I think most of our politicians and most Americans are living under some false delusion that the “yes we can” Candy Man is going to fix the economy. Before you eat too much of his sugar you might read about why that cannot happen.

This first article will have nice graphs and explanations why this is not an ordinary recession. It is my own view that it will lead into a conventional great depression unless we take the path of a  long term inflationary depression.

Think not? Read this article that gives 30 reason why there will be a great depression by early next decade. Having said that, If our government can do anything to prevent a depression they will. They are not likely to allow the nation to go into a deflationary spiral. They will just dump money fresh off the printing presses out of helicopters first.

Of course doing that pisses off people in other nations that hold trillions of our dollars that they actually had to trade for their own goods and services. With more dollars being printed you will have more dollars chasing the same amount of goods and services in the world which means that the prices of everything bought in dollars will be bid up, making the buying power of all the dollars that they hold buy less. So they will either get angry and dump the dollars at a loss or demand much higher interest rates to take the risk of holding them while they lose value. I believe this is economics 101 although it seems to me that those that are running our government probably took the pass/fail version of the course and only showed up for the multiple guess tests.

Anyway, higher prices on goods and services always means higher inflation and that means a higher cost of living for everyone. Also higher interest rates on servicing the national debt means government will have less money and they will have to borrow even more money or print more money causing an inflationary spiral. The article on this link will explain why government most likely will choose the path of inflation rather than let the country go into a classic depression.

I suppose you know that historically government has always shut down inflation by raising interest rates higher and higher until less people can afford to borrow. That does work, but it is very bad for business and for those who want to buy houses, cars and other items they usually finance. Since it would cost more to borrow, businesses would tend to not expand and some would go out of business and unemployment would rise. Only when there are less dollars to buy those goods and services will prices and interest rates actually start to come down. That is the way they have been managing our economy since world war II.

The crises now is that the interest rate controls that they used to keep our economy deflating or inflating over the past 60 years will not work this time because we are now at the start of a deep recession and interest rates are already as low as they can go. They cannot lower rates below zero or they would be giving money away. Government is now borrowing money and spending it like a drunken sailor and still the economy continues to tank. The only thing left for government to do to avoid a deflationary spiral is to give away money. That will put the government further in debt. The Candy Man has said he has no problem giving out trillions of dollars in the next two years to get the economy going again. Problem is, The Candy Man will come in office with the national debt at about $12 trillion. The sugar he will hand out from the national debt candy machine will put the nation $15 trillion in debt within two years. So, by 2011 the national debt will have increased 50 percent.

But as I already said, keeping the printing presses running will make the dollar worth less to those that hold them. Not only that, they will want higher returns to take the risk to hold them because the interest on our $15 trillion debt will be so large that they will fear, with good reason, that we will default on the payments. They certainly will demand more control over how we spend money in this nation and we will lose much sovereignty. The present economic crises is already lossing our soverignty as this link describes. It is amazing how one elitist controlled Texan can all by himself give away our nation to the European globalists.

But, getting back to the depression scenario, higher interest rates by the Federal reserve always brings national slow downs but since we will be coming out of the worst recession since the Great depression in two years and real unemployment will be running greater than 15 percent the government could not allow us to go back into recession. If they did it will turn into a 1930’s type great depression and civil breakdown. So they will keep printing more money creating an inflationary spiral better known as hyperinflation or an inflationary depression.

We saw that take place in Germany prior to world war II. It brought about the rise of Hitler. We saw it in Argentina more recently, and it is now taking place in Zimbabwe. That is most likely our future, but there is a small chance that government will instead cut spending and raise taxes significantly to pay our debt and then we will just be in great depression II but that will probably be worse than great depression I. If that should happen besides the civil unrest we will have to default on our debts, pull all our troops home from everywhere, and become a isolated nation or at least a nation that lost its sovereignty.

In any case, because of massive national debt and entitlement debt there is no way out of this one and whether we go into a great depression or hyperinflation the results for most Americans will be very similar. Living standards in the U.S. will be reduced to that of Mexico. Perhaps even worse, if we get in foreign conflicts or have great civil unrest and martial law. If that happens you will see a national draft, and rationing of everything.

This is not a pretty picture of the near future for the USA, but to be informed and to prepare for it is better than living in delusion. The “yes we can” Candy Man slogans will not be able to deliver us from what we cannot fix without great individual and personal sacrifice. it would be better to save the possive thinking “yes we can” slogans for those that will take part in the next revolution.

