The United States of Bankruptcy – New Book Release July 4th

The United States of Bankruptcy will be available where all books are sold and for ease you may purchase a copy at www.Billyg.net .

The sovereignty of the United States is now in the hands of foreign nations that hold our debt. America is socially, morally, politically and financially bankrupt. The United States of Bankruptcy offers 20 solutions to help save the American way of life. It is a scathing verdict on how the American Oligarchy and business leaders have squandered the finances of our nation and have dismantled the American Dream.

Unemployed and Out of Luck

 

Numbers Don’t Lie

Anyone can stand up and say “you Lie”.  The truth is the numbers speak for themselves.  We have all watched the housing depression and wealth being wiped out.  We all know and knew unemployment would continue to rise and have a dramatic impact on the economy ongoing.  The new 200,000+ unemployed just adds to the pain.  The second wave is coming.

Inflation will take a lead role in agitating the economy.  Gas prices are high and approaching $3 a gallon again.  While food and other products remain relatively stable the basics are even getting out of reach for many.  It’s a vicious cycle.  The more people that tighten their belts or are losing weight quickly the less they can purchase.  The cash for clunkers is over and Chrysler may not even make it a year.   Although politics and international affairs have overshadowed or even distracted the economic news I feel it is time again to put attention back on America’s internal affairs.

Healthcare looms.  Our portfolio of equity and debt continues to be in jeopardy and the FED pulling back from buying IOUs is a pile on.  The storm hasn’t gone away.  Like a rubber band stretched to a limit everyone is trying to keep it from breaking and persist in using media to boost consumer confidence so it won’t.  Confidence is not the issue it is disposable income and there isn’t enough to go around.  So what’s coming.

The market will go up and down like a yo yo and it isn’t going to replace the hundreds of billions wiped out.  Housing won’t be back for years and the credit crunch and lending is constraint at best.  Inflation is coming and the FED is boxed in and can’t make any mistakes.  Gloom and doom but is there a glimmer of hope? 

The world reaction to the crisis has left countries and economies hobbled with debt.  Financial reform is held up here in states right now.  But there is a lot of money sitting on the sidelines.  We need that money to inspire the stock market and it will jump in at the right time.  Also, companies selling internationally are performing well but domestic businesses especially small business continues to contract.  As long as something isn’t done directly for the consumer and small business here and the US debt has a repayment plan in place the lights will go out again.

It’s a razor’s edge.  We are cut, bleeding and trying not to fall on our sword.  I fear that mistakes are being made and going to be made and we can’t afford a mistake right now.  Unemployment and its continued rise is a real indicator of a fundamental problem.  Remember I have been harping on underemployment as well and any recovery there will be a political win but the disposable income won’t be around anytime soon.  Hate to say but the wood are long, dark and deep and we are still stumbling around.  I hope this isn’t a Blair Witch project but I would bet we are still lost.

Government Capitalism

K Street to Look Over the Back of Wall Street

Government Capitalism – more like socialism – is still trying to take a larger and larger administrative role in how Wall Street operates. Wall Street just isn’t going to go along with it. Yes Wall Street was largely to blame for the economic implosion. Now the government wants to step in and regulate how the firms operate and how they pay people. That isn’t the government’s job. They can create legislation empowering the SEC and the Treasury/Fed with powers to force regulations and standards upon Wall Street like the Sarbanes-Oxley act of 2002 but they cannot and will never be able to control the price people are willing to pay for talent. This at the core of Capitalism.

All eyes are focused again on the high pay of executives on Wall Street. Obama will speak today about this very subject and to a lesser amount about the actual regulatory specifics that need to change. Oh by the way – this needs to happen globally too – where the US has no power at all. I know regulations and more power being held by the SEC will happen and a lot of that good to reign in pandemic possibilities and rogue practices but talent is a fluid resource that will go where the money is – and hence take the business and clients with them.

Frankly, if Goldman Sachs didn’t pay out huge bonuses – the people would go to the Bank of Hong Kong for example that would and use their talents there. Why? Because they pay better. 99% of all Americans can’t stomach the hundreds of millions of bonus payments and perks on Wall Street but they would also leave their job in a second if their pay would go up by 50% or even 500% I assure you. The same holds true here although the people just make a lot more money.

Now my opinion is that executives in America in the C suite should all get paid a very modest sum of money. If the team makes money the money goes into a pool. They are all aligned. If they make money for shareholders great they get paid more. If they lose money or the stock plummets under their watch then they don’t get a penny. This should be a free market principal. Shareholders like you and me I think would back companies with this type of profile as opposed to others that don’t adhere to pay programs that create up front pay packages that don’t penalize poor performance.

But despite the free market principles that America was built on K Street just can’t keep their hands off the Golden Goose. Right now financial firms more than ever are pumping hundreds of millions in to campaign coffers, lobbyists and hiring senior political people to help them. Why would DC ever give up that attention now. The wouldn’t – and Won’t. This new direct DC relationship with Wall Street should be entirely arms length but legislation is for sale in America. Expect pay packages and incentives to remain under the capitalist watch while government tries to curb it. Our government and those around the world should be working internally without outside influence to put standards and practices legislation in place – with the rest of the world in total agreement – to make sure the systems and the risky practices are monitored tightly and regulated – that is the only role government should be playing – and not politicizing the whole thing.

Healthcare Continues to Overshadow The Real Problem

The media is the most powerful weapon of the 21st century.

I guess diversion is the best political tool. We are all glued to the political entertainment channel like last night hearing a marketing and advertising speech for healthcare. What the heck is wrong with us. America is broke and here we are selling, pandering a better word, a new system that we all know will be a honey pot for wild politicians to raid. In addition, fiscally it is the worst time in history to get this done.

