America’s Great Disappointment

City.jpeg

So the Wall Street Journal asks today,”Why [Is] This Recovery Is So Lousy“?


They say that with Obama, “No president was ever better positioned to lead a strong recovery…no resources were spared…yet not once in the last seven years has annual economic growth ever reached [even] 3%.”


But the news gets worse, in fact, “U.S. GDP grew a disappointing 1.2% in the second quarter…[and] economic growth is now tracking at a 1% rate in 2016…that makes for an average annual 2.1% rate since the end of the recession.”


And that is after Obama’s $836 billion stimulus and $3 trillion in Federal reserves injected into the economy!


The Great Recession may be the most disastrous economic results short of the Great Depression itself.


However, this is not the only reason Americas are disappointed with what they are getting from Washington (and we won’t even talk about the candidates).


80% say we are heading in the wrong direction!  Let’s repeat that again, 80% say we are heading in the wrong direction.


Harvard Business Review says it’s not just the economy stupid, since we still [despite ourselves–with failing policies of enormous tax and spend and over-regulation] rank #5 on GDP per capita. 


Yet that doesn’t translate into overall social progress for us.


Get this, the U.S. ranks 19th in social progress in the world–just one place above Slovena!


Why???


– We rank 26th on personal rights because of restrictions on freedoms like the right of assembly. 


– We rank 27th on personal safety because of high homicides and poor road safety.


– We rank 36th on environmental quality because of high greenhouse gases and poor water quality.


– We rank 40th on basic knowledge because of poor education and high dropout rates.


– We rank 68th on health and wellness because of suicides, obesity, cancer, and heart disease.


HBR points out that there may be individual reasons for each of these, but overall this is a bleak “troubling picture” and Trump isn’t the one who painted it.


The sad fact is that one of the only things that the U.S. is ranking #1 in the world in is our national debt to everyone else…and this is being squandered. 


Think good and hard about the nation you are leaving your children and grandchildren…this is a horrible performance scorecard for America, the superpower!  😉


(Source of the amazing photo: Minna Blumenthal)

When It Comes To Education, We’re Just Playing Around

Education Playtime.jpeg

So I overhead a conversation of 2 young women in Starbucks talking about their college education. 

One of them while acknowledging that she enjoys her classes, says, “But I still don’t feel that I am learning anything practical!”

He friends responds saying, “Yeah, all we learn is X+Y, but what does that do for us in real life?”

The first young women says, “They need to emphasize the practical things and teach us personal finances, fitness, healthy cooking, and so on.”

The second young women starts repeating, “X+Y, X+Y, that’s all they teach us!”

I couldn’t help but chuckle at this point, even though it was sort of sad. 

The education system is known to be so bad in this country, especially until you get to college. 


We’ve gone from No Child Left Behind to Every Student Succeeds, but no matter what you call it–it’s still a big C-R-I-S-I-S. 

According to Ranking America, the US ranks 14 out of 40 countries in education–behind Netherlands and Poland.

Moreover, we rank 2nd in ignorance about social statistics like teen pregnancy, unemployment rates, and voting patterns. 

Moreover, we are falling behind in our competitiveness ranking in science, technology, engineering, and math (STEM), and are now 27th in math and 20th in science out of 34 countries.

We can’t innovate, improve productivity, and effectively compete if we are just playing around with our education system. 

If we don’t change, X+Y may soon equal the bottom of the education barrel. 😉

(Source Photo: Andy Blumenthal)

David And Goliath – It’s Biblical!

David and Goliath Goliath and David

There are 22 Arab Countries versus 1 Jewish State of Israel.

The Arabs Countries far outnumber Israel with 64 times as many people, 760 times as much land, and 10 times as much GDP. 

Overall the world’s Muslim population is even so much larger with 50 majority-Muslim countries and 1.6 billion Muslims. 

Some moderate Muslim or Arab countries are friendlier and have peace treaties with Israel, such as Egypt and Jordan, and others like Saudi Arabia are cooperating with Israel against a common Iranian threat. 

However, it is no secret that many other Arab nations and especially Iran would like to see Israel wiped off the map with a total genocide of the Jewish people (just 70 years since the Holocaust).

This last week alone in Israel there were over 150 terrorist attacks (including shootings, stabbings, stonings, firebombs, and more)!

To the west, just last year in 2014, there were over 4,500 missiles fired by Hamas-controlled Gaza indiscriminately into Israel. 

To the north, Hezbollah is estimated to have 100,000 rockets pointed at Israel. 

To the northeast, ISIS is menacing Israel with possible chemical weapons and even nukes if they get their hands on them. 