Its getting close to Halloween and I know you all want to read a good scare story. Well learn what the banks and investment firms have been doing with your money and you will know why Washington and the banks are in a cold sweat panic and saying if the government does not bring stability the whole house of cards is going to come crashing down into the second great depression.

For a house of cards to fall it has to be a house of cards to begin with and this article about derivatives will take you on a tour of the house. After you read this article you will not only know everything you need to know about derivatives. You will also know why everyone in the know is turning white with fear long before Halloween.

There simply is no reason why a sub-prime crises would cause all these investment bank failures unless they have been doing something with your money that is very risky. Turns out they have. Instead of making sound investments with your money they have been gambling at the Derivatives Casinos. All these firms are now so leveraged on their next bet that any loss at the wheel of fortune makes them unable to pay their bills and if they cannot pay their bills other banks that are levered to the teeth because of their own gambling habits also cannot pay their bills and if they cannot pay their bills none of the others can pay their bills either and if none of the others can pay their bills there is no money to borrow for anyone in the nation.

Read about it for yourself but anyone who thinks the crises is over is not paying attention. Also take note that the following article was written before the announcement of the really frighting government bailout that was announced today to bail out all the derivative gamblers bad debts. Yeah, the government has to do this taxpayer bailout because all the gamblers were not gambling with their own money they were gambling with your retirement, insurance and investment incomes and everything else.

Next years Halloween fright night will be about the coming rapid hyperinflation that will bring you green toilet paper.

OpEdNews » It’s the Derivatives, Stupid! Why Fannie, Freddie and AIG Had to Be Bailed Out

Until recently, most people had never even heard of derivatives; but in terms of money traded, these investments represent the biggest financial market in the world. Derivatives are financial instruments that have no intrinsic value but derive their value from something else. Basically, they are just bets. You can “hedge your bet” that something you own will go up by placing a side bet that it will go down. “Hedge funds” hedge bets in the derivatives market. Bets can be placed on anything, from the price of tea in China to the movements of specific markets.

“The point everyone misses,” wrote economist Robert Chapman a decade ago, “is that buying derivatives is not investing. It is gambling, insurance and high stakes bookmaking. Derivatives create nothing.”1 They not only create nothing, but they serve to enrich non-producers at the expense of the people who do create real goods and services. In congressional hearings in the early 1990s, derivatives trading was challenged as being an illegal form of gambling. But the practice was legitimized by Fed Chairman Alan Greenspan, who not only lent legal and regulatory support to the trade but actively promoted derivatives as a way to improve “risk management.” Partly, this was to boost the flagging profits of the banks; and at the larger banks and dealers, it worked. But the cost was an increase in risk to the financial system as a whole.2

Since then, derivative trades have grown exponentially, until now they are larger than the entire global economy. The Bank for International Settlements recently reported that total derivatives trades exceeded one quadrillion dollars – that’s 1,000 trillion dollars.3 How is that figure even possible? The gross domestic product of all the countries in the world is only about 60 trillion dollars. The answer is that gamblers can bet as much as they want. They can bet money they don’t have, and that is where the huge increase in risk comes in.

Credit default swaps (CDS) are the most widely traded form of credit derivative. CDS are bets between two parties on whether or not a company will default on its bonds. In a typical default swap, the “protection buyer” gets a large payoff from the “protection seller” if the company defaults within a certain period of time, while the “protection seller” collects periodic payments from the “protection buyer” for assuming the risk of default. CDS thus resemble insurance policies, but there is no requirement to actually hold any asset or suffer any loss, so CDS are widely used just to increase profits by gambling on market changes. In one blogger’s example, a hedge fund could sit back and collect $320,000 a year in premiums just for selling “protection” on a risky BBB junk bond. The premiums are “free” money – free until the bond actually goes into default, when the hedge fund could be on the hook for $100 million in claims.

And there’s the catch: what if the hedge fund doesn’t have the $100 million? The fund’s corporate shell or limited partnership is put into bankruptcy; but both parties are claiming the derivative as an asset on their books, which they now have to write down. Players who have “hedged their bets” by betting both ways cannot collect on their winning bets; and that means they cannot afford to pay their losing bets, causing other players to also default on their bets.

