MB360: 10% on food stamps, yet Wall St. is TBTF

I love this guy. If you Repubs & teabaggers can read & understand this, then you realize why you need to point your guns and pitchforks in the opposite direction.


Banking and Housing Payments Devoured the Middle Class Income – 1 out of 10 Americans on Food Stamps and how the Fed Slowly Devalued the Dollars in your Wallet.

Posted by mybudget360 February 7, 2010

It is a challenge to say that things are getting better when every month that goes by more Americans are losing their jobs or needing to apply for food assistance. In the latest data for food assistance through SNAP we find that 200,000 more Americans were added to the program. That now brings the total number of Americans on food assistance to 38,183,000. 1 out of 10 Americans are receiving food assistance. For 2009 this cost the government $50 billion, up from $34 billion in 2008 and $30 billion in 2007. It should be no surprise then that average Americans are questioning the viability of a middle class in the upcoming decade.

But even when we look at the balance sheet of the government, things are still not improving:

Source: U.S. Treasury

Take a look at the amount of revenue (taxes) the government brought in for the month of December. $218 billion was taken in. But look at data from December of 2008. The government at the peak of the crisis brought in $237 billion. So this December was even worse than the one ending 2008. How is this a sign of recovery? You would assume that receipts would be going up if things were in fact getting better. All we see is the spending side of the equation going up and the only sector in the economy turning a solid profit is the banking sector that is now running a new form of corporatocracy. It would be one thing if we were adding jobs each and every month but even the massive amounts of bailouts have yet to yield any visible help for average Americans.

In the past few decades Americans have seen more and more of their income being eaten up by the housing sector of the economy:

This latest decade saw a much larger share of income going to housing than any in the past. Unlike stocks, every American needs to live somewhere and will need to either pay a mortgage if they own or pay rent. The banking sector found a method of siphoning off wealth from the biggest asset Americans hold. We have seen this occur slowly over the decades:

1950
Median household income: $3,319
Median home price: $7,354
Home price / income = Percent of 221

1960
Median household income: $5,620
Median home price: $11,900
Home price / income = 211 percent

Running those numbers today, we find that nationwide the cost of a home eats up more and more income:

Median Household income: $52,029
Median U.S. home price: $172,600
Home price / income = 331 percent

The above data is pulled from years of Census data but shows clearly that housing has eaten more and more into the income of average Americans. In a purely fiat money system, banks can create money out of thin air. The Federal Reserve has done this through the monetization of debt. Now think about this, if a participating member bank borrows say $1 million from the Fed it can then turn around and lend the money out through loans up to $9 million courtesy of fractional reserve banking. With current interest rates, if it borrows from the Fed at near zero even a 5 percent return on bread and butter mortgages would yield $450,000 a year for doing absolutely nothing but being a middleman. And some banks have gone ahead and issued credit cards with 79.9 percent rates. When Bear Stearns and Lehman Brothers failed their leverage was even higher at 20 and even 30 to 1. The other investment banks are near those levels even today yet with full government support.

So why bring this up? In the United States debt is treated as money. In fact, without debt we wouldn't have money. I think this is lost on many. When someone goes to a bank and takes out a mortgage with virtually no money down, all of a sudden a liability and asset of a few hundred thousand is created out of financial alchemy. So when this housing bubble burst trillions of dollars evaporated from the system but it was nothing more than erasing previous debt that really had no actual backing.

So if the Fed can create money out of thin air through their banking web why is the economy still faltering? In boom and bust cycles we see a love and revulsion towards debt. Banks can be willing to lend out money but you can't force average Americans to borrow. This past decade we saw the absolute disregard for prudent debt lending and now, many Americans are averse to taking out loans. In fact, now that banks are actually checking and verifying incomes it turns out that many middle class Americans really don't qualify for additional debt.

This brings us to our next chart looking at household debt:



Even after the stock market recovery, it is estimated that average Americans have seen their household net worth decline by $11 trillion since the peak of this bubble. Yet take a look at the chart above. Household debt still remains near the peak. And keep in mind that real estate was the biggest item of net worth for Americans and this has fallen by roughly $6 trillion. Yet the loans remain the same. And that is largely a reason for the flood of foreclosures and bankruptcies. While banks still have mortgages valued at peak levels the actual market value is much less. The U.S. Treasury and Federal Reserve made a troubling bet during the early days of the crisis that things would correct quickly. Actually, I tend to believe that the Fed knew all along that when push came to shove, the entire banking sector would be bailed out by the U.S. taxpayer since the Fed is simply the lender of first and last resort for member banks.

