government debt, since deficit spending is a symptom of government doing more than it can or should. The federal government now borrows and spends with such reckless abandon that it is careening toward a global economic catastrophe. If Christians can’t muster the courage to speak out against what Rep. Paul Ryan has called “the most predictable debt crisis in history,” we won’t deserve to be taken seriously after the collapse.
Sadly, many Christians don’t know how to disciple our nation to turn the tide because they’ve never studied God’s design for economics or the Biblical role of government. They can’t teach what they don’t know. The key to real reformation, says R.C. Sproul, Jr., is for Christians to understand and work to implement Biblical economic principles:
Christian author and teacher R.C. Sproul, Jr. told CBN News Anchor Lee Webb that he believes it’s time to return to the basics when it comes to economics.
“When we’re left arguing about whether or not we should have a marginal tax rate of 45 percent or 48 percent, and the conservative is stuck arguing for the 45 percent we’ve had an insufficient reformation in our thinking,” Sproul said.
Sproul believes that reformation will happen only when we return to scripture to see what God has to say about economics. That’s why he produced a video series called “Economics for Everybody.” It’s a compelling, even entertaining approach to a topic many find boring.
[...] Sproul provides historical evidence that nations most influenced by biblical Christianity are nations that, by and large, have prospered. They are nations marked by decentralized governments and free markets.
But nations that reject God are marked by centralized power, tyranny, and no free markets. Unfortunately, he said he has observed some of those troubling trends in America now.
“The United States is not a free market. It’s an interventionist economy that’s been moving closer to socialism for over a century now,” he said. “I am not optimistic about our nation’s future economically.”
“We live in a country in which the state forbids me to hire a man unless I promise to pay him X number of dollars,” Sproul explained. “We now live in a country where I can’t hire 50 men unless I promise to buy them all health insurance, including access to abortion.”
“This is not economic liberty. This is not free markets,” he said. “We’re missing the fact that we’re the frog and the water is boiling.”
That’s why Sproul believes it’s not enough to think conservatively. We must think biblically and train our children biblically.
“It’s my conviction that education is always and everywhere religious,” he said.
“And it’s not a surprise that when 80 percent of evangelical parents have their children in the government’s schools that they’re going to embrace the religion of the government which is the worship of the state,” he said.
Sproul cautioned Christians to avoid despair. One way to do that is by returning to the beginning, to the Creation Mandate and begin to see that our work is part of worship.
If you have never watched the “Economics For Everybody” series, I highly recommend it! We cannot teach what we do not know!
There’s nothing “affordable” about it!
Health insurance companies across the country are seeking and winning double-digit increases in premiums for some customers, even though one of the biggest objectives of the Obama administration’s health care law was to stem the rapid rise in insurance costs for consumers.
Particularly vulnerable to the high rates are small businesses and people who do not have employer-provided insurance and must buy it on their own.
Exactly as it was intended to do…they’re driving people off of private insurance plans and onto government healthcare plans, bankrupting the insurance industry in the process.
Why should this surprise? The must-issue regulation built into ObamaCare increases costs for the insurers, who cannot draw all of the needed revenues from the high-risk pool, thanks to mandates on rates. That means those costs have to get spread out to everyone in the pool. This is nothing more than Risk Pool 101, a course that Congress flunked repeatedly in the ObamaCare debate.
And why are rates rising higher on individual premiums than employer-based premiums? First off, the economics of aggregation are always going to work out that way; insurers want large groups of customers, and it’s less costly in the long run to find customers that way rather than one at a time. I’d guess that the employer-aggregate pool might generate somewhat lower costs than the general population too (especially after must-issue), but that’s just speculation. What isn’t speculation is that ObamaCare heavily regulates the individual markets in 2014 based on a law that doesn’t have many details in how that is supposed to be accomplished, based on state exchanges that may never exist in more than half of the states. In that kind of environment, can anyone blame the insurers for basing premiums on worst-case scenarios this year?
None of this surprises those who both understand risk pools and the dynamic reaction to regulation. It’s amusing to see everyone else be shocked, shocked that ObamaCare ends up driving costs upward even further.
We’re headed down the road to Greece at a break-neck pace. It’s time for wise Americans to prepare to take care of their families, and for churches to be ready to care for the needy in their communities when it all hits the fan.
