Could America's Economy Be on the Verge of Collapse?



Courtesy of Paul Katz / Getty Images


Lately, it seems we have seen a barrage of videos, ads, text messages, and internet links about the demise of the U.S. dollar as the world's reserve currency. Many economists, investment researchers, politicians, and the like, have bombarded us with their personal forecasts for the fiscal future of the United States. One of the most controversial videos that has recently surfaced is "The End of America": brainchild of Porter Stansberry of Stansberry & Associates Investment Research. The firm was founded by the investment researcher, whose video has gone completely viral, drawing considerable criticism and skepticism, on one hand, and support and validation on the other.

      Many Americans are legitimately concerned about our country's economic outlook and are searching for answers to questions that are being raised publicly, as well as those that we've never even thought to ask. In turn, we seek sound advice from experts who could possibly help us navigate through all of the propaganda disseminated by the government, as well as those watch dog or whistleblower organizations that claim to be serving the best interest of the people.

      Sentiments expressed in many of these messages forecasting the collapse of the dollar, have been said to play on the consternation of an already fearful American populous, concerned about the direction our economy has taken. While there has been some debate about whether Porter Stansberry's recent web video has been formulated to illicit sentiments of fear, it's also worth focusing in on the facts that he asserts in order to determine if the U.S. could possibly experience the type of fall out that is essentially being predicting.

      It is becoming a commonly known fact that the Unites States' currency is in trouble, but in his video, Stansberry has prescribed the formula for the collapse of our monetary system in some pretty graphic terms. He claims that although the global banking system has not yet abandoned the dollar, the rise of many other commodities such as gold, silver, oil, and wheat, are telltale signs that the world's economy will, indeed, reject the dollar much more quickly. He asserts that superpowers such as France, Japan, Russia, and China have begun talks to "end dollar dealings for oil..." and instead move toward currencies like the euro, the Japanese yen, the Chinese yuan, and even a new unified currency created for nations in the Gulf Co-operation Council. According to Robert Fisk of The Independent, a news organization based in the U.K., finance ministers and central bank governors in Brazil, China, Russia, and Japan plan to "...transition from dollar markets within nine years." One of the reasons for the transition has been the (global) financial crisis that has crippled the U.S. economy, branding China as the new financial power. To Stansberry's point, by 2018, we could be seeing the conversion from the dollar become a reality. Once this transition takes place, he predicts prices for everyday things like gas, food, and clothing will shoot straight through the roof. Interest rates will soar and housing prices will be virtually unattainable. He argues that inflation will be higher than we've ever seen before.

      One of the causes that Stansberry cites for the continuing financial crisis, is the strategy of quantitative easing (QE) employed by the federal government. The Federal Reserve resorts to QE in order to keep interest rates low, but many argue that while it looks for ways to improve the economy, the fed runs the risk of causing hyperinflation and the devaluation of the US dollar. According to the National Inflation Association, "... the U.S. dollar is likely to lose nearly all of its purchasing power over the next few years." The NIA predicts that programs like unemployment, food stamps, and social security will become extinct and those dependent on these programs will likely lose their livelihood.



Courtesy of the National Bank of Serbia


An extreme example of the type of chaos that ensued during a currency crisis referenced in Stansberry's video was in Yugloslavia in 1993. Not only had the country's way of life begun to drastically change, it had also experienced the worst bout of hyperinflation in the world. Its government's attempt to create currency to deal with its budget deficit, led to an all-out economic catastrophe. It began to impose price controls, depriving citizens of basic necessities like electricity and heat, and had even resorted to pillaging the savings of its people. In less than two years, prices of everyday items increased 5 quadrillion percent and according to Economics instructor Dr. Thayer Watkins, Yugoslavia's "... social structure began to collapse."

      Stansberry also made claims in December of 2010, about the economic future of Greece: "In 2001, the Greek government borrowed $1 billion from Goldman Sachs to help balance the budget. In total, the Greek government owes $1.2 trillion. It's merely a matter of time before the Greeks default." Last Friday, news of a pending Greek financial meltdown sent American and European financial markets into a tailspin (escalating protests in the streets of Athens). Stansberry asserted that the fate of the U.S. economy will be no different: possibly even worse. He states that any government that has used paper money has ended up borrowing in excess, stressing commodity investor, Rick Rule's sentiments: "Paper money's track record is unblemished by success. The return of paper money to its intrinsic value (nothing) is guaranteed."
Take a look at the facts; judge for yourself.

      Could the U.S. be heading down that economic slippery slope that so many countries before us have succumbed to? Only time (and money) will tell.

American Perspectives and the Death of Osama Bin Laden



Courtesy of Allen Tannenbaum 

      There's something unmistakably inevitable about events like the one the U.S.,and even the world, has experienced in the death of Osama bin Laden. Something that stirs emotions and resuscitates the consciousness of events that have long since passed; although the memory of these events has never died, it now seems to have, in some strange way, been given new life. Perhaps, it's the intrinsic ability that humans possess, to connect with other human beings, especially during times of tragedy or crisis. Suddenly, the world seems a much smaller place with lives that intertwine, no matter the physical distance, cultural differences, or language barriers. It's India, it's Haiti, it's Japan, and even Libya. The crisis; the tragedy; the emotional toll; and the aftermath - we all seem to internalize, in some way, the human factor within these events.

