Is Rep. Vern Buchanan (FL-16) Sugar Coating his Vote for the Ryan-Murray Budget deal?

I sent an email to Congressman Vern Buchanan (FL District 16) regarding his vote in favor of the Ryan-Murray Budget. I received a reply and decided to analyze what Rep. Buchanan said in his letter. This is important because Rep. Buchanan sits on the House Ways and Means Committee and is co-Chair of the Florida Congressional Delegation. Both are key positions in developing fiscal and spending policies at the federal level.

Here is a point by point analysis of Rep. Buchanan’s reply using a variety of resources including the Washington Post, Heritage Foundation and Breitbart:

Dear Dr. Swier:

Thank you for contacting me about the federal budget that passed the Congress last week.  Although far from perfect, this agreement is a positive step toward restoring fiscal responsibility to Washington.

ANALYSIS – RESTORING FISCAL RESPONSIBILITY: WaPO, ‘The total deal is $85 billion. About $45 billion of that replaces sequestration cuts in 2014. About $20 billion replaces sequestration cuts in 2015. About $20 billion is deficit reduction atop sequestration.” Heritage, “[T]he deal increases spending immediately while delaying deficit reduction until later and trades some spending cuts for more revenue.” Breitbart, “The Bipartisan Budget Act (BBA) of 2013 would increase the discretionary spending caps established by the 2011 Budget Control Act (BCA) by $45 billion in 2014 and $18 billion in 2015,” the opening paragraph of the analysis reads. “The $63 billion in higher spending is not offset over the BCA window of 2014–2021; during that period, the legislation increases spending by almost $25 billion, as 53% of the offsets in the BBA realized during the BCA window come from higher fees and revenues.'”

The budget reduces the deficit and cuts spending by eliminating waste, stripping corporate welfare and trimming benefits for federal employees.  And it does this all without raising taxes.

ANALYSIS – ELIMINATING WASTE, STRIPPING CORPORATE WELFARE AND TRIMMING BENEFITS OF FEDERAL EMPLOYEES: WaPO, “The new policies in the deal are split between revenue through fees — travelers will see higher prices on airline tickets and federal workers will have to contribute more to pensions — and spending cuts.” Heritage, “The budget deal ends a cost-shared partnership called the Ultra-Deepwater and Unconventional Natural Gas and Other Petroleum Resources Research Program, which researches ultra-deepwater architecture and unconventional drilling technologies. Ending the program is an important recognition that the federal government allocates billions of taxpayer dollars to activities that the private sector should be fully funding. Congress should go much further and remove all of these funding streams for all energy sources and technologies … The budget deal’s provision to improve the Pension Benefit Guaranty Corporation’s (PBGC) $36 billion deficit is a step in the right direction, but the allocation of increased premiums is misguided. The budget deal increases both the per-participant premium as well as the variable-rate premium assessed on plans’ unfunded liabilities. Increasing the per-participant premiums forces financially sound pension plans to pay for the financially unsound plans.” Breitbart, ” [T]his plan is not even really a budget since Ryan and Murray abandoned commitments to a budget conference—making the legislation actually just a spending bill.”

The agreement replaces some of the arbitrary cuts under sequestration with more targeted spending reductions, while achieving deficit reduction greater than under current law.  The budget also preserved 92 percent of the original spending cuts required under sequestration.

Specifically, the budget deal includes some of the following provisions:

  • Reduces the deficit by $23 billion without raising taxes.
  • Reduces borrowing by $85 billion through a combination of mandatory savings and increased non-tax revenue.
  • Repeals corporate welfare policies, saving taxpayers $8.1 billion.
  • Ends the special carve-out for student-loan servicers saving taxpayers $3 billion.

ANALYSIS – ACHIEVING DEFICIT REDUCTION AND INCREASING NON-TAX REVENUE: WaPo, “Spending will be $45 billion higher in 2014 than it would’ve been absent the deal. The deal replaces about half of sequestration’s cuts to defense and non-defense discretionary spending in 2014. It replaces about a fourth of them in 2015. That means most of sequestration will go into effect in both years.” Heritage, “Under Title VI section 601, the proposal calls for an increase in aviation passenger security fees. This fee increase would take the current amount from $2.50 per passenger to $5.60. Unlike the original fee, this increase is not being used to fund or improve security. Instead, the revenue collected is being proposed to replace automatic spending cuts set to begin in January. The revenue, however, will not be directly distributed to the Transportation Security Administration (TSA); instead it will be deposited annually into a general fund of the Treasury. This increase is yet another way that the Administration and Congress are using the travel industries as an open pocketbook.” Breitbart, “Much of the spending increase in this deal has been justified by increased fees and new revenue. In other words: it’s a fee increase to fuel a spending increase—rather than reducing deficits. Disappointingly, CBO’s analysis states that $47 billion out of the $85 billion in offsets occur outside the original BCA window, and the spending cut portion of those outyear offsets are of dubious validity. It is not disputable that net spending in the BCA window is increased.”

Although far from perfect, this agreement is a positive step toward restoring fiscal responsibility to Washington.

Again, thank you for contacting me.  If you want to receive congressional updates on this issue click here.


Member of Congress



Booze, Pole Dancing, and Luxurious Hotels: Top 10 Examples of Government Waste in 2013
The 13 Tax Increases of 2013 – Gird Your Loins, more coming in 2014!
2014 begins with $54 billion in tax hikes

The 13 Tax Increases of 2013 – Gird Your Loins, more coming in 2014!

Curtis Dubay from The Foundry writes, “It’s about time for us to uncover our eyes and take a hard look at what 2013 did to our finances. Did you feel the pinch of the 13 tax hikes that hit Americans this year?”

Before you review the list below, put these two on your watch list for 2014:

  • Obamacare’s individual mandate. Beginning in 2014, it’s mandatory to purchase health insurance. If you don’t, you’ll pay a penalty that dramatically increases over time. It starts at $95 or 1 percent of your income (whichever is greater). It rises to $325 or 2 percent of income in 2015, and $695 or 2.5 percent of income in 2016.
  • Obamacare tax on insurance companies. If you liked seeing your premiums go up, you’ll love this new tax on health insurers—which they are most likely to pass on to you.

As you start reviewing your tax information for 2013, here’s what you’re contending with.

The 13 Tax Increases of 2013

1. Payroll Tax: increase in the Social Security portion of the payroll tax from 4.2 percent to 6.2 percent for workers. This hit all Americans earning a paycheck—not just the “wealthy.” For example, The Wall Street Journal calculated that the “typical U.S. family earning $50,000 a year” would lose “an annual income boost of $1,000.”

2. Top marginal tax rate: increase from 35 percent to 39.6 percent for taxable incomes over $450,000 ($400,000 for single filers).

3. Phaseout of personal exemptions for adjusted gross income (AGI) over $300,000 ($250,000 for single filers).

4. Phase down of itemized deductions for AGI over $300,000 ($250,000 for single filers).

5. Tax rates on investment: increase in the rate on dividends and capital gains from 15 percent to 20 percent for taxable incomes over $450,000 ($400,000 for single filers).

6. Death tax: increase in the rate (on estates larger than $5 million) from 35 percent to 40 percent.

7. Taxes on business investment: expiration of full expensing—the immediate deduction of capital purchases by businesses.

Obamacare tax increases that took effect:

8. Another investment tax increase: 3.8 percent surtax on investment income for taxpayers with taxable income exceeding $250,000 ($200,000 for singles).

9. Another payroll tax hike: 0.9 percent increase in the Hospital Insurance portion of the payroll tax for incomes over $250,000 ($200,000 for single filers).

10. Medical device tax: 2.3 percent excise tax paid by medical device manufacturers and importers on all their sales.

11. Reducing the income tax deduction for individuals’ medical expenses.

12. Elimination of the corporate income tax deduction for expenses related to the Medicare Part D subsidy.

13. Limitation of the corporate income tax deduction for compensation that health insurance companies pay to their executives.

President Obama demanded these higher taxes, but they did nothing to address the actual cause of our deficit and debt problem: too much spending. The proper way to address this problem is through reforms to entitlement programs.

President Obama promised the American people a “balanced approach” of tax increases and spending cuts to reduce deficits and debt. He achieved the tax increase portion of that approach. Now Congress needs to force him to follow through on the spending cuts.

Early returns: Top ten states for year-over-year job growth

Conservative Intelligence Briefing reports, “Nationwide, job growth just can’t seem to get ahead of growth in the U.S. working-age population.” The share of Americans who work for a living remains stuck near its post-crash low, and that hasn’t changed in 2013:


National employment growth was just 1.7 percent over the last twelve months. Still, some states are doing better than others. The Bureau of Labor Statistics published its preliminary state jobs data for November this week. Thirty-three states enjoyed statistically significant job growth in the year-long period that ended at the beginning of this month.

Here are the biggest job gainers in terms of percentage growth. There isn’t a clear common political thread here, but it is worth noting that all of the top five and seven of the ten have all-Republican governments.

10. Colorado:


Who knows — maybe all that recent election spending helped out? The Centennial State has 46,000 more people employed today than it did twelve months ago — a gain of 2.0 percent, which is 12 percent ahead of the national rate. Among other things, the fracking revolution has helped Colorado exploit its shale resources — the state now ranks sixth for natural gas production and ninth for oil.

Construction jobs in Colorado are up 7 percent and shale gas is although a few financial sector jobs disappeared. The unemployment rate fell from 7.6 to 6.5 percent during those twelve months.

9. Delaware:


Hi, we’re in…Delaware, home to the nation’s most corporate-friendly legal system. Financial and professional services enjoyed the largest gains as Delaware created 8,400 jobs, or 2 percent growth year-over-year. It also has some nice beaches.

8. Indiana:


The Hoosier State’s beaches aren’t quite as nice, but it is the second-newest right-to-work state and the top state for manufacturing as a share of all employment. The Hoosier Tiger now sustains nearly 3 million workers on the job — more than Washington State, which has a larger population and faster population growth.

Unemployment in Indiana fell from 8.4 to 7.3 percent over the last year. Job growth was 61,100, or 2.1 percent, with the trade/transportation/utilities sector leading the way. Neighboring Illinois, with a population twice as large, created fewer jobs over the same period.

