The U.S. ran a budget deficit of $680 billion for fiscal year 2013…this was the first year in 5 that the deficit was under $1 trillion. To put $1 trillion in perspective, this is equal to $3,000 for every living citizen in the country. But let’s refine this just a little further because $3,000 is like an expensive ham sandwich.
Let’s make a couple of assumptions, one, that there is one “child” (under 18 years old) for every 3 adults, and also that only half of the adult population actually pays taxes. These 2 assumptions I am sure are not spot on and someone will correct me to the decimal point but they are probably close to the reality. So, assuming the above, we get to a “number” of how much the deficit was “attached” to each actual “taxpayer” of $8,000 for 2013. Now we are talking some money of significance…and this was just for 1 year.
But wait, the “deficit” was $680 billion yet the national debt increased by $794 billion. So the actual increase in debt amounted close to $10,000 per each “taxpaying” citizen. $10,000! How would you feel if you woke up tomorrow and the balance on your credit card was magically (and tragically) $10,000 higher…AND it was not a “fraudulent” charge? Yes I know, you may consider it a “fraudulent charge” but that’s just too bad…it sticks to the bill and you will be required to pay it.
Please remember that this “tragic discovery” that you all of a sudden owe another $10,000 on your credit card…is for just one year alone. You will again wake up Oct. 16th of this year and find out how much more your credit card balance will rise…and the year after that etc. This is awful isn’t it? Another 10 years and it will total $100,000 not including interest and assuming that we don’t again start piling up trillion of dollars annual additions like the last four years.
But “we owe it to ourselves” so who cares right? Umm, no, we don’t “owe it to ourselves.” We owe roughly 1/3rd of our debt to foreigners and another 25% or so to the “Federal Reserve.” In case you haven’t been paying attention, the “Federal Reserve” is not “federal” at all. The Fed is a private corporation owned predominantly by European “monied families.” Between the two, foreigners and the Fed, we owe more than half of our debt “NOT to ourselves or U.S. institutions!”
Last year the Fed bought 150% more than ALL foreigners combined as explained here by Zero Hedge. Foreigners purchased some $221 billion worth of Treasury securities while the Fed purchased $552 billion. Doing a little bit of basic math here we come up with a total of $773 billion or a whopping $21 billion less than the total increase in debt…$21 billion! Do you see where I’m headed? Other than from foreigners (which include dubious accounts such as those from the “Caribbean”) and the Fed, only $21 billion worth of Treasuries were placed elsewhere. “Elsewhere” like Joe the plumber buying them or domestic insurance companies or banks or whatever.
This is a very BIG problem, not the “elsewhere” part nor the “foreigner” part (although lack of foreign buying is really scary because for years they were THE buyers), no, the problem is that the Fed has been forced to purchase all of this debt. They have been “forced” because there is no one else, they have been forced because the Treasury absolutely must issue debt and borrow because tax revenues cannot sustain the system. They have been forced to purchase the debt …for the simple reason that Richard Russell has explained so so many times…they MUST “inflate or the system dies!” The Fed has no choice in this matter because by definition, the interest that must be paid in the future does not currently exist…so it must be “created”…and the only way to create it is for the Fed to digitally print which is what they do when they purchase Treasuries.
Going just a little further, was the Fed not to purchase whatever is offered but not “spoken for” then the Treasury would have what is called a “failed auction.” This would create a panic where existing owners of our debt would panic sell because of the realization that there are not enough buyers. Not enough buyers for “new stuff” not to mention what the existing creditors hold.
The old phrase that “we owe it to ourselves” is wrong. Not only is it flawed logic because if you cannot afford to pay your debt which is supposedly owned (and an asset) by you then what you own is worthless, it just isn’t true anymore. We don’t “owe it to ourselves,” we also owe a large percentage to foreigners and the Fed who are now THE ONLY buyers left…because “we” can no longer afford to fund our current operations much less fork out money to purchase new and “necessary” debt. This phrase “we owe it to ourselves” is nearly the same logic as 2 drunks at closing time telling each other “don’t worry, I’ll drive.”
