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alstry (35.40)

Obama is HOSED!!!!....can he save America???

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May 29, 2009 – Comments (9)

It appears the Bush/Pelosi administration handed President Obama an economic catastrophe that will impact EVERY American in radical ways in the very near future.

Federal tax revenue plunged $138 billion, or 34%, in April vs. a year ago — the biggest April drop since 1981, a study released Tuesday by the American Institute for Economic Research says.

When the economy slumps, so does tax revenue, and this recession has been no different, says Kerry Lynch, senior fellow at the AIER and author of the study. "It illustrates how severe the recession has been."

For example, 6 million people lost jobs in the 12 months ended in April — and that means far fewer dollars from income taxes. Income tax revenue dropped 44% from a year ago.

"These are staggering numbers," Lynch says.

Big revenue losses mean that the U.S. budget deficit may be larger than predicted this year and in future years.

http://www.usatoday.com/money/perfi/taxes/2009-05-26-irs-tax-revenue-down_N.htm

In 1981 America's national debt was a fraction of what it is today following the last 8 years of incredible borrowing.  In 1981 our entitlement obligations were much smaller...especially after the enactment of the prescription drug bill dramatically increasing the burden on government.

Let's think about this, revenues down 44% and six million workers lost their jobs in the months leading up to Obama's presidency??????

How can any executive walk into a company, where upon entering....the revenues drop 44%, its its fixed and variable costs are rising dramatically, and its citizens NOT be aware that he has been handed an economic catastrophe?  Conspiracy or coincidence???  Not only is the tax revenues dropping, but the demands on expenditures are rising because millions have lost their jobs and now depend on the government for food and medical care as there are few replacement jobs out there to make a living.  As the population ages, millions more will make demands on the government.

Hundreds of hospitals now depend on government payments to keep their doors open.  Thousands of retailers depend on the revenues from food stamps and other aid given to our citizens.  And as unemployment keeps going up, more and more will depend on government assistance just to survive even though the revenues to government will shrink.  In the end, we all depend on each other as we all live in one economy.

How will Obama be able to make up a 44% revenue drop when 2/3 of the budget simply went to paying interest and entitlements BEFORE his arrival.  If he doesn't pay entitlements, hospitals, clinics, and retailers shut down and millions will be out on the street.  If he doesn't pay interest payments, the rates all Americans pay on their  loans will climb to levels never seen before and few can afford.

How can President Obama simply meet the debt obligations?  The previous Bush/Pelosi era created as much debt in eight years as America incurred since 1776 in total. 

The math simply doesn't work and those that lend money to the U.S Government know this....

How could the previous Bush/Pelosi administration burden this nation with so much debt and not warn the citizens???  Now, at the current tax revenue receipts....just interest and entitlements will consume MORE than the total tax revenues....and that is before defense, security, and every other government expenditure.  Did the previous administration think we should just shut down the country after its departure?

What should our President do???  Should he shut down hundreds of hospitals serving the health needs of our citizens???  Should he default on our debt driving borrowing costs for the citizens higher???  If he prints money and borrows even more, interest rates will also rise and few will be will be willing to fund an economy where declining tax revenues barely cover entitlements and  interest???

Yes....President Obama was hosed the day he walked into the job of CEO of America due to the wanton spending of the previous eight years in the Bush/Pelosi era........now our President is faced with extremely difficult choices....shut down health care facilities, fire millions of workers slowing the economy further, and/or borrow even more likey causing interest rates to reach levels few businesses can afford?

At this point there are no easy choices....and Wall Street knows it....why do you think they are pursuing a Zombie Bank Policy transferring as much of taxpayer money onto their balance sheet as quickly as possible???....maybe becuase they know asset values are crashing and that we are running out of money???.....according to President Obama on Saturday....we are already out of money.

There you have it...Alstry's 100th blog for May......what can he say....but we are out of money and it is now time we as a nation start dealing it....or we will all be Zombulated soon.

 

9 Comments – Post Your Own

#1) On May 29, 2009 at 2:39 AM, awallejr (83.83) wrote:

100 blogs and pretty much saying the same thing ;p

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#2) On May 29, 2009 at 2:45 AM, alstry (35.40) wrote:

NEW YORK (Reuters) – One out of eight U.S. households with a mortgage ended the first quarter late on loan payments or in the foreclosure process, in a crisis that will persist for at least another year until unemployment peaks, the Mortgage Bankers Association said on Thursday.

