Tag Archives: CBO

ObamaCare: More Taxes, Less Medicare

Today, RepublicanSenate.gov published the highlights of the CBO’s updated report on the costs of Obamacare. Over one trillion dollars will be sucked out of the American economy to fill a massive feeding trough for government bureaucracies.

 CBO: $1.05 Trillion In New Taxes

“Penalty Payments by Uninsured Individuals … Changes in revenues 2013-2022:-55 [billion dollars].”
“Penalty Payments by Employers… Changes in revenues 2013-2022:-106 [billion dollars].”
“Excise Tax on High-Premium Insurance Plans… Changes in revenues 2013-2022:-111 [billion dollars].”
“Associated Effects of Coverage Provisions on Tax Revenues… Changes in revenues 2013-2022:-216 [billion dollars].”
“Fees on Certain Manufacturers and Insurers… Changes in revenues 2013-2022:-165 [billion dollars].”
“Additional Hospital Insurance Tax… Changes in revenues 2013-2022:-318 [billion dollars].”
“Other Revenue Provisions… Changes in revenues 2013-2022:-87 [billion dollars].”

Total: 1.05 trillion dollars  (Douglas Elmendorf, CBO Director, Letter To Speaker Boehner, Table 2, 7/24/12)


CBO: ‘$716 Billion’ In Medicare Cuts

CBO: “As you requested, the Congressional Budget Office (CBO) and the staff of the Joint Committee on Taxation (JCT) have estimated the direct spending and revenue effects of H.R. 6079, the Repeal of Obamacare Act, as passed by the House of Representatives on July 11, 2012. … Many of the other provisions that would be repealed by enacting H.R. 6079 affect spending for Medicare, Medicaid, and other federal programs. … an estimated $716 billion over that 2013–2022 period.” (Douglas Elmendorf, CBO Director, Letter To Speaker Boehner, P.1 & 13, 7/24/12)


President Obama Promised: ‘I Will Protect Medicare’

PRESIDENT OBAMA: “So don’t pay attention to those scary stories about how your benefits will be cut … that will not happen on my watch. I will protect Medicare.” (President Obama, Remarks To Joint Session Of Congress, 9/9/09)

The CBO actually produced two reports: one detailing the perilous costs of Obamacare and another that details the impact should the House effort to repeal Obamacare succeed.

The Obamacare report stated that “CBO and JCT now estimate that the insurance coverage provisions of the ACA will have a net cost of $1,168 billion over the 2012–2022″. This is the bill the President worked so hard to keep under one trillion dollars? What will it cost when they review it next year?

The second report discusses the impact of repealing PPACA (aka Obamacare). In it, the CBO estimates that the repeal of PPACA through the enactment of H.R. 6079 “The Repeal of Obamacare Act” “would reduce direct spending by $890 billion”.

The CBO does attempt to illustrate that the repeal bill would increase deficits by $109 Billion over ten years. Their math is based on the fact that over $1 trillion in job killing taxes would also be repealed forcing the government to cut spending instead of continuing to drain the American economy of the capital it produced and requires to grow.

These reports were issued by the “non-partisan Congressional Budget Office” that has been reported to be stacked with Obama-friendly staff just prior to this analysis. How different would the numbers be if reviewed by a truly independent review board?

It Would Be ‘Priceless’ If Romney Admitted He Was Wrong

John C. Goodman challenges Americans to rethink healthcare in his book from the Independent Institute, Priceless: Curing the Healthcare Crisis. In the wake of the Supreme Court decision that determined that the individual mandate was constitutional, there has been much talk about “repeal and replace.” That has lead to the question, what does the GOP have to offer to replace Obamacare?

While Goodman’s suggestions throughout Priceless should probably form the basis of any GOP plan, it’s questionable whether or not that will actually happen. The book is necessarily repetitive, because it suggests a very radical change from what we currently have. Bluntly, the concept of people paying for routine healthcare at a market rate with their own money could be considered frightening, especially to seniors on a fixed income. But, one must keep in mind that Goodman is a long-standing proponent of Health Savings Accounts (HSA’s), and his plan is that people rely HSA’s for healthcare costs not covered by real insurance. In his plan, health insurance would resemble casualty insurance, and would primarily be there to cover major health care expenses.

