The 35.4 Percent: 109,631,000 on Welfare

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By Terence P. Jeffrey

109,631,000 Americans lived in households that received benefits from one or more federally funded “means-tested programs” — also known as welfare — as of the fourth quarter of 2012, according to data released Tuesday by the Census Bureau.

The Census Bureau has not yet reported how many were on welfare in 2013 or the first two quarters of 2014.

But the 109,631,000 living in households taking federal welfare benefits as of the end of 2012, according to the Census Bureau, equaled 35.4 percent of all 309,467,000 people living in the United States at that time.

When those receiving benefits from non-means-tested federal programs — such as Social Security, Medicare, unemployment and veterans benefits — were added to those taking welfare benefits, it turned out that 153,323,000 people were getting federal benefits of some type at the end of 2012.

Subtract the 3,297,000 who were receiving veterans’ benefits from the total, and that leaves 150,026,000 people receiving non-veterans’ benefits.

The 153,323,000 total benefit-takers at the end of 2012, said the Census Bureau, equaled 49.5 percent of the population. The 150,026,000 taking benefits other than veterans’ benefits equaled about 48.5 percent of the population.

When America re-elected President Barack Obama in 2012, we had not quite reached the point where more than half the country was taking benefits from the federal government.

It is a reasonable bet, however, that with the implementation of Obamacare — with its provisions expanding Medicaid and providing health-insurance subsidies to people earning up to 400 percent of poverty — that if we have not already surpassed that point (not counting those getting veterans benefits) we soon will.

What did taxpayers give to the 109,631,000 — the 35.4 percent of the nation — getting welfare benefits at the end of 2012?

82,679,000 of the welfare-takers lived in households where people were on Medicaid, said the Census Bureau. 51,471,000 were in households on food stamps. 22,526,000 were in the Women, Infants and Children program. 20,355,000 were in household on Supplemental Security Income. 13,267,000 lived in public housing or got housing subsidies. 5,442,000 got Temporary Assistance to Needy Families. 4,517,000 received other forms of federal cash assistance.

How do you put in perspective the 109,631,000 people taking welfare, or the 150,026,000 getting some type of federal benefit other than veterans’ benefits?

Well, the CIA World Factbook says there are 142,470,272 people in Russia. So, the 150,026,000 people getting non-veterans federal benefits in the United States at the end of 2012 outnumbered all the people in Russia.

63,742,977 people live in the United Kingdom and 44,291,413 live in the Ukraine, says the CIA. So, the combined 108,034,390 people in these two nations was about 1,596,610 less than 109,631,000 collecting welfare in the United States.

It may be more telling, however, to compare the 109,631,000 Americans taking federal welfare benefits at the end of 2012 to Americans categorized by other characteristics.

In 2012, according to the Census Bureau, there were 103,087,000 full-time year-round workers in the United States (including 16,606,000 full-time year-round government workers). Thus, the welfare-takers outnumbered full-time year-round workers by 6,544,000.

California, the nation’s most-populated state, contained an estimated 38,332,521 people in 2013, says the Census Bureau. Texas had 26,448,193 people, New York had 19,651,127, and Florida had 19,552,860. But the combined 103,984,701 people in these four massive states still fell about 5,646,299 short of the 109,631,000 people on welfare.

In the fourth quarter of 2008, when President Obama was elected, there were 96,197,000 people living in households taking benefits from one or more federal welfare programs. After four years, by the fourth quarter of 2012, that had grown by 13,434,000.

Those 13,434,000 additional people on welfare outnumbered the 12,882,135 people the Census Bureau estimated lived in Obama’s home state of Illinois in 2013.

OBAMA OFFICIAL DELETED OBAMACARE EMAILS SOUGHT BY CONGRESS

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Administrator of Centers for Medicare and Medicaid Services deleted some of her emails

Patrick Howley
Political Reporter

The administrator of the Centers for Medicare and Medicaid Services (CMS) deleted some of her emails and may not be able to cooperate with a congressional investigation into the flawed Obamacare rollout, CMS has warned Congress.

Marilyn Tavenner, who was appointed by President Obama to take over CMS within the Department of Health and human Services in 2013 — prior to the Obamacare rollout — deleted some of her emails and did not save hard copies as the Federal Records Act requires her to do, MSNBC reported Thursday.

