Despite enormous federal spending, deficits, and debt, many
Americans remain relatively unconcerned. With evidence of
uncontrolled debt’s consequences so clear in Europe, how can so
many so easily ignore it at home? The answer is that competing
economic realities divide America, obscuring our fast-approaching
tipping point.
Under the President’s own budget and estimates, the deficit this
year will be $1.327 trillion. If correct, this will be the fourth
consecutive budget deficit over $1 trillion and the highest deficit
since 2009. Prior to this, America had never had one deficit over
$1 trillion.
This year’s $1 trillion-plus deficit will amount to 8.5 percent
of GDP. Excluding those of the previous three years, it will be the
largest since WWII. Under the President’s own assumptions, the
deficit will not fall below 2.7 percent of GDP — and not reaching
that until 2018 — in any year of the next decade. As recently as
2007, the deficit measured just 1.2 percent of GDP.
Under the President’s own budget and own estimates, the size of
government never drops below 22 percent of GDP — meaning
government will consume almost a quarter of all America produces
for the foreseeable future. Excluding the previous three years, the
budget’s lowest level would be the government’s
highest in 20 years.
Finally, under the President’s own budget and estimates, debt
held by the public will reach $11.6 trillion this year — double
2008’s $5.8 trillion level.
Prior to the recession, such levels of spending, deficits, and
debt were unthinkable. During the recession, they were seen as
unavoidable. Now, many seem to believe them acceptable. How can so
many not see spending and debt’s danger? It is not unseen, but
rather seen through an alternate economic reality.
In the real world, the private sector is the producer and
government is the consumer. In the alternate economic reality now
pervading much of America, the reverse is believed true. This
alternate reality is increasingly accepted by the increasing
numbers who are decreasingly dependent on the private sector and
increasingly dependent on the government for their economic
means.
The engine of their economy is government. For them, government
does not consume from them, it produces for them.
According to Congress’ official tax estimator, the Joint Committee
on Taxation, in its 2/24 estimate of taxes paid for 2012, 52.9
percent of those filing taxes will pay just 6.8 percent of total
taxes — social insurance, excise, and income. Their share of
income taxes — due to refundable credits, which pay
recipients in excess of their tax liability — will be a
negative 3.1 percent.
We marvel at Greek rioting over reduced government benefits,
even when bankruptcy is the alternative. But seen from an alternate
economic reality, it is perversely understandable. They simply are
fighting for the only economic reality they know.
Assuredly, the cries of impending collapse have been made there
— as they have been made here — for some time. Yet government’s
response — both there and here — has been to increase the size
and scope of its extent and spending. As in the fairy tale, it is
hard to believe the cries of “wolf,” when the wolf neither appears
nor is even regarded.
California offers a closer view of the same picture.
Government’s spending and extent creep inexorably until many no
longer know anything else. What they then “know” — their daily,
lifetime experience — is that the relevance in their lives is not
economic theory, regardless of analytical soundness, but
government.
Its fullest manifestation becomes that of the Greek rioters.
They become worse than the Luddites, who merely sought to stop
progress, and instead seek to refute reality itself.
While government can enable people to perceive a “reverse
economics,” it cannot in fact reverse economics — any more than
Canute could command the tide recede. Economic reality can only be
put off temporarily by ever-widening circles of subsidy: the
government’s redistribution of wealth through taxes, then
redistribution through borrowing at home, and finally
redistribution by borrowing abroad.
With each widening circle, its cost escalates. Ultimately
someone, if not everyone, balks — producers’ efficiency
diminishes, creditors cease to lend. The nation goes from tipping
point to tipping.
Until then though, the alternate economic reality creates an
alternate perception. People see the same things, but interpret
them entirely differently. So, here and now. Despite our horrific
spending and the debt problems America faces, a large percentage of
Americans do not fail to see, but their altered economic reality
causes them to not see crisis, so long as government keeps
spending.
Bill Hussein O'Stalin| 4.24.12 @ 7:45AM
Good comments.
The reason most Americans don't care though, is that around half don't pay taxes and could care less about the Constitution or losing it.