Without borrowing more money from the world we cannot do this. It is clear the only ideas DC can come up with is to borrow more money to throw at broken systems and further put our way of life at risk. Who is watching the hen house. Rome is burning and healthcare is more kerosene. When a trillion dollars is batted around without a blink of the eye we have to shiver in utter fear and disgust. But the debate hasn’t focused on the program details and moreover the astronomical cost.

So on the stump again the political machine just churns out rhetoric and advertising for the program. I think it diverts society away from the core issue – COST. We all know it will cost more than $1 trillion – I bet $1.5 - $1.75 trillion if it passes. I know I have put out 10 ideas that are rapid and don’t cost money. Every idea I have put forth doesn’t cost money to do. But the honey pot is just too mouth watering for politicians to keep the foxes hands out of. Now the screeching republican “you lie” statement will take over the news an everyone will tune in. Again another diversion for us to look the other way while the political machine cuts back room deals and rams unwanted legislation down our throat.

Every diversion keeps American glued to the TV. Given media is the most power weapon of the 21^st century it is used to sell us and also divert attention away from key issues like how will America survive fiscally. I see no way we can right now with or without healthcare reform. This is the real issue. It isn’t healthcare, the newest product for sale, it is the whole capitalist system. Survival and longevity are all stated clearly for Americans but our survival also depends on America’s ability to stay afloat. Bolt trillions of dollars on the system followed by over $6 trillion of new borrowing and it will be over for all of soon anyway. Borrow all this money for healthcare but I don’t hear anything about replacing the social security money that has been stolen from us. But diversion works and the issues facing our society are just never brought up. Where have you heard a plan to fiscally overhaul America before we die. NEVER.

Good Money After Bad

$60+ Billion for Automakers Down The Tubes

As I have been mentioning the “investments”, really loans from the world to the US to loan and “invest” in the automotive giants, is very unlikely to ever get paid back. Note that GM alone with $50 billion would require a historic increase in their stock value. This is very unlikely to occur as is the case in many of the loans and stock positions the government has taken in big businesses. Although it appears the banking sector is recovering and not reaching out for a lot of new bailouts it is still a challenge at best for the US to recover those positions either. Then there is TARP and that is made up of toxic loans and portfolios so that is also in jeopardy.

It is not like we all haven’t been talking about this for over year and common sense already led us to this point. So now we see the headlines already talking about the probability of the ROI (return on investment) of all the money put into the auto companies alone. Although these bailouts may have been necessary to save companies and entire industries our new stock broker appears to have made some bad choices. The government has been very aggressive in their ownership stakes in the businesses and I like that component because it may juice returns. However, a lot of zero is still zero. We are all hoping the money across all these companies will have gains and losses so in the end the portfolio comes out ahead or at least recover the money but we all know the government has never been able to do things like this.

There you have it. I expect to see more headlines around the assets we now own as shareholders. I know you and I would never make investment like this unless you were a venture capitalist like me. The whole program is hugely risky and I hope the managers of the portfolio are really great. In my opinion I would have or would incentivize large buyout companies, turn around executives and other best of breed people to manage these portfolios for optimum return. The fear I have is that politicians and career academics are managing these things. If money was to be made by making these portfolios really produce returns I suspect the best and brightest people in the world would sign up to help. I certainly would for certain.

Will the SEC be Sued

 

Madoff Negligence Sets up SEC for Madoff Investors

I am certain the Billionaire’s Boys club is using every tool, social, political and economic to wrangle the SEC into a position to help them recover their pilfered monies from the Madoff scam. The recent announcements of negligence and incompetence in uncovering the Madoff ponzi scheme leaves the door wide open for a shareholder class action suit against the SEC for certain.

It already appears to me the powers to be are at work. Having the SEC spit up words like incompetence is a strong indication that behind the scenes pressure has begun to soften the government for another bailout. Powerful people lost huge amounts of money and so did the little guy. The little guy is in good company. I am certain if mom and pop who also lost millions stood up, and they have, to cry foul they words would go largely unnoticed. That is one thing. If a billionaire stands up and cries foul that is an entirely different dynamic.

Money and power go hand in hand. Lucky for all the investors the big boys are playing hard ball and for certain pressure on the political machine that they have probably paid millions into has their head in a vice to do something. It is not some revelation that the SEC missed all this but it is a revelation to see them set themselves up for a fall. It is really unheard of. I strongly believe this has been brought about at least in part from tremendous pressure worldwide to position a recovery of the monies lost. Heck you would be shot in the streets these days for a pair of sneakers. In this case the fall guys are being lined up against the wall in front of firing squad and I bet we will see the SEC in court and forced to cut a deal to pay the investors back.

I made a trillion dollar mistake

Ok so I said the US debt would be 19 trillion in under 10 years a year ago. Whoops. Should have guessed we are dealing with the government. So 20 trillion it is over the next 10 years. This is just the 9 trillion dollar shortfall (deficit) to be made up by borrowing. I assure you all this number will be much higher and a much steeper slope - the numbers don't add up.

I think we can all agree that the government numbers released late yesterday affect or culture, sovereignty and way of life. At this time in history this government has abandoned all sensible stewardship of this 300+ year old capitalist experiment. And history will call it just that. If you and I can't see the massive brick wall we are barreling up to we are dead for sure. And I know for certain, 100 percent, that our government leaders and I mean all of them have ruined, are ruining and absolutely devastating our nation.

