BIDEN WATCH: 5.8.21 - How Much National Debt Is Too Much? America May Soon Be at It's Tipping Point

How Much National Debt Is Too Much? America May Soon Be at It's Tipping Point – Jon Miltimore - https://www.prophecynewswatch.com/article.cfm?recent_news_id=4702 Last week, President Biden pitched a new plan to Americans before a joint session of Congress: more spending. The just-released $1.8 trillion plan, presented just weeks after Biden signed a $1.9 trillion in COVID relief spending into law, includes "free" community college as wellas universal preschool for all three and four-year-olds. "Mr. Biden could usher in a new era that fundamentally expands the size and role of the federal government," The New York Times reported. How Much Debt Is Bearable? The announcement comes months after the Congressional Budget Office released a report projecting a $2.3 trillion deficit in 2021. Biden's plan will almost certainly make the deficit worse. Though the plan contains various tax increases to fund its programs, the taxes are likely to fall well short ofgovernment outlays, economists say. "The laws of economics are more rigid than the laws of the federal government, and these tax hikes are unlikely to yield the windfall Biden expects," Joshua Jahani, themanaging director of Jahani and Associates, noted in a recent NBC News article. As a result, the $28.2 trillion national debt will swell even faster. Worse, when unfunded liabilities are included in the balance sheet, as private companies are legallyrequired to do, the debt exceeds $120 trillion. How much risk these obligations present is unclear. There is a school of thought that suggests these debts pose no serious risk. After all, in theory, a government can roll over its debt indefinitely. However, in a recentarticle for the Federal Reserve Bank of St. Louis, economist David Andolfatto noted that ultimately the government doesn't decide how much debt is bearable. The market does. "There is presumably a limit to how much the market is willing or able to absorb in the way of Treasury securities, for a given price level (or inflation rate) and a givenstructure of interest rates," Andolfatto wrote. "However, no one really knows how high the debt-to-GDP ratio can get. We can only know once we get there." A Dangerous Level of Debt? Andolfatto is right that no one really knows the debt tipping point. But it's worth noting that the US debt-to-GDP ratio--essentially a country's debt compared to its annualeconomic output--was 129 percent at the end of 2020. In other words, the official US debt was nearly a third larger than the entire US economy. That is considerably higher than Greece's debt-to-GDP ratio in 2010, when it received a bailout from the International Monetary Fund to avoid defaulting on its obligations. The United States is not Greece, of course. Its economic potential is far greater, and it is operating under a currency it controls. But there's no denying that the US isin uncharted territory. Today, the federal government debt-to-GDP ratio is higher than it was at the conclusion of World War II, when the nation assembled one of the largest armies the world hasever seen. Perhaps even worse, the government is piling on debt faster than ever. Eventually, as Andolfatto notes, the market may very well decide enough is enough, and the demand for Treasury securities will dry up. Indeed, this is likely one reasoncryptocurrencies are suddenly flourishing. In seemingly the blink of an eye, cryptos have gone from being discussed in the corners of Reddit rooms and university lounges to a market of more than $2 trillion. It'sno exaggeration to say cryptos are now mainstream; they are being gobbled up by hedge funds and star athletes signing 10-figure contracts. And it's not hard to see why. The market is hedging. Like rats on a sinking ship, many are eyeing an exit, sensing that the dollar's day may finally be coming to an endas its value is eroded by mass pumping. In a popular 2016 article, author Richard Ebeling explored how central planners in ancient Rome destroyed the economy. A lot of what Ebeling describes--debt, massive spending, inflation, and price controls destroy--sound eerily familiar to modern ears. And Ebeling naturally explores theage-old riddle: why did Rome fail? For centuries, as any history buff knows, thinkers from Edward Gibbon to Peter Heather and beyond, have asked this question. The answers vary. Some blame barbarians, othersimmigration. Some claimed Christianity divided the nation, while others point to disease or the weakening of Roman legions. All of these theories are interesting and worthy of examination, but I've found no single better explanation than the one offered by economist Ludwig von Mises who concludedRome's decay stemmed from its rejection of individualism and free markets. "The marvelous civilization of antiquity perished because it did not adjust its moral code and its legal system to the requirements of the market economy," Mises wrote. He continued: "A social order is doomed if the actions which its normal functioning requires are rejected by the standards of morality, are declared illegal by the laws of the country,and are prosecuted