Lew Rockwell

1. The Storm Before the Storm

I really don't know anyone that would argue that the U.S. economy is in great shape right now.  Inflation is out of control, large companies are conducting mass layoffs all over the nation, the housing bubble is starting to implode, and more homeless encampments are constantly popping up in our major cities as poverty spreads like wildfire.  But this isn't the main event.  I am calling this "the storm before the storm", because the truth is that this new economic crisis is still only in the very early chapters.  Unfortunately, much more suffering is on the way, and our country is not going to be able to handle it.

Perhaps you don't agree with me.

And that is okay.

Nobody agrees with me 100 percent about everything.

But hopefully we can all agree that things are clearly trending in the wrong direction.  According to Challenger, Gray & Christmas, the number of job cuts that employers announced in May 2023 was 287 percent higher than the number of job cuts that employers announced in May 2022…

U.S.-based employers announced 80,089 cuts in May, a 20% increase from the 66,995 cuts announced one month prior. It is 287% higher than the 20,712 cuts announced in the same month in 2022, according to a report released Thursday from global outplacement and business and executive coaching firm Challenger, Gray & Christmas, Inc.

It would be one thing if the month of May was some sort of a statistical anomaly, but it wasn't.

In fact, for the first five months of 2023 the number of job cuts is up a whopping 315 percent compared to the same five months last year.

Take a few moments to reflect on that number.

Other than during the lockdowns of 2020, we haven't seen anything like this since 2009.

And those that are at the top of the economic food chain are leading the way.

For example, we just learned that Goldman Sachs is planning to conduct a third round of mass layoffs…

Goldman Sachs plans to make another round of job cuts — its third in less than a year — as dealmaking profits continue to tank, sources told The Post on Tuesday.

The David Solomon-led investment bank will cull an additional 250 workers on the heels of 3,200 being fired in January in what staff had dubbed "David's Demolition Day," an insider said.

Economic activity is really slowing down all over the nation, and this is beginning to show up in corporate earnings reports.

On Thursday, Macy's announced that same-store sales actually fell 8.7 percent during the most recent quarter…

In an earnings report on Thursday, Macy's said same-store sales sank 8.7 percent last quarter, forcing the New York-based department store to cut prices on clothes and other discretionary items.

Macy's results concluded the retail industry's earnings season, which showed how stubbornly high inflation, particularly in food, is forcing shoppers to further cut back on discretionary items like clothing to afford their soaring grocery bills.

Dollar General announced very disappointing results as well, and that resulted in a wild sell off of Dollar General stock…

Meanwhile, Dollar General, which caters to low-income shoppers and is the fastest-growing US retail chain by store locations, also cut its annual sales and profit outlook on Thursday, sending the company's stock down 19.55 percent for the day.

A 20 percent decline in one day is a big deal.

So why is Dollar General performing below expectations?

Well, the CEO says that their core customers are very financially stressed right now.  In fact, he says that many of them are "having to rely more on food banks"…

"Unfortunately, our customers are saying they're having to rely more on food banks, savings, credit cards," CEO Jeff Owen said on a call with analysts Thursday.

The company says its "core customer" makes less than $40,000 a year. Owen also said he believes customers were caught off-guard by reduced tax refunds and reduced SNAP benefits, "which exacerbated the inflationary pressures they were already experiencing."

Dollar General's results echo those of rival Dollar Tree, which also came in below investors' expectations last week and cut its profit outlook for the year.

In an article that I posted a few days ago, I discussed the extraordinary demand that we are starting to see at food banks around the country.

There is so much suffering out there right now, and it is only going to intensify as more Americans lose their jobs in the months ahead.

If the Federal Reserve had not raised interest rates so aggressively, that would have greatly helped matters.

But instead they have chosen to bring the hammer down on the U.S. economy, and now the average rate on a 30-year fixed mortgage is almost up to 7 percent…

The rate on the 30-year fixed mortgage rose to 6.79% this week from 6.57% a week ago. One year ago, it averaged 5.09%.

"Mortgage rates jumped this week, as a buoyant economy has prompted the market to price-in the likelihood of another Federal Reserve rate hike," said Sam Khater, Freddie Mac's chief economist. "Although there has been a steady flow of purchase demand around rates in the low to mid six percent range, that demand is likely to weaken as rates approach seven percent."

As the housing bubble steadily implodes, those that work in the industry are going to have such a hard time.

Of course the truth is that difficult times are ahead for all of us.

It has become clear that nobody in Washington is going to be coming riding to the rescue.

The debt-fueled years when "easy money" was flowing like wine have come to an end, and now a whole lot of pain is on the horizon.

Sadly, most Americans still do not understand that a great economic storm is rapidly approaching, and that is extremely unfortunate.

Reprinted with permission from The Economic Collapse.

The post The Storm Before the Storm appeared first on LewRockwell.

2. Pride Month Goeth Before a Fall

June is upon us and the rainbows are out full force—but could it be with a diminishing force? Unilaterally appropriated as "Pride Month," the beginning of summer comes with the unfurling of the Rainbow Flag in neighborhoods, stores, and internet ads because anything less, at this point, would be branded as homophobic censorship. Get in line, fly the flag, cry "love is love," or get torn down.

But what happens when the untainted and unafraid refuse to fly the flag or bend the knee? When push comes to shove, the Rainbow Flag is meaningless and proclaims a fidelity as fleeting as the rainbow that vanishes as quickly as it appears (how cruel it is to compare that thing of beauty to such ugliness). The time may be coming when people will be brave enough to see it, and say it, and stop the moronic LGBTQIADIDIGETTHEMALL?+ lip service.

They say that woke allegiance is a mile wide and an inch deep, meaning that though it's pervasive, it's not as firm as it seems. This latter point is probably in some ways true and not true. It is not true in the sense that the origins of what we call "woke" have roots that run very deep, as the liberal lifestyle and ideologies have a longstanding history of divorcing themselves from natural law and traditional values. But it is true in the sense that society is a fickle thing that is moved by fear, popularity, and power and will march to the beat du jour if only for the sake of obtaining financial security and political sway.

For this reason alone, the Rainbow Flag shouldn't be flown. It is ridiculous in the haphazard, frantic fashion that we see because no one really means what they say by it. They just don't. And the demonstrations of Pride Month are beneath the dignity of those who wave it and even those for whom it is waved. No one will die on the hill of gay pride and gay rights. It is too individualistic a cause to motivate martyrdom. The Rainbow Flag is no more than a gesture of safety, self-righteousness, self-indulgence, self-service, and allegiance to the powers that be that wish to promote the false idea of freedom as being limitless choice unrestricted by external norms or authorities.

No one has that much loyalty to a movement that is against the normal course of nature and reason. No one has that much dedication in a relativist, nonconformist culture. The Rainbow Flag is a lie, plain and simple, and it shouldn't be tolerated either on the conservative Christian side or the liberal secular side. It is pandering, it is patronizing, it is grooming, it is a false front for a trendy and treacherous movement; and it is not about love at all—unless it is love of self. For loving acceptance lies not in a loving acceptance of lies.