Hoosier job growth especially picked up in the fall, with more than 25,000 jobs added between October and November.

7. Utah:


Former Gov. Jon Huntsman pointed out during the 2012 GOP primaries that his state had been tops in job creation, ahead of Texas. The Beehive State isn’t number one this time, but it’s not doing too badly. The manufacturing, financial services, and trade/transportation/utilities sectors all grew as the number of employed grew 28,100, or 2.2 percent. Unemployment also fell by a full point over the last 12 months to 3.4 percent.

6. Oregon:


When the price is $4.99 in Oregon, you’re going to get that penny back in change — there’s no sales tax. It’s also a beautiful place where lots of people want to live – and it has the best ads for Obamacare, by far.

Construction jobs are up nearly 8 percent in the Beaver State since last year. Oregon added 36,800 jobs in the last 12 months for 2.2 percent growth, and its unemployment rate fell from 8.4 to 7.3 percent.

5. Georgia:


Life’s still not a peach in Georgia, with the unemployment rate above the national average, but at least it fell over the last year from 8.7 to 7.7 percent. Construction jobs rose 9.5 percent as overall job growth was 2.3 percent, or 91,400.

4. Idaho:


A hidden Gem — nope, it’s not just a bunch of potatoes.

Idaho’s employment base increased by 2.3 percent as it added 14,500 jobs in twelve months, leaping ahead of New Hampshire in its absolute job total. The state’s unemployment rate also fell from 6.7 to 6.1 percent.

3. Florida:


Rick Scott, the Sunshine State’s unpopular Republican governor, has to be happy to see his state doing well at just the right moment for him. Construction, trade, and professional and business services all made big gains as the state continued its recovery from the depths of the real estate crash. Job growth was 183,000, or 2.5 percent. Unemployment, which exceeded 10 percent after the crash, fell from 8.0 to 6.4 percent over the last 12 months.

2. Texas:


In absolute numerical terms, Texas remains the Granddaddy of job growth, beating even California, with its much larger population. In total, Texas is now home to three-quarters as many jobs as California, despite having just two-thirds the population.

On net, the Lone Star state added 274,200 jobs in twelve months, an increase of 2.5 percent. Among other things, Texas has played a large role in the recovery of U.S. domestic oil production.

1. North Dakota:


For years, there was a serious effort among state legislators to rename this state just “Dakota,” to make it seem a bit less remote. That probably won’t be necessary anymore. North Dakota created jobs this year twice as fast as the national average, with 4.0 percent growth or 17,500 jobs.

The state’s oil boom has led to such massive growth that infrastructure can hardly keep up. Oil and gas exploration has created vast numbers of jobs that pay very well, along with huge demand for supporting industries. Construction jobs are up 8 percent year over year. The cost of living has skyrocketed, as has the cost of real estate.
If you need a job — or if you want to spend a year doing something practical before you go to college — there’s no better place to go. You can call the state whatever you want, but at 2.6 percent, the unemployment rate is almost as low as the temperature this time of year.

Read more.


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Booze, Pole Dancing, and Luxurious Hotels: Top 10 Examples of Government Waste in 2013

Romina Boccia and Matthew Sabas from the Heritage Foundation have compiled the Top 10 Examples of government fraud, waste and abuse of taxpayers money.

According to Boccia and Sabas, “The latest budget deal, passed by a bipartisan majority in both the House and the Senate, suggests that Washington agrees with House Minority Leader Nancy Pelosi (D-CA) when she said that ‘the cupboard is bare. There’s no more cuts to make.’”

The cupboard, however, is overflowing with liquor, crystal glassware, and more.

Here is the Heritage Foundation’s list of the Top 10 examples of wasteful government spending this year, serving as a reminder that there is no shortage of excessive spending in Washington.

10. Outhouse in Alaska: $98,670. The Interior Department spent nearly $100,000 to install an outhouse on an Alaskan trail, which includes a single toilet with no internal plumbing.


9. A bus stop with heated pavement for the Washington area$1 million. A lavish bus stop with heated pavement was built in Arlington, VA, but it has failed to keep commuters warm or dry.

bus stop

8. Grant for a pole dancing performance$10,000. Utility poles, that is. The National Endowment for the Arts provided a grant to PowerUP for Austin Energy employees to perform an artsy dance with 20 utility poles, accompanied by a live orchestra.


7. Pizza — from a printer$124,995. NASA gave a six-figure grant to a company that aspires to make pizza from a 3-D printer.


6. Study to find out if couples are happier when the woman calms down after argument:$335,525. “[M]arriages that were the happiest were the ones in which the wives were able to calm down quickly during marital conflict,” found a study of 81 couples funded by the National Institutes of Health.

happy couple

5. Booze and crystal for the State Department$5.4 million. The State Department went on a bender the week before the government shutdown, purchasing $5 million of “exquisite”crystal glassware to presumably drink the $400,000 in booze they purchased in 2013.


4. Monitoring depression on Twitter$82,000. The National Institutes of Health is funding a study “to use Twitter for surveillance on depressed people,” according to the Free Beacon.

Social Network - Twitter

3. Seven-figure stack of rocks at the London Embassy$1 million. The American Embassy in London will be receiving a granite sculpture from an artist “whose work resembles stacked piles of paving stones,” according to the Daily Mail.


2. Artwork for Veterans Affairs offices$562,000. The Department of Veterans Affairs went on a spending spree during “use it or lose it” season, purchasing over half a million in artwork and millions in furniture in a single week.


1. Government employee trip to luxury hotel in the Caribbeanpriceless. Federal employees took a taxpayer-funded trip to the Buccaneer Hotel in St. Croix—the same hotel made famous on TV’s “The Bachelor.” The bill was divided among a number of agencies, making a final tally difficult to come by.

Scenes Of St. Croix

Honorable Mention

A Super Bowl champion Obamacare campaign: $130,000. The Baltimore Ravens were paid $130,000 in taxpayer money to sponsor the Affordable Care Act.

President Barack Obama honors the Ravens

An overwhelming, bipartisan majority of Americans thinks that Congress can find more ways to cut government spending, and there are numerous programs of questionable value that Congress should eliminate.

America did not end up $17 trillion in debt overnight. Congressional refusal to cut spending and prioritize taxpayer money more appropriately year after year got the nation to this point. Congress will have another opportunity before January 15, when considering the 2014 spending bill, to do better. Fiscal restraint is long overdue.

For other examples of government waste, see Heritage’s 2013 edition of Federal Spending by the Numbers and Senator Tom Coburn’s 2013 Wastebook.

New York set to Trail Florida in Population

New York Times writer Jesse McKinley writes, “New York, whose status as the most populous state has long been ceded, will soon fall behind Florida into fourth place, a long-anticipated drop that is rife with symbolism and that could carry potentially serious economic consequences in coming years.”

“When the Census Bureau releases its latest population estimates on Monday, demographers expect that Florida and New York will be narrowly separated — perhaps by as little as a few thousand people — and that if Florida does not pass New York this time, it almost certainly will do so in 2014,” notes McKinley. Read more.

The Miami Herald reports, “If Florida surpassed New York in the near future, it wouldn’t be a surprise,” said Stan Smith, director of the Population Program in the University of Florida’s Bureau of of Economic and Business Research. “We’ve been gaining on New York for a long time.”

Andrew Beveridge, a Census expert and Queens College professor, said Florida’s ascent was inevitable: “If it hadn’t been for the financial crisis, Florida probably would have already passed New York.” Read more.

Florida gained three seats in Congress after the 2010 Census (see map below). If this trend continues, it may pick up more seats in 2020?


A special thanks to the 50% of taxpayers who pay 97% of all income taxes

The Tax Foundation has released a summary of who really pays federal income taxes. According to the Tax Foundation:

The Internal Revenue Service has released new data on individual income taxes, reporting on calendar year 2011.[1] The IRS data continues to reflect the fact that half of all taxpayers pay nearly all income taxes. However, the improving economy resulted in a spreading of the tax burden as the number of filers increased along with incomes and taxes paid for all income groups except the top 0.1 percent. The higher incomes pushed taxpayers into higher brackets, resulting in an increase in average income tax rates for all income groups except the top 0.1 percent, whose effective rate remained about the same as in 2010. The income shares of the top 1 and 2 percentiles fell in 2011, as did their shares of taxes paid.

The Top 50 Percent of All Taxpayers Paid 97 Percent of All Income Taxes; the Top 5 Percent Paid 57 Percent of All Income Taxes; and the Top 1 Percent Paid 35 Percent of All Income Taxes in 2011

Table 1 breaks down the latest IRS data on number of returns, adjusted gross income, income taxes paid, and average tax rate by income group. In 2011, the bottom 50 percent of taxpayers (those with Adjusted Gross Incomes (AGI) below $34,823) accounted for 11.55 percent of total AGI. This group of taxpayers paid approximately $30 billion in taxes, or 2.89 percent of all income taxes in 2011. In contrast, the top 50 percent of taxpayers (those with AGIs above $34,823) accounted for 88.5 percent of total AGI. The top 50 percent of taxpayers paid $1.01 trillion in income taxes, or 97.1 percent of all income taxes in 2011.

In 2011, the top 10 percent of taxpayers (with AGIs above $120,000) accounted for 45.4 percent of all AGI and 68.3 percent of all income taxes paid. Taxpayers in the top 5 percent accounted for 33.9 percent of all AGI and 56.5 percent of all income taxes paid. The top 1 percent of all taxpayers accounted for 18.7 percent of all AGI and 35.1 percent of all income taxes paid.

Economy Improved, Pushing Incomes and Taxes Paid for all Income Groups Higher, Except for Those in the Top 0.1 Percent

The improving economy added about 1.6 million new filers, from 135 million in 2010 to 136.6 million in 2011. This alone tended to spread the tax burden, as many of these new filers also paid taxes. As well, incomes and taxes paid increased for all income groups except those in the top 0.1 percent (taxpayers making $1,717,675 or more). (See Tables 3 and 4.) Income increased only slightly for the top 1 percent and remains below the levels seen in 2005 through 2008. Likewise, taxes paid for the top 1 percent remains significantly lower than the peak year of 2007. As a result, the income and tax shares for the top percentiles, including the top 1 and 2 percent, fell in 2011.