U.S. unemployment in April reached its highest rate in more than a quarter century and is still rising, helping propel mortgage delinquencies and foreclosures to record highs.

Such economic conditions drove up foreclosures of prime fixed-rate mortgages, which represented the largest share of new foreclosures for the first time since the rapid growth and the ensuing collapse of the subprime loan market.

"We clearly haven't hit the top yet in terms of delinquencies or the bottom of the housing market," Jay Brinkmann, the group's chief economist, said in an interview.

"The housing market depends on the employment situation," he said, "and we don't expect employment to bottom out until the middle of next year so then normally housing would not recover until after employment recovers."

http://news.yahoo.com/s/nm/20090528/us_nm/us_usa_housing_foreclosures_1

1/8th of all mortgages late or in forclosure.....remember, 70% of American's live paycheck to paycheck.....what do you thin will happen to foreclosures as more American's lose their jobs and even more face paycuts?????

As more and more homes hit the market...expect prices to continue to crash....as prices crash....expect fewer to be able to pay off their mortgages when the sell.

As more default, expect fewer to pay property taxes driving revenues to government down further....it just gets messier.

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#3) On May 29, 2009 at 2:46 AM, alstry (35.40) wrote:

awa,

If we are going down, we might as well support our pilot...especially if our rapid decent was not his fault.

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#4) On May 29, 2009 at 4:09 AM, Seano67 (84.25) wrote:

Well I don't know that President Obama is hosed, nor do I know that he really particularly needs anyone to feel sorry for him. What I do know is that he's a really bright guy surrounded by really bright people, and these guys knew what they were walking into. Obama knew he had a hatful of troubles and an epic challenge lying ahead of himself, and he was willing to accept that challenge and take on those troubles, or at least try to. So all we can do is wish him the best, and whether or not he ends up getting 'hosed'  in the end, I appreciate his willingness to take on that effort. I sure as hell wouldn't want to do it.

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#5) On May 29, 2009 at 8:13 AM, ralphmachio (24.75) wrote:

It appears the 3rd and 5th tentacles of the Governopuss handed the 6th tentacle of said creature a glob of Horse Crap entitling said creature to use said Horse Crap to further detach the People from the fruits of their hard earned labor. Nothing new, just improved!

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#6) On May 29, 2009 at 8:27 AM, alstry (35.40) wrote:

Well here we are....here is what Obama was handed....about a 50% loss of revenue to the government against a much smaller base of taxpayers and much HIGHER expenses!!!!!!!.....

EVERYBODY's TAX RATE MUST DOUBLE just to maintain record deficits........and actually MORE than DOUBLE.....

Let's see how "really smart" guys add 2+2......Prepare to be Zombulated!!!!!! 

Sorta like the elderly must spend down everything they have before being able to get government assistance.....welcome to your new "really smart" guy policies....we are all elderly now;)

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#7) On May 29, 2009 at 8:41 AM, ralphmachio (24.75) wrote:

Still trying to decide if O'bama is a tentacle, or just a sucker on one. Only time will tell.

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#8) On May 29, 2009 at 9:29 AM, russiangambit (29.21) wrote:

> For example, 6 million people lost jobs in the 12 months ended in April — and that means far fewer dollars from income taxes. Income tax revenue dropped 44% from a year ago.

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OK, I have a penchant for numbers and these numbers don't line up. If unemployment  is now about 9%, an inrease of about 5% in good time, should the income tax drop will be only 5%?

44% drop means that the rest of working population - which is 95% of the last yeat number , got something like 40% income drop over the last year?

That doesn't seem realistic. I would expect 10-20% drop in the income of peope still working, not 40%.

 I think unemployement number is being under-reported. All those illegal immigrants who worked in construction and  paid taxes? It looks like if they were included, they would've added another 10% to unemployment.

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#9) On May 29, 2009 at 2:53 PM, briyan (30.69) wrote:

russiangambit, you are correct in that the reported unemployment percentage is basically a fabricated figure that cannot be mathematically related to anything meaningful.

The definitions and reporting methods have been manipulated over the years and the survey process is strategically faulty.  The whole thing is basically designed to throw out a number that media outlets can spout to a fully-trusting general public that doesn't want to know any details beyond that number.

The "official unemployment percentage" is a great tool for political spin in any direction, but it is absolutely worthless for calculations.

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