And, marginal though it may seem—and may be—there are stirrings of resistance to the agenda behind the Rainbow. The mega-retailer Target has featured LGBTQ+-themed merchandise in June, including this year's "tuck-friendly" women's bathing suits for men (in adult and children's sizes). But this year, thanks to a loud backlashing and boycotting from conservative groups and customers, Target swept those products from their shelves. Though the corporation ascribed their capitulation to the safety of its employees from rabid right-wing extremists, the bottom line is that the dollar is still almighty.

The Bud Light and Nike fiascoes in featuring the transgender activist Dylan Mulvaney are other high-profile, big-business instances of proclaiming support for madness and then backing right off when confronted with sane people who are determined to debase their brand and damage their profit margins.

Presidential candidate Ron DeSantis has also shown that Floridians are ready to take a stand against the sexual psychoses of the day with the "Don't Say Gay" bill and his staunch political war against the indoctrinations of Disney. Meanwhile, the Los Angeles Dodgers have been flip-flopping with drag queen invitations due to the loud objection by ordinary, honest Americans. Despite the rainbows that plaster our neighborhoods, there are still plenty who object and who are growing more and more ready to do so with both words and wallets.

Read the Whole Article

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3. Despite U.S. Denials… Kiev Regime Hasn’t Gone Rogue With Strikes on Moscow – It’s an Obedient Cat’s Paw

Moscow's dilemma is how to show its Western aggressor that playing with fire means getting burned – without inciting a catastrophic Third World War.

If the United States and its NATO lackeys really wanted to avoid a direct war with Russia, then they know what to do: stop arming the reactionary Kiev regime and get down to serious diplomacy.

This insanely dangerous conflict could end right now.

This week saw a swarm of military drones attack the Russian capital. The Russian authorities claimed that all of the unmanned aerial vehicles were shot down or electronically disabled, but not without some of the aircraft inflicting damage on civilian apartment blocks.

Nearly four weeks ago, a double drone attack was launched on the Kremlin Senate building close to where President Vladimir Putin has a residence.

Moscow has never been attacked in such a symbolic way since the Great Patriotic War when the Soviet Union was fighting Nazi Germany at the very gates of the capital.

Elsewhere across the Russian Federation, Ukrainian drones have targeted major Russian oil and gas installations, as well as military air bases deep inside its territory. Latest reports say Russian children are being evacuated from the Belgorod and Bryansk westerly regions due to constant heavy shelling by Ukrainian forces. Those regions have also seen commando-style incursions by militants using American-supplied armored vehicles. The CIA media front Radio Free Europe is evidently delighted by the anticipated sapping of Russian morale.

Russia is incrementally being subjected to a tightening aggressive vice, which when viewed in perspective presents a shocking attempted assault on its existential interests. Moscow has warned that its national defense doctrine permits the use of nuclear weapons if its existential interests are threatened. The U.S. and its NATO partners are provocatively shaping the Ukraine conflict into Russia's existential concerns. The aggression is being fully directed and intensified by Washington and its NATO accomplices, in particular Britain.

The nearly 15-month conflict in Ukraine seems to be spiraling uncontrollably toward a direct war between the United States and Russia, the world's two biggest nuclear powers. Russia did not want this conflict. Its proposals for diplomacy and dialogue over geopolitical security concerns due to NATO expansion were dismissed out of hand by Washington and its European minions in the weeks before the Ukraine war erupted on February 24 last year.

We need to be clear: the onus is on Washington to halt the slide toward world catastrophe.

President Joe Biden's administration is brazenly lying to the American public and treating the Russians like fools. Following the latest drone attacks on Moscow, the White House and State Department repeated the dissembling mantra that Washington does not "enable or encourage" Ukrainian strikes inside Russia.

Washington is affecting a seeming frustration with Ukraine over the latter's "incorrigible" use of American weapons to hit targets deep inside pre-war Russian territory. (That is, beyond the Crimea Peninsula and the newly federated Russian territories of Donbass, Zaporozhye and Kherson.)

This has led some commentators to surmise that the Kiev regime "has gone rogue" on its American and NATO sponsors.

Writing for the Libertarian Institute this week, Ted Snider remarked: "Ukraine is now pursuing its own security interests in a way that is extraordinarily dangerous to U.S. security interests. And they seem to be disregarding U.S. restrictions in pursuing them… The United States seems to have lost control of Kiev, and Ukraine is now pursuing its own goals in a way that ignores American goals by increasing the danger that NATO could get drawn into a war with Russia."

In the same article, Snider claimed that the stated American goals were two-fold: to defend Ukraine's sovereignty and to avoid direct war with Russia.

The sad reality is that many Americans who are anti-war and critical of the Biden administration's reckless policy in Ukraine do not seem to fully understand the depth of Washington's nefarious involvement. The goals of the United States are neither to defend Ukraine nor avoid a direct war against Russia. The goal is to defeat Russia by whatever means, to foment regime change, and to subjugate Russia for Western capitalism as in the 1990s under Yeltsin. It's all about hegemonic aggression and dominance, a policy that also is directed at China.

In other words, the root problem is not some misguided policy by the Biden administration in Ukraine. The problem is the fundamental and relentless condition of American global hegemonic ambitions. That in turn stems from the nature of American corporate capitalism and its latest iteration as corporate fascism (albeit with a pseudo-liberal image and lexicon).

Ukraine and the conflict therein are merely a temporary means to a bigger end for U.S. imperialism.

Admittedly, most figures in the American power structure no doubt prefer to avoid a direct war with Russia as a matter of pragmatism and self-preservation, not principle. They prefer low-intensity, hybrid warfare and lots of distant violence right down to the "last Ukrainian". But the problem of fomenting aggression no matter how stealthy is that it inevitably runs the risk of spilling into all-out war, as the present dynamic demonstrates.

The Biden administration and the foreign policy establishment, the CIA and Deep State imperial planners cannot pretend to be agnostic about Ukrainian strikes on Russia. The U.S. and its NATO accomplices have every step of the way de facto enabled and encouraged the Kiev regime to escalate hostilities with Russia. That was its mission ever since the CIA-backed coup in Kiev in 2014.

Only a short time ago, it seems, it was controversial to send the NeoNazi military in Ukraine anything beyond helmets and infrared night scopes. Then the supplies went from there to "lethal weapons", longer-range missiles, drones, battlefield tanks, depleted uranium artillery shells, and nuclear-capable F-16 fighter jets.

You can't arm a Russophobic regime to the teeth and then later turn around and coyly maintain that you don't support the regime's military tactics of firing missiles and drones at civilian centers in Russia. It is as insulting as it is duplicitous.

