-- Published: Friday, 29 May 2020 | Print | Disqus
Key Points
- The U.S. economy has used phony numbers for a long time. The U.S. Gross Domestic Product has been falling for some time.
- Cuts in government-funded services, including Social Security and Medicare were already in the works before the COVID-19 coronavirus outbreak.
- President Trump offered reduced taxes for U.S. companies doing business overseas as incentive to bring their profits home. Some $465 billion of U.S. dollars were repatriated. But CEOs of U.S. companies bought back shares from their small stockholders and enriched themselves, double-crossing Trump’s plans to “make America great again.” Now President Trump has control as the federal government has a 3% stake in these companies via the COVID-19 bailout money. Now they have to start new ventures and hire Americans.
- “Medicare For All” is a rallying cry for social equality. But not only can’t America afford Medicare any longer, hospitals receive higher reimbursement from private insurance than what Medicare pays. If everything is Medicare, then it will cost the federal government more, not less, to provide healthcare for all.
- The COVID-19 coronavirus “death numbers” reported by news sources may just be normal deaths reported in an average year. Many people are alleged to have died with but not of COVID-19 coronavirus. Except for a brief period over the past 5 months, excess deaths have not been reported.
- The politics of an epidemic cannot be ignored. Deaths in States with Democrat Party governors that are still in lockdown have far more reported deaths than States with Republican Party governors that have re-opened.
The timely arrival of the COVID-19 coronavirus epidemic has served as cover for a collapsing economy. I have been saying, based on all the investigation I have done, that the U.S. economy was a false economy to begin with. U.S. Gross Domestic Product (GDP), the broadest measure of total goods and services, has been in minus territory for some time now but hidden from view because of imputed (imagined) GDP growth.
The largest imputation in GDP accounts is owner-occupied housing. But owner occupiers do not receive rent. Yet rent is counted as part of GDP if you own housing. Those who count up the nation’s productivity have resorted to tricks to maintain US GDP growth (artificially).
It was Monty Pelerin, writing a decade ago at www.economicnoise.com, who calculated if 15% of the GDP is eliminated as nothing but imputed (imagined) and then all of the federal government’s unfunded future liabilities are added to the general fund according to Generally Accepted Accounting Practices, then government spending is 79% of the economy!
Social Security was on the cusp of having to announce cuts of $64 billion (largely disability cuts) based on $20.5 trillion of future obligations and the Social Security Trust Fund holding a bunch of U.S. Treasury Notes (IOUs) plus whatever is collected in the bi-weekly FICA payroll deductions, which is now less ~40 million workers who are unemployed. The full tax burden now shifts to those who have maintained employment.
Pre-planned Social Security cuts are also in process, that started in 2017 for everyone who will turn 62, with cuts growing to 7% for everyone now under age 60.
The Federal Reserve was essentially giving away free money to the financial classes to produce perpetual economic bubbles (Wall Street, real estate, etc.), and when Generally Accepted Accounting Practices are used and the general fund is merged with Social Security and Medicare budgets, the U.S. was actually collecting $3.2 trillion taxes and spending $6 trillion (if you can believe). The U.S. has simply been printing electronic money to make up the difference.
So, Americans have a false living standard that will surely decline by 50% or more. President Trump was touting low unemployment numbers because he has to… he is cheerleader in chief. The real unemployment numbers were always ~20% and are now an astounding 39.6% according to economist John Williams at Shadowstats.com.
To fully comprehend the predicament of these low-income army of workers faces, if these same workers were earning $20,000 a year in 2008 when the economy collapsed in the housing bubble, due to inflation of ~6% (not the advertised 2% target inflation quoted by the Federal Reserve Bank), these same workers would have to earn $56,850 to have the same purchasing power in 2020. Of course, this is how we get demands for minimum wage, but pay raises increase the cost of goods beyond affordability. When minimum wage reform appeared impossible, guaranteed income came into discussion.
Unlimited money
It’s true, the U.S. is pouring unlimited money into corporate bailouts (more about this below) and public assistance, trillions of dollars coming out of nowhere. So, the U.S. is awash in money. But mostly for the large corporations, and there is a reason why. Here is my take on what happened.
Stock buybacks
While President Trump’s predecessor felt American companies should pay their fair share of taxes. A 35% tax on overseas profits was crippling American companies in their battle to compete with foreign businesses. Trump was reportedly able to repatriate $465 billion with a tax of 15.5%.
When President Trump offered a tax reduction for American companies to bring their overseas profits back home, the intent was to get those companies to start new ventures and hire more American workers.
But American business executives chose to use the money to buy back shares of stock from small shareholders and enrich their own wealth as stock prices in their own companies rose. CEOs of major corporation repurchased $3.5 trillion of shares between 2011-2018. But doing that with money Trump got them in a discounted tax for bringing U.S. liquid assets home was the straw that broke the camel’s back. Mr. Trump’s MAGA plan was foiled.
Suddenly we learn nearly 1300 CEOs of major corporations resigned last year. We don’t have to guess why. It’s just the nation’s news agencies left us wanting for an answer as to why all these resignations.
