The Greatest Fiscal Nightmare on Earth: The Obama Economy

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Courtesy: Dave Granlund

By Ann-Marie de Veer
Saturday 15 August 2015

Welcome to the greatest fiscal nightmare on Earth, aka. the US economy, in which the US dollar, the self-appointed primary reserve currency of the world, has been intentionally debased by the Obama regime, via Quantitative Easing (QE), not just once since the turn of the Century but three times, in 2008, 2010 and 2012.

As of 11 August 2015, the US National Debt (USND) had risen to US$ 18.3 trillion (US$ 18,341,300,539,990) while the US Gross Domestic Product (GDP) was just US$ 17.8 trillion (US$ 17,840,639,935,823): in essence, the Obama regime in the US had simply spent more than the economy had earned and the debt to GDP ratio of 102.8% demonstrated that quite succinctly. Clearly all is not well in this bastion of economic virtue, an oxymoron of gargantuan proportions in this context, given the vast majority of economists tend to agree that a National Debt Ratio (NDR) of 102.8% to GDP is far too high for the long term sustainability of any economy and they are mostly unanimous on the issue that any country with an NDR above 110% is in serious trouble and will need some financial restructuring and/or debt relief to recover. The current financial crisis in Greece is a good example of this rationale at work.

Nonetheless, while the Obama regime is keen to promote a rose-tinted view of the US coping with the issues of a faltering economy that is clearly under considerable stress, the reality is the country is in fiscal decline, although many would argue it is in fact in terminal decline, and the vast majority of its people can look forward to nothing more than the continued erosion of their health and wealth for the foreseeable future. As some of the recent data on the US economy demonstrates, all is not what it seems:

Debt per Person: US$ 57,054
Debt per Taxpayer: US$ 154,471
US Population: 321,473,164 - US Workforce: 148,915,563 - US Income Taxpayers: 118,731,069 - August 2015

Fifteen years earlier, as the World spun into the 21st Century, the situation looked very different:

Debt per Person: US$ 20,099
Debt per Taxpayer: US$ 54,420
US Population: 282,452,377 - US Workforce: 135,290,340 - US Income Taxpayers: 104,328,701 - August 2000

That is, both the National Debt per Person and the National Debt per Taxpayer have increased by approximately 183% while the Consumer Price Index (CPI) has risen just less than 30% in the same period. In other words, the rate of indebtedness per person or per taxpayer has risen 6 times faster than the rate of the CPI. Clearly, the Obama regime, akin to the autocratic war criminal George Bush who preceded him, have been printing and spending money at an obscene rate and obviously much faster than the economy can reasonably justify in respect of routine inflationary processes. The notion that the US economy will be able to service this debt in the future is patently fanciful.

What is even more interesting is the effects of this fiscal incontinence on the average working man or woman who have experienced a severe reduction in their disposable income during the last 15 years. In 2000 the median income per annum was US$ 28,562 and now, in 2015, it is US$ 28,877. If the median income of 2000 is adjusted for inflation, based on the aggregate CPI for the same period, then it should be approximately US$ 37,130. In other words, not only have successive US regimes been woefully irresponsible in printing money they don't have and then spending it on illegal wars they are known to have started, they have now compounded their incompetence by presiding over the greatest decline in living standards that the people have experienced since the end of World War II.

Courtesy: Dave Granlund

There can be no doubt whatsoever that the massive increase in the US National Debt and the subsequent erosion of adequately remunerated employment are having a disastrous effect on the American people and the nation as yet further data testifies:

Official Unemployed: 8,240,662 (5.5%)
Actual Unemployed: 16,289,542 (10.9%)
Living in Poverty: 43,856,094 (13.6%)
In Receipt of Food Stamps: 45,358,099 (14.1%)
In Receipt of Social Benefits: 159,915,494 (49.7%)
Unfunded National Liabilities: US$ 97,309,140,112,743 (US$ 97.3 trillion)

Of course, the Obama regime could argue that their Total National Assets of US$ 119.3 trillion (US$ 119,375,843,417,346) would be more than enough collateral to cover their liabilities but in reality, the best they could expect to get in realising any of those assets is at most 50 cents on the dollar and more likely somewhere between 20 and 30 cents. The Greek firesale of €50bn in state owned assets in support of its current bailout from the Troika is yet another good example of the realities of nation states attempting to liquidate their assets: Greece, and the Troika, already know that they are unlikely to get 50 cents on the Euro in their forthcoming sales.

The fact is, the US is technically bankrupt.

Nonetheless, the Obama regime is about to embark on yet another round of QE in a desperate attempt to lift the economy out of the mire in which his predecessor had firmly placed it at the beginning of the Century. The notion that by printing yet more fiat money, i.e. debasing the currency, and then using it to purchase worthless treasury securities, is going to somehow inject the liquidity, aka. cash, that is needed to reinvigorate a moribund economy, is patently absurd. The fact that QE1, QE2 and QE3 were used as fiscal instruments to recapitalise banks and businesses, aka. Wall Street, that had failed in the wake of the Great Recession, is common knowledge while Main Street, aka. the ordinary American, has continued to suffer.

That the country needs a working population with sufficient disposable income to generate growth and prosperity for its people who will, in turn, lift the nation out the bog in which it is firmly stuck, is obvious.

The fact that this fiscal nightmare is unlikely to end in the near future is equally obvious.

A failed state signs its cheques with the blood of its people.
Ann-Marie de Veer