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We don’t really have to January 2, 2013 to go off the fiscal cliff. It’s December 4, 2012 and congress goes on Christmas vacation Friday December 14th 2012 and they don’t come back till after we fall off the cliff. Taxmageddon will show up in the stock markets and will come well before January 1, 2013. If no deal is done before that date of Friday December 14th 2012. (There won’t be any deal) The stock market will show the results prior to the date not afterwards. If you have a 401-k or any other investment in stocks or bonds brace yourself for heavy losses.

This is a warning on Friday December 14th or in just 10 days all stock markets will start a rapid decline worldwide and this will continue into Monday the 17th and all the way to Friday the 21st December 2012 if no deal is done. The republicans will stay in Washington but the democrat controlled Senate will be ordered shut down by Harry read and the correction or crash will take place. The democrats will blame the republicans as that is what they are already doing even before there’s anything to blame anyone for. What will the blame game be like after markets crash? Friday December 14 is the normal scheduled Christmas break for congress.

The real cliff comes from a market reaction to the lack of any deal that stops America’s economy from a $600 billion shock. That shock comes from the shift in taxes and spending equal to a 4% negative to GDP and the biggest losses will not be the taxes themselves but the market’s reaction to those tax increases could cost trillions of dollars in lost stock values.

If the stock market’s losses are 2000 points on the DJIA for example in dollars it is equal to $2 trillion in lost stock values. This is the true result of Taxmageddon if congress allows us to go off the Cliff. It has been said for every 1000 points lost on the DJIA is approximately $1 trillion is lost in stock values across all U.S. markets.

Currently Republicans have no options to avoid the fiscal Clift or taxmageddon that will not destroy the economy and all the choices that democrats will allow to pass the senate will force a recession. All the options are really bad and the only one that will work for just a little while is keep everything the way it is and extend the current tax rates, but Obama has said and he insists he will not except that outcome of kicking the can down the road. If anyone is holding the middle class hostage it is Obama not the republicans in the house. Obama wants a grand bargain for which there is no good economic out come for anything he wants, what Obama wants will cost millions of jobs. That’s not an option Republicans can agree to.

Obama has proven over the last 4 years he understands nothing about economics, business or how jobs are created. It needs to be said Obama’s an idiot to top all idiots; he is the king of fools and will lead America to its complete economic destruction in the next few weeks. Obama’s winning of the election doesn’t prove his genius; it just proves how stupid the American people have become, all because of Obama phones that cheaply bought votes with tax payer’s money. (That is if he really won? As I believe the election was a complete fraud)

http://gulagbound.com/35972/nationwide-white-votes-down-by-16m-smell-like-election-tampering/#.UKEgkmfNPFw

Obama says he will only accept a full 4.9% tax increase to the wealthiest tax payers and they are the job creators. That’s not a bumper sticker slogan anymore or a political talking point, it is just the facts. By the numbers it can be proven true that what Obama is demanding will certainly put us in a recession according to the congressional budget office = CBO. Let’s look at what faces the American people in the next few weeks and what the democrats have done in the past 6 years of the control of congress since January 2007. The American people have been setup with this no win scenario that we now have and democrats will be able to blame it all on the republicans no matter what republicans do because democrats control 85% of what is so-called the main stream media.

If congress does nothing we get the full force of the fiscal Clift which is a $600 billion shift in taxes and spending cuts. The media has been talking about this fiscal Clift but no one clearly explains exactly what that means. I don’t think any of media types are smart enough to see what it is or what it truly means for the economy, but I will attempt to explain it here. It’s not a matter of speculation it’s just really simple math and understanding economics.

If Republicans do what Obama and the liberal progressive democrats wants here is what the congressional budget office said about a deal republicans offered to raise taxes on the wealthy in the budget act of 2011 debt ceiling increase that threaten to shut down parts of government.

The CBO scored the proposal the republicans offered in 2011 that would raise taxes on the wealthy by roughly $80 Billion. The result was a recession and negative GDP growth of .5% or ½ %. They also said it would force 700,000 private sector jobs to be lost and by the end of 2013 push the unemployment rate from the current rate up to 9.1%. Again this was in 2011 and now Obama and the democrats want double or two times that much to $160 Billion in higher taxes from the job creators or the wealthy and that means twice the job losses to 1.4 million and twice the negative GDP growth -1%. This is what Obama wants; this is his so-called grand bargain. Only a complete idiot would think that’s a good idea, but that’s just Obama.

This doubling of higher taxes to the wealthy tax payers is the option that Obama is giving the republicans and this is not an option republicans can except, but it is insanity to ask for a tax increase that will force 1.4 million jobs to be lost to the middle class then lie about wanting to protect the middle class and force a recession in an already very weak economy that will loss 1.4 million jobs in the middle class. (Twisted logic) The only ones here protecting the middle class is the republicans not Obama.

How can the republicans agree to such an insane proposal when Republicans know it will cost so many jobs in the middle class and force us into a recession at the cost 1.4 million middle class jobs? They cannot. What sane person would vote for that? No sane person would vote for Obama’s so-called grand bargain and it’s not a deal of any acceptable kind. This whole Obama so-called deal is like trying to make a bargain with a terrorist who wants to kill you.

The Republicans have offered some concessions to higher taxes on the wealthy in recent discussions, but not the $80 billion and certainly not the $160 billion as the economy is weaker now then in early 2011 and any sizeable tax increase would not be good for the economy. There is no such thing as a grand bargain in what Obama is asking for; it’s more like a grand screwing to the American worker. Republicans are being asked to accept our grand economic destruction and the complete collapse of America’s economy into a deep recession or will it be a depression?

Taxes on the wealthy doesn’t include the automatic spending cuts from The Budget Control Act of 2011 said to be about $150 billion more that comes out of the economy and will have an additional negative effect on the economy. Obama is not trying to fix our fiscal issues and problems; Obama is trying to destroy the Republican Party and America along with it. I am all for spending cuts we need to shrink the spending of the federal government but not this way, not while taxing the crap out of everyone and forcing a depression like economy. These budget cuts should be done in increments’ in separate pieces of legislation over time slowing as the economy grows. I know this will not happen but that is the way it should happen.

The options the republicans have are unacceptable and the whole problem with the country is making deals or compromising with the democrats a party that wants to intentionally destroy the country. Obama and the democrats have found a way to blame the whole thing on the Republican Party but the truth is the whole thing was contrived by the democrats. The democrats want America to go off the fiscal Clift because they can blame any deal and all of them are bad on the Republican Party.  No matter whose fault it really is the liberal fringe lame stream news media will carry the lie and the people will believe the lie. America’s favorite pastime is blaming someone else for what they did to themselves by voting for democrats and Obama to get the free stuff.

I have told you about what the CBO has said about just taxing the wealthy and it has a really bad outcome and now let’s have a look at the math on the even bigger problem going completely off the $600 billion cliff. There is very big chance of the whole economy completely falling apart if the full force of taxmageddon if the existing law isn’t changed. The cost is a dramatic 4% of GDP just disappears into thin air. This will have the same economic effect as a gallon of gasoline going from $3.50 a gallon to $6.00 a gallon. You can probably relate to that and you know what that will do to your finances then multiply that time 140 million working Americans and the national fleet of 250 million cars. I did do the math based on our usage and the $600 billion taxmageddon it’s a very close estimate. This is an example for the effects and it will not necessarily affect the price of gas but the overall economic effect will be the same. (Catastrophic)

This taxmageddon automatically just happens in less than 4 weeks on January 1st 2013 if congress does nothing because this is already the law. Again stock markets will react before that date of January 1, 2013 not after. The optimism market players have that congress will stop taxmageddon comes from fantasies of the media and or wishful thinking.

The last 2 years has proven we have a senate that refuses to bring anything that passes the house to be allowed an up or down vote. At last count the republican controlled House of Representatives has passed 39 bills and Harry Reid hasn’t allowed any of them to go to the floor of the Senate for a vote. The house of representatives is functioning just fine passing 39 bills proves that. It is the Senate and or Harry Reid that is completely dysfunctional. The house has also passed 2 bills to fix the Clift or taxmageddon but dirty Harry wont allow a vote on either one. The truth is the democrats are screwing things up they are the dysfunctional party and they want to force America to go off the fiscal Clift. There purpose is to destroy the Republican Party and America with them. Will the democrat’s devious plan work?

If congress does nothing we get the full force of the fiscal Clift the media has been taking about but no one clearly explains exactly what that means to you and the whole country and the whole world will suffer great economic distress from our taxmageddon. I don’t think any of them are smart enough to see what it really means but I will attempt to explain more clearly here.

Here is what taxmageddon or the fiscal Clift means to you and to the whole economy and this number seems to get bigger by the week as more deductions are found that just go away and the higher total of the taxes mount up. The total amount of higher taxes collected from the wealthy and the middle class and the working poor (now 28 million that now pay no taxes at all and probably voted for Obama) is now $ 538 Billion in higher taxes as all tax rates go up 5% higher than they are now and around 20 tax deductions go away. This huge number of $ 538 Billion and based on the CBO estimated results of what $80 billion in higher taxes to only the wealthy was projected to do can be used as a guideline to calculate the economic impact of going off the Clift or taxmageddon.

The CBO has currently stated they cannot do an estimate on taxmageddon deal because they need the legislation to score the cost to the economy but that legislation doesn’t exist yet so we have to use the last CBO estimate as a basis on the budget act of 2011 debt deal that got us in this mess.

The higher tax of taxmageddon of $ 538 Billion on every one that works or has taxable income is 6.7 times the $80 Billion scored by the congressional budget office in 2011. Logically and mathematically the higher taxes would have the same multiple in its negative economic effects of 6.7 times the money that goes missing from the private sector economy into the black hole of government deficits of $1.1 trillion for 2012. So the math is 6.7 times the 700,000 lost jobs or 4,690,000 jobs lost. The negative growth rate of -.5% will be 6.7 times more or -3.35% This is to show the trend that when this much money being taken from the private sector in just simple straight math and it shows it will be catastrophic for the economy and jobs. This will be worse than the 2008 bank collapse because it doesn’t stop this time. No big stock market corrections or crashes are in the CBO estimates, there not allowed to do that.

