Here Lies the USA Economy. RIP

In a nutshell the USA is starting to realize how utterly and hopelessly screwed they are. Unfortunately none of these wet-noodled leaders are going to do a damn thing about it. Perhaps they know the truth. They can’t.

The Republican's and the Democrats have released plans to reduce the deficit ($4.4 Trillion over 10 years and $4 Trillion over 12 years respectively). Sounds like progress right?

Not even close.

Neither actually reduces the deficit. These make-believe plans are only attempts to reduce the amount they will be going into debt each year.

These plans are like telling your alcoholic Uncle that he needs to stop drinking or he’ll die…if he was deaf… and your were wearing oven mitts…and your lips were crazy glued shut….while you drove him to the LCBO…and bought him booze.

These plans are so stubbornly useless that even with grotesquely fabricated “Inflation” and “GDP” estimates blended into the mix, they still can’t show themselves not running massive annual deficits in a decade!

Might as well buy your Uncle barrels of his favorite booze, place him in Depends undergarments and cheer on the inevitable.

Also it’s worth noting none of these “law makers” will even be in power in 10 years to account for how pathetically wrong they were. It’s a cute trick.

Oh and how much of the cutting in these plans will take place over the next 2 years when they are actually "in power”?

2.5%.

That's right. 2.5% of these plans affect the next 2 years. The other 97.5% kicks-in during the last 8-10 years. That's how cute these buggers are.

Doing virtually nothing is a plan I suppose. Eventually your drunkie Uncle will die and he will no longer be drinking, so problem solved.

Obama even had the audacity (and not the Hope kind) to give a speech about what kind of America they should be. Broke I'm guessing.

And before you think raising taxes on the rich is the solution here is the truth:

Every person who made over $100,000 in 2008 ($100,000 is not rich btw) had a total combined taxable income of $1.582 Trillion (Wall Street Journal).

The Government is already getting $650B of that with current Federal and State taxes leaving the "rich" with roughly $900B of net earnings.

Now if you taxed the "rich" at 100%. That’s right. Take every dime they make and left them with nothing…the Government would still be running a deficit of $700B.

Of course the deficit will only be $700B if projections are spot on. Last year they estimated they’d go in the ditch $1.2 Trillion but ended up at $1.6 Trillion. That is a miss of $400B or 33%. Nice going fellas.

Putting aside everyone who used to make over $100,000 is now making $0 and the economy is dead. We still have to find another $700B to balance this budget!

One slight problem... the remaining citizens (all those that make under $100,000 per year) don’t have $700B left in their pockets after paying their existing taxes.

That's right. If you take 100% of EVERY citizen's income...every last dime of every American’s earnings for the entire year...you still can't balance one single year of the budget.

Now that is a colossal clusterfuck.

In 2000 the cumulative budget deficits of the USA was $4T.

By 2008 it climbed another $4T to a new total of $8T

In the last 3 years it has grown another $6T to a total of $14T.

Americans are now amassing more debt in 3 years then they did in the 60’s, 70’s, 80’s and 90’s…combined!

Not bad enough for you?

The low interest rates of the past 10 years, coupled with American’s ability to write off mortgage payments against their income, has incentivized it’s citizenry to borrow against any equity they once had... and spend it.

That’s right. Private debt doubled in the last 10 years as people borrowed and spent their future.

Hard to let a temporarily low interest rate suck you into squandering your future but those plucky Yanks sure did.

To add insult to injury all that spending didn’t help the economy all that much in America. That’s because they don’t manufacture anything. Ask the now 14,000,000 millionaires in China how well all that American spending worked out.

Ok now your Uncle has no food in the cupboards and is strictly living on booze could it be any worse?

Oh yes it can.

We are all familiar with the looming worry over aging Baby Boomers and the $50+ Trillon Entitlement Programs (Medicaid, Medicare and Social Security). What is less known is how fortunate the USA has been for decades.

You see in the Dirty 30’s there was a depression going on and in the early 40’s a World War. Baby production was in a lull for 15 years and it is those “Lull Babies” who have been utilizing Entitlement Programs for the last 15 years.

Amazingly the Government has been going bust taking care of the “Lull Babies” with the aid of the massive Boomer Demo in the workforce and paying the bills.

Over the next 5 years those Boomers are going to push off of payrolls and onto the Dole and then instead of a “lull” at the public trough…you’ll have Ka-“Boom”.

All bets are off after that.

The invincibility cloak of America will finally fall and lay bare for all the world to see…that in the end the greatest economy that ever was...got gutted.

And all anybody could do...was watch.