Why the US Economy will Fail in 2010

Re: WHY THE USA ECONOMY WILL FAIL IN 2010

That's a pretty good article. However, it belongs in Financial Cents rather than News.


When the Gimmicks Fail
January 25, 2010
Doug McIntosh
© SteveQuayle.com

Never have so few, lied so much, to so many and with such devastating results. Here in the USA we have a criminal conspiracy of media shills, court jester economists, political hacks, globalist thugs, wall street whores and banksters who have looted and pillaged the American middle class for decades now. We are seeing the results around us on a daily basis now. The only "green shoots" visible are the tendrils of the Marxist economy eating plant our esteemed fuhrer Obama the First keeps in the White House basement. The fertilizer Obama uses are the hopes, dreams and aspirations of the nearly extinct American middle class. I have neither been surprised, amazed or confused that one year into the open imposition of a Marxist dictatorship on the rotting corpse of the American Constitutional Republic, we are where we are now. Obama has been consistent in his hatred of the USA and its historical traditions, his contempt for the American people and that special combination of arrogance and incompetence he has perfected.

Fasten your seatbelt, for the ride will get even nastier in 2010. The only reason the political and economic system didn't collapse in 2009 was the vile beast called the Federal Reserve openly manipulated both the stock and Treasury markets. The other big reason was the "stimulus bill" kept the fiat money IV tube flowing into the desiccated corpse called state, county and city government. Aside from these two factors, we would have had systemic collapse in the spring of 2009. 2010 is off to a rocky start at the state, city and county level regarding budget deficits, tax receipts and spending cuts. In state after state we are looking at a total failure of the budgeting process. Written into the fine print of the stimulus package were a series of budget busting unfunded mandates which will wreak fiscal havoc in both 2010 and 2011. I am not a fan of Texas Governor Perry, but I have to say he was wise indeed to not take stimulus money in 2009 and thus avoid massive increases in Medicaid spending this year. The stimulus bill forced states to add more people to health insurance plans and only pay for them for one year. After that, the states are facing a massive increase in health care costs. An increase that the states must pay out of reduced tax revenue. The Feds will simply walk away from the mess.

Since I was one of the few "economists" who correctly predicted the Christmas retail season would be another disaster, it is only fair that I spend some time explaining that. I watched week after week in November and December 2009 as the "experts" and the shill media openly lied about what was going on, openly made excuse after excuse for the weekly declines in actual sales. When the Commerce Department made its famous "2.9%" sales increase my contempt knew no limit, as this statistic was a fantasy. The newly released sales tax receipt totals now show the magnitude of the retail disaster. For BOTH November and December 2009, sales tax receipts were down 7.7% from November and December 2008. Since December 2008 sales were at a 1968 level, this means that 2009's Holiday retail season were lower than that. It is obvious to me that if you have a 7.7% sales tax decline then you had a 7.7% decline in actual sales. Until the Commerce Secretary is indicted for criminal conspiracy the lies will continue. Never has the saying, "lies, damn lies and statistics" been more true. We have a Commerce Secretary and Department which openly engaged in a criminal fraud. Nobody is so incompetent that they can confuse a 7.7% sales decline with a 2.9% sales increase. The Commerce Department knew exactly what it was doing when it openly published fraudulent numbers. Just like the Labor Department knows what it is doing when it releases faked unemployment numbers. The real unemployment rate is closing in on 20%. At some point these government liars and cheats must be held accountable for their treachery. Until that happens, there will be no economic recovery.

The reason I am highlighting sales tax receipts is I am prepared to state the obvious for 2010. As bad as 2009 was for the states, cities and counties in the USA, 2010 will be worse, much, much worse. It is clear to me the "gimmick" phase is now over at the state, city and county level. My personal favorite gimmick was California and its sale of bonds based on future lottery revenue. What if I decided to base my apartment rent for June of 2010 upon the fact that I would win the Oregon Lottery in May? Such action would correctly lead my highly intelligent readers to conclude that I had lost many of my marbles, although those of you who think I have lost at least some of my marbles are not far off. I have not found being insane to have had much of an impact on living in modern America. In fact, I think it helps one deal with daily life to have a fleeting relationship with reality. Given the grimness of daily life in modern America, the refuge of temporary insanity is a much needed haven.

I foresee only doom and gloom in the USA this year of our Lord 2010. It is a simple fact that most Americans deal with state, local and city governments much more than they ever deal with the FEDERALES. We have run out of gimmicks, budget cuts, fee increases and the like at the state, city and county level for 2010. 2010 is going to be the year the fiscal rubber hits the road at the state, city and county level. Either we are going to see massive tax and fee hikes, like Oregon's $700 Billion permanent income tax surcharge on high incomes, or we are going to see massive service cuts. One or the other. Our esteemed fuhrer Ubanga the First, and his pet central banker Braying Bernie, are running their own $150 Billion a month federal deficits, so there will be no federal money to help the colonies. The locals are on their own, aside from having unfunded mandates imposed upon them by the stimulus bill of 2009. As such, it is at the local level, state, city and county, the fiscal collapse will start.

We are going to see in 2010 nothing less than the fiscal implosion of local government. All types of revenue the locals depend upon: income tax, property tax, sales tax and building and permit fees are going down, down, down. Virtually all states are facing multibillion dollar revenue shortfalls in 2010. They cajoled, squeaked by, finessed, juggled the books, advanced revenues from 2010 to 2009 etc. etc. etc.; however, that is all done now. The winter of our discontent is passing. The spring of our hard choices is soon upon us. After that, we will get to our summer of anger and rage. The only reason we haven't had mass riots in our cities is the Feds have kept the lifelines open for a few months more. It is food stamps, extended unemployment benefits and assorted emergency welfare, utility assistance and other help programs which have kept the urban mob quiet. All of these programs are exploding in use as the money dries up. Many state unemployment programs are bankrupt and have been on the Federal Dole since early 2009. The second the federal funding and loans to the states for these programs cease, we will see levels of social anarchy which will rival Hati.

The fiscal games are over. The money has run out at the local level. The social chaos comes.

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