I can tell you it will be a lot worse than any CBO estimate and there are a number of reasons. Here are just a few: first people will change their spending habits according to affordability after a stock market correction or a market crash. The working population or the tax payers that support the whole economy and socialist system will pull back spending as 50% of the working population are somehow invested in the stock market like in a 401k retirement program and that hurts business even more as everyone feels poorer and spends less. Adding to the devastation caused from the $538 Billion in higher taxes. The stock markets worldwide will adjust to America going into a recession along with all American stock markets as we are all tied together economically whether we like it or not that’s just the way it is. The CBO is not allowed to speculate on how markets will react they have a stricter set of guidelines and that’s why they are way off on most of their estimates long-term. There estimates are good for a few weeks to maybe 6 months, after that as time goes by their longer term estimate are useless.

No matter what the outcome the Republicans will be blamed for it. The election didn’t change anything and we will get 4 more years of congressional gridlock and 4 more years of an Obama’s dictatorship.

Some examples you can reference to see how people react and change their spending habits after any economic catastrophe is the 2008 bank collapse the 1987 stock market crash and the September 11, 2001 attack on the twin towers in New York. People just stopped spending and the economy went directly into a recession and my point is – things will get a lot worse than the -3.35% negative economic decline and will more likely be in the 6% negative GDP range just like after the 2008 bank collapse and the first quarter of 2009 was negative – 6% GDP and we have still not fully recovered from that. On top of that the Federal Reserve can no longer bail anyone out they are out of options but they can take over the banks and federalize them.

The overall dynamics of the economy has changed dramatically since 2008. This decline will be worse than any decline before because of the huge $16.4 trillion total deficits and a much larger portion of that are held within the banking system now in 2012 than in the 2008 bank collapse. A GDP growing at only 2% and Inflation said to be low at 2.2% if you believe that? The economy isn’t really growing at all, it’s the inflation that makes it seem like it is. We are in a much weaker position economically in 2012 than in 2008. 

This is a worldwide problem as all the major economies are doing the same thing. The total world-wide printing by governments has increased $21 trillion in just the last 6 years and most of that new debt is in the banking system.

The middle class with 401k Retirement plans or any money involved in the markets stocks or bonds will likely lose 40% to 60% of their money in those retirement accounts. Just like in 2008 after the banks froze up and this is just to start with, so the working people who support the economy will not be spending at the same rates they are now and all the false optimism will be forced away with a collapse coming in just 10 days when congress goes home for Christmas vacations while the economy through the stock markets just falls apart.

I have followed and been directly involved in every economic catastrophe since Jimmy Carter was president as a business owner and Obama and the democrats’ have set us up for the biggest collapse in world history. (The political economy)

In the last 4 years since the bank collapse of 2008 here is what has changed and will give us a multiple of 3 to 4 times worse than in the last bubble bursting and all created by the Federal Reserve poor economic and monetary policies. The banks have been buying trillions in U.S. treasury debt adding to what they already hold and adding trillions to the problem because the Federal Reserve has been making up phony money with these dollar amounts in trillions and creating a new much larger bubble than we had in 2008. The Federal Reserve has been buying old debt with the Q.E 1-2-3, and the so-called twists and the banks have been investing some of the money into the stock markets and commodities as well and repurchasing new federal debt with the very same money the Federal Reserve has been putting into the banks. (A Ponzi scheme; if you or me did this we would go to jail for a very long time like Burney Madoff)

This pumping of artificial money into markets has artificially inflated stock prices by pumping trillions of dollars into the banks creating money out of thin air with nothing but faith to back it up. Markets will collapse quickly as that faith will evaporate in a steep decline or even worse a panic sell off like in the 1987 crash and like all other crashes will take everyone by surprise. The banks are holding this huge multi trillion-dollar bag of dogey doo in U.S. government debt and banks will be blamed once again for what the politicians did or didn’t do. This is a 1934 cartoon from the New York Times. This has happened before.

 65312741

The banks and the biggest investment firms which are banks are the biggest players in the artificially propped up stock markets and the bond markets. This is a worldwide condition that every government and economy in the world has been doing the same thing for the last 4 years. This bubble only needs a trigger to set it off and I believe the trigger is taxmageddon that comes in 10 days. This starts on December 14, 2012. The markets will decline and this decline will continue till Friday the 21st of December. The reason it stops there is because the 25th is Christmas day holiday and markets will be closed Saturday December 22nd to Wednesday the 26th of December. After that all the damage will be done and whatever congress and Obama do after that will make no difference, it’s too late to fix anything once the markets correct or collapse.

The economic losses will be similar to a repeat of the 2008 bank collapse only multiplied times 3 to 4 of what happen in 2008. There will be no rescue from the Federal Reserve and no bailouts of the banks as the federal government with the Dodd, Frank banking act allows the government to just take over the whole banking system there are no limits to what the government can do now under Dodd, Frank and that’s what will happen as that’s exactly what the bill is meant to do. Nationalize the banking system and here we go to the government controlling everything. (Communism) So what’s next? They’re going to steal all your money no matter where it is.

How much do you trust the government having control of all your savings and what do you think they will do with it once they have legally taken control of the banks and nationalizing the whole banking system and all the money? What did they do with the social security money? They spent it all, need I say more? If or when this happens think about what you will do if you have savings in the bank and that’s what everyone else will do. The results will be Runs on the banks just like in the great depression and finally just closing the banks as they run out of paper and digits in the computers. Banks only have about 10% of their deposits in cash or liquid assets the rest is loaned out to someone and even loaned to other banks that may go bankrupt and close their doors these loses quickly dominos through the entire banking system no matter who owns them.

The Federal Reserve has no bullets left and the bazooka doesn’t exist anymore.

In 2008 prior to the collapse of the banks the federal deficit total was about $9.6 trillion and its now $16.4 trillion. The interest rate set by the Federal Reserve was 5% in 2008 now its .5 or ½% it can’t get any lower than zero and lowering it 4.5% has done little good for the economy and reducing it, another ½% won’t make any difference after a market crash. We also will have reached the current debt ceiling of $16.4 trillion by the last week of December 2012 or first week of January 2013. Little has been said about this debt ceiling being reached but their parts of a grand deal Obama wants that’s no deal at all and will not come.

If I wanted to destroy America I would have done everything the democrats did since they took control of congress in January 2007 and I would refuse to change anything just as democrats and Obama have done and continue to do. If I wanted to destroy America I wouldn’t change a thing.

We are currently barrowing nearly $100 billion a month for deficit spending and just printing and digitizing most of that up in computers the paper doesn’t even exist, it’s mostly cyber money on a hard drive in computers. If markets do come crashing down in 2 weeks with the debt ceiling increase tied to a tax increase bill that will not come and congress is out on vacation it all comes to a head at the same time. Once things do fall apart it’s too late to fix the damage already done.

This is the perfect storm and America’s judgment day has arrived. If congress does pass something and it’s not economically sound like raising taxes on the wealthiest 2% the exact same thing will happen and markets will react as if congress did nothing at all. We will all pay a price for the people who backed Obama and voted for him. The utopia Democrats all dreamed of and like they have dreamed of in socialist Europe for the last 150 years that utopia never did materialize and will never come for America either. What is coming will be more like the opening of the gates of hell.

The Federal Reserve is a bank. It is not a branch of government and isn’t controlled by congress directly. When this bubble bursts there’s not enough money in the world to fix this crash. The Federal Reserve holds around $4 trillion in its own issued debt and when the crap hits the fan this time the Federal reserve bank will be just as broken as the banking system they artificially propped up for the last 4 years and its all self-inflicted from poor monetary policy’s mostly since 2007. They think they have it under control but if they did we wouldn’t be in this catastrophic position.

I am a realist and do not hope for any better outcome for which there is no evidence of any possible better outcome. Hope is like wishing for something it only works in fairy tales but not so much in the real world. I have watched and participated in the political economy for over 30 years and I know what the politicians will do before they know what they’re going to do.

There are no grand deals to be made and any choices they do make will be bad ones for the economy. The policies of the federal government and the democratic controlled congress have put us in a box we cannot get out of. All of the possible outcomes stink. The poorly contrived political economic policies of the past our going to haunt us and our children through eternity and the bill is coming due now,  in the next few weeks not in 5-10 or 20 years.

We are about to witness the destruction of America through its economy from within our own elected government. This is all absolutely intentional it is not by accident that this is going to happen. Liberal progressive Democrats are just the tool or the useful Idiots for the destruction of America. There is someone else behind all this but this article is not about that.

The visible and undeniable end of America starts in 10 days. Obama is not trying to fix our fiscal Issues and Problems; His s trying to destroy the Republicans and to do that Obama’s going to destroy the economy and the country with it.

Congress goes from one screw up to the next screw up and the reason for this is the compromise of capitalism in trade offs for a larger more expensive government and more socialism and wealth redistribution. This will only end when we collapse under the weight of too much socialism, the government will go away with it and that’s weeks away not years. The deal Obama and the democrat controlled senate offers are going to collapse the economy. Keeping taxes the same for everyone will just put off the date as it will come up again.

The bottom line on taxmageddon or the so-called cliff is no matter what happens Americans gets screwed.

 If we get exactly all that Obama’s asking for we go off the cliff and into a deep recession. The congressional budget office has stated this and I agree.

 If congress does nothing at all we go of the bigger cliff. So no matter what: deal or no deal we go off the cliff. That’s the deal, we go off the cliff.

 The only alternative is keeping all tax rates at their current levels for everyone and Obama said that’s not acceptable. So we go off the cliff.

 The republicans are already being blamed for this but they haven’t been in control of congress since 2006 and they still are not in control but the lying media says republicans are to blame.