as criminal by the courts and the police. The Roman Empire crumbled to dust because it lacked the spirit of [classical] liberalism and free enterprise. The policy of interventionism and its political corollary,the Fuhrer principle, decomposed the mighty empire as they will by necessity always disintegrate and destroy any social entity." The American president and statesman John Adams once reportedly said there are two ways nations are destroyed. "One is by the sword and the other is by debt," Adams reputedly said. There is no question debt is a serious problem. (Just ask the ancient Romans and modern Grecians.) But if Mises is correct, the explosion of debt may merely be a symptomof a much larger problem: a collapse of the spirit of liberty and the growth of a system hostile to free enterprise. We should learn from one thing we have that the Romans didn't: their ominous example. --------------------------------------------------------------------------------------------------------------------------------------------------------------- Get Ready For The Most Painful Inflation Since The Jimmy Carter YearsOf The 1970s - by Michael Snyder - http://theeconomiccollapseblog.com/get-ready-for-the-most-painful-inflation-since-the-jimmy-carter-years-of-the-1970s/ If you are too young to have been alive during the 1970s, you might want to read up on that decade, because current economic conditions are starting to become eerily similarto what we experienced back then. In the 1970s, an energy crisis caused tremendously long lines at gas stations all over the country. In 2021, we don�t have a shortage of gasoline, but shortages of other key products are starting to cause very serious problems. Infact, as you will see below, even the Biden administration is publicly admitting that there will be �supply chain disruptions� in the months ahead. The 1970s also featured extremely painful inflation, and I certainly don�t need to tell you that prices havebeen rising very aggressively lately. In fact, Bloomberg is using the term �skyrocketing� to describe the �upward trajectory� of commodity prices� The prices of raw materials used to make almost everything are skyrocketing, and the upward trajectory looks set to continue as the world economy roars back to life. From steel and copper to corn and lumber, commodities started 2021 with a bang, surging to levels not seen for years. The rally threatens to raise the cost of goods fromthe lunchtime sandwich to gleaming skyscrapers. It�s also lit the fuse on the massive reflation trade that�s gripped markets this year and pushed up inflation expectations. With the U.S. economy pumped up on fiscal stimulus, and Europe�s economy starting toreopen as its vaccination rollout gets into gear, there�s little reason to expect a change in direction. Over the past year, the Federal Reserve has pumped more money into the financial system than ever before, and the U.S. government has been on a wild spending spree thatmakes Zimbabwe look fiscally conservative. It was inevitable that this was going to cause rampant inflation, but the numbers that we are starting to see are so crazy they are difficult to believe. A couple weeksago, Charlie Bilello posted a summary of how commodity prices have changed over the past year� Lumber: +265% WTI Crude: +210% Gasoline: +182% Brent Crude +163% Heating Oil: +107% Corn: +84% Copper: +83% Soybeans: +72% Silver: +65% Sugar: +59% Cotton: +54% Platinum: +52% Natural Gas: +43% Palladium: +32% Wheat: +19% Coffee: +13% At this point, nobody can deny what is happening, and even the Biden administration is admitting that there will be �supply chain disruptions� and �transitory increasesin prices�� Council of Economic Advisers chair Cecilia Rouse said on this week�s broadcast of �Fox News Sunday� that they expect to see some �transitory inflation� as America is comingout of the coronavirus pandemic. Anchor Chris Wallace said, �Can you guarantee with all this spending that we are not going to have a new round of overheating the economy and serious inflation? Rouse said, �These are very serious concerns, and we know that coming out of an extremely deep recession that there are going to be bumps along the way. We expect that thereis going to be supply chain disruptions. That will cause some transitory increases in prices.� Biden administration officials would like for us to believe that this inflationary period will just be �temporary�, but exactly how do they plan to achieve that? Do they have a plan to somehow pull trillions of dollars out of the system? No, they are planning to borrow and spend trillions more. In the 1970s, double-digit inflation made headlines for years on end. Many people believe that we are well on the way to a return to such levels, but according to John Williamsof shadowstats.com, we are already there. In fact, if inflation was still calculated the way that it was back in 1980, we would already be in double-digit territory. And for certain items, we are already seeing inflation that is off the charts. For example, the price of corn is up more than 30 percent so far in 2021� From tortillas to cornbread, some of your favorite corn-based dishes may go up in price late