Though Tavenner’s computer did not crash like ex-IRS official Lois Lerner’s computer allegedly did, Tavenner may be unable to cooperate with House Oversight and Government Reform Committee subpoenas.

“During her entire tenure at CMS, Ms. Tavenner’s CMS email address, which is accessible to both colleagues and the public, has been subject to write-in campaigns involving thousands of emails from the public,” according to a letter CMS sent Wednesday to the National Archives and Records Administration. “Therefore, she receives an extremely high volume of emails that she manages daily. To keep an orderly email box and to stay within the agency’s email system capacity limits, the Administrator generally copied or forwarded emails to immediate staff for retention and retrieval, and did not maintain her own copies.”

CMS noted that this practice of not keeping emails “continued until November 2013,” just one month after the Obamacare website launched.

“It is possible that some emails may not be available to HHS,” the letter stated.

Read more: http://dailycaller.com/2014/08/07/obama-official-deleted-obamacare-emails-sought-by-congress/#ixzz3A8BGXosj

Obama Official Deleted Obamacare Emails Sought By Congress

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Patrick Howley

The administrator of the Centers for Medicare and Medicaid Services (CMS) deleted some of her emails and may not be able to cooperate with a congressional investigation into the flawed Obamacare rollout, CMS has warned Congress.

Marilyn Tavenner, who was appointed by President Obama to take over CMS within the Department of Health and human Services in 2013 — prior to the Obamacare rollout — deleted some of her emails and did not save hard copies as the Federal Records Act requires her to do, MSNBC reported Thursday.

Though Tavenner’s computer did not crash like ex-IRS official Lois Lerner’s computer allegedly did, Tavenner may be unable to cooperate with House Oversight and Government Reform Committee subpoenas.

“During her entire tenure at CMS, Ms. Tavenner’s CMS email address, which is accessible to both colleagues and the public, has been subject to write-in campaigns involving thousands of emails from the public,” according to a letter CMS sent Wednesday to the National Archives and Records Administration. “Therefore, she receives an extremely high volume of emails that she manages daily. To keep an orderly email box and to stay within the agency’s email system capacity limits, the Administrator generally copied or forwarded emails to immediate staff for retention and retrieval, and did not maintain her own copies.”

CMS noted that this practice of not keeping emails “continued until November 2013,” just one month after the Obamacare website launched.

“It is possible that some emails may not be available to HHS,” the letter stated.

Read more: http://dailycaller.com/2014/08/07/obama-official-deleted-obamacare-emails-sought-by-congress/#ixzz39jyOTeVF

Doctors Begin To Refuse Obamacare Patients

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Sarah Hurtubise

Obamacare plans have shrunk payments to physicians so much that some doctors say they won’t be able to afford to accept Obamacare coverage, NPR reports.

Many of the eight million sign-ups in Obamacare exchanges nationwide already face more limited choices for physicians and hospitals than those in the private insurance market. But with low physician reimbursement rates, the problem could get even worse.

For a typical quick patient visit, Dr. Doug Gerard, a Connecticut internist, told NPR a private insurer would pay $100 while Medicare would pay around $80. But Obamacare plans are more likely to pay closer to $80, which Gerard says is unsustainable for his practice.

“I cannot accept a plan [in which] potentially commercial-type reimbursement rates were now going to be reimbursed at Medicare rates,” Dr. Gerard told NPR. ”You have to maintain a certain mix in private practice between the low reimbursers and the high reimbursers to be able to keep the lights on.”

Narrow networks have become a hallmark of many Obamacare exchange plans, as one of few options left to insurance companies that allows them to save money by lowering reimbursement rates and covering fewer providers. In the health-care law’s first year, 70 percent of all Obamacare plan networks were either narrow or ultra-narrow, according to an analysis from consulting firm McKinsey.

But doctors are feeling even more financial pressure due to the changes and many believe there’s a risk that Obamacare insurance will go the way of Medicaid, where patients still struggle to find a doctor after low reimbursement rates led many physicians to stop accepting it.

“I don’t think most physicians know what they’re being reimbursed,” Gerard said. “Only when they start seeing some of those rates come through will they realize how low the rates are they agreed to.”

If Obamacare coverage continues on its current track, exchange customers could face a lower level of care than those who buy coverage in the private market.