  Lou Dobbs agrees with me 

http://video.foxbusiness.com/v/1998558236001/fiscal-cliff-is-no-joke

Paul Ryan: That leads us to conclude Obama’s trying to get us to our fiscal cliff,” Ryan said. “He doesn’t want to come to the middle.”

http://dailycaller.com/2012/12/04/paul-ryan-addresses-fiscal-cliff-were-nowhere-were-farther-than-where-we-started/

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Painting a happy face on this taxmageddon is just putting lip stick on a pig. It’s just 45 days away until the US falls off the fiscal cliff and around $600 billion or 4% of Gross domestic product goes into the black hole of deficit spending from $450 billion in higher taxes on everyone not just the rich and an automatic $150 billion in spending cuts for a total of $600 billion shift in economic activity. For those with poor math skills pay attention to this, the taxes are not a plus to the GDP it is taken from existing GDP wages to employees and profits of companies

 

The current GDP growth rate is only 1.7% so far in 2012 and 4% of that will shift into the oblivion of deficit spending and deficit reduction and still leave us with an additional shortfall of $600 Billion in deficit spending. The CBO – congressional budget office has stated in their testimony to congress that just an increase in taxes on the rich of an estimated $80 Billion in tax increases will force a lose in jobs of 700,000 and a negative .5% GDP (½%) and or a recession. Now that number is just on the wealthiest and business owners has doubled to $160 billion a year in higher taxes to the wealthiest since the election and the simple math is negative -1% GDP and 1.5 million jobs lost just from taxing the rich not the taxmageddon that will tax the crap out of everyone and everything which is 3 times that number if they don’t do anything.

 

If you allow the bush tax cuts to expire January 1, 2013 than taxes go up on everyone including 25 million low-income Americans that don’t pay any federal tax at all will pay taxes. This is what the democrats voted for on November 6 2012 and all this will at the very least cause a decline in real terms of GDP gone missing of a negative – 2.5% of the GDP growth rate figured strate line without the projection of how businesses will react or how the spending habits of people will change and they will change dramatically more negative than a -2.5% growth rate decline.

 

The dollar amount lost by doing nothing and allowing current law to expire on January 1, 2013 and then tax rates go up 5% on every one who works and or pays taxes. it will cost the American workers and the rich $450 billion total and 150 billion in spending cuts totaling $600 billion then my estimate of job losses of 5 times the 700,000 jobs or 3.5 million jobs lost and the job losses will happen as fast as the money disappears from paychecks every week. The moneys just not there anymore for us to spend or save as it is taxed away at a rate of $1.2 billion a day from higher taxes to everyone. I want to repeat this part and make this clear, this is already the law, congress doesn’t have to vote on anything the existing laws will allow this to happen January 1, 2013 and congress doesn’t need to vote on anything it’s automatic. Next is why a deal will not be made and everyone working will get the 5% tax increase unless you move out of the country or your state succeeds from the union which neither is likely.

 

The political blame games and the real goals of the Democratic Party are why no deals will be made and why we will go off this fiscal Clift or so-called taxmageddon. This will be once again blamed on the republicans for what the democrats did. (There’s a 100 year history of this) The progressive, liberal democratic parties goal has been and still is to destroy the constitutional America we know and change us into a socialist dictatorship (I believe all the evidence shows we are already a socialist dictatorship and have been the last 3 years and 10 months and even possibly the last 12 years) and doing away with the constitution and replacing it with a communist constitution and this taxmageddon is exactly what the democrats need to do that and they will try to make it look like the republicans fault (this is already being done) and the lame stream liberal progressive socialist media will help them do it with their normal lies and disinformation.

 

Here is what to expect in the next 47 days. A lot of grand standing by democrats telling you conservatives economic policies are why the economies is so bad and its Bush’s fault even know the democrats have controlled congress for almost the last 6 years.

 

It’s at this point I want to inform and or remind everyone who reads this. The democrats have now controlled congress for 5 years and 10 months the reason the economy went off the Clift and the banks collapsed in 2008 was under the control of the Democratic Party for 21 months it was not the Republicans it was the democrat controlled congress that did it by their actions or lack of actions. To believe otherwise means you have been misinformed and you believe the lies of the liberal progressive news media.

 

The democrats didn’t inherit this economic mess they caused it. http://wp.me/pO1Ho-9w 

 

So if you still think this was all done by Bush your eating the little balls of crap the liberal media has been feeding you for your entire life and the last 6 years. All you need to do is a search for congress January 2007 to 2012 and you will see the democrats have controlled everything for the whole time period and then blames republicans and Bush for what they did. To say well that’s just politics does not make it right and it doesn’t fix the mess we are in. If they are getting away with these lies it’s because some Americans like those voting in democrat party for the democratic party are allowing them to get away with it. I don’t get my news from fox I seek the truth always this is the real no spin zone. I go to the federal record and look at the numbers and if you really want the truth it’s in the numbers not the news media they all sound like parrots to me spinning their stories as they see the truth with 10 different versions or opinions about the same story and none of them are right.

 

Facts compared to opinion and views. The glass is half full or is it half empty? No matter what you opinion or view is; the same amount of water resides in the glass. its math and math is not an opinion or a view. This goes to the next part the historical events of the past that can give us a clear picture of the possibilities and the near term effects of economic events like taxmageddon.

 

I have seen many economist discuss this $450 billion tax increase like it’s a good thing and the value of the dollar will increase because the deficit would shrink and that’s would be a good thing under normal text-book economic conditions it would be, except for the facts they seem to forget that we would definitely go into a very deep recession or depression from a $450 billion tax increase and while we have a deficit of $16.4 trillion hanging over our heads that’s not good for bonds or the value of the dollar if we are borrowing $600 billion while the economy is shrinking at a rate of 3% and could quickly go 6% negative GDP  it is likely under these conditions no one will loan us any money and people who hold our bonds would sell them very fast causing a panic sell off or a crash in the bond markets.

 

This has happened before in 1980. I can tell you right now when the economy starts to decline and go into a recession under the new much higher tax rates that what the economist are telling you say it’s a good thing is idiotic and that’s being kind. As the whole dynamics of the entire economy changes very quickly in economic declines the stock markets and bond markets will change and go into a severe decline and bond markets will be up for a few days maybe and then be sold off to cover losses in other stock markets and commodities markets this is always a worldwide event and everything will all change dramatically as well. None of it will be good. It will all be bad news (do you have a 401-K) and even before the first dollar in higher taxes is stolen away from the rich, the middle class and working poor this will unfold and become history. When this happens and it will, the economists college degrees can all be thrown out the window or used as toilet paper because nothing works in severe declines. I have been in 3 severe economic declines or crashes as a business owner and an investor.

 

Currently what gives the dollars or the bonds the value they do have is the confidence that the government can pay the interest on the debt and that confidence level all changes if we go into a recession. Confidence is nothing more than a thought and as quick as we can change our minds or in one day that confidence could disipere and this could cause a second bond market collapse worse than the one in 1980 because the debt is 32 times larger than in 1980

 

The Bond Market Collapse of February 1980 The time is November, 1979; the place, the White House. Like in November 2012, a dark financial cloud hovers over Washington — not only fiscal troubles, but also the threat of hyperinflation.

 

President Jimmy Carter and Congress have been gridlocked for months, unable to deal with the brewing storm. Unlike November 2012, the next presidential election is a year away. But investors don’t wait for the ballots. Nor do they have to. They begin issuing their sell orders immediately, venting their wrath primarily in the U.S. bond market by dumping medium and long-term U.S. Treasury securities. Treasury bond prices collapse, while interest rates surge. (We are set up for this perfect storm once again triggered by taxmageddon)

 

The tipping point comes on February 5, 1980. That’s when Treasury bond prices fall so far that their yields surge above the 11% level the all-time peak reached during the Civil War. “Faced with a prolonged buyer’s strike,” says one bond market pro, “we decided to throw in the towel and get yields up to a level where some cash buyers might be shocked off the sidelines.” But the next day, panicky bondholders begin unloading bonds at any price … and there are still few takers even at record interest rates everyone is still selling. The selling is so intense that all except two of the largest, best-capitalized bond dealers on Wall Street Merrill Lynch and Solomon Brothers effectively abandon their market-making role.

 

Now, it’s no longer merely a case of a price collapse. It’s a market collapse in the literal sense of the word: The dealers themselves are packing up and going home! By February 19, the collapse gathers even more momentum, as Treasury bonds lose over 5% of their face value in a single trading day!

 

Investors aren’t just shouting their protests from the rooftops. They are shutting down the market for U.S. Treasury securities, making it impossible for the U.S. government to borrow the money it needs to stay alive — and to avoid defaults on maturing debts. 

 

Result: With Paul Volcker (idiot) at his side, President Carter (another idiot) acts, announcing an anti-inflation bombshell: An unprecedented package of CREDIT CONTROLS that clamps down on virtually all forms of credit. (Dodd-Frank bank regulations will have same effects) The U.S. economy is pushed over a cliff and into a tailspin. Carter’s chances for re-election are doomed. But the bond market recovers and the U.S. Treasury is able to resume borrowing. 

 

But this all happened when the total of all federal deficits was about $ 500 Billion and now its $16.4 trillion anything even ½ of that historical recount would destroy the country and the dollar. Inflation ran between 12% and 15% in that period from 1977 to 1982 and bonds sold are governments borrowing money to finance the spending of money they don’t have. Just imagine if this only in part happens in such a weak economy and with borrowed money amounts $16.4 trillion and a need for a least and additional $50 billion a month after taxmageddon. While at the same time the economy is in a steep decline with a president that’s adverse to business. (The perfect economic storm that will end America) This also really screws up all the CBO estimates of the impact of the recession caused by taxmageddon and things will get a lot worse than there projected declines. The economy is always a moving target.

 

It was massive deficits of that time period that caused this to happen and those deficits were only $50 billion to $75 billion a year and now there over $1 trillion a year. This extremely high 16% interest rate at the peak is what the market set is the sacrifice that investors demanded in order to kill the threat of hyperinflation or the extreme devaluation of a currency. It really never worked but they won’t tell you this because it makes both Carter and Volker look like the idiots they are. Inflation remained high and the higher interest rate had only one purpose atract money to finance deficit spending. The higher interest rates fueled inflation in higher cost to barrow money that doest reduce cost it increases cost thus inflation increases. Liberal progressives always get it backwards. This is what Washington ultimately delivered. That at least in part will happen with taxmageddon coming in just 7 weeks. (Merry Christmas)

 

The general notion here is that, given the root causes of our economic distemper, rampant financialization, over-leverage and over-indebtedness, a politically dominant parasitic banking sector, an aging population, over promised entitlements, a financial business model based on fraud, Federal Reserve monetizing of debt, and a dysfunctional political system, to mention only the top of the list how can the USD appreciate in real terms? It cannot! It only has one way to go and that’s down. There only needs to be a trigger to set this whole decline into motion and I believe its taxmageddon.