Well thank God I was watching Glen Beck the other night. Man what a show. Looking at the pseudo US balance sheet and the few HUNDRED TRILLION DOLLARS we need is appalling. But I was ready to jump through the tv a give Glen and big hug. Finally- finally - finally the cavalry in the media is swooping in all over now to expose the outright vile, disgusting, irresponsible, God awful behavior that got us here. The national debt will double in a short time and it took 40 years to get here in the first place. We all have much better words to use than what I said above. Then sitting in an airport I see the new whoops numbers off by a few trillion.

Can someone tell me what the heck we are going to do? I am dead serious this is going to bring our nation to its knees. I just can't believe this is actually happening and in my lifetime and probably yours we will see the collapse of America. How sad and pitiful is that.

Hey Did Warren Buffet Just Agree With Me

I’m in Good Company Finally on Debt and Deficit

Ok I am not a national economic brand like Warren Buffet but very proud to be “On The Money”. With that I must say I do have a pretty large voice across the country and I have been ranting about the deficit and debt for 2 years. Finally, the big boys are going public with their vision of a catastrophe just waiting to happen to the entire US economy that will be much worse than the financial crisis.

Yes I am frustrated and bit red in the face that I don’t have an Op Ed in the NY Times. But my book IOUSA NOT – is coming out in the next few months. I do feel a great deal of pride in the “On The Money” track record I have built. The debt and deficit as have been shouting about at the top of my lungs are cancer, brain trauma, suicide or any other form of death. It is simply not sustainable and with everything done over the past 2 years and foreseeable future we are sunk. During the time of World War II the nation had a deficit of 4% of GDP. We have triple that this year of 13% or $1.8 trillion. Here is the catch – what do you think the GDP back then was compared to today. These comparison figure are apples and oranges and astronomically different.

This will come home to roost and be devastating – MARK MY WORDS! Dare say again.

Can you or me stop this free fall of our capitalist nation. NO! No one really cares or will listen to our opinion without some national news exposure. Just look at the activist in the Town Hall meeting on healthcare. The only way to bring light to this nationally and to enrage a populous is to broadcast and broadcast what is downright wrong about the direction of the country. That is what we are here for and it is our responsibility to air daily or weekly briefings and the state of the economy – and all the backroom accounting and deals – so everyone is highly educated on the appealing and mismanagement of the country.

Back Peddling on Peddling Government Insurance

Read Some Great Solutions and Ideas

Weill it seems the people have some voice out there and the outrage has bubbled to the top. It is clear now that in its current state nationalized healthcare won’t become a reality. Whew! That will wind up being a call too close for comfort. I have 8 great and some radical ideas to really solve this issue. Read on.

Here is my ninety nine cents. I think having healthcare for every American is something we should strive for but at what cost? Massive cost. Overhauling the systems of care in the country, making us more like Canada, France and Cuba is so unruly that the system itself will be torn apart. We have the best healthcare in the world because we have a free market medical system. In fact, many people from all over the world come here for the best care they can get.

Using pooled insurance programs that are for profit is a good way to spread the risk among a large universe of people. Statistically the population in the pool would result in insurance benefit payouts that will allow insurance program managers to invest the money collected and make money on the money. Therefore being able to afford the massive payouts for benefits. That is how insurance companies operate. It’s a capitalist system and works for insurance companies as well as Wall Street.

However, the main issue in healthcare today is the cost of care. Pharmaceutical giants make billions peddling their drugs and supplying them to every class of citizen from babies to the elderly. The insurance companies make billions in liability insurance premiums having to be paid by the very people trying to save your life. It is so astronomical and ridiculous that we should be living in the Land of Misfit Toys!

Solutions

1. Why hasn’t anyone thought about a tax break for pharmaceutical companies to donate large amounts of drugs into the system for those on Medicaid and Medicare and others who need them most.

2. We can donate billions to Aids in Africa – what about using that money for aids in America. We spend so much around the world to promote and offer care – we should redirect it all into the US. You want to win hearts and minds – how about American minds.

3. The MI Bill. Yes like a GI bill. Those who want to earn money for medical school and nursing programs etc.. Can work for the system to benefit everyone and provide the massive care resources needed to help everyone.

4. Open up all military, VA and related hospitals and care centers to Americans. We have to figure out a way to service all these people so why don’t we use the resources already made available to our military.

5. Peace Corp. Why not a Health Core. Instead of sending all of people across the world under these non profit programs why don’t we redirect or create programs that put those people into our system to ease the brunt of the large increase in care.

6. Welfare, Medicaid, Medicare etc.. if you are receiving government benefits you will have to perform civic duties not just in healthcare but other projects necessary to rebuild America. We pay them anyway so lets out them to work.

7. TORT REFORM. Liability Insurance is the greatest barrier to providing care and quality of care. You cut a finger on a neighbor’s fence and someone will sue them. Cut a finger in the doctor’s office and someone will sue them for millions. Although the lawyer’s lobbyists will spend hundreds of millions to thwart this – and are large contributors to political parties – this one issue is a major cancer in the healthcare economy.

8. Faith based programs. How many tens of thousands of trips and millions of people are taken by Church groups annually to foreign nations and the Third World. Well our citizens are living in the Third World in many areas of the US. Why don’t we incent the Faith community to redirect those resources and massive volunteer work force right back here at home.

How’s that for just ninety nine cents.

Federal Deficit Numbers are WRONG

$1.8 Trillion in 2009 - $1.3 Trillion 2010

We can add! $11.7 trillion debt + projected $3.1 trillion (2 yr deficit) + a trillion of newly printed currency. Taxes projected to be down another $500 billion this year. Whoops I forgot the other $1 trillion (sure to be much higher) for healthcare. The fact is this is too rosy a picture.