The dominos go down in a cascade of cross-defaults that infects the whole banking industry and jeopardizes the global pyramid scheme. The potential for this sort of nuclear reaction was what prompted billionaire investor Warren Buffett to call derivatives “weapons of financial mass destruction.” It is also why the banking system cannot let a major derivatives player go down, and it is the banking system that calls the shots. The Federal Reserve is literally owned by a conglomerate of banks; and Hank Paulson, who heads the U.S. Treasury, entered that position through the revolving door of investment bank Goldman Sachs, where he was formerly CEO.

Full Article

This articles sure has a whole lot of economic information and it is easily understood with the aid of his graphs. It does not paint a pretty economic picture for the U.S. for the next few years. Being a realist I agree with what it implies. I think we have yet to feel the real economic pain. If you want to look at the reality of it all take a good look at the data in the article.

The economy probably will be even worse than anyone imagines because we can already see that government is going to screw up the economy even more through failed socialistic interventions. Government also helped make the bubble in the first place by government intervention of easy credit and overspending or it would have corrected itself long ago. The bubble will completely deflate and go at least 10 or 20 percent negative to what it was at the start of the bubble before any balance is restored, if that is even possible in this generation.

The only thing that might allow you to think the economy is not going in the tank fast is inflation but you will soon figure out that you are in an economic decline when your income is not keeping up with rapidly rising prices. Of course the economic downturn could turn into a world price war and a full fledged world depression and then we will not see stagflation but instead we will see a great depression like in the 1930’s with low prices but few jobs and little income to buy anything.

I guess it is possible that we could have some economic miracle but with socialists in control of congress I personally do not see how that is possible.

Guest Commentary

The Great Consumer Crash of 2009

* by James Quinn
* August 19, 2008

James Quinn is senior director of strategic planning, the Wharton School, University of Pennsylvania.

“It is easy to ignore the storm if you look at the opposite horizon. When the storm reaches your location there can be no more ignorance.”

I hate to tell you, but the storm has reached your location and it is a Category 5 hurricane. The levees are leaking. Ignore it at your own peril. The 6,000 sq ft McMansion buying, BMW leasing, $5 Starbucks latte drinking, granite countertop upgrading, home equity borrowing days are coming to an end. The American consumer will not go without a fight. For the last seven years the American consumer has carried the weight of the world on its shoulders. This has been a heavy burden, but when you take steroids it doesn’t seem so heavy. The steroid of choice for the American consumer has been debt. We have utilized home equity loans, cash out refinancing, credit card debt, and auto loans to live above our means. It has been a fun ride, but the ride is over. We can’t get steroids from our dealer (banks) anymore.

There has been and will be resistance to the inevitable deep recession that is coming. The American consumer is not cutting back willingly. They are being dragged kicking and screaming towards the joys of frugality. The “material generation” needs to dematerialize. My biggest concern is that our politician leaders and their cronies running our government will continue to try and reverse the normal capitalistic course of recession and expansion. Companies need to fail, housing needs to find its bottom based on supply, demand and price. Those who gambled must be allowed to lose and suffer the consequences. If the government attempts to shift the losses to those who lived lifestyles of thrift, an angry uprising will ensue. Government intervention in this natural process could lead to a decade long depression. Let’s hope that reasonable heads prevail.

Full article

Obama will lead us into stagflation worse than Jimmy Carter but we are going to have stagflation under any of the major party choices for President. The debt in this country makes it inevitable but it will be worse if the Keynesian’s get in and try to create a social state with new taxes and government printing presses.

Obama’s Excremental Economics – CWN

The key elements of Senator Obama’s proposed economic policies, as in
the New Deal and the stagflation of the 1970s, are much higher taxes,
along with a pervasive increase of business regulations and price
controls in healthcare and energy (which sharply depress business
activity and employment rates), full-frontal embrace of labor unions
(which will push up wages and benefits to levels deterring profitable
expansion of industrial production), and massive new government
deficit spending (which will accelerate the already dangerously high
rate of inflation and devaluation of the dollar). Carried out as he
proposes, Senator Obama’s polices will lead us into the swamp of
stagflation.

