Smoke, mirrors and the U.S. population

By Randa Wagner -

2.26.13 – Peo­ple enjoy watch­ing magic tricks, espe­cially when they’re well per­formed. Most peo­ple real­ize the feat isn’t really magic: it’s ‘slight of hand’ or ‘smoke and mir­rors,’ so to say, that make the illu­sion of some­one dis­ap­pear­ing, float­ing in air or being divided in two look realistic.

There are many ways to influ­ence peo­ple to see, hear or believe what you want or need them to. If you’re try­ing to con­vince them of some­thing that is real­is­tic and true, a com­mon sense approach usu­ally works. You can use logic, facts and his­tory to prove your point.

How­ever, when you’re try­ing to hide the truth and push an idea or con­cept to cover up a decep­tion, it gets trick­ier. It takes a lot more effort to ‘sell’ a lie because you have to take into con­sid­er­a­tion all the peo­ple and fac­tors affected by the lie. If it’s a really BIG lie, you usu­ally have to have other peo­ple who have power and influ­ence help you out. As time goes on, you have to keep rein­forc­ing the sys­tem sup­port­ing the lie to keep it from being dis­cov­ered. It must get very labor-intensive and tire­some sometimes.

Some peo­ple feel this way about the ‘so-called’ recov­ery in the United States. The ‘new jobs’ and ‘lower unem­ploy­ment’ num­bers the gov­ern­ment hands out to the main­stream media paint a rosy pic­ture, don’t they? When the news announces, “Employ­ers cre­ate 155,000 new jobs in Decem­ber,” many of us look around and ask, “where?” When the pres­i­dent announces the ‘eco­nomic recov­ery is here,’ it’s news to many of us.

The U.S. National Debt Clock stated the Out­stand­ing Pub­lic Debt as of Feb. 22, 2013 at 6:16 PM GMT was: $16,595,843,364,037.65.

The esti­mated pop­u­la­tion of the United States is 314,471,283, so each citizen’s share of this debt is $52,773.80. The National Debt has con­tin­ued to increase an aver­age of $3.84 bil­lion per day since Sep­tem­ber 28, 2007.

I noticed at one point on the debt clock, the U.S. Fed­eral tax rev­enue read $2,487,011,714,061.– but, at the same moment, the U.S. total inter­est on its loans were higher, at $3,098,580,740,134.–. That means we can’t even pay the inter­est on our loans, much less our 16 tril­lion dol­lar debt.

This explains Why it doesn’t feel like a recov­ery in an arti­cle by Neil Irwin for the Wash­ing­ton Post Busi­ness News.

“The nation’s eco­nomic woes boil down to this,” he explains: “Com­pared with a healthy econ­omy, about 7 mil­lion working-age peo­ple and 5 per­cent of the nation’s indus­trial capac­ity are sit­ting idle, not pro­duc­ing what they could. The econ­omy is grow­ing again, but at a rate — less than 2 per­cent in recent months — that’s too slow to keep up with a pop­u­la­tion that keeps increas­ing and work­ers who keep get­ting more efficient.

“This is the out­put gap,” he con­tin­ues, “the divide between the amount the United States can pro­duce and what it is actu­ally pro­duc­ing. The gap, cur­rently $900 bil­lion, explains why we feel so mis­er­able more than a year into what is tech­ni­cally clas­si­fied as an eco­nomic recovery.”

That’s a mild assess­ment com­pared to how some budget-watchers see the situation.

In a recent inter­view at the Van­cou­ver Resource Invest­ment Con­fer­ence, Jeff Berwick, Founder and Chief Edi­tor of the Dol­lar Vig­i­lante, said the U.S. finan­cial sys­tem is in collapse.

“Most peo­ple don’t even see what’s going on,” he main­tains. “The U.S. media will always tell you there’s going to be a recov­ery. There’s no chance of that: it’s not pos­si­ble. The U.S. gov­ern­ment is now 40% of the GDP of the U.S. There’s one in four chil­dren on food stamps right now and one in six adults. There’s so much debt, so much gov­ern­ment involve­ment in the econ­omy… there’s 11 states in the U.S. now that have more peo­ple on wel­fare than who have jobs.”

Berwick said it’s not pos­si­ble for the gov­ern­ment to turn the sit­u­a­tion around, com­par­ing its sta­tus to that of the U.S.S.R. in 1989.

