Are We Relying on the Government? – ULM Report – Chapter 7

Am I relying on the government for my financial security?

To answer this question we are focusing on two main areas – (1) the number of Americans employed by the federal government and (2) the number of Americans enrolled in social support programs.

We are focusing on the number of Americans employed by the federal government because these numbers tell us how many Americans are directly dependent on the government for financial security through their paycheck as an employee.

According to the Bureau of Labor Statistics (BLS), the federal government is “the Nation’s single largest employer.”  Ed O’Keefe of The Washington Post is the founder of the Federal Eye news source for current events surrounding the US government.  O’Keefe’s Eye developed its own method of measuring the number of federal employees for ultimate accuracy and fairness.

According to The Eye, currently at least 2.65m of 310m Americans employed by the federal government.  Therefore, 1 out of every 117 Americans is directly dependent on the government for financial security – through their paycheck as a federal employee.  What is interesting is that this is the lowest recording of government workers per American going all the way back to before the 1960s.

Although the percentage of government workers is low by comparison to previous years, the percentage of government workers that exceeds the percentage of workers in the sectors of fundamental production for the American economy – such as manufacturing and agriculture – has been growing out of control.

One person who has been tracking this growth of government and thus, growth of dependence on the government, is G. Edward Griffin.  Ed Griffin is the author of The Creature from Jekyll Island: A Second Look at the Federal Reserve.  Although the book was first published in 1994 it continues to be the foremost authority on the Federal Reserve and its role in the development of the US economy and the financial life of the American individual.

The Creature from Jekyll Island has been revised and updated numerous times and is current.  To illustrate the immense popularity of Ed Griffin’s Creature, consider this – the book is ranked in the top 5,000 books on Amazon, and is rated with 4.5 stars, as well at least 100 customer reviews for each edition.  As I scanned the reviews I found that most people described The Creature with the same words – “a must read.”

Furthermore, Ed was called upon to be interviewed by one of the most influential thought leaders in American politics and finance – Glenn Beck.

Click here to watch this video in the Unfunded Liabilities Monster YouTube Channel

Why is Griffin’s book being so well received and in many cases worshipped as a “must read”?

Because Griffin presents a hard-hitting and shocking analysis of the developments in the American economy and its relation to the quality of American life using an incredibly deep root system of exquisitely researched history, as well as cold facts, and an engaging commentary.

We mentioned earlier that Ed Griffin is one person who have been following the growth of and dependence on the US government.  Here are some words from Griffin that show why his book is so popular and powerful, and what has been occurring with the US government with a special emphasis on the hideous Unfunded Liabilities Monster:

“The size of government is growing larger, not smaller.  There are more people working for government than for all manufacturing companies in the private sector…

When it is possible for people to vote on issues involving the transfer of wealth to themselves from others, the ballot box becomes a weapon with which the majority plunders the minority.  That is the point of no return, the point where the doomsday mechanism begins to accelerate until the system self-destructs.  The plundered grow weary of carrying the load an eventually join the plunderers.  The productive base of the economy diminishes further and further until only the state remains.

The doomsday mechanism is also operating within government itself.  By 1992, more than half of all federal outlays went for what are called entitlements (The ULM).  Those are expenses – such as Medicare, Social Security, and government retirement programs – which are based on promises of future payments.  Many of them are contractual obligations, and millions of people depend on them…

The programs that do involve contractual obligations – such as Social Security and Medicare – could be turned over to private firms which would not only operate them more efficiently but also would pay out higher benefits.  Congress, however, does not dare to touch any of these entitlements for fear of losing votes…

Normally, with contracts for future obligations of this kind, the issuer is required by law to accumulate money into a fund to make sure that there will be enough available when future payments become due.

The federal government does not abide by those laws.  The funds exist on paper only.

The money that comes in for future obligations is immediately spent and replaced by a government IOU.

So, as those future payments come due, all of the money must come from revenue being collected at that time.