As bad and fiscally irresponsible as this is I am calling the shot now that this will be much worse. Let’s not forget the interest on the debt. We are fast approaching $750 billion in interest annually alone. This will be at $1 trillion in just a few years. Projecting a 2 year $3.1 trillion deficit, far beyond anything ever seen, won’t be the number. I expect we will be closer to $4 trillion than $3 trillion. Why? Well we all know numbers from our government are always much lower than they tell us for one. Second recovery will be slow and painful so tax revenue will be less and less. And does someone think taxing the $250k + earners will make up for it. Not in a million years – it will make matters worse.

Unemployment will rise if the “rich” get taxed more. Corporations will do more business overseas and lay off people. Government is growing bigger than ever and we haven’t even seen all the liberal programs getting baked in the backroom. Of course everyone should be aware of the other $111 trillion of unfunded liabilities the US has for social programs and other benefits for its citizens.

This is just the 2 year outlook. 2 YEAR! We have one chance this election cycle to reign this in – but I doubt it will ever be reined in. I think our national debt will be at least $15 trillion if not $16 or $17 by the time Obama is done with his first 4 years. The we will definitely be paying a trillion in interest on our debt – annually. It is so crucial that everyone in this country becomes an armchair economist with at least the knowledge of how out of control Congress is. This is chronic and will not end until it ends us or we stand up and do something about it.

American sovereignty is held by foreign governments, we are a bankrupt nation, decay from within on every level and that is just a start. We are the few with a voice. We can make a difference but over the next 12 months it is absolutely critical – everyday – every week to educate audiences around the country of the peril our nation is in.

Churches & Non Profits Get Hammered

Christians Are Not Exempt From Financial Woes

Churches and all non profits are severely wounded by the financial crisis that has really hit home. Dependant on donations both are struggling to keep the lights on in some cases and significantly reducing programs for those that need it most especially now. This is a time in history where more and more people are looking for help and turning to the Church for guidance while the coffers are running dry. Non profits across the nation are also being tapped out so people can’t turn there either.

Add to this the Administration’s proposal to pay for healthcare reform by eliminating the Non Profit tax exemption for people over $250k. Who the heck do you think gives the money to non profits! Yes financial discrimination again but this is the bread and butter that keeps these institutions alive. People that tithe at churches definitely write their donations. Those that can afford to tithe are mostly higher income families. So inflow of money is down severely and now you want to eliminate the deduction too.

Mark my word! The storm has already hit the Church even harder than the Non profits. The Non Profits are feeling pain already and many are certain to fold up their tents as will churches at an alarming rate. The Church is a fundamental – no crucial – part of holding our society and families together. “Families that pray together stay together”. What do you think of the social, moral and spiritual decay of our nation already? Add to that violence, unemployment and underemployment, hip hop, gangs, wanna bee gangsters, divorce, killing babies – on and on. Yes this foundation and support as well as community building will be shattered. Is this what a socialist and liberal plan is designed to do?

Frankly we are all aware of this problem. My Father in Law is a pastor, wife a Christian Romance writer, me an advisor to the Christian Entertainment Industry’s leaders and so on. It is really bad – I mean really bad. I don’t hear headlines about this at all and it is crucial that something happen and now to help incentivize people to give to these right and just causes. Why doesn’t someone in DC turn around and help people to give and help others. Instead it is Liberalism squashing conservatism and the foot of our faith and families.

AND GUES WHAT? We didn’t show up in force as with George Bush at this election. Without a united Christian front in the next election these policies will get enacted – abortions paid by healthcare and further decay of America from within that many historical figures and very smart people have predicted for two centuries.

Disgusted! Disenchanted! Down Right Mad.

An Economic Play Book 2009

Economy May be Bottoming but Main Street will Remain Under Water

Economists are being conservative in a quarter by quarter analysis of how and when the US economy and housing market will recover.  Based on manufacturing output, exports and a host of variables everyone is eyeing GDP growth – especially when compared to last year.  I am of the opinion that a lemonade stand would look positive against the last year.  Expect that US “Big Business” begins to revive themselves it will take some time – not the expected big bounce but a slow, painful and gradual increase.  The key will be you and me getting back to buying products, goods and services.  It has always been the key.  Without consumption no economy can survive.

Credit addicted consumers will remain in rehab and locked out of the spending game for quite a while.  The unemployed and under employed will be a huge factor in recovery given that they are hobbled and scared.  Those consumers are likely to have curbed their spending or stopped all non essentials purchases already.  These consumers will most likely be withdrawn from spending and focus on re building their lives – that is if they can ever get a job or a comparable one.  Expect this to further impact domestic growth.  The credit addicted can’t get more credit and the credit worthy aren’t going to spend enough to make up for all that.  It is the credit spending that artificially boosted the economy for so long.

I have been hand waiving for some time that the heart of recovery will be consumption.  Even with home sales spiking in some areas overall it is a mess.  Also, the higher end homes are stagnant and many people can’t qualify for loans to buy them and certainly those wanting to sell are having their equity eaten away just to unload them if at all.  This will be a problem.  I understand the “Clunker” program to artificially move the auto market but that is another dangerous game.  Getting consumers on a different hook with new bait may look good on paper but is a future credit problem too.

As you can see I am sour on the recovery however modest it will be.  The psychology of Americans may be lifted by public relations around consumer spending and recovery but this go around I think “Joe Plumber” is hurt so bad that the underpinnings of the US and the world’s economy will suffer as will main street.  Expect chest pounding and pandering of all the great things done to “stimulate” the economy but remember that is mostly big business artificially driven by blow out sales of inventory and products just to get more stuff on the shelf that people can’t or won’t buy.

You want answers here are few:

Adjust FICA scores.  An immediate psychological boost and open door for consumers to consume when they do recover.  It is simple in fact – have the credit bureaus adjust scores – just during the last 18 months and next 18 months so 30,60,90,120 days lates – foreclosures and bankruptcy (rates we don’t like to talk about) won’t be as devastating.  This period would not hold the same weight as other times in history and not assure tens of millions of families are locked out.