Radical as his theories may be, Goodman has managed to get the endorsements of a couple former CBO Directors, and a former Administrator of the Centers for Medicare and Medicaid Services, based on posted reviews. Well, it would be a better sign if those officials were still working in their respective agencies, and stated publicly that they agreed with his ideas. Of course there are some GOP politicians that have come out saying that they are impressed with Goodman’s book and theories. But there is nothing from Mitt Romney. That’s not surprising, since Goodman has used Romney’s healthcare reform in Massachusetts as a policy poster child of what not to do – or an example of coming attractions nationwide under Obamacare. Either way, it is anything but praise, like the following:

In fact, there is nothing in the legislation [the Affordable Care Act] that makes “healthcare a right.” Nor is there anything in the new law that makes the role of government more just or fair. To the contrary, a lot of knowledgeable people (not just conservative critics) predict that access to care is going to be more difficult for our most vulnerable populations. That appears to have been the experience in Massachusetts, which President Obama cites as the model for the new federal reforms. True enough, Massachusetts cut the number of uninsured in that state in half through then-Governor Mitt Romney’s health reform. But while expanding the demand for care, the state did nothing to increase supply. More people than ever are trying to get care, but because there has been no increase in medical services, it is more difficult than ever to actually see a doctor.

Far from being fair, the new federal health law will give some people health insurance subsidies that are as much as $20,000 more than the subsidies available to other people at the same level of income.

Right after the passage of the Affordable Care Act, Obama administration health advisers Robert Kocher, Ezekiel Emanuel, and Nancy-Ann DeParle announced that the new health reform law “guarantees access to healthcare for all Americans.”

In fact, nothing in the act guarantees access to care for any American, let alone all Americans. Far from it. Again, take Massachusetts as the precedent. The waiting time to see a new family practice doctor in Boston is longer than in any other major US city. In a sense, a new patient seeking care in Boston has less acess to care than new patients everywhere else.

Fairly harsh words for Romney’s healthcare reform that the campaign has undoubtedly been trying to figure out precisely how to deal with on the road. But, there’s one option, albeit unlikely. Why not admit that the Massachusetts health care reform law was a mistake? It’s not like there’s any shortage of factual proof to back that assertion, since Goodman has already taken the time to not only find it, but also expound on it. Sure, it’s off the reservation for a candidate to admit flaws unless there is absolutely no other option. The Romney camp isn’t there, but this isn’t a typical situation either.

While Obamacare has some popular features, in general it is disliked by a majority of Americans. Now that the actual costs for the program are becoming more clear, the need to come up with “something better” should be high on the list of things to do for the Romney folks. Saying that repealing Obamacare on day one isn’t enough – back to that whole GOP “repeal and replace” theme. Goodman’s plan is to move healthcare to a market-driven system, and this is something that a good businessman can manage much better than a typical politician. The left has been hammering on Romney’s background at Bain Capital in an attempt to portray him as an out-of-touch corporate man. But if the GOP “replace” plan was to slowly shift healthcare and health insurance to a true business model, even a past as the most ruthless of corporate marauders could be sold as an asset.

Goodman points out that the primary problem with healthcare is the fact that there is no real price for anything in the industry. Because of this, this complex system does not behave like any other economic system. Contrary to what policy makers would like to have people believe, the problem of increasing healthcare costs is not the amount of money being paid to providers. The problem lies in the fact that people are encouraged to over-consume healthcare services when they are healthy, and under-utilize services when they are ill. This is the direct result of insurance companies catering to the healthy, primarily because their care costs less. Because people are not directly paying for services rendered, and have no real control of healthcare dollars, there is no incentive for them to be frugal in their consumption of healthcare. Bureaucracy has created an environment of wasteful spending, and perverse incentives that keep those that need care the most from actually getting it at all, or at the very least, getting it in the most cost effective way possible. Priceless, while a repetitive text, should be considered required reading for anyone that honestly wants to learn about what ails our current healthcare system, and what problems Obamacare will undoubtedly exacerbate in the near future.

