It's Doom and Gloom all Over Again

Just in case you have been watching too much main stream news and were feeling chipper about our economic "recovery", here are some reasons to take a deep breath.

Europe is a disaster.

US manufacturing is cooling rapidly

China is cooling rapidly: China Manufacturing PMI is at a 7-month low, it's the sharpest decline in new export numbers since March 2009.

US Monetary policy is at best useless, but more likely net harmful, especially to those on fixed income.

First year presidential politics are frequently recessionary

Unemployment insurance has expired for millions:  200,000 lose Unemployment Benefits this week, nearly half from California.

Self-Employment desperation: 100% of U.S. Jobs added since 2010 have been self employment, contractor, or other jobs without unemployment benefits.

Last two jobs reports have been dismal: Another payroll disaster: Jobs + 69,000, employment rate +.1to 8.2%, April jobs revised lower to +77,00; long-term unemployment + 310,00.

The 4-week moving average of weekly unemployment claims is at the highest rate of the year, at 386,250.

New home sales cannot gain significant traction.

Tax Armageddon coming soon.

What is Taxmageddon? 

The Tax Foundation reports that because of higher federal income and corporate tax collections, Tax Freedom Day came four days later this year than last. And the bad news is that unless Washington takes action, it will take working Americans 11 more days to meet next year’s tax burden.

That’s all due to Taxmageddon — a slew of expiring tax cuts and new tax increases that will hit Americans on January 1, 2013, amounting to a $494 billion tax hike. American households can expect to face an average tax increase of $3,800 and that 70 percent of Taxmageddon’s impact will fall directly on low-income and middle-income families, leaving them with $346 billion less to spend.

Without significant tax code changes, in 2013, America is scheduled to get hit with what would be the largest tax increase in our history.

Not only will the $1,000 per year tax holiday for a $50,000 income household disappear, come 2013 all Americans will see the tax on their first $8,700 of income jump from a 10% rate to 15% rate.

That hike will cost the majority of filers an additional $435.

For those eligible for child care tax credits that deduction will drop from $1,000 to $500. The marriage penalty will roar back into effect. The AMT, alternative minimum tax, will finally kick in.

Roll those changes up and a family filing as married with two children making $50,000, will see their taxes increase by basically $2,700

Who is to blame for Taxmageddon?

Republicans are to blame. They accepted this lousy deal instead of a far better one that Obama would actually have signed.

But No! Republicans insisted on no tax hikes at all in 2012, putting everything off until after the election, believing Romney would win in a cake-walk.

However, if President Obama wins, certainly not at all an unlikely possibility, he is going to drive a much harder bargain this go around.

That's why the corporatocracy wealthy elite spend Billions on elections and advertising, manipulating people's perceptions. Those Billions certainly are not charity. It is a simple cost/benefit analysis, or looked at another way, an investment with an incredibly high return. In our plutocratic electoral system, investing in political bribes is often the highest returning investment a corporation can make.

But hey, that's the "free market" for ya

Regardless of tax consequences, the US is headed for recession, if not already in one. 2013 rates to be a disaster regardless who wins. In elections, "perception" always trumps "reality".

So "austerity" is headed our way. Less deficit spending. It's so important who controls the vocabulary. Remember when they tried to frame the first bailout as a "rescue"?

 Rescue sounds so much better than bailout. They lost that semantic battle. Most people would support "balanced budgets" but who is for "austerity"?

The one percent - that's who.

Spain is already unraveling, and is right now trying to prevent a run on the banks by enforcing capital controls. No one with a bank account in Spain can withdraw more than 2,500 Euros at a time, and cash transactions are being closely followed by the government.

The taxpayers and the national economies will always have to be sacrificed whenever a decision has to be made about how to resolve conflicting interests between banks on the one hand, and taxpayers and national economies on the other. The latter will always be sacrificed to make the former whole, no matter the fact that the former made bad decisions and should bear full responsibility for the risky loans they made.

No doubt, this is a Global race to the bottom, everyone is in and will get an equal chance to score the Great Big Ugly Prize.

While the world runs back and forth on the deck of the good ship Titanic, one thing is becoming crystal clear - the passengers will be fung over-board to save the ones who created the iceburg.

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