Use Stimulus Money for businesses hiring workers.  Unleashed money quickly and provided to small business, midsized and even large businesses in the form of a tax credit, access to capital and a shot in the arm ONLY IF THEY HIRE MORE PEOPLE.  Now that sounds like a reasonable way to better invest the recovery dollars than to just bail out big companies.

Eliminate Capital Gains.  So you invest and make money for your retirement or other things and the government gets 15% off the top of your returns when you sell.  And now the proposal is to raise that.  So I make $5 dollars per share investing in Microsoft.  I took the risk and supported the stock market and Microsoft.  I invested $75 dollars and sold at $80.  A great return.  Well I forfeit $.75 for having done the right thing.  This would put huge dollars in the markets and more money in the pockets of consumers who would be incented to save huge amounts of money and YES SPEND MORE.  It would make up ground for a lot of the losses and of course a huge market surge.

Instead of Tax Cuts – Give Economy Bonds.  Japan only survived its banking meltdown because it was a savings nation and it took almost 10 years to recover.  They were a savings nation not credit addicted.  If 5% of the income tax you pay was to be given back in the form of economy bonds we would have a huge upsurge in savings and help people pay for their retirement.  Social Security isn’t a sure retirement anymore.

Oh I have a lot more than this but doesn’t this make sense to help get consumers on their feet so the stagnant recovery can happen and be sustained.  If we don’t solve unemployment, consumers access to cheap capital, unemployment and psychology beyond pandering this is going to take a long time.

The Health Care Scare

Pharmaceutical Incentives, Tort reform and Some Sanity

Yes I am sick over this – we just can’t afford it. In fact, many insured will actually end up paying more into another form of welfare. It appears though that Congress is holding up the Bill and I suspect everyone there is trying to cut back room deals and get their snout into the trough. We all know in order to get the votes needed to pass legislation deals for money are being extracted. So not only can we not afford this – politicians are looking to extract ridiculous sums of money for their communities as they have done with the stimulus and so many other Bills. Our political machine is so screwed up it even allows this to happen so these people can favor their communities to re elected.

Back to Health Care Legislation. The majority of the cost of care in America is liability insurance. Someone cuts their finger in an office and they sue for hundreds of thousands of dollars. Hey even if McDonalds serves coffee and it spills in the lap (yeh right – that person spilled and we all know it) of the person they can sue. So is it Health Care reform or is it tort reform that is necessary. I do think both but establishing another broke system like social security, Medicare and Medicaid is not the answer.

How about this. The drug companies operating in the US get a slight tax break and a donation tax credit to offer large supplies of drugs to the marketplace for these entitlement programs. That is a huge chunk of expense for those that need it most. Now doesn’t that make a huge amount of sense. Reducing liability insurance for docs allowing them to build their practices and incent them to offer more care would be a great backroom deal to cut. Incent docs and hospitals and it will be another reduction in the cost of care.

My wife had a kidney stone while we were Florida. She had to call 911 and I was in NYC doing a deal. I rushed back. The hospital in Clear Water Florida treated her in an appalling fashion – the worst health care experience we have ever had. Then our insurance had a whopping bill for almost $10k. For 4 hours of care and some tests it cost $10k. What is wrong? That is clearing insane. And also given socialized medicine you better expect a lot of the same - inferior levels of care and the staff just don’t care. If you want subpar care then another welfare system will give it to you.

Election promises – to get elected – then following through on impossible programs and massive pandering to us through television, the web, town hall meetings is horrifying. Imagine running for office and making all these promises when in fact you don’t even know what the heck the county’s finances or system is doing. Somebody owes somebody for certain and a $600 million dollar campaign owes a lot of people – count the lawyer’s lobby into that.

If I were President – and I would never run by the way as most great people wouldn’t – I would stand up there and the first words out of my mount would be “You know what I am going to promise you” NOTHING! How could I if I don’t know what the heck I am up against. And with a $2 trillion deficit and spiraling debt how could I ever run a business where I am bankrupt and then offering more healthcare to employees. Someone tell me I am wrong.

Healthcare Reform Makes Me Sick

I am healthy but the more I hear of socialized healthcare the more sick I get. Don’t get me wrong I think It will be great to get the 47 million uninsured – insured.

But being a fiscal watchdog this is the worst time in history to push another huge borrowing bill. If they say $1 trillion we know it will be way more expensive than that. Although this worked well in Massachusetts nationally it won’t. Plus with unemployment at levels we haven’t seen since World War II and those using far extended benefits how much more will that impact the cost? Did anyone in DC figure that in?

Much like car insurance everyone would be required to have it or get a nice tax penalty. Low income families will get a waiver or a voucher to use. Of course the pigs are at the trough already with Insurance companies, hospitals and drug companies spending hundreds of millions to lobby for healthcare reform. But the doctors have had little representation and it will be horrifying for them - the providers. Add it up! Unemployed, can’t afford it, low income etc.. And you have one of the most expensive efforts in US history.

Following European and Canadian Liberal programs like this and massive expansion of government is going to weigh heavily on an already bankrupt America. The hidden costs of the program won’t be understood until they institute another entitlement program that fails. Welfare, Medicaid, Medicare are already so screwed up and cost us so much money how can we add more fuel to the fire. Worse this is just another cookie jar for politicians to dig into. Why do you think the bill is having trouble getting structured? You got it – every side deal and backroom bribe is being tossed into it.