So this leaves Americans contenting with debt amounts that no longer reflect the value of their underlying asset. Yet the banking sector is now fully supported by the taxpayer. So with the current system in place, if banks do fail taxpayers are on the hook. The Fed has setup the perfect trap for middle class Americans. If average Americans decide to walk away from their underwater mortgages then the bill will be paid by taxpayers. After all, we are already told that the too big to fail by definition won't fail. And the other option is to continue paying a mortgage on a home that is no longer worth its value. Many Americans simply cannot afford to do this. Do you notice how in no scenario the banks lose? This is another characteristic of the corporatocracy. And the FDIC which insures bank deposits is essentially insolvent:

And the FDIC backs $13 trillion in total assets with a fund that is insolvent! Now that is maximum leverage.

Over the past decade as the financial sector gained more and more power many Americans saw more and more money go to their housing payment. The housing bubble was merely the end product of the banking sector through Wall Street flooding the system with debt. If we live in a world where only one house is on the block and you have $1,000 and I have $1,000 and we both want the house the maximum we can pay for the home is $1,000 given our resources. But enter a bank that is willing to create debt of $10,000 in the form of a mortgage and say we are obsessed with the house; it is very likely we would be willing to pay $11,000 for the home. Is the home really worth $10,000 more? Of course not. But our $1,000 just got a lot less valuable. And this is the crux of a fiat money system. The government can force it as legal tender but if the value continues to erode people will begin questioning the system. It is only valuable to the point that people have faith in it. And right now many Americans are losing faith in the system.

First corporation runs for political office

They've even got a "designated human." It's the future now.

First "Corporate Person" Runs for Political Office
By Brooke Jarvis
February 1, 2010 YES! Magazine

URL: http://www.yesmagazine.org/blogs/brooke-jarvis/first-corporate-person-runs-for-political-office?utm_source=wkly20100205&utm_medium=email&utm_campaign=descr_mrJarvis

Obama defeating terrorists by ignoring them?

Hey, I predicted this:

"Conservatives keep saying that Obama doesn't really believe we're at war; that he sees terrorists as mere criminals, not the epic evil-doers that they really are. But here's the irony: It's precisely because he doesn't see the terrorist threat as quite so epic that al Qaeda is falling apart.

And I've been saying al Qaeda is no real threat to America for a long time:

"To understand why, it helps to understand that al Qaeda is one of the weakest enemies America has ever faced. In their day, the Nazis and communists each ran a great power. (In the case of the communists, two). What's more, during the Depression, vast numbers of people across the globe—including some of the most famous intellectuals in the United States and Europe—believed the fascists and communists could build societies that were more prosperous and dynamic than their democratic competitors. Barely anyone has ever believed that about al Qaeda. Not only have the jihadists never controlled a powerful country, but no one really believes that if they did it would be anything other than a basket case. To millions of people, Nazi Germany and Soviet Russia once offered compelling visions of modernity; Taliban Afghanistan never did.

"At the end of the day, all jihadist terrorists can really do is kill. [And even then, they can't kill very many people, and certainly not many U.S. troops in combat - J]. But the more they kill, the more they alienate their fellow Muslims."

And here's some evidence that a U.S. policy of CTFD (Calm The F*** Down) is working:

"Now Obama, by pledging to withdraw U.S. troops from Iraq and close Gitmo, and by eschewing torture—in other words, by not overreacting to the terrorist threat—is cutting al Qaeda's throat. Although the U.S. government is still not exactly loved in Muslim nations, it is hated less. Between 2008 and 2009, according to Gallup, approval of U.S. policies rose 23 points in Tunisia, 22 points in Algeria, 19 points in Egypt, 17 points in Saudi Arabia and 13 points in Kuwait. In Indonesia, according to the Pew Research Center, approval of the U.S. rose 26 points. And not coincidentally, al Qaeda's slide seems to be accelerating. Between 2003 and 2009, according to Pew, support for Osama bin Laden has dropped 34 points in Indonesia, 28 points in Pakistan, 28 points in Jordan, 20 points in the Palestinian territories, 16 points in Lebanon and 13 points in Turkey. In Indonesia and Pakistan, much of the decline has occurred in the last year alone. Bin Laden is having so much trouble demonizing the United States that his last audio tape focused on climate change."

Here's the upshot:

"The dirty little secret of the 'war on terror' is that America is winning. We began winning during George W. Bush's second term, when al Qaeda's violence began corroding its support among Muslims, and we're doing even better under Barack Obama, because the U.S. now presents a less menacing face. The best chance al Qaeda has is another American overreaction of the kind the GOP demands: reckless military attacks by the United States or Israel, mass profiling of Muslims, a return to torture. Perhaps Obama's Republican critics do take the terrorist threat more seriously than he does. I'd rather take it less seriously, and win."

