The United States Government couldn't care less about their constituents. Instead, the United States government is overrun by corruption, special interest, and power-mongers who use the American people to line their own pockets and further their own agendas.The United States of America is experiencing the biggest financial crisis since the Great Depression. Citizens are losing and/or have lost their jobs at an alarming rate, and unemployment is now hanging at around 9.7%. However, anyone who knows anything about unemployment numbers knows that the 9.7% is well below real unemployment since it is calculated by tallying the number of unemployed and then dividing that number by the total workforce and multiplying that number by 100 (to get a percentage). But how are the unemployed counted?
The unemployed are counted through surveys taken by a sample of the workforce. There are many problems with this method. The unemployment number is based upon a percentage derived from answers given in these surveys. This sample survey ask specific questions of the unemployed/employed people that are referenced against a predetermined criteria which will determine which category the surveyed fall into. Based on the numbers in each category, the unemployment rate is then calculated by taking the total number of people who fell into the unemployed category and dividing that number by the total number of people in the employed category. The resulting number is then multiplied by 100 to get a percentage.
Perhaps the biggest problem with the official unemployment number is the criteria by which the surveyed workforce is categorized. The Bureau of Labor Statistics (BLS) determines the number of workers placed into each category and the size of the workforce based upon the following criteria:
- People with jobs are employed
- People who are jobless, looking for jobs, and available for work are unemployed
- People who are neither employed nor unemployed are not in the labor force
The underlying effect of unemployment, real unemployment and not the official unemployment number, is that Americans are facing severe and prolonged financial hardships. John Collins Rudolf writes in his article in the New York Times, "Pay Garnishments Rise as Debtors Fall Behind," that during "one of the worst economic downturns of modern history" there has been "an increase in the number of delinquent borrowers, and creditors are suing them by the millions." Rudolf describes an inequality in the justice system that situates debtors in a significantly disadvantaged position to defend themselves against creditors and the unfair debt collection practices they use to collect on the delinquent accounts of those facing financial hardships during these difficult financial times. To some, this may not sound like anything out of the ordinary, and to these people it may sound like justifiable actions on the part of these financial institutions who are likewise facing financial hardships. To the contrary, though, this noticeable increase in debt collections amidst such difficult financial times, while it may be the result of a causal relationship, is powerfully reflective on governmental policy.
Over the past few years, billions of dollars have been dolled out to save failing financial institutions, purportedly to stave off economic disaster, and to stimulate growth in the economy. I would laugh if it wasn't such a serious situation. While the idea is sound, the strategy of the government to achieve these goals was seriously flawed and has resulted in this increase of delinquent debtors, stale job growth, and rising unemployment. More over, the strategies of the American government, as will be discussed later, are leading the American people into economic slavery. In order to understand the failures of governmental strategies to stimulate economic growth and alleviate the financial pressures Americans are facing, 
one must first understand the strategy of the American government as it pertains to the American economy.The first government bailout issued under President George W. Bush was the Troubled Asset Relief Program (TARP). TARP issued funds to financial institutions that were at risk of becoming insolvent as the result of bad loans or toxic assets. The threat of these financial institutions failing was that lending would have significantly been reduced or stopped since these financial institutions would have had no money to lend off of. Had these financial institutions stopped lending, the economy would have failed since businesses would not have been able to secure the loans needed to grow without cutting into their profits. A lack of growth opportunity in business would have resulted in massive cutbacks by businesses necessary to maintain profits. An inevitable result of such cutbacks would be job loss, and, consequently, a loss of consumer purchasing power leading to a further decline in growth opportunities. The domino effect of drastically decreased or halted lending would have inevitably led to the collapse of the entire economic system of the United States. Therefore, the government bought up the troubled assets of these financial institutions in an effort to stimulate lending and prevent economic collapse.