this summer. Corn has been leading the rally among grain commodities, rising more than 30% in 2021, according to MarketWatch. Corn is used in hundreds of different products at the grocery store, and so this is going to dramatically affect the food budgets of millions upon millions of American families. Meanwhile, we continue to see more shortages start to emerge. Last week, the mainstream media was freaking out over our new nationwide chicken shortage� A chicken shortage is taking place across the country, much of it fueled by the chicken sandwich craze at fast food chains such as KFC and Bojangles, which are having ahard time keeping up with soaring demand. Experts say February�s massive winter storm in Texas also contributed to gaps in the supply chain. That shortage is supposed to be �temporary�, but analysts are warning that the current computer chip shortage could last until 2022. But despite all of the problems that I just detailed, Americans are increasingly optimistic about the future. In fact, one recent poll found that a whopping 64 percent of all Americans �are optimistic about the direction of the country�� President Joe Biden completes his first hundred days in office with a country that is more optimistic about the coming year, according to a new ABC News/Ipsos poll. Nearly two-thirds of Americans (64%) are optimistic about the direction of the country in the poll, which was conducted by Ipsos in partnership with ABC News using Ipsos� KnowledgePanel. And Americans are also extremely optimistic about the stock market. If you can believe it, Americans now have more of their assets invested in the stock market than everbefore� Individual investors are holding more stocks than ever before as major indexes climb to fresh highs. They are also upping the ante by borrowing to magnify their bets orincreasingly buying on small dips in the market. Stockholdings among U.S. households increased to 41% of their total financial assets in April, the highest level on record. That is according to JPMorgan Chase & Co. andFederal Reserve data going back to 1952 that includes 401(k) retirement accounts. Most Americans seem to believe that happy days are here again, and the stage is set for an immense nationwide emotional meltdown once this �bubble of hope� inevitably bursts. Anyone that believes that things are going to get better has a fundamental misunderstanding of the times in which we live. We have just been through the most painful year for the U.S. economy since the Great Depression of the 1930s, and I know that most people would like to see things turn around,but that simply is not going to happen. Very dark days are ahead, and those that are trusting Joe Biden to save America are going to be bitterly, bitterly disappointed. --------------------------------------------------------------------------------------------------------------------------------------------------- Senator Tim Scott and Racism � Bill Wilson � www.dailyjot.com Responding to Joe Biden�s address to Congress, Senator Tim Scott (R-SC) shined a very bright light on the hypocrisy and extreme agenda of Biden and the Democratic party,and because he is a black Christian, he was ridiculed as an �Uncle Tom.� While Senator Scott said that America is not a racist country, he also exposed a racist political party�the Democratic Party. In the spirit of Jim Crow laws instituted solely by the DemocraticParty after the Civil War and continue to oppress black people even to this day, the Democrats and leftists who call everybody else racist, attacked Scott for offering a truthful counterbalance to the extremism of Biden and his buddies, and their use of raceas a political weapon. Scott exposed the multi-trillion dollar Democratic plans for just what they are: extreme leftist programs designed to turn this country to socialism. These programs aredeceptively named The American Rescue Plan, The American Jobs Plan, The American Families Plan and so forth. None of them are about their titles, but rather are about expanding the reach of government and lining the pockets of freeloaders so they will supportthe politicians advocating this redistribution of your hard-earned money. And if you disagree with these people, you may as well be dead. I�m talking about the visceral expressed by leftist politicians, left-leaning corporate bosses, and Hollywood elites.There has been no better example of their hate and racism than what they have been saying about Senator Scott since his rebuttal to Biden. Scott attacked the divisive Democratic Party and leftist race narrative. He said, �Nowhere do we need common ground, more desperately than in our discussions of race. Ihave experienced the pain of discrimination. I know what it feels like to be pulled over for no reason, to be followed around the store while I�m shopping� From colleges, to corporations, to our culture, people are making money and gaining power by pretendingwe haven�t made any progress at all. By doubling down on the divisions we�ve worked so hard to heal. You know this stuff is wrong. Hear me clearly: America is not a racist country. It�s backwards to fight discrimination with different types of discrimination.And it�s wrong to try to use our painful past to dishonestly shut down debates in the present.