The government has increasingly manipulated the economic data to its own advantage for decades. When you realized that it now takes two wage earners to support a family when it took one in the 1960’s you will begin to get the picture that things are not as government reports. Nevertheless, you have seen nothing yet. Understating Inflation does not prevent it. Americans are about to experience a rapid decline in their standards of living. They might not call it a depression or hyperinflation but the impact will be the same. Americans standard of living will fall 50 percent in the next decade. Are you ready to live on half of what you do now? Most of us will. If the socialists get control of government the fall can be even more dramatic unless you are on the dole.

This is a good article that explains how we are being lied to by our own government.

Numbers Racket: Why the economy is worse than we know KEVIN PHILLIPS / Harper’s Magazine v.316, n.1896 1may2008

The real numbers, to most economically minded Americans, would be a face full of cold water. Based on the criteria in place a quarter century ago, today’s U.S. unemployment rate is somewhere between 9 percent and 12 percent; the inflation rate is as high as 7 or even 10 percent; economic growth since the recession of 2001 has been mediocre, despite a huge surge in the wealth and incomes of the superrich, and we are falling back into recession. If what we have been sold in recent years has been delusional “Pollyanna Creep,” what we really need today is a picture of our economy ex-distortion. For what it would reveal is a nation in deep difficulty not just domestically but globally.

Undermeasurement of inflation, in particular, hangs over our heads like a guillotine. To acknowledge it would send interest rates climbing, and thereby would endanger the viability of the massive buildup of public and private debt (from less than $11 trillion in 1987 to $49 trillion last year) that props up the American economy. Moreover, the rising cost of pensions, benefits, borrowing, and interest payments—all indexed or related to inflation—could join with the cost of financial bailouts to overwhelm the federal budget. As inflation and interest rates have been kept artificially suppressed, the United States has been indentured to its volatile financial sector, with its predilection for leverage and risky buccaneering.

Arguably, the unraveling has already begun. As Robert Hardaway, a professor at the University of Denver, pointed out last September, the subprime lending crisis “can be directly traced back to the [1983] BLS decision to exclude the price of housing from the CPI. . .With the illusion of low inflation inducing lenders to offer 6 percent loans, not only has speculation run rampant on the expectations of ever-rising home prices, but home buyers by the millions have been tricked into buying homes even though they only qualified for the teaser rates.” Were mainstream interest rates to jump into the 7 to 9 percent range—which could happen if inflation were to spur new concern—both Washington and Wall Street would be walking in quicksand. The make-believe economy of the past two decades, with its asset bubbles, massive borrowing, and rampant data distortion, would be in serious jeopardy. The U.S. dollar, off more than 40 percent against the euro since 2002, could slip down an even rockier slope.

The credit markets are fearful, and the financial markets are nervous. If gloom continues, our humbugged nation may truly regret losing sight of history, risk, and common sense

This is about the best article I have read that explains why costs keep going up but the consumer price index (CPI) hardly budges at all. The government CPI pricing scheme does not reflect the true cost of living but yet all cost of living adjustments are tied to it. Read the article and you will get the deceptive drift.

CPI Two-Step -

Why the CPI Matters

Why, you ask, does the BLS go through all this trouble? Simple: Because the CPI is the single most important index in the world. No matter who you are, this index has a direct impact on the wages you earn, the taxes you pay and the benefits you receive.

Here’s why: Each year, the government uses the CPI to make cost-of-living adjustments (COLA) to Social Security, military and federal pensions and food stamps. They also use it to fine-tune the cost of school lunches, to determine the yield on inflation-protected bonds (TIPS), and since 1985, to adjust the federal income tax structure to prevent inflationary tax bracket creep.

A few percent a year may not seem like much, but when you compound it year after year and apply it to programs covering hundreds of billions of dollars in spending, it really adds up. That goes double for the federal government: With all those programs tied to the CPI, CPI-related adjustments alone amount to one of the larger items in the federal budget

This article clearly explains much of what you need to know about the American economy. If you wonder why the economy has been reported as being so good over the years but you cannot make ends meet or find a good job this article just might clear up the matter for you. You have been lied to by your government for decades.

Now add to the facts in this article the $10 Billion and rising national debt, the over $50 trillion in unfunded liabilities coming due, rising taxes, rising food and energy prices caused by environmental radicals and carbon loons, and the cost of socialism and wars and you will understand that things are going to get much worse very soon. America’s standard of living will be less than half of what it is today within a decade.

Don’t feel too bad much of the rest of the world will do almost as bad except for the rich elite, energy exporters and developing nations with nukes.

