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The coming economic collapse of the United States
By Michael Hampton
Posted: March 7, 2007

The Great Depression will look like a small blip compared to the economic collapse the United States is about to suffer, according to several experts. But Congress refuses to listen and do what’s necessary to stave off disaster.

Worse, Congress has been warned year after year since at least 1992, and perhaps before that.

“The federal budget is structurally unbalanced. This will do increasing damage to the economy and is unsustainable in the long term. Regardless of the approach chosen, prompt and meaningful action is essential. The longer it is delayed, the more painful it will be.”

Those were the words of the General Accounting Office (now the Government Accountability Office) 15 years ago. Reporting on the long-term fiscal outlook of the federal government, GAO reported then (PDF) that Medicare, Medicaid and Social Security would grow out of control and that “the path of ‘no action’ is unsustainable.”

It also warned that “a major effort to strengthen the economy must be completed by 2010,” when the Baby Boomers will begin retiring.

We all know what happened in the intervening 15 years: absolutely nothing good. The entitlement programs are still here, larger than ever, and draining ever larger percentages of the national economy.

Last month, GAO reported again to Congress on the nation’s long-term fiscal outlook. It’s only gotten worse.

“GAO’s current long-term simulations continue to show ever-larger deficits resulting in a federal debt burden that ultimately spirals out of control,” GAO reported (PDF). Even under the best-case scenario GAO studied, “the risks to the Nation’s future financial condition are too high to be acceptable.”

And again, the problem is government entitlement programs — and Social Security, bad as it is, isn’t even the biggest one.

In the succeeding 2 decades America’s population will age dramatically, and relatively fewer workers will be asked to support ever larger costs for retirees. . . .

Although Social Security is a major part of the fiscal challenge, it is far from our biggest challenge. Spending on the major federal health programs (i.e., Medicare and Medicaid) represents a much larger and faster growing problem. In fact, the federal government’s obligations for Medicare Part D alone exceed the unfunded obligations for Social Security. Over the past several decades, health care spending on average has grown much faster than the economy, absorbing increasing shares of the Nation’s resources, and this rapid growth is projected to continue. For this reason and others, rising health care costs pose a fiscal challenge not just to the federal budget but to American business and our society as a whole. — Government Accountability Office

Federal Reserve chairman Ben Bernanke last week also warned Congress, but of course, most of them refused to listen or even acknowledge that the problem exists.

Federal Reserve Chairman Ben Bernanke could not have sounded the alarm any clearer if he had carried a bullhorn and a gong. “This expansion of debt would spark a fiscal crisis. . . . The U.S. economy could be seriously weakened. . . . This is sort of like a snowball rolling down the hill. . . . This can really get out of control.”

Other lawmakers struggled to wrap their arms around the crisis Bernanke was describing. “We’re just, kind of, whistling past the graveyard?” asked Rep. Marion Berry (D-Ark).

“Yes, sir,” said the chairman.

“And hoping that the tooth fairy comes and bails us out of this deal?”

“I don’t know about the metaphors there, Mr. Congressman,” Bernanke replied.

Rep. Jeb Hensarling (R-Tex.) had a different metaphor to run by the chairman. He asked if “we are debating how to mop up six inches of water in the stateroom of the captain of the Titanic when we should be focused upon the gaping hole in the hull of the ship.”

“The heart of the problem are the entitlement programs,” Bernanke affirmed. — Washington Post

“Federal deficits will grow to unsustainable levels in as little as two decades,” says David M. Walker, the comptroller general of the United States, “At that point, without significant policy changes, federal deficits could reach 10% or more of our economy.”

As head of the GAO, it’s Walker’s responsibility to sound the alarm. Not at all satisfied with Congress refusing to listen, he’s taken his message directly to the people, appearing on CBS News’ 60 Minutes television program on Sunday, and touring the U.S. “We are the world’s largest debtor nation, and time is working against us,” Walker said in an article for The Futurist magazine.

Indeed, the American welfare state is growing out of control, with tens of millions of Americans receiving some form of government handout.

The number of families receiving cash benefits from welfare has plummeted since the government imposed time limits on the payments a decade ago. But other programs for the poor, including Medicaid, food stamps and disability benefits, are bursting with new enrollees.

The result, according to an Associated Press analysis: Nearly one in six people rely on some form of public assistance, a larger share than at any time since the government started measuring two decades ago. — Associated Press

“This story only looks at the welfare state for the poor,” writes Cato Institute vice president David Boaz. “Far more than one in six Americans are dependent on such government programs as Social Security, Medicare, unemployment compensation, and so on. . . . And how long can a nation remain free if half its citizens are dependent on government hand-outs?”

Rep. Ron Paul (R-Texas), who is running for President in 2008, also sounded the alarm.

When it comes to Social Security and Medicare, the federal government simply won’t be able to keep its promises in the future. That is the reality every American should get used to, despite the grand promises of Washington reformers. Our entitlement system can’t be reformed — it’s too late. . . .

The politicians who get reelected by passing such incredibly shortsighted legislation will never have to answer to future generations saddled with huge federal deficits. Those generations are the real victims, as they cannot object to the debts being incurred today in their names.