Bill,
What I am about to say is not how I was brought up, but I feel we have been screwed on purpose.
I saw we stiff the bastards on their debt and barter between ourselves until we can develope an honest monentary system. Of course it will be difficult, but how else are we going to end this rigged game?
Back to local community banks and no more international banks that ultimately shaft us.
Also do not invest one single penny into the stock market that is 100% rigged.
We have been screwed too long!
yes…on purpose.
Thats another home run hitter Bill. I say you can throw in the phrase “I will agree to disagree” with the two drunks one. People need to see things the way they are and stop trying to sugar coat it. When people are living a “LIE”, no truth can be seen. I remember when I was working in corporate America, I never realized I was a slave until one day, I saw how much debt I was in. That was the day when I looked myself in the mirror and said to the Almighty, “I am tired of being a slave”. The biggest thing that makes you a slave is lying to yourself about the illusion you are living in.Especially in this paper paradigm.
What we all owe to ourselves if to be honest about who we are and where we are in this world. Many worship this dead piece of paper with a dead man’s face on it and believe this is the life. They do not realize that they are trading life for death/debt. For if they had appreciated life, they would see this abominable piece of paper for what it is. Just look at the amount of lives are being lost and have been for the maintenance of this paper. But as in the matrix they are not ready to be unplugged, they will fight to keep the system going and die for it also. That is why many believe they owe the debt(death) to themselves. I believe the majority ones stating “we owe it to ourselves” are probably the ones who are on some sort of social program where they believe its a free handout. I was told from a young age “nothing is free and blanking everybody pays”. Now the payment has come due!
The rich ruleth over the poor and the borrower is servant to the lender. When these debts comes due, many will retract that statement of “we owe it to ourselves”. Owing no one is really the best and only thing someone can owe to themselves.
“We owe it to ourselves” is just a B.S. statement to promote more spending, more debt / more “kicking the can down the road.” There simply no “political will” to fix things. The political will is to put off the day of reckoning as long as possible, i.e., “not on my watch.” As an aside, this sentiment is why Bernanke passed the baton to Yellen. “Get out while the gettin’s good.”
However, as Bill often points out, reality will have its day, and that day is fast approaching. It is odd – I know what is coming will be brutal, but a part of me says, “bring it on.” I think this is because I know we cannot move forward as a nation until “the day of reckoning” is in the rear view mirror. Does that make sense?
my thought is…let’s just get it over with.
“WICKED DEBT FRAUD” The one and ONLY answer to the debt problem is to declare it null and void because of FRAUD! It is fraud because it is mathematically impossible to repay ! It can not be repaid because the interest is never created on the loan and that is fraud ! And fraud voids all ! If we don’t void all out of thin air debt the bankers will own almost EVERYTHING ! And we will be homeless slaves ! They have a license to counterfeit ! Can I counterfeit the money to repay the loan ? Why not ? If we even attempt to repay a impossible debt (the national debt) all we do is show our ignorance ! The way to fix this mess is so simple a 3rd grader can figure it out ! We void the fraudulent debt! and everyone keeps ALL the items they have so called debt on ! And then we start to use a debt free currency and / or gold and silver ! And then we will have a robust economy like never before — OR WE LET THE BANKERS STEAL EVERYTHING !
