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134520Re: [energyresources] Update for March 5, 2014 - Newsletter (Outlook for US Federal Spending -3)

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  • Gerry Agnew
    Mar 6, 2014
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      All that you have written on the “dependent class” is correct. Very serious stuff, when they make a living in filing all sorts of claims which can run into thousands of dollars. However, this cannot last. How can it with what seems to be a major budget crisis just over the horizon? In the last of the “budget newsletters” I wonder just how this will all fit together when the here-to-fore trampled GOP start to discover that they have a spine and will demand that welfare spending stop.
      You are quite right when you state that it is dawning on you just how serious the situation really is. It is quite possible that all of the DHS spending and so forth is to test a system which can handle millions of hungry and rioting citizens whose welfare benefits have been cut off because of budget constraints. We should also consider what can happen if Social Security is reduced, and additionally what happens if the bankrupt state and local pension funds run out of accounting tricks to pay their members.
      The dependent classes will be huge.
      Sent: Wednesday, March 05, 2014 9:59 AM
      Subject: Re: [energyresources] Update for March 5, 2014 - Newsletter (Outlook for US Federal Spending -3)


        Could you commit on the "dependent class?" There is now a dependent class of people in America numbering from 50 to 100 million who depend upon gov for part or all of their resources. Recently I have had my eyes opened as to the number of people on welfare and that many are gaming the system. Personally I have tried to hide from gov, but have been told by several I am crazy. You have kids don't you know what you can get? This is the mentality of millions. I know someone who is going to profit 11k from filing federal income tax. Yes that was a net profit of 11k. With Obamacare here I was talking about medical insurance to someone and they said they were only paying $85 for him, his wife and child a month. I said how can that be as my policy is just for me and I was told the lowest priced policy was $300. He responded, 'well you see your tax guy and your health insurance guy have to work together to come up with the right numbers, my policy is actually $585. The gov pays $500 a month towards it.' If a family plays it right they can get, 6k in medical, 5k earned income tax credit, 7k in food stamps, and assorted other benefits. We are talking 20k year in benefits! Correct me if I am wrong, but how can this continue for long?
         On another note what is going to happen when the next great depression hits? In 1930 at least everyone was making it on their own before the depression hit. Next time around there will be an 100 million who could be facing starvation and another 200 million in a struggle to survive. It is starting to dawn on me how serious the situation is.


      -----Original Message-----
      From: Gerry Agnew <gaea@...>
      To: energyresources <energyresources@yahoogroups.com>
      Sent: Tue, Mar 4, 2014 2:48 pm
      Subject: [energyresources] Update for March 5, 2014 - Newsletter (Outlook for US Federal Spending -3)

      So, this time around what is likely to happen? The huge spending increases to fund “our boys overseas” will have to paid for when all of the excitement ends and this may well cause a bond market crisis. That will really hit stocks hard in my view, and we shall be seeing the crunch which just about every analyst on Wall Street has been screaming for, seemingly forever. OK, but now let’s ask the question of what happens to the overall spending patterns in the economy as they relate to the federal government? Which sectors of the economy will have to be pared back, and which will continue to do very well indeed? Is there a template for all of this, and what happens if the war leads to an unresolved mess? There IS such a template, and we can find it in North Korea (!) of all places.
      The major player in that bedraggled economy is the powerful military which absorbs upwards of 40% of the national output under the heading of “Songun” – or military first policy. The rest of the economy suffers dreadfully and the State food rationing system is simply not seen in some of the more backward areas of that country. Even in the capital of Pyongyang this rationing system is pitiful at best (estimated at about 56% of what theory holds it should be) and so the average North Korean has reverted to an officially tolerated version of capitalism to generate the cash required for simple existence. Lots of Korean generals are, accordingly, quite well-to-do as may be expected. The rich get richer in other words, and the poor are left to fend for themselves. My thinking is that these sorts of priorities may be seen in the US federal spending patterns this time around.
      If we are looking at major problems for the US economy and bond market after the 2014 conflict, then I think the GOP will stop playing “doormat” (which, of course, they are not) and will demand that serious cuts be made to the so-called welfare programmes. The what might be termed “underclasses” in the US will suffer, although perhaps not quite along the lines of their North Korean equivalents. I saw something interesting on this score this evening in a short article about how the US immigration bill should include a generous allowance for the importing of low-skilled labour! The rationale behind this was that many Americans simply do not have any job skills whatsoever, nor do they have any “get up and go”. Stop wasting time on them in other words, and we shall see this in spending priorities in the first post-war budgets. I have also seen a nasty comment from a corporate CEO (from one of the television news services, if I am not mistaken) when the poor in the US were dumped on quite viciously. He said something along the lines of “Stop Whining ... or Move to China”. If I am not mistaken, aren’t there words on the Statue of Liberty which read something like “Give me your poor, your wretched, your huddled masses yearning to breathe free”? This now seems to be unfortunately passé, but perhaps what might happen is not. Let us not forget “Let them eat cake”; not quite an exact quote but you get the drift!
      One of my readers, a published author I believe, has written to me on many occasions feeling (rightly) annoyed at my support (in previous newsletters) at the pending US immigration bill, still wending its way through Congress. I do NOT support this bill, but feel that it is absolutely inevitable and that those who oppose it are going to wind up going nowhere fast. As noted above, US corporate moguls simply do not feel very well disposed towards their fellow citizens, and now feel that they should be written off in favour of harder working immigrants. I emphasise this because these CEOs pay corporate and personal income taxes and (as many in blogland seem to feel) probably have direct lines to their Congressional representatives to remind them of this fact. The messages to these Washington types will probably be something along the lines of “Look! Our taxes in the US are higher than what we should be paying overseas. Do something about this. Stop raising my taxes and cut payments to these welfare layabouts or I send my campaign contribution elsewhere next time. Our deficit is wacky! Do something about it, and not on my back”. Words to this effect will almost certainly be exchanged I would think.

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