The official national debt figure, now approaching $9 trillion, reflects only what the federal government owes in current debts on money already borrowed. It does not reflect what the federal government has promised to pay millions of Americans in entitlement benefits down the road. Those future obligations put our real debt figure at roughly fifty trillion dollars — a staggering sum that is about as large as the total household net worth of the entire United States. Your share of this fifty trillion amounts to about $175,000.

Don’t believe for a second that we can grow our way out of the problem through a prosperous economy that yields higher future tax revenues. If present trends continue, by 2040 the entire federal budget will be consumed by Social Security and Medicare alone. The only options for balancing the budget would be cutting total federal spending by about 60%, or doubling federal taxes. To close the long-term entitlement gap, the U.S. economy would have to grow by double digits every year for the next 75 years.

The answer to these critical financial realities is simple, but not easy: We must rethink the very role of government in our society. Anything less, any tinkering or “reform,” won’t cut it. — Rep. Ron Paul

In summary, the welfare state that the socialists built here from the 1930s (after they destroyed the money supply and created an artificial depression) is going to do the same thing it did when they built it in the Soviet Union. And if their example is any guide, it won’t take until 2040 for the nation’s economy to collapse utterly. It will be sudden and unexpected. It will be horrific. Millions of Americans will die, never knowing what happened. But if you’ve read this far, you will know why: In a word, socialism.

Socialism sounds good, because it plays on the emotions, not because it’s good fiscal policy. It’s terrible fiscal policy. For that matter, it’s also terribly damaging — psychologically and financially — to those who it ostensibly would help.

Maybe this time around, we will actually remember the lesson. Maybe this time around, we’ll remember what real money is, and reject the worthless paper our overlords have given us in its place. Maybe this time around, when millions of Americans are starving in tents, we will look not to government for a “solution” which makes economic slaves of us all, but where we should have looked in the first place: our neighbors, our communities and within ourselves.

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FTW Economic Alert
Global Economic Collapse Imminent,
Pension Fund Disaster;
Stocks, Dollar To Free Fall, Gold To Skyrocket
By Michael C. Ruppert

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USA's Future
Economic Collapse
Excerpt from FOUNDATION TO ALL FREEDOM



As the most dominant empire since Roman times, America has helped to bring great wealth and prosperity to the world...

                                                                   Pat Robertson

The merchants of the earth will weep and mourn over her because no one buys their cargoes anymore–cargoes of gold, silver, precious stones and perils; fine linen, purple, silk and scarlet cloth; every sort of citron wood, and articles of every kind made of ivory, costly wood, bronze, iron and marble; cargoes of cinnamon and spice, of incense, myrrh and frankincense, of wine and olive oil, of fine flour and wheat; cattle and sheep; horses and carriages; and bodies and souls of men.

                                         Revelation 18:11–13

America's unquenchable materialistic appetite is the machine that fuels a global economy. Japan's economy would collapse if it were not for the billions of dollars per year gained in trading with America. When America goes into a recession, the world follows. When America's economy is booming, the world's economy strengthens. America devours, yet, is never satisfied. Running out of money, she tells the waiter to put it on her tab. He gladly complies making a tidy profit from the interest. He cannot serve her quick enough. The more she eats, the hungrier she becomes. As time passes, less goes to paying for food and more is needed to pay for the huge debt she is accumulating. Finally, all of her resources are used up in paying for the interest she owes. America falls crashing to the ground in economic ruin, so suddenly, it sends shock waves throughout the world. She is incapable of paying for her massive imports. Merchant ships sit offshore, heavy laden with cargo, weeping and wailing in horror for Babylon has fallen.

In 1929, the debt ratio in relation to the Gross National Product stood at a healthy 16%. In 1990, the national debt increased to an alarming 60% of the GNP. The total debt of America is greater than the combined external debts of all the nations of the world. America's debt is 4.3 trillion dollars which is equivalent to a 270 mile high stack of tightly bound $1000 bills. Each mile representing the depth of the pit America will be unable to crawl out of.

TREMORS OF AN ECONOMIC EARTHQUAKE
In 1929, America was having an economic explosion. Immigrants were pouring in. There were more jobs than people. Farmers were leaving their fields for factories, making twice the income for half the labor. Politicians confidently portrayed a picture of an endless era of unprecedented prosperity. The prophets of gloom and doom were ignored as being fanatical crazies.

Fall is a beautiful time of year. A time of thanksgiving, a remembrance of God's blessing upon the birth of a Christian country. The leaves are in full bloom, ready to fall. It is a time for Sunday drives through the country without a thought of the winter to come. Splashes of color cover the hills and valleys. As the squirrels wisely gather food for a cold long winter, a nation is borrowing and spending because of a thriving economy that can promise only spring and summer.