This week following the drone attacks on Moscow, President Biden commented that Washington was now considering supplying the ATACMS long-range missile system to Ukraine. This weapon has a range of 300 kilometers, more than double that of the already U.S.-supplied HIMARS rockets.

Despite the cynical denials and duplicity, Washington is consciously escalating the aggression against Moscow with its policy of doubling down on weaponizing its cat's paw regime in Kiev. The duplicitous Americans know full well that this corrupt and unscrupulous regime will ignore seemingly pious public calls for "not striking inside Russia".

Russian Foreign Minister Sergei Lavrov has warned the U.S. and NATO that they are "playing with fire". Especially considering that the Kiev regime has not gone rogue; on the contrary, it is doing what it is armed to do.

Washington could extinguish the fuse by stopping the arms flowing to Ukraine and by engaging in meaningful diplomacy with Russia to address the long-term security concerns. Not just with Russia, but with China too. Why are the United States and its NATO lackeys so averse to diplomacy and geopolitical engagement? The depraved incessant Western craving for war and conflict, for designating enemies and constant demonizing of others is illuminating.

But Washington is not taking the sane option of peace and diplomacy because it is fixated on hegemonic power interests. That way only leads to war and playing with fire. Moscow's dilemma is how to show its Western aggressor that playing with fire means getting burned – without inciting a catastrophic Third World War.

The views of individual contributors do not necessarily represent those of the Strategic Culture Foundation.

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4. A Nation of Junkies: The Empty Future of a Stimulus-Speculation Economy

Now that the US economy is totally dependent on trillions of dollars in stimulus and speculative gains reaped from the stimulus, there is no Real Economy left to pick up the pieces when the credit-stimulus-speculation bubbles all pop.

When economists speak of organic growth, they're referring to growth that arises naturally from the expansion of population, advances in productivity gained from better training and wise investments and the fruits of innovation.

Organic growth doesn't need constant stimulus, nor is it dependent on speculation. It doesn't need to be juiced by central banks and government to function. In an economy that isn't dependent on stimulus, the role of central banks is limited to being the lender of last resort in periodic financial crises, and government's role is to serve the common good by funding what fosters the common good but isn't profitable enough for private companies to pursue, for example, rural electrification and critical infrastructure.

Compare this Real Economy with the Artificial Economy we now have that is completely dependent on central bank and government stimulus and rampant speculation. If either the stimulus or speculation disappeared, the economy would collapse. Without constantly increasing monetary and fiscal stimulus, the asset bubbles inflated by stimulus would collapse.

Every decision in this stimulus-speculation-dependent economy is keyed off of Federal Reserve stimulus or federal spending guarantees. Consider the decision to buy or build a residence to live in or hold as an investment. This decision is now keyed to Federal Reserve manipulation–scrape away the sugar-coating and this is what it is–of mortgage rates and the market for mortgages (mortgage backed securities) and federal government backstops and guarantees.

Glance at the first chart below of the Fed's "intervention" in the mortgage market: somehow the housing / mortgage market survived without the Fed owning any mortgage backed securities prior to 2009, but now the Fed must intervene to the tune of trillions of dollars to keep the housing / mortgage market from imploding.

All this stimulus is sold as "help" but it all ends up "helping" the wealthiest few at the expense of the bottom 90%. Look at the two charts below of the percentage of wealth held by the top 1% and the percentage of wealth held by the middle class, those households between 50% and 90% in terms of household income. Every new Fed / federal stimulus pushes the wealth of the 1% higher and the wealth of the middle class lower.

To those pushing the stimulus, the soaring wealth of the top 1% is "success" because that's their circle of colleagues and pals. If we're doing great, everyone must be doing great. Such is the hubris and denial olf our financial and political leadership.

You'll notice three charts all display parabolic rises: the Fed balance sheet, federal debt and total debt. The primary form of stimulus is credit: expand the availability of credit and (until recently) make it cheaper to borrow by manipulating interest rates lower.

All this "free money" fueled a dependency on speculation for "growth," a dependency that has hollowed out the economy. As a direct result of all this stimulus / credit, corporations have bought tens of thousands of homes as rentals, inflating another housing bubble. Investors have snapped up tens of thousands of dwellings to cash in on the short-term rental (AirBnB etc.) boom, effectively distorting the long-term rental markets and pushing rents higher.

Read the Whole Article

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5. Who Can You Trust?

"I'm sick and tired of hearing Democrats whining about Joe Biden's age. The man knows how to govern. Just shut up and vote to save Democracy." — Rob Reiner, Hollywood savant

Perhaps you're aware that the World Health Organization (WHO) is cooking up a plan to impose its will over all the sovereign nations on this planet in the event of future pandemics. That means, for instance, that the WHO would issue orders to the USA about lockdowns, vaccines, and vaccine passports and we US citizens supposedly would be compelled to follow them.

Why the "Joe Biden" regime would go along with this globalist fuckery is one of the abiding mysteries of our time — except that they go along with everything else that the cabal of Geneva cooks up, such as attacks on farmers, and on oil production, and on relations between men and women, and on personal privacy, and on economic liberty throughout Western Civ, as if they're working overtime to kill it off. And all of us with it.

I think they are working overtime at that because the sore-beset citizens of Western Civ are onto their game, and getting restless about it. So, the Geneva cabal is in a race against time before the center pole of their circus tent collapses and the nations of the world are compelled to follow the zeitgeist in the direction of de-centralizing, foiling all their grand plans.

The "Joe Biden" regime is pretending to ignore the reality that this WHO deal is actually a treaty that would require ratification by a two-thirds vote in the senate, an unlikely outcome. In any case, handing over authority to the WHO — in effect, to its chief Tedros Adhanom Ghebreyesus — to push around American citizens like a giant herd of cattle would be patently unlawful.

That center pole of the circus tent is the wobbling global economy. It's barely holding up the canvas over the three rings of the circus. In the center ring, the death-defying spectacle of the Biden Family crime case is playing out before a huge audience (us). This week, a gun went off at the FBI and smoke is curling out of the barrel. FBI Director Christopher Wray was forced to verify that he's been sitting on an incriminating document for three years from a "trusted" confidential human source, i.e., an informant, stating that the Biden Family received a $5-million bribe from a foreign entity when "JB" was vice-president.

That's only one bribe of many others, of course, as documented in the Hunter Biden laptop, and it must be obvious it represents treasonous behavior that will demand resignation or impeachment. As this spools out in the weeks and months ahead, do you think Americans will be in the mood to accept further insults such as "Joe Biden" surrendering our national sovereignty to the WHO?

Anyway, you must ask yourself: why on earth should I trust the WHO about anything? Did they not participate in laying a trip on the world with Covid-19? How did those lockdowns work out? Do you think they destroyed enough businesses and ruined enough households? How's the vaccination program doing? Effective? Safe? Yeah, maybe not so much. Maybe killing a lot of people, wrecking immune systems, sterilizing reproductive organs, causing gross disabilities, shattering lives.