This TARP bailout was a necessary bailout insofar as it pertained to insolvent financial institutions, and ONLY insolvent financial institutions. However, instead of providing funds ONLY to these troubled financial institutions, the New York Times has reported that TARP funds have been dispersed to GMAC, homeowners, Term Asset-Backed Securities Loan Facility (TALF), small businesses, and various private-public entities. The issue with the management of TARP funds is that, while government spending during a recession is good when directed into the private sector, government spending in a recession that is focused on bigger government is contradictory to growth in business. The vast majority of TARP funds went toward bailing out Wall Street bankers and financial institutions, a government takeover of the auto industry, and government funded loan programs. This expansion of government is counterproductive to the purported desired result of the federal government.
The government is funded through taxes collected from
businesses and citizens of the United States. Therefore, any increase in spending must be funded by the taxes collected from these individuals. If the amount of spending exceeds the income generated by tax revenues, then the government must either increase taxes in order to account for the difference or cut government spending in order to make up the difference. Any increase in taxes, especially during a recession, reduces the purchasing power of businesses and consumers alike since it reduces the amount of their profits or disposable income respectively by transferring purchasing power from the private sector to the government. As previously illustrated, a reduction in profits or disposable income is detrimental to the economy since it inhibits growth. As far as businesses are concerned, a decrease in profits directly impacts growth since it forces businesses to recoup these losses by reducing the cost of doing business (e.g. the size of their workforce, the amount of investment spending, etc.). Likewise, a reduction in consumers' disposable income impacts consumer spending resulting in a reduction of income for businesses. For businesses, a reduction in income is proportionate to a reduction in profits resulting in the consequences to business that were previously mentioned. By putting the power of spending in the hands of the government, the American economy falls under the control of the American government since the government then dictates how spending will occur. While TARP was necessary to maintain the lending capability of banks, likewise, government spending during a recession was necessary. However, the allocation of such spending to non-essential entities was not. Moreover, increased government spending following the TARP bailout undermined the desired result of TARP since it further increased the tax liability of the American people without addressing growth issues in business or consumer purchasing power.Following the TARP bailout, President Obama issued the American Recovery and Reinvestment Act of 2009 (ARRA). Under the ARRA, $787 billion was allocated by the American government to purportedly be used to stimulate economic growth in the country. Recovery.gov tracks how the economic stimulus funds are being used. Interestingly, California is the largest recipient of stimulus funds to date having received $7,601,188,739 of a total allocation of $20,355,072,321. The second largest recipient is New York having been awarded about half the amount awarded to California and having received $1,957,246,603 of the $11,548,324,549 award. Texas comes in third having received $2,745,983,634 of the $11,422,001,149 awarded. Recovery.gov clarifies that the "Recipient Reported Data section comes directly from the recipients of federal contract, grant, and loan awards (entitlements and tax benefits paid under Recovery are not included)." Out of the funds awarded to states, the vast majority of awarded funds are being used to fund government programs. This fact presents a great problem to the alleged purpose of these funds.
An entire column, on the Recovery.gov website's state-by-state breakdown of funds allocation, is dedicated to the number of jobs reported to have been created by the allocation of these awards. California reports 71,088.58 jobs have been created by stimulus funds, New York reports 42,780.94 jobs have been created, and Texas is reporting 33,541.5 new jobs as the result of these funds. That means that taxpayers will have to continue paying for 147,411.02 new jobs created by stimulus funds in the three top awarded states once the stimulus funds run out, or, 147,411.02 new government employees will find themselves out of work once the stimulus funds run out. Moreover, Recovery.gov reports a national total of 608,317 new jobs have been created by stimulus funds as the result of ARRA; all of which will be in jeopardy once stimulus funds run out.
So, what does all of this mean?
Well, the government's choice to follow up the TARP bailout, which mismanaged funds, with the ARRA caused economic matters to go from bad to worse. While the TARP bail out was necessary in order for financial institutions to remain solvent after government mandates essentially forced them into or near bankruptcy, the ARRA undercut economic growth by increasing the tax liability of American taxpayers without providing any real economic stimulus. When government programs increase in size, so does the tax liability of American taxpayers. By increasing the tax liability of Americans, the government thwarted economic growth since businesses understand that the increase in tax liability will inevitably lead to a decrease in profits as the result of the increased cost of doing business. Therefore, business have grown at a slower pace than they likely would have without the ARRA. In addition, the increase in the tax liability of the American people, the result of which has not been felt yet, will lead to an increase in taxes and therefore a decrease in disposable income. The decrease in disposable income will lead to a decrease in consumer spending, and so on and so forth.
