On Thursday November 26th, Dubai, a state of the United Arab Emirates, proposed delay of payment on $59 billion of debt it has accrued raising worldwide fears it could become the largest government to default on such payments in history. Like the United States and much of the world, Dubai spent at a frenzied pace during the real estate and economic boom years.

In the early 2000’s Dubai became something of a paradise playground for celebrities and the uber wealthy from around the world as the government spent big to bring in tourism and fashion itself a must stop destination. With money pouring in, Dubai established Dubai World, a holding company that further invested money into real estate ventures around the globe, including inside the United States. Dubai also became a place of excess, with millions spent to build artificial islands and wondrous attractions, it also became a hub for the world underground drug and sex trades.

With the global recession and collapse of real estate markets, Dubai’s announcement signaled it could face collapse without intervention. Dubai proposed a six month freeze of payments and world markets responded negatively. Seeking help from Abu Dhabi and others, Dubai World now faces restructuring and a future that will undoubtedly be less profitable than its past.

At $58 Billion, Dubai’s debt problems seem almost quaint in comparison to the United States; leaving me wondering about our own future and potential for collapse. At $12 Trillion and growing, our nation’s debt is astronomical and equates to $110,819 per worker. Considering the entire GDP of our nation stood at $14 Trillion plus in 2008. Repayment is almost implausible. The problem is only confounded by looking further into the numbers.

The United States carries an enormous hidden debt in what are called unfounded liabilities. These are Medicare, Medicaid, Social Security and other Congressional spending promises. This number is not factored into the astronomical national debt number because it is money we will owe, rather than money we already do.

Our unfunded liabilities are promises made by the government to provide money to people and programs. This is money we don’t have. The promises were made with the idea that in the future, the Congress would raise the funds necessary to provide. Just as you buy a home expecting to have a job over the life of a mortgage, Congress assumed it would raise money to keep up with demand. If these programs were in fact a house, our government would be facing the prospect of not only paying for the house with money it doesn’t have, but also furnishing, heating, cooling, and maintaining the structure with all the necessary spending to make it livable.

These programs, like a home, are used as shelter for the American people. Millions expect the government to take care of their medical bills through Medicaid. All American’s now make long-term life decisions expecting Social Security, Medicare and now a Prescription Drug benefit to be there. Just as children expect to live comfortably in their parents home, the American people expect government to provide in some small way. Every working American has made payments to these programs without the luxury of choosing. Every employer has made payments with good faith that the government will not simply destroy these entitlements and instead manage them soundly. They have instead been run into bankruptcy.

To put it as plainly as possible, Government does not have the money to pay for these entitlements. Worse, government cannot pay for its own annual budget and in addition to these future payments, has accrued an enormous amount of debt for things it wanted or needed immediately. If you look at the numbers, this is not the case of a family buying a TV when they cannot pay for the groceries, the house, the car and the electricity. It is far worse.

The level of debt both currently held and planned to be held, is so enormous, it is almost unfathomable in personal terms. According to the debt clock, each citizen’s share of the debt is $39,125 and growing every second. Each citizen’s share of the GDP is $41,934. To pay off the debt at this very moment, without interest, it would take 93% of all earnings in America paid to the government. This is only confounded by the fact that each WORKING citizen’s share is actually $110,844 while their share of the GDP is $93,395. The problem is, we don’t have enough people actually working to raise money in order to be taxed at OVER 100% to pay our debt off.

Worse still, the amount of private debt held by citizens works out to $54,177. Taxing all Americans at 93% leaves no money to live on, let alone pay down the debt that they personally owe. All of this should be enough to make you start thinking that what happened in Dubai might not be far off for us. The United States cannot pay for what it owes.

What makes our situation almost entirely different and far more horrific than Dubai is the amount of money owed in those unfunded liabilities. Private and public debt added together, each American is operating at about -$93,302. Our individual share of the unfunded liabilities puts us further in the hole owing an addition $345,162 per person. The amount of wealth needed to be generated to pay back our debt, fund all of the programs currently operating our government and then fund programs already promised by the government is astronomical. Just imagine what another major hurricane or a terrorist attack or a major war would do to our economy.

