Volcker Says Time Is Running Out for U.S. to Tackle Fiscal Woes (This is one of Obama’s top advisers. He says politicians don’t seem to have a “sense of urgency".)

Biden says Brussels is the new capital of the free world (Oh yeah, because when the world thinks of individual liberty and economic dynamism, the first place that comes to mind is Belgium.)

Democrats are unlikely to pass a federal budget (It’s an election year, and they don’t want to be on the record for passing new tax increases or voting for a budget with another $2 trillion deficit. This is what moral and intellectual bankruptcy looks like.)

Bill Clinton blames economic inequality and the financial crisis on the US leaving the gold standard (Wow. He’s able to identify a major part of the problem, which is impressive. But he then attempts to justify it anyway. Wouldn’t want some wacky Rothschild-spawn coming at his junk with a hunting knife or anything. Lulz.)

From Tom at Radio Free NJ

Morons,

There is no money. There is no one else’s pocket left to pick. You can’t borrow anymore, you can’t print anymore, and you can’t steal anymore from anyone else. The people who will be paying the bill to keep you from reentering the 15th century are, unlike you, working very hard. They deserve better than you spoiled pampered children are giving them.

You object to the bond market, but the bond market is just the voice of reality calling. It’s telling you that 2 plus 2 is still 4, no matter what your union bosses would have you believe. Your bosses tell you that ‘the people’ didn’t spend the money, but it’s not true. That’s exactly who has wasted the money, and now the bill is coming due. Right now the Bond Market is actually your very best friend. It’s telling you what a horrible mistake you’ve made, and giving you a chance to undo it, before it’s too late.

The standards that the Germans are living by right now are unsustainable in their own right, but they are a lot closer to reality than you are. At the very least you should pull up your pants, wipe that stuff off your face and be responsible enough to live at that level. Since it’s they who will be coming up with the bulk of your shortfall you should do it out of good manners if you can’t manage any other reason. And once you do, the rest of us will step up and pull you back from the brink.

But the truth is, we’re not going to pull you that far. If you continue to make no contribution to productivity, your life from here on out will be one of relative hardship and poverty. And frankly that’s how it should be. You can live your lives any way you like as far as we’re concerned, but no one is going to reward you for getting drunk on the beach anymore. In the modern world you’ll only get out of the system what you put into it. Either work – or learn to live without.

Socialism always was (and frankly – still is) a horrible idea. It’s the reason you’re in this embarrassing position in the first place. In the eyes of the world you all look just as stupid and spoiled as can be. You could be protesting in diapers and demanding that ‘the state’ wipe your behinds and it would only marginally affect your public image. You need to accept the fact that there are no circumstances under which politics can arrange for nothing to be equal to something. You can not make a contribution of zero and expect to get a benefit greater than that.

You’ve thrown your bottles, burned your flags, waved your signs and had your fun. Now it’s time for you to learn the lessons of history and abandon this idiocy before we finally lose our patience with you. Grow up – and get back to work.

From Before It’s News

Federal Reserve Governor Kevin Warsh told an audience on Friday that the U.S. economy is in the midst of a cyclical recovery and that there are "encouraging" signs of improvement in financial markets.  Many other governmental and media talking heads have uttered similar pronouncements about a "recovery" which will put the U.S. economy back on track.  But are we really experiencing a recovery?  If so, then why are foreclosures still hitting record levels?  Why is unemployment so high?  Why are so many cities and states on the verge of bankruptcy?  Why are so many average Americans hurting so much?  The truth is that what we are experiencing now is a period of stabilization before the "second dip" of the double-dip recession so many economists have been talking about hits.  What the U.S. economy is actually in the midst of is a complete and total structural failure.  The American Dream is going to permanently die for millions of American families.  Millions more are going to lose their jobs and millions more are going to lose their homes.  This is what we get for piling up the biggest mountain of debt in the history of the world and outsourcing much of our manufacturing and industry to places like China and India.  Now we are an aging, bloated dinosaur trying to survive on a service economy and the biggest debt bubble of all time.