Obama claimed that he made history with his landmark healthcare legislation. If Romney could manage to be daring enough to publicly admit that his Massachusetts plan is fundamentally flawed, and offer a solution along the lines of those offered by Goodman, the upcoming election could end up re-writing that historical moment. The Supreme Court left this issue squarely on the shoulders of the politicians, and that should be interpreted as a call to the GOP to declare open season on failed Obama policies in healthcare, and everything else. The only wrong answers are already on the books thanks to Obama. It remains to be seen whether or not Romney will have the courage to stand up and offer something more than just a promise to undo Obamacare on day one. What about day two?

Payroll Tax Debate: The Truth Comes Out in the U.S. Senate

On Thursday, Dec.1st the battle to extend the payroll tax holiday and unemployment insurance benefits reached new heights in the Senate, as not only did Republicans battle Democrats, but both parties saw raging fights within their own ranks over how to pay for the extensions, along with whether the tax holiday should even be extended at all. In the end, once again, nothing was accomplished

The Senate Republican bill won only 20 votes, less than half the GOP conference. The Democratic bill also went down in flames, 51-49, failing to muster the 60 votes needed for passage. The debates included back and forth rhetoric on whether the tax holiday actually has ever created jobs or improved the economy, the fact that the Democrat’s bill was weakening Seniors Social Security programs by lessening revenues. Here is a common sense question that will never be asked in the elitist halls of Congress during these debates: Why not give the holiday tax break to all of America’s workers by cutting federal payroll taxes, instead of SSI payroll taxes? (fica) That way you give the workers more money in their pocket, while at the same time keep funds coming into an already under-funded SSI program.

The Truth: Senate Republican leaders introduced a bill that would keep the payroll tax rate at its current level for another year. The cost is roughly $120 billion. Senate Republicans would offset most of the cost by freezing the pay of federal employees through 2015 and gradually reducing the federal work force by 10 percent. In addition, Senate Republican leaders would go after “millionaires and billionaires,” not by raising their taxes but by making them ineligible for unemployment compensation and food stamps and increasing their Medicare premiums. ← These facts are basically being ignored in the media today.

Fact: The Congressional Budget Office said the Republican bill would reduce federal deficits by $111 billion, mainly because of the pay freeze and the reduction in the federal work force.

Senate Democratic leaders want a deeper temporary reduction in Social Security payroll taxes. They would provide payroll tax relief to employers as well as employees. And they would offset the cost with a 3.25 percent surtax on modified adjusted gross income in excess of $1 million.  Once again, instead of working with Republicans to get our out- of – control spending under control, Liberal Democrats in the Senate want to grow government by taxing Americans more. Spend, spend spend is all these tyrants want to do, with no regards to fiscal sanity in any way shape or form. Here are a few quotes from the Senate payroll tax debate yesterday, that may surprise some of our readers:

After House Speaker Boehner alluded to the benefits of the tax holiday as, “I don’t think there’s any question that the payroll tax relief, in fact, helps the economy. You’re allowing more Americans, frankly, every working American, to keep more of their money in their pocket,” the Speaker added. “Frankly, that’s a good thing.”

To which, Senator Orin Hatch then responded, “If they could show me a lot of increases in jobs or something, that’s a different matter,” Sen. Orrin Hatch of Utah, the ranking Republican on the Finance Committee, said Wednesday. “But I don’t think they’ve been able to show that.”

Then we have a strong statement from Senate Democrat Joe Manchin: “Letting Americans believe that we don’t have to pay for Social Security is wrong. It is dead wrong,” Manchin said. “And I will not vote for it. Period. Under any condition.” Finally, common sense rears it’s long-forgotten head up in the Senate!