“Our over­all debt to GDP is 60%,” he stated.

Imag­ine if you ran your per­sonal house­hold bud­get this same way: always spend­ing more than you take in, charg­ing items or ser­vices you do not have the funds to sup­port. What hap­pens? Soon you max out your credit line, now you can­not afford any­thing more than the min­i­mum pay­ments on your credit cards and loans. Inter­est con­tin­ues to accu­mu­late, and now you are only pay­ing the inter­est on the loans. All the while you have to find a way to keep your house­hold oper­at­ing and func­tion­ing. Per­haps it reaches the point where you file bank­ruptcy, which allows you to begin again with a clean slate, but you can no longer bor­row money for anything.

What if the U.S. ‘declared bankruptcy?”

Wash­ing­ton Post colum­nist Ezra Klein writes, “The choices it (the gov­ern­ment) will face quickly become stark. It can cover inter­est on the debt, Social Secu­rity, Medicare, Med­ic­aid, defense spend­ing, edu­ca­tion, food stamps and other low-income trans­fers, and a hand­ful of other pro­grams, but doing all that will mean default­ing on every­thing — really, every­thing — else. The FBI will shut down. The peo­ple respon­si­ble for track­ing down loose nukes will lose their jobs. The pris­ons won’t oper­ate. The bio­med­ical researchers won’t be funded. The court sys­tem will close its doors. The tax refunds won’t go out. The Fed­eral Avi­a­tion Admin­is­tra­tion will go offline. The parks will close. Food safety inspec­tions will cease.”

Peter Schiff told Fox Busi­ness News cen­tral banks are cre­at­ing infla­tion so gov­ern­ments don’t have to default on their debts. He believes, based on cur­rent trends, the U.S. will have a cur­rency and sov­er­eign debt cri­sis by 2014.

“Pres­i­dent Obama tried to buy our affec­tions by promis­ing more free stuff and by promis­ing the gov­ern­ment can solve our eco­nomic prob­lems,” Schiff said of the Feb. 12 State of the Union address. “They always tell us how strong we are, how great it is — even when we’re on the edge of a precipice.”

The fact of the mat­ter is, Schiff says, the state of the nation is not strong, it’s a ‘com­plete disaster.’

“We are star­ing at an eco­nomic cri­sis much graver than the finan­cial cri­sis of 2008,” Schiff said Feb. 14. He cites the pres­i­dent as say­ing we need a lit­tle more gov­ern­ment to ‘fix’ things: more gov­ern­ment pro­grams, more gov­ern­ment spending.

“Just about every­thing he pro­posed involved more gov­ern­ment,” he said. “What’s stand­ing in the way of our econ­omy and pros­per­ity is the government.”

He quoted Ronald Rea­gan as say­ing ‘gov­ern­ment isn’t the answer to our prob­lems; gov­ern­ment IS the prob­lem’ in one Reagan’s State of the Union addresses.

Auto­matic spend­ing cuts are set to kick in on March 1 if Con­gress does not come up with an alter­na­tive plan to avert them. The ‘sequester’ as it’s being called, involves $1.2 tril­lion over 10 years in cuts, which were ini­tially set to kick in on Jan. 1 but was allowed a stay of exe­cu­tion. Now time has run out and if an accept­able deficit reduc­tion plan isn’t worked out by the end of the month, the ini­tial phase of the ten-year plan would com­mence, draw­ing half its cuts from defense spend­ing and half from non-defense.

I know a man who works for a legit­i­mate busi­ness that buys gold and sil­ver jew­elry from folks who want to sell it for cash. Hav­ing seen ads in the news­pa­per, I asked him how that busi­ness is going these days and if peo­ple really use it.

“It’s a very steady busi­ness,” he said, “and we get repeat cus­tomers. The sad thing is, some peo­ple are down to sell­ing heir­loom jew­elry for rent and gro­cery money.”

Really? I asked. What hap­pens when they run out of jew­elry to sell?

“That’s a good ques­tion,” he responded.

I guess the smoke is dis­si­pat­ing for some Americans.

ADDENDUM — Please spend three and a half min­utes watch­ing this video by Bill O’Reilly http://www.youtube.com/watch?v=fOxvwOLiPnU

Posted by Randa Wagner on Feb 25 2013. You can follow any responses to this entry through the RSS Feed. Both comments and pings are currently closed.