In the estimation of the bottom feeders some new benevolent force will come along to house, clothe and feed them.
That's all they care about but they don't realize it's a fairy tale assumption.
Maddox| 4.24.12 @ 7:52AM
"None is so blind as he who will not see" and no one will be so hungry as he who does not prepare.
TLP| 4.24.12 @ 8:19AM
Indeed. The Immigration Act of 1965' coupled with 50 Years of the Destruction of Public Education, Hollywood, Television, Disciplining our Children, and taking Personal Responsibility for our action, have finally run their course.
Our Cities resemble the Third World barrios of Mexico, more than they do, some place in America. We have areas that look more like Brasilian Slums, than some place in America.
We have a Lowest Common Denominator Class who has been TRAINED to expect what they want, when they want it. the Black Community has become a Parasitic Virus, moving in to a Healthy Host (pick any crumbling city) and decimating it, until it can no longer take care of itself, and DIES.
And we have one Political Party responsible, for drilling it in to these people's heads that "YOU DON'T HAVE TO WORK! Just show up and VOTE, when we tell you to.
Purp| 4.24.12 @ 3:50PM
"the Black Community has become a Parasitic Virus" - that's a nice racist remark, now isn't it?
Explain to me how 13% of the population can simultaneously be 50% of the population that doesn't pay taxes? Can you explain? Didn't think so.
"And we have one Political Party responsible, for drilling it in to these people's heads that "YOU DON'T HAVE TO WORK! Just show up and VOTE, when we tell you to." - What you mean is what the Republicant party has drilled into your head to believe. Without your belief in their lies, this would be a better country than it is. It used to be, didn't it?
TrueBlue | 4.24.12 @ 4:53PM
True, used to be a better country before the Republicans started acting like the Democrats.
TLP| 4.24.12 @ 5:48PM
Why don't you tell everyone why 13% of the population commits 56% of all VIOLENT CRIMES?
Why don't you tell us why 85% of Black Children are born OUT OF WEDLOCK, to SINGLE MOTHERS?
Why don't you tell us why Blacks kill other Blacks like it's an Olympic Event, and nobody in the Black Community GIVES A SHIT?
Tell us why the #1 Cause of Death, of young Black Males is HOMICIDE?
Why don't you tell us why Blacks don't seem to give a shit that one of the 1st things the Muslim did, was to TEAR UP the Private School Vouchers of poor minority CHILDREN, in D.C. In favor of the Teacher's Union's Money?
Black unemployment is 17%. Black Youth Unemployment is over 50%, and yet you stupid bastards are gonna crawl on your bellies, over hot coals, to give this MFer 4 more years?
STFU.
You people get everything you DESERVE.
So, again.
STFU.
Purp| 4.24.12 @ 8:39PM
"Black unemployment is 17%. Black Youth Unemployment is over 50%" - Let me guess - YOU don't think your attitude and others like you has a thing to do with that issue and all the others for the Black community?
It would be useful for you to provide links to the stats you cite - or did you pull those right out of your a** ? or Rush Loudmouth's a** ? There's sure plenty of space for your head up his a** - and that's where it belongs.
TLP| 4.24.12 @ 5:48PM
Why don't you tell everyone why 13% of the population commits 56% of all VIOLENT CRIMES?
Why don't you tell us why 85% of Black Children are born OUT OF WEDLOCK, to SINGLE MOTHERS?
Why don't you tell us why Blacks kill other Blacks like it's an Olympic Event, and nobody in the Black Community GIVES A SHIT?
Tell us why the #1 Cause of Death, of young Black Males is HOMICIDE?
Why don't you tell us why Blacks don't seem to give a shit that one of the 1st things the Muslim did, was to TEAR UP the Private School Vouchers of poor minority CHILDREN, in D.C. In favor of the Teacher's Union's Money?
Black unemployment is 17%. Black Youth Unemployment is over 50%, and yet you stupid bastards are gonna crawl on your bellies, over hot coals, to give this MFer 4 more years?
STFU.
You people get everything you DESERVE.
So, again.
STFU.
