There's a great graph that the New York Times had done reflecting home values adjusted for inflation going back 100 years. It shows the booms and the busts, such as the 35% loss of home values in the Great Depression, as well as the booms in 1970s and 1980s. The one constant is that home prices always return to about 110% of historical norm.
Home Values thru 2006
The current credit bubble and housing boom started with a steep increase in home values in 1997, not long after government loosening of credit and the fed pressures to lower interest rates. Starting in 1997, homes increased from 110% of historical value to about 205% of value in 2006. Then the bubble started to burst. Since 2006, values have dropped 40% (value loss plus inflation loss) to about 155% of the historical norm. See the curve now:
Home Values thru Today
The downward slope of the curve is very steep right now and could do one of three things. It could start to level out, continue to plummet to the norm, or in the case of entering a depression, values drop well below the historical norm before it bottoms out. Home values across America are losing about 1% of value a month, on top of the value being lost due to inflation that is beginning to increase rapidly.
If you are hoping things will turn around soon and are making financial decisions based on that hope, this is information you need to be aware of.
Thursday, February 26, 2009
Obama deficit to equal 2000 federal budget
From the Office of Management and Budget (OMB) Briefing Book
Obama budget to increase spending up from $2.983 Trillion under Bush to $3.938 Trillion this fiscal year. Will decline to $3.552 Trillion next fiscal year, down $714 Billion, but stimulus new spending remains! Obama budget forecast to increase to $3.856 Trillion by end of first term. That is a 29% increase in size of government, assuming no additional spending.
TOTAL federal spending in 2000 was $1.79 trillion.
Total estimated 2009 DEFICIT according to Obama’s budget blueprint will be $1.75 trillion.
Obama budget to increase spending up from $2.983 Trillion under Bush to $3.938 Trillion this fiscal year. Will decline to $3.552 Trillion next fiscal year, down $714 Billion, but stimulus new spending remains! Obama budget forecast to increase to $3.856 Trillion by end of first term. That is a 29% increase in size of government, assuming no additional spending.
TOTAL federal spending in 2000 was $1.79 trillion.
Total estimated 2009 DEFICIT according to Obama’s budget blueprint will be $1.75 trillion.
Monday, February 23, 2009
How much trouble are Social Security and Medicare really in?
You won't believe it, but it's all here at
OASDI and HI Annual Income Excluding Interest, Cost, and Balance in Current Dollars
According to the Government, they look at three different scenarios based on cost trends. "OASDI" is Social Security, and "HI" in Medicare Part A. Medicare Part D, Prescription drugs, isn't even included here.
So here are some hard facts that you're not being told. You could call this the real crisis behind the crisis.
Under the estimates from the Social Security Administration done last year, Medicare is today already spending more than it is taking in. Social Security, under the "intermediate" estimate of costs, will be in the red in 2017, and the combined programs will be underfunded as early as 2015.
Under the worst-case scenario of high costs (and I have to wonder whether recession or depression will hasten us in this direction), these programs will be underfunded as soon as 2011. In fact, under this scenario, less than $50 billion in surpluses are left before SSI, that surplus-maker that has provided more than $2 trillion to the Treasury to fund other government programs and reduce deficits, will itself be in the red.
What happens when Social Security and Medicare require additional funds to make payments? Do we just fire up more printing presses? Does China continue to lend us the money to grow our debt?
But here is the real frightening point, if it can be scarier. The government appears to use the Low Cost scenario when they estimate our unfunded obligations out the next 75 years. As if $54 trillion doesn't sound bad enough out through 2085, how does $414 trillion sound in the Intermediate Cost scenario?
Oh, you're not worried enough yet? The high cost scenario shows a shortfall in unfunded obligations of.... wait for it.... $1.1 QUADRILLION (thousands of trillions) out to 2085.
Now every time reform of Social Security and Medicare have come up, which political party has absolutely refused to address it? But if reforming Social Security or Medicare is the 3rd rail of politics, then is it already too late to save ourselves from ourselves?
OASDI and HI Annual Income Excluding Interest, Cost, and Balance in Current Dollars
According to the Government, they look at three different scenarios based on cost trends. "OASDI" is Social Security, and "HI" in Medicare Part A. Medicare Part D, Prescription drugs, isn't even included here.
So here are some hard facts that you're not being told. You could call this the real crisis behind the crisis.