Were these CEOs told they would be jailed for the stock buy-backs that double-crossed America’s attempts to bring back jobs from overseas? Maybe.
A report at TheStreet.com says:
“This kind of recklessness by executives needs a reckoning. The hammer needs to be brought down hard on executives whose buyback decisions have now placed their companies in need of federal money.”
Federal government moves onto governing boards of companies
Now the COVID-19 crisis strikes American business and the federal government offers billions in bailout funds to these companies. Only this time, the Federal government has taken a 3% stake in these companies. President Trump representing the federal government is sitting on their board of directors. Now, if these companies don’t launch new ventures and hire American laborers, their loans are likely going to be yanked.
The federal government is playing hardball with these companies who double-crossed the President’s dream of “make America great again.” Let’s see what transpires now. (Why you don’t hear this from the news media speaks mountains.)
Clueless over how much money the federal government has
On May 15, 2020, Chelsea Clinton with Georgetown Law Professor Eric A. Friedman, called for massive financial aid to stave off massive starvation throughout the world as a consequence of the global lockdown, with no regard for where these billions of dollars of aid would come from. Obviously, Chelsea Clinton has no clue about the budgetary crisis the U.S. is facing. Neither do most politicians.
Presidential candidate Kamala Harris’ platform serves as another example: a $6000/year tax credit for workers who earn less than $100,000 a year; a $315 billion plan to raise teacher pay; a $100 billion giveaway to increase black homeownership without any regard for tax increases to pay for this. It was H.L. Mencken who said: “If a politician found he had cannibals among his constituents, he would promise them missionaries for dinner.”
It was Federal Reserve Bank chairman Alan Greenspan who upon his retirement in 2004 asked politicians when they were going to tell the people the nation can’t afford Medicare and Social Security anymore? Politicians kept it a secret.
This fact reveals how unrealistic if not totally out of touch with reality (defined as psychosis) politicians are who continue to promise “Medicare for all.” These politicians have misled many Americans that attainment of such a government giveaway is a possibility. Maybe on the planet Mars.
Medicare For All has become a rallying point for social equality (or is it mass psychosis?) that is indicative of a population that is totally misled. Few Americans realize private insurance pays almost double Medicare rates for hospital care. In other words, private insurance bears an extra burden to offset what Medicare doesn’t pay and that makes hospitals profitable. If all hospital bills were paid by Medicare, Medicare-paid hospital bills would have to rise dramatically.
Excess deaths
Death numbers blare from every TV set in the world as the COVID-19 coronavirus escapade made its entry onto the world stage. Almost 8000 Americans die every day. That amounts to almost 3 million deaths in a year. Are there excess deaths emanating from the COVID-19 epidemic?
This may be difficult to determine because the lockdown took automobiles off the road. Fewer auto accidents. But you examine the evidence for yourself (below). What the chart below shows is the predicted weekly number of deaths from all causes and a gold line showing when excess deaths were significantly above what was anticipated.
What we see is briefly in May of 2017, then in the flu season of 2018 and then again in the current infectious disease season beginning in Nov-Dec. of 2019-2020, a significant number of excess deaths, somewhere between ten and twenty thousand more than normal per month. That isn’t enough to warrant a worldwide quarantine and lockdown.
If, early-on, health authorities in the U.S. had employed COVID-19 testing to determine is geographical spread, walled off the disease and limited it to demographic groups (nursing home patients, healthcare personnel, African-Americans), as was done in South Korea, a complete lockdown with accompanying financial destruction could have been averted. There continues to be pleas to conduct more testing, but the testing is not being used for its intended purpose. It is being used to spread fear.
https://www.cdc.gov/nchs/nvss/vsrr/covid19/excess_deaths.htm
An overblown COVID-19 coronavirus plague that has so far resulted in only ~100,000 over-reported deaths or 0.0003% of the (3 in 10,000) population with an overestimation correction of 99% for the assumption that people who died of COVID-19 may not have died due to COVID-19 and because of it.
For comparison, the 1918 Spanish flu was estimated to have killed 50 million worldwide but only 675,000 in the U.S. out of a population of 103 million at the time. That would represent a death rate of 0.0052 (one half of 1% or 1 in 2000).
The politics of a virus
A strange picture emerges of the death toll in the COVID-19 coronavirus epidemic. The virus has its own targeted geo-political infection/death rate. Here is what news commentator and activist Candace Owens recently tweeted:
Either politicians who commandeer these epidemics in America intentionally misclassify normal deaths as COVID-19 deaths or they actually take actions that kill, such as mandating the transfer of COVID-19 infected patients to nursing homes, thus exposing a vulnerable nursing home population to this viral killer. The overcounting has become so absurd that state departments of health have now admitted they counted deaths caused by gunshot wounds as COVID-19 deaths. The political blame game is to hold the Executive Branch of government accountable for these deaths. The lockdowns in these states worsens the financial crisis, again, another game of finger pointing. Politics can’t be removed from any analysis of this viral outbreak in America.
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-- Published: Friday, 29 May 2020 | E-Mail | Print | Source: GoldSeek.com
