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Feb-17-2011 18:29printcomments

American Armageddon: Why US Economy has Already Plunged Over the Cliff

Time has run out. Making do with the status quo signals the certain death of the Republic.

American Armageddon

(CHICAGO) - 2011 may be remembered by historians as the year that America died.

Many political, economic and market pundits have been warning of an approaching "tipping point" for several years. They warn that once America tips over that cliff there'll be no avoiding certain disaster.

Well, that proverbial tipping point has already occurred. The debt has reached such stratospheric heights that—under the current system—it will never be able to be repaid. And still Washington adds more debt.

Poking fingers at a living corpse

Now, the death of America didn't happen overnight. Its demise played out as a slow train wreck eight decades in the making.

Five killers are responsible for the murder of the United States of America. Any one of them alone probably could not have caused America's demise. All five forces in unison, however, are a perfect storm of economic and cultural death. Neither political party has the vision, the urgency or—frankly—the guts to avert the now almost certain doom.

Centuries past the vision of the men and women who ignited the torch of individual liberty and raised that torch for all the world to see, the politicians of today are little more than doting morticians poking their fingers at a living corpse.

"Burning of Rome" by Robert Hubert

Although the historic 2010 elections swept a tidal wave of new Representatives into the House, so far many of the members have been ineffectual and the committees have been chaired by many of the good-old-boys that have a penchant for doing business as usual.

The halls of the centralized government are overflowing with glad-handers, smirking know-it-alls, arrogant legislators, nodders and winkers, and shady politicians making shady deals with cronies in the corners of the Capitol's back rooms. The Congress has become an echo of the ineffectual, gutless Senate that presided over the death throes of the final days of the Roman Empire.

It's 2011. Time has run out. Making do with the status quo signals the certain death of the Republic.

Jeff T. Allen has identified three of the killers in his recent in-depth article published at the American Thinker website. Two more that he overlooked have been added.

Spending

Half-hearted attempts to get a handle on the nation's debt is woefully inadequate. Cutting $100 billion from a budget pegged at $3.7 trillion dollars still leaves an added deficit of an additional $1.6 trillion. This is because if the federal government spends $3.6 trillion while receiving only $2 trillion in tax revenues the gap is more than one and a half trillion dollars.

With the projected budget shortfall already equal to the entire Gross Domestic Product (GDP) every additional dollar spent is one that government will not be able to pay back, ever.

While Senator Rand Paul proposed a $500 billion cut (that would still leave a deficit of $1.1 trillion), he was largely criticized or at best ignored. Yet that cut represents only the first bold step desperately needed to take swift remedial action to save the economy, the dollar and the American peoples' lifestyles and property.

No serious attempt is being taken to stop the spending that has drained the lifeblood of America and sent it into a dizzying spiral towards becoming a Third World country with a worthless currency.

Unemployment

Many people are aware that the statistics released by the Bureau of Labor are a sham. Unemployment being touted as hovering just under 10 percent is a lie. The actual figure is closer to the low 20 percent range.

Add to that the dissection of the internal statistics released in January 2011 that revealed that less than half of those Americans that fall into the age group that can work hold full-time jobs and the real picture of the shocking emergency that's facing the nation emerges.

Just 48 percent of those that want (and need) a full-time job have one. The rest are either unemployed or underemployed with low-paying part-time jobs.

The workforce has shrunk as well. More than 500,000 jobs were permanently lost during 2010, evidence of a dying—or dead—economy.

The Federal Reserve's QE2

Federal Reserve Chairman Ben Bernanke's horribly misguided "quantitative easing" that results in printing hundreds of billions of dollars of Monopoly money, is inflationary and will lead to the U.S. currency becoming next to worthless. As the value of the dollar shrinks everything else will go up at the gas pump, grocery store…all retail stores. The cost of energy will skyrocket as will the cost of labor and services.

The effects of this policy can be easily traced to the run up of world commodity prices during the past six months. Staples needed for life are all skyrocketing: corn, wheat, sorghum, soybeans and other grains have increased from 30 to 50 percent.This has led to food riots.

Corn riots driven my U.S. economic policy have broken out across Mexico three times in the past five months. During December of 2010, riots broke out in the UK.

But nowhere have people felt the squeeze as those that live in Africa and the Middle East. Strong evidence exists that the unrest and uprisings across the Middle East—including Egypt—were ignited by food prices. The cost of wheat in Egypt had risen so high that millions are on the verge of literally starvation.

The Fed monetary policy of qualitative easing is driving the U.S. towards five to six percent interest rates not that far down the road with inflation at the door and hyperinflation just down the street.

All of this will exacerbate the federal government's ability to repay its debt as each time the interest rate ratchets upwards hundreds of billions more will be added to the existing debt.

Without a swift reversal of policy and huge, epic cuts in the deficit, 100 percent of Americans annual earnings will be needed to simply repay the country's debt.

The United States of America will be a banana republic.

Entitlement programs implosion

Some are now projecting the cost of Social Security and Medicare to reach upwards of $140 trillion by 2050. That number represents ten times the entire annual economic output every business and worker in the nation.

Although previous accounting projections had the Social Security trust fund falling into a negative cash flow by 2020, it arrived nine years early.

Social Security will sit at a negative $56 billion at the end of 2011.