Under the estimates from the Social Security Administration done last year, Medicare is today already spending more than it is taking in. Social Security, under the "intermediate" estimate of costs, will be in the red in 2017, and the combined programs will be underfunded as early as 2015.
Under the worst-case scenario of high costs (and I have to wonder whether recession or depression will hasten us in this direction), these programs will be underfunded as soon as 2011. In fact, under this scenario, less than $50 billion in surpluses are left before SSI, that surplus-maker that has provided more than $2 trillion to the Treasury to fund other government programs and reduce deficits, will itself be in the red.
What happens when Social Security and Medicare require additional funds to make payments? Do we just fire up more printing presses? Does China continue to lend us the money to grow our debt?
But here is the real frightening point, if it can be scarier. The government appears to use the Low Cost scenario when they estimate our unfunded obligations out the next 75 years. As if $54 trillion doesn't sound bad enough out through 2085, how does $414 trillion sound in the Intermediate Cost scenario?
Oh, you're not worried enough yet? The high cost scenario shows a shortfall in unfunded obligations of.... wait for it.... $1.1 QUADRILLION (thousands of trillions) out to 2085.
Now every time reform of Social Security and Medicare have come up, which political party has absolutely refused to address it? But if reforming Social Security or Medicare is the 3rd rail of politics, then is it already too late to save ourselves from ourselves?
Saturday, February 14, 2009
The United States is Bankrupt!
Jerome R. Corsi of WorldnetDaily did an article entitled, "Federal obligations exceed world GDP - Does $65.5 trillion terrify anyone yet?. This article describes the absolute reality of collapse of the American government. I can't say anymore about it, but you can read the article, and then review the 2008 Financial Report of the United States provided by the US Treasury.
The table below is extracted directly from the US Treasury Report looking out the infinite horizon. Look down at the lower-right total obligation for Social Security, Medicare, and Disability Insurance. Yes, that reads $101.9 TRILLION more in outlays than projected revenues.
The table below shows where we stand right now, looking out only 75 years, but including all federal government obligations, including social program entitlements from the table above. Yes, you're seeing $65.5 TRILLION dollars (the amount of money we're going to need in current dollars, added to the expected revenues for the next 75 years, to cover the federal obligation for all the promises our government has made for the next 75 years.)
Below is the link to the report from ShadowStats.com, as referenced in the Corsi article. You can read the US Government's dirty little secret for yourself.
December 2008 - GAAP-Based 2008 Federal Deficit
Perhaps this explains why the Democrats appear to have lost all sense of responsibility? I mean, after all, why bother to be fiscally responsible when the fuse is lit and it can't be extinguished? Republicans have engaged - again - and are fighting to stop the waste and the acceleration to our collapse, but are they doing it because they think they can stop it, or simply so they will have some power before things come crashing down around us all?
Have the Chinese and other foreign investors in America's debt figured out what is happening? What can they do? If they stop throwing good money after bad it will only hasten the destruction of the world economy and civilization as we know it. But if they keep throwing money into our spending insanity, don't they only prolong the agony and worsen the collapse?
China announced last week its intention to continue to buy US Treasury bonds even though it knows the dollar will depreciate because such investments remain its "only option" in a perilous world. But is this "only option" a decision based on confidence in the dollar, or a decision driven by desperation to keep the global economy from collapsing?
Luo Ping, a director-general at the China Banking Regulatory Commission, speaking at the Global Association of Risk Management’s 10th Annual Risk Management Convention, said: "We hate you guys. Once you start issuing $1 trillion - $2 trillion . . . we know the dollar is going to depreciate, so we hate you guys but there is nothing much we can do."
God help us all.
The table below is extracted directly from the US Treasury Report looking out the infinite horizon. Look down at the lower-right total obligation for Social Security, Medicare, and Disability Insurance. Yes, that reads $101.9 TRILLION more in outlays than projected revenues.
The table below shows where we stand right now, looking out only 75 years, but including all federal government obligations, including social program entitlements from the table above. Yes, you're seeing $65.5 TRILLION dollars (the amount of money we're going to need in current dollars, added to the expected revenues for the next 75 years, to cover the federal obligation for all the promises our government has made for the next 75 years.)
Below is the link to the report from ShadowStats.com, as referenced in the Corsi article. You can read the US Government's dirty little secret for yourself.