Bottom line is America can’t afford to run our business this way. Our profit and loss statement is $2 trillion in the hole. We are $12 trillion and soon $19 trillion in debt. Revenue is being cut (taxes) and to make up for all this we borrow money from the World. Now on top of that our failed company decides that although it is on the brink of bankruptcy that it is going to borrow another few trillion to provide employees huge healthcare programs. Not only is American sovereignty now held in the hands of foreign nations with another few trillion in socialized healthcare America ensures that the spiral drives us right off Capital Cliff.

$5 trillion Skeleton in Congress’ Closet

Contingent Liabilities Add up to Almost $30 Trillion          

How’s that!  Someone telling the truth.  Better than my economic bulimia. The figures are out and  just the bank bailout program alone will equal more than ONE THIRD of the US Economy. And  yes there is more to come – commercial real estate and jumbo loans – so it’s not over yet.  But I think some real business people are realizing that Congress has no clue how much money is being spent (whoops borrowed to be spent), how much it is costing and oh by the way all those financial commitments to Freddie and Fannie and a host of others.  If you add all that to the $111 trillion of unfunded liabilities of the government we start to see the picture they don’t want us to see.  “The Full Faith of The US Government” is backing up all these commitments, liabilities, contingent liabilities and the world’s investments in our country. 

Oh add a $2 trillion deficit this year – and over $1 trillion for healthcare reform.  So in a nutshell our sovereignty has been forfeited to foreign nations, we are bankrupt at best, moral and social decay, uneducated and ignorant voters, subpar education for our children and a nuclear economy.  It is true that I am a radical thinker but it doesn’t take any education to see all the cave drawings on our wall.  You tell me if I am wrong. 

History in the Making: Deficit tops $1 trillion

Expected $2 trillion by year end

A direct quote from me “If the US was a company our Board of Directors, Management and employees would be fired, the business bankrupt and a lot of people would go to jail”

I just brushed me teeth and tongue this morning because I had just choked on my own vomit. The US has many milestones that have impacted our nation and the world very positively. Now we are seeing the negative side of our leader’s actions and management. Try to comprehend what a $2 trillion deficit will do to the national debt. Yes $2 trillion more. This doesn’t include the minting of currency and other debt we are taking on but simply our national profit and loss. Imagine if the US was really a company!

Well the best way to gain perspective and a proxy for where we are fiscally is to see the US as a business. We are a capitalist nation after all.

First our government promises tax cuts. OK? This means that revenue will be reduced. In order to make up for voluntary revenue reduction the company executives decide to raise money to offset this. Did you hear that! Voluntary reduction of revenue and issuing debt to pay for it. Well fire management right there because that is so twisted and backward that anyone proposing that in the business world would be banished from the company and may never get a job again. Certainly wouldn’t deserve one.

Now as revenue is reduced the company itself is having a negative $2 trillion year. So reduce revenue, borrow money to stay afloat and take a bankrupt balance sheet and pile on more debt. Then comes the hammer. The shareholders – you and me – have to have full disclose of the liabilities that don’t get reported to us because they are like Enron off balance sheet transactions. This amounts to $111 trillion, and growing massively, of unfunded liabilities. These contingent liabilities have to be reported to show the health of the company and was one of the biggest reasons for Sarbanes Oxley laws. Now take a snap shot of that. Bankrupt correct. You better believe it.

So like AIG we allow our executives to take wild trips and parties and in this case spend billions on projects that directly benefit their job security. When completely bankrupt our management and board of directors use shareholder money and borrow to spend it for their benefit. Well people just went to jail for that – Enron, WorldCom, Adelphi etc... Worse while that is happening the managers decide to raid the company ESOP or 401k to pay for their projects. Yes, take money from federal programs like Social Security, Medicaid, Medicare and others and give them IOUs because they took the money. Madoff looks like a walk in the park because many people are getting rich from this and the investors – again you and me – will have our investment in those programs wiped out. Yes our retirement and more.

What is the worst thing is that Americans (shareholders) have no choice in the matter. We hired this management team to run a tight ship and do a turnaround of the largest company in the world and we got shafted AGAIN. Like GM shareholders that “SACRAFICED” we too have worthless stock in a mismanaged, bankrupt enterprise that even Geithner thinks is still a good investment. Didn’t he get laughed at by a bunch of Chinese people for uttering the Full Faith of The US Government is solid as a rock. Would you personally invest your money in the American Company? Think of it that way and I am sure you will wake up and realize why the rest of the world has lost confidence in the investment worthiness of our company.

Stop The Stimulus: The Fox is in the White House and Congress.

Democrats are turning up the volume on the stimulus while the GOP has finally put their foot down.  Obama is using TV, again, to pander to us.  Can you even imagine that there are now talks about another stimulus package of borrowing and spending in DC.  I don’t know if I am blind, deaf and dumb but wasn't it borrowing and spending money across every part of economy that got us here in the first place?

The current stimulus package has already shown the typical mismanagement and ineffectiveness of the government to run this kind of operation.  Pilfering the money already for pet projects should have every American marching in the streets and a real sign of what else is coming.  Worse we are allowing them to do it.  Why?  Because they don’t care about, listen to or even acknowledge our ideas, sentiment and outrage.  How does it feel to be impotent and marginalized in America.

It should be more than apparent that McCain is correct in his dialogue that this money is being used for political gain and pet projects.  It is also apparent that the program only, 4 months into it, is not working as planned and the unemployment and economic downturn continues to get worse.  Only %6.8 has been invested in the turn around which is appalling from my perspective.  If you are going to do it – do it quickly and massively.

As the pandering continues and the promise that the money will be invested (after borrowing I may say) in the second half of the year and next year is bad policy.  The money should have been shelter from the politicians and put under the reigns of our best business executives to make sure it all – I mean 100% – went into a massive and radical economic boost.  But in DC it is another piggy bank to raid and now they want even more.  We can all see the paw prints on the cookie jar and writing all over that wall. 

