Category: Fiscal irresponsibility

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Deepening Inequality Driving US Middle Class into Oblivion

“The hollowing of the middle has proceeded steadily for four decades, and it may have reached a tipping point,” Pew Research Center says

A closer look at the shift out of the middle reveals that “a deeper polarization is underway in the American economy,” says Pew Research Center report. (Image: DonkeyHotey/flickr/cc)

The American middle class is shrinking.

For the first time in more than four decades, middle-income households have lost their majority status in the U.S., according to new findings, and are now outnumbered by their counterparts on opposite ends of the income spectrum.

“The fastest-growing segments are the ones at the extremes, the very lowest and highest ends of the income distribution.”
—Pew Research Center

Based on the definition used in the Pew Research Center report released Wednesday, the share of American adults living in middle-income households—that is, with an income that is two-thirds to double that of the overall median household income, or $42,000 to $126,000 annually in 2014—has fallen from a high of 61 percent in 1971 to 50 percent in 2015.

At the same time, the share living in the upper-income tier jumped from 14 percent to 21 percent over the same period, and the share in the lower-income tier rose from 25 percent to 29 percent.

“The hollowing of the middle has proceeded steadily for four decades, and it may have reached a tipping point,” the Pew study suggests. Furthermore, a “closer look at the shift out of the middle reveals that a deeper polarization is underway in the American economy.”

“The movement out of the middle-income tier has been more than just a step in one direction or the other,” the report says. “The fastest-growing segments are the ones at the extremes, the very lowest and highest ends of the income distribution.”

In addition, middle class families have fallen further behind financially, the study shows, with the share of U.S. aggregate household income held by middle-income households having “eroded significantly over time.”

“Upper-income households now command the greatest share of aggregate income and are on the verge of holding more in total income than all other households combined,” the report reads. “This shift is partly because upper-income households constitute a rising share of the population and partly because their incomes are increasing more rapidly than those of other tiers.”

The Pew findings support what many 2016 presidential candidates, led by U.S. Sen. Bernie Sanders, have been saying on the campaign trail.

In an op-ed published this summer, Sanders decried what he called “the war against the American middle class,” marked by Wall Street greed, anti-worker policies, and corporate tax evasion.

And on Thursday, he tweeted:

There’s been a massive transfer of wealth from the 99% to the top 1%. We’ve got to bring that money back to working families.

A Wall Street Journal/NBC News poll in January found that 47 percent of respondents considered reducing income inequality an absolute priority for the government to pursue this year, with Democrats placing far greater importance on it than Republicans.

In a piece for Gawker on Thursday, Hamilton Nolan responded to Pew report with an irreverent eulogy.

“The Middle Class, a popular figure in American folklore, died this week after a long battle with capitalism,” Nolan wrote. “Its passing has been expected since the recent death of its partner, The American Dream.”

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Consortium News

Obama Keeps Pentagon Spigot Open


President Barack Obama on the campaign trail. (Photo credit:

Though he ran for the White House as a “change” candidate, President Obama has mostly favored continuity, including bending to the usual pressure from the Military-Industrial Complex to keep the Pentagon spending flowing, as budget watchdog Chuck Spinney explains.

By Chuck Spinney

The Pentagon just won another small skirmish in its long war with Social Security and Medicare. That is the unstated message of the budget deal just announced gleefully by congressional leaders and President Barack Obama. To understand why, let’s take a quick trip down memory lane.

Last January, President Obama submitted Fiscal Year (FY) 2016 budget to Congress, and he proposed to break the spending limits on both defense and domestic programs.  These limits are set by the long-term sequester provisions of the Budget Control Act of 2011  (BCA), which, for better or worse, is the law of the land, and Obama was asking Congress to change the law.

Mr. Obama wanted to finance his ramped up spending proposals by increasing taxes.  Of course, he knew that the Republican-controlled Congress lusted for defense increases but hated domestic spending, particularly entitlements, such as Social Security and Medicare.

Moreover, he knew increasing taxes was like waving the red cape in front of the Republican budget bulls. So, he knew his budget would be dead on arrival. Obama’s budget, nevertheless, had one virtue: it was up-front about the intractable nature of the budget problem. In effect, whether deliberately or not, Obama laid a trap that the Republicans merrily walked into during the ensuing spring and summer.


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The Rutherford Institute


By John W. Whitehead
October 20, 2015

If you answered yes to any of the above questions, you may be an anti-government extremist (a.k.a. domestic terrorist) in the eyes of the police.

As such, you are now viewed as a greater threat to America than ISIS or al Qaeda.

Let that sink in a moment.