A ship sails to England in the early part of October, full of wealthy entrepreneurs, a sign of absolute faith in a thriving American economy. While they were on their care–free vacation, enjoying the pleasure away from the stress of their jobs, a powerful economic tremor rippled through the United States. On October 24, 1929, 12,000,000 shares of common stocks traded in a single afternoon. By Monday, October 28th, the trading averages had dropped by 20 points. On Tuesday, October 29th, virtually all trades were to sell. It became A Nightmare On Wall Street. Investors became panic–stricken, resulting in a huge economic land slide. AT&T was down a hundred points, General Electric, 90 points and General Motors, plummeted 150 points. Sixteen million shares were traded at a loss of 10 billion dollars. This is equivalent to twice the amount of currency of the entire USA. Headlines proclaimed, WALL STREET CRASHES. Tens of millions of people's life savings became completely useless. Millionaires were reduced to the unemployed. On Wall Street, it rained the bodies of men jumping from their offices high above. When the ship returned full of happy–go–lucky entrepreneurs, they were worth the clothes on their backs. An economic winter had fallen upon America which would effect the entire earth. An ice age that would last four long years.

Revelation 18 describes an economic earthquake that will hit America with such force it will make the Great Depression seem like child's play. It will be utter destruction in which she will never rise again. A judgment from the hand of God because of a nation that is seeped in adultery and rebellion. A nation that began as a Light on a Hill became a corrupting stench rising up to the altar of the Living God. The moral fabric that would allow America back on its feet from the Great Depression will not be present in this massive economic earthquake. The Beast she rides will devour her flesh so he may rise to absolute world power, filling the vacuum created by America's fall. The only warning will be the prophetic voices of the faithful saints of God who will be hated and despised by the world. For the Harlot will be drunk on the blood of the saints. In her intoxication, her mind will be numb to her impending doom. A head–on collision with a wrathful God. If you have built your life on the sands of the kingdom of this world, your hopes, your dreams, your energies and aspirations will mingle with the smoke that will rise up from the utter destruction of Babylon.

Ten thousand nuclear war heads and the most technologically trained army in the world will not be able to stop America's economic disaster. An implosion that will come from the moral rot inside her heart. A physical army cannot stop the wave of spiritual destruction, for God does not use the weapons of this world to fight against her.

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Raising alarm over oil supply
Retired professor is in Capital Region to spread word about "looming catastrophe"

By LARRY RULISON, Business writer
First published: Tuesday, June 10, 2008

COLONIE -- Clifford Wirth's view of the future in the United States is pretty grim.
     
The retired University of New Hampshire political science professor is in the Capital Region this week talking about the impending "peak oil" crisis.
For those unfamiliar with it, peak oil is the point at which world oil production hits its peak and then starts declining.
Because of the world's ever-increasing demand for oil, the declining supply will cause major shortages, political unrest and economic instability, observers say.
"This is a looming catastrophe," Wirth said Monday morning during a meeting with reporters at the Route 7 Diner in Latham.
Some peak oil researchers say we've already reached the top of the production curve, while others say it may still be decades away. And there are some who discount the problem altogether, although Wirth says it's not debatable.
"Peak oil is not a theory," he said. "It is a geophysical fact."
Wirth was scheduled to speak Monday night at The College of Saint Rose in a program sponsored by the Capital Region Energy Forum, a local group focused on energy education and policy.
He has done a lot of research on the subject and has his own consulting firm, Peak Oil Associates International.
Wirth is so worried about the problem that he is moving his family from New Hampshire to the Mexican state of Veracruz. His wife is originally from Mexico City, he said, and Veracruz has a rich soil, perfect for agriculture. And there is no need for home heating.
"New Hampshire is not a sustainable place to be," Wirth said.
Even though $4-a-gallon gas is already changing the way people and businesses act, Wirth said skyrocketing gas prices under a peak oil scenario will have a devastating effect. The transportation system will come to a halt, cutting off the food supply to most Americans.
He also is skeptical of alternative-energy sources such as hydrogen, saying the economic benefits are largely unproven. He wants the National Academy of Sciences -- scholars who advise the U.S. government -- to come up with solutions.
"It should not be coming from the energy community," he said, referring to businesses.
Wirth said states like New York should have a plan to deal with peak oil, much like they have plans for natural disasters and terrorist attacks.
"The media needs to be pounding on the door, asking questions," Wirth said. "What is the state of New York, and what is the governor going to do about it?" A phone call to Gov. David Paterson's office was not immediately returned.
Bill Reinhardt, a senior program manager with the New York State Energy Research and Development Authority, who was also scheduled to speak at Monday night's program, said state policymakers are aware of what's going on with the oil supply. "Yes, the oil crisis is real," Reinhardt said. "The era of cheap oil is over."
Paul Swartz, chairman of the Capital Region Energy Forum, said the public needs to hear what Wirth has to say because it presents a wake-up call, despite what they think of his opinions.
"It's a frightening issue," Swartz said. "It's going to have an impact on Western civilization. People are just oblivious, unaware."
Larry Rulison can be reached at 454-5504 or by e-mail at lrulison@timesunion.com.

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"The media needs to be pounding on the door, asking questions," Wirth said. "What is the state of New York, and what is the governor going to do about it?" A phone call to Gov. David Paterson's office was not immediately returned.