      Yet, what is even more amazing is that we all seem to be affected by these circumstances in different ways and on distinctive levels. Recent conversations and discussions have revealed this. We perceive these events from different points of view and through a different life lens. If one believed that the death of Osama bin Laden, one of the most nefarious men in the history of the world, would bring relief or closure to all Americans, especially those that were either involved directly in the 9/11 tragedy, or knew of someone who was: despite the heinousness of the act committed, this is, indeed, not the case.

      Some Americans were seriously torn over the news. They oppose the idea of violence in retribution of violence. In his 1957 sermon, "Loving Your Enemies", Dr. Martin Luther King, Jr. expresses this same sentiment by stating that, "Returning violence for violence multiplies violence, adding deeper darkness to a night already devoid of stars." And although his timeless words were erroneously intertwined with another quote recently, they went viral, nonetheless.

      Yet another point-of-view reveals that others feel strongly about the celebration of retaliation against our enemies, even those that have committed heinous crimes. This perspective, expressed eloquently by 24-year old English teacher, Jessica Dovey, speaks to the heart of what some felt upon witnessing the outcry of the majority in response to the U.S. Navy SEAL raid: "I will mourn the loss of thousands of precious lives, but I will not rejoice in the death of one, not even an enemy." Dovey's thoughts may reflect a belief that is more heavily focused on the response to an action like that which occurred on 9/11, more than the action itself. In many cases, there is an abundance of emotion attached to the reaction, and these Americans may very well agree that bin Laden's actions were barbaric, but the question then becomes, "What should our response be?"

      A number of people feel that the legacy of bin Laden has been, systematically, bequeathed through the undertakings of the U.S. and many other countries worldwide, as we have adopted an attitude of violence and defensiveness that should be uncharacteristic of our great nation. Kai Wright, writer for "In These Times", argues that two wars, racial profiling of Muslim Americans and a broken immigration system "turned into an arm of national defense" does not make a nation great. In response to President Obama's speech following the death of Osama bin Laden, he pens, "And yet, the Nobel Peace Prize winner can fix his mouth to say that killing a man on the other side of the globe provides proof of America's exceptionalism."
 

Courtesy of Getty Images

   
The, seemingly, prevalent response to bin Laden's death is best put in terms articulated here by The New York Daily News: "It's a psychological victory for a country in desperate need of good news." Many in our country are touting the phrase "proud to be an American" in conjunction with the sentiment that "there is justice in the world." It was, undoubtedly, one of the few 'stop and watch' moments that we rarely catch a glimpse of, as the world stood captivated by the news of bin Laden's death.

      Some argue, that the news of bin Laden's death speaks to the unsuccessful 1980 U.S. raid of Iran, where eight soldiers died in an attempt to rescue American diplomats. It calls into account the tragedy on September 11^th that was witnessed, almost simultaneously, in New York City, Pennsylvania, and Virginia. Its encompasses a seven year-long war in Iraq and 10 years of unyielding combat in Afghanistan. It, indistinctly, undercuts the ideology of al -Qaeda and the growing tide of Islamic extremist groups sprouting up in countries all across the globe. As Afghan President Hamid Karzai says, bin Laden's death is "a serious blow to terrorism". It's a sense of relief or closure and a feeling of, justifiably, wanting to just "move on". A few Americans even expressed the hope that the victims of 9/11 can now 'rest in peace'.

      Whether one heralds the "victory" of the U.S. or stands firm on the belief that the death of one's enemy does not make a nation great; the demise of Osama bin Laden, has, ironically, brought together the ties that bind us as Americans and even beyond. It's rare moments like these that make us stop, if only for a moment, and realize that, on one level or another, we are all simply human beings.

Illegal Immigration: The Beginning, The Illegal, and the Argument

     Sometimes in order to understand where we are; we have to go back to where we came from.    


Courtesy of Photoworld

A law was signed in 1882 banning nearly all immigration from China into the U.S.  The Chinese Exclusion Act was, in many respects, the beginning of illegal immigration which saw a new wave of migrant workers entering the United States.  The composition within the U.S. had undergone many changes, as people entered its borders from various backgrounds, cultures and walks of life. 

      Before 1882, hardly any regulation existed within the states. There was no need for passports. Immigrants came to the U.S. by way of Castle Garden in New York.  Illegal immigration was a distant thought and anyone was free to enter the U.S.  During that time, Chinese, as well as Mexican, Australian, European and South American immigrants headed for San Francisco to try their luck during the Gold Rush of 1848. By 1853, over half of San Francisco’s population was foreign-born.  

      As the Chinese population grew, so did work on the U.S. railroads. The Transcontinental  Railroad saw strikes by white factory workers on the East Coast. Many more Chinese moved to California.  San Francisco factory workers fought for more pay, but, in turn, were replaced by Chinese immigrants.  Americans were angered by the jobs being lost to the Chinese and soon, laws began to be put in place that reflected these sentiments.  A miners’ tax, that subtly targeted Chinese miners, was assessed soon after.

      A very weak economy and a growing number of jobs being lost and, subsequently, filled by immigrant workers, turned up the heat in the already, very volatile climate in the United States.  Riots sprang up in San Francisco and, frighteningly enough, 1877 proved itself to be a deadly year for many Chinese workers.  10,000 Americans burned buildings in Chinatown and docked boats were also burned in the riots.  At that time, four people were killed and fourteen others injured.  The Chinese had no rights when it came to testifying in criminal and civil cases in California and there was no recourse of action for the violent acts that were being committed against them.  In the aftermath, many Chinese migrants returned to China.