And finally, Senator Mark Krik (R – Ill) threw in another dose of reality: “I don’t think seniors should be based on a ‘trust us’ policy, that we’ll pay you back,” Kirk added. “And I would actually say even the political vote is to vote against this so that you’re for Social Security.”

Today, the House is supposed to come out with their own version of the tax holiday and unemployment benefits extension bill. The vicious cycle of the irresponsible debt-spending versus a fiscally responsible government-political-battle rages on with exactly no Presidential leadership anywhere to be found. Barack Obama is too busy waging class warfare in campaign fund-raising speeches on the taxpayers dime for the 70th time in 2011,… to actually concern himself with doing his job as President of the United States.

2012 just can’t get here fast enough!

CBO Analysis of August 1 Budget Control Act

On August First, the Congressional Budget Office (CBO) released this summary of its analysis of the debt limit compromise legislation (amendment to S.365).

The Congressional Budget Office (CBO) has estimated the impact on the deficit of the Budget Control Act of 2011, as posted on the Web site of the House Committee on Rules on August 1, 2011. The legislation would:

  • Establish caps on discretionary spending through 2021;
  • Allow for certain amounts of additional spending for “program integrity” initiatives aimed at reducing the amount of improper benefit payments;
  • Make changes to the Pell Grant and student loan programs;
  • Require that the House of Representatives and the Senate vote on a joint resolution proposing a balanced budget amendment to the Constitution;
  • Establish a procedure to increase the debt limit by $400 billion initially and procedures that would allow the limit to be raised further in two additional steps, for a cumulative increase of between $2.1 trillion and $2.4 trillion;
  • Reinstate and modify certain budget process rules;
  • Create a Congressional Joint Select Committee on Deficit Reduction to propose further deficit reduction, with a stated goal of achieving at least $1.5 trillion in budgetary savings over 10 years; and
  • Establish automatic procedures for reducing spending by as much as $1.2 trillion if legislation originating with the new joint select committee does not achieve such savings.

If appropriations in the next 10 years are equal to the caps on discretionary spending and the maximum amount of funding is provided for the program integrity initiatives, CBO estimates that the legislation—apart from the provisions related to the joint select committee—would reduce budget deficits by $917 billion between 2012 and 2021. In addition, legislation originating with the joint select committee, or the automatic reductions in spending that would occur in the absence of such legislation, would reduce deficits by at least $1.2 trillion over the 10-year period. Therefore, the deficit reduction stemming from this legislation would total at least $2.1 trillion over the 2012–2021 period.

Those amounts are relative to CBO’s March 2011 baseline adjusted for subsequent appropriation action. CBO has also calculated the net budgetary impact if discretionary savings are measured relative to its January baseline projections. Relative to that baseline, CBO estimates that the legislation would reduce budget deficits by at least $2.3 trillion between 2012 and 2021.

Why You Should Care About the CBO Report – Really This Time

The non-partisan Congressional Budget Office (CBO) produced the most-recent version of it’s periodic report on the state of the nation’s economy.  The report was as dreadful as expected: debt rising and tax receipts going down, but you knew that already.  What’s different is how they are either lying to candy coat how bad things are going to get, or they are simply telling us that our personal situations .. are about to get much, much worse.

As a numbers geek, I read these things.. the whole thing to find those things that really mean something.  The report starts out sounding kind of rosy.

The Congressional Budget Office (CBO) estimates that the federal budget deficit for 2010 will exceed $1.3 trillion—$71 billion below last year’s total and $27 billion lower than the amount that CBO projected in March 2010, when it issued its previous estimate.

Great, so the deficit isn’t as bad as the CBO thought it might be a few months ago, but still terrible.  We hear this stuff on the evening news, in the car, in the paper .. to the point that we’ve become numb to it.  That’s why they bury this little nugget “below the fold” or in other words, late in the article after you’ve already tuned out (emphasis mine).

