Decision to raise the debt ceiling draws closer

The United States Congress is going to have to make a decision within the next week: Either to raise the national debt ceiling to its legal limit, which the debt is now $14 trillion, or let the United States go into default.

It has been nothing more than a circus act between the two failed parties over the course the last several months and America’s attention on our major financial problems were diverted this week because of the killing of Osama bin Laden.

The Republican controlled House is refusing to do anything with relation to raising the debt, unless the Obama Administration agrees to additional budget cuts, and Democrats want the status quo. In short, they want everything to remain the same. History has shown that keeping everything the same is what got us into this mess in the first place.

As the decision to raise the debt ceiling draws closer, Treasury Secretary Tim Geithner decided to tap into a $200 billion reserve fund that seemed to have just come out of nowhere, to make some of the nation’s obligations. Well, the $200 billion was quickly depleted within a week’s span. I guess that verifies what we thought about raising taxes on the rich, which if Congress were to tax even 100% all of the people in this country annually making $250,000 or more, would net the Federal Government an estimated $1.4 trillion. So if Tim Geithner can spent $200 billion in a week, then $1.4 trillion would only fund the Federal Government for maybe four to five months.

Furthermore, Geithner has been warning Congress that if the debt ceiling isn’t raised and the United States doesn’t pay its obligations, we would have another economic crisis similar to what we had experienced in 2008 and the unemployment would reach 17%, which by the way, the unemployment in this country is much higher than they really want you to know. The April 15^th edition of USA Today had a stunning report from the Bureau of Labor Statistics which found that only 44.4% of Americans actually held jobs in 2010, which means 55% of Americans did not have jobs. How does the Federal Government seriously determine that the current unemployment rate is only at an average of 9%? Surely, they're only counting the percentage of Americans that are actually collecting real unemployment benefits.

To address the debt ceiling from another perspective, on the April 19^th blog of Independent Word, I commented on a report from Professor Antony Davis of Duquesne University Donahue School of Business who insists the debt ceiling is really nothing more than a work of fiction. In his analysis, Professor Davis indicated that the debt ceiling has been raised by the U.S. Congress 70 times since 1970. Despite the Federal income tax ranging from 77% in 1969 to averaging between 30% and 40% for the years from 1990 to 2011, the average GDP remained the same at about 18%. Davis’s conclusion is the if tax brackets are fixed to jump up and down through four decades, but the GDP remained the same, then our debt problem is nothing more than a pure spending problem.

But does anyone in Washington really believe this nation has a severe spending problem?

I guess not. If that were the case, then we probably should have cut substantial government cost two years ago following the financial collapse. This way, Geithner wouldn’t be whining right now about raising the nation’s debt limit.

California redevelopment agencies misuse tax money

Money was apparently misused last year by 18 redevelopment agencies, according to a California State Audit that was released on Monday.

Redevelopment agencies in California receive roughly $5.5 billion a year to beautify areas and build low to moderate income housing, and several of these so-called agencies claim that they produced jobs last year.

$5.5. billion of tax payer money, has nothing to do with actually creating jobs. Far from it.

According to an article released by Southern California Public Radio, the State Controller's office found that 10 out of the 18 agencies failed to verify their claims that they "created" jobs; failed to provide transparency and keep proper accounting records and misused money that was supposed to be spent on building housing. Instead, this money went to cover administrative salaries, in some cases more than 20% alone. 

The head of the California Redevelopment Association, John Shirey, calls the audit "politically motivated". What's motivated about this Mr. Shirey is that many public workers simply used millions of dollars on themselves, without any consideration to the people that are actually paying their salary and to create work in a state agency, designed to build public housing.

As for the creation of jobs, Shirey insists California Redevelopment has created hundreds of thousands jobs. Yes, to be sure. Hundreds of thousands of jobs to pay the salaries to redevelopment freeloaders. Yet, nothing has been said about the creation of private sector jobs in the State of California.

Maybe Mr. Shirey doesn't realize that California is fundamentally bankrupt and has a $25 billion budget deficit and our unemployment is 12.4%. Governor Brown has called for cuts in discretionary spending. I wonder if that would have included this outrageous junket by redevelopment workers of misusing tax money to pay themselves.

I'd be curious to know why Mr. Shirey believes these entitlements are okay for public workers to misuse tax money while the State continues to suffer everyday from budget and unemployment problems.

Unemployment rises to 9.8%

The unemployment rate in the United States rose to 9.8% from 9.6% this month, and it is starting to send warning signs throughout Washington. Whether or not they will actually pay any attention to the warning signs remains unclear since they've been ignorant on virtually everything else.

Economists were hoping to be more optimistic as they were predicting 150,000 new jobs, while only 39,000 jobs were actually created in the month of November alone. According to the Labor Department, for the month of November, 17% of the labor force is "underemployed", 1.3 million people are simply given up looking for work because jobs are not available as retail firms slashed 28,000 positions, factories eliminated 13,000 and the public sector 11,000. The  businesses that were hiring are re-employing either retired individuals or those over the age of 50 because they have the experience and not utilizing college graduates.

The total people unemployed for the month of November is 15.1 million.

Despite the fact that economists believe the economy grew, but way "too slowly", they believe it is imperative that the economy needs to continue to rebound. The only problem is when you have a completely incompetent and ineffective Deficit Commission that cannot agree to they're own plan about extending the Bush tax cuts, or letting them expire, how in the world can one even think about growing the economy?

What is really shocking is that despite the millions of Americans suffering in this country from unemployment, many of the President's far-left liberal supporters say the Bush tax cuts should just expire, and allow the largest tax increase in our nation's history to be paid by those earning more than the average person. Again, this comes back to the President's plan of the redistribution of wealth, and far-left America wants this simply because as things continue to get worse, they will look for the Government to support them.

I don't believe that was the initial intention when our Government was formed some 234 years ago.

As if the rise in joblessness in this country was not enough, the benefits to the unemployed expired because Congress failed to extend them, and more than 2 million Americans will loose their unemployment benefits by the end of this month.

What are all of these people suppose to do when they have nothing left?

I'll choose a quote from Gerald Celente, an expert trends forecaster, who has commonly said: "when people have nothing left to loose, they loose it". 

I'm inclined to agree with him, if things don't start shaping up this nation.