Average Tax Rate Increased for All Groups and Remained Essentially Flat for the Top 0.1 Percent

Higher AGIs pushed taxpayers into higher tax brackets, resulting in higher average income tax rates for most income groups (Table 8). The average tax rate for the bottom 50 percent of taxpayer increased from 2.37 percent in 2010 to 3.13 percent in 2011, but still remains lower than the average of 3.4 percent since 2001. This increase in tax rate is likely due to the expiration of the Making Work Pay tax credit. The top 50 percent’s average income tax rate increased from 13.05 percent to 13.76 percent.

The average tax rate for taxpayers in the top 1 percent also increased from 23.4 percent to 23.5 percent—the highest average tax rate of any income group. However, the average tax rate for the top 0.1 percent remained essentially flat, changing from 22.84 in 2010 to 22.82 percent in 2011.

For all taxpayers, the average tax rate increased from 11.81 percent to 12.54 percent.

To view the all data upon which this column is written go here.

Sharia Compliant Finance in America

Yesterday’s New York Times Business Day Section had a major article reporting  on Shariah Compliant Finance, “Islamic Banks, Stuffed with Cash, Explore Partnerships in West.”  In late October 2013, we posted on the Iconoclast  about cheerleading that UK Prime Minister  David Cameron gave at the London meetings of the World Islamic Economic Forum  extolling the virtues of making the City,  “the unrivaled Center for Islamic finance.” In that post, we drew attention to some of the demonstrable problems that  the UK had encountered over the past five years accommodating  “Islamic Economic Imperialism,” the term  used by Christopher Holton, Vice President for Outreach at the Washington, DC-based Center for Security Policy and editor of Sharia Finance Watch.

The New York Times article noted the mushrooming growth of the  global Shariah compliant  financial market place:

Over the last 30 years, the Islamic financial sector has grown from virtually nothing to over $1.6 trillion in assets, according to data from the Global Islamic Financial Review, an industry publication. The financial crisis has only encouraged the growth. Industry assets grew 19 percent in 2011 and 20 percent in 2012, in contrast to the less than 10 percent growth at non-Islamic banks in most of the world.

Until recently, Islamic banks have largely put their money to work in the Middle East — or, if they invested in other parts of the world, in real estate. Real estate is among the most popular investments under Islamic law, also known as Shariah, because a deal can be structured that does not require interest payments, which are prohibited by Shariah. But as the banks grow larger they are looking for new, more diverse places to put their money.

Coincidentally, Holton, see our March 2013 NER interview with him, sent us a recent video of his presentation on Shariah Compliant Finance at an event sponsored byChildren of Holocaust Survivors of  Los Angeles  (CHSLA) on December 18, 2013, “Shariah Compliant Finance and Jihad with Money.”  Watch the CHSLA presentation of Holton, here.

Holton  made several  telling points to his lay audience. He said that the term Islamic Finance, the term of art used in the international financial and investment banking community, is cover for Shariah compliant finance aimed at perpetrating  stealth Jihad via a sophisticated call to Islam. It connotes so-called “ethical investing”  given compliance with the totality of  Islamic Shariah and Qur’anic doctrine. It is all about using the cover of the greed factor that undergirds capitalism in the West.

He gave some background of Shariah compliant finance going back to the writings in 1940 of Maulana Maududi, the Indian-born Pakistan Islamic scholar, extolling the virtuesof  Islamic Economics as part of an Islamic revival in the 20th Century. There were similar soundings about the benefits of this in the writings of Sayyid Qutb in the 1940’s and 1950’s. Qutb was a member of the Muslim Brotherhood who provided the underpinnings for the Jihadist doctrine that had its manifestation in Al Qaeda. We also note that Hassan al Banna, Egyptian school teacher and founder of the Muslim Brotherhood in 1928 like Maududi and his disciple Qutb, viewed  Islamic Economic Imperialism as a counterweight.Joseph Spoerl in an NER article, “The World View of Hasan al-Banna and the Muslim Brotherhood” noted that al Banna said:

The entire Muslim world is being corrupted by Western decadence: Muslim countries are being flooded with Western capital, banks, and companies. The founding of the Muslim Brotherhood in 1928 is often explained as a reaction against Western imperialism. For Islamic imperialism al-Banna has only the most effusive praise.22 Imperialism to impose Islamic rule on non-Muslims is altogether to the good. Al-Banna is fully aware that Islam was born not only as a religion but also as an imperialistic ideology mandating the conquest of non-Muslims.

Al-Banna began a network of banks in Egypt and elsewhere that met the Qur’anic standards that prohibited  interest payments as usurious.

Holton explains as vast areas of the Muslim Ummah from Morocco in the West through the Arab heartland to South Asia and the Indonesian Archipelago were Western colonial possessions with Western banking commercial and industrial enterprises. There were few independent Islamic countries of note until the post World War Two era  when independence movements swept these areas. It was oil, and especially the 1973 and 1979 Oil Embargoes and the establishment of the OPEC Cartel that suddenly filled the coffers of Muslim autocrats and gave rise to trillions of petro-dollars for recycling.

Holton noted that the current market for Shariah Compliant finance including instruments like Sukuk or Islamic bonds has virtually doubled between  2008 to 2012, from $800  billion to over $1.7  trillion. Given UK PM Cameron’s  announcement at the World Islamic Economic Forum in London in October 2013, the  Shariah Compliant Finance market looks ready to kick into gear with the underwriting of a $324 Million Sukuk sovereign bond issue. Historically, the Iranian Islamic regime since the 1979 revolution has become the largest center of Shariah Compliant Finance. Holton noted that Iranian banks held  the top rankings of  the leading 500 Islamic finance institutions in the annual Islamic Finance Review by the UK-based publication, The Banker.

That according to Holton gave rise to providing oversight and clearance of ‘ethical’  Sharia compliant investment that  met the  so-called Qur’anic interest payment prohibitions. That meant turning to Islamic scholars like Muslim Brotherhood preacher Yusuf al Qaradawi in Qatar, Mufti Tami Usmani in Pakistan and others in Malaysia. They became advisors to Western investment groups, such as  al Qaradawi did with Dow Jones that had established an Islamic Investment Index. In the case of Hong Kong Shanghai Bank Corporation (HSBC) initially retained Usmani as Islamic legal  advisor for its Amanah  funds program.  Western investment groups did not care a fig about what Shariah is, what they wanted was someone of alleged Islamic legal background  to certify that the investment was halal. The problem was that there were not many of these Shariah experts around to satisfy the growth of  Islamic Finance and it lead to evident growth problems and conflicts of interest. There was virtually no due diligence let alone disclosures about Shariah doctrine and especially about zakat.

Zakat as we have written in an NER article on the relation to terrorism is the annual tithing of charitable contributions  to Muslim charities. One of the eight purposes of which is support for the way of Allah, Jihad. Holton illustrated the later referencing a Shariah compliant real estate mortgage firm  based in New Jersey, BMI, that prior to 9/11 had zakat funds directed via an offshore Islamic bank  to the Egyptian predecessor of Al Qaeda controlled by Ayman al Zawahiri.

Conflicts have occurred as many of  the limited supply of Islamic scholars have forced Islamic finance investment fund sponsors to employ them among competitive sponsors. He noted that both Al Qaradawi and Usmani had additional problems because of their support for terrorist groups like Hamas in the case of the former and the Taliban in the latter instance. Usmani as Holton pointed out had formed the largest Madrassa in Pakistan that harbored the Taliban. Moreover in the instance of Usmani, when HSBC was advised to cease advisory relations with him, the bank simply resorted to retaining his son. Dow Jones didn’t seem perplexed about retaining al Qaradawi for its Islamic Finance Index, despite Qaradawi’s being barred from entry by the US Government.

One peculiar instance that Holton noted was an American convert to Islam who is cited as an advisor to one of the Islamic Finance groups in the New York Times article, Yusuf DeLorenzo. He is featured reviewing a rail car finance deal for Continental Rail to make sure that the cars to be financed wouldn’t carry pork, alcohol or tobacco. DeLorenzo, Holton points out was born a Catholic raised in Massachusetts, who after a year at Cornell  University left to find his bliss in Islamic Pakistan. He converted to Islam becoming a Shariah scholar and advisor to  President Gen. Mohammed  Zia- al  Haq, arch Islamist,  who perpetrated the  bloody Jihad civil war in former East Pakistan in 1971 that morphed into what is now Bangladesh.

Holton cited examples of US government and major legal education institutions in the US complicit in promotion of Shariah Compliant Finance. In 2008, the Bush Administration had the Treasury Department sponsored a conference in conjunction with the Islamic Finance Project  of Harvard Law School on the topic of Islamic Finance 101. Holton had attended a seminar on the subject at one of the seminars of the Islamic Finance Project at Harvard Law School in which he observed that at best the participants had a nodding acquaintance of the term Shariah. He also interviewed a former Treasury official involved with terrorism finance who had joined HSBC after being fined $1 billion for engaging in illegal transactions with  Iran’s oil program. The person evinced little interest or knowledge about Shariah.

Perhaps the best comment at the conclusion of the New York Times article is by Mr. Ibrahim Mardam-Bey, a group president at  Washington, DC-based  investment firm Taylor-DeJongh. who observed:

That some American businesses were hesitant to take money from Islamic banks, perhaps a byproduct of negative associations with Shariah since the Sept. 11 attacks. But in the Texas deal, and in many others, that tends to fade as the financial possibilities become clear.

“The borrower was a Texan wildcatter who couldn’t spell ‘sukuk,’ ” Mr. Mardam-Bey said. “But at the end of the day when I brought the check he didn’t care if I prayed to Allah. He just wanted the money.”

EDITORS NOTE: This column originally appeared on The New English Review.

Turkey’s Illegal Gold Trade with Iran

In our Iconoclast post on Harold Rhode’s speculations regarding a possible alliance of convenience between the Gulenists and Secularists that might topple Premier Erdogan, he drew attention to the illicit gold trading conducted by the state-owned Halkbank.  Suleyman  Aslan, the head of Halkbank at the center of the illicit  gold trading  had been prominent among the 52  arrested in the swirl of events in the current Turkish corruption  scandal.  Jonathan Schanzer and  Mark Dubowitz of the Washington, DC-based Foundation for Defense of Democracy published an article in Foreign Policy Magazine  (FPM) covering  research into the “gas for gold ” scheme that the Obama Administration failed to stop, “Iran’s Turkish Gold Rush”.

