Now What, Genius?

Current unemployment numbers are showing a false decline or, at least, short-lived. A break down of the current state of the government and US ledger as a whole shows the national family budget is in deep Kim-chi.

When the central bank and government inject trillions of dollars in fake money into the economy to keep it propped up, over just a few years, does anyone really expect that will have no effect?  The downside is all those injections have to eventually be withdrawn and repaid.  Notice how less than 20% of the jobs lost have been recovered.  Unfortunately, they won’t be recovered before the economy turns south again.

Look at this example of a family budget:

Gross household income:  $2,400
Annual Expenses: $3,600
Credit Card debt at 2.7%: $16,400
Annual credit card interest payments: $443
Additional annual CC debt added: $1,200
Net Principal of Outstanding Mortgage (net present value of unfunded liabilities):  $132,000 (no principal or interest payments currently made).  Annual net additions to principal mortgage debt:  $11,000.

Now add 9 zeros and you have the current status of the Federal Government’s “household budget.”  Want to do the economy as a whole?

Gross household income (GDP):  $15,200
Annual gross expenses:  $12,400
Net income from Gross annual income: $2800
Credit Card debt at 5.5% (Gross public, private, corporate debt):  $54,000
Annual credit card interest payments: $2970
Additional annual CC debt: $3,300
Net Principal of Outstanding Mortgage (unfunded liabilities):  $259,600 (no principal or interest payments currently made).
Annual net additions to principal mortgage debt:  $14,800 (gross public and private, additions to debt; net present value).

Now add 9 zeros and you have the current status of the United States Economy as a whole including the feds, states, public, private and individual economic status on the accrual basis.  You want to know why no one is going to lend the Feds any more money on the open market and the Federal reserve will continue to increase its purchases of federal debt?  You want to know why we’ll soon find it hard for anyone else to lend any US debt sellers, public or private, any more money?  It’s right there for any one to see.  For the economic illiterates this is called “insolvency.”

There’s only one question to ask the government and mainstream pundits and economists out there: Now what, genius?

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