 

This is how investors play the markets and why the dramatic decline or a crash will become obvious in the next 45 days or less. Businesses and market players make their decisions based on future projections of business activity and profits or the lack of profits. All market investment is determined by future projections or guesses of economic activity 6 months before they accrue not afterwards. You can expect a crash or at least a major correction of a few thousand points in the next few weeks and up to the week before January 1, 2013. Just like the decline after the banks collapsed in September 2008 this decline will continue well into 2013 just like the one in 2008.

 

Either way whatever happens in Congress the democrats will not make a deal because they want the economic collapse. They want the crash and they need it because democrats want the country to end as we know it so they can abolish the constitution. Making a deal with the democrats and Obama will not happen and their actions and the long history of changing constitutional law through the Supreme Court in the last 100 years and especially the last 4 years of ignoring constitutional law and playing dictator or King at every turn should prove that to people who have been paying attention Democrats hate the constitution.

 

Liberal progressive democrats have worked hard to circumvent the constitution and make unconstitutional law legal through the courts. It’s a term called judicial activism. This entire deal making process will be like trying to negotiate with a terrorist that wants to kill you, it’s a useless endeavor. Democrats’ have a long history of behavior that never changes in the liberal progressive Democratic Party. So why would any sane reasonable person expect that to suddenly change now? Liberal, progressive, Democrats want an economic collapse.

 

The conservative media will keep doing what they always do giving the benefit of the doubt to the liberal democrats and they will hope and or wish that Obama and the democrats will find a middle ground or a compromise with republicans, but the last 4 years of their actions shows that doesn’t fit Obama’s or the democrats play book. It’s always their way or the highway anything else is just imaginings and hopeful thinking so far hope has gotten us into this horrible position. The only compromises made have gotten us to the current fiscal Clift otherwise known as taxmageddon everything else has been my way or the highway with the democrat’s control of the senate and Obama. I think the democrats set America up perfectly for total economic destruction with an expiration date January 1, 2013

 

You can’t make a deal with the devil and expect anything good to come from it. I don’t think John Bonner will make a deal with the devil and if he does there’s a price to pay either way all Americans will lose no matter what our politics are.

 

What you are about to witness few weeks and months no one alive has ever seen before. This will be way worse than the great depression or the civil war. Hell on earth is what is coming and it’s not years away it’s only a matter of weeks and months and I repeat it’s not years away. To think this destructive pattern of the democrats’ and Obama can continue and Americas economy can survive 4 more years is just wishful thinking.

 

You can Hope I am wrong as I really hope I am wrong, but I said in back in 2004 and in my book 2012 that came out in November 2009 this president Obama would be the last president of the United States and so far I was right. From 40 years of observing politics and studying political history. I understand how a liberal thinks and they don’t use logic. This lack of logic is why all their ideas and policies always fail it is a form of insanity and that’s why what I say here may not make any sense to a sane person but their is no logic to there thinking it is insanity.

 

We don’t have 4 more years under any president or any dictator. The book 2012 explains it all. I said in 2009 it would either happen in 2012 or by the middle of 2013 and now we are just weeks away. You will see this unfold in the next 6 to 7 weeks in the stock markets as I expect a 2500 point correction from the September highs and so far it 1000 points down with 1500 to go and it will get a lot worse in early 2013.

 

I really hope I am wrong and I know you do too.

 

By the way very soon after taxmageddon and I mean very soon after we fall apart, the real Armageddon between Israel and Iran will start. First it will be conventional weapons but it will escalate quickly after other Arab countries join Iran in an all out WAR and an attack on Israel. Israel is surrounded by nothing but enemies with combined armies in the millions and with no allies. Regardless of what Democrats say or Obama he will not back Israel, Obama is a Muslim he will side with the Muslims. If attacked by multiple countries at one time Israel will have only one choice and that’s nuclear weapons = Armageddon. Israel has claimed 80 nuclear weapons and that’s enough to destroy all the Arab or Muslim countries major cities. The deadline for this is March 2013 set by Israeli Prime Minister Benjamin Netanyahu. Here it comes! 200 million dead in one day is very possible with 80 nuclear weapons and the real sh-t hits the fan.

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The News media is leaving so much information unreported it’s pathetic. I’m going to make a list here of everything that is affecting the current state of the economy that no one is identifying not even fox news.

 To find the true state of the economy these listed items need to be identified and figured in. This is necessary Because of the way the government fixes the numbers because they do not want you to know the truth.

 Healthcare insurance premiums have increased dramatically from Obama care. I took the total dollar amount we spend as a country on health care and multiply it by the minimum percentage reported in premium increases of 12%. Using the lowest premium increase I came up with $252 billion a year in higher premium cost to the public. That money disappears just like the gasoline that we put in our automobiles. The true number is much higher as I use the lowest possible percentage to come up with my estimate of premium costs to the American people. This by itself is equivalent to a one dollar a gallon increase in the price of gasoline.

 The only thing the news media talks about in healthcare costs is either how much it costs in government deficit spending on Obama care or how much were going to save in deficit spending. They say nothing about the cost in higher premiums for the American people. These Higher costs and premiums is 1.6% of the gross domestic product or the total amount of money made in our economy this gives us a false picture that the economy is growing faster than it actually is. We are just spending a heck of a lot more than we used to and buying the same product.

 No one has reported a total current cost of crude oil refined products like gasoline and diesel and everything else made from crude oil. When gasoline was $2.50 a gallon we’re spending $760 billion a year on refined crude oil. Now we’re at $4.00 a gallon and spending $1.2 trillion a year on refined crude oil. This is a difference of $440 billion a year that goes up in smoke. This dramatic change has taken place over the last six months and we have gone from 4.8% of GDP spent on refined crude oil products to 7.8% of GDP. This is a -3% shift to the negative that takes away from all other sectors of the economy and no one is reporting this.

 The unemployment situation starting in January 2011 or four months ago, the Department of Labor and statistics made a change in the way they calculate the jobs. The new change the Department of Labor and statistics  is now counting self-employed people as employees. This means they will add approximately 1,000,000 people to the total number of employed. This will dramatically dilute and mask the true state of the job situation. This is precisely why we had two months in a row where unemployment came in at 39,000 and 31,000 which is very weak job growth and the numbers suddenly jump to 180,000 and then 210,000 in the following two months. This is because they added in 1 million people who were self-employed and now are being counted as employees. They have to blend them in over a period of months so that people don’t notice what is really going on. This is no more than just fixing the numbers. In other words they’re just plain lying to the American people. As soon as they run out of self-employed people to blend in will find the true state of the job situation and things will go negative very quickly from there on. I figure around July or August of 2011 the true nature of the job market will show in each monthly report after that we will have hundreds of thousands of jobs being reported lost from higher gasoline and food prices as all that money goes missing from other sectors of the economy.

 The Federal Reserve is borrowing money at a rate of $130 billion a month and $1.5 trillion a year. This money is being digitized or printed and 100% of it is being spent into the streets. The whole world has been flooded with US dollars as the money is being spent to keep up with normal federal government obligations of entitlement programs, two wars we cannot afford and other government expenses. What is being reported that it’s not a problem as long as the money does not get into the hands of the public, but it is! This is only on budget spending and does not include off budget spending. The CBO reports the grand total of on budget and off budget spending for 2011 will be $1.9 trillion. But they’re trying to keep that a secret. The on budget and off budget amount of deficit spending is $158 billion a month that is being borrowed digitized or printed and every penny of it is getting into the streets and it has been accumulating for a total of $5.3 trillion over the last three and half years.

 Since Democrats took control of Congress in January 2007 they have deficit spent $5.3 trillion of which every penny of it has been spent into the streets and all that has been either borrowed printed or digitized. When the Democrats took office and got control of Congress in January 2007 the grand total of the federal deficit was just $9 Trillion even. Now its $14.3 trillion and this is the current debt limit that we will reach in two weeks. Every penny of this money is spent into the streets with each passing month the number gets bigger and bigger. This is what is causing a severe devaluation of the currency and pushing up the price of crude oil as our dollar devalues against all other currencies. On The dollar index the dollar has devalued 17% in just the past ten months and this is the biggest part of  why gasoline has gone up to $4.00 a gallon. The liberal fringe news media is telling you its the greedy oil companies fault but the truth is, it’s all Democrats fault not the oil companies.

 No one is reporting the true reason why the banks collapsed in September of 2008. This biggest lie ever told is the Democrats blaming the mess as being created by the Republican Party but the facts prove a much different picture. In the five months from May to September of 2008. The federal government borrowed $413 billion of on budget deficit spending in just 5 months. This never happened before as the debt had never even come close to this amount in a 5 month period, all just before the banks collapsed in September of 2008. This does not include the off budget deficit and this made it much worse. If you add up the money borrowed from the world banking system in that 5 month period prior to the bank collapse, use both on budget and off budget deficits this brings the total to $683 billion in that five-month period and that’s $136.6 billion average each month.

  Don’t you find it odd that it’s almost exactly the same amount of monthly deficits we have now in 2011 or almost 4 years later? So is this by accident or is it on purpose? Blaming it on Pres. George W. Bush doesn’t work at all if you look at how Congress spends money and the dates that they spent it. The president can’t spend a dime without Congress first consenting to it. To get funding for the wars and our military George Bush was held at gunpoint to sign the spending bills. The deficit spending on the first budget the Democrats are responsible for which was the 2008 budget the total on budget and off budget federal deficit was $978 billion. This is exactly why the banks collapsed in September of 2008. This was 100% the doing of the Democratic Party who controlled Congress by majority votes not the Republican Party. No one is reporting this and all of his hiding in plain sight. Maybe that’s why nobody sees it.

