America’s Challenge Why we are here, What’s coming, What we can do

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Americas Challenge Why we are here, Whats coming, What we can do. Sam Houston Tea Party November 21, 2011. Disclaimer - PowerPoint PPT Presentation


  • Sam Houston Tea PartyNovember 21, 2011AMERICAS CHALLENGE

    WHY WE ARE HERE, WHATS COMING, WHAT WE CAN DO.DisclaimerThis Presentation is based on information available to the public from various sources at the time of writing as well as various private and internet sources. No assurances are made for the accuracy and correctness of the information in the Presentation and the consequences being a result of using the information herein. New and different information may be available at a later stage that can vary or modify the current views. The information, opinions, and analysis contained herein are based on sources believed to be reliable but no representation, expressed or implied, is made as to its accuracy, completeness or correctness. The opinions contained herein reflect my current judgment and are subject to change without notice.Lyle Henderson

  • PERSPECTIVEUsed to hearing from Politicians and Pundits.Politicians focus on getting elected.Pundits/Media focused on sound bites

    Engineers trained to look at the numbersLook at analogsUnderstand the underlying forcesBoil down to solutions

  • TALK OUTLINEAmericas Financial ProblemGlobal DemographicsEuropeProgressivismCivilizationSolutions


  • Problem started with:Lyndon JohnsonWar on PovertyGreat SocietyPoverty is 14%Poverty is 14.3%

  • 55% or 16,700Per family33% of avg income

  • GDP BY COUNTRYCurrent Growth Rate

    U.S.14.5 T $China5.9Japan5.5Germany3.3France2.6U.K.2.2Brazil2.1Italy2.1

  • Great Society

  • In 2000,Alan Greenspan Said by 2011 we wouldbe debt free.

  • U.S. DEBT PROBLEMUS Revenue:$ 2,170,000,000,000

    Federal Budget$ 3,820,000,000,000

    New Debt$ 1,650,000,000,000

    National Debt$14,271,000,000,000


    Spending: $ 88,000

    New Debt$ 38,000

    Cumulative Debt$ 328,000


  • U.S. GOVERNMENT REVENUE2012 PROJECTEDIndividual Income Taxes$1.14 TrillionCorporate Income Taxes$ 329 BillionSocial Insurance$ 925 BillionOther$ 233 Billion

    Total$ 2.6 Trillion



    +$160,000+$114,000+$67,0002008 numbers








    Share of AGI

    Share of FIT


    2008 Tax YearAnalysis of FIT Increase: TAX the RICHAdd. RevIncr FIT

    50% Increase.35 to .395

    % of TaxpayersSplit Pt - $No. of ReturnsAGI - Billion $FIT Paid - Billion $Share of AGIShare of FITAvg taxon Rich% of TaxpayersAGIFITAvg tax

    Top 1%380,3541,400,0001,68539220%38%23%0.34519650.4Top 1%1,203,571280,00023%


    6-10 %113,7996,998,00093011611%11%12%6-10 %132,89516,57612%



    Bottom 50%33,04869,980,0001,0742813%3%3%Bottom 50%15,3474003%


    Increasing all tax brackets by another 5%

    only adds about $ 200 Billion

    Source : Internal Revenue Service


    AGI - Billion $

    FIT Paid - Billion $

    Billion $

    2008 IRS Data


    Share of AGI

    Share of FIT



    Raising Marginal Tax on top 1% from 35% to 39.5%Raises only 50 of 1,600 Billion needed.Raise all tax brackets by 5% (e.g. 15% 20% or +33%)Raises only 200 BillionDouble Taxes on top 10% Raises 1.37 Trillion

    But: At what cost to the Economy?

  • THE WEALTH TAXSpain is re-introducing it.France has long had one.Italy is considering one.

    Tax on physical assets, Financial assets, Pension funds, etc.

  • THE GREEDY 1%A LESSON FOR THE OCCUPIERSWhen you see the poor around the world and the concentration of wealth in the hands of a few, dont you start having doubts about Capitalism and greed?Tell me a society that doesnt run on greed. Do you think Russia or China dont run on greed?The world runs on individuals pursuing their self interest.The great achievements of civilization did not come from GovernmentsThe only cases where the masses have escaped grinding poverty is where they have had capitalism and relatively free markets.The masses are worst off in societies without capitalism and free tradeBut it doesnt seem to reward virtue as much as ability to manipulate the system.What does reward virtue? Do you think a soviet commisar rewards virtue? Or a Hitler rewards virtue?Where do you think you will find these angels who will organize society for us?Milton Freedman being interviewed by Phill Donahue 31 years ago



  • Cut to Eliminate Borrowing

  • 20% Cut w/0 cuttingEntitlements

  • MedicadeMedicareSocial SecurityMilitary InterestOther


    Washington is dependent on the bond markets being willing to absorb an increase in federal debt:$ 100+ Billion every MONTH.Equivalent of the GDP of Canada or India every year.