So far, every solution by the government has involved spending more money and printing more money. This has resulted in further losses of jobs and the devaluation of the dollar. Those two outcomes only further our nation’s difficulties. A weak dollar means the purchasing power for citizens and holders of American currency cannot put back into the system the same wealth that has been taken out. Meanwhile, the loss of jobs means there are less people producing, less people paying taxes in, more people taking government money out, and even less money going to buy goods and services that would result in new wealth creation or the creation of new jobs.

The sobering reality is that the government must tax more individuals in order to pay for its programs but it cannot tax people enough to actually pay for what it is spending or has promised to spend. Cost cutting will not result in easing our debt, let alone revive the dollar or fund the programs already promised by the government. This doesn’t mean cost cutting should not be the very first thing adapted, it should. The problem is that if we froze all new spending and began taking away from the entitlement programs and cut all non-essential programs, we would still be unable to raise enough revenue, even with astronomical new taxes, to fund what is left.

We have all heard that government spending is unsustainable. It isn’t just unsustainable, it is impossible. We simply have no means available in the foreseeable future to avoid financial collapse. Sooner or later the world will simply stop accepting the money we are printing. Nations like China know they will not continue lending us credit forever and at some point will simply turn the spending spigot off and start demanding we repay.

Over the last few decades China has done almost the opposite of our nation. They took the money we gave them and began purchasing massive quantities of resources that had value. Steel, copper, magnesium, palladium, zinc, you name it. They now sit upon massive reserves of resources that are actually worth something. The United States printed money and stopped producing the raw materials China was buying at any price.

If you want to really understand the trade deficit, think of it this way. We keep buying from China, nearly everything we consume (especially those things of little real value) while they buy very little from us. Instead of purchasing from the United States, China takes the money we pay them and purchases things of value from countries who hate us. They then loan us back the money we used to purchase things from them, so we can purchase more things of little value and oil which also comes from people who hate us . This is our trade deficit and it is the reason Americans are out of work and will be the reason we eventually have nothing to pay China with.

Finally, with all of this in mind, each American actually owes even more money because they are on the hook for state and local government spending, each of which are at or near a billion dollars and follow the same trends of mismanagement, waste and trade deficit as the federal government. Taxpayers must pay back their own debt, their local governments debt, their states debt and the federal governments debt all while making less money from the job they have or worse, being laid off and collecting unemployment money that keeps adding to the debt they are paying off.

Our country needs to generate more and tax more to pay down the debt. It also needs to promise less and provide less. Without generating massive new wealth, taxation would strain the American citizen even further, leading to more bankruptcy, more foreclosures, a lessoning of the standard of living, and a decrease in the incentive to work. Worse, new taxation on the few who have wealth and on business both large and small, will lead to the loss of more jobs and move us further away from generating new wealth.

The reality is that, like it or not, Americans have to start understanding that they must soon give up government programs and begin paying more of their income in taxes while their employers pay less. The working class must begin working more for less money in order to produce goods sellable to the rest of the world in order to generate money so they can employ more people in order to pay off the nation’s debt and avoid national catastrophe. They then need to sit down and come up with a good idea for a product to sell the world or our nation will be squeezed by the world into oblivion.

Any politician, Republican or Democrat, who tells you otherwise is lying. Taxation must go up, wages must go down, services must be eradicated and innovation must occur all in a very short amount of time or we face collapse. The last remaining ounces of security we had in the bowels of the Treasury were robbed by George W. Bush, Barack Obama and the Congress from late 2008 through early 2009. This money was given, unrestricted, to massive financial institutions who took the money and invested it in Chinese banks, golden parachutes and who knows what else.

Every action taken by politicians has actually made the situation worse and handed more money to China and resulted in more job loss. Dubai will ultimately be fine. It will find other Arab investors and restructure itself. The United States has no one to bail us out. We have only two other implausible alternatives. One China simply forgives massive quantities of our debt or we refuse to pay and enter into War. The first won’t happen and the second would cost untold lives and could also lead to our destruction.

There is only one way to lose weight, you have to eat less and work out. Likewise there is only one way to pay off debt, spend less and make more money. Politicians are selling snake oil and infomercial diet pills to an American people unwilling to deal with reality… We have no money and face financial ruin, welcome to reality.

Businessweek says Cash for Clunkers will result in less than a 3% increase in sales for the year.