 All the numbers come from: Department of labor and statistics: The U.S. Treasury department: Congressional budget office and its all hiding in plain sight.

 The gross domestic product numbers reported to the public is not an inflation-adjusted number. The recently reported 1.8% growth rate for the first quarter of 2011 by the Federal Reserve does not adjust for the inflation or lost buying power of our dollars. This is also a yearly average not a quarterly average. Although it is reported every three months is based on a yearly growth rate.

 If we just take the most recent inflation numbers also reported by the Federal Reserve and that yearly inflation was 2.1% only if you take out the higher cost gasoline and food. Now we just take that 2.1% and back it out of the 1.8% growth rate and we are negative 3/10%.

 Now if you put gasoline and food back in the monthly inflation for the past two months it has been half a percent each month and since this is reported on monthly basis you have to multiply times 12 and that gives you a yearly 6% inflation rate when you include food and gasoline. So now to inflation-adjusted and find the true state of the economy you have to take that 1.8% growth rate and back out the 6% inflation rate and it gives you a -4.2%. This is the more accurate state of the economy. This is not taking into consideration higher healthcare insurance premiums that continue to rise or the higher cost of gasoline as it continues to go higher every week.

 The bottom line here is the true state of the economy is its real bad.

 The government is lying to us about everything.

 When the Federal Reserve chairman gets on the news with reporters and tells everyone he’s believes in a strong dollar and he has no intention of devaluing the currency or the dollar when all the evidence proves otherwise. It is about the time they intentionally do devalue the currency and this is what they do in every single instance where some countries currency has collapsed. Just ask Ron Paul he will tell you the exact same thing.

 A summary of everything I talk about in a list that negatively affects the economy.

 The Higher insurance premiums from Obama’s socialized health care costing the American people minimum of $250 billion a year.

 Higher cost of gasoline by itself is a full -3. % negative from the gross domestic product reported at 1.8%. This gives us a -1.2% just from higher crude oil refined prices and this does not include food inflation.

 The $5.3 trillion printed up over last four years by the Federal Reserve is severely devaluing the dollar. This is pushing up the cost of gasoline.

 Since Democrats took office in January 2007 they have deficit spent by $5.3 trillion. This is 100% the fault of the Democrats it all happened with Democrats in charge of Congress not the Republicans. This is the big news this no one is reporting it, not even Fox news or talk radio.

 The Democratic Party caused the bank collapse in 2008 not Wall Street or the banks. $683 billion was sucked out of the banking system by the Democratic Party’s government deficit spending in that five-month period just prior to the banks collapsing in September of 2008. To see the evidence of this statement check out this page which I’ve created a table this is the year-to-year spending and who was in charge of Congress at the time. All the information was taken from the government records. I did not make this up, it is the truth.  Is the democratic party Guilty of Seditious treason? http://tiny.cc/anjwq

To show you how much trouble we are in look at this pie chart of how much we are spending and how much we are collecting in taxes. We are so screwed.

 
 This pie chart does not show all the expenditures for 2010 the total amount was really a lot more than it shows. The tax recites is correct but the total outlays was $3.7 trillion not $3.5 trillion. Again I say we are so screwed.
 
 

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President Barack Hussein Obama and his entire Ilk of liberal and progressive Democrats are so mathematically illiterate it’s beyond belief. Their deficiency in math skills is to the magnitude they don’t belong in charge of anything that has to do with the economy or the country. It is as if we have a group of four-year old children in charge instead of adults and I think we would be better off with four-year olds running the country.
 

Points: President B.O. and his advisers do not realize the scope of the size of the automobile and truck fleet in the United States and that’s 260,000,000 cars and trucks. (260 million) this increases in size by 2 million cars a year as the population grows so does the fleet and so does fuel consumption even if they are fuel-efficient cars. As the number of people reaches driving age or about 2 million each year, cars are purchased adding to the fleet size and total fuel consumption increases. This is a moving target that as long as the population grows so will fuel consumption totals unless you collapse the economy.

 

 President B.O. and his advisers do not seem to realize we currently use 7 billion barrels of crude oil each year and that’s 583 million barrels each month. At 42 gallons for each barrel of crude oil this is 24,486,000,000 billion gallons of crude oil every month. Using just the $1.00 increase in the cost of a gallon of gasoline and to keep it simple, this cost the American economy $24,486,000,000 and that’s billions of dollars every month. This costs the economy $293 Billion a year. This is 2 Percent of the whole American economy or gross domestic product that just disappears into thin air. The bigger problems are food and everything else goes up with the cost of crude oil or gasoline in a like kind inflation percentage adding to the problem. For the report on total fuel consumption see it at this link.  http://www.eia.doe.gov/petroleum/

 

President B.O. and his liberal, progressive advisers and the Democratic Party are the groups that want gas to go to $8.00 a gallon. They haven’t got a clue what that will do to the economy or do they? I want to show you that with the kind of increases those so-called market experts and B.O are now talking about. I want to show you what $6.00 a gallon gas will do to the economy and the people.

 

 Barack Hussein Obama has stated he thinks it’s sociological and won’t affect the economy until it gets to $6.00 to $7.00 a gallon. I will show you the math that proves he’s either a complete idiot or he is trying to destroy the economy and the country on purpose. The numbers will also prove if he believes it’s only sociological and it is what he really believes then he is also an idiot, just like the rest of his ilk. The only part that may be sociological is, it really pisses off the American people. But as a whole nation it has a huge economic physically measurable effect on the country and especially once the price gets above the $2.50 a gallon price and now we are at $4.00 a gallon and the price goes up every few days.

 

 What I am going to do is show you the math in a progression from the $2.50 price of just 7 months ago back in September 2010 and up to the current $4.00 a gallon level. Then look at $5.00 $6.00 $7.00 $8.00 a gallon and figure the effects at each stage on the GDP and the country’s economy as hundreds of billions of dollars is shifted from all other sectors of the economy and diverted into crude oil and refined petroleum products. This is not psychological it is physical all we have to do is a little math to prove this statement.

 

Let’s use the Starting point of $2.50 a gallon gas in September of 2010 and  find the percentage of GDP that is spent on refined petroleum products to find the effects on the whole economy as the price increases. The gross domestic product for 2011 is estimated to be $15.2 trillion with a growth rate projection of 3.5% for the current budget year that started October 1, 2010 and runs to September 30, 2011. The numbers will be rounded off to nearest percentage and dollar amounts. There is only so much money in the economy at a given time including credit availability like credit cards. If things cost more from inflation or higher prices this back feeds into other sectors of the economy and takes away from the total number of products we can purchase with cash or credit. We don’t have a printing press like the federal reserve and we just can’t make money up as we need it. 

 

Liberal progressive democrats seem to think we all have wheel barrels full of cash just lying around waiting to be spent. B.O. on the campaign trail made a statement to a man asking about higher fuel prices and Barack Hussein Obama told him if he didn’t like it to just buy a more fuel-efficient car. Just like that B.O. takes it for granted the man can afford to go buy a new fuel-efficient vehicle. Now if the man is complaining about $30.00 extra a week in higher gas prices what makes Obama think he’s got thousands of dollars just lying around for a down payment to buy a new vehicle? There is no logic to what B.O. said and this is only a small part of why I call him an idiot. Now let’s get started on finding the truth about higher gas prices to prove it’s physical and not sociological.

 

My estimate is based on the cost of gasoline not a barrel of crude oil. The reason for this is we understand the cost of a gallon gas much more than we do the cost per barrel of crude oil. The reason I use total crude oil consumption is because there is refined crude oil in almost everything we buy. Gasoline is the cheapest product that comes from refined crude oil. Some examples would be Tires or anything made of rubber, diesel fuel, heating oil, or motor oil, plastics, fertilizers and thousands of other products all made from refined crude oil.

 

Every one of these products mentioned are much higher than the cost of a gallon of gasoline for those who may be critical of me using the cost of gasoline and matching it up with the total number of barrels of crude oil we use, if anything this would be underestimated since gasoline is the cheapest refined product coming from crude oil, so let’s continue.

 

September 2010. $2.50 base price x 24.486 billion gallons a month = $61.215 Billion monthly.

On a yearly basis x 12 = $734.580 billion

This is 4.8% of the gross domestic product and this is our starting point.

$2.50 to $4.00 a gallon = $1.50 x 24.486 billion gallons month of total crude oil refined= $36.729 Billion

On a yearly basis x 12 = $440.748 Billion

Added to the base price yearly of $734.580 billion we get a total yearly $1.175 trillion

This is 7.8% of the gross domestic product. This is where we are right now April 28, 2010

 

This is a 3% shift in spending from all other sectors of the economy and transferred into the higher cost of refined petroleum. The gross domestic product will not go up at this point. This will back feed $440.748 Billion out of other sectors of the economy and will not fully register in economic data for at least 2 business cycles and that’s 4 months from now. This is April and 2 business cycles put us into August or September 2011 before this shows up its full economic effects in the monthly data releases. The GDP rate of growth is expected to be 3.5% for 2011 but to find the true state of the economy we now have to back out the 3% that now is directed to higher fuel prices or inflation and that give us ½ percent in real growth for 2011 and that’s were we are right now, but we are not done yet, we have only started to disprove the notion or myth that higher priced gasoline is only psychological

 

The next price we look as is the physical loss of purchasing power effects of $5.00 a gallon gasoline.

 Now we will look at the physical effects of $5.00 a gallon from current $4.00 level.

$1.00 x 24.486 billion gallons month = $24.486 billion each month.

Multiplied for the price yearly x  12 = $293.832 Billion year consumption

Added to the $4.00 price yearly $1.175 trillion = $1.468 Trillion

This is 9.6% of the gross domestic product.