Of course, in over three years neither the WHO nor the US medical authorities showed the slightest interest in helping to figure out how the Covid-19 virus was made in a lab, and exactly how it got loose in the world. Lately, Dr. Ghebreyesus has warned the world about much worse future pandemics supposedly coming down at us. Oh? Really? What does he know that we don't? That possibly new efforts to concoct chimeric diseases are ongoing in labs around the world? (You know that dozens of such labs were discovered in Ukraine as the war got underway there in 2022.) What's Dr. Ghebreyesus doing to stop that?

If US orgs and citizens are involved in this "research," why doesn't the WHO alert our government leaders so they can stop it? (Would they? I'm not so sure.) And, who is behind it this time? The Eco-Health Alliance again, like with Covid-19? By the way, that outfit got another whopping grant last fall from the NIH to "study" bat viruses — right after the NIH terminated a previous grant on account of The Eco-Health Alliance failing to turn over notebooks and other records.

No, you cannot trust the WHO about anything. The "trust horizon" (a concept introduced by the great Nicole Foss, late of The Automatic Earth dot com) is shrinking. You can no longer trust any distant authorities. You also cannot trust the US federal government (especially the executive branch behind "Joe Biden"). And notice: the trust horizon is shrinking just as the world is de-centralizing. This, you see, is the main contradiction behind all the Globalists' twisted ambitions to control everything, including you. They are working against the current tide of human history which is pushing everything toward down-scaling, re-localization, and re-assertion of the sovereign individual person.

That trend will become increasingly evident as things organized at the giant scale start to implode — giant retail chains, medical behemoths, hedge funds, big banks, you name it. The world no longer has the mojo for globalism. There's reason to wonder these days whether the USA has the mojo to remain a unified national polity of states. Our federal government is not only financially bankrupt beyond any coherent reckoning, it is also morally bankrupt, and it has decided to make war against its own people. None of this is satisfactory and none of this is working. It's time to figure out who and what you can trust and act accordingly.

Reprinted with permission from Kunstler.com.

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6. Speaker McCarthy’s Rotten Deal…

If there was ever any doubt, now we know: Speaker Kevin McCarthy has straw for brains and a Twizzlers stick for a backbone. He was within perhaps a few days of breaking the iron grip of America's fiscal doomsday machine, yet inexplicably he turned tail and threw in the towel for a mess of fiscal pottage.

We are referring, of course, to the impending moment when the US Treasury would have been forced to forgo scheduled vendor or beneficiary distributions in order to preserve incoming cash for interest payments and other priorities. That act of spending deferrals and prioritization would have obliterated the debt "default" canard once and for all, paving the way for a nascent fiscal opposition to regain control of the nation's wretched public finances.

And there should be no doubt that we were damn close to that crystalizing moment. After all, Grandma Yellen herself forewarned just last week on Meet The Press that absent a debt ceiling increase, the Treasury Department would have to prioritize payments and leave some bills unpaid:

"And my assumption is that if the debt ceiling isn't raised, there will be hard choices to make about what bills go unpaid," Yellen said on NBC's "Meet the Press……."We have to pay interest and principle on outstanding debt. We also have obligations to seniors who count on Social Security, our military that expects pay, contractors who've provided services to the federal government, and some bills have to go unpaid…."

And, of course, that prioritization and deferral could have been easily done. Federal receipts are now running about $450 billion per month, meaning that after paying $61 billion of interest, $128 billion for Social Security, $26 billion for Veterans and $47 billion for military pay and O&M there would still be $188 billion left to cover at least 50% of everything else.

That is to say, no sweat with respect to servicing the public debt, and a lot of sweat among the constituencies that would have had payments delayed or reduced.

So, yes, the GOP has truly earned the Stupid Party sobriquet. No ifs, ands or buts about it.

Instead of spending days negotiating over the minutia of budgetary scams, tricks and slights-of-hand, which is the entirety of the McCarthy deal, they should have been demanding from the Treasury a detailed list of scheduled payments by day for the first few weeks in June. And then, in return for continued negotiations on meaningful spending cuts and reforms, demanded assurance from the White House that enough of these due bills would be temporarily stuck in the drawer (deferred), if necessary, to ensure payment of scheduled interest, Social Security, military pay and Veterans pensions.

That is to say, McCarthy had Sleepy Joe over the proverbial barrel. But instead of applying the wood to his political backside good and hard, the Speaker chose to hold Biden's coat and help him get back up, praising the latter's supercilious retainers as he did so.

For crying out loud. Upwards of 96% of Uncle Sam's cash balance had been dissipated over the past year, guaranteeing that expected June collections of well more than $500 billion would not be enough to cover 100% of the scheduled due bills. Accordingly, just a couple of days of missed payments on selective items would have turned the Washington fiscal equation upside down.

The bogeyman of "debt default" would have been completely annihilated. And the legions of interest groups, businesses and individuals who suckle on the Federal teat month-in-and-month-out would have screamed to high heaven for relief, which McCarthy would have been positioned to provide to them…..at a price!

Needless to say, the "price" in question has nothing to do with the risible budgetary trivia that passes for the Speaker's compromise deal. For instance, does the GOP think voters are actually stupid enough to buy the rescission of $28 billion of left-over Covid budget authority, which probably wouldn't have been spent anyway, when these "saved" funds are to be recycled into FY 2024 appropriations but not counted against the ceiling?

That's Swamp Creature math, and arrogance, too, like never before.

Even Goldman Sachs says that the budgetary impact of the deal amounts to a pure rounding error in the scheme of things:

The spending deal looks likely to reduce spending by 0.1-0.2% of GDP yoy in 2024 and 2025, compared with a baseline in which funding grows with inflation.

Here's the point. CBO's most recent projection shows new deficits of $20.3 trillion over the 10-year budget window—and that's based on Rosy Scenario economics with no recession, inflation gone away and only gently rising interest rates. Throw-in even a modest dose of realism about the economics and back-out the huge tax increases and spending cuts built into the out-year baseline, which will never be permitted to actually materialize, and you have a de facto public debt of $55 trillion by the early 2030s or more than 200% of the current GDP.

What that amounts to is a long-term structural fiscal equation which is a guaranteed route to financial and political disaster. Thus, CBO's end year numbers (FY 2033) show current policy receipts at 18.1% of GDP and spending at 25.3% of GDP.

Folks, you can't borrow 7.3% of GDP every year from now until eternity and get away with it; and most especially not when American society is plunging into a 100 million strong baby boom retirement wave—accompanied by a shrinking work force and tax base owing to collapsing birth rates and Washington's idiotic migrant worker internment camps at the southern border.

Stated differently, fiscal governance in Washington is totally kaput. They never pass an annual budget resolution and enforcement plan, which was taken as a sacred duty back in the day; and there are never even annual appropriations bills for the mere 25% of the budget still subject to the Congressional "power of the purse".