Herein lies the doomsday mechanism.  These obligations will be paid out of future taxes or inflation.  Entitlements…are growing at the rate of 12% each year.  When this is added to the 14% that is now being spent for interest payments on the national debt, we come to the startling conclusion that two-thirds of all federal expenses are now entirely automatic, and that percentage is growing each month…

These are the doomsday mechanisms already in operation.  If we do not understand how they function, we will not be prepared for our trip into the future.  The scenes that will unfold there will appear to bizarre, the events too shocking.”

The best part about Griffin’s analysis is that he is nearly spot on.  The worst part about Griffin’s analysis is that he is still wrong.  Yes, the federal government is growing out of control and spending even more out of control, although his words were written in the mid 2000s and the fact is that the problem has been growing even more serious and at an even faster rate.

Haven’t you noticed?

Are you prepared for more?

Another expert who has been following the growth of government and the decrease of American financial self-sufficiency is Peter Schiff.  Peter Schiff is a highly respected economist who advocates free market capitalism as a solution to the big government living nightmare in the United States.

Schiff is most well known for his accurate predictions – such as his foresight of the Great Recession as detailed in his book Crash Proof: How to Profit from the Coming Economic Collapse, which was published in early 2007.  His book is another best seller and fan favorite on Amazon.com.

Click here to watch this video in the Unfunded Liabilities Monster YouTube Channel

Due to his incredible powers of economic forecasting and outspokenness on important yet painful issues such as the detrimental growth of government, the universal American debt disease, and the Unfunded Liabilities Monster, Schiff is often featured on authoritative financial news shows such as CNBC as well as documentaries.

One popular documentary that features Peter Schiff is named Meltup, by the National Inflation Association (NIA).  NIA is a non-partisan organization dedicated to informing Americans about the financial meltdown, with particular emphasis on the coming tsunami of inflation.  If you would like to converse with other people interested in NIA, join my LinkedIn Group – National Inflation Association Users.

Towards the beginning of Meltup there is a section about the Unfunded Liabilities Monster and the growth of government that features Peter Schiff.  What we experience is video of Peter Schiff speaking during a presentation interspersed between the narrator dictating frightening statistics, and the result is a type of dialogue:

(Click here to watch this video in the Unfunded Liabilities YouTube Channel)

NIA Narrator: While US consumer spending has risen…the US savings rate has fallen..[and] 43% of Americans now have less than $10,000 saved for retirement.

What’s going to happen when the US government is inevitably forced to default on it Social Security obligations?

Retirement will become a thing of the past.

Americans getting ready to retire need to assume now that Social Security won’t be there.

Peter Schiff:  Bernie Madoff is in jail for a reason.  He’s in jail because Ponzi Schemes don’t work.  They don’t work when the private sector tries them and they don’t work when the government tries them.

We have a coming disaster in Social Security if we don’t do something and do something about it soon.

NIA N: Retirees will soon be forced to re-enter the workforce, which could send the unemployment rate up to Great Depression levels.

The only area of our economy that has been seeing increasing employment is the government…

Including benefits, the average federal worker now earns twice as much as the average private sector worker.  While incomes in the private sector are contracting, federal workers are receiving a…pay raise…

P Schiff: How can that be?  They’re supposed to be – civil servants.  They’re supposed to work for us.  What is this, the Twilight Zone?  You know, there was a time when the government workers actually earned less – they really were servants.

Who’s the servant now?

As we have seen highlighted by prominent experts in the study of American finance – Ed Griffin, Peter Schiff, and the minds of the National Inflation Association, the US government has been growing.  It is borrowing more.  It is spending more.  More people are joining it.  More people are becoming dependent on it.  More people are risking their financial life on it.  More people are heading into the shock of their life by following it.

More people are becoming food for the Unfunded Liabilities Monster.