My thoughts on a Bernanke second term as Chairman of the Federal Reserver can be summed up as, meh.

I have come to believe, like many on the fringes of both the far right and the far left, that the Federal Reserve is at best a useless and at worst an all powerful and controlling institution. The Reserve has overseen the largest expansions and the greatest depressions in our nation’s history and in his term Bernanke has personally taken every opportunity to grow the institution’s power and hold over our nation’s economy.

I fear Bernanke not so much as some controlling megalomaniac but as a clouded intellectual. He seems lost in theory and complexity. He is someone who is driven by an obsession with the Great Depression and the monetary policy surrounding it. This scares me because like a first year medical student who finds personal ailments linked to horrible diseases they read about in medical books, I fear Bernanke is seeing signs of economic collapse in every bit of data and every news headline. Signs that may not actually have ever been there.

No one can doubt that the housing collapse was ready to level our economy like a glacier pulverizing Earth. The way in which our leaders reacted, to declare doomsday was upon us and so the printing presses had to be left on all night while a central authority micromanaged corporations and government, well, we will see how that turns out in the long run. My expectation is that it won’t turn out well.

The real question we are left with is, if not Bernanke, who can we turn to? In all honesty, I don’t know that we can do better. I distrust economists by nature. I studied the basics, have seen formulas and have tried to understand how they come to conclusions. Those you see on television jumping up and down with exuberant madness are not the ones any individual let alone our nation should turn to. They are pitchmen and women who talk up the economy and then sell books.

Academics too seem incapable of the task at hand. The very nature of our system is political and driven by desires that are not realistic. Each election season candidates promise jobs, programs, entitlements and deficit spending cuts. Somehow each season we come out with the dueling messages of spend more; spend less. We always end up just spending more.

Academia is driven by notions of the ideal. They come up with conclusions that would occur in ideal situations, form strategies that work if you can simply change one or two of the most fundamental laws of Heaven and Earth. That kind of thinking leads to revolutions against that kind of action, not real solutions that accept there are limitations that cannot change and must be accounted for.

Russia, Cuba, China and every other nation that has attempted a centrally planned economy have failed. Add to that the problems that these nations never had, endless demands for programs, endless expectations of wealth creation by the population, no ability to forcefully remove opposition with bloody violence and secret police. Our endeavor toward central planning is wrought with problems and Bernanke seems a key advocate of continuing on this path.

So in short, reappointing Bernanke is a terrible decision but it is also the best decision for the moment. It is the best of our least options. Bernanke will continue to push for printing money, continue to push for more power and control, will continue the cycle of creating more minor booms and busts, booms and busts, booms and busts. In reality that is what the Federal Reserve system has given us. Minor cycles of growth followed by minor cycles of downturn. In short, the exact same thing that would happen without it existing at all.

Yet I cannot even begin to imagine who would be waiting in the wings of an Obama administration. Seeing his many Czars and their resumes I know we can do a great deal worse. So Bernanke it is and the continuation of our embrace of socialist and totalitarian central control. It could be better, but I don’t know who has the capability to make it so. It could be worse and maybe we should just keep reminding ourselves of that.

Billionaire and lefty wingnut George Soros had a brilliant, spread the wealth, idea for the less fortunate people of New York State. He gave $35 million of his own money so needy children in our state could buy school supplies, federal taxpayers gave $140 million in stimulus money routed through the state to do the same.

The intention was clear, the money was supposed to go to help children. The execution, like most government and socialist programs, was deplorable! $200 for every kid whose parents were on welfare, no strings attached on how the money could be spent.

Where did the money go? To the purchase of flat panel televisions, videogames, beauty parlors, and even in some cases disappeared in cold cash. In short widespread abuse. Luckily my county of Monroe has an executive, Maggie Brooks, willing to stand up to the abuse.

For those of us who are upset though not surprised about the behavior, the left has its simple argument that they have used in every case of abuse, mismanagement and flat our stupidity with the stimulus and other government programs. What do you care? It is stimulating the economy, generating sales tax, stop being mean!

Abuse is rampant in Medicaid, welfare and food stamps and it costs taxpayers billions every year. Abuse has destroyed local and state budgets and has collapsed the federal budget into debt. Programs like this back to school are exploited or worse left completely mismanaged by the government with no care for how the money is spent. Just as banks have run amok with TARP money, citizens have brought massive abuse to every government welfare program.