Can you live on half of your income or worse adjusted for inflation in the future? You better start thinking about how you will do that, because you certainly will if you survive the upheavals.

Numbers Racket: Why the economy is worse than we know KEVIN PHILLIPS / Harper’s Magazine v.316, n.1896 1may2008

The real numbers, to most economically minded Americans, would be a face full of cold water. Based on the criteria in place a quarter century ago, today’s U.S. unemployment rate is somewhere between 9 percent and 12 percent; the inflation rate is as high as 7 or even 10 percent; economic growth since the recession of 2001 has been mediocre, despite a huge surge in the wealth and incomes of the superrich, and we are falling back into recession. If what we have been sold in recent years has been delusional “Pollyanna Creep,” what we really need today is a picture of our economy ex-distortion. For what it would reveal is a nation in deep difficulty not just domestically but globally.

Undermeasurement of inflation, in particular, hangs over our heads like a guillotine. To acknowledge it would send interest rates climbing, and thereby would endanger the viability of the massive buildup of public and private debt (from less than $11 trillion in 1987 to $49 trillion last year) that props up the American economy. Moreover, the rising cost of pensions, benefits, borrowing, and interest payments—all indexed or related to inflation—could join with the cost of financial bailouts to overwhelm the federal budget. As inflation and interest rates have been kept artificially suppressed, the United States has been indentured to its volatile financial sector, with its predilection for leverage and risky buccaneering.

Arguably, the unraveling has already begun. As Robert Hardaway, a professor at the University of Denver, pointed out last September, the subprime lending crisis “can be directly traced back to the [1983] BLS decision to exclude the price of housing from the CPI. . .With the illusion of low inflation inducing lenders to offer 6 percent loans, not only has speculation run rampant on the expectations of ever-rising home prices, but home buyers by the millions have been tricked into buying homes even though they only qualified for the teaser rates.” Were mainstream interest rates to jump into the 7 to 9 percent range—which could happen if inflation were to spur new concern—both Washington and Wall Street would be walking in quicksand. The make-believe economy of the past two decades, with its asset bubbles, massive borrowing, and rampant data distortion, would be in serious jeopardy. The U.S. dollar, off more than 40 percent against the euro since 2002, could slip down an even rockier slope.

The credit markets are fearful, and the financial markets are nervous. If gloom continues, our humbugged nation may truly regret losing sight of history, risk, and common sense.

Here is an inconvenient truth about those inconvenient politicians who are the cause of the rising food prices and food riots all over the world.

Al Gore’s inconvenient food riots

Al Gore took it. It’s an “Inconvenient Truth,” says Al, “that the gasoline that runs our cars is ruining the planet, causing global warming.”

Responding to this threat, about 30 percent of the U.S. corn crop last season was diverted to ethanol production, mandated and subsidized by the government. The goal was to use less gasoline, reduce CO2 emissions and lessen our dependence on foreign oil.

After all the cost and effort, gasoline use was reduced only about 1 percent. However, corn prices shot up, causing a ripple effect for all food products containing corn from flakes to tortillas. Then wheat prices went up, too, because less wheat had been planted to make room for the mandated and subsidized corn.

In spite of these consequences, the all-but-tied Democratic presidential contenders, Barack Obama and Hillary Clinton advocate more biofuel production. Both would expand the 2005 mandate to 36 billion gallons by 2022, rising to 60 billion gallons by 2030. With the Iowa (corn growing state) primary looming last January, Obama advocated expanding the federal mandate for corn-based ethanol, and Clinton switched her 2005 opposition to mandates to support.

The Republican nominee, John McCain, lost the Iowa primary, famously opposed to biofuel mandates and biofuel subsidies and tariffs. He would abolish the $.51 per gallon subsidy the federal government pays to fuel blenders for using ethanol and the $.54 per gallon tariff imposed on imported ethanol, such as Brazilian sugar cane based ethanol.

Meanwhile the higher price of gasoline costs the average American family an additional $1,500/year.

Al Gore, Hillary Clinton, Barack Obama – when will you realize the damage your ideas have done to every American consumer?

The net effect on consumers is pain at the pump and at the supermarket. And the pain doesn’t get any easier knowing that it’s largely self-inflicted.

Every so often I read the daily news and I just get feed up with the inept leaders that are running this world. They do not seem to have a collective grain of wisdom between them.