I would only add that the Muslim world never has to love us. Lots of eurofags don't love us, but they don't put bombs in their pants trying to kill us either; they sit in cafes and complain about us. No, all we need is to tone down the hysteria a few notches, to reduce the flow of terrorist recruits and donations. That's good enough. That's victory.


Obama Outsmarts the Terrorists
By Peter Beinart
February 5, 2010 The Daily Beast

URL: http://www.thedailybeast.com/blogs-and-stories/2010-02-05/the-dirty-secret-of-the-terror-war/

Re: You might be a redneck if... A different take

Here's my slightly different take on the different take (see at bottom) that was forwarded to me by a conservative Republican:

You might be a redneck if: You think the phrase, 'One nation, under God,' excludes non-Christians.

You might be a redneck if: You've never protested seeing the 10 Commandments, of which you know 3 to 5, posted in public places like courthouses, where you appeared for that DUI, or in schools, which you opted not to attend.

*Bonus: You might be a redneck if: You think "home schooling" is when pappy took a belt to your hide and said, "That'll larn ya."

You might be a redneck if: You still say 'nigger/kike/spick/camel jockey' instead of 'African-American/Jewish/Latino/Arab'.

You might be a redneck if: You bow your head when someone prays, as you plot to grab the extra-crispy drumstick first.

You might be a redneck if: You stand and place your hand over your heart when they play the National Anthem and hold your 32-oz Bud at a respectful gut level.

You might be a redneck if: You treat our armed forces veterans with great respect, and always have, because you are an armed forces veteran.

You might be a redneck if: You've never burned an American flag, nor intend to, nor have you ever taken down your treasonous Confederate flag, nor intend to.

You might be a redneck if: You know what you believe and you aren't afraid to say so, no matter who is listening, even if the TV screen or bartender can't understand your slurred speech.

You might be a redneck if: You respect your elders (after all, granny is 42 and gramps is almost 50!) and raised yer youngins to do the same.

You might be a redneck if: You'd give your last dollar to a friend, because he gave you his last dollar the week before, and you him the week before that, etc., etc.


IF YOU DON'T FEEL LIKE STANDING IN FRONT OF OUR TROOPS, TELL EVERYONE LOUDLY AND PATRIOTICALLY THAT YOU STAND BEHIND THEM!
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You Might Be a Redneck....a different take

We have enjoyed the redneck jokes for years. It's time to take a reflective look at the core beliefs of a culture that values home, family, country and God. If I had to stand before a dozen terrorists who threaten my life, I'd choose a half dozen or so rednecks to back me up. Tire irons, squirrel guns and grit -- that's what rednecks are made of. I hope I am one of those. If you feel the same, pass this on to your redneck friends. Ya'll know who ya'll are.

You might be a redneck if: It never occurred to you to be offended by the phrase, 'One nation, under God.'

You might be a redneck if: You've never protested about seeing the 10 Commandments posted in public places.

You might be a redneck if: You still say ' Christmas' instead of 'Winter Festival.'

You might be a redneck if: You bow your head when someone prays.

You might be a redneck if: You stand and place your hand over your heart when they play the National Anthem.

You might be a redneck if: You treat our armed forces veterans with great respect, and always have.

You might be a redneck if: You've never burned an American flag, nor intend to.

You might be a redneck if: You know what you believe and you aren't afraid to say so, no matter who is listening.

You might be a redneck if: You respect your elders and raised your kids to do the same.

You might be a redneck if: You'd give your last dollar to a friend.

If you got this email from me, it is because I believe that you, like me, have just enough Red Neck in you to have the same beliefs as those talked about in this email.

God Bless the USA!

Keep the fire burning, redneck friend.


IF YOU DON'T STAND BEHIND OUR TROOPS FEEL FREE TO STAND IN FRONT OF THEM.

Shocking results of GOP survey

I don't usually read Kos but these poll results are downright amazing. It's quite likely that the gap between our woldview and the 20-30% of Americans who call themselves Repubicans is too wide to bridge.

All you Republicans, take a look at the questions and answer truthfully. Are you a wingnut, too?

The 2010 Comprehensive Daily Kos/Research 2000 Poll of Self-Identified Republicans
by kos
February 2, 2010 | Daily Kos

URL: http://www.dailykos.com/story/2010/2/2/832988/-The-2010-Comprehensive-Daily-Kos-Research-2000-Poll-of-Self-Identified-Republicans