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alstry (34.88)

Is America MORE Communist Than China???????

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July 17, 2009 – Comments (5)

For the purposes of this blog, we will define communism as depending on the state, all forms of government, for one's livlihood.....we will not address the issues of civil liberties.

If you think about it, if you depend on the state for your income, you are "owned" by the state.  And whether you get a check directly from the state, or you indirectly get your check from the state, it really is a difference without a distinction....the original source is the same

We know about 1/3 of the American population gets their primary source of income from the state whether welfare, social security, medicare, medicaid, food stamps and unemployment etc.

We also know that over 7% of the population works for the state earning their incomes.

In sum, over 40% of America makes its livlihood directly from payments from government.

Then there are a bunch of people that work in private companies whose primary source of income is dependent on checks directly from the state, such as defense contractors and other contractors.  Heck, much of the population of the Washington, D.C. metro area fits this catagory....about 2% of the population.

As you can see, we rapidly approach about 40- 45% of the American population depends on a government check to make their living.   The 10-15% that work for the state, including University and College employees, or contractors for the state are relatively high income earners generating a large percentage of consumer sales that drives many jobs

Then if we add in those who benefit indirectly from state entitlement payments, the numbers become staggering.  These people include those businesses where welfare recipients, food stamp recipients and unemployment recipients shop such as WalMart and grocery stores and appearal stores.  In additon, OVER 50% of our entire health care system comes from payments from government such as medicare and medicaid benefitting hospitals, clinics, drug companies and drug stores plus the insurance proceeds from government employees and contractors.

If you add it all up, practically our entire economy is now dependent on government spending in one way or another to survive. 

If you add in the recent government funding to the banks and massive NOL carry backs to a number of businesses, including homebuilders, OVER 100% of S&P earnings this quarter comes directly and/or indirectly from government payments.

Under the Bush era, the size of govenrment doubled.  Now Obama is in control and he is making it a larger and larger percentage of our GDP as the private economy shrinks. In the mean time, as banks cut credit to a credit dependent society, the private economy will decrease further .  As the economy contracts but the debt remains outstanding, servicing the debt will take up a bigger and bigger percentage of the revenue stream.

We are rapidly getting to the point where servicing debt will consume the majority of the GDP.....but government will still need to generate revenues someplace.......the only place left will be assets, unless we purge the debt.

Under the current policies, if the state stops spending, so will the revenue to the vast majority of Americans, and our economy will crash.....but at least it will be our economy.

Now that you have left the matrix for a moment, the choice is yours on how to proceed.....for now.

5 Comments – Post Your Own

#1) On July 17, 2009 at 1:50 PM, alstry (34.88) wrote:

Actually, I should make one clarification, 7% of the population works for the state, but closer to 15% of the workforce.

The clarification is made because those incomes support a number of children and spouses in the population likely taking the number well NORTH of 10%.

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#2) On July 17, 2009 at 2:12 PM, mrindependent (96.10) wrote:

There is no doubt that we are more communist than China.  China switched to capitalism whole hog.  They get it.  We talk a good game but our economy is socialist at best.  The socialist wave will probably last a decade or two.  Then we will try to unwind the damage, but it will be too little too late.  We will take our place beside the European nations as one more economic "has been".

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#3) On July 17, 2009 at 2:16 PM, alstry (34.88) wrote:

If you think about how many Chinese simply farm their own land......as a percentage of the population, I would have to agree with you practically.

Then add in the workers, who work for factories that sell things overseas.......the analysis gets interesting.

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#4) On July 17, 2009 at 5:39 PM, alstry (34.88) wrote:

Ready, Set, Go!!!!!!!!!!!!!!!!!!!!!!!!!!!

July 17 (Bloomberg) -- Moore-Handley Inc., an Alabama tool supplier, became the first small company to blame CIT Group Inc. for its bankruptcy today when it filed for protection from creditors.

 

Just a few hundred thousand to go.........

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#5) On May 08, 2010 at 4:53 PM, mtinvest (92.39) wrote:

As a European I have to admit I find your view on the world to be rather skewed in favor of your political standpoint. The US will like Europe see slowed growth for the next 100 years, unless a US president decides to invade a country with large oil ressources. I admit Iraq is easier to invade than Canada. Maybe you could make the world believe that they have mobile weapons of mass destruction? All this being said I agree with you that the US is more left wing on many economic issues than China. I find that to be an attractive thing about the US. I wouldn't like to live in a country like China, where nobody can see further away than their own nose tip.

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