Today we read that wholesale prices are up 1.1 percent in one month! Oil is at $113 a barrel and rising and food prices have gone up so much that people in poor countries are in danger of starvation.

Now who were the idiots that suggested we make grains into alcohol to run cars? I recall that Bush signed a piece of nutty legislation that will make 20 percent of our liquid fuel alcohol. The EU and other countries are also converting grains to alcohol. Meanwhile, people in poor countries are going hungry and are in danger of starving. Great thinking guys! With leadership and thinking like that you must of slept through your education classes and especially through your leadership training. These nutty polices must be reversed now!

I know the hype coming from Al Gore, had something to do with these government polices and that is why I say Al Gore is the most dangerous man in the world. Those that follow his leading will in the end bring starvation to millions.

Since you world leaders are clueless let me tell you the solutions?

1. Stop converting grains to make alcohol to run in cars. It was never needed. It is inefficient and the world does not have food to burn! Will this increase demand on oil? Not much. Any oil shortfalls can be taken care of quite easily as I will outline below.

2. Stop paying over $100 a barrel for oil to these vultures. I would not pay more than $50. How do we do that? First we DISBAND OPEC by world or U.S. decree. It is an illegal monopoly. If anyone whats to argue about it, that is why our taxes pay for all our aircraft carrier task forces. They were built to protect us from foreign enemies. If anyone thinks paying these extortion rates for oil (from wells that we developed in the Middle East) are not a huge danger to our country they are not living in reality. By the way, “our friend” Saudi Arabia alone could pump enough additional oil to bring the world oil prices down significantly.

3. Cut through the environmental red tape and allow for oil drilling off our coasts and in Alaska. There is significant oil there. All oil companies during this national emergency should be required to reinvest most profits into new energy production until balanced energy levels are achieved.

4. Vastly expand coal production and scrap all the restrictions put on new coal plants because of the global waring nonsense. We could make liquid fuel out of coal slurry for our cars and also use coal generating plants for spare electric generation at night for charging electric cars.

5. Build some damn refineries. Not one has been built in 30 years in this country mostly due to asinine environmental regulations. Meanwhile stop the insane laws that required scores of different types of fuel and fuel additives that adds to the costs and creates spot fuel shortages. Let the refineries we have produce 5 or 6 different major fuels and not be required to make 50.

6. Stop this crazy oil speculation in the markets. They are adding a third to the price of oil and they add nothing to our economy other than gambling. It can be stopped.

7. Government Incentives for mass production of reasonable priced electric cars for city commuting.

8. A major national project to develop solar energy production. They are doing it in Israel, we can certainly do it here. Solar energy at less then 10C a KW hour is easily achievable in the Southwestern deserts with today’s technology. The above ground land area in the Nevada Nuclear Test Site alone could produce much of the electricity needs for this country at reasonable rates.

Contact your representatives in Washington and demand action.

There is no painless solution to this crises since there are over 50 trillion dollars of unfunded liabilities coming due. The only significant thing that can be done about this is to reduce future benefits. If they just raised taxes to pay the costs it would further depress the economy and it would make the shortfall worse. Unless something is done really soon paying out these unfunded liabilities are going to rapidly add to our national debt. That means more erosion of our standard of living through stagflation.

Here is what I expect from the next government if the economy recovers:
- The full retirement age will be raised to 70
- Social Security and Medicare taxes will be increased
- Continued understating of inflation and CPI adjustments for benefit increases.
- Denial of some medical treatments.
- Means testing to receive full benefits
- Passing some costs on to the future.
If the economy collapses the government will default and just pay for the tents and soup lines.

Government Benefit Programs in Trouble

The first year that payments will exceed income for Social Security will occur in 2017, just nine years from now, reflecting growing demands from the retirement of 78 million baby boomers. Medicare is projected to pay out more than it receives in income starting this year.”The financial difficulties facing Social Security and Medicare pose enormous challenges,” the trustees said in their report. “The sooner these challenges are addressed, the more varied and less disruptive their solutions can be.”

Treasury Secretary Henry Paulson, one of the trustees, warned that the country was facing a fiscal train wreck unless something is done.

“Without change, rising costs will drive government spending to unprecedented levels, consume nearly all projected federal revenues and threaten America’s future prosperity,” Paulson said in releasing the new report. “Our nation needs a bipartisan effort to strengthen both programs for future retirees.”