“I think it could lead potentially to this kind of distinction that there are these different tiers of quality of care,” Connecticut Obamacare chief Kevin Counihan told NPR. ”That’s been something, at least in our state, that we’re trying to work against. And the carriers are, as well.”

The problem is especially bad for private practices like Gerard’s, where physicians’ income is directly tied to reimbursements. But hospitals — especially top-tier ones that treat the most difficult diseases — are also increasingly rejecting the low reimbursement rates. The nation’s best cancer treatment centers are often covered by very few exchange plans in their states; if Obamacare customers end up with a difficult-to-treat cancer, they’re likely to face a lower quality of care right off the bat.

“You get what you pay for,” said Connecticut State Medical Society president-elect Bob Russo. “If you can’t convince [doctors] that they’re not losing money doing their job, then it’s a problem. And they haven’t been able to convince people of that.”

Read more: http://dailycaller.com/2014/08/04/doctors-begin-to-refuse-obamacare-patients/#ixzz39TNjuopb

THE FINANCIAL SYSTEM IS PRIMED FOR A CRISIS WORSE THAN 2008

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Trillions in US household wealth has evaporated

by PHOENIX CAPITAL RESEARCH | INVESTMENTWATCH | AUGUST 4, 2014

Over the last 30 years, the US has built up record debts on a personal, state, and national level. Consumers thought they were financially stable so long as they could cover the interest payments on their credit cards, states created program after program few if any of which they could afford, and the Federal Government issued $30-50 trillion in debt and liabilities (counting Social Security and Medicare).

This all came to a screeching halt when the housing bubble (arguably the biggest debt bubble in history) imploded in 2007. Since that time, stocks have staged one of their worst years on record (2008), one in five us mortgages has fallen underwater (meaning the mortgage loan is worth more than the home itself), and some trillions in US household wealth has evaporated.

These issues seem to be distinct, but in reality they all stem from a debt problem. And as you know, there is only one legitimate way to deal with a debt problem:

Pay it off.

However, instead of doing this, the Feds (the Federal Reserve, Treasury Dept, etc.) have been producing EVEN MORE DEBT. Here’s a brief recap of their moves thus far:

The Federal Reserve cuts interest rates from 5.25-0.25% (Sept ’07-today)
The Bear Stearns deal/ Fed buys $30 billion in junk mortgages (March ’08)
The Fed opens various lending windows to investment banks (March ’08)
The SEC proposes banning short-selling on financial stocks (July ’08)
The Treasury buys Fannie/Freddie for $400 billion (Sept ’08)
The Fed takes over AIG for $85 billion (Sept ’08)
The Fed doles out $25 billion for the auto makers (Sept ’08)
The Feds’ $700 billion Troubled Assets Relief Program (TARP) (Oct ’08)
The Fed buys commercial paper (non-bank debt) from non-financials (Oct ’08)
The Fed offers $540 billion to backstop money market funds (Oct ’08)
The Feds backstops up to $280 billion of Citigroup’s liabilities (Oct ’08).
Another $40 billion to AIG (Nov ’08)
The Fed backstops up $140 billion of Bank of America’s liabilities (Jan ’09)
Obama’s $787 Billion Stimulus (Jan ’09)
The Fed’s $300 billion Quantitative Easing Program (Mar ’09)
The Fed buying $1.25 trillion in agency mortgage backed securities (Mar ’09-’10)
The Fed buying $200 billion in agency debt (Mar ’09-’10)
QE lite buys $200-300 billion of Treasuries and mortgage debt (Aug ’10)
QE 2 buys $600 billion in Treasuries (Nov ’10)
Operation Twist reshuffles $400 billion of the Fed’s portfolio (Oct ’11)
QE 3 buys $40 billion of Mortgage Backed Securities monthly (Sept ‘12)
QE 4 buys $45 billion worth of Treasuries monthly (Dec ’12
And that’s a BRIEF recap (I’m sure I left something out).

In a nutshell, The Feds have tried to combat a debt problem by ISSUING MORE DEBT. They’re pumping trillions of dollars into the financial system, trying to prop Wall Street and the stock market. They’ve managed to kick off a rally in stocks…

But they HAVE NOT ADDRESSED THE FUNDAMENTAL ISSUES PLAGUING THE FINANCIAL MARKET.

