How to prepare your family to survive and thrive in todays uncertain world

The Entitlement Trap Closes

(Warning: A bit of language slipped into this one … I got a little excited. I left it in because it’s how I genuinely feel, but if you don’t like a few choice words, you may want to skip a few parts…)

Despite the focus of most of the world and the press being solidly on the recent events in Japan, there are a few things that are running under the radar that shouldn’t.

One of the big ones is a bit of news that frankly makes me feel that economic issues in this country will come to a head sooner than I suspected.

The Jaws of the Entitlement Trap Snap Shut

If you recall from my recent article on Delusions and Deceptions, the Obama administration is lying to us about the Federal Budget and the deficit predictions.

In late 2007 the Bush administration had dire things to say about the massive chunk of the budget that was taken up by mandatory entitlement spending.

They, and the Office of Management and Budget, projected that by 2057 mandatory spending would exceed the total amount of federal revenue.

This was made when mandatory spending was $1.117 Trillion lower than the Federal revenues.

This month, just a few years after that prediction, the OMB has come out and announced that they are now projecting that in Fiscal Year 2011 entitlement spending will in fact be higher than overall Federal revenues.

To be specific, it’ll be 101% of Federal revenues, based on figures published by the White House.

Rudy’s Note: The US Government Fiscal Year goes from Oct 1 – Sept 30, so in this case FY 2011 is over on September 30, 2011 … we’re about halfway through FY11.

Just so we’re clear here, that fifty year projection came true … four years later.

Now Wait Just A Minute…

What about all those rosy projections in the budget?

Well, next year Obama says that the entitlement spending percentage of revenues will be 81%. And the year after, 73%. 2014 should be 70%, with 2015 clocking in at 69%. So next year we’ll see a 21% increase in Federal revenues. Huh.

Oh by the way … the biggest year over year increase in Federal revenues for the past 40 years has been 16%. Obama sure is an economic genius since he’s going to blow that out of the water.

What the fuck is he smoking? Hell, what are ALL of the politicians smoking?

Oh wait … THEY. ARE. LYING.

Intentionally. They don’t want you to know this stuff.

Obamas predictions have historically been quite accurate. In 2010 he predicted a 9% increase in federal revenue. We got a 3% increase. For this fiscal year, he predicted a 19% increase. We’re clocking in at … wait for it…

0.5%

(Yes, I was being sarcastic about Obama being a fantastic and accurate economic forecaster…)

Endgame

This WILL hit the dollar. Hard. This type of unfettered spending growth is what leads to our credit rating being downgraded.

Rudy’s Note: By the way, anyone notice that Spain, Portugal, Greece, and Egypt were all downgraded recently?  No?  Big surprise.

Oh, and Spain is too big to bailout.  Hold onto your hats…That one will get interesting.

And like I’ve said before, when that happens, it’s all over. Goodbye dollar.

Not to say that we’ll Weimar if that happens, but it’s a very, very real chance. But our economy will be devastated, beyond what it is now.

I try really hard not to doom and gloom. But as you can tell by a few choice words that have slipped into this article, I’m really torqued about this.

And as I’m sure you can all sympathize, I wish we had more time … there’s never enough time. There’s always more to do.

At this point, physical preps are looking pretty damn good. Get yours in order, while you can afford to.

And if you don’t have open pollinating seeds, or at least a good long term stock of hybrids, fix that problem. Quickly. It could make a huge difference.

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2 Responses to The Entitlement Trap Closes

  1. Good column. Anyone who hasn’t realized this since 2005 at least hasn’t been paying attention. We are conditioned to have the best of everything immediately, keep up with the Joneses and to live on credit. When the bills come due we wring our hands and gnash our teeth. What did we expect?

    Austerity is the new normal and some of us have been practicing this for awhile now: getting out of debt and staying there, saving, living a simpler life and yes, prepping physically as best we can. Learning to be self-sufficient, learning how to garden, make do with what we have, even making our own laundry soap. I can’t tell you how many times I’ve been criticized for doing this.

    My husband can collect SS next year at 62 and I can 5 years from now. However, we don’t count this in as part of our long term financial plan because it either will not be there, will be reduced or we’ll be unable to collect it until much later. I think it would make sense if these funds were dispersed based on annual income and it may come to that. We’ve prepared for this eventuality.

    One thing I do know is that this country is about to be hit hard and too many will be caught unprepared.

  2. I’m a (very) late 30 something and frankly I don’t trust anyone that’s been in office for as long as I can remember. It doesn’t matter if you’re left or right wing focused. They have all been unable to make the tough choices that are needed to get this country back in line. Our politicians are too focused on getting reelected seeing there are no caps to the number of terms they can serve (except President, of course, who’s basically a puppet). I felt that if we changed this, we could get our elected leaders to focus on getting the job done, making those tough, NEEDED choices that would otherwise get them replaced in the next election. Our current system simply pushes the problem down the line, creating additional issues and inevitably solves nothing. Now what was the original question? :)