I can't help it...It's the truth!

"The U.S. government has never succeeded in collecting more than about 20% of GDP in taxes.... Our GDP is roughly $14 trillion today. So no matter how you organize the tax base, you end up with $2.8 trillion to spend. And you can't spend that much, because you've got interest payments and (gasp!) debt repayments to make.

Yes, that's right, America: You borrowed all this money, and our creditors actually expect to be repaid. Interest payments and principal reductions of our debt will have to come first and should total around $500 billion each year. If interest rates go up, we'll have to spend more than this. Sorry. That's the price we have to pay if we expect to maintain control of our economy and not allow our children to end up as house-boys and maids in Shanghai. That leaves us with roughly $2 trillion to spend.

Here are our current expenses: Medicare and Social Security are now spending $1.5 trillion and, if left alone, will quickly grow to far more than the entire tax base. The military spends over $700 billion (that we know of) each year. Domestic social programs (food stamps, Department of Education, etc.) cost $500 billion. Federal pensions cost more than $200 billion a year. So... we've got $2 trillion to spend... but our bills are running to $3 trillion per year, and they're scheduled to increase, substantially.

Thus, we will have to cut at least $1 trillion from the budget – immediately – and be prepared to continue cutting on discretionary spending and the military for at least the next decade. That will mean cutting about one out of every three dollars the government spends today. Unless we balance this budget, there's no longer any doubt our currency will be destroyed, our savings lost, and the assets of our country stripped by foreign creditors."

Porter Stansberry, The S&A Digest, April 22, 2011
  

Unsustainable!

"For the first time in modern history, the government is paying out more money, in cash, to citizens, than it is taking in taxes. We spent $2.3 trillion on direct benefits to taxpayers last year, while the government's total income was only $2.2 trillion. Roughly 60% of all Americans now receive some significant financial benefit from the government. Meanwhile, less than 50% of all people pay any federal income taxes. And roughly 10% of all taxpayers foot virtually all the significant income taxes levied."

Porter Stansberry, The S&A Digest, April 22, 2011

Gold, the New Currency

“Central banks are printing more money than they ever have, so what’s the value of money in terms of purchases of goods and services,” Bass said yesterday in a telephone interview. “I look at gold as just another currency that they can’t print any more of.”


~Kyle Bass, a Dallas hedge fund manager and member of the University of Texas Investment Management Co., the second-largest U.S. academic endowment’s board. Bass made $500 million on the U.S. subprime-mortgage collapse.