TLP| 4.24.12 @ 5:50PM
I said it twice, because you're obviously TOO STUPID to understand it, if I only write it once.
Purp| 4.24.12 @ 8:40PM
So you're double dumb? Is that it?
Von Mises Jr| 4.24.12 @ 9:49PM
Stop calling names, Perpy, or I'll tell your mummy.
Jack in Wi.| 4.24.12 @ 8:01AM
Lets throw granny off Dialysis and cut back grandpa's Social Security, before we cut one penny from the military budget by bringing our troops home from overseas, ending all foreign aid, and closing down hundreds of overseas bases. I just worked at a packed soup kitchen last night, in a somehat affluent county where I live. By all means lets cut food stamps and unemployment benefits in the middle of a depression. The Republicans will be slaughtered if we keep pushing spending like crazy on wars and welfare overseas, but want to cut things for Americans in need.
Ron Paul has recieved over 350,000 in contributions from our active military. Obama has received about 172,000. After that comes Mitt Romney with 13000. Our troops want out from endless wars for no sane reason, They are sick of chickenhawks leading them over the cliff. Bring them home to their families to defend these borders and shores. Let those leeches in Israel, Europe, Japan, Korea and everywhere pay for there own defenses. All we are doing is subsidizing the social security systems of those countries. Let them pay for their own defense.
The Ryan plan will be attacked with extreme prejudice to alienate the most reliable group of Republican voters, the elderly. Before we touch one penny of the entitlements, end the wars and foeign aid, slash many needles depts, sell assets to liquidate debt, and end corporate welfare. Then maybe we can have a civil debate on entitlement reform.
Harry the Horrible| 4.24.12 @ 10:14AM
Sorry, the Military is a constitutional duty of the Federal Government. Granny's dialysis, food stamps, etc. are not and never have been.
That said, lets bring the troops home, cut spending, and return the money to those earned it. The charity of the American people (like you) will take up the slack, and do so far more efficiently that the little bureaucratic empires in the Federal Government.
Purp| 4.24.12 @ 3:52PM
You only know what you've been told to believe - that is not true.
TLP| 4.24.12 @ 5:54PM
Yeah, we should ignore the CONSTITUTION, and only listen to Dumbfcks like you.
Purp| 4.24.12 @ 8:33PM
Ignore? No, but YOU can decide what is constitutional and what is not? Give me a break - YOU can determine constitutionality better than dozens of Supreme Court Justices? Really? You need some serious help.
The Bruce| 4.24.12 @ 6:39PM
Purp,
Try reading the Constitution just once. Go ahead, it's only a seven page document.
Even you can handle that much.
Purp| 4.24.12 @ 8:35PM
I have, you haven't - try reading the Federalist Papers and the State Conventions on Ratifying the Constitution also - you might find you don't know what the h* you're talking about - and neither do the yokuls you listen to.
The Bruce| 4.24.12 @ 10:09PM
Purp,
Article I, Section 8:
"The Congress shall have the power to [...] provide for the common [sic] Defence."
"To raise and support Armies"
"To provide and maintain a Navy"
"To make Rules for the Government and Regulation of the land and naval Forces"
"To provide for organizing, arming, and disciplining of teh Militia, and for governing such Part of them as my be employed in the Service of the United States."
Article II, Section 2:
"The President shall be Commander in Chief of the Army and Navy of the United States, and of the militia of the several States..."
You're right, Purp. There CLEARLY isn't any Constitutional authority for the government to have and maintain a military (/sarc).
Did your mother ween you properly as a child?
The Bruce| 4.24.12 @ 10:12PM
And Purp, please cite your references regarding the Federalist Papers. I have my copy right next to me.
TLP| 4.24.12 @ 11:12AM
Shouldn't you be having a nice Camel Dick Falafel, at your favorite "Death to America", "Death to Israel", "I'll trade you my 8 year old Daughter for one of those Goats" Palestinian Restaurants?
Von Mises Jr| 4.24.12 @ 8:48AM
Beck explained this as the "normalcy bias." It can't happen here, and it could never happen to me.