You see the IQ in DC – especially the Economic IQ – is sub par.  Economic savvy by career politicians and academics would be the last thing I would ever retain to run my business or manage money.  Economic IQ to just borrow and spend is their only solution?  And worse they want to do it again!  What is wrong with these people – our representatives.  I just can’t believe this happening.  I really am sick to my stomach.

We must stop the borrowing and spending.  The world needs a signal that we can get our fiscal crap together and fast.  But the very people that have bankrupted our nation are all foxes in the White House and Congress eating away at us – the stupid chickens that let them in to begin with. 

The Big Blue States Bellying Up: How about IOUs!

California, New York, Illinois, Pennsylvania

The economies of the most liberal and largest states in our union are in jeopardy of bankruptcy and collapse. Who would ever think that we would see such chaos and fiscal mismanagement across the nation. It is hard to believe that California, one of the world’s largest economies, is on the brink of bankruptcy. Is this writing on the wall for the Federal government too? You Bet! This should be taken with the utmost seriousness on Capitol Hill – or should is say CAPITOL CLIFF because that is what America is teetering on and close to going over while our government has the peddle to the floor.

Does anyone see the borrowing and spending coming to a halt at the state or Federal level? Poll people and I bet an overwhelming majority would say no – even Hell No! When state governments across the nation are in dire need of money, in political statement after stalemate what is their answer? More borrowing – even California is ready to issue IOUs to keep itself afloat. That means more debt on top of mountains of debt. Our currency and Treasuries are not dissimilar – these are IOUs to the world. How long can states and the Federal Government keep the house of cards afloat?

This house of cards is cracking from the inside and from the outside. We are fighting a multiple front war against collapse – like the Wizard of Oz pulling all the levers behind a curtain of promises and pandering of social programs that are further bankrupting America. Can you imagine around $ 111 trillion of un funded government liabilities. A $12 billion debt load and growing astronomically. Do we have anyway of changing this? Poll the people again and I bet an overwhelming majority would say NO! Write a letter to a Congressman. Even I tried that – what a joke! If they won’t listen to me on innovative solutions like the 10% solution to buy back our national debt – why would they listen to Joe Bag of Doughnuts. The only reason why is if it could be publicized and pandered all over the TV for political gain.

Even if the states get their act together and steer clear of political, social and financial meltdown – what changes would they make to end the irresponsibility. NONE! Things won’t change until we run off Capitol Cliff. Change in our nation is reactive not proactive. In my opinion we will see massive debt issued at all levels – maintained borrowing and then spending and we are sure to crash and burn. The world is looking and it sees even great states like California teetering on bankruptcy what do you think they are saying about America itself?

The Buffett Rebuff

Stimulus Success = Consumption

I will say it again – the US is a consumption Economy. This is a rock solid fact. Even Berkshire Hathaway is feeling the impact. Buffett said himself it will get worse before it gets better. I think I have heard this before – hummm in fact I even said it!

The stimulus packages – certain to be more of them – are not getting to the street. In fact, even if money does get to the street it will be stepped on so much that it won’t stimulate consumers to consume. Worse, if you see all these programs they mostly target low income families. Another fact is the consumption power of these families is not close to the consumption power of the rich and upper middle class that represent a large percentage of consumption worldwide and definitely in the US. I frankly don’t see the entitlement consumers shopping at Dillard’s, Nordstrom’s, airlines, fancy new cars etc… Even if they did the money they will get in stimulus may not even pay for one month of their utilities. It wouldn’t even pay my electric bill.

So “Here We Go Again” to borrow a famous line from Regan – bailing out large businesses only to face a marketplace that is devastated and can’t or won’t consume their products, goods and services. So will this hurt for a long time – you bet! Why? Because manufacturers can’t make more goods if retailers don’t buy them and retailers can’t buy them into their stores because consumers aren’t buying from the retailers. It is a very vicious cycle and one we will not get out of until the government and private industry realize – close out sales, rebates, discounts and more won’t solve it. Also, take into account that all the sales and sell offs are severely reducing margins on products so their sales will continue to suffer while they try to unload things people can’t buy. You get the point.

Unemployment. Forget about those 10%+ buying anything shinny and new. Worse and not presented to us is underemployment. Yesterday a family member was hiring for a front desk position. A man came in having made over $100k last year and was applying for a front desk job at $20k. This is a huge problem too. There are millions having to accept much lower pay to even try to make ends meet and I assure you this puts our figures in the toilet for sure. Then there are those 30-60-90 days late, foreclosures, bankruptcy and the unemployable. That is more tens of millions. That is the consumer landscape. If you believe me that the US is a consumption economy and every business has to sell something – then take the facts above and add them up. Yes it equals prolonged – perpetual economic turmoil and decay in all sectors not just those with high visibility.

First force credit bureaus to adjust FICA scores for the economic conditions to enable people to get on their feet. Those that have kept good credit may cry out for justice but frankly it is what it is. The last 2 years and next 2 years need to be calculated differently or not weighted as heavily in the credit ratings. An immediate mental boost and a chance to even get back into the market in say 2 years not 5 to 7 to 10. We need these people to be able to just live and provide for their families but we also need them to stimulate the economy too.

Second allow a onetime refinancing of all credit held by anyone and any business. You want to free up capital and have banks make a boatload of money then package up everything and get it in line with the economy so people are not under pressure and devastated further again so they can feel good, have mental relief and key – HAVE CONSUMER CONFIDENCE. I assure you if you don’t fix that everyone will lose. And by the way it will reduce the toxicity of all those loan portfolios We The People – as we are called – own now.