If you believe in and exercise your rights under the Constitution (namely, your right to speak freely, worship freely, associate with like-minded individuals who share your political views, criticize the government, own a weapon, demand a warrant before being questioned or searched, or any other activity viewed as potentially anti-government, racist, bigoted, anarchic or sovereign), you have just been promoted to the top of the government’s terrorism watch list.

I assure you I’m not making this stuff up.

Police agencies now believe the “main terrorist threat in the United States is not from violent Muslim extremists, but from right-wing extremists.”

A New York Times editorial backs up these findings:

Law enforcement agencies around the country are training their officers to recognize signs of anti-government extremism and to exercise caution during routine traffic stops, criminal investigations and other interactions with potential extremists. “The threat is real,” says the handout from one training program sponsored by the Department of Justice. Since 2000, the handout notes, 25 law enforcement officers have been killed by right-wing extremists, who share a “fear that government will confiscate firearms” and a “belief in the approaching collapse of government and the economy.”

So what is the government doing about these so-called terrorists?

The government is going to war.


Only this time, it has declared war against so-called American “extremists.”



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Daily Caller News Foundation

Silent But Expensive: An Anti-Poverty Program’s Mysterious Achievements

Ethan Barton

An obscure Department of Housing and Urban Development (HUD) program grants millions of dollars every year to only three eligible organizations, but a government official won’t say how the money actually combats poverty.

More than $429 million has been granted through Section 4 of the HUD Demonstration Act of 1993 to help local organizations – called community development corporations – combat poverty through “capacity building” – a vague phrase that essentially means building their size and expertise, according to a HUD document.

“Capacity building develops core skills that strengthen the ability of local community based organizations to implement HUD programs, raise capital for community development and affordable housing, coordinate on cross-programmatic place-based approaches and facilitate knowledge sharing,” the agency’s 2015 request for funding says.

The funds pass through one of three eligible groups, known as intermediaries, which then either redistribute Section 4 funds to local groups or provides them with direct assistance through trained staff. Those three groups defined by law are Enterprise Community Partners, Habitat for Humanity International and Local Initiatives Support Corporation.

According to HUD’s 2015 funding request, $20 million will “result in: approximately 5,000 housing units newly constructed renovated, or preserved; 600 training opportunities; and an estimate of more than $200 million in total development costs channeled to low-income communities in more than 250 communities nationwide.”

But HUD officials won’t say how indirectly backing local groups after funds pass through an intermediary will achieve those claims, and the intermediaries can still receive grant dollars without providing evidence of successful urban renewal.



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MSN News

Many Low-Income Workers Say ‘No’ to Health Insurance

By STACY COWLEY 6 hrs ago
An employee at Golden Corral taking clean cups from the kitchen. Some Golden Corral restaurants began offering health insurance to employees, but few have opted in.© Logan R. Cyrus for The New York Times An employee at Golden Corral taking clean cups from the kitchen. Some Golden Corral restaurants began offering health insurance to employees, but few have…JACKSONVILLE, N.C. — When Billy Sewell began offering health insurance this year to 600 service workers at the Golden Corral restaurants that he owns, he wondered nervously how many would buy it. Adding hundreds of employees to his plan would cost him more than $1 million — a hit he wasn’t sure his low-margin business could afford.

His actual costs, though, turned out to be far smaller than he had feared. So far, only two people have signed up.

“We offered, and they didn’t take it,” he said.

Evidence is growing that his experience is not unusual. The Affordable Care Act’s employer mandate, which requires employers with more than 50 full-time workers to offer most of their employees insurance or face financial penalties, was one of the law’s most controversial provisions. Business owners and industry groups fiercely protested the change, and some companies cut workers’ hours to reduce the number of employees who would be eligible.

But 10 months after the first phase of the mandate took effect, covering companies with 100 or more workers, many business owners say they are finding very few employees willing to buy the health insurance that they are now compelled to offer. The trend is especially pronounced among smaller and midsize businesses in fields filled with low-wage hourly workers, like restaurants, retailing and hospitality. (Companies with 50 to 99 workers are not required to comply with the mandate until next year.)

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US House Select Committee on Benghazi Chairman Representative Trey Gowdy and ranking member cummings talking before a Benghazi committee hearing © Jonathan Ernst
The House Select Committee on Benghazi, a 17-month investigation into the 2012 consulate attack in Libya, has long been accused of being a partisan witch hunt. Now a former staffer is complaining about its extracurricular activities.

Over the course of the ongoing  Benghazi Committee investigation ‒ so far, a month longer than that of Watergate and counting ‒ there were bound to be some ebbs and flows to the committee’s workload. However, it is how they took advantage of that downtime that is raising questions over the point of keeping the committee in business.