It is a human defense mechanism. Since one cannot fathom the basics crumbling beneath them, they block it out.
Ruling Class politicians and intellectuals fail miserably time and time again. But they just keep telling themselves that they are the smartest people in the room, and imagine how bad it would be if the stupid people were in charge.
Teachers and police in "Blue" states, as well as federal employees retire with packages of $75K to $125K ranges at 55. The pension funds are broke. Their response is "somebody promised me."
Seniors are receiving 3-4 times the contributions they paid into Social Security. They see their grandchildren unable to find jobs, but they just know that they are entitled to $1,200 month plus health care.
Reality will be very difficult for these people when the tires meet the road.
numbatdog| 4.24.12 @ 8:58AM
Americans are currently suffering under a mass delusional disorder. It is not very different from the ostrich which buries its head in dirt to make danger go away.
The best way to see the extent of the disorder is to look back and see what the older generations response was when the government tried to take their freedom away. They reacted massively and rejected enslavement to anyone.
We are so driven down and beaten we watch apatheticly as the government piles on tax after tax, restrictions and regulations that don't benefit anyone except their cronies. And we are so far gone that many axtually believe their lies that they have a plan despite plunging into more unsustainable debt every day. The constitution which protected us from government is now stripped and easily bypassed.
It is at this point delusional to believe we have anything except a poverty riven authoritarian future. The government has already failed the American people and staring at entertainment TV with wide eyes will not make the looming crash go away.
The government will not save us. They have already proved that. We need to save ourselves.
Indy| 4.24.12 @ 9:02AM
"How can so many not see spending and debt's danger?"
Most of America has been dumbed down, the electorate has a poor understanding of basic economics.
The media is complicit, they do not report the truth, they drive an agenda
Too many takers, too many not paying Federal Income Taxes
Most is Congress don't speak the truth, Sen. Reid won't let a budget come to the floor for a vote. Our President offers no solution on how to rein in the debt, he tells the public (mostly from the pulpit at universities, those who don't pay taxes) that all we have to do is tax millionaire / billionaires and so many buy into that...
Welcome to Ameritopia!
Al Adab| 4.24.12 @ 12:07PM
They pay no income taxes.
They get government checks.
What's not to like?
Brad9883| 4.24.12 @ 10:10AM
One can ignore reality, but one cannot ignore the consequences of ignoring reality. -- Ayn Rand
Dave Williams| 4.24.12 @ 3:11PM
That is one of my all-time FAVORITE quotations, and applied to our current political and economic situation, is sadly quite apt...as we will discover after the first week in November, one way or another.
Reality| 4.25.12 @ 4:04PM
The irony of this is Dave Williams is ignoring the reality of God The Creator, Christ The Savior, and even The Holy Ghost;
Dave Williams is ignoring the consequences of ignoring the reality of God The Creator, Christ The Savior, and even The Holy Ghost;
and Dave Williams is even ignoring the reality of how long eternity lasts in reality;
but Dave Williams cannot ignore the consequences of ignoring the reality of God The Creator, Christ The Savior, and even The Holy Ghost, forever.
Louis Jenkins| 4.24.12 @ 10:30AM
"We're headed down hill like a snowball headed for he--." Merle Haggard
Mark in LA| 4.24.12 @ 10:58AM
What do you expect after 30 years of Reaganomics? Massive immigration illegal and legal, and guest workers to drives wages down coupled with taxes indexed to inflation so naturally people fall off the tax rolls. Free-trade agreements that ship peoples jobs overseas forcing them into low paying jobs that further decrease the tax rolls. Idiotic illigration policies designed to bring some of the worlds most useless parasites to our welfare system like with "diversity" visas.
How anybody couldn't see it coming years ago is beyond me.
squalis| 4.24.12 @ 11:05AM
A related link suggested to me by this article:
http://www.youtube.com/watch?v=bRul5EZeMR0
Kingofthenet| 4.24.12 @ 11:32AM
I think it would be a masterstroke by the President to 'showcase' Republican ideas, actually implement Republican plans in certain areas, prior to the election, to 'see how they do', of course it has to be made clear to the 'examples' that they will be reimbursed for their pain, AFTER President Obama gets reelected.