    We know we are outspending AmericaWhat happens if we outspend the entire planet?


  • EXPERIENCE TEACHES US:Mid 60s Fed started buying Treasuries to finance Vietnam WarLed to Recession of late 70sJob lossesInflationHigh unemploymentInterest rates of 20%

  • A LOOK AT GLOBAL DEMOGRAPHICSReading Suggestions:America, Alone and America, After by Mark Steyn

  • FERTILITY RATES BY COUNTRYBIRTHS PER WOMANEurope & The WestItaly1.39Russia 1.42Germany1.41Spain 1.47France1.96U.K.1.91



    AfricaUganda6.69Angola5.97Nigeria4.73Source: CIA 2011 est.2.1 to Maintain Population, Below 1.7 is Death Spiral

  • FALLING FERTILITY RATESExperts attribute to:increasing costs of raising a childrising womens labor force participationdelayed childbearing

    U.S. fertility remains higher increased access to child careincreased male domestic involvement?


  • GLOBAL TRENDSBy 2050, most of the developed countries in both Europe and East Asia will become veritable old-age homes:A third + of their populations will be older than 65Only a fifth in the U.S. 30 percent of China over 60United Nations est.

  • DEPOPULATIONIn eastern Germany, rural communities are dying.Sewer systems dont have enough people flushing to keep the flow moving.Environmentalists got it backward. Not a question of sustainable growthBut of sustainable lack of growth.By 2050: Public pensions as % of GDP:US 6.5%, Germany - 16.9%, Spain 17.3%, Greece 24.8%

  • END OF THE POSTWAR WELFARE STATEPAUL S. HEWITT 2002 PAPEREconomic consequences of depopulation.Current society depends on continued economic expansion.Rapidly depopulating nations face aging recessions vicious cycle of falling demand, collapsing asset values, shrinking corporate profits, deteriorating household and financial institution balance sheets, weakening currencies, and soaring budget pressures. 2002 assessment concluded aging recessions would begin appearing sometime after 2010, and continue for the next three or four decades.

  • CHINAS FUTUREDue to one child policy, China will get old before it gets rich.

    Millions of surplus young men lead to: convulsions at home or war abroad.

    Has to maximize its power before demographic decay sets in. Incentive to push, hard and fast.

  • AFRICASub-Saharan Africa will double its population between 2010 and 2030

    It would be asking a lot for them to remain in the teeming, pathogenic, shanty megalopolises into which the third worlds population is consolidating.Pressure to move to Europe or America


  • 0.5 T$2.2 T$2.2 T$

  • THE GLOBAL PICTUREAbout half of the Global Economy is living beyond its meansAlso beyond its diminished number of childrens means

    Instead of addressing that factCountries with government debt of 160% of GPDAre being rescued by countries with 80% debt levels.Good luck with that.

  • EUROPEAN AUSTERITYPOLITICIANS AVOID IT, BUT:Depopulation means government-sponsored insurance and pension plans must change. Options are:Increase taxes on a proportionately smaller working population or decrease benefits. A threshold for higher taxation will be reached Only choice will be to cut benefits.


    1.3 Children per couple100 grandparents have 42 grandkids.Greeks retire at 58. Who pays for the last 1/3 of their lives?Get 14 monthly payments per year for 30 weeks work.Work day ends at 2:30 PMEver fewer customers and even fewer workersBut ever more retirees and more governmentHow do you increase GPD? By export? To where? Totally uncompetitive.Government introduced an austerity package to rein in spending.In response, Greek tax collectors went on strike.

  • GREECE: WILL THEY REFORM?TAKIS MICHAS, WALL STREET JOURNALIn the last 12 months not one civil servant has been fired.Trying to tax the private sector out of existence.In August more than 1000 Greeks in the private sector were losing their jobs every day.The government was assuring civil servants with lifetime tenure that their job privileges were not in danger.Greeces plans resemble Soviet five year plans: They look good on paper but have no bearing on reality.Anyone in government who tries to point this out is forced to resign.

  • ITALY7 of 10 adults aged 18 39 live with their folks.

    When the government does too much, nobody else does much of anything.

  • GERMANY30% of German women are childless. 40% among university graduates.During the 21st Century, Germanys population will fall by over 50% to 38 million or lower.German worker puts in 22% fewer hours per year than American

    Germany has shrinking economy, shrinking and aging population, and potentially catastrophic welfare liabilities.

  • GERMANYU.S. pays for their defense,They beat their swords into welfare checksErected huge cradle to grave entitlements.70% of Germans want no further cuts in welfarePrefer increasing taxation on the very rich.Only 45% believe that competition is good for economic growth and employment.Increasingly think of themselves as citizens of the planet rather than citizens of the WestDo Islamic or Chinese citizens think this way?

