Financial, Economic and Social Mood Update (April 2, 2017)
The nominal stock market is still near record high (nominal) values, but like I said in last month’s update, the purchasing power of the American Dollar has greatly diminished. One of the most astute commentators today is Mr. David Stockman, former Budget Director under the late U.S. President Ronald Wilson Reagan. Mr. Stockman points out that regardless of which of the two large U.S. political parties has a governing majority (either the Democratic Party or the Republican Party), the USA has slid so far down with respect to its massive debt burden that we have literally passed the point of no return – as Patrick Buchanan says (he is yet another veteran of the Reagan Administration), the USA is clearly becoming a Third World Country.
Mr. Stockman points out that regardless of what current U.S. President Donald J. Trump wants, there will likely be no tax cut and no massive spending on necessary American infrastructure – the USA simply no longer has the resources to do these things. Even the nominal stock market is severely over-valued, and will eventually crash to the ground. Massive cuts in employment are coming to the public sector in the USA, in particular to employment on the state, county and city government levels. These cuts and consolidation will commence around June 2017 and they will not stop for a long time. Millions of current employees will be adversely affected simple because the USA has literally run out of financial resources. Circa 12 million positions are slated for elimination or “down sizing.”
Socialism has never worked, it does not work today and it will never work in the future. Plainly said, Socialism is an “ass backwards” philosophy which has all the wrong incentives – it rewards failure and it punishes success. Former U.S. President Barack Hussein Obama oversaw the largest expansion of the socialist welfare state in American history especially due to his so-called “Affordable Health Care Act.” Defeated candidate Hillary Rodham Clinton wanted to oversee an even larger expansion of the socialist welfare state by reducing the minimum age for both Social Security and Medicare to 55. Her defeated Socialist rival Bernie Sanders wanted even more Socialism & Communism in the form of so-called “free” college education.
Americans at the highest level of society already pay an overwhelming burden in the form of mandatory taxes and insurance – FOX News commentator Bill O’Reilly pays 90 percent of his gross income in the form of mandatory taxes & insurance. My own rate is up to a staggering 83 percent of gross earned income. Affluent Americans are forsaking their U.S. citizenship in record numbers, migrating to countries as far and wide as New Zealand and Colombia. Americans will be prudent to acquire dual citizenship and beyond.
The American middle class is vanishing, and with it the necessary bedrock to maintain a democracy and a free society. 58 percent of Americans no longer file an income tax return, because their annual income falls below the necessary threshold requiring them to do so. Of the 42 percent who do file an income tax return, fully 46 of these have chosen to pay the “Obamacare” tax penalty instead of actually purchasing health insurance – this is yet another glaring example of the failure of socialized medicine. Nobody should be “forced” to buy anything! An average mean of 47 percent of American babies are now born into families receiving “Medicaid,” the so-called “free” health care plan for the so-called “poor.” Among the 50 US states, babies born into Medicaid account for 49 percent of all births in the USA. This ranges from a high of 72 percent in New Mexico to a low of 27 percent in New Hampshire. The demographic and cultural makeup of the USA has also changed dramatically. Today, a mere 25 percent of children in American schools are native born Caucasians.
Europe (the EU)
Dutch voters went to the polls on March 15. The media tells us how the “far right” supposedly “lost” this election. Not really. Far right political parties in Europe have been virtually taboo since Germany surrendered to the Allied powers in May 1945. In recent years, far right political parties have finally come close to winning national elections. In the Austrian Presidential election in December 2016 the right wing Freedom Party of Austria won an impressive 46 percent of the popular vote. French voters will go to the polls in April and May (first and second round, respectively) to elect a President. National Front leader Marine Le Pen is polling as much as 44 percent of the popular vote for the second round – another record high performance for a right wing candidate in the post-World War 2 period. The vote in the Netherlands turned out as follows. The Christian Democrats (similar to the Republican Party in the USA) won 13 percent of the vote. The Socialists (similar to the Democrats in the USA) won 16 percent of the vote. The Liberals (similar to the Libertarians in the USA) won 30 percent of the vote – the Dutch Prime Minister comes from this political party. The Greens (environmentalists) won 10 percent of the popular vote. The far right political party of Geert Wilders won a record 20 percent of the popular vote. Conservative independents won 6 percent and a Pensioners Party (in favor of even more generous Social Security and health care) won 5 percent of the popular vote in Holland. The parties of the far right wing will likely gain support as times become ever more challenging in many more countries all over the world.
