Tag: economy

Understanding The ‘Raising The Debt Limit’ Scam

Last week President Trump tweeted, “I requested that Mitch M & Paul R tie the Debt Ceiling legislation into the popular V.A. Bill for easy approval. They didn’t…Could have been so easy-now a mess!”

Trump seemed awfully cavalier about raising the debt limit, didn’t he? Isn’t raising the debt limit a really big deal? Isn’t it capitulation by all conservative-minded Americans? Isn’t raising the debt limit tacit approval for the US Government to even further exceed its Constitutional boundaries? Well, maybe. But more importantly, the ‘raising the debt limit’ debate is just another scam on the American people, perpetrated by those we elected to represent us in DC, another reason they all must be replaced. 

The periodic raising of the so-called “debt limit” is simply the natural order of things anytime a national government chooses to carry out its financial responsibilities under a private banking system rather than a truly sovereign, national monetary system. The banking system in our case is that of the Federal Reserve.
Although it could if it chose, the US Government does not create and issue dollars…AKA, money. Instead private Fed member banks do, the largest of which are on Wall Street. Importantly, however, those banks only issue dollars when someone promises to pay them back, with interest. And because the banks do not issue the dollars to pay the interest, the only way for a society as a whole to pay back what has already been borrowed is to keep borrowing more and more, and pay off older loans with new, larger loans. The entire American economy ($68 trillion in debt), including the US Government ($20 trillion in debt) is testimony to that fact. There is no mathematical solution for this system. It cannot be paid off from within. And while the system runs, the bankers get richer and richer, the population gets poorer and poorer, and the Government goes more and more in debt. It is a covert, wealth transfer mechanism-the biggest scam in the history of mankind. And as long as the Federal Reserve System stays in operation, it will remain mathematically impossible for America to become a nation other than one that is increasingly encumbered in debt.

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Inflation Bites: The $38 Million Man

It’s easy to think of “inflation” as an abstract economic principle and forget that it has real impacts on real people.

Federal Reserve Chairman Jerome Powell acknowledged the pain of price inflation during his press conference at the close of the December FOMC meeting.

“We understand very well that prices went up by a great deal, and people really feel that, and it’s prices of food and transportation and heating your home and things like that. So there’s tremendous pain in that burst of inflation that was very global.”

Powell did not admit that he and his fellow central bankers were largely responsible for that pain, although he took credit for bringing inflation down, saying, “Now we have inflation itself is way down — but people are still feeling high prices — and that is really what people are feeling.”

Yes, Jay. We are feeling those high prices — because they haven’t come down! In fact, they continue to rise, just not as quickly as they were last year.

I might note here that inflation is on purpose. Making prices rise and go up is a stated policy. They just don’t want prices to rise so fast that you notice.

Unfortunately for the powers that be, you’ve noticed.

Just how much have prices gone up?

According to the most recent Consumer Price Index (CPI) data, prices are up 2.7 percent in the last year. But those of us living in the real world know prices have gone up much more than that.

Joaquin Henault and Laura Williams recently highlighted the dollar’s loss of purchasing power using the “Big Mac” index.

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DeSantis Migrant Crackdown Boosts State’s Economic Performance

Ron DeSantis’s crackdown on illegal workers in Florida has boosted the state’s economic performance, despite gloomy predictions from the media, commentators and “experts” that it would do the opposite.

DeSantis took to Twitter earlier this week to hail the Sunshine State’s latest figures, which show, he claims, that “incentivizing more illegal immigration” is actually a counterproductive economic policy.

“FL’s best-in-the-nation legislation combatting illegal immigration generated the typical array of false media narratives,” DeSantis Tweeted.

“That such narratives blew up shows that good policy pays dividends. The goal needs to be disfavoring illegal immigration rather than—as is common across the US—incentivizing more illegal immigration.”

New economic data revealed Florida’s GDP grew by 3.2% from Q1 to Q2 2024. In addition, the state added 133,000 jobs between October 2023 and now.

In May, Florida passed a sweeping bill, SB1718, that includes mandatory E-verify rules for hiring workers, a ban on local governments issuing IDs to migrants, and harsh sanctions for businesses that hire illegals.

Forbes recently hailed DeSantis’s legislation as a model to be followed on the national level under the second Trump administration.

“So far, the critics have been wrong. Florida’s economy has continued to grow despite warnings about the impact of SB1718. According to the Bureau of Economic Analysis, the state’s gross domestic product increased by 9.2% last year, tops in the nation and outpacing the national average by nearly 3 percentage points. In 2024, Florida’s economic growth remains strong, surpassing the national average in the first two quarters of the year, with Florida being one of just a handful of states to post 6% growth or higher in both quarters. This comes despite the Florida Policy Institute warning that the E-Verify requirement alone could cost the state $12.6 billion in its first year.”

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The Economy Has Failed the American People, But It’s Taboo To Say Why

The economy has failed the American people, but it’s taboo to say why because that would undermine the entire power structure that so richly benefits the few at the expense of the many. The few have an extremely compelling motivation to obscure the “why” and to enforce the taboo on saying it aloud.