Stocks are headed for another Crash, possibly as bad as the one we saw in October-November 2008. As you know, that Crash wiped out $11 trillion in household wealth in a matter of weeks. There’s no telling the damage this Second Round will cause.

The Feds have thrown everything they’ve got (including the kitchen sink) at the financial crisis… and things are fundamentally no better than they were before: most major banks are insolvent, one in five US mortgages is underwater, and the stock market is being largely propped up by in-house trading from a few key players (Goldman Sachs, UBS, etc).

Regarding stock investing, it’s important to take a big picture of stocks as an asset class. The common consensus is that stocks return an average of 6% a year (at least going back to 1900).

However, a study by the London Business School recently revealed that when you remove dividends, stocks’ gains drop to a mere 1.7% a year (even lower than the return from long-term Treasury bonds over the same period).

Put another way, dividends account for 70% of the average US stock returns since 1900. When you remove dividends, stocks actually offer LESS reward and MORE risk than bonds. If you’d invested $1 in stocks in 1900, you’d have made $582 with reinvested dividends adjusted for inflation vs. a mere $6 from price appreciation.

So as much as the CNBC crowd would like to believe that the way to make money in stocks is buying low and selling high, the reality is that the vast majority of gains from stocks stem from dividends.

The remaining gains have come largely from inflation.

Bill King, Chief Market Strategist M. Ramsey King Securities recently published the following chart comparing REAL GDP (light blue), GDP when you account for inflation (dark blue), and the Dow Jones’ performance (black) over the last 30 years. What follows is a clear picture that since the mid-70s MOST of the perceived stock gains have come from inflation.
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Which brings us to today. According to official data, the S&P 500 is currently trading at a CAPE ratio of 25 and yields 2.3%. In plain terms, stocks are expensive (historic average for CAPE is 15) and paying little.

In other words, there is little incentive, other than future inflation expectations, for owning stocks right now.

By most historic metrics, the market is showing signs of a significant top. Here are just a few key metrics:

1) Investor sentiment is back to super bullish autumn 2007 levels.

2) Insider selling to buying ratios are back to autumn 2007 levels (insiders are selling the farm).

3) Money market fund assets are at 2007 levels (indicating that investors have gone “all in” with stocks).

4) Mutual fund cash levels are at a historic low.

5) Margin debt (money borrowed to buy stocks) is at a new record high.

This final point is key. Mutual funds are the “big boys” of the investment world. If they have become fully invested in the market, this means there are few buyers left to push stocks higher. This is evident in the fact that every time mutual fund cash levels dropped, stocks collapsed soon after.

In plain terms, the odds are high that a Top is forming in stocks. With that in mind,

if your portfolio is heavily invested in stocks, now is a time to be taking some profits. If you can, consider moving a sizable chunk into cash.

The market is extremely tired and the systemic risks underlying the Financial Crisis are in no way resolved. With investor complacency (as measured by the VIX) at record lows, the Fed withdrawing several of its more significant market props, and low participation coming from the larger institutions, this market is ripe for a serious correction.

Be prepared.

This concludes this article. If you’re looking for the means of protecting your portfolio from the coming collapse, you can pick up a FREE investment report titled Protect Your Portfolio athttp://phoenixcapitalmarketing.com/special-reports.html.

This report outlines a number of strategies you can implement to prepare yourself and your loved ones from the coming market carnage.

Best Regards

Phoenix Capital Research

THE ROT WITHIN, PART I: OUR PONZI ECONOMY

Dependent on inflating bubbles to evince “economic strength”

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by CHARLES HUGH-SMITH |ZERO HEDGE | JULY 22, 2014

Depending on blowing the next bubble to temporarily prop up the economy is the height of foolhardy shortsightedness.

All the conventional policy fixes proposed by Demopublican politicos, technocrats and the vast army of academic/think-tank apparatchiks are the equivalent of slapping a coat of paint on a fragile facade riddled with dryrot. All these fake-fixes share a few key characteristics:

1. They focus on effects and symptoms rather than address the underlying causes, i.e. the dryrot at the heart of our government, society and economy.

2. They maintain and protect the Status Quo Powers That Be–no vested interests, protected fiefdoms or Financial Elites ever lose power as a result of these policy tweaks.

3. They are politically expedient, meaning they assuage the demands of vested interests rather than tackle the rot undermining the nation.