The beginning of the year has traditionally been a time of optimism when we all look forward to the exciting things that are going to happen over the next 12 months. Unfortunately, there are a whole bunch of things about 2013 that we already know are going to stink. Taxes are going to go up, good paying jobs will continue to leave the country, small businesses will continue to be destroyed, the number of Americans living in poverty will continue to soar, our infrastructure will continue to decay, global food supplies will likely continue to dwindle and the U.S. national debt will continue to explode.
Our politicians continue to pursue the same policies that got us into this mess, and yet they continue to expect things to magically turn around. But that is not the way that things work in the real world. Bad decisions lead to bad outcomes. Instead of realizing that what we are doing is not working, our “leaders” continue to give us more of the same. As a result, there are going to be a lot of things about 2013 that will not be great. Sticking our heads in the sand and pretending that everything will be “okay” somehow is not going to help anyone. We’ve got to make people understand exactly what is happening and why it is happening if we ever hope to see real changes.
The following are 16 things about 2013 that are really going to stink…
That sucking sound is your savings going down the drain. What was the definition of insanity, again?
The Federal Reserve on Wednesday announced that it will launch a fourth round of quantitative easing (“QE4”), this time committing $45 billion a month to the purchase of long-term Treasury securities.
You know what this means, right? It means that along with Washington’s open-ended $40 billion a month program to buy up mortgage backed securities (“QE3”), total monthly bond purchases by the Fed will amount to $85 billion.
Yes, that’s $85 billion a month.
[...] There’s no calendar date set for when the Fed plans on calling it quits. They’re going to keep rates low and keep purchasing bonds until unemployment hits 6.5 percent.
That’s why we’re going to call it “QE4-Ever.”
In addition to the bond purchasing, the Fed announced that it would keep the federal funds rate near zero….until unemployment dips below 6.5%! Unless the labor market shrinks to oblivion, the unemployment rate will never dip that low as long as Obama is president. And as long as we suffer from Obama’s taxation, regulation, and subsidization, thereby mitigating economic growth, his unelected acolytes will continue their monetary stimulus. So we will continue devaluing the dollar and depleting saving as far as the eye can see.
Something is fundamentally wrong when a completely unelected branch of government has such unilateral power to affect our savings, purchases, and currency without any recourse. Milton Friedman used to call it taxation without legislation. The sad thing is that they obdurately refuse to learn the lessons from previous failures to tinker with the economy. Nothing will change until we repeal the Fed’s dual mandate of destruction.
Tyler Durden at Zero Hedge calls it “The Scariest Chart Of The Quarter“:
We have already discussed the student loan bubble, and its popping previously, most extensively in this article. Today, we get the Q3 consumer credit breakdown update courtesy of the NY Fed’s quarterly credit breakdown. And it is quite ghastly. As of September 30, Federal (not total, just Federal) rose to a gargantuan $956 billion, an increase of $42 billion in the quarter – the biggest quarterly update since 2006.
But this is no surprise to anyone who read our latest piece on the topic. What also shouldn’t be a surprise, at least to our readers who read about it here first, but what will stun the general public are the two charts below, the first of which shows the amount of 90+ day student loan delinquencies, and the second shows the amount of newly delinquent 30+ day student loan balances. The charts speak for themselves.
[...] We’ll let readers calculate on their own what a surge in 90+ day delinquency from 9% to 11% (or as footnote 2 explains: 22%) in one quarter on $1 trillion in student debt means. For those confused, read all about it in this September article: “The Next Subprime Crisis Is Here: Over $120 Billion In Federal Student Loans In Default” which predicted just this.
Easy credit and the push to send an ever-increasing number of young people to college have combined to create what University of Tennessee law professor Glenn Reynolds has termed the “higher education bubble.” College has become much more expensive, but barely 60 percent of enrollees complete a four-year degree within six years. The other 40 percent are left with no degree, and plenty of debt.
For obvious reasons, loan burden falls almost exclusively on youth. Almost 40 percent of loans belong to people younger than 30, an age category hit hard by the current economic stagnation. That’s still no reason to stick taxpayers — many of whom don’t have college degrees — with the bill for graduates.
