A report by Deloitte Touche last week said that about $500 billion of the $787 billion in stimulus will be spent through the "traditional (government) procurement network." Using past performance as a gauge, Deloitte predicted as much as $50 billion will end up being fraudulently spent -- or 10% of the total. The entire United States government outlays in 1952 totaled less than $50 billion. Now, $50 billion is an acceptable fraud write-off.

The country has lost jobs in every month since December 2007. The number of unemployed has doubled over this time to approaching 15 million people. While 7 million people have lost their jobs in the private sector, government has increased their hiring by 600,000, from 21 million to 21.6 million. We can all be thankful there are 600,000 more bureaucrats increasing the efficiency of our government. Another 2 million people will lose their jobs this year. The unemployment rate will approach 11% by the end of 2009.

As Barry Ritholtz notes: “The ‘exhaustion rate’ for jobless benefits reveals that people are not leaving the pool of continuing unemployment claims because they are getting new jobs; Rather, they are leaving because they have exhausted their benefits. They are now unemployed and broke.”


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Trying to borrow and spend our way out of debt was asinine from the start. If Americans are ready to accept the inevitable pain of deleveraging today, we can take back our country.

Money is Power

When looking at a graph of government revenues and outlays since 1962, a few things stand out.

                                   
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The government was able to keep revenues in line with outlays until about 1982. Even while fighting the Vietnam War, the budget deficit was kept relatively under control.

Since then, we've had cooperation between the Republican and Democratic parties for the majority of the last 27 years. The Democrats allowed the Republicans to reduce taxes and increase military spending, therefore decreasing revenues. The Republicans allowed the Democrats to increase spending on social welfare programs. The only time revenues exceeded expenditures was when gridlock reigned during the Clinton administration. New spending slowed down, and capital gains taxes from the dot-com era provided a one-time boost to revenues.

The CBO projects a $1.8 trillion budget deficit in 2009. This is equivalent to our entire national debt in 1985.