The economy has failed the American people because it’s a two-tiered power structure that’s essentially neofeudal, meaning it’s an updated version of traditional feudal social orders. To understand this, we must start by understanding traditional feudalism.

In feudal societies, life is pretty good for the nobility in the castle on the hill. For the powerless peasants working the fields below to fund the nobility, life is less good, and so the peasantry is open to changing this asymmetric power structure to a fairer balance.

To maintain its grip on power, the nobility must promote a social zeitgeist in which the peasantry’s powerlessness is the natural order of things and therefore resisting this structure is not only a sin, it’s futile.

One key feature of feudal social orders is the impermeability of the line between nobility and peasantry, what we call social mobility. Nobility and serfdom were established at birth, never to change. Serfs were bound to the land of their birth and could not leave; their servitude was for life.

This was a regression from the Roman Empire, which allowed ownership of land by free citizens, and relatively free movement of citizens throughout the vast empire.

Wedged between these hereditary classes were the merchants and craft workers whose services were essential to the nobility’s maintenance of power. As Fernand Braudel documented in his massive three-volume series Civilization and Capitalism, 15th-18th Century (Vol. 1: The Structure of Everyday Life, Vol. 2: The Wheels of Commerce, Vol. 3: The Perspective of the World), the story of capitalism is the steady expansion of commerce and production eventually generated a class with sufficient power to unseat the feudal power structure and replace it with various flavors of capitalism.

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Malice Aforethought

Professors of finance are a dime a dozen. Their theories are generally shallow and wrong… or kooky and silly. We weren’t sure which category Professor Richard J. Murphy of Sheffield, England, belonged in. We doubt that his core thesis on the coming crash is correct… but it is provocative.

At first glance, Murphy appears to be even more of a cynicalist than we are. He believes Donald Trump is offering dumb economic policies intentionally… trying to sink the US economy.

Everybody knows restricting trade is bad policy. It prevents people from getting the best product at the best price… and it allows uncompetitive, but politically well-connected, domestic companies to stay in business long after they should have been liquidated.

Threatening foreign nations with sanctions if they use currencies other than the dollar is another bad idea. It’s like when you’re losing a Little League baseball game… and threatening to take the bat home. Eventually the foreigners will find their own bat.

And there’s the threat of deporting millions of workers. Add those deported workers to the $2 trillion Musk and Ramaswamy say they will cut from the Federal deficits… and the higher prices caused by tariffs…

All of them coming on stream just as the stock market reaches bubble highs…

… and you have set the stage for a catastrophic meltdown.

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Demand At Food Banks Has Soared To Record Levels All Over The United States

Why is demand at food banks all over the country higher than it has ever been before?  The media keeps insisting that economic conditions are just fine, but it has become quite obvious to everyone that this is not true.  In particular, the rising cost of living has been absolutely crushing households from coast to coast.  In the old days, most of the people that would show up at food banks were unemployed.  But now food banks are serving large numbers of people that actually do have jobs but that don’t make enough to pay for all of the basics.  The ranks of the “working poor” are growing very rapidly, and this is creating an unprecedented crisis all over America.

Perhaps you think that I am exaggerating.

Let me share some specific examples that will prove that I am not.

In Pennsylvania, the Greater Pittsburgh Community Food Bank saw “its highest need on record this past year”…

A new report shows the Greater Pittsburgh Community Food Bank saw its highest need on record this past year. It comes as we mark Hunger Action Month across the country.

Toi Payne of Pittsburgh’s Allentown neighborhood gets emotional thinking about how the Greater Pittsburgh Community Food Bank in Duquesne and other local pantries have been lifesavers for her for the past 30 years.

“We need these places,” Payne said. “Without the food banks, I think a lot of people would be struggling even more, you know, and it helps like the elderly and people like me that’s on disability.”

We are also seeing record demand in Montana…

North Valley Food Bank in Whitefish served 613 families a Thanksgiving meal – a record high.

They anticipate more than 1,000 food bank customers for their Christmas holiday distribution on December 18-19.

“Year round here we’re feeding over a 1,000 of our neighbors every week and the need goes up during the holiday season,” said North Valley Food Bank Director of Development Mandy Gerth.

And in the San Francisco area…

This holiday season, food banks say they’re facing greater need than ever before. In Silicon Valley, they say 1 in 6 people are coming in for food assistance. In San Francisco, that number is 1 in 5. But the organizations say donations are not keeping up with demand.

For all the food banks, December is a big month. Both in terms of need, and in terms of fundraising. And they say what happens now will impact the entire year ahead.

In some parts of the nation, food banks are absolutely shattering all of the old records.

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Global Food Prices Are Entering Very Dangerous Territory

What in the world is going to happen if global food supplies continue to get even tighter?  During the second half of this year global food prices have been surging.  A “perfect storm” of factors is suppressing production all over the planet, and meanwhile worldwide demand for food just keeps rising.  Needless to say, higher prices hurt those at the bottom of the economic food chain the worst.  Food prices have become a major issue in country after country, and if current trends continue it won’t be too long before widespread unrest breaks out.  Here in the United States, the cost of living is absolutely eviscerating the middle class.  If a way cannot be found to stabilize food prices, we will be seeing a tremendous amount of anger and frustration in 2025 and beyond.