To the east, Iran is threatening Israel with ongoing development of nukes and ballistic missiles.

Many Christians and Jews clearly see the Biblical underpinnings for the threats to Israel and want to protect the Holy Land. 

One Central American, Christian lady told me today that she and all the people in her church love Israel and want it to be protected. 

She said many, many people are dissatisfied with the current state of pullback from the Middle East and what was always the iron-clad support for Israel. 

Further, the United Nations has been swayed by the numbers against Israel for decades–just last year alone, there were 20 resolutions singling out Israel versus 1 resolution against Syria, even though the war in Syria in the last 4 years has killed more than 10 times the number of those killed in the entire Israel-Palestinian conflict.

While many extremists falsely try to portray themselves as the underdog in this fight against Israel, the facts speak for themselves, and the Bible is clear–in the end, David does beat Goliath. 😉

(Source Photo: Andy Blumenthal)

A Political Teddy Bear

Teddy Bear

Thought this was an awesome photograph.


Taken on the Washington, D.C. Mall…


You can see the Capitol of the United States in the background.


The gate is surrounding the construction being done.


On the fence is a Teddy Bear–representing so many of our national challenges–sort of just hanging there helpless.


This political bear looks like he’s clutching for dear life, but unfortunately he is left hung out to dry as we just keep chugging away…but where is the real progress? 


– ISIS and radical Islam is still growing stronger.


– Iran continues building toward a nuclear WMD.


– China and Russia are “becoming [ever more] aggressive as they perceive U.S. pulling back.”


– North Korea achieves capability for a “nuclear ICMB.”


– Cyber insecurity is a “real and growing threat.”


– There is a growing danger of a catastrophic EMP attack with a “staggering human cost.”


– Immigration crisis remains in “limbo.”


– Economic growth is “grinding to a halt.”


– National deficit is “projected to skyrocket over next decade.” 


– American economic competitiveness is in ongoing “slow decay.”


– U.S. education “still lagging” significantly in science and mathematics. 


– Life expectancy in U.S. ranks 26th, “right behind Slovenia.”


This doesn’t mean that good things aren’t continuing to happen especially with innovation despite all the gridlock…there is the Apple Watch (ok, the jury is still out on that one too).


Why don’t we let the bear down gently please. 😉


(Source Photo: Minna Blumenthal)

10 Reasons In Just 1 Week To Fear Government Breakdown

Chaos

When I saw this in the store, I knew it was a true sign of the times, as they say. 


When the government that is supposed to sustain order and usher in social and economic progress is dysfunctional and broken, instead we have:


“Chaos, Panic, [and] Disorder”


Here’s some news highlights from just this last week:


SPREADING BASE OF WORLDWIDE TERRORISM


1) ISIS murdered 137 and wounded over 300 in suicide bombings at mosques in Yemen.


2) Al Qaeda / Islamic State killed 23 mostly European tourists and injured over 50 at attack on the National Bardo Museum in Tunisia.


3) Iraq’s battle to take back Tikrit from ISIS slows as ISIS continues to hold territory in Iraq and Syria larger than many countries–this after the last U.S. troops left Iraq in 2011. 


AGGRESSIVE POWER AND LAND GRABS:


4) Russia annexes South Ossetia from Georgia, just a year after annexing Crimea from Ukraine.


5) China starts up the Asian Infrastructure Investment Bank (AIIB) with support from key European Countries as well as Australia and South Korea, challenging American dominance via the International Monetary Fund (IMF)–this shortly after China surpasses America as the world largest economy.


PROLIFERATION OF WMD:


6) Iran says “Nuclear deal within reach,” while their neighbors in the Middle East shutter and warn of impending nuclear arms race.


FORESAKING STALWART ALLIES AND MIDDLE EAST PEACE:


7) The Administration threatens to back United Nations against Israel, imposing a 2 state solution rather than a negotiated peace and security for the region. 


ECONOMIC MESS:


8) U.S. economic forecast by the Fed was downgraded to just 2.5%, despite years of near-zero interest rates that were supposed to spark growth, but instead has simply driven stocks into overdrive and set us up for another bursting of the financial bubble


HEALTHCARE SHAMBLES:


9) Upcoming Supreme Court decision on Obamacare could see 8 million people lose subsidies and ultimately their health insurance coverage.


ENVORNMENTAL CRISIS:


10) 2014 as the hottest year on record and 13 of the 14 hottest years are in the 21st century so far, this as even Chinese officials acknowledge looming fallout ahead in terms of climate change and disasters


If this is just one (more) week with the current breakdown of government,  those causing it all, as the sign states, can proclaim:


“My Work Here Is [Almost] Done.”
 😉


(Source Photo: Andy Blumenthal)

Debt Default–Now Or Later

Debt Default--Now Or Later

So reopening the government, narrowing our deficit spending, and raising the national debt ceiling is coming together in planned negotiations this week.