Businesses see what is coming, and the harsh reality that the government is spending more than it can afford to spend and will therefore have to inevitably recoup those cost through higher taxes, they realize that a bleak economic future is in store for them. So, as businesses do during hard economic times, businesses are trimming the proverbial fat in order to weather the upcoming economic storm. How could that be, one might ask, with all of the money that the government is pumping into the economy? Well, that is just it. The government isn't really pumping any money into the economy. The United States government acts like a holding company in the cash flow of America. When economic times are good the government takes more money out of the cash flow in the form of higher taxes purportedly to pay for needed government programs that will increase the quality of life for Americans. Conversely, during bad economic times, it is necessary for the government to lessen restriction and/or put money into the cash flow in order to prevent a recession and therefore keep the economy moving. President Reagan believed that the best way to increase the amount of money in the cash flow during economic times, or at any time for that matter, was by giving the American people their money back by cutting back on the tax liability of the American people.
Reaganomics, as it has come to be known, follows the principal that the American people will spend their money when they have more money to spend (makes perfect sense to me) and that the increase in consumer spending will allow for economic growth (again makes perfect sense to me) which will keep the economy moving (and yet again, genius economic strategy). So why is the economy in dire straits then if it is so simple to keep the economy moving like this? Simple. The government is now being run by Democrats.
President George W. Bush spent a very large amount of money on the Iraq war following the 9-11 attacks, and large amounts of money are still being spent on the war. To put it into perspective, 1000Pennies posted a YouTube video demonstrating the difference in deficit spending (i.e. the amount of government unfunded mandates) since the beginning of the 20th century.
According to the video, President Obama and the Democratic House has increased the federal deficit spending by almost 3 times that of the George W. Bush administration which was record spending to begin with. White House correspondent Mark Knoller of CBS News writes in his article, "Bush Administration Adds $4 Trillion To National Debt," that under the George W. Bush presidency the national debt grew by $4 trillion which was "the biggest increase under any president in U.S history." In another article by Knoller, "Obama Budget Projects Never Ending Rise In National Debt," he says that under the Obama administration "federal spending and indebtedness will continue to rise as far as the eye can see." Knoller continues saying that the Obama administration is projecting that the national debt will "climb to $14-trillion" in 2010, and that by the end of 2013 it will "wind up at $17.1-trillion dollars." What this equates to is in the face of the worst economic crisis since the Great Depression, the United States federal government in increasing the tax liability of the American people at an unsustainable rate adding to the current economic troubles, as well as, the economic future of America. To put it another way, America is a boat that is taking on water and the Obama administration, instead of paling water OUT of the boat, is tipping the nose of the boat into the ocean.