By removing the sliver of budgetary discipline that comes from holding individuals responsible for paying off debt, loan forgiveness encourages bad decisions. It also fosters the expectation of a “free” college education — with free meaning taxpayers foot the bill. The better solution is to cut off taxpayer-subsidized credit to universities. This would force institutions of higher learning to provide students an education that is actually valuable, not merely a credential.
This is EXACTLY what Obamacare was designed to do: systematically eliminate competition to the Welfare State. They want to drive away all choices and competition except that which can be taken over by their soon-to-be single-payer system.
When government gets bigger, big business typically benefits at the expense of smaller competitors, consumers, and taxpayers. Obamacare is demonstrating this rule.
Bloomberg reports today on how Medicare payment rules have led to hospital consolidation, with small practices selling out to big hospitals. The article notes about consoldation:
Simon Gisby, a principal in the life science and health care practice at Deloitte Corporate Finance LLC in New York, said the trend fits with changes starting to take place under the 2010 Affordable Care Act designed by the Obama administration to overhaul health care.
This consolidation means higher costs, the article explains. Some academic studies have confirmed that hospital consolidation means higher costs, and at least one has pinned some of the blame on Obama’s Affordable Care Act:
hospitals are able to extract higher private payments when they hold more market power…. Now provisions of the ACA are encouraging further consolidation of hospitals and physicians, and the final antitrust review regulations from the Department of Justice and the Federal Trade Commission have eliminated the proposed mandatory review of certain prospective ACOs.
News reports also point towards Obamacare causing provider consolidation — that is, small practices selling out to bigger hospitals.
Unfortunately, he’s right. Like the stubborn Children of Israel, America may have to learn the hard way.
Conservative Christian minister Franklin Graham has recently taken to multiple talk shows to speak on the re-election of President Barack Obama, saying that more Christians should have turned out to vote, and suggesting that America may need a “complete economic collapse” before turning to God.
“God is in control, and if Christians are upset, they need to be upset at themselves. We need to do a better job of getting our people – the Church – to vote,” Graham said in a recent interview on The Brody File, featured on the Christian Broadcasting Network’s website.
“Now, I’m not trying to tell you how to vote, you can vote, but vote, my goodness, and vote for candidates that stand for Biblical values,” added Graham, who is the president of the Billy Graham Evangelistic Association (BGEA).
Graham went on to tell host David Brody that he believes Obama’s policies, which include the Health Care Mandate, will “usher in the largest changes in our society since the Civil War,” which, in his opinion, include a massive increase in taxes.
In a recent, separate interview with Newsmax TV, Graham said that he believes America has turned its back on God, and “the more we turn our backs on God, the bigger our problem becomes.”
“What has happened is we have allowed ourselves to take God out everything that we do – and I believe that God will judge our nation one day,” Graham continued.
He added that “maybe God will have to bring our nation to our knees – to where that we just have a complete economic collapse… Maybe at that point, people will again call upon the name of Almighty God.”
No, it wasn’t your imagination. The mainstream media deliberately delayed reporting on economic stories that would reflect poorly on Obama during the last few weeks of the election. The ugly truth about the consequences of Obamanomics is only just coming out:
Earnings falling: The Labor Dept. reported on Thursday that real average hourly earnings dropped again in October for the third month in a row, and are now down 2% from when Obama took office.
Poverty rising: A new Census Bureau report, also released after the election, finds that the number of poor people in America climbed 712,000 in 2011. The “official” report that came out in September had the number dropping by 96,000. So much for Obama’s claim that things are getting better.
Food-stamp enrollment skyrocketing: Another government report conveniently timed after the election found that food stamp enrollment exploded by more than 420,000 in August. The number of people getting food stamps has climbed more than 15 million — or 47% — under Obama. That’s a bigger increase than in all of President Bush’s eight years. Today, almost 15% of the population is collecting food stamps, up from 7% just a decade ago.
Jobless claims jumping: The number of new jobless claims shot up to 439,000 last week, up 78,000 from the week before, due largely, it’s said, to Hurricane Sandy. But the two states with the biggest increases in jobless claims the week before that were Pennsylvania and Ohio, thanks to layoffs in the construction, manufacturing and auto industries.
Inflation creeping up: We also learned that the annual inflation rate climbed to 2.2% in October, according to the BLS, which is the third consecutive monthly increase.