Despite all the talk, we continue to spend beyond our national means and basically we must raise the debt ceiling or else the game of borrow and spend is over.

Almost like insatiable gamblers, we use up our money at the table, head to the pawn shop to sell our watch and car to replenish for the next game, and then borrow against our credit card to fuel our addiction to the game some more.

Eventually though the house always wins and the borrower must pay up (or they get their legs broken or something nasty like that).

So while the question posed by the pundits this month is whether the U.S. will default on its debt now, the real question is whether a default is just a matter of time anyway–as we continue to spend more than we generate in revenue as a country.

Sure can we raise the debt limit again–hey, why not borrow more, if others are willing enough to lend to us (and for little to no interest too)?

And can we through sequestration or more surgical spending cuts, decrease the rate of our deficit spending–however actually balancing our budget is not even on the table anymore, as booming entitlements for Social Security and Medicare are expected soon with the aging baby boomers to drastically increase our spending again.

The hope that we will somehow, magically grow our way out is fanciful thinking–almost rising to delusions of national grandeur–that just don’t mathematically add up (since we have a median GDP growth rate over the last 80 years of just over 3%).

Perhaps, we don’t care if we can’t pay our debts, because we are the superpower and what is anybody going to do to us about it anyway?

Or perhaps, we rely as a backstop on our ability to print more money and pay off old borrowed sums with worthless new money galore?

Maybe it’s not a default if no one acknowledges it or we just get away with it…but somehow, someway, no one and no country can spend more than it generates in perpetuity.

If you believe in the endless virtual cycle of borrow and spend, then the mind control program is working just great, indeed. 😉

(Source Photo: Andy Blumenthal)

Economics, Pendulum Style

Economics, Pendulum Style

To combat the recession of 2007, the Federal Reserve initiated an aggressive policy of Quantitative Easing–purchasing federal debt en masse to flood demand for Treasuries and lower interest rates to near zero to stimulate the economy.

As of June 2013 the Feds balance sheet has swelled to over $3.4 trillion in assets of treasury debt. What happens when the Treasury has to repay those trillions?

Who is the Treasury going to borrow that money from and at what interest rate?

Just like raising demand for Treasuries lowered interest rates, increasing the supply of Treasury debt to pay back the Federal Reserve will make interest rates go way up the other way.

Rising interest rates makes borrowing more expensive–e.g. buying a car with an auto loan is more expensive, buying a home with a mortgage is more expensive–and inflation can skyrocket.

But what is worse is that despite the recent slowing of the growth of the national debt, many economists calculate the total US debt at a whopping $70 trillion when you include the host of unfunded liabilities including social entitlements such as Social Security, Medicare, Medicaid, as well as government loan guarantees (mortgage, student loan, etc,), deposit insurance (i.e. FDIC(, and the money owed to the Federal Reserve.

What is really sad about this is that the entire wealth of American families in this country is guess what–also $70 trillion–which means that we are essentially a bankrupt nation:

Family assets of $70 trillion – Family liabilities of $70 trillion = a big fat 0 in the kitty!

To pay back the $70 trillion, it is not realistic that we will simply “grow our way out” of this fiscal mess with a GDP growth rate over the last 20 years of a mere 2.6%. Also, we will likely not confiscate people’s assets to pay off the debt, rather we will print money–lots of it–so that we end up paying back the trillions of past debt in much devalued future money.

Heads we win, tails you lose!

The problem is that devaluing the dollar will mean that American family savings will become worth less as well–with the risk, at the extreme, of wiping out mass amounts of savings altogether.

Despite sequestration reducing the rate of our debt growth, the aging baby boomers with the resulting liabilities for their care will soon escalate the debt problem once again.

David Walker, a former U.S. Comptroller has warned about our national debt problem as well as many prominent economists.

Like a pendulum swinging from one extreme to the other, the spendthrift ways of the past will by necessity lead to penny-pinching in the future, and inflation rates of near zero since 2007 will lead to hyperinflation after 2014.

It reminds me of the story of Joseph in the Bible, with the 7 lean years follow the 7 fat years (in Egypt that time)–this is not just providence, but common sense economics.

Good times will come again when there is a return to the mean and the pendulum hovers near center, but the swings until then can be wide and scary.

Of course, like taking your medicine, the earlier we start to course-correct our nation’s finances, the sooner we get healthy again. 😉

(Source Photo: here with attribution to zzz zzz)