� And he predicted exactly what would happen in the wake of his rebuttal. He said, �I get called Uncle Tom and the n-word by progressives by liberals. Just last week, a national newspaper suggested my family�s poverty was actually privilege becausea relative owned land, generations before my time. Believe me, I know first-hand, our healing is not finished.� Since his speech, he was labeled �Uncle Tim� on social media. Politicians and others like Jesse Jackson, who make a lot of money pretending no progresshas been made, criticized the speech saying it was an �inherent contradiction� and �sick.� Racism is a heart issue. Those who would hypocritically weaponize race are like those described in Jeremiah 17:9, �The heart is deceitful above all things, and desperatelywicked: who can know it?� We know it when it exposes itself as it has with these people. ----------------------------------------------------------------------------------------------------------------------------------------------------- Inflation Dragon Is Back � Todd Strandberg - https://www.raptureready.com/category/nearing-midnight/ Few people remember the inflation that occurred in the 1970s. From 1970 to 1980, the price of everything doubled. Federal Reserve chief Paul Volcker finally slew the inflationdragon by raising interest rates to 21%. It appears very likely that the 2020s is going to be a repeat of the 70s. The Fed has printed so much money in the past few years that prices are guaranteed to rise. Injust the past seven months, 40% of all the money in existence has been freshly created. The government is trying to maintain the illusion of normal inflation by suppressing the prices of gold and silver. It slowly loses the battle as the price of other preciousmetals needed in industry that it can�t control has exploded. Palladium was once at $400 per ounce. It now trades at $2,840. Iridium was at $500 per ounce five years ago. It now trades at $6,300 per ounce. Rhodium was $600 per ounce five years ago. It nowtrades at $29,000 per ounce. The main way the government manages inflation is by keeping interest rates at very low levels. Each month the fed goes into the market and purchases $120 billion of bonds.The 10-year bonds are at 1%, and the 30-year bond is at 2%. Once inflation gets above 5%, no amount of smoke and mirrors will be able to hide the fact that the value of the money is rapidly being destroyed. I frequently check on the price of basic commodities. In the past year, the vast majority of them have soared in price. Soybean went from $8.40 a bushel to nearly $16 perbushel. Corn went from $3.50 to $6.50 per bushel. Lumber went from $400 to $1400 per thousand board feet. Copper went from $2 to a near-record high of $4.50 per pound. I also keep a close watch on the value of the dollar against other currencies. I don�t think the dollar will decline against the Japanese yen and Euro based on debt. BecauseJapan and Europe have deficits just as large as the U.S., it�s unlikely the dollar will decline because of federal debt. What would probably cause the dollar to go down is the massive trade imbalance we have with the rest of the world. They send us goods, and we ship them dollars. We now dependso much on imports, there is a massive backlog of container ships at our nation�s ports. If the world suddenly realized the foolish nature of this trade relationship, America could find itself unable to get the most basic products. I was shocked to learn thatwe import material required to produce even the most common drugs. The Ford Motor Company has just had to slash its earning projections because it can�t get microchips for its vehicles. When we reach a point where we depend on third-world nations to make simpleproducts, I think we�ve become a fourth-world nation. The job market is another key source of inflation. As workers demand more money for their labor, prices are forced higher. There is such a shortage of labor, people arebeing paid to do job interviews. One Florida McDonald�s started offering a $50 incentive to anyone who went in for an interview to help hire more workers, according to Tampa Bay�s CBS affiliate WTSP. �At this point, if we can�t keep our drive-thrus moving, then I�ll pay $50 for an interview,� said Blake Casper, a McDonald�s franchise owner in Tampa. A tweet shared on social media on April 15 shows the sign offering $50 at a location off North Dale Mabry Highway and West Chestnut Street in Tampa. WTSP reported, citingBusiness Insider, the restaurant did not have many applicants despite the incentive. Some business owners who spoke with the Associated Press said some �would-be workers� are worried about getting COVID-19 at work and prefer to live off unemployment benefits,which are higher during the pandemic. I recently recorded a 5-minute audio promotion for my chapter in Terry�s book Lawless. I still find it amazing that my chapter is still valid. When I was writing it in Marchof last year, it looked like the second Great Depression was about to unfold. I labored on because I knew God was going to continue to hold the world together. Inflation