It would be great if we could experience at least a temporary economic recovery, because very few people are ready for a total economic meltdown right now.  Most of us still need more time to prepare for what is ahead.  But unfortunately almost all of the recent economic news is bad.

The following are 14 pieces of really bad news for the U.S. economy….

#1) According to RealtyTrac, foreclosure filings were reported on 367,056 properties in the month of March.  This represented an increase of almost 19 percent from February, and it was also an increase of nearly 8 percent from March 2009.  In fact, the number for March 2010 was the highest monthly total since RealtyTrac began issuing its report in January 2005.  That is really, really bad news for the real estate industry.

#2) And yet things are expected to get even worse for the housing market.  RealtyTrac projects that there will be 4.5 million home foreclosures before the end 2010.  If you figure that there are approximately 4 people per household, that is another 18 million people that will be forced out of their homes by the end of the year.

#3) Interest rates have already gone up, and most experts forecast that they will continue to increase throughout the rest of 2010 and into 2011.  This is going to make existing adjustable mortgages more expensive, and this will also make it even harder for home buyers to purchase a home.  Needless to say, this is likely to put significant downward pressure on housing prices.

#4) It turns out that the much celebrated foreclosure assistance program introduced by Barack Obama and the Democrats last year is helping very, very few mortgage holders, and the default rates for those who have managed to receive help are still very high.  From all appearances it seems as though the U.S. government is unable to do very much at all to turn around the real estate market.

#5) The unemployment crisis continues to get worse.  The number of unemployed Americans per job opening has started to increase again, hitting 5.5 in February.  There just are not nearly enough jobs for everyone, and this is creating a great deal of despair among unemployed workers.  Many of those who do manage to find work have only been able to obtain part-time employment.  Gallup’s underemployment measure hit 20.0% on March 15th.  This was up from 19.7% two weeks earlier and 19.5% at the start of the year.  That is not a good trend.

#6) The IMF is forecasting that unemployment will remain high for at least two more years.  Unfortunately, IMF forecasts tend to be chillingly accurate, so those Americans hoping for an employment boom in the coming months are likely to be quite disappointed.

#7) Even with the economy struggling and so many out of work, the price of gasoline continues to skyrocket.  It is almost as if the 1970s have struck again and we are back in the days of the misery index.  In some areas of the United States, people are already paying as much as $3.50 for a gallon of gasoline, and many experts are predicting that gasoline could hit $4.00 a gallon by the end of 2010.

#8) And health care costs show no sign of slowing down either.  Even the Los Angeles Times (which is radically pro-Obama) is admitting that the new health care law will not prevent health care premiums from continuing to increase dramatically.  So why did they pass that law again?

#9) Well, it turns out that the new health care bill is not good for physician-owned hospitals either.  According to the executive director of Physician Hospitals of America, more than 60 doctor-owned hospitals across the United States that were in the development stage will now be canceled.  Why will they be canceled?  Well, it is because of the new health care law that Barack Obama and the Democrats wanted so badly.  Apparently the new law singles out doctor-owned hospitals, making new doctor-owned projects ineligible to receive payments for Medicare and Medicaid patients.  Who in the world came up with that bright idea?

#10) Not only that, but soon the United States will be facing a critical shortage of physicians.  The U.S. health care system was already facing a shortage of approximately 150,000 doctors in the next decade or so, but thanks to the health care bill passed by Congress, that number could grow by several more hundred thousand.  Ouch!

#11) Cities and states across America are facing unprecedented financial pressure.  For example, many analysts believe that the city of Los Angeles is on the verge of bankruptcy.  Of course the entire state of California is a financial wasteland at this point, so that is not that much of a surprise.

#12) Several prominent economic analysts are now declaring the the risk that the government of Japan will go bankrupt is very real.  If Japan does financially implode, that will have major implications for the United States, as Japan is one of our biggest and most important trading partners.