In CBO’s baseline, total revenues climb sharply in the next few years, from 14.6 percent of GDP in 2010 to 17.5 percent in 2011 and 18.7 percent in 2012. That increase is attributable in part to the scheduled expiration of tax provisions originally enacted in 2001, 2003, and 2009 (including temporary relief from the AMT, which expired at the end of December 2009) and in part to the anticipated economic recovery.

The parenthetical mention of the expiration of AMT relief is almost a confused negative , kind of like “jobs created or saved”.  It took me several reads and some prodding from a CDN staff member to focus on the intent of this paragraph: this economic outlook is based on the assumption that ALL of the Bush Tax Cuts will expire (not just the ones for the top 1%) and that tens of millions of Americans will no longer be given “relief” from the AMT provision of tax law – that could mean YOU!

In the past, most of us have not made enough to have been affected by AMT, or, the alternative minimum tax.

The original idea behind this tax was to prevent people with very high incomes from using special tax benefits to pay little or no tax. The AMT has increased its reach, however, and now applies to some people who don’t have very high income or who don’t claim lots of special tax benefits. Proposals to repeal or reform the AMT have languished in Congress for years, but effective action does not appear to be on the horizon. Until Congress acts, almost anyone is a potential target for this tax.

The reason that most of us have not paid attention to this tax on the wealthy is that it does not impact middle-class America (thanks to interventions from our beloved Congress) as this Tax Policy Center Post makes clear.

It has become a regular stop on Washington’s fiscal merry-go-round: Congress patches the Alternative Minimum Tax for a year or two, but leaves future fixes for mañana. For instance, the Senate Budget Committee’s new fiscal blueprint makes room to fix the AMT for one year only and assumes money will be found from somewhere to pay for future patches.

Alternative Minimum Tax

From TaxPolicyCenter.org

The good news – even folks like you and me are now considered wealthy.  AMT was never indexed for inflation or anything else so over time, more median-income families will be pulled into what is quickly becoming the middle-class tax.  This graph illustrates how, with the CBO’s proposed expiration of the AMT relief, an alarming number of Americans will find themselves subject to the supposed wealth tax.

The good news is we’re wealthy – the bad news.. Obama is promising to raise taxes on, that’s right,  the wealthy.  You and I, and everyone that works and struggles to make ends meet .. is going to meet head-on with an ugly tax bill in years to come.  Here’s a situation illustrated by MSN.com that you or I could easily find ourselves in the middle of.

Marile Robinson, 52, had just bought her dream home a few years ago when her accountant gave her a nasty shock: She owed an unexpected $290,000 in taxes.

Robinson, who earns $75,000 a year as a human resources director at Intel, had no choice but to sell the house and take out a loan to pay off the tax bill. Im starting from scratch, and Im in my 50s, Robinson said. Her monthly take-home pay is equivalent to the monthly interest on her loan.

It turns out that Robinson, like more and more middle-income folks each year, got slapped with the alternative minimum tax, a tax system thats separate from the regular income tax and comes with its own rates and rules. By 2010, the Internal Revenue Service estimates, more than 35 million taxpayers will be subject to the tax.

That’s a single person making $75,000 .. the same applies to a family.

The news gets no better if you continue to read between the lines of the CBO report.

Revenues will also be boosted by provisions of the recently enacted health care legislation (the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010), which are estimated to increase receipts by growing amounts over the next few years

Ah, so Health Care reform was more about collecting taxes than doing much else – not much of an aha moment actually.  Unfortunately, those revenues.. come from medical equipment manufacturers and pharmaceutical companies.. you know.. employers.  At best, this adds to the causes of stagflation where prices need to go up to pass on the costs of government greed, but can’t because of deflationary pressures (no one can afford more expensive drugs, or insurance companies force lower price compensation due to government regulation).

Stagflation.. scary.. that’s what we had during Carter’s catastrophe of a Presidency.  Oddly enough .. Paul Volcker was leading the economic direction then too..

The CBO report does discuss inflation, or the lack thereof.