      In 1881, one California senator moved to halt Chinese immigration in its entirety for the next 20 years; he introduced a bill that was shot down by then President Chester Arthur; in protest, Americans burned President Arthur in effigy.  (Its interesting to note, that in the Burlingame Treaty of 1868, was an agreement between the U.S. and China promising “the inherent and inalienable right of man to change his home and allegiance” and guaranteeing that “Chinese subjects . . . residing in the United States, shall enjoy the same privileges, immunities, and exemptions in . . . residence, as may there be enjoyed by the citizens or subjects of the most favored nation.”  Needless to say, the U.S. needed to renew its pledge within the agreement and the Burlingame Treaty was amended in 1880, due to increasing political pressure from the Western States.)  One year later, a watered down version of the senator’s bill was introduced, which banned Chinese immigration for 10 years, allowing only teachers and students to come to the U.S; others including criminals, were barred.  Once the bill was made law in the subsequent years, the price the U.S. would pay, was yet to be seen.  All Chinese residents had to register for certificates and could not bear witness in court cases. The Chinese fired back through protests; they brought legal challenges up in court, refused to patronize American businesses and prevented U.S. ships from unloading cargoes in Shanghai and Canton. 

      After the 1906 San Francisco earthquake, many birth and citizenship records were destroyed during a fire, which made it impossible for the government to tell who was a citizen and who was not.  In China, fake papers were created and names of fictitious children were registered in the U.S.  The name, “paper sons” was adopted, allowing Chinese immigrants to migrate to the United States. Between the years of 1943 and 1965, the Chinese Exclusion Act and the Immigration and Nationality Act were both repealed, which lead to a greater influx of Chinese immigrants.  As history would have it, the Chinese Exclusion Act affects much of our policy on immigration today.  

      During the time the Chinese Exclusion Act was initially passed, somewhere around 1883, the number of Chinese migrant workers began to dwindle; roughly 30 years prior to the Exclusion Act, the cultural face of migrant workers slowly began to change and a new wave of peoples had begun to be ushered in.       

      In 1846, the Mexican-American War was fought, which ended with Mexico surrendering to the U.S. by way of the Treaty of Guadalupe Hidalgo of 1848.  Within the terms of the treaty, states like California, Arizona, Texas, New Mexico; parts of Utah and Nevada, were relinquished by Mexico to the U.S.  After the Mexican Revolution of 1910, in yet another unsuccessful turn of events, Mexico’s government could no longer provide the kind of financial support its citizens needed to survive; many Mexicans fled to the U.S. where they found a growing number of opportunities available, as many American men were overseas fighting in World War I.

      During this time, Mexican immigrants were also being recruited and brought to the U.S. to work and live.  Many remained in positions obtained, laboring for years and under “unspoken terms”.   As long as no one complained, it is said, the migrant worker, “…proved particularly useful during World War I”.  Many of these migrant workers were skilled in areas of trade such as painting, plumbing, machinists and the like.  This was especially beneficial for the U.S.

Courtesy of Dorothea Lange / Gelatin silver print

       What would benefit the U.S., would bring a bittersweet reality for the migrant worker.  In 1942, The U.S. Border Patrol was birthed and with it, the term “illegal alien” was born. Many of these workers were subject to harsh labor and lack of constitutional protections, as they were recruited to work on railroads, being paid a fraction of what such labor entailed. 

      In 1942, The Bracero Program allowed temporary guest workers to work in the U.S.; labor protections excluded.  Mexican workers had to prove they had indeed secured employment within the states in order to be eligible for visas.  Thus, the issue of hiring immigrants for cheap labor is also one for which the U.S. takes responsibility.  Soon after, the U.S. became one of the most thriving agricultural countries in the world.

     Today, we continue to see the lack of any kind of reform or any lasting attempt to close the border; this could be attributed to many U.S. businesses benefiting tremendously, for more than a century, from undocumented workers.  Amnesty was granted to 3 million illegal immigrants in 1986 by Ronald Reagan. Corporations continued to push for undocumented labor and since 1986, about 11.2 million illegal immigrants are believed to be in the U.S. today.  Many feel that granting citizenship to those that have come here and been utilized for work, would be in order, to close the door, at least on this aspect of the issue. Securing the border also rates high on the list.       

      There have been a litany of arguments for and against illegal immigration since the beginning of immigration and the debate continues to confound and anger many, on the left and the right, caught in its midst.  The problem many on the right are having isn’t so much with immigration itself, but whether or not it is legal.  A very interesting case to be made against illegal immigration, poses the question: (and by the way, it seems that most people on the other end of the spectrum are not in FAVOR of illegal immigration; perhaps in some ways the issue has a tendency to pull on the heartstrings of those on the left and this makes it difficult to imagine just deporting immigrants, breaking up families and squashing the dreams of many who have tried to make a better life for themselves and their families-just to clarify) why would so many risk putting families and loved ones in jeopardy by crossing the border into the U.S. illegally? There are consequences to any action outside of the law and as a nation of laws, we must uphold that. Many families here illegally, are thrust into poverty and are forced to live sub-standard lives because opportunities are limited without proper documentation. Many find themselves involved in gangs; committing crimes or putting their lives in jeopardy, as well as others.  A growing trend of Islamic terrorism is said to be on the rise, as extremists from Yemen and Afghanistan find their way into the U.S. illegally, holding on to their identity instead of acclimating into the culture of the U.S.;  i.e. learning the language or attempting to become U.S. citizens. Some even argue that we will, through amnesty or even immigration reform, in a way, be encouraging and supporting illegal immigration.   