Worse welfare kills individual spirit and the ability for people to move themselves further on the social and economic ladder. It removes the value of work and the value of property. I don’t doubt that this latest folly was put together with the best of intentions, just like every other twisted socialist program. The road to hell is paved with such intentions and this is one more mile of bankrupt highway.

Hillary Clinton’s replacement in the Senate Kirsten Gillibrand has been one of the largest disappointments for New York in the last year. She came to Washington sold by our incompetent Governor David Paterson as a gun toting moderate. Almost immediately upon her entrance, she moved to the extreme left. Each day the Senator finds a new tiny corner of laughable opinion to play in. [For those who may claim otherwise, here is ME being hopeful about Gillibrand and even extending some praise for Paterson before he exploded into extreme nuttiness and mismanagement.]

The latest is the forwarding of the possibility that Congress might need to pass a second stimulus. Now wait for just a moment, are you confused too?

One week, the stimulus worked wonders and the economy is on the road to recovery. The next week the stimulus is not enough and a second massive injection might be needed. Then the next week unemployment is looking great. Then the next day unemployment might get worse. Then the next week deficits are amazingly important and we are promising the Chinese we will cut them. Then the next day we want to spend more money on silly car schemes, health care, cap and trade and a second stimulus.

Is anyone else confused? I think that is the objective.

Anyway Gillibrand says this:

“My view is if we don’t have the recovery that we’re looking for in the next year and a half, [another stimulus] is something I would certainly look at, and you probably want it to be on a significant magnitude if you need it,” she said.

So the point of the first stimulus was specifically to create jobs and inject the economy into recovery. So if it did not work, wouldn’t you figure the last thing to do would be to repeat the same mistake twice? Nope, not if you are a liberal. Every liberal answer involves spending more money. A lot more money! Money to create programs. If those programs fail, well the solution is to spend more money! The problem MUST be that the program did not have enough money. Not that it wasn’t needed. Not that it wasn’t run properly. Not that it needs to be fixed. Nope, just more money.

Gillibrand has cemented in her short Senate stay where she stands. To the far left and far away from the well being of American taxpayers.

Since Liberals and most of Congress seem to keep forgetting this fact, I will from time to time just put out this reminder.

WE HAVE NO MONEY! So every one of these programs that are supposedly paid for by shifting our debt around? THEY AREN’T PAID FOR!! If you spend more than you make and carry with you a debt many, many, many times over what you bring in each year, there is nothing you do that is “paid for.”

Our country is bankrupt!

That is all.

Update: Step 7) Do everything possible to make this terrible program permanent and print MORE money.

1) Government takes $1 Billion it DOES NOT HAVE and WILL NOT BE ABLE TO COLLECT with current tax rates and spending.

2) Government gives that $1 Billion to car owners in exchange for cars that are perfectly drivable and are largely owned outright.

3) That money given to individuals by government is used to pay to purchase a new car. The individual is now IN DEBT for the remaining cost of the car.

4) Government insists perfectly drivable cars are destroyed.

5) In first week government spends the $1 Billion that was supposed to last through end of October.

6) Government seeks to add $2 Billion more it DOES NOT HAVE and WILL NOT BE ABLE TO COLLECT with current tax rates and spending to keep the program going.

Bonus: Government makes the rules so confusing they total 135 pages

Bonus 2: The flashy Web site that cost big $ to produce crashes and burns under the weight of actually having to process requests for the program.

So our government is spending money it does not have to destroy cars that people own so that they can go into debt to finance the purchase of new cars. Somehow lawmakers and Democrats believe the fact that the mismanaged, confusing and debt creating program is a success because people are taking the imaginary printed money to accrue more personal debt during a recession.

WHAT?

In conclusion, I cannot wait until the government runs health care. I am sure the $1 Trillion estimated cost won’t be exceeded. I am sure the GE computer systems holding our digital medical records will work just fine. I am sure the rules won’t be so confusing that people are drowned in a sea of bureaucracy. I am entirely sure government will work. HAHAHAHAHAHAHAHAHA

Update: Obama admin saying program not suspended but being looked into. No one knows. Government as usual!

A “Hill Staffer” told FOX Business the program is out of money. Program only began on July 24th.