 

This 9.6% needs the base 4.8% of the gross domestic product back out from $2.50 a gallon gasoline price level and taken out and that gives us 4.8% negative shift in economic activity from other sectors. Then we take the expected GDP growth rate of 3.5% and we have in effect a negative GDP of -1.3%

 

It is at this point of gasoline prices at $5.00 a gallon that I think the economy will start into a second collapse and here are some of the reasons why. First after gasoline is food inflation that has been in lock step with the rising price of crude oil and refined petroleum products. In January of 2011 as a nation we did spend more money on food then we did on crude oil. This will also work the same way month by month like gasoline the additional money spent on food will go missing from other sectors. I calculated in January of 2011 that we spend $750 billion a year on food and that was based on an average per person eats $47.00 a week in food. This is what I could find and verify on several different websites and the average was $47.00. There are 308 million people according to the 2010 census. This means we spend an average of $2,444.00 a year per person on food and multiplied by 308 million people = $752 billion and that just disappears like gasoline.

 

I am not going to do the math here of food inflation increases. I just want people to know the scope of the problem is a lot bigger than just gasoline prices. But all the inflation or higher prices is most noticeable in higher refined crude oil inflation and this drives up the price of every single thing we buy.

 

 It is at this point the only reason I will go further doing the math is to show how ridicules the liberal fringe news media is and President Barack Hussein Obama and his liberal, progressive advisers and the Democratic Party to prove they really are total idiots. Then there’s the possibility they are doing it intentionally to destroy the country. I would like to know your thoughts on that possibility. There is a place for comments at the bottom of the page please leave your comments.

 

 Now we will look at the physical effects of $6.00 a gallon from the $5.00 level.

$1.00 x 24.486 billion gallons month = $24.486 billion each month.

Multiplied for the price yearly x 12 = $293.832 Billion

Added to the $5.00 price yearly $1.468 trillion = $1.762 Trillion dollars yearly

This is 11.6% of the gross domestic product.

 

 The 11.6% needs the base 4.8% of the gross domestic product back out from $2.50 a gallon gasoline price level and taken out that gives us a negative -6.8% from the growth in GDP of 3.5% expected growth rate. Then we have a net negative of -3.3% real GDP. In dollars at this point its $1 trillion that is diverted from other sectors of the economy. This is exactly like putting $1 trillion in a very big pile and setting it on fire. What happens to all petroleum refined fuels? We burn it. Also 72% of all crude oil is imported from other countries. We are totally at the mercy of foreign counties and that’s a huge security issue when 20% of the worlds crude oil supply comes from countries that hate us. This is also the exact equivalent of the economy shrinking in dollars from the expected $15.2 trillion down to $14.2 trillion. This also will greatly reduce profits for company and companies pay taxes on profits so less taxes will be collected and this means bigger federal and state deficits. The number of  jobs the economy can support is also greatly reduced because the money just diapered into our gas tanks. This adds up to massive layoffs of employees and greatly increased deficit spending from lower recites in payroll taxes.

 

 This does not include food inflation and we burn that too. Using a wild educated guess adding food inflation we could be missing at least another $300 billion a year before gas gets to $6.00 a gallon. It is my estimate from 34 years of following the economy as a business owner and doing cost analysis we will be gone before we reach $6.00 a gallon gas because higher fuel prices increase the prices every thing we buy not just gasoline.

 

But Barack Hussein Obama thinks otherwise he thinks its only psychological. He either doesn’t understand or comprehend the scope of the problem or doesn’t care. Then there’s the possibility it’s exactly what he wants to happen and that’s really what I think is happening. He wants to collapse the system or he is just plain stupid. There is no other answer like he’s smarter than the rest of us. I just showed you the math based on the latest government report of how much crude oil we use that proves to anyone with an ounce of common sense that Barack Hussein Obama is the dumbest man in the world.

 

The GDP numbers will go up slightly but nowhere near the amount of dollars the economy will go negative. There is no way out of this and the prices will continue to go up as the dollar declines in value. I believe it’s already out of the control of the Federal Reserve. They have to continue to expand the money supply to finance the deficit spending of the liberal progressive democrats and this will continue well into the year 2012. The alternative would be to cut every single expenditure of the federal government in half and that will never happen because of politics being what it is and the other part is this is what the Federal Reserve has to do by laws they are bound by they have to print or barrow up to the debt limit to keep the government running.

 

Americans will drive less and we will conserve gasoline, but the total effects will be a declining economy just like we used less gas after the bank collapse of September 2008.

 

We don’t buy barrels of crude oil we buy refined gasoline, diesel, heating oil, motor oil, and gasoline is the cheapest of all those products. So the real cost will be a lot higher than my estimates. This is all meant to show the direction we are headed in and the seriousness of the crimes being committed by the current politicians that still control the senate and the presidency. This will be the equivalent of genocide in the end and tens of millions of people will die in the United States and Billions worldwide.

 

 Printing more money will only make the matters much worse since that is what really did this in the first place. If they do print more money and I expect they will, it would accelerate to even higher crude oil prices and thus even higher gasoline prices.

 

I have heard a lot of talking heads say the federal reserve’s barrowing, printing or digitizing of money to cover the deficit spending gone wild isn’t getting into the streets. With three consecutive years of $1.5 trillion average for a total on and off budget spending at $5.3 trillion. These people don’t seem to understand what deficit spending is so I will explain. First of all every single dollar of this $5.3 trillion is being spent or has been spent into the streets of all 50 states and abroad. The deficit is the shortfall in taxes collected and regular expense obligations for the federal government. Here is a list of just a few, Social security monthly payments, Medicare, Medicaid, unemployment insurance, food stamps, the military, 2 wars in addition to the regular military budget and thousands of other federal expenses. In general 53% of the federal budget goes to some sort of socialism or entitlement programs. All these budget deficits are being spent into the streets every month and the whole world has been flooded with paper or digitized American dollars over the last 30 months. That is why the dollar is currently being devalued so severely. It usually takes about two years of a country dumping large amounts of its paper currency into a system for it to cause high inflation. We are now 30 months away from the bank collapse in September of 2008 and it was about six months ago that prices started to noticeably increase, so we are right on schedule. This printing of paper money is the main reason for the higher prices of petroleum products. It is a massive multi-trillion dollar printing and digitizing of the dollar that is causing the price increases.

 

 Now we will look at the physical effects of $7.00 a gallon from the $6.00 level to show the insanity of liberal progressive Democrats who would like to see gasoline at $8.00 a gallon.

 

$1.00 x 24.486 billion gallons month = $24.486 billion each month.

Multiplied for the price yearly x 12 = $293.832 Billion

Added to the $6.00 price yearly $1.762 trillion = $2.056 Trillion dollars

This is 13.6% of the gross domestic product at the 7.00 a gallon level.

 

The 13.6% needs the base 4.8% of the gross domestic product back out from $2.50 a gallon gasoline price level and taken out that gives us a negative -8.8% against the growth in GDP of 3.5%. Then we have a net negative of -5.3% real GDP. In dollars at this point its $1.3 trillion in additional money from the $2.50 a gallon price that is diverted from other sectors of the economy. I’ll say it again this is exactly like putting $1.3 trillion in a very big pile and setting it on fire. What happens to all petroleum refined fuels? We burn it. This -5.3% gross domestic product is right where we were shortly after the 2008 bank collapsed and were losing as many as 750,000 jobs a month. I expect this time around it will be much worse.

 

You should be able to tell by now that we will never make it to the liberal, progressives democrats and Barack Hussein Obama’s wanted price of $8.00 a gallon gasoline. These people really are clinically mentally ill. When you confront them with the facts they change the subject and divert to environmental issues or just blame it on the republicans and George Bush and that is not going to ever solve anything. That malarkey will not solve any of our inflation problems or bring down the price of gasoline. Trying to have a discussion with a liberal or a progressive is like dealing with a child like mind in an adult’s body. You will never get through to them and it’s a waste of time. The government reports I give at the beginning of this article are put out by the very same types using the total consumption of crude oil is a naughty thing.

 

The latest comments from Barack Hussein Obama is how to bring down the price of oil is.

 White House press secretary Jay Carney said at his daily briefing Tuesday that this is an apt week to highlight the tax breaks.

 “The oil and gas companies are all announcing their profits this week. They’re expected to be quite large,” he said. “And while we certainly are glad to see companies making a profit, we do not believe that. . . they need to be subsidized by the American taxpayer.”

 Okay……and? You raise taxes on them, so they raise their prices to keep up their profit margins and….? I mean, how was this supposed to work out for the rest of us?

 The United States oil and natural gas industry does not receive taxpayer-subsidized payments.

 

This is a liberal progressive talking point and it is the usual disinformation and class war always played by the democrats. The truth is the oil companies are just allowed to write off more of the money they spent to drill an oil well but not all of it. It is not the people’s tax money being given to the oil companies that is a lie and it’s not adding to deficit spending. It is just the oil companies being allowed to write off more of their expenses for which they would otherwise have to depreciate the expense over time which means they have to pay taxes on money they actually spent which they no longer have. The state and federal government does this to businesses all the time not just the oil industry and this is nothing new because I have had to deal with this myself going all way back to 1978 or for 32 years that I ran my own business.

 

As a business owner I can attest to this from experience there is equipment that I purchase and I pay cash for and I cannot write all of it off as an expense because the IRS requires me to depreciate equipment over time. This is the exact equivalent to me of paying taxes on money I do no longer have because I spent it on the daily operations of my business and how is that fair to tax me or any other business to pay taxes on money they longer have? I didn’t go on a cruise or vacation to Disney World with the money. I spent in the normal course of doing business. This tax back feeds into my profits that I may have and forces me to increase my prices to cover my costs of higher taxes on money that I no longer have. Do you work for free? Well neither do I.

 

Liberal, progressive Democrats consider this a subsidy as they do with any tax deduction because they think the money is theirs first and you get whats left over. One more example of this would be home mortgage loan interest tax write-offs. The Democrats want to do away with the public being able to write off the interest on their home mortgage loans. Their exact words are the government should not be subsidizing homeownership. It’s the exact same thing as what they call oil subsidies. The Democrats will never learn it is the people’s money first and not there’s. Keep voting for Democrats and you’ll keep getting more of this deception and disinformation.

 

If you really want to see the value home decline wait until they do take away the home mortgage interest tax deduction and your home will become absolutely worthless. Most people buy a home because of the tax deduction they get on their mortgage which means they get to keep more of their earned money and invest it in their home. When this goes away so will the value of your house and you will be able to thank the Democrats for that. This home mortgage deduction has already been limited once since Democrats have had total supper majority control of all branches of the government since 2007. The democrats limited the dollar amount to $400,000 and every thing above that you can no longer take the deduction for  the interest paid. Then we wonder why the housing industry is at all time record lows.