      Others argue that since many areas in the West, were built off of the backs of migrant workers (or natives at one time), amnesty should be considered for illegal immigrants. Some that side with the left, say that since there has been an unspoken agreement between the government, corporations and undocumented workers; there has also been a hesitation to close the borders.  Some argue that the attempt to deport 11.2 million undocumented immigrants would lead to less immigrants on the path to citizenship, more availability by corporations to take advantage of this labor, less protections and more money in the pockets of big business and their political caretakers.  Others would argue that so many illegal immigrants come here because of the opportunities to make a better life for their families or that economically, Mexico, their home country, is systematically structured to accommodate the mass exodus of its peoples to foreign lands. Its' economy depends upon the monies being sent back by immigrants from these new countries.      

      It seems that since the dawn of America’s rising, immigration has existed as well. Both the immigrant; whether from China, Mexico, etc., as well as the United States, have depended more on each other than we would care to give mention to.  If it weren’t for Chinese, Mexicans and even other immigrant workers, a much different story would be written in the books about many of our railroads, fields factories, and households. Would we, as a nation, be as prosperous and developed as we are just by our hand alone?  One should take a look at the countries that each of these immigrants have fled.  Imagine the success and prosperity these lands would have if they could hire workers to build their railroads or till their fields, build their homes or even care for their children. On the other hand, many immigrants, even at a very young age, dream of living in America; the land of milk and honey. They see the richness of our culture and way of life. Many see an opportunity to not only provide for their own families, but, to also give back to their own communities in their native land. They envision the chance to live in a Democratic society; where every American has the freedom of life, liberty and the pursuit of happiness. The things that we sometimes take for granted, are things that many give up all they have for; risking their lives and those of their children, to take hold of.  

      Immigration is not a new topic; there are many similarities weaved into the debate today that have taken place over a century ago. It is extremely important to dig deeper to find out what fuels the controversy over immigration. It may just provide a different perspective on an age old argument. Its interesting to find that nothing has really changed much since the beginning stages and why it would truly be historic to break this cycle of dependency we’ve grown accustomed to.  Still, it may be even more important to know exactly where we’ve come from, to know where we are headed.

Why the Atmosphere is Ripe for Obama's Reelection in 2012

Many underestimate the power of the minority. We witnessed, what has been described as, the seemingly disregarded grievances of the underdog; complaints of "big government", "deficit spending", and "federal interference in free market". These were the very same voices; voices of the minority party in both the House and the Senate, which turned out the vote last November. Now, with the proverbial shoe on the other foot, the present beholds a Democratic minority in the House and just enough legislators in the Senate that would constitute a very slim majority.

But the ground is swelling. The middle class is about to make one of the biggest statements it ever has in its political life. Its fighting back and its not waiting for Washington to roll up its sleeves and do the "dirty work". Could this be deja vu?


Courtesy of AP / AJ Mast

Back in 2008, the economy was issue #1 on the minds of middle Americans and the sentiment was that the American Dream was slipping slowly out of reach. The war in Iraq was trailing a close second. Wall Street had just run rampant in an environment which lacked regulation and declared an all-out assault on the middle class by introducing derivatives and gambling on the presumed misfortunes of homeowners.  Sub prime mortgages were no longer the "it" thing; banks had become greedy; over-indulging on fat-cat bonuses and other little perks, and, we suspect, all on the backs of taxpayers. With a Republican President eclipsed by a 31% approval rating and Democrats ruling both the House and Senate, it seemed the entire country wanted change. Big change. And they wanted it "now".



Fast-forward to 2009. The economy still very much American issue #1; we suffered one of the most severe economic recessions since the Great Depression.  The job market hemorrhaged jobs at a rate of 779,000 during the month of January alone. Unemployment stood in some places, at best, 10%. We were involved in two wars; one of which, Americans have been supporting, albeit tiredly, for the last 8 years. Foreclosures sky-rocketed to a record high as people lost their jobs and struggled to make ends meet. The poverty rate increased to 14.3% as 43 million people were categorized as living in poverty. Banks hoarded billions of dollars as if fearful of another economic recession; and Americans were afraid to deposit their money into banks; they had no idea whether there would be a return on their investments or how such an unstable market would play out. We had a Democratic President with his party ruling both the House and the Senate and a small, but growing portion of Americans that were absolutely livid with Washington's "out-of-control" spending and the state of affairs in our country. Although those voices did not represent the majority; they were the voices that were moved to action while the rest of the country began to take notice.

Jump to 2010. The downward spiral effect of some of our most pertinent issues began to slow. The economy, though still very feeble, had begun to show signs of resuscitation. Unemployment numbers, still high, started on an encouraging descent in the right direction. The housing market had begun the slow and arduous process of healing, as "... several large markets have hit what appears to be a tentative bottom in home values," according to Zillow. We saw jobs being created in industries like health care, professional and business services, leisure and hospitality and mining. Banks were opening up their lending doors again, as they were given incentives to increase small business loans.  Even with the nation's outlook moving from pessimistically dismal to optimistically grim, the minority was still not satisfied. In fact, it was even more outraged by the amount of spending it had taken to ease the economy (i.e., the bank bailouts, TARP, the Recovery Act). What added to the frustration was the passage of  bills like health care, that made the bitter pill of spending even more difficult to swallow.  It had drawn a line in the sand and dared anyone to cross it.