Seven Democrats joined Republicans in voting to create the @HouseBenghazi Select Committee. 

Wine Wednesdays

The committee has not held a public hearing since January 27, but that hasn’t kept its members from meeting up on a weekly basis. They’ve formed a wine club, nicknamed “Wine Wednesdays,” in which they drink from glasses imprinted with the words “Glacial Pace,” Major Bradley F. Podliska, a committee investigator who was fired in June, told the New York Times. The customized goblets are a dig at Ranking Member Elijah Cummings (D-Maryland), who used the term in May to complain about the committee’s lack of urgency in completing its task.

“At every turn, the Select Committee comes up with a new excuse to further delay its work and then blames its glacial pace on someone else,” Cummings said in a statement at the time.

Benghazi gun-buying club

Wine Wednesdays are not the only social aspect of the Benghazi Committee. Its members have also set up a gun-buying club. They used the committee’s conference room to discuss the 9mm Glock handguns they wanted to purchase, Podliska said. A favorite agenda item for the club was the type of monograms that they wanted inscribed on the firearms.


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President Obama seated next to the U.S. Trade Representative Michael Froman. (Photo: USTR)

The negotiations and the sales push behind Washington’s latest (and biggest) “free trade” agreement amounts to Kabuki theater.

What theater? Kabuki. It’s a 17th-century form of Japanese drama, featuring elaborate sets and costuming, rhythmic dialogue and stylized acting and dancing. That does, indeed, nicely sum up the White House’s production of the Trans-Pacific Partnership: Its negotiations have been set in luxury resorts around the world, covered by elaborate secrecy; insiders wear the costumes of global corporate power; trade officials parrot rhythmic dialogue about high standards and incredible benefits for all. And the president himself is the main actor, dramatically proclaiming that TPP is “the most progressive” trade deal ever, and now he’s doing a stylized political dance in hopes of winning congressional approval.

What a phenomenal show!

But it doesn’t seem to be selling. Recent polls show broad public opposition to any more of these same old trade schemes, not only among Democrats, but independents and Republicans, too. Ten of the 2016 presidential candidates are against the deal. The counter movement is led by Democratic contender Bernie Sanders, who calls it flat-out “disastrous,” and by GOP frontrunner Donnie Trump who dubs it “a horrible deal.” Even corporate darling Carly Fiorina is “very uncomfortable with this deal.” Congressional opposition is strong, and even Ford Motor Company — which was one of the corporate giants allowed inside the negotiations — has blasted it, calling on Congress to vote no.


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© Andrea Comas
A school district in Tennessee voted to cancel classes and shut down its schools as a result of a budget problem that has left the government unable to fund the facilities. The school director blamed Obamacare for its problems.

Clay County, Tennessee operates three schools total – one high school and two that cover pre-kindergarten through eighth grade – on a $9.5 million budget. However, now more than 1,100 students are sitting at home while officials try to figure out how to reopen the doors. A school board meeting last week saw the board voting 6-4 to close the schools. A separate vote to keep them open failed.

Notably, the county’s financial issues are not new. Clay County Director of Schools Jerry Strong told Associated Press that officials have been struggling with the budget for three years, and blamed county obligations such as state and government mandates, particularly the Affordable Care Act, for the monetary hole.

“Clay County’s inability to generate the revenue to offset the mandates is what’s caused this to come to a head,” he said.


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Congress Declares Martial Law as Dollar Rapidly Collapses

dollar collapseBy Mac Slavo

The debt ceiling issue is returning to the forefront in American politics, again threatening a government shutdown.

Last time, the shutdown resulted in sequester for many agencies that suspended work for many government employees; a great deal of political theater dominated the news cycle; but ultimately, things returned to a basic normalcy.

This time may be different, as a number of critical factors face Americans in 2015. Last week, Congress passed “procedural martial law” to address stop-gap spending as it faces the debt ceiling crisis again.

Meanwhile, this quietly announced martial law forced a vote on bills the same day, preventing members from even reading the legislation they were voting on, to avert an October 1 government shutdown. The move, which was done just a few weeks prior, shows how desperate things have become.

The Hill reported:

For the second time in a month, the House on Tuesday invoked “martial law” to allow more expeditious consideration of a stopgap spending bill to avoid a government shutdown on Oct. 1.

The use of martial law refers to bypassing the typical procedure that requires the House to wait a day after the Rules Committee produces a rule establishing floor debate parameters before voting.

[…]House GOP leaders invoked martial law earlier this month to fast-track a spending bill. But they ultimately never had to use it after the Senate opted to go first with the spending bill.

Crisis is averted – for now.