Its' now official: Social Security is paying out more than it is taking in—and all actuarials admit that the situation will mushroom each year forward. There's no going back.

As the dollar spins out of control, the currency dumped on the world markets, the inflation rate soaring, employment languishing and property values continuing to shrink the 1930s Great Depression will begin to look like the land of milk and honey.

Long before 2050 America—for all intents and purposes—will have ceased to exist.

Mortgage policies and home ownership

The American housing market already in a slump worse than that experienced during the Great Depression years. Depending upon the region of the country, homeowners have seen market values tumble from 25 percent to more than 50 percent off the peak in 2006. The housing recession/depression is now into its fifth year with no end in sight.

Now buyers and builders are about to get another one-two punch that could set housing off into a final death spiral it may not be able to recover from for many decades.

The federal government is now moving ahead with a scheme to tighten the credit management of those seeking to purchase a house.

In essence, the scheme involves tighter regulation of the industry and raising the minimum downpayment for a piece of property to 25 percent of the assessed market value.

Additionally, the mortgage interest rate will be set depending upon the buyer's credit rating. The lowest rates will be given to those with credit rating scores above 740. Those that fall below that benchmark will pay higher rates. The lower the rating, the higher the rate.

For the conclusion of this article, visit: helium.com

___________________________

Terrence Aym is a Salem-News.com Contributor based in Chicago, who is well known nationally for his stirring reports on the top ranked site, helium.com. Born in Minnesota, Terrence Aym grew up in the Chicagoland suburbs. Having traveled to 40 of the 50 states and lived in 7 of them, Aym is no stranger to travel. He's also spent time in Canada, Mexico, the Caribbean, Europe, Asia and Western Africa. An executive for many years with Wall Street broker-dealer firms, Aym has also had a life-long interest in science, technology, the arts, philosophy and history. If it's still possible to be a 'Renaissance man' in the 21st Century, Aym is working hard to be one.

Aym has several book projects in the works. Media sites that have recently featured Aym, and/or discussed his articles, include ABC News, TIME Magazine, Business Insider, Crunchgear.com, Discover, Dvice, Benzinga and more recently, his work has been showing up in South Africa and Russia.




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Jonny F Auf May 28, 2011 4:03 pm (Pacific time)

ok.. I get really piss'd off when people say America is gonna collapse.. and it never does! How can we speed up the process?.. and how can we encourage other countries to give America a swift kick when it's 'down'.. you know to keep it there. Anyway, thumbs up to a bright future for the rest of planet, a planet free from relentless American interference. Go to hell America and take Israel with you!


Bootsy May 26, 2011 10:43 pm (Pacific time)

The 19th Century was Britain's, The 20th Century was America's The 21st Century is China's. Any questions?


Mannstein May 26, 2011 11:09 am (Pacific time)

@ John You took the word right out of my mouth.


John May 25, 2011 4:48 pm (Pacific time)

Interesting article. However the entirety of its content could be replaced by a single word: "Jews".


Michael Hardesty May 25, 2011 9:52 am (Pacific time)

An excellent report ! One of the most perceptive I've read on the current, seemingly terminal crisis. Everyone should read Ayn Rand's Atlas Shrugged. Anyone who thinks this is ho hum should have their pulse checked as they have probably expired.


Anonymous February 18, 2011 10:31 am (Pacific time)

Ho-hum. Nothing new here. Daniel Johnson has been writing about this for the last couple of years in a more authoratative and less screeching way.


stephen February 18, 2011 9:23 am (Pacific time)

Pretty good job Terrence. I knew this was coming 10 years ago and tried to warn people, but too many let the corporate owned tv lead their lives. I moved out of all my fiat investments (IRA's/pensions/dollar) etc. and bought gold at $300 an ounce. Today its almost $1400 an ounce. I also told people that the plan was to de-industrialize the U.S., and continue moving jobs to China and India. Their plan for the U.S. is for the U.S. to focus on health and education. China/India would be technology/manufacturing. I wrote these things ten years ago. And guess what? it is now well known that the U.S/Israel/germany are selling China the latest technology, and today, Obama is in Oregon supporting health and education. Problem is, education will be indoctrination, and health will be whatever makes the pharma industry richer/more powerful.Thats what obamacare is all about.I have a hundred of these examples. I read the books of the elite and pay attention to Bilderberg/CFR/IMF/trilateral meetings. Here is 2011: The dollar will continue to lose value, commodities will continue to rise. Unemployment will rise even more. Gas will be $4-$5 a gallon. No major wars in the middle east, but major unrest and continued settlements. China will continue to grow as the world superpower overtaking the U.S. Major efforts will be to move from the dollar to SDR's (its already begun) and a world bank, then world government. Their plan is a slow controlled demolition of the economy/middle class. Problem is, they are playing with fire, and one wrong move it could all come tumbling down quickly. The good news is, millions are beginning to wake up to this scam. THey are learning about the Fed Res Bank and the central banks all over the world owned by a select few, and who also own all the media. Bryzinski quoted in a recent CFR meeting, that he is concerned of the global awakening, and their missions will be much more difficult. The NSA brought forth the internet for their own agenda, and it backfired on them. We are in for very dark times, but there is hope as millions are now awakening to the truth. I spent a few hours researching a few interesting facts about Oregon. Its quite surprising. Here is a link to my writing if interested. http://salem.craigslist.org/pol/2219462022.html

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