December 2008 - GAAP-Based 2008 Federal Deficit
Perhaps this explains why the Democrats appear to have lost all sense of responsibility? I mean, after all, why bother to be fiscally responsible when the fuse is lit and it can't be extinguished? Republicans have engaged - again - and are fighting to stop the waste and the acceleration to our collapse, but are they doing it because they think they can stop it, or simply so they will have some power before things come crashing down around us all?
Have the Chinese and other foreign investors in America's debt figured out what is happening? What can they do? If they stop throwing good money after bad it will only hasten the destruction of the world economy and civilization as we know it. But if they keep throwing money into our spending insanity, don't they only prolong the agony and worsen the collapse?
China announced last week its intention to continue to buy US Treasury bonds even though it knows the dollar will depreciate because such investments remain its "only option" in a perilous world. But is this "only option" a decision based on confidence in the dollar, or a decision driven by desperation to keep the global economy from collapsing?
Luo Ping, a director-general at the China Banking Regulatory Commission, speaking at the Global Association of Risk Management’s 10th Annual Risk Management Convention, said: "We hate you guys. Once you start issuing $1 trillion - $2 trillion . . . we know the dollar is going to depreciate, so we hate you guys but there is nothing much we can do."
God help us all.
Friday, February 13, 2009
Stimulus? The rape is complete
Too late to fight it. Not enough time to read it. Every single senate Democrat and all but 7 Democrats in the House voted for it. 90 minutes of debate and the taxpayer is now on the hook for $787 Billion to grow government and give government more control. Boy, we're glad they pushed it through with less than a day for anyone to see it, so Pelosi could head off to the Vatican. Without a single member of Congress physically capable of reading the final bill, and even with the help of three Republicans who couldn't possibly of read the bill, it is now law.
Susan Collins (Republican - Maine)
Olympia Snowe (Republican - Maine)
Arlen Specter (Republican - Pennsylvania)
I hope that when the history of this crossroads is written about, and hopefully by historians living in an America that still exists, that the part these three played in this betrayal of all Americans is noted with all the disdain and disgust that every other Democrat will have earned who blindly supported this railroading of the American people.
What is a political party that allows those within its ranks to so willfully spit on the principles and responsibilities of the people they are elected to represent?
At least we know what to expect from the 21st century Democrat. But what these three have helped to orchestrate is beyond forgiveness.
Susan Collins (Republican - Maine)
Olympia Snowe (Republican - Maine)
Arlen Specter (Republican - Pennsylvania)
I hope that when the history of this crossroads is written about, and hopefully by historians living in an America that still exists, that the part these three played in this betrayal of all Americans is noted with all the disdain and disgust that every other Democrat will have earned who blindly supported this railroading of the American people.
What is a political party that allows those within its ranks to so willfully spit on the principles and responsibilities of the people they are elected to represent?
At least we know what to expect from the 21st century Democrat. But what these three have helped to orchestrate is beyond forgiveness.
Wednesday, February 04, 2009
Obama's Universal Voluntary Public Service
Al Gore spoke recently to the National Youth Scholars in Washington DC during the inauguration festivities for Barack Obama. The audience included 3,000 children - our best and the brightest - including 12 year old fourth graders from across America. His message was frightening. Please tell me this doesn't send a chill up your spine?
Gore: "Parents try to tell their kids the right thing, you know, usually. I do."
Gore: "There are some things about our world that you know that older people don't know."
What do you think Al Gore was talking about? Yes, this was out of context in a lesson he was giving on the Civil Rights movement and his suggestion that while children were being taught to understand how prejudice was wrong, many parents didn't get it until the laws were changed. I could put the whole context here, but those two quotes above accurately express that underlying message he was making to the audience.
Was Gore telling these children to ignore their parents and believe others? Maybe to believe their teachers over their parents? Or perhaps government? Was he saying that their parents can be, and are often wrong? Is he saying that a 12 year old fourth grader, properly taught by our public schools, and correctly informed of crises like Climate Change or the need for redistribution and collectivism principles should stand up to the beliefs, knowledge, reason, and experience of their parents?
Here is how Glenn Beck reacted to it this morning:
Beck: "I'm trying to think where else this has been done. Soviet Russia, Nazi, Germany, Mussolini's Italy. In fact, the Nazis took an extra step. Not only did they indoctrinate the kids and tell them you're probably right, you know but your parents don't; in fact, here's the next step: Why don't you tell us what your parents are telling you. Are we having the new Hitler youth? Is that what this is? The new Hitler youth? I'm sorry, that's so politically incorrect. The new green guard. Man your station, 12-year-olds, your parents just don't know."