From that minority, the Tea Party was born. Although a so-called fringe element of the voting constituency, its power to make a significant dent in Washington's political armour was questioned by many. The momentum of discontentment and disdain quickly swept across the nation, as the minority became a unifying force, dominating the 2010 elections and catapulting its own party to historic heights.  We saw a massive takeover of the House of Representatives by Republicans last November; leaving Dems shuffling to pick up the pieces after losing one of the biggest battles fought of its political life. As they came into office, the Tea Party-backed group made epic promises, claiming that the era of "business as usual" had ended.

Now, in 2011, we find the tides of change shifting yet again; this time with a Republican-led House that vowed to its supporters that it would cut deficit spending and repeal Obama's health care. No one could foresee how much of a detriment their oath would prove to be to the American middle; as the GOP leaped forward, delivering a blow below the belt, forcing the wildly, unpopular Bush tax cuts down the throats of financially-strapped taxpayers. It left a really nasty taste in the mouths of many. How could Republicans claim to cut spending, while providing tax cuts to the wealthiest Americans?  That was only the beginning. The Republican agenda has been packed, though only 3 months into the new year. So far, the country has witnessed the looming threat of a government shut-down, as some of the GOP's more conservative members' vow to "slash and burn", rather than compromise on many of the proposed spending cuts brought to the table. Oddly enough, to this point, even some Republicans have taken issue with many of the sweeping cuts being introduced, as Rep. Dan Lungren (R-Calif.), mildly put it, "... across-the-board cuts are a lazy member's way to achieve something."  As conservatives hammer out their differences; one can only wonder how future, and inevitable rifts within the Republican party will serve to help them in 2012.

The GOP has already started down that slippery slope; proposing huge decreases and, in some cases, the elimination of federally-funded programs like Head-Start and Planned Parenthood. Some Republicans have justified their decision to cut funding, based upon the logic that if mothers would just stay at home, they wouldn't need programs like Head Start.  They plan to end programs that, in some regards, benefit women and children like Title X; WIC, whose services help increase the survival chances of low-income babies born with low birth weight and higher infant mortality; as well as support services for older Americans who rely on Social Security and Medicare benefits.  Its even gone so far as to push for legislation that would redefine the legal term for a "victim" of rape to be termed "accuser". Many women's rights groups label the GOP's latest efforts as "an attack on women's rights."




Courtesy of heytherejesus by Flickr

As if plans to cut funding in these crucial areas were not controversial enough, one of the most recently proposed bills that has come under intense fire, is that which includes state budget cuts to unions in Wisconsin that strip public workers of their collective bargaining rights. Gov. Scott Walker also proposed to cut state aid to school districts and local governments by $1 billion. Protests are being held in Ohio as well as New Jersey, where the same policy is being considered for implementation by Republican Governors in those states, with many others to follow suit. Despite  overwhelming political dissidence for these reform bills, GOP governors plan to ram these proposals through their respective State Senate, with no room for negotiation and little regard for their constituency who oppose the measure. Sounds freakishly familiar given that, just last year, we saw a minority insurrection against Democrats who were accused of the very same tactics.  

While newly appointed GOP crusaders are cracking down; the middle class wrecking force is ratcheting up. Polls show that the majority of the public are in support of the unions' collective bargaining rights; and with the recent turn of unabated events in the Midwest, its beginning to look like Wisconsin may just be ground zero for the American middle's uprising.  As Walker and his cronies dig their hills in the ground by threatening to lay off thousands of state workers, the people of Wisconsin have begun to engage in a grass roots drive to recall eight of the state's senators who were elected to office, Walker included. Needless to say, voters are having second thoughts about electing Republican Gov. Scott Walker.

Furthermore, in regards to what many now see as, "extreme" cuts in spending, others have begun to make the argument that the fiscal fight Republicans are engaging in, will do more to hurt the U.S. economy than actually help it grow. Goldman Sachs reports that "the GOP's proposed spending cuts would be a drag on the economy and slash economic growth by about 2 percent of Gross Domestic Product." Last November, Republicans made a pact with America through its Pledge: "We have a plan that will help create jobs, end economic uncertainty, and make America more competitive."
They stressed the need for job creation, but so far, have not implemented any new policies that reflect that. We need to look no further than Wisconsin to see the unfortunate reality behind the Pledge. The middle and working class have borne the brunt of the tax burden, public spending cuts and decreasing entitlement programs. The voice that spoke in the last election demanded jobs, but the new wave of Republican budget cuts may send the jobless rate shooting right back up into double-digit figures.

Even more potentially devastating than a Middle class revolution, would be the thread of GOP solidarity unraveling from within. While many on the far-right herald the efforts of the over-reaching cuts being made to domestic and government programs, there is also a growing portion of Tea Party supporters who feel that Washington Republicans are back-pedaling on promises made in November to slash spending and solve the country's debt crisis. It has issued dire warnings to the Washington-ites, that if they don't live "... up to the expectations of the tea party people, they will be eliminated one by one".  With the kind of support it has from those within its own party; Democratic and Independent voters won't be the GOP's worst nightmare come 2012; it will be those that elected them to office.

The country has seen historic voting trends over the past 2 years; it hasn't taken long for the pendulum to swing in the opposite direction when voters feel disenfranchised or that Washington is simply not getting the message. 2012 might prove to be a year that witnesses yet another historic swing of the pendulum; this time the momentum may be enough to give Barack Obama another go at the White House.



A Cut Above the Rest

Courtesy of Mark Lennihan/AP/File

The U.S. debt crisis; according to the Financial Crisis Inquiry Commission, a combination of many things have contributed to it - including, but not limited to: the sub-prime mortgage crisis, lack of regulatory oversight in the financial sector, excessive borrowing on both Main Street and Wall Street, the concept that specific institutions were too-big-to-fail, the "tax treatment of financial products and investments" and a "global imbalance of savings".