I was in about the third grade when the news was talking about the national debt and I asked my dad who do we owe money to and who could possibly be richer than the United States? and where did they get the money? And then my dad took a gulp off his beer and said we owe it to our self ! I said that’s the dumbest thing I ever heard of ! that’s like me borrowing from my right pocket and setting fire to the interest and putting the rest in my left pocket ! This was about 1972 ! But Dad was wrong! We owe it to international Bankers running the biggest Ponzi scheme on earth called The Federal reserve system! And yes it really is this simple ! The bankers have a shoe in on ALL loans they make ! All they have to do is stop lending and then start foreclosing on ALL debts!-meaning they now own everything that has a debt by having a license to counterfeit ! So we” 1″ keep getting fleeced by continuing to pay this fraudulent scheme ! OR” 2 “we declare ALL out of thin air debt NULL AND VOID because of FRAUD ! And we keep everything we have so called debt on! MOST people don’t get this part Every car, boat, house, machine, tool, farm,ect. has already been paid for by the fraudulent paper! So no one looses ! WE sure as hell cant give it to the banksters! (let them steal it) AND IT DOESENT MATTER IF YOU WANT TO REDUCE THE DEBT 99% ITS STILL UNPAYABLE! So when we void the FRAUD This will be the ultimate FRESH start for everyone ! Share this if you want THE solution to the WORLDS problems! If not everything will continue to get worse until we have HONEST DEBT FREE MONEY /and GOLD AND SILVER ! And there is plenty of gold and silver! just Divide the paper money (FRN) by the gold /silver and you have the value of them! NO MATTER WHAT IT COMES TO per OZ ! Then we would be happy to work for SAY A ONE OZ. SILVER COIN A day ! Because a one OZ. silver coin ( REAL MONEY ) will buy what $100 – $200 did before the reset! THINK ABOUT IT! This is what Scripture calls the jubilee ! “WICKED” Debt And the amount and size of the debt has nothing to do with it being mathematically impossible to pay This fraud is so “WICKED” that even a $10 loan is a Ponzi scheme here’s how it works ! I’m the new banks first customer ( CHUMP ) I borrow $10 @ 1% interest I now owe the bank $10.10 but ALL the money in the world is $10 the .10 cents doesn’t exist so some one else has to borrow some so called money and I have to find a way to get .10 cents from them so I can repay my loan ! Now say they borrowed $10 also now I somehow get .10 cents from them to pay my loan back ! But now he is short .20 cents to pay his loan ! so now you can see how a $100,000. house that will cost you $ 265,000 to pay off because you have to pay $165,000 in interest is a GIGANTIC PONZI SCHEME ! Now multiply that by millions of people in the U.S. and you can see how It turned into the monster debt we see today ! And for the loans that do get repaid multiple people have to default on there loans for you to pay off your loan ! NOW you can understand why we have a rapidly growing homeless problem ! Now that is a WICKED debt money system that we must declare Void !
Good article! It’s sad, no make that scary, the majority of Americans will not notice the collapse until it is to late. God bless us all.
the “majority”? Probably 95% +++ would be my guess.
won’t the debt be paid for by valuing gold at a much higher value?
…assuming that we actually have any?
“Ranting Andy” has nothing on you Collin. Kudos! Let’s flush the toilet and start over clean. As Collin points out: It’s NEVER going to be paid back anyway, so why not just admit it and PRESS THE RESET BUTTON. Certainly better than everyone getting upset and setting fires in the street, which is what I believe is coming to a city near you – wherever you live (for a preview watch the evening news on Kiev and imagine it happening in your town).
Of course the “powers that be” would never stand for such a thing. But I agree it would be a FAR BETTER method than the one that will eventually be forced upon them.
Lastly I would just like to say tht I can’t believe the bull shit that is printed on the state of things. Geeze Louise!!! Let’s all sing together now, “Santa Claus is coming to town.”
…reset…it’s coming to a theatre near everyone.
Bill,
The following does not have any thing to do with your article, but I would like to see if you or any others would like to comment on the following:
Today, on February 21, 2014, the White House is condemning the Ukraine governments use of live ammo on the protestors (citizens of Ukraine).
Given the above White House statement, why has the Department of Homeland Security, IRS, and now the Postal Service recently bought billions of rounds of hollow point ammo?
Who do they plan on shooting? It would appear to me the ammo will be used on US citizens.
Isn’t this speaking with a forked tongue?
it’s for “target practice”.