Inflation in the prices of consumer goods and services (calculated using the price index for personal consumption expenditures, or PCE) is projected to be about 1 percent in 2010 and 2011, when measured on a fourth-quarter-to-fourth-quarter basis. Core inflation, which excludes the prices of food and energy, is also projected to be about 1 percent this year and next. CBO projects that inflation will pick up moderately thereafter but remain below 2.0 percent from 2012 through 2014.

While the report somehow makes the possible 1% price growth a positive thing, we all know that with the aforementioned fallacies in-mind that’s not even a reasonable assumption.  Deflation is going to be the order of the day for the foreseeable future.  The CBO is able to ignore the possibility by simply pretending that Congress will act a certain way (kill 100% of Bush tax cuts and expose 30 Million middle-class Americans to AMT AND assume economic recovery.. yeah that’s happened).  Perhaps Congress will do those things, but if they do .. consumers, who make up 70% of GDP will be left with much less to spend- deflation is all that can result.

If Congress acts in the way that the CBO presumes, middle-class families will have to cough up an additional $500 Billion over ten years.  The only way the CBO sees to balance the budget is to raise taxes, odd how a non-partisan Government agency is no more frugal than the partisan ones.The flip side is what if they don’t?

If Congress does what they’ve done for years, the budget deficit and the national debt will increase to alarming levels (ok ok , even more alarming levels).  This report demonstrates that they are counting on the expiration of all of the Bush tax cuts, no fix for AMT, light inflation, and a perceivable recovery.  It is very realistic to assume that the Bush tax cuts will be extended for all but the top 1 or 2% of earners, that the AMT fix will be put back in, the we might see severe deflation and that the recovery won’t be this year.  The debt picture gets downright dark if the fairy-tales in the economic report don’t come true.

I will be as financially distressed as many of you by the actions Congress will take to match this outlook.  It’s coming, it’s nasty and it’s real.  This CBO report is about you, to you, and affects .. you.

I pray November comes fast enough: “Silence has gotten us nowhere so it’s once again time for our collective voice to make a simple yet powerful demand .. Don’t Tread on Me” –Glenn Beck

Are we on the verge of an Economic Collapse?

Are we on the verge of an Economic Collapse?

In my opinion yes, and it is intentional, but I’ll let the CBO give you a heads up before I give my opinion.

Federal Debt and the Risk of a Fiscal Crisis

July 27, 2010

Economic and Budget Issue Brief


“Over the past few years, U.S. government debt held by the public has grown rapidly—to the point that, compared with the total output of the economy, it is now higher than it has ever been except during the period around World War II. The recent increase in debt has been the result of three sets of factors: an imbalance between federal revenues and spending that predates the recession and the recent turmoil in financial markets, sharply lower revenues and elevated spending that derive directly from those economic conditions, and the costs of various federal policies implemented in response to the conditions.

Further increases in federal debt relative to the nation’s output (gross domestic product, or GDP) almost certainly lie ahead if current policies remain in place. The aging of the population and rising costs for health care will push federal spending, measured as a percentage of GDP, well above the levels experienced in recent decades. Unless policymakers restrain the growth of spending, increase revenues significantly as a share of GDP, or adopt some combination of those two approaches, growing budget deficits will cause debt to rise to unsupportable levels.

If the United States encountered a fiscal crisis, the abrupt rise in interest rates would reflect investors’ fears that the government would renege on the terms of its existing debt or that it would increase the supply of money to finance its activities or pay creditors and thereby boost inflation. To restore investors’ confidence, policymakers would probably need to enact spending cuts or tax increases more drastic and painful than those that would have been necessary had the adjustments come sooner.”