Messrs. Schanzer and Dubowitz drew attention to the two principals at the center of the gas for gold trade between Turkey and Iran:

The drama surrounding two personalities are particularly eye-popping: Police reportedly discovered shoe boxes containing $4.5 million in the home of Suleyman Aslan, the CEO of state-owned Halkbank, and also arrested Reza Zarrab, an [Azeri] Iranian businessman who primarily deals in the gold trade, and who allegedly oversaw deals worth almost $10 billion last year alone.

The FPM article on the Turkey Iran  ‘gas for gold” trade  described  how it worked:

The Turks exported some $13 billion of gold to Tehran directly, or through the UAE, between March 2012 and July 2013. In return, the Turks received Iranian natural gas and oil. But because sanctions prevented Iran from getting paid in dollars or euros, the Turks allowed Tehran to buy gold with their Turkish lira — and that gold found its way back to Iranian coffers.

Earlier this year in May 2013 the FDD teamed with Roubini Global Economics and conducted an investigation into the dynamics of the gold trade and its significant alleviation of currency restrictions under sanctions against Iran’s nuclear program. The FDD report, “Iran’s Golden Loophole” indicated the scope and impact of the gas for gold scheme:

These foreign exchange reserves are Iran’s principal hedge against a severe balance of payments crisis, and help Iran withstand international pressure over its nuclear program. Since July 30, 2012, when the Obama administration issued an executive order prohibiting gold exports to the government of Iran, Iran has received over $6 billion in payment in gold for its energy exports—the value of the lack of enforcement of the golden loophole—mainly as gold payments to the Central Bank of Iran. These gold exports to the Central Bank of Iran already are a sanctionable activity under existing U.S. law; gold exports to any entity in Iran will become sanction able as of July 1, 2013. This report estimates that, unless gold sanctions are enforced, Iran could receive up to $20 billion a year, representing around thirty percent of Iran’s projected 2013 energy exports.

Schanzer and Dubowitz questioned why Turkey, a NATO ally of the US, had engaged in the Gold trade with Iran, and why the Obama Administration hadn’t closed it:

The Turks — NATO allies who have assured Washington that they oppose Iran’s military-nuclear program — brazenly conducted these massive gold transactions even after the Obama administration tightened sanctions on Iran’s precious metals trade in July 2012.

Turkey, however, chose to exploit a loophole that technically permitted the transfer of billions of dollars of gold to so-called “private” entities in Iran. Iranian Ambassador to Turkey Ali Reza Bikdeli recently praised Halkbank for its “smart management decisions in recent years [that] have played an important role in Iranian-Turkish relations.” Halkbank insists that its role in these transactions was entirely legal.

The U.S. Congress and President Obama closed this “golden loophole” in January 2013. At the time, the Obama administration could have taken action against state-owned Halkbank, which processed these sanctions-busting transactions, using the sanctions already in place to cut the bank off from the U.S. financial system. Instead, the administration lobbied to make sure the legislation that closed this loophole did not take effect for six months — effectively ensuring that the gold transactions continued apace until July 1. That helped Iran accrue billions of dollars more in gold, further undermining the sanctions regime.

In defending its decision not to enforce its own sanctions, the Obama administration insisted that Turkey only transferred gold to private Iranian citizens. The administration argued that, as a result, this wasn’t an explicit violation of its executive order.

Perhaps as the authors point out, the Administration had other concerns  not disturbing the relations with the Erdogan regime regarding  the latter’s role in the regional  alliance contending with the 33 month Syrian civil war . There was Turkey’s support for rebel factions and the safe haven it provided the massive stream of 1.5 million refugees.  However could  it have been  the  nearly $6 billion “they estimate the golden loophole” could have provided  Iran in the way of an ”olive branch” used during the secret negotiations  by the Obama Administration that led up to the November 24, 2013 P5+1  interim agreement?

According to a Zaman Today article, cited by the authors,  the illicit “gas for gold” trade between Iran could be vastly more  significant: “The  suspicious transactions between Iran and Turkey could exceed $119 billion — nine times the total of gas-for-gold transactions reported. “

There are suspicions about whether the “gas for gold” scheme enabled Iran to pay for machinery used in the production a new class of centrifuges announced by AEOI head Ali Akbar Salehi this week. Then there is the question of payments for Russian contractors and personnel engaged in projects like the Arak heavy water reactor that would enable Iran to produce plutonium.  And lest we also not forget  could have been used  to fund payments in the  waivers granted  by the US  for the Iranian  oil trade with China and others.  Clearly, the current corruption probe in Turkey may lift the veil on a vast underworld of transactions with Turkey  that may have enabled Iran to continue, if not accelerate, achievement of their nuclear weapons program objective: nuclear hegemony destabilizing the Middle East and the World.

EDITORS NOTE: This column originally appeared on The New English Review.

Your Money in Pictures: The Top 5 Charts of 2013

As part of our countdown to the new year, here are Heritage’s top five must-see charts of 2013.

5. What If a Typical Family Spent Money Like the Federal Government?

While middle-class families are still plagued by a sluggish recovery in the Obama economy, this is what their finances would look like if they spent money like the government—and it’s not a pretty picture. Most families understand that it is unwise to constantly spend excessive amounts compared to what they take in, but the government continues its shopping spree on the taxpayer credit card with seemingly no regard to the stack of bills that has already piled up.


4. Obamacare’s Barrage of Tax Hikes

Remember President Obama’s promise that he would not raise taxes on the middle class? Much like his pledge that Americans could keep their health insurance, this turned out to be another promise Obamacare was bound to break. As this chart shows, tax hikes included in Obamacare are huge and pervasive, amounting to hundreds of billions of dollars in new revenues. Since this chart was published, new numbers for Obamacare’s taxes have become available, and a study by Heritage’s Alyene Senger shows that Obamacare will impose even more in taxes—amounting to a whopping $771 billion in new revenue through 2022.


3. Sequestration Cuts Only 2.5 Percent of Spending

As it turns out, sequestration isn’t much of a “meat cleaver” after all. While the sequester is an imperfect mechanism to reduce spending, as the brunt of the cuts falls disproportionally on defense, it only amounts to a 2.5 percent reduction in spending over 10 years. This hardly lives up to the President’s warnings that the cuts would be “harmful” to the economy and would decimate government services. As you can see, the U.S. has a long way to go to rein in its growing spending.


2. Where Did Your Tax Dollar Go?

Wonder what happens to your hard-earned cash after you hand it over the IRS each year? Almost half goes toward paying for the ballooning entitlement programs—Social Security, Medicare, and Medicaid—a proportion that will only increase as the number of retirees expands in the near future. Even worse, your tax money only funded 70 cents of every federal dollar spent in 2012, meaning the remaining 30 cents was borrowed and tacked on to the massive national debt.


1. Each American’s Share of Publicly Held Debt

As Washington lawmakers continue to spend more and pile on debt, each American’s share of public debt has risen to $36,000—about six times more than in 1970—and is set to rise astronomically in coming years. Without reform, the government will have borrowed $135,547 in public debt for each American, or almost three times the current median income, by 2036. This chart shows that serious consequences lie ahead if the government continues on its current path of reckless spending with no reform in sight.


To address the serious issues highlighted in these charts, Congress must put America on a path to balance by reforming the major entitlement programs—Social Security, Medicare, and Medicaid—that are the key sources of higher spending and debt. By implementing entitlement reforms and discretionary spending cuts, Congress can lift a tremendous burden off the economy, freeing up resources for investment in jobs and growth in the private sector.

Florida Public Service Commission to take up Smart Meters January 7, 2014

According to Marilynne Martin from Venice, FL, “The Florida Public Service Commission staff has posted its recommendation to the Commission regarding Florida Power & Light’s (FP&L) request to charge for an opt out. In a nutshell, they are recommending the charge be reduced as follows: One Time Fee – FP&L requested $105, Staff Recommends $95; Monthly Fee – FP&L requested $16/month, Staff recommends $13/month.”

“The recommendation does not address the type of meter you will get. FP&L’s tariff just says ‘non-communicating’ meter. This causes two problems. For those objecting for privacy reasons, they can put a digital meter on your home that contains a computer that collects data but does not transmit such data wirelessly to FP&L,” notes Martin.

For those that are getting sick from the meters, it was found in California and Nevada that the digital non communicating meters continued to make people sick. They fought and won the right for an analog meter.

Martin states, “Staff’s report indicates that as of the writing of their report only 35 residents filed objections to the tariff. There are 4.5 million FP&L customers. No serious opposition on record so I fully expect the Commission to approve the staff recommendation and charges will most likely start to occur April 2014.”

The Commission will meet on this docket on January 7, 2014. All Docket Info can be found here

Martin provided the following talking points for those concerned about Smart Meters in Florida:

  • If you are a FP&L customer and don’t have a smart meter, please note that in your comments up front.
  • Not only should this petition be suspended but it should be put on hold pending full evidentiary public hearings on smart meters from a cost, health, privacy and security perspective. In light of the recent NSA scandals and also all the Federal Government concerns and potential mandates on cyber-security for the grid, as well as the fact that FP&L’s own estimates from the recent rate case do not show savings to the ratepayer, it is time to re-evaluate.
  • Opt Out’s alleviate some concerns but not all. What happens to the multi-family dwellings? How does someone with 10-100 meters behind their wall “opt out”? You can’t. What happens to the residents that are getting sick from their neighbors meters or the associated equipment outside their unit on the poles?
  • What exactly is a “non-standard” meter? Those opting out want to retain their analog meters and do not want a non-communicating meter (digital). (This is important as California found that the digital meters were still making people sick because of the dirty electricity it produced on their home electrical lines.)
  • Those opting out should not have to pay a fee to protect their health and privacy. The smart meters cost approx. 5 times more than the analog and their estimated useful life is half. They require more equipment (routers, repeaters, IT maintenance, security, software, telecom fees, etc.) than analogs. The cost is far greater. Weather events will cost more as there is now additional sensitive communication equipment that can be damaged and will need replacement
  • As FP&L admitted in Docket # 130160, smart meters stop communicating. FP&L needs a method to get the meter reads in for the smart meters that don’t work properly. FP&L could use the same programs to get the manual meter reads in for the opt outs. They don’t need to write separate programs.
  • Monthly manual meter reads are not required for those opting out. FP&L could do one of two things. Either do estimated billing based on history or have the customer submit their own meter reading. Once a year FP&L should be coming out to all customers (regardless of which meter they have) to inspect their equipment on our property to make sure it is in good working order. They could do a meter read at that time to verify that the customer was doing proper readings. In addition, customers could also submit digital photos of their meter to support their readings. No need for monthly charges.
  • There is PLENTY of precedent of services be performed for “some” customers and not “all” and no fee is charged. Examples, 1) spanish translations of materials, customers service, 2) brail bills, 3) TDDY services for the deaf, 4) home energy audit.