Last week, it was being reported that global food prices had risen to “the highest level in 19 months”…

The world food price index, compiled by the U.N. Food and Agriculture Organization (FAO) to track the most globally traded food commodities, increased to 127.5 points last month from a revised 126.9 points in October, the highest level in 19 months and up 5.7% from a year ago.

The vegetable oil index jumped 7.5% above levels seen a month ago and 32% above those seen a year earlier, driven by concerns over lower-than-expected palm oil output due to excessive rainfall in Southeast Asia.

Clearly, things are not heading in the right direction.

But what could be coming next is potentially even more alarming.

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Unsustainable: Yellen resigns, leaving behind over $36 TRILLION in debt — the highest in U.S. history

The federal deficit has reached unsustainable levels, with the U.S. national debt surpassing $36 trillion, largely due to reckless fiscal policies under the Biden administration.

– Treasury Secretary Janet Yellen acknowledged concerns over the lack of progress in reducing the deficit, admitting that the deficit needs to be brought down amid rising interest rates.

– The Biden administration’s fiscal approach, including $3 trillion in economic stimulus, led to runaway inflation and a ballooning deficit, with interest expenses now exceeding defense and health spending.

– The incoming Trump administration, with Treasury Secretary nominee Scott Bessent, aims to prioritize fiscal responsibility, focusing on reducing government spending, reforming entitlement programs, and promoting sustainable economic growth.

– The U.S. faces an urgent need to address its fiscal crisis to avoid a future debt crisis, with the Trump administration tasked with restoring fiscal sanity and rebuilding public trust in responsible financial management.

As the Trump administration prepares to take the reins of government, the nation faces a stark and urgent reality: The federal deficit has ballooned to unsustainable levels, threatening the long-term stability of the U.S. economy. The outgoing Biden administration, led by Treasury Secretary Janet Yellen, leaves behind a staggering national debt that has surpassed $36 trillion, a figure that underscores the reckless fiscal policies of the past several years.

Yellen herself has acknowledged the gravity of the situation, expressing concern over the lack of progress in reducing the deficit. During a recent event organized by the Wall Street Journal, she stated, “I am concerned about fiscal sustainability and I am sorry that we haven’t made more progress. I believe that the deficit needs to be brought down, especially now that we’re in an environment of higher interest rates.” These words, though belated, are a stark admission of the fiscal irresponsibility that has characterized the Biden administration’s tenure.

The numbers tell a damning story. Under Yellen’s watch, the U.S. debt increased by an astonishing $15.2 trillion, representing 42% of all U.S. debt ever issued. This unprecedented accumulation of debt was facilitated by years of ultra-low interest rates and massive government spending, much of it aimed at pandemic relief and economic stimulus. While these measures may have provided short-term relief, they have sown the seeds of a future financial crisis.

The Biden administration’s approach to fiscal policy was marked by a dangerous overconfidence in the ability of government spending to solve economic problems. Yellen, in her role as Treasury Secretary, endorsed the administration’s 3 trillion in economic stimulus, including the 1.9 trillion American Rescue Plan. She justified this approach by arguing that “the smartest thing we can do is act big. In the long run, I believe the benefits will far outweigh the costs.” However, the reality is that this strategy has led to runaway inflation and a ballooning deficit, with interest expenses now surpassing defense and health spending.

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Laughable: Biden Claims Trump Is Inheriting A Strong Economy

During a speech at the Brookings Institution in Washington D.C. Tuesday, Joe Biden claimed that the US economy has been a “success” under his administration.

“Most economists agree the new administration is going to inherit a fairly strong economy,” Biden ridiculously claimed.

He added, “It is my profound hope that the new administration will preserve and build on this progress.”

What the hell is he talking about?

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Huge Small Biz Break: Judge Suspends Enforcement Of FinCEN Reporting Requirement

Just a few weeks before a poorly publicized Jan. 1 deadline, a judge has issued a nationwide injunction barring the enforcement of a controversial mandate that would compel tens of millions of small and large businesses to file beneficial ownership reports with an obscure federal agency. The ruling doesn’t kill the requirement altogether, but it does bar the Treasury Department from enforcing it until lawsuits challenging the requirement’s constitutionality are fully resolved.

“There are now CTA cases pending in the Fourth, Fifth, Ninth, and Eleventh Circuits,” notes attorney and Forbes contributor Kelly Phillips Erb, posting as @taxgirl on X. “It’s looking more like it could end up at the Supreme Court.” There’s also the possibility that the next Trump administration — either unilaterally or via cooperation with Congress — could find a way to kill or at least narrow the requirement.

The rule imposed by the Corporate Transparency Act (CTA) swept the vast majority of “legal entities created to do business in the United States” into a new bureaucratic net, directing them to dump information about themselves and their “beneficial owners” into a federal database managed by the Financial Crimes Enforcement Network (FinCEN) — which most Main Street businesses and single-member LLC’s have probably never even heard of. Those who failed to comply faced severe penalties, ranging from civil fines of up to $591 a day to criminal consequences of up to $250,000 and a five-year prison term.

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