Instead, what occurs is a perennial string of short-term Continuing Resolutions (CRs) followed by an 11th hour, 3000 page pork-ridden "Omnibus Appropriations" bill that no one has read and which gives log-rolling (i.e. more domestic for more defense) a new definition.

In short, the debt ceiling was the only fiscal control mechanism left. And even that has been neutered time after time in the last decade by the hideous, flat-out lie that if the Treasury on any given day is one dollar short of being able to cover all of its due bills it must default on each and every one of them including interest payments, thereby destroying the credit of the United States. Yada, yada.

Finally, that lie was being put to the test and would have been eviscerated sometime next week. Yet after a lifetime on the public teat, Kevin McCarthy like his two GOP predecessors surrendered to the Doomsday Machine because he works for the GOP wing of the Swamp, not the voters, current and future.

And he did so while expectorating the most risible of lies:

Republicans are changing the culture and trajectory of Washington—and we're just getting started.

Not close. Not in the ballpark or even the catcher's box behind home plate.

The deal does absolutely nothing to change the current "trajectory" toward fiscal disaster because it reduces nary a dime of built-in spending for defense, entitlements/mandatories, veterans and net interest, while those items account for 89% of the $80 trillion of built-in spending over the next decade.

Current 10-Year CBO Baseline for FY 2024-2033:

• Revenues: $60 trillion;
• Spending: $80 trillion;
• New Debt: $20 trillion;
• Mandatory Spending & Net Interest: $59 trillion;
• Discretionary Spending for Defense & Veterans: $12 trillion;
• Total Spending Exempted From Cuts in McCarthy Deal: $71 trillion;
• % of Baseline Spending Exempted From Cuts: 89%

For avoidance of doubt, just consider the recent trajectory of defense spending, and the uncut CBO defense baseline for the next decade. That is, the GOP is so enthrall to its war-mongering neocon majority that it can't even talk about spending control with a straight face, as underscored by national defense spending levels since Obama left office.

The schedule below computes to a 52% expansion in just seven years, with Biden getting his full request for FY 2024 under the McCarthy deal.

As it happens, the subsequent FY 2024-2033 spending total for national defense according to the CBO projection is now $10 trillion. The deal does not reduce that by one red cent, either.

In this context it might be noted that FY 2024 defense outlays rise by 11.5% versus the 3.3% gain in defense budget authority advertised for the deal. Of course, that's because the budgetary tricksters on Capitol Hill never stop their con job.

In fact, the uniparty raised defense budget authority by a whopping $76 billion or 9.7% in FY 2023, which base was incorporated into the more modest gain for FY 2024. But, alas, the cash outlays (which lag) from the FY 2023 appropriations eruption will happen notwithstanding the deal's budget authority cap for FY 2024.

Back on the farm, that was called closing the barn door after the horses already left.

OMB Record of National Defense Outlays, FY 2017 to FY 2023 and McCarthy Deal Amount for FY 2024:

• FY 2017: $599 billion;
• FY 2018: $631 billion;
• FY 2019: $686 billion;
• FY 2020: $725 billion;
• FY 2021: $754 billion;
• FY 2022: $766 billion;
• FY 2023: $815 billion;
• FY 2024P: $909 billion.

With respect to the heart of the budget—entitlements and mandatories—the deal is about as pathetic as could be imagined. The CBO base line total for the 10-year window is $48.3 trillion and we doubt whether the deal would even save $10 billion. That's 0.02% if anyone is computing.

Actually, as it turns out, CBO is counting. And it concludes that the new exemptions from the food stamps work requirement for veterans, homeless people and young people leaving foster care will cost more than the savings from raising the age cut off for everyone else.

That is to say, the GOP negotiators started with -$130 billion of CBO certified savings in the House based bill and ended up with a +$2 billion increase over 10-years!

And McCarthy says he's bending the trajectory?  Bending over, bar of soap at the ready, is more like it.

Alas, the liberals are no better. They are whining to high heaven about this sensible increase in the working age to 54 years, yet this change would only impact 700,000 able bodied adults, who constitute just 1.7% of current food stamp enrollments.

Indeed, here is a list of the major entitlement programs which are left unscathed by the McCarthy deal. They account for 98% of the CBO baseline for mandatories/entitlements over the FY 2024- 2033:

10-Year Baseline Spending That The McCarthy Deal Leaves Unscathed:

• Social Security: $18.8 trillion;
• Medicare: $14.8 trillion;
• Medicaid, Obamacare and Child Health: $8.0 trillion;
• Veterans Disability and Comp: $3.0 trillion;
• Earned Income Tax Credit and Child Credit: $0.9 trillion;
• Aid to Aged, Blind and Disabled: $0.7 trillion;
• Military retirement: $0.9 trillion;
• Total Mandatories Unscathed: $47.1 trillion;
• % of CBO Mandatories Baseline: 98%;

As it turns out, the only cuts in the entire entitlement universe contained in the McCarthy deal pertain to the aforementioned foods stamps and family assistance programs, where baseline spending totals about $1.5 trillion over the decade. So our estimated $10 billion cut, which is owing to raising the work requirement for adults without dependents from age 49 to age 54 and excludes the expanded exemptions, amounts to a minuscule 0.7% of the baseline.

Moreover, the resulting hall pass for the remaining $48.29 trillion of built-in mandatory spending was not issued owing to the intransigence of the White House negotiators. Fully 97.3% of the CBO baseline amount for mandatory/entitlement spending was given a no cuts exemption by the GOP caucus, even before they brought their phony "Limit, Save, Grow Act" to the floor last month.

That's right. The CBO baseline for what amounts to the heart of the Fiscal Doomsday Machine is projected to grow from $3.98 trillion in FY 2023 to $6.14 trillion in FY 2033. And yet the only savings the GOP chose to even table was $130 billion of work requirement savings from Medicaid, foods stamps and family assistance. And when you count the expanded work exemptions, fully 102% of those meager savings were left on the cutting room floor of the White House negotiations.

Then again, an even more complete capitulation occurred on the two items in the original House GOP bill that actually saved a meaningful amount of money. For instance, the GOP cancellation of Biden's student debt forgiveness plan would have saved $320 billion according to CBO, which savings evaporated to $0.0 billion under the McCarthy deal.

Likewise, there could be no greater blow for free market efficiency and fiscal sanity than the House GOP's original provision to cancel the ridiculously generous tax credits for overwhelmingly inefficient solar, windmill and electrification investments. These measures designed to save the planet from the phony Climate Crisis were originally guesstimated to cost $270 billion over 10-years when Biden's so-called Inflation Reduction Act was passed last year.

But in response to the House-passed debt ceiling plan in late April, Congress' official tax scorekeeper, the Joint Committee on Taxation (JCT),  updated its estimates, pegging the costs at $570 billion from 2023 to 2033, or roughly double its original estimate. And that's nothing compared to a new estimate from researchers at the Brookings Institution, which puts the revenue loss at more than $1 trillion over the coming decade.