Right now the U.S. National debt is upwards of a staggering $14 trillion. More than $1 trillion make up the U.S. federal budget deficit, or the amount of money Congress spends in relation to how much it actually receives from the IRS. Congressional "spending" makes up about $3.5 trillion.

What complicates things, is that the U.S. currently has an established debt ceiling of $14.3 trillion. According to Federal Reserve chairman, Ben Bernanke, either the U.S. raises the already stifling debt limit or it should be prepared to default on its debt, both domestic and abroad. Of course, the epic scenario has not escaped the political merry-go-round in Washington. While Democrats argue that raising the debt limit would keep the U.S. from reneging on its global financial responsibilities and halt a  government shut down; Republicans argue that there are other ways to bring down the debt before we actually have to "go there". The GOP now proposes deep spending "cuts" in exchange for raising the country's ever-mounting ceiling of debt.

"Cuts"; a word that conjures up visions of sacrifice, lessening, or even doing without. For all intents and purposes, its been a word that has been thrown around Capitol Hill quite a bit lately, and one that, at least, symbolically, seems to be easier said than done. Everyone knows its something that needs to happen, but it seems an unsolvable mystery in determining where to begin. Whether its Medicare or Social Security, education or research and development, in order to get our fiscal house in order, something's gotta give. Question is-what are we as Americans, willing to sacrifice by doing without? Or better yet; what can we AFFORD to sacrifice by doing without? According to a recent Gallop poll, most Americans are definitely OPPOSED to cuts being made to Social Security, Education, and Defense.

Last February, President Obama organized a "deficit commission", more formally known as the National Commission on Fiscal Responsibility and Reform.  The commission is made up of a Congressional bi-partisan committee that has the responsibility of "identifying policies to improve the fiscal situation in the medium term and to achieve fiscal sustainability over the long run."  In addition "... the Commission shall propose recommendations designed to balance the budget, excluding interest payments on the debt, by 2015." In laymen terms, its doing a job that is neither popular or, in some cases, palatable, but that needs to be done; reduce spending.

So, just what are the spending "cuts" Congress is looking to make? As expected, Social Security will most likely be one of the entitlement programs that will undergo a major face lift.  In a disturbing new report published by the Congressional Budget Office, Social Security will begin running deficits 5 years earlier than the original 2016 projected date. It will pay out $45 billion more than it collects in payroll taxes in 2011 alone. As the government fishes for a strategy, one idea that has been tossed around by President Obama's deficit commission, has been the possibility of gradually raising the age of Social Security retirement to 68 by 2050 and 69 by 2075. The committee's proposal also includes a decrease in the program's cost-of-living adjustment and an increased cap on any income subject to Social Security taxes.

Another plan submitted by the commission, is a 15-cent a gallon increase on gasoline. Although this particular proposal would not require Americans to actually relinquish anything (at least, not technically), we would be required to pay higher prices at the pump in exchange for, say, lower income taxes.  But with the possibility of gas prices rising in light of the protests in Egypt, and the fiscal pinch already felt on many taxpayer's wallets; would this be another "grin and bear it" type of burden?

Other committee proposals include reconstructing the tax code. According to FoxNews.com, "... taxpayers would face three tax brackets of 12 percent, 21 percent and 28 percent." This would call for the elimination of special tax provisions, more efficient tax rates across income classes, and dissolving the Alternative Minimum tax.

Still, another idea that seems quite popular among Republicans, is the elimination of earmarks. Some Democrats oppose the idea, but in the President's State of the Union address, he said he would veto any bill that came across his desk containing earmarks. This comes as both a response to last year's midterm elections to do away with earmarks and as a transparent effort to let voters know that special interest groups aren't receiving money that goes to benefit these groups exclusively. According to Robert Gibbs, White House spokesman, decisions like this, are just one of many tough choices that we face as a country in order to curb U.S. waste.

Republicans just recently announced that they look to slash spending, about 17%, in areas such as transportation, energy, commerce, water and agriculture. According to  Bloomberg's latest report, "labor, health-care and education programs would shrink by 4 percent, as would foreign aid and international programs. Congress’ budget would see a 2 percent cut. Defense would grow by $8 billion, or 2 percent, from 2010 levels while homeland security funding would be frozen."

As an additional measure, in his address, The President called for a five-year, governmental spending freeze on non-security discretionary spending, in efforts to reduce the deficit by $400 billion over 10 years. But the GOP wants to go deeper.



Courtesy of Mark Wilson/Getty Images N.A.

In his response to President Obama's State of the Union Speech,  Republican Congressman and Chairman of the House Budget Committee,  Paul Ryan, warned Americans that the debt our nation has incurred will "... soon eclipse our entire economy," and that if we don't act now, "America's best century will be considered our past century." In an effort to convey, what many on the Right view as our nation's sobering reality, Ryan provides statistics on government spending and how it is crippling the economy, reiterating that incessant borrowing will only grow the debt to catastrophic levels.

Despite the bleak forecast, Ryan says Republicans are willing to meet the President halfway in order to handle the country's debt crisis, "I assure you that we want to work with the president to restrain federal spending." He also admitted that the debt the U.S. faces is one that has occurred over many years, not solely under one administration or another, and that Obama was handed a "severe fiscal and economic situation". 