Beyond those gradual consequences, a growing level of federal debt would also increase the probability of a sudden fiscal crisis, during which investors would lose confidence in the government’s ability to manage its budget, and the government would thereby lose its ability to borrow at affordable rates. It is possible that interest rates would rise gradually as investors’ confidence declined, giving legislators advance warning of the worsening situation and sufficient time to make policy choices that could avert a crisis. But as other countries’ experiences show, it is also possible that investors would lose confidence abruptly and interest rates on government debt would rise sharply. The exact point at which such a crisis might occur for the United States is unknown, in part because the ratio of federal debt to GDP is climbing into unfamiliar territory and in part because the risk of a crisis is influenced by a number of other factors, including the government’s long-term budget outlook, its near-term borrowing needs, and the health of the economy. When fiscal crises do occur, they often happen during an economic downturn, which amplifies the difficulties of adjusting fiscal policy in response.

Although deficits during or shortly after a recession generally hasten economic recovery, persistent deficits and continually mounting debt would have several negative economic consequences for the United States. Some of those consequences would arise gradually: A growing portion of people’s savings would go to purchase government debt rather than toward investments in productive capital goods such as factories and computers; that “crowding out” of investment would lead to lower output and incomes than would otherwise occur. In addition, if the payment of interest on the extra debt was financed by imposing higher marginal tax rates, those rates would discourage work and saving and further reduce output. Rising interest costs might also force reductions in spending on important government programs. Moreover, rising debt would increasingly restrict the ability of policymakers to use fiscal policy to respond to unexpected challenges, such as economic downturns or international crises.

This entire report is an alarm bell. The CBO, while admitting the spending/tax revenue shortfall, does not provide a solution but straddles both sides of the fence with the final sentence of this report.  I believe we are heading to an economic collapse and the Obama policies are speeding us there.

However this report will not be used, as it should be, by the Obama Administration. Instead of seeing this alarm bell as a warning to stop the spending, it will be used to drastically raise taxes, to let the Bush tax cuts expire, and to push through a VAT tax.

These new taxes will kill job growth, bankrupt the middle class, and further hasten an economic collapse because the Obama Administration has no intention of stopping the spending in any way. I have made the case that Obama is using the Cloward-Piven strategy not Keynesian Economics in a post at Conservative Daily News. This report is proof that Cloward-Piven Strategy is working.

If I am wrong about the Cloward Piven Strategy, the President will heed this report and make moves to downsize our bloated Federal Government, Renew the Bush Tax Cuts, Use all unspent stimulus and TARP funds as a downpayment on the debt, and actually stimulate private sector growth instead of hampering it.

If I’m right, they will not waste a crisis and move to Increase taxes on everyone, especially the very wealthy.

I recommend that you prepare for an economic collapse. This report is not your only warning sign. Here are some excerpts from Yahoo News & Reuters:

“Local governments warn: more job, service cuts”

“WASHINGTON (Reuters) – Local government revenue has withered so drastically that U.S. cities and counties will have to cut hundreds of thousands of jobs in the coming months, leaving communities without basic services and raising jobless rates, according to a survey.

Those surveyed — 214 cities with populations of more than 25,000 and 56 counties of more than 100,000 people — reported they will cut 8.6 percent of their full-time positions from 2009 through 2011.

“If applied to total local government employment nationwide, an 8.6 percent cut in the workforce would mean that 481,000 local government workers were, or will be, laid off over the two-year period,” the report said.

Currently, the U.S. unemployment rate stands at 9.6 percent. In June, local governments had a net loss of 8,000 jobs, according to the U.S. Labor Department, and they have shed 18,000 jobs over the past three months.


So far, more than half of cities and more than a third of counties have cut staffing for police, safety and firefighting services due to the deep recession that began in 2007. Those numbers are surprisingly high, given that “cities and counties almost always seek to protect public safety services.”

Philadelphia Mayor Michael Nutter said at a press conference about the survey and the local jobs bill that he had recently cut two classes of police training, keeping 200 officers from joining the city’s force. Philadelphia is suspending work at some fire stations to prevent laying off firefighters. Those choices have been hard to make, he said.”

The State and Local Governments will borrow from the Federal Government where possible which adds to the debt. When no one can borrow anymore and they can’t possibly tax anymore, the economy will collapse. I again recommend you prepare.