So. Pray tell what did McCarthy's pitiful negotiators do in response to the good news that the House-approved plan would shrink the deficit by up to $1 trillion over a decade?

Why, they effectively said, "just kidding!" We will keep bashing these senseless give-a-ways out on the political hustings, but all the green energy interest groups can keep sending their bribe money to the Dems because these huge tax subsidies will remain in place.

As we said, the Stupid Party is driving toward a cliff with its eyes-wide shut.

We truly cannot believe that a majority of the GOP House caucus is bone-headed enough to fall for the McCarthy deal. But if they do the GOP will have forfeited the last chance to stop the nation's rush toward fiscal armageddon.

Indeed, if the plan is approved the debt ceiling will take its place along side of budget resolutions and annual appropriations bills in the dead letter office of fiscal governance. The only thing the "compromise" pretends to cut is domestic discretionary appropriations excluding veterans health care and when all the gimmicks are peeled away, the IRS, too.

The GOP claims they froze FY 2024 nondefense appropriations below the FY 2023 level, but the so-called freeze is actually loophole-ridden in the fine print and is not binding after FY 2025. And, not surprisingly, these unenforceable "targets" for the out-years (FY 2026-2033) account for 90% of the purported "savings".

Holy moly. At least the 2011 debt ceiling deal had a 10-year enforcement mechanism based on automatic sequestration. As it happened they loop-holed their way around these caps with "emergency" spending and other exempt gimmicks, and even then the result was a blithering joke.

In return for the debt ceiling increase, appropriated defense and nondefense spending was to be limited to $8.45 trillion over the next 10-years. The actual level, as it turned out, was $10.60 trillion. That is to say, these fakers missed their targets by $2.15 trillion or 25% over the period!

As it also turned out, once the GOP got back into the White House and took partial control of Congress, nondefense discretionary spending literally went into orbit. Here is the path from Obama's FY 2017 outgoing budget to FY 2023. That's up by 53%, and now these cats have the gall to call it a freeze!

Non-defense Discretionary Outlays:

• FY 2017: $610 billion;
• FY 2018: $639 billion;
• FY 2019: $661 billion;
• FY 2020 $914 billion;
• FY 2021 $895 billion;
• FY 2022: $912 billion;
• FY 2023: $936 billion;
• 6-Year Increase: +53%

And yet, and yet. The GOP clowns in the US House now want to count enforcement-free savings from eight years of outyear "targets" that no one in Washington—-and we mean no one—intends to observe.

As we said, the "compromise deal" is a hideous joke, and Kevin McCarthy truly does have sawdust for brains and a Twizzlers stick for a backbone.

There is no other way to interpret the facts. In fact, just five months into his Speakership, McCarthy has already earned his place on the Wall of Shame right along side of Speaker John Boehner and Speaker Paul Ryan.

Reprinted with permission from David Stockman's Contra Corner.

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7. The Biggest Problem With The Western Left Is That It Doesn’t Exist

The biggest problem with the western left is that it doesn't exist.

To look at leftist discourse you'd think the left's biggest problem is that some leftists have the wrong beliefs about this or that issue, or that the left pays too much or not enough attention to identity politics, or places too much or not enough emphasis on electoral politics, or is too sympathetic toward enemies of the US empire or not sympathetic enough, or that this or that faction gets it all wrong — but it's not. The biggest problem is that there aren't anywhere remotely close to enough leftists to get anything done in the west today.

And by leftists I of course don't mean Democrats or "progressives" or anyone who just wants a few adjustments to be made to the capitalist empire so that they can afford medicine or a college degree or whatever. I mean real socialists, communists and anarchists who oppose capitalism and imperialism and seek the drastic, revolutionary changes this civilization urgently needs. Those who understand that the system is not broken and in need of repair, but is working exactly as intended and is in need of complete dismantling.

This latter category has barely any meaningful existence in the western world. The "western left" in modern times is either controlled opposition or what amounts to a glorified online message board. That's not our fault; the empire has poured vast amounts of wealth and effort into making that happen. But we do need to be real about it, and we do need to fix it.

And it's just so strange to me that this doesn't dominate all leftist discourse all the time. The fact that the western left is a tiny politically impotent minority with nowhere near the numbers needed to accomplish its goals is the single most significant thing about the western left, by a long, long way.

"Long Live the Communist International!"
CPUSA meeting celebrating Lenin's birthday.
Madison Square Garden, New York, 1931.

We are sure that such meetings will be held again in the United States! pic.twitter.com/4Hf0FJTq6M

— Politsturm International (@PolitsturmInter) June 24, 2021

I mean, if you were a general who was setting off to war, and you only had a handful of soldiers to fight against an entire enemy nation, that would be the single most glaring fact in your attention. You wouldn't be spending your time arguing about military strategies or the history of equestrian combat, and you certainly wouldn't be wasting your energy fighting against those who are basically on your side. Front and center of your attention would be the fact that you don't have enough troops to fight this war, and how can you get more.

If you're an architect who's been hired to construct a skyscraper, and your workforce shows up and it's just one guy with a plastic toy hammer, that's going to be the focus of your attention. You're not going to be poring over your blueprints and books on architectural theory and musing about the finer points of foundational integrity, you're going to be trying to figure out how to get more workers to build this damn thing.

So you'd think that would be the case with the western left as well, because we find ourselves in more or less the same kind of situation. But it isn't. To look at the writings of a lot of western leftists you'd think the best way to enact your ideology in the world is to spend your time arguing with other leftists using esoteric Marxist jargon about obscure points that nobody outside your tiny echo chamber knows about or cares about, or to sit back smugly knowing better than everyone else while waiting for the contradictions inherent in capitalism to bring about its demise.

If you look at organizing and demonstrating it's not much better. You've got sparsely attended meetings with increasingly atomized sects, antiwar protests with a handful of people and one banner, and some LARPers dressed in black punching racists and transphobes here and there to make believe they're fighting a real revolution against real power. Which is the same as nothing.

The first and foremost goal of the western left should be to create more western leftists. You don't do that by having all the correct opinions and reading all the correct books and proving yourself the most correct in argument after argument, and you don't do it by waiting for western material conditions to deteriorate like a bunch of fundamentalists awaiting the Rapture. You do it by reaching out to people, winning hearts and minds, showing them that everything they've been taught about their nation and their world is a lie, and showing them that things can be better.

I don't claim to have all the answers on how to address this dilemma, I'm just highlighting a massive, glaring problem that doesn't get the tiniest fraction of the attention that it should get. I address this problem the best way I know how with my own work, but I'm just one person with one mind. I hope to see many more minds pointed at this issue in the future, so that we can all come up with solutions and fix this thing.