  • EUROPEANSWork fewer hours than AmericansDont go to church, marry, have kidsWhat do they do with all their time?When life becomes an extended picnic, with nothing of importance to do,Ideas of greatness become an irritant.Such is the nature of the European syndromeThe government makes the grown-up decisions (health care) and they spend their pocket money on our record collection and satellite TV.

  • BEHIND EUROPES PROBLEMSPeople Refuse Cuts in EntitlementsHigh Taxation on shrinking base causes private job creators to leaveEurope is Post-Christian, Post-Nationalist, Post-modern,But what gives it meaning?

    Complements of Brad Schafer - GBTV

  • THE LONG RUNFunctioning societies honor the long run.Why they have children, build houses, plant gardens, start businesses,Build churches, create great works of art, fight and die for king and country.Europe used to do these things.You dont need to make material sacrifices; the state takes care of itYou dont need to have childrenCertainly dont need to die for king and country.

  • THE LONG RUNBut a society that has nothing to die for has nothing to live for.So it has 30 year old students and 50 year old retireesAnd wonders why the small band of workers in between cant make the math add up.

  • TWO FORCES FACING OFF IN EUROPEModern social-democratic stateAmerican left thinks this should be our model.

    Resurgent IslamImmigrants refuse to assimilate

  • FERTILITY RATES BY COUNTRYBIRTHS PER WOMANEurope & The WestItaly1.39Russia 1.42Germany1.41Spain 1.47France1.96U.K.1.91


    Australia1.78Muslim CountriesSomalia6.35Afghanistan5.39Gaza Strip4.74Yemen4.63Iraq3.67Jordan3.39Pakistan3.17Egypt2.97Syria2.94Saudi Arabia2.31Indonesia2.25Iran1.88


    AfricaUganda6.69Angola5.97Nigeria4.73Source: CIA 2011 est.2.1 to Maintain Population, Below 1.7 is Death Spiral

  • FRANCEIn 2005 10% of Frances population was Muslim.

    30% of age 20 and under

    45% in major urban centers


  • HISTORY732 ADMuslim armies had advanced a thousand miles north of Gibralter to control Spain and southern France.At Poitiers, for once, the Christian army held and defeated the MuslimsClose run thing. What if the Muslims won?

    No Christian EuropeNorth America would have been Muslim.

    Now a peaceful muslim advance has penetrated far deeper.

  • HOW MUCH ALLAH CAN THE OLD CONTINENT BEAR?HEADLINE IN DER SPIEGELParadoxically, the Holocaust enabled the Islamization of EuropePost war guiltRevulsion against NationalismEmbrace of multiculturalism

    Europe made its principal source of new Europeans a population whose primary identity derived from a belief system that claimed total jurisdiction over every aspect of their lives.

  • HOW MUCH ALLAH CAN THE OLD CONTINENT BEAR?HEADLINE IN DER SPIEGELAmazed to discover:The new Europeans assumed that all European social, cultural, and political life should realign itself with the Muslim belief system.

  • ISLAM AND FREEDOM OF RELIGIONIslam is a religion, but it is also a legal code Sharia LawThere is no Christian LawEnglish Common Law (and Napoleonic Code) are different philosophically from Christianity.Not merely that there is a global jihad lurking in IslamBut the religion itself is a political project an imperial project: the global caliphate.So, we have a global terrorist movement insulated within a global political project insulated within a severely self segregating religion.Whose adherents are the fastest growing demographic in the developed world.

  • TERRORISM AND WELFAREIts not true that every immigrant on welfare is an Islamic terrorist,But, the vast majority of Islamic terrorists in Europe are on welfare.Living in radicalized ghetto cultures with nothing to do but sit around plotting jihad all day at taxpayers expense.


    Mnjem Choudary, British Muslim leader, hailed 9/11 as magnificent and its perpetrators heroes. Advocates Sharia for the UK and US.He and his wife are welfare recipients.Racks up frequent flyer mileage jetting off to liaise with like minded Muslims in other countries.


    Muslim Immigrants Do not assimilateDe facto incremental Islamic law is well establishedBritish and Ontario governments confirm thousands of polygamous men receive welfare payments for each of their wives.A British attempt to confine spousal benefits to no more than two wives was struck down as discriminatory by the European Court of Human Rights.57% of Pakistani Britons are married to their first cousins, 70% to relativesGenerating increased health problems and straining the health care budget.Half the Yorkshire kindergarten class are children of first cousins.

  • ARE WE FOLLOWING THE EUROPEAN PATH?BY 2050 there will be 100 million more Americans and 100 million fewer Europeans


    A European demands to know what the governments going to do about it.Now other governments

    An American does it himself


  • AUSTRIAN SCHOOL OF ECONOMICSCelebrated contribution of business to society,opposes taxes, price controls, and regulations Job of an economist is to tell govern...


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