So, to sum it all up, the policies of the current administration are driving the American economy into the ground. They are driving the American economy into the ground by increasing the tax liability of the American people at an unprecedented rate which will result in astronomical taxes or unconscionable borrowing which the federal government will never be able to secure. If the borrowing to fund the deficit does occur, the American dollar will be worth less than the Mexican peso, and countries will stop lending to the U.S. as a result. This will leave the federal government with only one source of income, taxes. Moreover, if the American government becomes so indebted to other countries as a result of borrowing, then the American government will be susceptible to take over by these governments if, after calling the U.S. on their debts, the government is unable to pay these debts since the federal government will be financially unable to mount a defense against an invading army. By increasing the tax liability without putting forth any real policy which will result in new jobs in the private sector, businesses see only increasing costs of doing business and the quickly depreciating value of the dollar in their economic future. Such a bleak economic outlook dictates that business brace for the economic impact by cutting cost by eliminating jobs, reducing spending, and increasing the price of goods and services in order to offset these losses and maintain profit levels. The result will be, higher unemployment rates, less pay for more responsibility, hyper-inflation, and eventually the collapse of small business coupled by the rise of monopolistic marketplace and a new oligarchy.One might ask, how did we get here? The answer
would be that the American people have been conditioned to believe that overextending their budgets through the use of credit, when not absolutely necessary, is an American way of life. This same mode of thinking is mirrored by the American government, and is the mode of thinking that has led to skyrocketing deficit spending. The United States government and the American people have essentially being living on borrowed time as a result of this thinking, and now the chickens have come home to roost. The transition to a mainly credit driven economy occurred somewhere between the late 1920s and the early 1960s, and has since become the driving force behind the American economy. After all, it was the potential collapse of lending or extending credit to businesses and consumers that threatened to destroy the entire American economy resulting in the legislation of TARP.The American economy overinflated its worth by relying on the psuedo economic viability of credit. In reality, both the American government and the American people, by relying on this perceived value of American assets, based American worth upon the false security of credit. Those who are lucky and remain fortunate enough to afford the debt taken under credit agreements do not feel the sting of these debts once they came due. However, others who are not so lucky end up bankrupt and/or financially buried beneath the burden of overwhelming debt that strangles their quality of life. So, after having prolonged the inevitable, those who eventually default on their debts suffer greater consequence as the result of these debts since, once they fall victim of this default, they become the equivalent of a financial slave to their creditor. John Collins Rudolf illustrates this consequence perfectly in his article in the New York Times, "Pay Garnishments Rise as Debtors Fall Behind," illuminating the consequences debtors face when they fall victim to creditor chickens coming home to roost. Rudolf points out that debtors face the unscrupulous debt collection practices of creditors for which bankruptcy offers some relief bu comes a seemingly insurmountable cost saying, "many low-income debtors must save for months before they can afford to go broke." Rudolf goes on to say how post-judgment debtors can end up paying several times the amount of the original debt as the result of fees, attorney's cost, interest, etc.. These awards lead to an exponentially more difficult financial situation for debtors, by severely reducing their income and, consequently, further reducing their ability to pay the debt. In the event that debtors are still unable to pay a post-judgment debt, then a debtor's wages can be garnished, their property seized, and funds in a debtors bank account can be confiscated to pay off the debt. This type of situation can serve as a financial death sentence to a debtor that finds themselves underwater, and the alternative, bankruptcy, is no picnic either.
So, as the United States suffers through the worst economic crisis since the Great Depression, American citizens who have fallen victim to this financial crisis are being enslaved by the financial institutions that their tax payer dollars paid in order to bail out. Essentially, the American government paid a ransom, in the form of TARP, to the financial institutions in order to keep themselves in business while the American people were then sold into slavery by the current administration. If the financial institutions were simply bailed out with TARP, then the increased tax liability would have been minimal or null and void since the money is and continues to be repaid. Instead, the government piled more and more debt at unprecedented levels onto the American people. The combination of such is crippling to the American economy, and will inevitably lead to the financial enslavement of the American people. Had the current administration taken the ARRA funds and used them to stimulate the economy in the form of tax cuts or consumer grants of some kind, then the economy would have
seen actual growth. The BLS advocates consumer spending as a job-growth engine saying that consumer spending accounts for "60 percent of total employment." So, if consumer spending is such a great way to stimulate growth, then why would the current administration implement policies that achieve the exact opposite of consumer spending by taking money out of the consumers hands and putting it into the hands of the government? Simple. The government, under the current administration, wants U.S. citizens to become their slaves, and they are using the financial apparatus as the means of achieving it. All it took to enslave the American people was to condition them to overextend themselves by causing them to turn to the credit savior in times of economic hardship or moments of vainglorious consumption in order to allow the financial industry to swoop down and collect the exposed victims of an engineered economic collapse. Following such an event, it was relatively easy for a power hungry government bent on enslaving its citizens in order to subject them to the will of an overarching government to compound their financial hardships by removing their ability to defend themselves against the onslaught.Now, as the American people cry out against their cannibalistic government, the only question that remains is, who runs this country? The American people? Or the American government? The irony here is that the same device that was used to enslave the American people, has also been used to enslave the American government.
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