Now consider President Obama's calls for a civilian security force in America funded equally to that of the military, and how Gore's urging of children to ignore the reason of their parents would play into that agenda. Is Beck onto something?
At Wesleyan University not too long ago, Obama urged graduates not to pursue the American dream of success, but to serve others. But to serve who?
"You can take your diploma, walk off this stage and chase only after the big house and the nice suits and all the other things that our money culture says you should. But I hope you don't. Fulfilling your immediate wants and needs betrays a poverty of ambition."
Obama then brought it all together. "We cannot continue to rely on our military in order to achieve the national security objectives we've set. We've got to have a civilian national security force that's just as powerful, just as strong, just as well-funded."
And what would this Obama "security force" do exactly? Something like an ACORN for youth? Promoting the ideals of the left using any methods available?
Last July at the University of Colorado Obama said, "We will ask Americans to serve. We will create new opportunities to serve. And we will direct that service to our most pressing national challenges."
Yes, he said, "we will direct"! That will be direction on the priorities of government - Obama government.
Obama's stated plan is to "set a goal for all American middle and high school students to perform 50 hours of service a year, and for all college students to perform 100 hours of service a year."
And what if they refuse to serve? Will this "voluntary" service be a condition for graduation? How many of your children now are already required to perform community service to graduate Junior High or High School? Your kids get to choose today what that service is, but not whether they have to perform it or not, right? What will you do when the type of service is directed by government? What would you do if your government demanded your children to serve in such a way that you objected, but your kids were taught to ignore your objections for some greater good?
Gore: "Parents try to tell their kids the right thing, you know, usually. I do."
Gore: "There are some things about our world that you know that older people don't know."
What do you think Al Gore was talking about? Yes, this was out of context in a lesson he was giving on the Civil Rights movement and his suggestion that while children were being taught to understand how prejudice was wrong, many parents didn't get it until the laws were changed. I could put the whole context here, but those two quotes above accurately express that underlying message he was making to the audience.
Was Gore telling these children to ignore their parents and believe others? Maybe to believe their teachers over their parents? Or perhaps government? Was he saying that their parents can be, and are often wrong? Is he saying that a 12 year old fourth grader, properly taught by our public schools, and correctly informed of crises like Climate Change or the need for redistribution and collectivism principles should stand up to the beliefs, knowledge, reason, and experience of their parents?
Here is how Glenn Beck reacted to it this morning:
Beck: "I'm trying to think where else this has been done. Soviet Russia, Nazi, Germany, Mussolini's Italy. In fact, the Nazis took an extra step. Not only did they indoctrinate the kids and tell them you're probably right, you know but your parents don't; in fact, here's the next step: Why don't you tell us what your parents are telling you. Are we having the new Hitler youth? Is that what this is? The new Hitler youth? I'm sorry, that's so politically incorrect. The new green guard. Man your station, 12-year-olds, your parents just don't know."
Now consider President Obama's calls for a civilian security force in America funded equally to that of the military, and how Gore's urging of children to ignore the reason of their parents would play into that agenda. Is Beck onto something?
At Wesleyan University not too long ago, Obama urged graduates not to pursue the American dream of success, but to serve others. But to serve who?
"You can take your diploma, walk off this stage and chase only after the big house and the nice suits and all the other things that our money culture says you should. But I hope you don't. Fulfilling your immediate wants and needs betrays a poverty of ambition."
Obama then brought it all together. "We cannot continue to rely on our military in order to achieve the national security objectives we've set. We've got to have a civilian national security force that's just as powerful, just as strong, just as well-funded."
And what would this Obama "security force" do exactly? Something like an ACORN for youth? Promoting the ideals of the left using any methods available?
Last July at the University of Colorado Obama said, "We will ask Americans to serve. We will create new opportunities to serve. And we will direct that service to our most pressing national challenges."
Yes, he said, "we will direct"! That will be direction on the priorities of government - Obama government.
Obama's stated plan is to "set a goal for all American middle and high school students to perform 50 hours of service a year, and for all college students to perform 100 hours of service a year."
And what if they refuse to serve? Will this "voluntary" service be a condition for graduation? How many of your children now are already required to perform community service to graduate Junior High or High School? Your kids get to choose today what that service is, but not whether they have to perform it or not, right? What will you do when the type of service is directed by government? What would you do if your government demanded your children to serve in such a way that you objected, but your kids were taught to ignore your objections for some greater good?
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