Tax Freedom Day

Tax Freedom day was yesterday (Tuesday) for this year.  Translated, all of your income through April 12, 2011 for this year, was effectively paid to the federal government to satisfy your tax obligations (how nice of you comrade!). 

The question is, do you feel free from the federal government and their uncontrolled spending?  No?  Me either!  Nor this author either.

Meanwhile, as I type this I have cruised over to www.usdebtclock.org where I see that my share of the Federal Debt as a taxpayer (per taxpayer) is approximately $128,548 of the total $14,292,975,600,000 debt.  (Of course, give or take a few clicks of the printing press mouse).  Have you paid your fair share?  Have you gotten a good return on your investment?  I didn't think so.

Here's to hoping that the Repubs get their act together and stonewall an attempt to raise the debt limit.  Perhaps they can make some push with all 47 Repub senators signed onto a Balance Budget Amendment, but I'm not holding my breath. 

Fixing the Country's Debt Problem: Nuclear Solutions

Fixing the Country's debt problems is proving to be no easy task.  Just yesterday, the Central Bank of Mexico went all in and pushed $600 million worth of dollar options.  Basically, Mexico just decided to become the next player in the global currency war in an effort to devalue the Peso to sustain their exports.  Well, I guess we should consider that they did it to sustain their legal exports, as I’m sure the drug trade has been thriving during this downturn as people need every ounce of delusion that they can get; especially those at the SEC or Federal Reserve.

Currently, this means that nearly ever central bank in the world is doing their best to pay tribute to Gutenberg, as they steam full forward towards the iceberg of inflation.  Of course, to those who run the asylum, this old parlor trick that has never worked is sure to work with just the right people pulling the levers and turning the knobs right?  Better hold on to our hats, as they may become worth more than our paper dollars in about a year’s time.  

I know dear reader that I have been a bit behind in my postings, so I tell you the above to show you this article.  Behold!  Our solution to the mountain of debt is before us!  (Or it is at least one author’s solution to the problem).  The "Smoking Ruin Solution.”  

While the “smoking ruin solution” is effectively a nuclear option, it would be the quickest solution to our problems.  Using a “if it doesn’t kill the patient" approach, it would put us ahead of the entire world on the path to default, which is really a path to finding out what things are really worth.  Forcing our creditors (China, Japan, Oil Sheiks, et al) to accept dimes on the dollar will certainly ruffle a few feathers, but to me and the author (David Galland) it seems like a real solution instead of the “let us pretend we’re solvent” Keynesian solution.  

Obviously, forcing a debt restructuring of the world’s sovereign obligations doesn’t come without costs, but the costs aren’t all bad.  A removal of the “weight of oblivion” that is the Federal Government would quickly free the economy to purge its bad debts, and thus start real wealth creation.  Advocating for stricter meddle-proof currency, Galland believes that the dollar may even be able to retain its reserve status, which will help capital inflows to rebuild the “smoking ruin” back into the greatest economic engine that man has ever known.  Destroying the national debt through default rather than inflationary burn would also destroy the bureaucracies that accompany our sovereign obligations.   This would force a natural reordering of labor and would potentially send our illegal immigrant problem packing!  What’s not to like!  

Well, as simple as Galland said, it is too simple and too painful for the average Joe or government politician to like.  Thus, we’ll continue to add a few more zeros to the notes that we use as our medium of exchange.  Maybe Helo-Ben has a green magic marker he’ll lend me that I can use to add the zeros to my stash of C-notes.  Don’t bother robbing me readers, they aren’t worth anything anyways. 

WSJ'S ROI: A Crash Is Coming

I want to make sure that I got this simple and easy to follow article out in the hands of my readers.  Published last week from the WSJ's Return on Investment blog, Brett Arends details 10 simple and easy reasons to read why you should contemplate getting out of the market. 

Things continue to worse, and the cheerleaders continue to scream for more.  Bread and Circuses was the saying in Rome. 

Hello Elephant in the Room! Bankruptcy You Say?

Somewhere in that title, there is a cruel, cruel joke, but unfortunately, this is today's reality.  It is the bleak assessment that has been offered from the IMF reverberated by Boston University Professor Laurence Kotlikoft, and even echoed by the Congressional Budget office.  The total bill of current and future spending at today's present value?  Some 202 trillion dollars!  That's 202,000,000,000,000!  If you calculate each tax payer's share of this bill, each individual is on the hook for 1.3 million dollars.  That doesn't even include the state and local budget deficits or your personal debts! 

In his Op-ed today for Bloomberg News, the professor goes through a quick analysis of where we are as a country and where we are headed, financially.  The short version is that it's ugly.  At best, we will resemble Spain and Greece but at worst, we are headed for an Argentinian style fiscal collapse.  The numbers are so large, you can't really wrap your mind around them. 

There will be some tough choices that will have to be made as we move forward in the United States.  The budget pressures of maintaining the social spending, overseas aid, and even a litany of military programs will have to come under strict scrutiny if we are not to collapse under the weight of our country's mortgage.