Petronius| 4.24.12 @ 12:28PM
A majority of the populace of this country do not believe in markets, never have, and never will. They believe in the sand box. The economy will never improve while they are here eating out the substance of our remaining capital. They do not belong here. Let them take their deficiencies to Sweden and sponge off their bed fellows. Life to these people is not about what they want, but what they don't; being forced to compete in the job market. American business can't afford them. The tax payers can't either. The end can't come soon enough.
Kingofthenet| 4.24.12 @ 1:12PM
Who is going to cut your grass, clean your clothes, cook your food?
Tim the Enchanter| 4.24.12 @ 2:50PM
I do all that for myself. So should you, and so should they. Putz.
Petronius| 4.24.12 @ 4:50PM
none of your damn business
Pat| 4.24.12 @ 2:29PM
“Stop me before I tax again” – President Obama might utter that plaintive plea before long. France’s leading socialist candidate wants to Obamize the French by raising the tax rate on those who work for a living – they call it the “Le Buffett” rule. Some still in touch with reality thinkers among our American media are calling for “sober debates” on government budgets – but that’s not going to happen. Countries within Europe thoroughly hate each other and point accusing fingers over fiscal matters – sort of like America’s Liberals and Conservatives, only with funny accents.
What’s going on here? Apparently, citizens within the West unconsciously realize we’re heading toward national bankruptcies, internal dissent and probably future armed conflict but no one can stop “the voices”. The Tax and Spend Party knows it can’t keep on taxing and spending and taxing some more but it can’t say “enough” to its constituents. Republicans offer austerity and fiscal sobriety measures - but no one is buying that fairy tale because the GOP carries too much past baggage. Europe looks bad at the moment and pundits predict it will get worse before it gets better.
Greece is California and Germany is Texas – opposite sides of the fiscal responsibility coin. But Germany can’t make Europe toe the line – European voters want more government spending, not less. And Texans can’t make Californians act like adults or at least make California’s politicians stop robbing their constituents.
Where will it end? Both America and Europe will push the envelope until it breaks. We can’t help ourselves – the only way to stop “the voices” is to ignore the realists and race down our chosen path to eventual financial ruin.
Tim the Enchanter| 4.24.12 @ 2:52PM
Mr. Young: You used the King Canute metaphor wrongly. Canute KNEW he couldn't roll back the tide. He simply demonstrated to the people what he already knew.
Purp| 4.24.12 @ 3:33PM
"How can so many not see spending and debt's danger?" - Ask Ronald Reagan - he started us on increased deficit spending in recent times. "Deficits don't matter", he declared, and Republicans, but also Democrats, have taken him seriously.
The Bruce| 4.24.12 @ 6:45PM
Chaney uttered those words, not Reagan.
Purp| 4.24.12 @ 8:42PM
Nope - Reagan said it first, and Cheney repeated it. And you might want to know that Chaney was Lon Chaney or Lon Chaney Jr. ... The VP was Dick CHENEY... you had that wrong too... You just can't fix stupid, so I feel sorry for you.
From the Desk of Media Matters| 4.24.12 @ 8:13PM
Barney Polly Jacquelina Rachel Pantywaste Pansy Putz Fecal Pelosi Moscow Maddow Moscow,
You of all bottom rung MM mindless retarded parrots do not start with Reagan!
Even MM staff is sick and tired of the lastest in-joke among our other bottom rung MM mindless retarded parrots.
MM staff is sick and tired of our other bottom rung MM mindless retarded parrots incessantly chanting:
"Government is not the solution to our problem, government is the problem"
MM staff is sick and tired of this quote bouncing around in our heads over and over and over by our retarded bottom retarded rung retarded MM retarded mindless retarded retarded retarded parrots retardedly chanting government is not the solution to our problem government is the problem retardly chanting and chanting that quote over and over and over chanting and chanting government is not the solution to our problem government is the problem government is not the solution to our problem government is the problem chanting chanting chanting chanting and chanting the quote retardly chanting over and over the cha-
ahem
From the Desk of Media Matters| 4.24.12 @ 8:14PM
it is kind of catchy
Petronius| 4.24.12 @ 5:00PM
Reagan made a bad deal with Tip O'Neil in the TEFRA law of '86. The Demoncrats reneged of course. The House controls the spending. Reagan got even with them when the Senate was taken over by Barry Goldwater and the Finance Committee cut off money for the Bigdig in Boston.