will add to the pressure on the economy, but the trigger point is going to bethe rapture. �For the Lord himself shall descend from heaven with a shout, with the voice of the archangel, and with the trump of God: and the dead in Christ shall rise first: Then wewhich are alive and remain shall be caught up together with them in the clouds, to meet the Lord in the air: and so shall we ever be with the Lord. Wherefore comfort one another with these words� (1 Thes. 4:16-18). ------------------------------------------------------------------------------------------------------------- We Are Dangerously Close To �The Tipping Point� - by Michael Snyder - http://theeconomiccollapseblog.com/we-are-dangerously-close-to-the-tipping-point/ Every dollar that the federal government borrows and spends puts us even closer to a day of reckoning. Many Americans (especially those on the left) seem to think that wecan endlessly spend trillions upon trillions of dollars without ever suffering any consequences. If that was true, why hasn�t any other society in all of human history ever been able to do such a thing? Unfortunately, the truth is that the United States isnot immune to the laws of economics. Wildly creating money and driving up our national debt to absurd heights is inevitably going to crush our economic system. And at this point, our debt-to-GDP ratio is already higher than Greece�s debt-to-GDP ratio was whenthe economy of that country finally collapsed� But it�s worth noting that the US debt-to-GDP ratio�essentially a country�s debt compared to its annual economic output�was 129 percent at the end of 2020. In other words,the official US debt was nearly a third larger than the entire US economy. That is considerably higher than Greece�s debt-to-GDP ratio in 2010, when it received a bailout from the International Monetary Fund to avoid defaulting on its obligations. Even though we are already at such a dangerous level, the Biden administration wants Congress to pass another four trillion dollar spending package� Senate Minority Leader Mitch McConnell, R-Ky., said Monday that he did not expect any Republican senator to support President Biden�s push for a $4 trillion spending packageon infrastructure and other projects. Biden has outlined a two-part tax and spend proposal with funding for physical infrastructure projects as well as initiatives favored by his administration, such jobs training,elderly care and universal preschool. McConnell reiterated that the $4 trillion price tag was a nonstarter for Republicans, as well as some Democrats, who favor a smaller plan directly tied to infrastructure projects such as roads and bridges. We simply don�t have the money to do what Biden wants. In fact, we didn�t have the money for any of the �stimulus packages� that have been passed since the start of the pandemic. We had to borrow every single dollar that went out in the �stimulus checks�, and now Democratic lawmakers are �clamoring� for a fourth round of those checks� Democratic lawmakers in both chambers of Congress are clamoring for a fourth round of stimulus checks to help Americans who are still struggling financially during the coronaviruspandemic. Such a move could lift more than 7 million people out of poverty, according to a recent analysis from the Urban-Brookings Tax Policy Center, a nonpartisan think tank. If more money is the solution, then why don�t we send out five billion dollars to every American citizen? That would certainly fix all of our problems, right? Everyone would be a �billionaire�, and then life in American would be glorious. Or not. Sadly, the truth is that our �leaders� are systematically destroying the value of our currency and are plunging us into an abyss of debt from which our nation will neverrecover. I warned that once the government started sending checks directly to the American people that it would never be enough. At this point, people are begging for more checks even though 34 percent of all U.S. income now comes directly from the federal government� Putting that number in perspective, in the 1950s and 1960s, transfer payment were around 7%. This number rose in the low teens starting in the mid-1970s (right after theNixon Shock ended Bretton-Woods and closed the gold window). The number then jumped again after the financial crisis, spiking to the high teens. And now, the coronavirus has officially sent this number to a record 34%! And that�s how creeping banana republic socialism comes at you: first slowly, then fast. We are not on the road to socialism. We are already there. In fact, the U.S. has been a socialist country for quite a while now. We may not use the term �socialist� to describe ourselves, but that is precisely what we have become. As our system melts down right in front of our eyes, many in the financial community are trying to figure out how to protect themselves. For example, legendary investor Sam Zell has never been very enthusiastic about gold, but now he is suddenly changing his tune� �Obviously one of the natural reactions is to buy gold�It feels very funny because I�ve spent my career talking about why would you want to own gold? It has no income, itcosts to store. And yet, when you see the debasement of the currency, you say, what am I going to hold on to?