_________________________

My work is entirely reader-supported, so if you enjoyed this piece please consider sharing it around, throwing some money into my tip jar on Patreon, Paypal, or Substack, buying an issue of my monthly zine, and following me on Facebook, Twitter, Soundcloud or YouTube. If you want to read more you can buy my books. The best way to make sure you see the stuff I publish is to subscribe to the mailing list for at my website or on Substack, which will get you an email notification for everything I publish. Everyone, racist platforms excluded, has my permission to republish, use or translate any part of this work (or anything else I've written) in any way they like free of charge. For more info on who I am, where I stand, and what I'm trying to do with this platform, click here. All works co-authored with my husband Tim Foley.

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8. Escape to the Beach

I just returned from a few days in the Free State of Florida, where beaches manage to distract people from the idiotic things going on in the rest of the world. Making things even sweeter, I was in North Florida, where our Navy's beloved jets still roar overhead—Go Navy!

Those of us who spend time in more raucous towns need such escapes. We get away and find out that it's fun to sit on the beach and listen to country music, dive under waves, fish some ponds, and throw the football with our kids. There's no need to wear fancy clothes; while tasteful attire is required on the golf course, you can get by with bare feet or flip flops at most places. People watching is a sport there, too—and occasionally disturbing, given the new rules for who can wear bikinis. At the end of a warm day, you still find sand encrusted on your scalp, and it feels healthy.

Nature, for this reason, is a great equalizer among people, surpassing all the doomed efforts to "unite" people under the left's panoply of identity flags and "we're in this together" mantras. Beaches, mountains, lakes—all sit in a beauty that suspends one's political obsessions and angst, if only briefly. The people around you form a happy fellowship of sunbathers, swimmers, surfers, hikers, or anglers; all wear more a glow of sunshine, and less a tint of political red or blue.

Years ago, when my children were small, summer's city heat weighed on my spirit. It was hot, "everyone else" went to camp or left town, and the city offered all the 92-degree charm of concrete and car exhaust. For a bit of nature, we'd hit the dirty Chattahoochee or its trails, where a bout of rain renders them clay quagmires. Undeterred, I drove my kids to pools, parks and libraries all summer —with the finale at Chick-fil-A, the coveted "summer reading" milkshake prize. But I still pined for clear water, open skies, and barefoot fun.

In a twist of serendipity, my husband's Navy duty required an annual two-week stay in my native Florida. We stayed in a residential area on the coast, far from touristy condo strips. I traded my pools and parks routine for free access to the top facility in town—the Atlantic Ocean.

Back in Atlanta, our outdoor summertime attractions were nice clubs, city pools, or crowded water parks—all good, but bound by concrete. But at the beach, the ocean commanded a prominence that outranked even the best of manmade pleasures. We now had endless water, alligators, sharks, boats, and crabs. We had sunrise, sunset and jubilant breezes. Planks washed up from a sunken ship, and a whale washed up from its travels. Pirate stories lurked at the horizon. We ran barefoot on the golf course at night. We tracked stars in the evenings from the lifeguard stand.

As I did in Atlanta, I took my kids to the library there—not a top vacation activity, but this was a happy and bright place, not a dark, municipal book cave. The children's section featured an exquisite, large dollhouse donated by a Navy family. The friendly retirees who manned the library's bookstore kept it stocked with an impressive array of leather-bound classics, military history books and puzzles. They curated a room that supplied our home with giant books about World War II, and the collected works of Jane Austen; they showed us how to bring our brains to the beach.

This beach library boasted other charms outside; a boardwalk encircled a lake full of hungry snapping turtles, and a garden of boxwoods formed a children's maze. I relished every moment there, where the happy industry of retirees made a magical summer pairing of books and nature. I discovered how to maintain an intelligent mind while living in the carefree winds of the beach.

The active minds weren't just at the library; they were found beachside, too. For a couple summers in our earlier years, my husband and I observed a well-dressed elderly man who sat in the shade of our beach pavilion daily. He always wore a CVN-70 hat, having served on the carrier Carl Vinson; he spent hours reading a thick book, always a work of history or politics. His frailty somehow withstood the July heat of his faithful pavilion duty. We spoke to him a few times and considered him a living monument to the Greatest Generation. One year, his corner perch was finally empty; to this day, we wonder if our children will ever see such a stately old veteran, reading into his 90's, still stationed in an ocean breeze.

Another man, a transplant from the midwest, still runs his age-defying Labrador seven miles on the beach every morning. He spends the rest of his day operating on hearts as a surgeon at a nearby hospital. But, like many thoughtful early risers, he starts his day with reflection—this one simply mirrored on the water.

Perhaps it's also the remnant of patriotic and faithful people that make our favorite beach a respite from the rough and tumble. It's a Navy town, so many of its retirees have logged miles on aircraft carriers or submarines, and they still remember why America is great. They go to church, too; I'm not Catholic, but I'm always glad to see the police officer stop traffic on A1A to manage cars pouring out of mass, a reminder that churches here haven't yet been abandoned.

Read the Whole Article

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9. Foster Care & Group Homes: What’s Happening to Our Children

FOSTER Care – the good, the bad and the ugly.   For the most part, foster care is a temporary situation.   Approved by Social Services, a shortage of foster care givers has plunged the system in crisis.   Shortages mean the government departments start allowing critical measures to fall short.   In Australia alone the shortage is estimated to be roughly 40,000 homes.   In Sweden "Social" has been accused of taking children without the proper authorization having simply relied on a 'snitch' or Karen to then remove children from their homes. In the US 1 in 17 children enter foster care.

Foster Care is a revolving door. Children arrive with a small bag of belongings and leave months or years later with a small bag of belongings.   Often deadened to their fate, these children grow up with psychological disorders and different brain development.   In Mexico, the foster system was dissolved completely as a result.

Once a child turns eighteen – they are deposited on the street. Homeless.   They are either picked up by a gang or turned into prostitutes.

Migrant children coming into western countries seeking a home are further burdening an already strapped system.   And many simply 'disappear'.

A relatively new study of prison populations found that 85% grew up without a father.   By the age of 26, 70% of former foster children are arrested.   The importance of a family can not be underscored.   The decaying of the family in favor of state owned or controlled children is exasperating the already burgeoning crime stats within western countries.

According to the Foster and Adoptive Care Coalition, more than half of foster parents quit within the first year and by the second year only 40% remain.   As a result, children are disposed into psychiatric institutions and group homes where they can become sexualized.   As children transition from home to home they become more hardened to their reality and can act out aggressively making adoption an impossibility.

Although Social Services claim to 'train' their foster parents – too often the level of trauma experienced by a child is NOT compatible with the training.   And Social Service departments are negligent in relaying the necessary background information to prospective foster parents. Leading to a failed home environment.

In Mexico, orphanages are the primary means of homing children who can no longer live with their biological parents.   Most are privately funded – and all must register with the government.   What they provide that a revolving foster care environment does not is stability.