Get one thing through your infantile head. The Government is NOT Your Mommy. It does not exist to take care of anybody.
Hurricane| 4.24.12 @ 8:18PM
Umm, why wasn't this a topic of discussion when the previous president raised our debt level to over 1 trillion? Hmm, maybe because the stock market was topping 13,000 and the banks were raping average Americans on sub-prime mortgage lending schemes and a housing bubble?
The only thing I fault Obama for is continuing the banking/stock market racketeers control over the state of the economy. That is why the economy continues to stagnate; the losses what should have been incurred by these irresponsible groups never happened, they just passed that onto to the tax payers. Had those groups actually incurred those loses home prices would have plummeted and alot of the toxic debt would have evaporate, leaving opportunity for average Americans to buy homes cheap and begin creating equity; which they would have used to buy more goods and services and boost the economy in the long run. There would have been some hard times for a few years but the only people who would have really suffered would have been shareholders and investors.
Add some infrastructure spending and remove the Bush Tax Cuts and the economy would have recovered the right way.
Alas it was never meant to be; Obama was bought out by the bankers before he even entered office.
POST American| 4.25.12 @ 12:58AM
And as for the simple, undeniable,
REAL REALITY--yet again, a BLAST
from the very heyday of the Reaganomics
franchise slumming of America--
"America better watch it
or in a couple of decades
we're going to be minstrel
show ---for RED China."
-Gore Vidal
1985
And even now, even yet, the CFR
front perps saturate the government
and the Globalist EUGENISTS chart
the 'FEW--chore'.
Bob S| 4.25.12 @ 2:35AM
The real problem is, how do you get people to understand just how big trillions are? Just how much debt that means? Just how crushing it all is?
Hurricane| 4.25.12 @ 9:27PM
The amount of debt is irrelevant. The US economy, despite the best effort by the "1%" to ruin it; still has alot of strength left and we can recover. The real question is do we have what it takes to change course?
All these conservatives are screaming about "austerity" programs and cutting the budget; that that is just a code word for dismantling the social safety net and continuing the aggregation of wealth towards the top. The real cuts have to be made in military spending, corporate subsidies, drug enforcement agencies, and tax breaks. We also have to break up the monopolistic banking cabals that are strangling this country and regulate the power of corporations and limit their influence in government. Create an easy path to citizenship for undocumented workers (which represent a huge untaxed group; another method that the "1%" use to get out of paying taxes and keeping people in poverty) and we can have more than enough to keep our social programs; maybe even add some like Universal Healthcare.
What really gets me is the fact that these groups don't even know they are sowing the seeds to their own demise. If wealth accumulates to the top and the Middle Class is destroyed there will be no one with enough purchasing power to keep buying the good and services these groups base their wealth on. Without a manufacturing base (which is gone and will never truly return to the levels that it was) there isn't any "real economy" left to sustain our way of life. The top 1% don't spend anywhere near the levels of the rest of the 99% and without that flow of money our economic system is unsustainable.
Hurricane| 4.26.12 @ 1:55PM
Petronius:
You are absolutely DEAD WRONG; government only exists to take care of people. It's supposed to regulate business, it supposed to impose proper rules of behavior between people. It supposed to create infrastructure that allows society to operate freely and safely.
The problem is that POLITICS is the accumulation of power for it's own sake. And since government is the arena in which politics is played we get the dichotomy of people whose job is to look out for everyone only looking out for themselves and those that only support them.
That is where the "ethics" of goverment service are supposed to kick in. People swear oaths to protect and follow the laws and principles of this nation. However, it's obvious from the actions of everyone in government lately (meaning the last 25 years) that they don't really know what those oaths mean.