 

The United States oil and natural gas industry does not receive taxpayer-subsidized payments.

 

 Given the recent publicity surrounding this issue, this statement may come as a surprise, yet it is 100 percent true. Also true is that the industry pays more than $86 million to the government every single day and has an effective income tax rate of 41 percent. Why then have so many readily bought the notion that the taxpayers are supporting this highly profitable industry?

 

A fundamental pillar of the U.S. income tax system is that businesses are taxed only on net income. This means that there needs to be some practical method for businesses to recover costs. There are many tax code provisions that allow companies to recover their costs, but tax deductions and cost recovery mechanisms should in no way be confused with subsidies. 

 

For example, many inaccurately classify the ability to recover costs associated with drilling a well as some sort of unique subsidy for the industry. When companies drill, they incur intangible drilling costs, such as site preparation, labor, engineering and design. These “intangible” costs associated with drilling a well usually represent 60-80 percent of the cost of the well. Independent producers can deduct 100 percent of these costs in the year they occur while larger, non-independent companies can deduct 70 percent of the costs in year one and amortize the remainder over five years. 

 

This is the same treatment afforded many different types of taxpayers. Small businesses can expense 100 percent of certain equipment costs and mining companies can deduct mine development costs. Further, research and development (R&D) costs incurred by industries such as biotech, pharmaceutical and software firms can be immediately expensed.

 

As is the case with research and development, oil and gas development is no sure thing. Despite great advances in technology, drilling a well is the only means to determine the actual presence of hydrocarbons in reservoir rock or sand. And when companies drill, they often rely on new and innovative methods. While these methods have led to the recovery of domestic reserves few thought possible a decade ago, they remain, essentially risky ventures.

 

 Deductions allowed for the U.S. oil and natural gas industry are often more restrictive when compared with other industries. For example, in 2004, Congress enacted the Section 199 Domestic Manufacturers Deduction to spur job creation and retention for all businesses that grow, extract, produce and manufacture goods in the United States. Contrary to assertions, this is not a deduction unique to oil and natural gas manufacturing. It applies to all qualifying industries, from newspapers to home builders, electric companies to movie studios and — logically — oil and gas companies.

 

For most U.S. manufacturers, the deduction is 9 percent of their domestic net income. However, recent legislation has already penalized U.S. oil and natural gas companies by freezing their deduction at 6 percent. Oil companies are already being penalized and the liberals and progressives want to do it more. This expense will increase prices and will be passed on to the public, this means higher prices at the pump and if they don’t know what they are doing but they certainly should, or someone should tell them. I think they know exactly what they’re doing.

 

 The truth here is the oil companies are already being penalized and they are being taxed on money that they are spending to get the American oil for the American people. This is money that they no longer have that’s what the depreciation and depletion tax laws are all about more or less limiting the amount of money a business can write off even though they had to do it to accomplish their mission and to survive as a business.

 

 If you are a person working by the hour this is the equivalent of the government withholding tax money from your paycheck and then they tax you again on the after-tax money or your take home pay. Sales taxes are the equivalent of this type of taxing. This tax treatment of businesses is one of the main reasons tens of millions of jobs in manufacturing have left this country over the past 30 years. This is the atmosphere that the Democratic Party has created for small business and then we wonder why the businesses go to other countries to operate. This is not about the greedy corporation is about surviving as a business. If you are an employee and another company offers you more money then your current employer you will almost certainly go to the higher paying job. This is the same thing companies do and you say it’s because of greed well your guilty of the same behavior. This is also exactly why 80% of the economy is service sector and only 20% is manufacturing. The Democrats have chased the manufacturing out of the country with their taxing and regulation policies. It used to be exactly the opposite.

 

This is how these goof balls think and they think we the American people are stupid. Barack Hussein Obama and his ilk all need to go somewhere else other than Harvard or Columbia university for more education on how economies work because it is apparent he didn’t learn anything at either one of those collages he supposedly went to. He needs to ask for his money back, yes a refund to whomever footed the bill for his so-called education should demand to be reimbursed as the product of education was never delivered. I had a much better education at the 8th grade level. We have children running the country not adults.

 

William Buckley once said he would rather be governed by the first 400 people in the Boston phone book rather than 400 people from Harvard and I agree.

 

 But let’s look at those taxes on gasoline, shall we, and see who’s making how much money on a single gallon of gasoline or diesel fuel.

 

Gas tax table: A state by state report of Federal and state Gasoline taxes combined.

 

 

In my state and federal and state taxes are $.42 a gallon and the oil companies make about nine cents in profits for a gallon of gasoline. If I get 20 gallons of gas then the oil company makes $1.80 on an $80 purchase. The governments however make $8.20 in taxes on my 20 gallon purchase. So I ask you once again who’s making all the money the government or the oil companies? The government doesn’t own one oil company or one pipeline, they have no investment in the oil industry and yet somehow they seem to think that they are entitled to almost 5 times more than the oil companies that has done all the work. The truth of the matter is the government does under these circumstances own all the oil companies and they are making all the big money not oil companies.

 

So while the Liberal Democrats are playing class wars and trying to direct all the anger you have from higher gas prices at the oil companies the people are allowing them to get away with it. The Democrats are putting another commission to investigate price gouging in the oil industry I’ve seen this movie before. Nothing will come of it except to put more blame on small businesses like gas stations and the oil companies. This is just a continuation of the tactics of lies and disinformation I have seen the Democratic Party do for my entire life and I have watched liberal, progressive democrats do this for more than 40 years now. This will not change and the democratic party must be and will be beaten so bad in the 2012 elections that they become totally relevent.

 

The bottom line here is the higher gasoline prices come from the out-of-control deficit spending of Congress being controlled by the Democratic Party from January 2007 to 2011. It is the $5.3 trillion in unearned income made up by the Federal Reserve to finance the deficit spending that is causing all this inflation in the price of crude oil and refined petroleum products and the higher cost of food. The country is still under control of the Democratic Party federal spending and lack of a budget up to September 30th 2011. Make no mistake about it the liberal fringe news media and the Democrats will constantly blame it all on the Republicans and the stupid people will always eat these little balls of crap. I am talking about people who vote democrat because if they were smart people they would vote for republicans.

 https://jamesgarrett42.wordpress.com/2011/04/26/obama-and-the-democratic-party-are-guilty-of-seditious-treason/

 

The question I have for the general public is under the above circumstances do you think we’ll last until January 2013?

 Here is the timeline to our financial ruin.

 

Currently gasoline is around $4.00 a gallon nationally. At the current rate of price increases from February to April 2011 it has gone up about one dollar a gallon in that three-month period. If the dollar continues to decline in value at a steady rate and the price of gasoline increases at the same rate it has for the last three months. This would mean that by the end of July beginning of August we will have five dollar gallon gasoline. Now this would only count if there are no natural disasters or political disasters in the middle east that would disrupt the flow of oil and only if nothing happens over the next three months. An attack on Iran from Israel before august 20th 2011 is very likely. That is when the nuclear reactor is scheduled to go online in Iran, so hold on to your hats its going to be a wild ride. Israel did this to Iran’s nuclear reactor and to Syria both before they went online, so you can expect it to happen again.

 

Also if the dollar’s value starts to decline at a faster rate or goes into a free fall we could see five dollars a gallon in a few days. How far and how fast can gasoline go up an additional 1.00 a gallon? Do you remember when Hurricane Katrina hit the golf of mexico offshore wells and is created a supply disruption? The result of that natural disaster was gasoline going from two dollars a gallon to $3.50 a gallon in just 48 hours. Just do an overlay of that scenario once we are at five dollars a gallon for gasoline, in two day’s we could have $6.50 a gallon and it doesn’t have to be a Katrina type disaster it could be a man-made intentionally created disaster like Israel bombing Iran.

 

Has anyone noticed the Middle East is on fire? 20% of the world crude oil supply production comes from those countries and there are two possibilities. First there is the disruption of oil supply from the insurrections now taking place. It doesn’t matter that we don’t get very much oil from that area of the world. Disruptions in supplies anywhere in the world will force the price of crude oil up in the commodities market and that is the price we pay.

 

A second possibility is any new governments that come from these insurrections in these Moslem countries will almost definitely be hostile to the United States government and/or the American people. Moslems are taught to hate Jews and Americans from birth. It is highly unlikely that any of these new governments that will come from these insurrections will treat United States favorably. 

 

They will do one of two things they will completely cut off the oil supply to the United States for supporting Israel or they will just cut back on the supply of crude oil production to the point where they push the price up intentionally to destroy the United States economy, Europe and therefore Israels economy and they will be completely at the mercy of the Moslems as they are surrounded by them and so will we. Then we get the real Armageddon as israel has a minimum of 80 nuclear bombs and could have more than 200 of them but 80 will do the job. The never again slogan becomes a reality.

 

Anyone who says differently has no idea what they’re talking about. I have been following the Moslem fanatics for 42 years. This is the most likely scenario that will come from all this Middle East turmoil. A Moslems idea of democracy is entirely different from that of an American citizen. Sharia law is a dictatorship much worse than total communism under Stalin and much more brutal. I read this in the Koran. I have also gathered information over 42 year period for which I have committed to memory.

 

I don’t need some talking head telling me it’s a peaceful religion, they have obviously never read the Koran and they have never studied the history of the Moslem religion and its people as I have. The bottom line on this subject is we are screwed one way or the other these new Moslem governments can either control us or destroy us economically at their will. This is due to an energy policy driven by the liberal, progressive Democratic Party for over 34 years now and I want you to know the truth. The Republican Party has tried over and over to reverse some of the damage that has been done to our oil industry and even when they had majority control the Rhinos in the party voted with the Democrats. A rino is a Democrat in disguise as a Republican. Arlen Specter for example.