The US no longer provides orphanages.   They have been replaced with adoption and foster care/group homes. After WWII the government began funding foster care. As a result, by the 1950's orphanages began to phase out in favor of group homes, foster care, and psychiatric institutionalization.   Yet foster care is in crisis. Group homes have been implicated in trafficking.   And the children are left behind in one of the world's leading societies.

There are roughly 430,000 children in foster care in the US with only 100,000 eligible for adoption and half of those being adopted.   Group homes are a type of orphanage.   But group homes aren't necessarily only for orphans and can include drug addicts, juvenile delinquents, and impaired children.   Thus the exposure is significantly different than a traditional orphanage.

Follow The Money:   Group Homes are funded by HHS and State governments reaping the rewards of over $10,000 per bed… per month.  But these homes have come under their own crisis model involving abuse, lack of staff, untrained staff, assault, negligence, and neglect.

Foster Care homes are paid upwards of $40-$100 per day aggregating upwards of $14,600 to $36,500 per year.   By comparison, in a new 2022 study done by Brookings, the cost to raise a child is roughly $18,.000 per year.

The obvious conclusion is that Government initiatives are pushing children into expensive group homes to the detriment of permanent foster care protection.   There are 8700 group homes in the US.   They are considered 'businesses' operating for profit.   Each group facility houses upwards of 12 children each year or roughly 104,000 total.   That would translate to upwards of $12.5 billion in Group Home government and charitable spending.

In 2013, an FBI statistic stated that 60% of trafficked children in the US came from group homes. Children that had gone missing.

In 2018, the Trump administration introduced Family First Prevention Services Act to limit federal funding of group homes to two weeks per year with specific exceptions.   In Colorado, 35% of foster children are still living in group homes permanently.

While we are led to believe all these children are better off, in places like Australia and Sweden, children can be taken from their parents for minor issues.   And some are taken for nefarious purposes.   The taking of children is not always related to instances of abuse or neglect.

Many reports in Sweden indicate that the vast majority of 'taken children' are from immigrants.   In Australia, over 50% of indigenous children make up the demographic of group homes.  A form of government genocide.  The rates may be significantly higher given that as of 2019:   State and Territory jurisdictions have aligned with a new national definition of out-of-home care which excludes third-party parental responsibility orders.

They are not counted.

In both Sweden and Australia, there are numerous reports stating foster children are not allowed contact with their parents or siblings. A form of Child Abuse! In Sweden immigrant families take their children and flee!

A family of five reportedly fled Sweden in 2019 fearing their 3 children would be confiscated by the Swedish authorities over a legal dispute. They found refugee status in Poland.   Today the family escaped Poland over fears of reprisal and sought refuge in Russia!

State Control of our children isn't just thru school indoctrination ideologies, or runaways, it is inherent in the government system.   When the orphanage concept of Foster Homes and Group Homes becomes a for profit enterprise – the criminal logic is to fill every available trench with a child.

Reprinted with permission from Helena-The Nationalist Voice.

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10. What Debt Ceiling?

Statists all across the United States, especially those within the mainstream press, are uncorking their champagne bottles today and celebrating the newest deal that lifts the debt ceiling. Predictably, the political strategy of crying "Default! Default! Default!" succeeded spectacularly, just as it does every time. In fact, it worked so well that this time Congress decided to not even set a new ceiling. Instead, the deal authorizes federal officials to spend and borrow to their heart's content for the next two years — beyond Election Day 2024, of course.

The people who will pay the price for this deal will be American taxpayers. If you happen to die before the day of reckoning arrives, you'll escape having to bear the consequences of what these people have done. But if you're alive when that day of reckoning comes, you will be one of the ones reaping the whirlwind. 

Right now, each taxpayer's share of the federal government's $31 trillion in debt is around $275,000. It will be increasing over the next couple of years. How many people list that liability on their financial statements? I'll bet not very many. And yet, there it is — and growing. 

The biggest fear factor in the debt-ceiling circus is always the default factor. "Default! Default! Default!" the statists cry. "If the debt ceiling isn't raised, the federal government will default on its debts and the United States will fall into the ocean." 

Really?

Well, for one thing, it's simply not true that failing to raise the debt ceiling automatically meant default in the payment of the federal government's debts. That's because the federal government could slash welfare-warfare state programs instead of defaulting on its debts. The military, for example, spends more than the next 10 countries combined. There's obviously plenty to cut there, but of course, given the control that the Pentagon, the CIA, and the NSA have over Congress, the notion of cutting military spending was never seriously considered.

Throughout the debt-ceiling circus, the mainstream press claimed that there had never been a default on the government's debt. That's simply not true. 

For more than a century, the official money of the United States consisted of gold coins and silver coins. That was the monetary system called for in the Constitution. No, it wasn't a paper-money system that was "backed by gold," as the mainstream press often claims. It was a monetary system in which the official money was gold coins and silver coins.

Under the Constitution, the federal government was authorized to borrow money. They exercised that power by issuing notes, bills, and bonds, which people would purchase with their gold coins. These debt instruments promised to pay the lenders back in gold coins.

In the 1930s, the Franklin Roosevelt administration declared an end to America's gold-coin, silver-coin system. FDR did this without even the semblance of a constitutional amendment. Displaying the attributes of a European dictator, he ordered every American to deliver his gold coins to the federal government. FDR threatened that if anyone got caught violating his edict, he would slap him with a federal criminal indictment, conviction, and incarceration for 10 years in a federal penitentiary. Not surprisingly, most Americans hurriedly rushed to turn in their gold in exchange for irredeemable paper money.

What about those notes, bills, and bonds in which the federal government promised to pay people back their gold coins? FDR had a quick answer: Tough luck. We are going to pay you back in devalued, irredeemable paper money. And there is nothing you can do about it. 

In a word: Default. People had in good faith loaned their gold coins to the federal government. The federal government had promised in writing to pay back its loans with gold coins. The federal government knowingly, intentionally, and deliberately broke its promise by refusing to pay back its loans with gold coins. Instead, it chose to pay back its loans with cheapened, debased, irredeemable paper money. In taking this route, the government defaulted.

Did the United States fall into the ocean? Nope. It simply became a paragon of immorality, one that people could no longer trust. 

FDR's nationalization of gold, along with his conversion of the federal government to a welfare state, set the stage for a century of out-of-control federal spending, debt, and monetary debauchery. Once President Truman converted the federal government to a national-security state in 1947, so much paper money was printed to cover federal welfare-warfare state expenditures that silver coins, which FDR had not made illegal to own, were driven out of circulation.

Contrary to popular opinion, the biggest threat to the freedom and well-being of the American people is not Russia, China, Syria, Afghanistan, Iraq, Cuba, North Korea, Vietnam, the terrorists, the Muslims, the drug dealers, or the illegal immigrants. The biggest threat to our freedom and well-being lies in Washington, D.C. It is the welfare-warfare state that is taking us down from within. It is just a question of whether the American people will put a stop to it before it takes us down completely. 

Reprinted with permission from The Future of Freedom Foundation.

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