Third stop the government borrowing any money. The National Debt is cancer – it is likely already terminal. I offered the 10% solution and getting traction but clearly not enough. America needs to own America. Period! We have to rally, and even by law, have all institutions in the US managing, today over $70 trillion, invest in a US debt fund to buy all this currency and debt back. I just ask for 10% of the total value of their portfolio (not individuals – but they can opt in) into this debt buyback fund. It’s a great investment – because we all know the stock market would boom and their portfolio value would go up far above 10%.

Oh by the way these are just a few – and can you see one thing – NO MONEY required from the government. That’s right, sell Economy Bonds to create a savings nation. Commercialize government like the US Postal Service did. Reduce every faction of government – State, Local, Municipal and Federal. Treat the US like a business. Get an Office of Financial Defense in place to clean America’s clock before the world does it to us. Fact is

You are making it happen.

Watching it happen

Or

It is happening to you.

We are clearly watching it happening and you better believe me it is happening to YOU.

What The Numbers Mean to Main Street

World Bank, Unemployment, Trillions in Spending

Is there an end in sight? Nope! The news keeps getting worse and these projections made by our Government and the guessing game around the world should not surprise us. But what do all these facts and figures mean to us?

Unemployment. Reaching over 10% in modern America is an unrealistic number and equivalent to an American nightmare come true. The figures, as vile as they sound, do not represent all the facts. Underemployed and unemployable workers would paint a true picture and believe me it is far worse than 10%. State by state is even a worse picture. This means that a large portion of workers in America and therefore families are being wiped out. In order to pay bills savings, stocks, mutual funds and 401k’s are getting raided every day. Are these numbers reported? No! we just give Americans the broad strokes to keep our education at a minimum. Remember in the long run the only thing that kept Japan out of a complete national meltdown was they are a savings nation. You hear that! Because we aren’t even if you were its not the case now is it.

Contraction of growth. The World bank is right on when it reports the world has become an economically smaller place. People see this and say hmmm the world is suffering a bit too. They may even take solace in that fact. But as the world goes the US goes worse. If the world can’t consume and we can’t consume then the writing is on the wall. Yes more layoffs and unemployment. With that comes more businesses cratering because they can’t sell products goods and services. Airline solution for example – raise rates and make it even more unaffordable to travel for those who don’t have the money. Go to Arby’s for example. Last night I spent almost $20 for 3 roast beef sandwiches and some taters. Find Chache’ Lux for me. Strasburg Kids? Real Bargains there. Car dealers – construction – you name it. At least Wal-Mart is hanging in there but we all know why that is true.

Currency. Printing day and night. A lot of people think there is a Fort Knox somewhere. Well there isn’t. It’s just paper and the US isn’t the only nation printing it. The tragic thing is that it is not backed up by anything except by the world’s faith in governments. This means the more of it out there the more commoditized it becomes. That means inflation is coming and coming hard. So already hobbled consumers will pay even more for stuff. The fact is that what the economy needs is consumption and the people are broke. The US is too. When history writes about the fall of America the abandonment of the Gold Standard will be one of the most impactful decisions ever made.

Spending, Health care, Welfare – our entitlement society. Spending is untrue. We are borrowing to spend. Health Care reform? A Trillion dollars? Our government is crazy! We can’t afford the debt we have already and we want to borrow more for screwed up entitlement programs that have already been pilfered. I wonder if people know Federal programs own a huge portion of the US debt. Where is the money? Not there for certain and we want to borrow more to see it drained and accessed by the big, rich and powerful. Madoff looks like a walk in the park against the ponzi scheme our leaders have perpetrated upon us. Healthcare - what happened to Tort Reform? Well the lawyers’ lobbyists – those that John Edwards was so close to – obviously are not be fooled with. Therefore insurance premiums for doctors are so astronomical that combined with taxes many physicians can’t keep their heads afloat either. So create a huge government entity, fueled by borrowing while the people that provide services have insurance nightmares and people jammed down their throats. Sickening. Ask listeners if they see any end in sight to the lunacy and borrowing in DC.

Stimulus. The G8 nations have concluded that it needs to stop. Why? They can’t afford it. Well the American government already pandered all this stuff to us and instead of standing there and retracting all spending and unrealistic promises they put trillions of debt on our debt to follow through on things that are not possible to achieve without further bankrupting the nation. Now take into account the tens if not hundreds of billions unaccounted for and slipped into pet projects that politicians can claim credit for to be re elected. Is this working? Absolutely not – there are way too many pigs at the trough to ever see the money pour onto Main Street – a label by the way that makes me sick too.

Every single subject to be covered is sold to us like kids. Americans are simply ignorant and uneducated on all the facts and what they mean. Fickle? You bet. The stock market is the same. We see the headlines and political entertainment geared to cover our eyes with wool. Worse there is absolutely nothing average (imagine even being called average) Americans can do. We forfeit our voice to politicians that cumulatively spend over $100 billion each 4 years cycle to get themselves to DC to borrow and spend our money. Wouldn’t you agree that 90% or more of what we see our “LAWMAKERS” actually do is spend money. No wonder why they use TV so much. It’s a bunch of commercials created for us to consume more crap being doled out onto our plate.

I am so upset, disenchanted and outraged it is hard for me to sit down each week and write about this. We get sold “our children and grand children” – “The American Dream” – “Leaving this a better place then we mismanaged it”. Forget about them they are already bankrupt and devastated. it is us we should be worried about because in our lifetime we are very likely to see America’s collapse as so many predicated our Capitalist society would. I have to wipe my chin now because I dribble down my neck when I RANT because I am so enraged that I would puke on my bib otherwise.