 

Getting back to the timeline of when the cost of gasoline will certainly disrupt and/or destroy the American economy. As I’ve said above and we have look at the math is somewhere around six dollars a gallon for gasoline and the negative effects will ripple through the economy in a negative way that will leave us in a free fall economically and millions of jobs will be lost and this will feed the hyperinflation monster that will destroy us. This will come no later than the last quarter of 2011 or into the first quarter of 2012. This is where things really get bad. We will never get to $8.00 a gallon gasoline except for maybe the last few weeks or days before total economic collapse of the economy and the Government. The math just doesn’t work out to survive what I have explained here. 

 

Rather than the write another 250 pages to explain everything about how we got here and where we are going right up to the very end and I did point out in a book that it would be all of the above and a lot more. I would ask you to buy a copy of my book called 2012 what’s really going to happen in 2012. I wrote this book in April and May 2009 just after Barack Hussein Obama was elected. So far my predictions based upon my knowledge in business, economics and politics are right on schedule.

 

For a copy of the book 2012 what’s going to happen in 2012. See the cover in the right hand column top of this page it will take you to Amazon on-line book store. It’s also available at all on-line book stores if you have a club membership already just search the title.

 

 Believe it or not, even know I expected it all happen and it still scares the hell out of me. As I worry about my family, my friends and the American people and what will happen to them. My predictions or forecasts’ are not based on Bible prophecies or Nostradamus predictions or anything like that, so if you’re worried it’s a religion thing, it’s not. But my forecasts most certainly do fit the biblical end Times predictions for those of you that would like it to be so.

 

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I knew for the last 30 years the democrats wanted to do what they are doing today. Little by little liberal, progressive democrats over the very long period of time of 100 years have been changing the country slowly to socialism. I watch Glenn because he affirms what I already know to be true, but he teaches a lot more in detail and it’s like going back to school when he gets out his black boards. I hear he has three now.

 I wrote a book 20 years ago that predicted what is going on today in our politics and our economy. We are making the final changes to a proven failed political and economic system of socialism. Anyone who says that Europe’s doing OK needs to take a better look. Europe’s economy has been in a constant state of recession for over 40 years. Their normal unemployment rate is always above 10%. There’s very little industry because of supper high taxes on business. In France their two biggest industries are wine and cheese and that’s not a joke, those are the facts. The people who do work in the private sector are taxes at 70% when adding their payroll taxes and there sales taxes on products. For example they have a $5.00 a gallon gasoline tax to pay for there socialized healthcare system.

 Here is our big problem, we can’t afford anywhere near a 70% taxes and pay our existing bills to. Europe started out as socialist countries after the Second World War. They were rebuilt under the socialist economic model. We are structured under a capitalist model and were charging to hard left socialist. The country is already bankrupt. Where is all the money going to come from to support all these new social programs as we go all the way to a European style of socialism? I have done the math and the moneys just not there, even with the higher taxes included in all these new programs. It’s just not economically sustainable from the start.

We don’t have to wait 4 years to see if it works. The negative economic effects from the new socialized healthcare will be Immediate. In 2011 the new healthcare insurance premiums will have a direct negative effect on the economy. There are 180 million Americans with paid health insurance coverage. Everyone I have talked to has to pay an increased premium of $1,200.00 to $3,600.00 each person on their policy. Takeing the lower amount of $1,200.00 and multiplying that times 180 million Insured people will cost Americans $216 Billion in 2011. We are not getting more of a product or service we are just paying a lot more for the same thing. This is the definition of inflation, when costs go up the money disappears into tin air.

 It’s not so much about the cost of the socialism today as it’s about the confidence of the American people. Even before the jobs are lost and the taxes are taken to support the new socialism. Then we also have to consider the confidence of our foreign trading partners, will they lose confidence in our currency? Will they be able or willing to purchase our debt bonds to finance all our existing and all our new socialism when they know they can’t afford their own? I say no they won’t buy our debt bonds, since China has already dumped $50 Billion back into the market. There is a trick the chinese could use to combat our money printing and your going to love this. I expect if they do continue in the future to purchase our debt they may play the same game we are. The chinese government has a printing press like we do and they can print or digitize their currency to purchase our phony money with their phony money. This could offset their looses in the face value of our debt bonds and at the same time get paid interest on their phony money.

 Everything Glenn Beck says will come true and we only have to wait 2 years and by 2012 we will see it all unfold. Glenn has 10 million followers on the radio and up to 3.5 million on Fox news. That compares to MSNBC 350 to 500 Thousand. For the nut job people say Glen Beck is, he has as many 10 times as many followers as other like kind news programs. MSNBC says it’s because Americans are stupid and that could also be part of why there ratings are so low. I love Glenn Beck’s message.

2012 What's really going to happen in 2012

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What is a lobbyist and why do they exist? Lobbyists petition congressmen to prevent government from passing laws that will hurt their industry. On the other hand they petition congressmen to vote for laws that give them an advantage over competitors. This is a vicious cycle that never ends. First of all it’s a violation of the constitution to pass laws that restrict commerce. Secondly it would therefore be an obstruction of commerce to give one business favor over another by legislation that would restrict the free flow of commerce. This is also why under constitutional law we are not under a Nazi, Fascist socialist or Communist economic system. At least were not supposed to be.

But they do it anyway and here is why. This stated after the First World War and got a lot worse after the Second World War. The politicians learned they could make millions in campaign contributions, using first the threat of regulation on particular industries and then getting bribed or paid in the form of contributions not to pass those restrictive regulations. This is really illegal under the founding rules of our government, but congress has changed the original laws and made new ones to fit their greedy needs. Now we have the problems that we have on account of it. It is no more than legalized bribing of a politician. This as most know is also illegal. So what this all boils down to is we have a bunch of crooks in Washington running the country. But it has been made legal by the politicians.

At the same time the public blames the corrupt corporations for all their problems and the real truth is it’s the corrupt government that creates all the problems. The politicians and the unions are always blaming big business for why things are so hard on you. But I have asked many people who were on a rant about how it’s the corrupt corporations this question. I asked them to name one time you have been ripped off and had something taken away or stolen by a corporation. They had no answer. They were however smart enough to realize after a few seconds of thought that they never had lost anything to a corporation and that’s what their unions that told them all their problems were from the greedy corporations. Others said that’s what they had read it in an article. No one I had ever ask that question could answer, not one.

 This is a big part of the disinformation game of the politicians shifting blame. Everyone else is at fault and it’s never the politicians fault. The most recent example is the healthcare bill 2,700 pages of new regulation. It’s those greedy insurance companies and they are the cause of all your healthcare expense problems. But in fact it is the regulation on the healthcare industry over the past 40 years that makes the healthcare cost goes up a rate of 7 to 10% every year. But since you pay the insurance companies you believe they are the bad guys. It’s a giant shell game of shifting the blame and always hiding the truth from you. This is the case in every industry in the country. They are only trying to survive as a business. They provide jobs for 80% of the working public. How can they really be the bad guys?

 If government was not constantly passing new regulations or laws to restrict business in some way there would be no business for the lobbyists and if there no demand for an industry like the lobbyists then it would just disappear. The corruption is built into the system we now have. Since Washington has become nothing more than a law factory this will not change. If you don’t play the game, you don’t get the bribes or payoffs in the guise of contributions and you don’t have the money to get reelected. This has created a very corrupt political system and there seems to be no way to correct the problem. The only way we could possibly change it, is if we could get 535 new congressmen and women to promise in a written contract to stop it and that’s not going to happen.

2012 What's really going to happen in 2012

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 • A new 3.6% tax on all investment income including capital gains. That means that the capital gains tax rate (including California state tax) will rise to 33.9%. The tax on dividend income will rise from 15% today to 53.7% including California tax.

 • Additional Medicare tax on self employment income and wages. This removes the current cap on wages subject to this tax and it will effectively move the top income tax rate from 35% to 43.4% within a couple of years. Add in the California tax again and would then be close to a 54% marginal tax rate. I believe that this is the highest of any major industrialized country. But because spending is so high we would still have $1 trillion-dollar annual deficits even after this tax.

 • There is a 2.9% tax on all medical “devices”, which basically means everything used in a doctor’s office or hospital. Including gowns, syringes, and the like. This will increase health care costs for everyone who does not get free government insurance.

 • The deduction for Medical expenses is currently limited to those expenses that exceed 7.5% or your income. This will be raised to a threshold of 10% of your income. This means that fewer people will get any tax relief from medical expenses they pay for themselves.

 • There are various taxes on anything a person might do to pay for their own medical expenses. Things like Health Savings Accounts, Cafeteria Plans, and Flexible Savings Accounts are ways for people to save their OWN money for their OWN medical care on a pre-tax basis will be limited and taxed. This is all part of the way that President Obama gets to government-run health care by making it illegal or costly to pay for your own care so you have to go to the government.

 • A 10% tax on tanning services. I call this the “Jersey Shore tax”. This one has to be really upsetting to ‘The Situation’, Snookie, and Pauly D.

 • A tax on self-insured health plans. This is another penalty on those who try to pay for their own health care.

 • A new tax on pharmaceutical manufacturers. This will raise the price of drugs for everyone who does not get them from the government for free.

 • A new tax on “Cadillac” health plans. This is an up to 55% tax on any health insurance that costs over about $800 per month including employee and employer contributions. This tax does not apply if you are a union member or your plan is from AARP or Blue Cross Blue Shield of Michigan. These are major Democratic constituencies and they exempted them. For everyone else, this discourages comprehensive health coverage. Isn’t that what the President says he is trying to achieve? Like most of what the President says, his actions are not even close to his words.

  There is a new tax on all ‘for-profit’ health insurance companies (except for a few favored ones). This will also raise the costs of premiums for everyone not getting free care from the government.

 • If you don’t buy health insurance (as dictated acceptable by a new federal czar), you will be fined up to 2.5% of your income even if you pay all of your medical expenses yourself. If your company does not provide said health insurance to all employees, the company will be fined up to $2,000 per employee.

  61% of Americans (including both Democrats and Republicans) are against the bill, those for it the majority have no idea about the taxes included in it. The 2300 page bill was finally released to Republicans TODAY and will be voted on in less than 48 hours.

 2012 What's really going to happen in 2012

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