#13) The world’s five biggest AAA-rated countries (including the United States) are all at risk of soaring debt costs and will have to implement austerity plans that threaten "social cohnesion", according to a report on sovereign debt by Moody’s.  To get an idea of how popular "austerity plans" are, just check out the riots that have been happening in Greece lately.

#14) Trillions have been pumped into the U.S. economy over the last couple of years and officially all we have to show for it is about 2% growth.  Oh, and an exploding national debt that our children and grandchildren will never, ever be able to pay off.

The U.S. government continues to spend money like it is water, and yet the U.S. economy continues to be trapped in a death spiral.  The reality is that we have created an economic nightmare from which there is no escape, and it is going to take every ounce of government spending and intervention just to keep the economy functioning somewhat normally.  Unfortunately the economic crisis will become so dramatic at some point that even the government will lose control and that is when everything will really hit the fan.

So prepare yourself and your family now.  Very difficult times are coming, and the vast majority of Americans will be totally unprepared for what is going to happen.

Don’t be one of them.

It’s our only hope, apparently

Everyone thinks the Fed’s job is to fight inflation, but right now the Fed is actually doing everything it can to cause inflation.

Why?

It part to help the economy get cranking again.  Inflation provides an incentive for people to spend cash rather than saving it, because if they save it, the cash will lose value rapidly.

Inflation also helps solve another problem, though–our debt problem.  The more inflation we have, the less our dollars will be worth.  Because our debts are based on a specific number of dollars and not a specific value, the less our dollars are worth, the easier it will be for us to pay off our debts.

Hmm, looks like the cat’s out of the bag, finally. The federal government is going to inflate its way out of debt. Remember two things. First, inflation is a completely manufactured phenomenon. It only happens because the people who control the currency want it to. Second, inflation is a tax on wealth. If you have cash, inflation makes it worth less. If you have debt, inflation makes that worth less, too. Now consider who has more debt than they can ever pay off and absolutely no cash? DING DING DING! The federal government!

So inflation is an important tool in getting us out of this mess.  It’s painful and unfair–those who have been responsible and saved money will pay the price for those who borrowed money, racked up huge debts, and spent more than they could afford.  But it’s what the Fed is (quietly) aiming for.

With inflation, those who have been responsible and saved money will lose money to the direct benefit of those who have been irresponsible and racked up debt. It doesn’t get any clearer than that. And that is EXACTLY what our government is trying to do to us right now. There’s no justice. Playing by the rules and being responsible is discouraged. This is the moral hazard that occurs when money has to inherent value and political elites are given control rather than relying on laws and markets.

Might as well load up on non-perishables, because saving money is a pretty stupid idea right now.

Rich taxpayers in Maryland are vanishing

Illinois Governor Pat Quinn is the latest Democrat to demand a tax increase, this week proposing to raise the state’s top marginal individual income tax rate to 4% from 3%. He’d better hope this works out better than it has for Maryland.

We reported in May that after passing a millionaire surtax nearly one-third of Maryland’s millionaires had gone missing, thus contributing to a decline in state revenues. The politicians in Annapolis had said they’d collect $106 million by raising its income tax rate on millionaire households to 6.25% from 4.75%. In cities like Baltimore and Bethesda, which apply add-on income taxes, the top tax rate with the surcharge now reaches as high as 9.3%—fifth highest in the nation. Liberals said this was based on incomplete data and that rich Marylanders hadn’t fled the state.

Well, the state comptroller’s office now has the final tax return data for 2008, the first year that the higher tax rates applied. The number of millionaire tax returns fell sharply to 5,529 from 7,898 in 2007, a 30% tumble. The taxes paid by rich filers fell by 22%, and instead of their payments increasing by $106 million, they fell by some $257 million.

John Galt must have passed through. The smartest thing a state can do is to lure rich, successful people to the area with low tax rates. It builds the tax base and it increases entrepreneurship.

(On the other hand, statists will likely try to enact more laws preventing private parties from leaving an area, or forcing them to pay taxes on capital leaving their localities. Or equally as likely, the feds will begin setting blanket interstate tax policy, which would prevent the competition of ideas between states.)