How Deep Are We?

Sorry about how late this came out, I have been involved with rendering unto Caesar this week. Don’t forget your corporate returns or extensions are due Monday March 15, 2010.

Father’s Day 1964, the Phillies’ pitcher, a father of seven, was starting against the Mets. Ninety pitches later, the pitcher had struck out 10 batters and seen 27 batters retired with not one batter reaching first base. It was the first perfect game in 86 years in the National League and the finest hours of the future Hall of Famer’s baseball career.

Two weeks ago, Senator Jim Bunning of Kentucky battled on the Senate floor objecting to Harry Reid’s call for unanimous consent to waive through the $10 Billion spending bill that would extend unemployment benefits, make payments to doctors under Medicare and Medicaid, extend satellite TV to rural America, authorize expenditures in the Department of Transportation and a few other little ad-ons that our congress always slips on to any bill with any significance or importance. His only demand, “Show me how we are going to pay for it!”

His own party leadership abandoned him; Sue Collins from Maine said that Republicans did not back Bunning. Was he trying to stop supplies to the military, ground rescue flights to Haiti or Chile? No, he was holding up a spending bill impressing the point that we had no idea how we were going to pay for it! “If we cannot pay for a bill that all 100 senators support,” Bunning said, “how can we tell the American people with a straight face that we will pay for anything?”

His behavior made the case that neither party appreciates how deep in debt we are! It made some of us look into the chasm and wonder if there is a way out or will it continue to get deeper?

The bill was finally passed after Bunning was booed for five days, but what a game he pitched! Oh, that Phillies pitcher from Father’s Day 1964 was the same Jim Bunning in the Senate! Maybe his best game yet was his week in the senate holding up that bill!

So where is all of this spending coming from? George Bush added $4.122 Trillion over his eight years in office, the biggest increase by any U.S. president. On March 17, 2009 the National Debt surpassed the $11 Trillion for the first time ever. On September 30, 2009, the fiscal year 2009 ended with a $1.42 Trillion deficit. When submitted in January 2010, the 2011 budget was projected to be $1.3 Trillion. That deficit number then went to $1.4 Trillion, then $1.6 Trillion, $1.7 Trillion and has now ballooned to $1.8 Trillion! Almost ½ Trillion Dollars in about two months! The 10-year deficit projection has gone up $2.3 Trillion in that same time frame! Doesn’t it just give you a warm fuzzy feeling?

So does anyone know what our National Debt is now? Let’s all go to the official National Debt Clock together and get dizzy watching the clock spin! Right click on this link: www.usdebtclock.org and open it in a new tab. Then after getting sick looking at it, come back here and lets see what it means.

When I looked at it, it was $12,550,345,638,432.00. Nice cozy little number. Did you notice how fast the numbers are spinning? At $1.8 Trillion per year, we will go in debt at the rate of over $150,000,000,000.00 ($150 Billion) per month, $34,615,384,600.00 ($34.6+ Billion) per week, $4,931,506,850.00 ($4.93+ Billion) per day, $205,479,450.00 per hour, $3,424,657.50 per minute and $57,077.63 per second. In the time it will take you to read this post today, the government will have gone in debt more than an additional $34,000,000.00. More than most of us will ever gross in a lifetime! I can’t even imagine how I could even dream of ways to spend that much in one year! Seriously, look at these numbers! $150 Billion in one month in new debt!

This is government out of control! And we haven’t seen the worst of what they want to do yet! We haven’t even gotten into Healthcare Reform, Cap and Trade, Social Justice programs etc. I guarantee you that these programs will just speed up the National Debt Clock, not slow it down. Fannie Mae, Freddie Mac, Social Security, Medicare, Medicaid, U.S. Postal Service, Amtrak… need I go on. They prove our government’s fiscal record!

So what causes these numbers? The federal government is growing to over 2.15 Million employees in 2010. This will be the first time ever that the government workforce has exceeded 2 Million employees!

In occupations that exist in both the private sector and the federal government, the average cost of workers is $67,691 per year in 2008 for government employees and $60,046 per year in the private sector. An increase in salary costs of $7,645. Add to that the value of health, pension and other benefits; government employees were an additional $40,785 per year in costs and private sector were an additional $9,882 per year. The combined average costs per year were $108,476 per government employee while the private sector was $69,928 per employee. That is $38,548 additional the government spends per employee than comparable private sector employees cost their employers. Makes you want to go to work for the feds, almost.

In 2008 we spent $29 Billion on international affairs other than the military. In 2011 it will be $54 Billion!

Dependency on the federal government has jumped over 31% since 2001. There are now 60.8 Million people dependent on the federal government for daily housing, food and healthcare! These numbers are increasing by the effects of the recession and the economy and also by the aging of our average citizen. Yes, the baby boomers are filing for Social Security in ever increasing numbers, a 19% increase last year! Then add Obama’s efforts to expand dependency on the government and lookout!