EDITORS NOTE: For those interested in the installation of smart meters on their homes in Florida may contact the Public Service Commissioners directly. Very important that you put “Comments for Docket # 130223” in the Subject line. Public Service Commission e-mail addresses are as follows:

Commissioner Eduardo E. Balbis:

Commissioner Julie Imanuel Brown:

Commissioner Ronald A. Brise:

Commissioner Lisa Polak Edgar:

Commissioner Art Graham:

Office of Commission Clerk:

To the Federal Reserve: Happy 100th Birthday

On December 23, 1913 the Federal Reserve Act was passed, creating the Federal Reserve. The Federal Reserve Act (ch. 6, 38 Stat. 251, 12 U.S.C. ch. 3) was an Act of Congress that created and set up the Federal Reserve System, the central banking system of the United States of America, and granted it the legal authority to issue Federal Reserve Notes, now commonly known as the US Dollar, and Federal Reserve Bank Notes as legal tender. The Act was signed into law by President Woodrow Wilson.

Since that time the Federal Reserve has held tremendous sway over the US economy, especially Wall Street.

Robert H. Hamphill, Atlanta Federal Reserve Bank  notes, “We are completely dependant on the commercial banks. Someone has to borrow every dollar we have in circulation, cash or credit. If the banks create ample synthetic money we are prosperous; if not, we starve. We are absolutely without a permanent money system … It is the most important subject intelligent persons can investigate and reflect upon. It is so important that our present civilization may collapse unless it becomes widely understood and the defects remedied very soon.”

Here are some notable quotes about the Federal Reserve:

“The few who understand the system, will either be so interested from it’s profits or so dependant on it’s favors, that there will be no opposition from that class.” — Rothschild Brothers of London, 1863

“Give me control of a nation’s money and I care not who makes it’s laws” — Mayer Amschel Bauer Rothschild

“Most Americans have no real understanding of the operation of the international money lenders. The accounts of the Federal Reserve System have never been audited. It operates outside the control of Congress and manipulates the credit of the United States” — Sen. Barry Goldwater (Rep. AR)

“This [Federal Reserve Act] establishes the most gigantic trust on earth. When the President [Wilson] signs this bill, the invisible government of the monetary power will be legalized….the worst legislative crime of the ages is perpetrated by this banking and currency bill.” — Charles A. Lindbergh, Sr., 1913

“From now on, depressions will be scientifically created.” — Congressman Charles A. Lindbergh Sr., 1913

“The financial system has been turned over to the Federal Reserve Board. That Board as ministers the finance system by authority of a purely profiteering group. The system is Private, conducted for the sole purpose of obtaining the greatest possible profits from the use of other people’s money” — Charles A. Lindbergh Sr., 1923

“The Federal Reserve bank buys government bonds without one penny…” — Congressman Wright Patman, Congressional Record, Sept 30, 1941

“We have, in this country, one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board. This evil institution has impoverished the people of the United States and has practically bankrupted our government. It has done this through the corrupt practices of the moneyed vultures who control it”. — Congressman Louis T. McFadden in 1932 (Rep. PA)

“The Federal Reserve banks are one of the most corrupt institutions the world has ever seen. There is not a man within the sound of my voice who does not know that this nation is run by the International bankers” — Congressman Louis T. McFadden (Rep. PA)

“Some people think the Federal Reserve Banks are the United States government’s institutions. They are not government institutions. They are private credit monopolies which prey upon the people of the United States for the benefit of themselves and their foreign swindlers” — Congressional Record 12595-12603 — Louis T. McFadden, Chairman of the Committee on Banking and Currency (12 years) June 10, 1932

“I have never seen more Senators express discontent with their jobs….I think the major cause is that, deep down in our hearts, we have been accomplices in doing something terrible and unforgivable to our wonderful country. Deep down in our heart, we know that we have given our children a legacy of bankruptcy. We have defrauded our country to get ourselves elected.” — John Danforth (R-Mo)

“These 12 corporations together cover the whole country and monopolize and use for private gain every dollar of the public currency…” — Mr. Crozier of Cincinnati, before Senate Banking and Currency Committee – 1913

“The [Federal Reserve Act] as it stands seems to me to open the way to a vast inflation of the
currency… I do not like to think that any law can be passed that will make it possible to submerge the gold standard in a flood of irredeemable paper currency.” — Henry Cabot Lodge Sr., 1913

Below is a graph of the purchasing power of the US dollar since the creation of the Federal Reserve:

usa dollar purchasing powerHappy birthday Federal Reserve, printing money like there is no tomorrow.


Government Largess is the Opiate of the People

I attended a round-table presentation given by a local doctor on expanding Medicare to cover ever more Americans. A member of the group during the discussion asked everyone around that table about their personal health care coverage. Everyone said the federal government was at least in part subsidizing their coverage.

I want to use the example of Social Security to explain how we have all become addicted to government largess. With our addiction government control over us has increased to the point that today many are dependent on federal largess to maintain their health, happiness and well being.

Karl Marx said, “Religion is the opiate of the people.” I submit to you that, “Government largess is the opiate of the people.”

Government is defined as a “system of ruling or controlling”. Largesse is defined as, “the liberal giving (as of money) to or as if to an inferior.” Therefore, government largess is ruling or controlling by the liberal giving to inferiors (the governed).

Let me provide a brief historical perspective on how we got here.

We the people began to learn about government largesse 104 years ago with the founding of the Intercollegiate Socialist Society in New York City on September 12, 1905 in Peck’s Restaurant. An organizational meeting was held and Jack London was elected President with Upton Sinclair as First Vice President. The ISS was established to, “throw light [in America] on the world-wide movement of industrial democracy known as socialism.” Their motto was “production for use, not for profit.”

Production for use, not for profit is the prime goal of government largess.

So how could socialists begin distributing government largesse? First they had to gain unfettered control of production.

On February 3, 1913 Congress passed and the states ratified the Sixteenth Amendment to our Constitution. Congress grabbed control of production via the federal income tax. We taxed our productivity by tapping every American’s wages. With the millions, then billions, and now trillions of dollars that Congress collected, they could entice or even force the strongest American to take the government largesse drug.

Then on April 8, 1913 Congress passed and the states ratified the Seventeenth Amendment to the Constitution which transferred U.S. Senator Selection from each state’s legislature to popular election by the people of each state.

These two events made it much easier to collect and distribute government largesse as now Senators were no longer loyal to their state legislatures or primarily concerned with state sovereignty. Now U.S. Senators, along with U.S. Representatives, saw the value of spreading the government largesse drug amongst the people in return for votes.

During the Great Depression Congress created the first opiate for the masses and named it Social Security. It was to be a social insurance program run by government, in other words guaranteed government largess for life.

The Social Security Act was signed into law in 1935 by President Franklin Roosevelt. He and Congress said this new drug would keep those unemployed, retirees and the poor financially secure. He called it the New Deal. All we needed to do was just pay in and all would be well.

In 1937 the United States Supreme Court in U.S. vs. Butler validated the Social Security Act and stated that, “Congress could, in its future discretion, spend that money [collected from the income tax] for whatever Congress then judged to be the general welfare of the country. The Court held that Congress has no constitutional power to earmark or segregate certain kinds of tax proceeds for certain purposes, whether the purposes be farm-price supports, foreign aid or social security payments.” All taxes went into the general fund.

Testifying before the Ways and Means Committee of the House of Representatives in 1952, the chief actuary of the Social Security Administration said—“The present trust fund is not quite large enough to pay off the benefits of existing beneficiaries”—those already on the receiving end, in other words. In 1955 chief actuary believed that it would take $35 billion just to pay the people “now receiving benefits”.

In 1935 under the Social Security program the Congress included the Aid to Families with Dependent Children Act (AFDC).

During the late 1950s many states realized that this act, while created to help widows with children, was being used to subsidize women having children with men they were not married to. Louisiana alone took 23,000 women off the AFDC act rolls based upon their immoral behavior.

In 1960 Arthur Flemming, then head of the Department of Health and Human Services under President Dwight David Eisenhower and a key architect of Social Security, issued an administrative ruling that states could not deny eligibility for income assistance through the AFDC act on the grounds that a home was “unsuitable” because the woman’s children were illegitimate.

In 1968, the United States Supreme Court’s “Man-in-the-House” rule struck down the practice of states declaring a home unsuitable (i.e., an immoral environment) if there was a man in the house not married to the mother. Thus, out-of-wedlock births and cohabitation were legitimized. In very short order, the number of women on welfare tripled and child poverty climbed dramatically. The assault on the family was on and Congress and the Supreme Court were co-pushers of this new government largesse drug called AFDC.

In effect the federal government became the pimp, the homes of single mothers became the brothels and the fathers became the Johns. The children begotten by these women became the next generation of addicts. Just as a baby born to a mother doing crack is addicted to cocaine, so too are these children born with a lifetime addiction to the onerous and destructive drug – government largess.

Then Congress added a new ingredient to the powerful Social Security drug called Medicare on July 30, 1965.

Congress created Medicare as a single-payer health care system. Medicare was for those over 65 years old and was signed into law by President Lyndon B. Johnson. President Johnson called it part of his Great Society program. Congress immediately got more addicts to begin taking this drug.