But the dollar is now an unwanted export commodity. As the U.S. rattles sabers with Russia in its proxy wars, the basis for American power overseas is rapidly collapsing.

China is ready to move forward with a “global reset” that would include the yuan in a global basket of currencies, and knock the dollar out of its reserve currency status.

Increasing troubles of U.S. and government financial institutions gives a sharp warning that things are coming to a head.

SGT Report issues a critical and under reported warning: “We are living in the last days of this Republic.”


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End Of The American Dream
The American Dream Is Becoming A Nightmare And Life As We Know It Is About To Change

The Trans-Pacific Partnership: Permanently Locking In The Obama Agenda For 40 Percent Of The Global Economy

Obama Laughing


We have just witnessed one of the most significant steps toward a one world economic system that we have ever seen.  Negotiations for the Trans-Pacific Partnership have been completed, and if approved it will create the largest trading bloc on the planet.  But this is not just a trade agreement.  In this treaty, Barack Obama has thrown in all sorts of things that he never would have been able to get through Congress otherwise.  And once this treaty is approved, it will be exceedingly difficult to ever make changes to it.  So essentially what is happening is that the Obama agenda is being permanently locked in for 40 percent of the global economy.

The United States, Canada, Japan, Mexico, Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam all intend to sign on to this insidious plan.  Collectively, these nations have a total population of about 800 million people and a combined GDP of approximately 28 trillion dollars.

Of course Barack Obama is assuring all of us that this treaty is going to be wonderful for everyone

In hailing the agreement, Obama said, “Congress and the American people will have months to read every word” before he signs the deal that he described as a win for all sides.

“If we can get this agreement to my desk, then we can help our businesses sell more Made in America goods and services around the world, and we can help more American workers compete and win,” Obama said.

Sadly, just like with every other “free trade” agreement that the U.S. has entered into since World War II, the exact opposite is what will actually happen.  Our trade deficit will get even larger, and we will see even more jobs and even more businesses go overseas.


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Trans-Pacific Partnership Deal Struck As “Corporate Secrecy” Wins Again

Once again the corporatocracy wins as the so-called “Trojan horse” Trans-Pacific Partnership (TPP) trade agreement has been finalized. As WSJ reports, the U.S., Japan and 10 countries around the Pacific reached a historic accord Monday to lower trade barriers to goods and services and set commercial rules of the road for two-fifths of the global economy, officials said.

For the U.S., the TPP (reportedly) opens agricultural markets in Japan and Canada, tightens intellectual property rules to benefit drug and technology companies, and establishes a tightknit economic bloc to challenge China’s influence in the region (likely forcing their hand into separate trade agreements).

However, Obama is likely to face a tough fight to get the deal through Congress(especially in light of presidential candidates’ opposition).

The US, Japan and 10 other Pacific Rim economies have reached agreement to strike the largest trade pact seen anywhere in two decades, in what is a huge strategic and political win for US President Barack Obama and Japan’s Shinzo Abe.


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‘Massive’ Media Hype for TPP

It is amazing how the elite media can be dragged along by their noses into accepting that the Trans-Pacific Partnership (TPP) can have a big impact on trade and growth. If I had a dollar for every time the deal was described as “massive,” or that we were told what share of world trade will be covered by the TPP, I would be richer than Bill Gates. The reality is that the vast majority of the trade between the countries in the TPP is already covered by trade agreements, as can be seen:

TPP countries with and without current trade agreements with the US. Source: International Monetary Fund

We continue to hear superlatives even as the evidence suggests the trade impact will be trivial. For example, the New York Times reported that US tariffs on Japanese cars will be phased out over 30 years. Wow! The most optimistic growth estimates show a cumulative gain by 2027 of less than 0.4 percent, roughly two months of normal GDP growth.

This doesn’t mean that the TPP can’t have an impact. It will lock in a regulatory structure, the exact parameters of which are yet to be seen. We do know that the folks at the table came from places like General Electric and Monsanto, not the AFL-CIO and the Sierra Club. We also know that it will mean paying more for drugs and other patent and copyright-protected material (forms of protection, whose negative impact is never included in growth projections), but we don’t yet know how much.

We also know that the Obama administration gave up an opportunity to include currency rules. This means that trade deficit is likely to persist long into the future. This deficit has been a persistent source of gap in demand, leading to millions of lost jobs. We filled this demand in the 1990s with the stock bubble and in the last decade in the housing bubble. It seems the latest plan from the Fed is that we simply won’t fill the gap in this decade.

Economist Dean Baker is co-director of the Center for Economic and Policy Research in Washington, DC. A version of this post originally appeared on CEPR’s blog Beat the Press (10/6/15).

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.