� Other Americans are preparing for the coming meltdown in other ways. As crime rates in our cities continue to spike, more Americans than ever before are buying guns� The FBI conducted more than 3.5 million gun-related background checks last month, a 20% year-over-year increase from April 2020, according to the latest FBI figures releasedMonday. Nearly 1.7 million of those gun background checks were specifically for gun purchases, according to the National Shooting Sports Foundation, a firearms industry trade groupthat cross references FBI data with actual sales figures provided by gun merchants to determine how many guns are sold monthly. NSSF spokesman Mark Oliva said the firearms industry sold more guns last month than in any April on record. Deep in their guts, most people can feel that our society is rapidly approaching a �tipping point�. Nobody knows the exact moment when we will have passed the point of no return, but just about everyone can sense that it is coming. Every single day, U.S. consumers go into even more debt. And every single day, U.S. corporations continue to binge on debt as if tomorrow is never going to arrive. State and local governments continue to pile up record levels of debt, and the federal government is literally stealing more than 100 million dollars from future generationsof Americans every single hour of every single day. We should be thankful that this unprecedented debt bubble has been able to persist for as long as it has, but there is no way that this party can go on forever. Soon it will end, and that means that our current way of life will soon come to an end as well. ----------------------------------------------------------------------------------------------------------------------------------------------- Doing more harm than good � Bill Wilson � www.dailyjot.com There is perhaps an unintended lesson for all of us found in the national conversation of race. Georgia voting rights activist Stacey Abrams, Congresswoman Maxine Waters(D-CA), and Marxist Black Lives Matter founder Patrisse Khan-Cullers say they are civil rights activists. Yet foolish actions in recent weeks have harmed the very people they say they represent. Abrams� half-truths and lies about the Georgia voting reformlaw essentially single-handedly cost Blacks jobs and revenue in Atlanta. Khan-Cullers actions called into question her use of Black Lives Matter funds to personally enrich herself. Waters� remarks encouraging violence now may be part of a mistrial on appealin the Derek Chauvin murder trial. Abrams put up such a squawk mischaracterizing the Georgia voting reform law that Major League Baseball (MLB) pulled out of Atlanta for its planned All-Star game, costingthe city�and its businesses and hard-working citizens�over $100 million in anticipated revenues. Black businesses were severely harmed. Black citizens in the retail, hospitality, food service, tourism, and other related businesses were irreparably injured.Then Abrams had to back track begging MLB and other corporations to reconsider. It didn�t happen. MLB�s business went to predominantly white Colorado�which also demonstrates the hypocrisy of �wokeism.� Since then, several major media outlets such as the WashingtonPost and USA Today have corrected Abrams outright fibs about the voter reform law in Georgia. Waters, under police escort, went to the already violent streets of Minneapolis and encouraged protesters to �get more confrontational� if the Derek Chauvin jury didn�treturn a guilty of murder verdict. If not, she said, �then we know that we�ve got to not only stay in the street, but we�ve got to fight for justice.� Chauvin�s lawyer petitioned the court for a mistrial because Waters remarks could influence the jury. JudgePeter Cahill denied the motion, but said, �I�ll give you that Congresswoman Waters may have given you something on appeal that may result in this whole trial being overturned.� Today, Waters� remarks are a focus of Chauvin�s appeal. Waters attempt to fuelviolence over the verdict further harms civil rights progress. Khan-Cullers raised eyebrows by buying multiple homes totaling well over a million dollars. The BLM Foundation she heads raised over $90 million last year. Khan-Cullersdenied enriching herself from the movement, saying that she has several other jobs. But those �jobs,� such as TV shows, book deals, etc. came from her involvement in BLM. She called the media �racist� for asking about it. As Senator Tim Scott (R-SC) recentlysaid, there are those who make a lot of money pretending no progress has been made. James 3:13 says, �Who is a wise man and endued with knowledge among you? Let him show out of a good conversation his works with meekness and wisdom.� The lesson in this forall of us is to not allow ego, hypocrisy and foolish actions to trump wisdom, doing more harm than good. Say it with me�Stupidocrisy. ----------------------------------------------------------------------------------------------------------------------------------------------------------- VISIT: PROPHECY WATCHER WEEKLY NEWS: HTTP://PROPHECY-WATCHER-WEEKLY-NEWS.BLOGSPOT.COM