At the same time Congress added a second even more powerful ingredient to this drug called Medicaid. This new ingredient brought into being an entirely new distribution system – all of the states of the union. Even though this new program violated state sovereignty it was passed anyway, in no small part because Senators were no longer accountable to the State Legislatures but rather committed to pushing government largess.

The states were now helping pay for and distribute this powerful and expensive designer drug. The drug was offered to low-income parents, children, seniors, and people with disabilities. Congress now had more people on the Social Security drug than ever before. Congress had turned a corner – addiction to government largesse was now imbedded in our society.

But Congress was not finished for it kept looking for more clients until we now know that the estimated unfunded liabilities for these four drugs are:

Social Security – $10.7 trillion

Medicare Parts A and B – $68 trillion

Medicare Part D – $17.2 trillion (created in just 3 years)

Our addiction to government largess will cost our children and grandchildren an estimated $95.9 trillion dollars. Ladies and gentlemen, the gross domestic product of the entire world in 2007 was $61 trillion.

I repeat my premise that government largess is the true opiate of the people.

I close with the following quote from a May 26, 1955 Herald-Tribune News Service article:

“Seven Amish bishops appealed to Congress today to exempt members of their church from receiving any benefits of the Social Security program. They are willing to continue paying Social Security taxes, however . . . . The bishops made it clear that no elder of the church would think, today, of applying for Social Security or any other government benefits. They want the law changed, they said, to “remove temptation” from their children and grandchildren.”

Watch this video: Government Gone Wild Seminar: Cradle to Grave

A Nation in the Red: The Financial Collapse of America

“The United States is in very deep trouble. First, the concept of repaying $16.7 trillion in debt is not even a remote possibility over the next 100 years, even if the government had small surpluses. Then, because the country is running such large deficits, the national debt is increasing and getting worse…much worse. In addition, the government is approximately $70 trillion in unfunded liabilities that have to be resolved.”

“Pray that the market for the national debt remains open so that the United States can keep borrowing to repay the money is previously borrowed and then will have to re-borrow to repay the money it just borrowed. There is no chance the market will not change its demeanor over the next 100 years.”

Cover - A Nation in the RedThat’s Murray Holland’s conclusion in his book, “A Nation in the Red: The Government Debt Crisis and What We Can Do About It”. As a longtime book reviewer, I have read a growing stack of books warning about a financial collapse, but Holland’s book is not only based in the actual debt, but is written in a manner that even a person who has no knowledge of this issue can understand.

The “market” Holland refers to is the market for America’s treasury notes and bonds, issued to cover our on-going budget and the interest needed to pay prior borrowing. In sum, the nation is spending more and borrowing more than it can afford. It has been doing this for a long time and the warning signs are places like Greece, Italy, Spain, Portugal and other European nations that, following World War Two, embraced socialism. America did so even earlier during The Great Depression and the decades since the 1930s.

Holland calls it a Debt Trap and conservatives know instinctively that the U.S. government is too large and too based in socialism to survive. “There are over 500 agencies and departments on the list and it does not even include all the agencies and departments created in the states under grant programs from the federal government.” One can find the list here.

“The list of social programs is long,” writes Holland, “but the four major categories driving America into the Debt Trap are income security (Social Security, welfare, and other related programs), health care (Medicaid, Obamacare, and Medicare), education, and housing,” noting that “These programs did not exist until after the Great Depression.” They came about as the result of a Keynesian view that government spending would lift the economy out of its doldrums, but government spending does nothing to improve the economy. It sucks money out of the economy and, more specifically, out of the pockets of individual citizens and the business community.

Americans born during and after the Great Depression have had eighty years living in a nation whose economic system is capitalism, but whose governance is socialism.

Despite nearly fifty years of a Cold War with the former Soviet Union (1945-1991), Americans have been blissfully ignored its intention of the communist intention to destroy capitalism and have accepted a vast matrix of social programs that now represent $70 trillion in unfunded financial liabilities. Even after the collapse of the Soviet Union, their plan “to overwhelm America with debt, welfare, and entitlements—in other words, to bankrupt America has continued unabated.

“This will cause the collapse of America and the government could then turn to pure socialism,” says Holland, noting that “Their scheme has been so well researched it has its own name: the Cloward-Piven strategy,”

It’s worth noting that, in addition to the socialist nations of the European Union, communism is still alive and well in Russia, China, North Korea, Venezuela, and Cuba to name just a few nations. And yet, even Russia and China have adopted some capitalistic measures, while ensuring strong, totalitarian central governments.

The level of danger has increased exponentially with the election and reelection of President Barack Obama whose namesake legislation, Obamacare, is already having a catastrophic effect on the economy while putting all Americans at risk for the loss of healthcare from individual physicians and hospitals. The legislation was passed by a party-line vote by Democrats and opposed by every Republican in Congress. Obama spent the years since signing it lying about it. That’s what Communists do.

It is what the vast bulk of the nation’s print and broadcast media is doing are doing as well. They are little more than echo chambers for the torrent of lies that Obama administration is telling Americans about the economy.

“During the first few years of the Great Depression, almost 2,300 banks were closed, manufacturing fell 46 percent, and wholesale prices fell 32 percent. Today, the United States has a reported unemployment rate of around 8 percent. During the Great Depression, the unemployment rate hit 25 percent.” With ninety million Americans unemployed, the figures cited by the federal government are a fiction.

The only thing that can save America is an increase in our Gross Domestic Product (GDP), selling more goods and services, enabling an increase in employment, coupled with a vast reduction in the enormous governmental regulation of business. The vast taxation of Americans needs to be reduced in order to permit them to retain and spend their earnings, make investments, start new businesses. The annual GDP is now less than what the nation earns.

The “redistribution of wealth” is a totally communist concept and it is the intent of the Obama administration.

The future of the nation depends on the outcome of the 2014 midterm elections and control of Congress by as many conservative candidates and office-holders is essential. The RINOs, Republicans in name only, must be replaced.

In the meantime, I recommend you purchase and read “A Nation in the Red.”

© Alan Caruba, 2013

FHA Watch: 87% of FHA’s October home purchase loans were High Risk

For the fifth year in a row, the FHA has violated federal law by failing to meet its minimum capital standard of 2 percent—equal to about $22 billion on its $1.1 trillion book of insurance in force. The 2013 Actuarial Study found that the FHA had an economic net worth of −$8 billion, up from −$13.5 billion last year but still $30 billion short of the 2 percent statutory standard. This projection assumes moderate house price appreciation averaging 3–3.5 percent over the next 28 years and that a recession is unlikely over the next few years.

Under this rosy scenario, it is no surprise that each new book of business the FHA adds looks profitable. It is also no surprise it has had to revise the expected cumulative claim rates for the 2009-2012 vintages substantially upward from last year’s estimates (for example, 2009 was raised from 13.25 percent to 15.44 percent).

Under the new AEI Mortgage Risk Index, the FHA’s home purchase loans are almost exclusively high risk (87 percent) with 13 percent being medium risk and 0.3 percent being low risk. From 1935 to 1955, nearly 100 percent of FHA loans would have qualified as low risk. The preponderance of high-risk loans today helps explain why the FHA’s delinquency rate remains stubbornly high at 15 percent and its private GAAP net worth has improved only modestly, from −$27 billion in September 2012 to −$25 billion this month. These are not indicators of a financial institution on the road to recovery.

Consider that the current economic expansion is 54 months old, about on par with the World War II standard of 58 months. Given that the standard deviation of postwar expansions is 33.4 months, a recession sometime in the next couple of years is likely. At the same time, unemployment is at 7 percent, an unusually high rate this far along in an expansion. Since the unemployment rate generally rises by about two percentage points in a recession, a rate of 8.5–9 percent might be expected if the United States does enter a new recession.

The threat the FHA poses is demonstrated by the alternate scenarios contained in the actuarial study. For example, it has a −$23 billion economic value today under the 10th-worst scenario, one that likely equates to the impact of a near-term recession. This $15 billion decline in value compared to the baseline case is nearly enough to wipe out the FHA’s minimum statutory capital requirement of 2 percent or $22 billion.

Bottom line—if the economy catches a cold, the FHA gets pneumonia. It is time Congress and the FHA faced facts: the FHA poses great risks to the taxpayer and places most of its insured home buyers into high-risk loans.

Spotlight on Best Price Execution

Planned GSE Guarantee Fee Increase Adds to Ginnie Agency Price Advantage over Fannie

Table 1 demonstrates the pricing advantages the Ginnie/FHA, Ginnie/US Department of Agriculture (USDA), and Ginnie/Veterans Affairs (VA) divisions have over Fannie Mae. FHA, VA, and USDA pricing advantages have increased by about $500 compared to last month because of a 14-basis-point guarantee fee on Fannie loans announced on December 9, 2013.

Table 1. Best Price Execution (Ginnie pricing advantages in bold)

Source: Adapted from JPMorgan’s 2012 Securitized Products Outlook, November 23, 2011, 18.

Note: Mortgage-backed securities (MBS) pricing from MBS Live, published by Mortgage News Daily. Comparison based on MBS pricing as of December 14, 2013. On that date, a Ginnie 30-year MBS with a coupon of 4.0 percent had a price of 104.25, and a Fannie 30-year MBS with the same 4.0 percent coupon had a price of 103.31. These prices were then adjusted based on the present value (where necessary) of applicable borrower-paid credit fees, mortgage insurance premiums, and the value of the base servicing fee. Fannie’s guarantee fee was increased by 10 basis points effective April 2012, as mandated by Congress, by 10 basis points again as announced on August 31, 2012, by the Federal Housing Finance Agency, and by 14 basis points as announced on December 9, 2013, by the Federal Housing Finance Agency All publicly announced FHA premium increases are included. USDA and VA premiums are unchanged. FHA, USDA, and VA pricing includes loan-level pricing adjustments made by Carrington Wholesale Services.

On the whole, the five divisions of the Government Mortgage Complex (along with Freddie Mac) have substantial pricing and underwriting advantages over the private sector. The result is that the Government Mortgage Complex’s share of the entire first-mortgage market continues to be at about 85 percent.