4. They ignore the perverse incentives built into current systems and the incentives of complicity, i.e. to cheer another coat of paint on the dryrot rather than face the costs of real reform.

The financial underpinnings of the economy and society are rotting from within:finance, higher education, defense, healthcare, law, governance, you name it.

This week I want to highlight a few key causes of this pervasive and eventually fatal systemic rot.

Let’s start with Our Ponzi Economy. There are three primary examples of our Ponzi Economy: pay-as-you-go social programs (Social Security, Medicare, Medicaid, etc.); housing and the stock market. All are examples of financial Ponzi schemes.

All Ponzi schemes rely on an ever-expanding pool of greater fools who buy into the scheme and pay the interest/gains due the previous pool of greater fools. Ponzi schemes fail because the pool of greater fools is finite, but the scheme demands an ever-expanding pool of participants to function.

All Ponzi schemes eventually fail, though each is declared financially soundbecause this time it’s different. The number of greater fools required to keep the scheme going eventually exceeds the working population of the nation.

Here’s why Pay-As-You-Go Social Programs are all Ponzi schemes:

1 retiree consumes the taxes paid by 5 workers.

Those 5 workers when they retire consume the taxes paid by 25 workers.

Those 25 workers when they retire consume the taxes paid by 125 workers.

Those 125 workers when they retire consume the taxes paid by 625 workers.

Those 625 workers when they retire consume the taxes paid by 3,125 workers.

You see where this goes: very quickly, the number of workers required to keep the Ponzi scheme afloat exceeds the entire workforce.

The only way to keep the Ponzi scheme going is to keep raising payroll taxes on the remaining workers, which is precisely what welfare states (i.e. every developed economy on the planet) has done.

But raising taxes merely extends the Ponzi scheme one cycle. Eventually, taxes are so high that the remaining workers are impoverished. Right now, the U.S. has reached a ratio of 2 full-time workers for every retiree. As the number of retirees rises by thousands every day and the number of full-time jobs stagnates, the ratio will slide toward 1-to-1:

The Problem with Pay-As-You-Go Social Programs: They’re Ponzi Schemes (November 5, 2013)

Estimates are even worse in other developed nations. In Europe, the ratio of retirees over 65 to those between 20 and 64 will soon reach 50%–and that’s of the population, not of people with full-time jobs paying taxes to fund social welfare programs. (source: Foreign Affairs, July/August 2014, page 130)

As the percentage of the working-age populace with full-time jobs declines, the worker-retiree ratio will become increasingly unsustainable. The taxes paid by each worker are nowhere enough to fund the generous pension and healthcare benefits promised to every retiree.

In the U.S., the number of people of working age who are jobless is 92 million; the number of full-time jobs is 118 million. This chart of labor participation includes almost 30 million part-time employees who don’t earn enough to pay substantial taxes and millions of self-employed people making poverty-level net incomes.

Courtesy of STA Wealth Management, here is a chart that shows full-time workers are less than half the labor force:

Housing is also a classic Ponzi scheme: prices can only go up if there is an ever-expanding pool of greater fools willing and able to pay even more for a house than the previous pool of greater fools.

As I have explained many times, the only way the Status Quo has been able to expand the pool of greater fools is to lower interest rates to near-zero, drop down payments to 3% and loosen previously-prudent lending standards.

The Housing “Recovery” in Four Charts (May 27, 2014)

These tricks extend the Ponzi for a cycle by artifically expanding the pool of greater fools, but that pool is not infinite. (Foreign buyers are currently enlarging the pool, but their participation is dependent on the Ponzi schemes in their home economies not blowing up.)

The stock market has been made the official metric of the nation’s economic health; too bad it’s a Ponzi scheme. Financial bubbles are what economist Robert Shiller calls “naturally occurring Ponzis” because the psychology of ever-rising prices and profits fuels an inflow of greater fools that sustains the bubble until all available greater fools have sunk their cash and credit into the bubble.

Here is what a market that is increasingly dominated by Ponzi bubbles looks like: this is the S&P 500 (SPX):

(source: Gordon T. Long, Macro Analytics)

Depending on blowing the next bubble to temporarily prop up the economy is the height of foolhardy shortsightedness. Yet that’s our Status Quo, increasingly dependent on inflating bubbles to evince “economic strength” when the Ponzi paint will soon peel off the rotten wood of the real economy.