With the GOP now at the Congressional helm in the House and what is said to be the worst of the economic recession behind us, one can only hope that a better pecuniary destiny awaits us. But we need a plan; we need specifics. We have to make some tough choices; in some areas we will come out ahead, in others, we'd honestly better be ready to just suck it up. According to a recent Reuters Poll, 71% of Americans oppose the idea of raising the debt limit. If it is something both parties actually agree on, which is rarely ever the case, then a debt ceiling increase might actually be worth considering.  Again, we are going to be forced to make some decisions that, frankly, just might leave us scratching our heads in bewilderment. The bright side is that at least both Congress and the White House concede that we can no longer sustain the current trend of spending. One thing we can be sure of, is that Pennsylvania Avenue got the people's message last November at the polls. The nation recognizes that we have a fiscal dilemma on our hands and if nothing else, we should note, that all parties are working together diligently to solve our budgetary woes and to restore America's rightful economic standing.    

Was Steele a Victim of His Own Missteps?

Courtesy of Wikimedia Commons

Michael Steele rode the wave of hope and change right into the position of RNC chairman back in 2009. He was the first African-American male to ever hold the seat within the Republican National Committee. The GOP was desperately seeking to change its image after a crushing defeat in the presidential election of 2008. Two years, numerous gaffes and several alleged spending sprees later, Steele has found himself ousted from the illustrious chairmanship of the "Grand Old Party".

Steele appeared on CNN's "The Situation Room", Wednesday, deliberating over exactly why he got fired from the GOP post. He asserts that establishment Republicans are "relieved" that he's been dismissed, while at the same time, admitting his tone and style of leadership was much different than what many in the party had expected. He also mentions that there were several members, within the GOP, sparring for the same funds from contributors that once offered their financial backing to the committee without batting an eye.

Could it be betrayal rather than culpability that has Steele licking his political wounds in hindsight nowadays? Or perhaps it's just that Steele needs a little perspective and a slight reminder of how his tenure has been marred with allegations of spending sprees and fiscal irresponsibility in the handling of committee funds.

Not long ago, I did a piece titled, "Steele Remains Head of the RNC".  In it, I recounted some of Steele's most notable "situations" that had many on the Right shaking their heads, sometimes in horror and at other times, in disbelief.      

Since Steele took the job in January 2009, he says he has come under a lot of pressure, most notably, within his own party, for what some say has been the mismanagement of funds raised by the committee.  Steele has been criticized for spending money on high-end hotels, limos and private jets in the past; now, he says, the RNC is taking more steps to make sure that in the future, they are more "fiscally conservative".  In addition to this, Neil Albert, hired by Michael Steele as a special finance assistant, was fined $4,000, while he was still chairman for the D.C. Baseball PAC in 2007, for improperly spending money from a political action committee.  Just recently, the RNC has come under fire for picking up a tab for a group of donators that attended a night club in West Hollywood.    

During his interview, Michael Steele also mentioned that his style of leadership is "...very different, much more engaged on the streets of America...".  Steele also says he's not a product of the "old-boy network..." and it's rubbed some...the wrong way".

Of course, the unforgettable shout-out to Republican Governor Bobby Jindal, where Steele said he wanted to offer up "some slum love" and the attention-grabbing blog title on a very Conservative GOP.com website: "What Up", are just a few instances where this "street-wise" way of relating to those inside and outside the Party have brought Steele flack as well.

Still, some in his own party paint Michael Steele as a political outsider; a position, they claim, that Steele has been branded by as a consequence of his own doing. Having run for reelection, critics anticipated that he would call upon the support of the same tea party activists that lobbied against establishment Republicans during the primary elections of 2010.  Others feared that because Steele had not been able to raise the kind of dollars that outside groups were able to garner during the last election cycle, he would not be able to compete against the 2012 reelection machine of Barack Obama. All of this is topped by the fact that as he left, the RNC was $15 million in the hole.   



Courtesy of Alex Wong/Getty Images

Michael Steele lamented on the conservative website FrumForum, that he could relate to the Roman leader Julius Caesar, as his successor, former advisor and friend, Wisconsin Republican Party Chairman Reince Priebus, stepped up to the plate last week and won the coveted GOP chairmanship with a record 97 votes.  Steele claims Priebus had been secretly vying for the position for months, while advising him and serving as the RNC's top lawyer. "It is what it is," says Steele, "I trust my friends. Well, I guess the adage is right. In Washington, you should get a dog".  

Last week, Steele withdrew his reelection bid for the chairmanship after initially receiving a mere 44 out of 168 votes by committee members in the first round; his tally then dropped to 28 votes after subsequent rounds. With the number of votes against Steele, Priebus was clearly a shoe-in. 

While the strings of his term as GOP chairman have been cut short and in the wake of the all of the controversy and missteps, Michael Steele can unmistakably be linked to major, and in some cases, historic, victories the Party enjoyed under his auspices: 6 freshman Republican Senators, 21 states flipped from Blue to Red; a monumental 63 House seats acquired and $192 million that came through fundraisers. The pivotal nature of him having attained the position may indeed, in some circles, outweigh the politics involved as some look back on Steele's record one day; but the reality is that outside the beltway, a man's character is most certainly judged by his actions and, fortunately, not the other way around.   