53% of all immigrant families with children are collecting at least one form of welfare from a government program including food stamps, Medicaid and free school lunches. This number includes the legal immigrants! Take them out and the percentage of illegal aliens on welfare drastically increases. Yet our borders remain unsecured, our factories are employing illegal aliens without any federal interference under Obama and Napolitano, our legal immigration levels are at the highest level ever and we are suffering from 9.7% official unemployment and exceeding 17% in the real unemployment and underemployed numbers. Immigration of people who cannot add to our economy and society must come to an immediate halt!

Federal Reserve Chairman Ben Bernanke recently told Congress, “Unless we demonstrate a strong commitment to fiscal sustainability in the longer term, we will have neither financial stability nor healthy economic growth.”

Interest payments on the debt alone cost $452 Billion last year, the largest spending category other than Medicare/Medicaid, Social Security and defense.

The United States first went into debt in 1790 when it assumed $75 Million in the war debts of the Continental Congress. Since then it has only been free of debt once, fiscal year 1835. Now it stands at $12,550,419,077,848.00. It has gone up quite a bit since I checked it a few paragraphs ago! It now exceeds 80% of our TOTAL ANNUAL OUPUT OF THE ENTIRE U.S. ECONOMY (GDP)! That is totally unsustainable! We are going to go bankrupt!

Debt is financed by the sale of Treasury bonds and bills. Fortunately for right now, these are still seen as the world’s safest investments. Who owns these debt instruments? China (the largest), Japan, OPEC nations, United Kingdom, Brazil, Hong Kong, Russia, Caribbean Banking Centers, Taiwan, Switzerland, Luxembourg, Canada, Germany, Ireland, Korea, Singapore, Mexico, Thailand, India, France, Turkey, Poland, Italy, Netherlands, Egypt, Colombia, Belgium, Australia, Sweden, Israel, Spain, Chile, Norway, Philippines, Malaysia… go to www.ustreas.gov/tic/mfh.txt if you want to see the amounts recently purchased and by whom. But I think you get the picture, they are mostly countries that aren’t in much better shape than us and a few countries that their real level of friendship is questionable.

Former U.S. Federal Reserve Chairman Alan Greenspan said he’s not “overly concerned” about the dollar’s weakness in the markets. However he is very concerned about the long-term debt costs of our national deficit and debt! “There are equations in which certain relationships become progressively explosive” when he referred to our increasing interest payments and rising national debt.

On February 3, 2010, Moody’s Investors Service fired the shot across our bow, warning that our “triple A credit rating would come under pressure.” In an additional note to the warning, they said, “Unless further measures are taken to reduce the budget deficit further or the economy rebounds more vigorously than expected, the federal financial picture as presented in the projections for the next decade will at some point put pressure on the Triple A government bond rating.” OUCH! Ask any corporate bond expert what this will do to a company trying to finance its debt! Armageddon may be an easier fight.

It now becomes simple economics. With the debt to GDP ratio closing faster and faster to a 1:1 ratio, we are going to see greater problems in debt financing and interest costs. Investors are going to move to higher return instruments other than the US Government instruments. Investors are going to move to safer instruments. Investors are going to increasingly demand higher rates. Investors are going to increasingly demand safer investments. Market pressures on interest rates are going to push them higher with increasing debt forecasts for the next ten years, deficit pressures will increase the cost of interest costs for the national debt, further increasing annual deficits and most importantly for immediate effects on us the citizens, our interest cost will go up, causing additional costs to businesses, higher pricing for goods and services and all around inflationary pressure on our economy. Adding additional pressures of lower revenues to the government from individuals and corporate taxes due to higher costs. It just doesn’t get any better unless we cut the deficits now.

How deep are we? Deeper in a chasm than we can ever get out of unless, we stop excess spending now, reduce our deficits now and bring our national debt down. This isn’t for us anymore, we have already blown it. This is for our children, our grand children, and our great-grandchildren and beyond. We must deal with this now or it will never be solved! There are only a few in Washington DC that understand this. Bennett, Hatch, and Matheson do not. There records prove it. What you are hearing on TV, radio, Internet, etc. right now contrary to this is nothing but election BS! Bennett is never a greater conservative than the year he is running for re-election. If there is a microphone or camera within a one-mile radius of him, he will find it and tell you how important he is to Utah! If only he would have voted that way the last 18 years! Don’t listen to what they say now, look at their voting records and see how much a part of the problem all three of them have been over their terms. They need to come home and let those who understand the level of crisis they put us in go and try and fix it. And by fix, I mean cut spending like there is no tomorrow. Because there really is no tomorrow anymore. We already spent it and enslaved it with debt.

Senator Jim Bunning has had a couple of incredible games, Father’s Day 1964 and March 2010. Hopefully his latest has got the spectators interested in the game again! Thank you Jim! You woke us up from our naps.