Coal plants closing: A report by the liberal Union of Concerned Scientists, released (naturally) a week after the election, finds that as many as 353 coal-fired plants will close as a result of Obama’s environmental rules.
Small banks disappearing: Fortune reported three days after the election that the “overwhelming conclusion” of industry analysts and consultants was that Dodd-Frank would cause thousands of small banks to disappear. As a side note, one month before the election a Fortune “fact check” (by the same reporter, no less) blasted Romney for saying during one of the presidential debates that Dodd-Frank was “killing regional and small banks.”
Many Christians vote for politicians who support completely unbiblical economic policies because they have no idea what the Bible has to say about economics. All they know about economics they learned in secular government schools and the talking points put forth by politicians and political activists.
The world is reeling from poverty, drowning in debt, and suffering from other hardships caused by bad economic policies. God’s Word has the answers. Christians are called to disciple the nations to obey everything Christ commanded, INCLUDING in the area of economics, but we can’t teach hurting nations what we haven’t bothered to learn for ourselves.
A week ago, a lot of Americans received a jolt. After the election dust settled, they realized a majority of voters don’t want to lessen the role of government in their lives. If anything, they want to see government expand.
It was (and continues to be) the talk of the airwaves and Internet. As one radio host put it, in light of the election results, what we need is significant economic education. He is right – we do.
It is a pretty grave problem. The truth is that a majority of Americans in both political parties are radically ignorant of basic economics. In numerous ways, most people in the United States have been committed to some form of economic suicide for generations. They just don’t realize the extent of it.
This is one of the main reasons we created Economics for Everybody. The long-term implications of government intervention in the economy are extremely dangerous to all of us, especially to our religious freedoms. More and more people have a sinking feeling about this. But unless they take time to learn the basics of economics, nothing will change.
What is really at stake here?
If a majority of Americans are committed to the expansion of the welfare state, it will lead to increasing poverty for all. A basic economic principle is that whatever you subsidize you get more of.
If a dad offers to give money to his kids to clean up their rooms, he’ll get cleaner rooms. In the same way, if a government offers money to its citizens when they are unemployed, it will get more unemployment. Strange as it may seem, statistics consistently bear this out. And since the government offers money for all sorts of things it shouldn’t be offering money for, it’s no wonder we are where we are. We discuss this at length in ‘Lesson 10 – The Corporate and Welfare States of America.’
Next, if a majority of Americans are committed to government intervention in business through regulation, it will lead to a shrinking business sector. The basic economic principle here is that governments are unable to make accurate economic calculations.
The whole idea behind a planned economy is that central planners know better than producers and consumers what’s good for the economy. But such an idea assumes that a few people not only can comprehend, but actually direct the unique and ever-changing choices of limitless producers and consumers better than they can themselves.
It would be like a few people telling everyone else what they should buy at a grocery store. It’s functionally impossible to know all the discrete needs and desires of that many people, so the only way to attempt it is through general rules that restrict and direct consumption for all. At a business level, such a regulatory approach always ends in more and more businesses not being able to operate profitably and shutting down, ultimately resulting in the slow strangulation of an economy. We explain exactly how it happens in ‘Lesson 8 – The Basics of Government Intervention.’
Finally, if a majority of Americans don’t understand the relationship between economic freedom and religious freedom, they will inevitably lose both. The economic principle is that we are caught in a cosmic battle that has many economic aspects: God wants us to build up a godly civilization with our resources while Satan wants to prevent us from doing so.
In an economy based on Christian principles, there is economic freedom for people to use their land, labor and capital as they see fit. It is a matter of individual stewardship based on God-given ability and property. But in an economy based on atheistic principles, the government is a tool of Satan to control the lives of individuals so that they cannot steward their resources and time for God’s Kingdom. Think of the many socialist and communist economies that persecuted tens of millions of Christians.
The fact that there is a spiritual battle going on that has economic dimensions is lost on most people. But it is the reality of this, as well as the fact of sin in the world, that is so important economically. History reveals this to us over and over again. We explain it in greater detail in ‘Lessons 6 & 7 – A Tale of Two Theologies.’
There is, of course, even more to economics. We try to explore as many basic principles as necessary in the twelve-lesson series. Our belief is that if people go through the entire Economics for Everybody curriculum, they will be in a much better place to understand what happened last Tuesday on Election Day. They will also understand what needs to happen in the future.