The Toxity of Politics at Dangerous Levels

Courtesy of Gabrielle Giffords 

The current atmosphere of politics has become toxic; lethal even. Where and when it all began seems to be a hazy blur, but it would seem that the passage of health care reform has seen a dangerous rise in random acts of violence and ugly symbolism from both within the Washington establishment and beyond. Between January and March of 2010, members of Congress that voted in favor of the health care bill had reportedly seen 42 cases of violence or threats against them; in 2009, only 15 cases were reported within that same quarter.  Between 2000 and 2010 there had been 236 threats to lawmakers; in the beginning of 2010, that same number jumped, dramatically, 300 percent.

Last year, the ranting and protesting had only begun its horrific ascent. In March of 2010, while walking into the Capitol to cast their votes on the seemingly, ever-controversial health care bill, racial epithets were hurled at several members of the Congressional Black Caucus, while one member claims he was even spit upon. Barney Frank, an openly-gay member of the House of Representatives, was beleaguered with anti-gay chants during the Tea Party protest of the bill that same day. Other lawmakers, Sen. Debbie Stabenow and Rep. Paul Ryan were both threatened with assassination. Then-Senator Blanche Lincoln, for her vote in favor of health care, was told that her throat would be cut. And in an eerie foreshadowing of events, Rep. Gabrielle Giffords, had also been a target of vandalism back in March 2010. More recently, a vandal painted swastikas on the office door of Sen. Kay Hagan in North Carolina.

Courtesy of Sarah Palin

Strange postings of a target with the cross hairs of gun sights (or as Sarah Palin now refers to it: bulls eyes) over the districts of about 20 different Congressmen/women that voted in favor of health care reform, were touted on the Facebook page of former Governor Sarah Palin, last year. One of those districts, was that of Rep. Gabrielle Giffords. Palin's staff member, Rebecca Mansour maintains that the target and cross hairs on Palin's page were not intended to incite violence and that the "target list" displayed on the site, was purely political. It's clear that imagery like this, in conjunction with weak economic conditions and an angry, fringe element of society, can be stirred up to make an already volatile mixture, perilous.

Extremist and far-right activist, Mike Vanderboegh, capitalized on the situation; only he never failed to mince words. Vanderboegh posted messages of retaliation to other extremists, against Nancy Pelosi and other Democrats, in protest of health care reform; he even went so far as to warn of an imminent civil war. "So, if you wish to send a message that Pelosi and her party cannot fail to hear, break their windows. Break them NOW. Break them and run to break again. Break them under cover of night. Break them in broad daylight. Break them and await arrest in willful, principled civil disobedience. Break them with rocks. Break them with slingshots. Break them with baseball bats. But BREAK THEM."

What's more frightening, is that it gets even more extreme than Vanderboegh. Who can forget the Hutaree? The so-called Christian militia group, was comprised of 8 family members and friends who planned to plot war against the U.S. back in March of last year. Hutaree members engaged in their own paramilitary training, by shooting guns and making homemade bombs. They had even plotted to set these bombs off at a police funeral. Authorities quickly moved to bring the group down because not only was it planning to carry out the attack against law enforcement officials, but it believed the group would become a catalyst of similar anti-government movements around the country.

Four days ago, a mysterious envelope that ignited at a D.C. post office, addressed to Department of Homeland Security Secretary, Janet Napolitano, held a message of angry words.  "Report suspicious activity...You have created a self-fulfilling prophecy." Officials believe the sender was referring to "flashing road signs posted on some Maryland roads". Luckily, the package never made it to its intended destination and no one was injured.


Courtesy of The Charlotte Observer  

Fast forward to last Saturday's horrific incident resulting in the deaths of six people, as well as serious injury to Rep. Gabrielle Giffords and 13 others. The only thing that seemed to stop Jared Lee Loughner's senseless shooting spree that day, was that the Glock semiautomatic pistol he was touting, ran out of ammunition. By reports, Loughner was mentally ill and according to his postings on YouTube, he makes an argument on being called a terrorist and refers to, quite possibly, his, or someone else's, character being called into question. Loughner believes that the laws in place today are in direct violation of the Constitution. He had an obvious problem with illegal immigration and seemed to be preoccupied with words and their meaning and how he thinks they are used by the government to manipulate people. Loughner took serious issue with the state of our country like many others, but, tragically, chose to take the law into his own hands. The question now becomes: How do we rebuild and rebound from this unfortunate chain of events?



Let's start with a responsible debate. Right now, there seems to be a great deal of disillusionment with how many feel the government should work, as opposed to what it is actually out to accomplish; that it is bent on taking away the freedoms of Americans and dividing the classes, while pitting the classes against each other and controlling the people. Many Americans feel that there is no longer the same reverence for the U.S. Constitution. Some are disillusioned because they feel that our public leaders aren't listening; that promises that were made, were broken and that the Washington establishment vowed reform and hasn't delivered. Many feel that the wars we are fighting are unwinnable. Some people long for the America of long ago; they are nostalgic and unwilling to embrace change. Others see the need for change, but result to violence as a means of solving issues. Still, optimistically speaking, many realize that there is still hope for our country, and perhaps, that sentiment is just enough to help us move things forward.

One thing we must understand and consider, is that Change takes time; it takes courage and sacrifice, victories and challenges, voices and opinions-it takes you and me. Change is an uphill battle; it's not something achieved overnight, but it is something that can be measured over time. It matters how much we are ready and willing to embrace it-but it is also undeniable and inevitable. Change refuses to stay the same; there is no progress or growth without it. It's letting go of the old and ringing in the new. Change is upward-climbing, life-giving and purpose-driven. Change is a conversation, an acknowledgement, an admission.  Change has been here since the beginning and will be here until the end. Change has never exited, never said farewell and never left the building...no, Change is, unequivocally, here to stay.