Spotlight on Insolvency

FHA’s Private GAAP-Estimated Net Worth Declines to Lowest Level in Nine Months

This month, the FHA’s private GAAP-estimated net worth deteriorated by slightly over $1 billion. The estimate for November of the FHA’s GAAP net worth is –$24.92 billion, down from –$23.77 billion in October 2013 (revised), up from –$27.39 billion in September 2012 (revised), and down from –$20.87 billion in September 2011. The capital shortfall stands at $45 billion (using a 2 percent capital ratio) and $52 billion (using a 4 percent capital ratio adjusted to 2.7 percent based on expected recoveries). The Denial Dial was reset to −2.27 percent.

Please see the notes to table A1 for a detailed explanation, including comprehensive adjustments made based the GAO analysis described here.[4]

Spotlight on Delinquency

FHA watch december table

All Rates Experience Moderate Increases from October to November

In November, 14.96 percent of all FHA loans were delinquent, up from 14.70 percent in October 2013 and down from 16.48 percent in November 2012. The FHA’s overall delinquency rate is stubbornly high, notwithstanding the declining unemployment rate, the multiyear addition of what it describes as lower-risk loans to its insurance book, and the sale in 2013 of a substantial number of delinquent notes.

Most of the increase was due to the 30-day delinquency rate increasing from 4.81 percent in October to 5.01 percent in November.

The serious delinquency rate increased modestly to 8.05 percent from 8.02 percent in October 2013 and decreased from 9.56 percent in November 2012.

For the monthly data tabulation, see table A2 in the appendix.

Appendix: Historical Data Tables

Table A1. Insolvency Watch ($ Billions)

Notes: Table A1 has been revised based on FHA’s FY2013 Actuarial Review excluding HECMs (Forward Mortgage Program), Table A1estimates the FHA’s current net worth and capital shortfall under accounting rules applicable to a private mortgage insurer (PMI) such as Genworth. Estimates are based on the FHA’s delinquent loans, risk exposure, capital resources, and capital ratio under both the 2 percent statutory requirement for the FHA and the 4 percent of risk-in-force requirement applicable to a PMI. The 4 percent requirement has been adjusted to 2.7 percent based on FHA experiencing an average 30–35 percent recovery against its 100 percent claim payment. As of September 30, 2012, the FHA reported to the Government Accountability Office that its estimated transition-to-claim rate for 90-plus-day delinquencies was 71 percent. As of September 30, 2013, Genworth had loss reserves equaling 23 percent of its risk-in-force on 60–119-days-delinquent loans. This was adjusted to 20 percent for 60–89-days-delinquent loans. See GAO, “Applicability of Industry [GAAP] Requirements Is Limited, but Certain Features Could Enhance Oversight,” September 2013, footnotes 42 and 44,; and Genworth, Quarterly Financial Supplements, Delinquency Metrics-US Mortgage Insurance Segment, 44,

(accessed October 29, 2013).

*The FHA’s negative cash flow was $994 million per month during Q3 of FY 2013. See exhibit 10, US Department of Housing and Urban Development, FHA Single-Family Mutual Mortgage Insurance Fund Programs, Quarterly Report to Congress, 13. The FHA raised its upfront premium from 1 to 1.75 percent (excluding streamline refinances) effective for case numbers assigned on or after April 9, 2012. Since under private GAAP accounting this amount would not be taken into income immediately, it will be accounted for in the “Estimated liability for excess upfront premiums beyond GAAP allowance.” The amount of this liability was estimated at $9.60 billion as of September 30, 2013.

**Outstanding balance of loans 60-days-plus delinquent based on loan counts on applicable date times average loan balance for loans going to claim of $126,524. Reserve levels have been calculated based on termination and claim loss experience as reported in the report series entitled “Quarterly Report to Congress on the Financial Status of the MMI Fund,” FY 2013 Q3, exhibit 5, (accessed September 18, 2013).

***Total based on the FHA’s total amortized risk-in-force net of loans covered by loan loss reserve.

Table A2. National Delinquency Watch

End Date
30-Days Delinquency Rate and Number of Loans 60-Days-Plus Delinquency Rate and Number of Loans 30-Days-Plus Delinquency Rate and Number of Loans Serious Delinquency Total Loans
Jan. 2011 N/A N/A N/A 8.9% / 612,443 6,882,984
Mar. 2011 N/A N/A N/A 8.3% / 580,480 6,983,893
June 2011 5.79% / 411,258 10.55% / 749,204 16.62% / 1,160,462 8.34% / 592,366 7,103,531
Sept. 2011 5.70% / 413,834 11.08% / 803,899 16.78% / 1,217,733 8.77% / 636,778 7,258,328
Dec. 2011 5.72% / 421,404 12.07% / 889,602 17.79% / 1,311,006 9.73% / 716,786 7,370,426
Jan. 2012 5.35% / 397,018 12.18% / 903,748 17.53% / 1,300,766 9.92% / 735,760 7,418,830
Feb. 2012 4.78% / 355,092 11.70% / 871.870 16.47% / 1,226,962 9.73% / 725,002 7,450,480
Mar. 2012 4.57% / 341,213 11.21% / 837,472 15.78% / 1,178,685 9.47% / 707,930 7,471,708
Apr. 2012 4.77% / 358,174 11.20% / 840,803 15.97% / 1,198,977 9.42% / 707,222 7,507,031
May 2012 4.93% / 372,514 11.29% / 852,608 16.23% / 1,225,222 9.43% / 711,612 7,549,730
June 2012 5.19% / 393,894 11.43% / 867,959 16.61% / 1,261,853 9.48% / 719,984 7,594,689
July 2012 5.04% / 384,349 11.48% / 874,802 16.52% / 1,259,151 9.51% / 725,074 7,622,873
Aug. 2012 4.91% / 375,464 11.44% / 874,656 16.35% / 1,250,120 9.49% / 725,692 7,645,912
Sept. 2012 5.58% / 428,351 11.70% / 898,590 17.30% / 1,326,931 9.62% / 738,303 7,671,677
Oct. 2012 5.02% / 387,000 11.54% / 887,959 16.57% / 1,274,959 9.54% / 734,431 7.693,992
Nov. 2012 4.95% / 382,194 11.53% / 888,901 16.48% / 1,271,095 9.56% / 737,251 7,710,077
Dec. 2012 5.23% / 404,686 11.50% / 890,400 16.72% / 1,295,086 9.40% / 728,394 7,744,925
Jan. 2013 5.07% / 392,536 11.63% / 900,852 16.70% / 1,293,388 9.58% / 741,618 7,744,921
Feb. 2013 4.76% / 369,571 11.21% / 869,952 15.97% / 1,239,523 9.39% / 728,860 7,760,200
Mar. 2013 4.52% / 351,478 10.68% / 829,619 15.21% / 1,181,097 9.03% / 701,628 7,767,181
Apr. 2013 4.36% / 338,957 10.32% / 801.694 14.68% / 1,140,651 8.73% / 678,506 7,770.886
May 2013 4.39% / 341,400 10.06% / 782,193 14.46% / 1,123,593 8.45% / 656,909 7,771,948
June 2013 5.27% / 410,172 10.26% / 798,199 15.53% / 1,208,371 8.47% / 659,314 7,781,196
July 2013 4.87% / 378,903 10.10% / 782,895 14.94% / 1,161,798 8.25% / 641,808 7,776,713
Aug. 2013 5.05% / 393,536 9.98% / 776,768 15.03% / 1,170,304 8.11% / 631,502 7,778,157
Sept. 2013 4.98% / 387,624 9.99% / 777,901 14.97% / 1,165,525 8.09% / 630,077 7.778,663
Oct. 2013 4.81% / 375,530 9.89% / 771,215 14.70% / 1,146,745 8.02% / 625,415 7,801,056
Nov. 2013 5.01% / 391,010 9.95% / 776,188 14.96% / 1,167,198 8.05% / 627,641 7,800,165


Sources: US Department of Housing and Urban Development, “Neighborhood Watch,” (Servicing download, Excel; accessed December 14, 2013) and US Department of Housing and Urban Development, “FHA Outlook,” (accessed October 21, 2012). Rates not seasonally adjusted. Serious delinquency includes 90-days-plus delinquency and loans in bankruptcy or foreclosure.


[1] The AEI Pinto-Oliner Mortgage Risk Index is part of AEI’s new International Center on Housing Risk. The index is available on the center’s website

[2] A high-risk loan has a cumulative default rate under stress of 12 or greater, a medium-risk loan has a cumulative default rate under stress of 6 or greater and less than 12, and a low-risk loan has cumulative default under stress of less than 6.

[3] John Makin, “Third Time Unlucky: Recession in 2014?” AEI Economic Outlook (July 2013),

[4] January–June 2013 estimates were adjusted based on data contained in exhibits 5 and 8, US Department of Housing and Urban Development, FHA Single-Family Mutual Mortgage Insurance Fund Programs, Quarterly Report to Congress FY 2013 Q3, 9 and 13.

EDITORS NOTE: Starting with the January 2014 issue, FHA Watch will become Housing Risk Watch, with FHA Watchbecoming a quarterly feature. Housing Risk will cover all facets of housing risk, with a primary focus on government-sponsored risk.

83 Unbelievable Numbers From 2013

Fed Up USA posted 83 numbers that they call “almost too crazy to believe”. Thanks to Fed Up USA for their work in compiling this end of year list of things you can believe or not.

During 2013, America continued to steadily march down a self-destructive path toward oblivion.  As a society, our debt levels are completely and totally out of control.  Our financial system has been transformed into the largest casino on the entire planet and our big banks are behaving even more recklessly than they did just before the last financial crisis.  We continue to see thousands of businesses and millions of jobs get shipped out of the United States, and the middle class is being absolutely eviscerated.  Due to the lack of decent jobs, poverty is absolutely exploding.  Government dependence is at an all-time high and crime is rising.  Evidence of social and moral decay is seemingly everywhere, and our government appears to be going insane.  If we are going to have any hope of solving these problems, the American people need to take a long, hard look in the mirror and finally admit how bad things have actually become.  If we all just blindly have faith that “everything is going to be okay”, the consequences of decades of incredibly foolish decisions are going to absolutely blindside us and we will be absolutely devastated by the great crisis that is rapidly approaching.  The United States is in a massive amount of trouble, and it is time that we all started facing the truth.  The following are 83 numbers from 2013 that are almost too crazy to believe…

#1 Most people that hear this statistic do not believe that it is actually true, but right now an all-time record 102 million working age Americans do not have a job.  That number has risen by about 27 million since the year 2000.

#2 Because of the lack of jobs, poverty is spreading like wildfire in the United States.  According to the most recent numbers from the U.S. Census Bureau, an all-time record 49.2 percent of all Americans are receiving benefits from at least one government program each month.

#3 As society breaks down, the government feels a greater need than ever before to watch, monitor and track the population.  For example, every single day the NSA intercepts and permanently stores close to 2 billion emails and phone calls in addition to a whole host of other data.

#4 The Bank for International Settlements says that total public and private debt levels around the globe are now 30 percent higher than they were back during the financial crisis of 2008.

#5 According to a recent World Bank report, private domestic debt in China has grown from 9 trillion dollars in 2008 to 23 trillion dollars today.

#6 In 1985, there were more than 18,000 banks in the United States.  Today, there are only 6,891 left.

#7 The six largest banks in the United States (JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley) have collectively gotten 37 percent larger over the past five years.

#8 The U.S. banking system has 14.4 trillion dollars in total assets.  The six largest banks now account for 67 percent of those assets and all of the other banks account for only 33 percent of those assets.

#9 JPMorgan Chase is roughly the size of the entire British economy.

#10 The five largest banks now account for 42 percent of all loans in the United States.

#11 Right now, four of the “too big to fail” banks each have total exposure to derivatives that is well in excess of 40 trillion dollars.

#12 The total exposure that Goldman Sachs has to derivatives contracts is more than 381 times greater than their total assets.

#13 According to the Bank for International Settlements, the global financial system has a total of 441 trillion dollars worth of exposure to interest rate derivatives.

#14 Through the end of November, approximately 365,000 Americans had signed up for Obamacare but approximately 4 million Americanshad already lost their current health insurance policies because of Obamacare.

#15 It is being projected that up to 100 million more Americans could have their health insurance policies canceled by the time Obamacare is fully rolled out.

#16 At this point, 82.4 million Americans live in a home where at least one person is enrolled in the Medicaid program.

#17 It is has been estimated that Obamacare will add 21 million more Americans to the Medicaid rolls.

#18 It is being projected that health insurance premiums for healthy 30-year-old men will rise by an average of 260 percent under Obamacare.

#19 One couple down in Texas received a letter from their health insurance company that informed them that they were being hit with a 539 percent rate increase because of Obamacare.

#20 Back in 1999, 64.1 percent of all Americans were covered by employment-based health insurance.  Today, only 54.9 percent of all Americans are covered by employment-based health insurance.

#21 The U.S. government has spent an astounding 3.7 trillion dollars on welfare programs over the past five years.

#22 Incredibly, 74 percent of all the wealth in the United States is owned by the wealthiest 10 percent of all Americans.

#23 According to Consumer Reports, the number of children in the United States taking antipsychotic drugs has nearly tripled over the past 15 years.

#24 The marriage rate in the United States has fallen to an all-time low.  Right now it is sitting at a yearly rate of just 6.8 marriages per 1000 people.

#25 According to a shocking new study, the average American that turned 65 this year will receive $327,500 more in federal benefits than they paid in taxes over the course of their lifetimes.

#26 In just one week in December, a combined total of more than 2000 new cold temperature and snowfall records were set in the United States.

#27 According to the U.S. Census Bureau, median household income in the United States has fallen for five years in a row.

#28 The rate of homeownership in the United States has fallen for eight years in a row.

#29 Only 47 percent of all adults in America have a full-time job at this point.

#30 The unemployment rate in the eurozone recently hit a new all-time high of 12.2 percent.

#31 If you assume that the labor force participation rate in the U.S. is at the long-term average, the unemployment rate in the United States would actually be 11.5 percent instead of 7 percent.

#32 In November 2000, 64.3 percent of all working age Americans had a job.  When Barack Obama first entered the White House, 60.6 percent of all working age Americans had a job.  Today, only 58.6 percent of all working age Americans have a job.

#33 There are 1,148,000 fewer Americans working today than there was in November 2006.  Meanwhile, our population has grown by more than 16 million people during that time frame.

#34 Only 19 percent of all Americans believe that the job market is better than it was a year ago.

#35 Just 14 percent of all Americans believe that the stock market will rise next year.

#36 According to CNBC, Pinterest is currently valued at more than 3 billion dollars even though it has never earned a profit.

#37 Twitter is a seven-year-old company that has never made a profit.  It actually lost 64.6 million dollars last quarter.  But according to the financial markets it is currently worth about 22 billion dollars.

#38 Right now, Facebook is trading at a valuation that is equivalent to approximately 100 years of earnings, and it is currently supposedly worth about 115 billion dollars.

#39 Total consumer credit has risen by a whopping 22 percent over the past three years.

#40 Student loans are up by an astounding 61 percent over the past three years.

#41 At this moment, there are 6 million Americans in the 16 to 24-year-old age group that are neither in school or working.

#42 The “inactivity rate” for men in their prime working years (25 to 54) has just hit a brand new all-time record high.

#43 It is hard to believe, but in America today one out of every ten jobs is now filled by a temp agency.

#44 Middle-wage jobs accounted for 60 percent of the jobs lost during the last recession, but they have accounted for only 22 percent of the jobs created since then.

#45 According to the Social Security Administration, 40 percent of all U.S. workers make less than $20,000 a year.

#46 Approximately one out of every four part-time workers in America is living below the poverty line.

#47 After accounting for inflation, 40 percent of all U.S. workers are making less than what a full-time minimum wage worker made back in 1968.

#48 When Barack Obama took office, the average duration of unemployment in this country was 19.8 weeks.  Today, it is 37.2 weeks.

#49 Investors pulled an astounding 72 billion dollars out of bond mutual funds in 2013.  It was the worst year for bond funds ever.

#50 Small business is rapidly dying in America.  At this point, only about 7 percent of all non-farm workers in the United States are self-employed.  That is an all-time record low.

#51 The six heirs of Wal-Mart founder Sam Walton have as much wealth as the bottom one-third of all Americans combined.

#52 Once January 1st hits, it will officially be illegal to manufacture or import traditional incandescent light bulbs in the United States.  It is being projected that millions of Americans will attempt to stock up on the old light bulbs before they are totally gone from store shelves.

#53 The Japanese government has estimated that approximately 300 tons of highly radioactive water is being released into the Pacific Ocean from the destroyed Fukushima nuclear facility every single day.

#54 Back in 1967, the U.S. military had more than 31,000 strategic nuclear warheads.  That number is already being cut down to 1,550, and now Barack Obama wants to reduce it to only about 1,000.

#55 As you read this, 60 percent of all children in Detroit are living in poverty and there are approximately 78,000 abandoned homes in the city.

#56 Wal-Mart recently opened up two new stores in Washington D.C., and more than 23,000 people applied for just 600 positions.  That means that only about 2.6 percent of the applicants were ultimately hired.  In comparison, Harvard offers admission to 6.1 percent of their applicants.

#57 At this point, almost half of all public school students in America come from low income homes.

#58 Tragically, there are 1.2 million students that attend public schools in the United States that are homeless.  That number has risen by 72 percent since the start of the last recession.

#59 According to a Gallup poll that was recently released, 20.0 percent of all Americans did not have enough money to buy food that they or their families needed at some point over the past year.  That is just under the all-time record of 20.4 percent that was set back in November 2008.

#60 The number of Americans on food stamps has grown from 17 million in the year 2000 to more than 47 million today.

#61 Right now, one out of every five households in the United States is on food stamps.

#62 The U.S. economy loses approximately 9,000 jobs for every 1 billion dollars of goods that are imported from overseas.

#63 Back in 1950, more than 80 percent of all men in the United States had jobs.  Today, less than 65 percent of all men in the United States have jobs.

#64 According to one survey, approximately 75 percent of all American women do not have any interest in dating unemployed men.

#65 China exports 4 billion pounds of food to the United States every year.

#66 Overall, the United States has run a trade deficit of more than 8 trillion dollars with the rest of the world since 1975.

#67 The number of Americans on Social Security Disability now exceeds the entire population of Greece, and the number of Americans on food stamps now exceeds the entire population of Spain.

#68 It is being projected that the number of Americans on Social Security will rise from 57 million today to more than 100 million in 25 years.

#69 Back in 1970, the total amount of debt in the United States (government debt + business debt + consumer debt, etc.) was less than 2 trillion dollars.  Today it is over 56 trillion dollars.

#70 Back on September 30th, 2012 our national debt was sitting at a total of 16.1 trillion dollars.  Today, it is up to 17.2 trillion dollars.

#71 The U.S. government “rolled over” more than 7.5 trillion dollarsof existing debt in fiscal 2013.

#72 If the U.S. national debt was reduced to a stack of one dollar bills it would circle the earth at the equator 45 times.

#73 When Barack Obama was first elected, the U.S. debt to GDP ratio was under 70 percent.  Today, it is up to 101 percent.

#74 The U.S. national debt is on pace to more than double during the eight years of the Obama administration.  In other words, under Barack Obama the U.S. government will accumulate more debt than it did under all of the other presidents in U.S. history combined.

#75 The federal government is borrowing (stealing) roughly 100 million dollars from our children and our grandchildren every single hour of every single day.

#76 At this point, the U.S. already has more government debt per capita than Greece, Portugal, Italy, Ireland or Spain.

#77 Japan now has a debt to GDP ratio of more than 211 percent.

#78 As of December 5th, 83 volcanic eruptions had been recorded around the planet so far this year.  That is a new all-time record high.

#79 53 percent of all Americans do not have a 3 day supply of nonperishable food and water in their homes.

#80 Violent crime in the United States was up 15 percent last year.

#81 According to a very surprising survey that was recently conducted,68 percent of all Americans believe that the country is currently on the wrong track.

#82 Back in 1972, 46 percent of all Americans believed that “most people can be trusted”.  Today, only 32 percent of all Americans believe that “most people can be trusted”.

#83 According to a recent Pew Research survey, only 19 percent of all Americans trust the government.   Back in 1958, 73 percent of all Americans trusted the government.