We remember that the two faces of the Unfunded Liabilities Monster are technically referred to as social welfare and social insurance.  In addition to the social welfare of Medicaid, there is another social welfare program that reflects the degree of dependency the American people have on the government.  In fact, this other social welfare program reflects and even deeper degree of dependency, because of its importance in human life.

If you are depending on this social welfare program, your degree of dependence on the nearly bankrupt and indebted US government and your painful lack of self-sufficiency is at a pulsatingly dangerous level.

The next and final illustration we are going to look into as a measure of American dependence on the government and an answer to the question – Are we relying on the government? – is, food stamps.


Food stamps, technically known as the Supplemental Nutrition Assistance Program (SNAP), was created in 1939.  Food stamps are a form of government financial assistance for low-income earners to use for purchasing food.  Food stamps started out as actual paper squares worth various increments of money.  Now, in this age of electronics and light speed transfers of information, food stamps exist in the form of a card named an Electronic Benefits Card (EBT).

Food stamps are representative of great dependence because they are the money people use to buy food – ie. the stuff you and I eat to survive.  Yet, this basic need for survival is not being provided by oneself, it is being provided by an external force – a fiscally irresponsible US government.

The risk involved in relying on the government to provide your sustenance for physical survival is immeasurable.  The most unsettling part about the food stamp program is that the number of people on it would absolutely shock you.  These people, these people are basically dependent on the government in a way similar to a child being dependent on the parent, for food.

Can you imagine – (1) being entirely dependent on an external source for your food and (2) having that source spending your food money wildly and gambling with your survival?

Again, the number of people on food stamps is shocking.  Recently I was speaking with a elderly man about the Unfunded Liabilities Monster.  He confided in me and to my surprise, he was on food stamps!  While we were speaking he said to me, “What happens when the government can’t pay Social Security anymore?  What happens if they can’t pay food stamps?  If they do that, I’m done.  I live off that stuff.”

These are dangerous times, and I feel for this man.  He is one of the tens of millions of Americans who, for numerous reasons, did not have proper financial cushions prepared for his later years and are now planning to live off of the financial support from an insolvent gambler.

Once again, the number of people on food stamps is shocking.  Consider these figures:

1. At least 44 million Americans are receiving food stamps, according to the US Department of Agriculture.  This is the highest number since the program’s creation and the 37th monthly increase in a row.
2. In Mississippi and Washington, D.C, more than 1 out of 5 people are on food stamps, according to the Democracy Now! radio news service.
3. As of 2009, 1 out of 8 Americans and 1 out of 4 children were on food stamps and the program is growing at least at 20,000 more Americans every single day, according to Reuters news service.

4. As of 2011, more than 1 out of 7 Americans are on food stamps and the percentage of Americans on food stamps nearly doubled from early 2007 to early 201, according to SNAP itself.

Considering what we have just learned about food stamps, it should be plain to see that a dangerous percentage of Americans are depending on the Food Stamp Program and the decrease in financial self-sufficiency – even physical self-sufficiency – is rapidly diving towards a critical point of destruction.

Considering what we have learned about the growth of government spending and its gross financial irresponsibility, it is clear that the US government cannot currently be financially depended on for anything other than waste, excess, and devastatingly false promises.

Considering what we have learned about the growth of government size and influence, it is clear the the US government is absorbing an increasing chunk of American finance, American power, and American choice – and you are funding this.  Also, we are seeing that while the US government is growing its size and influence the American is diminishing their size and influence, resulting in a transfer of power and rise in dependence upon the government parent.

Considering what we have learned about the Unfunded Liabilities Monster, social insurance, social welfare, food stamps, government and personal fiscal irresponsibility, and the growth of government, it appears that amongst all of this excess, one component that is lacking is the original American spirit of individualism.  The American individual has been bred directly or indirectly to be independent, self-sufficient, and draw power from personal potential and small government, not collective support and big government.

This incredible growth of social welfare, social insurance, government influence has been breeding a beast even more deadly and frightening than the Unfunded Liabilities Monster – one that is simply contrary to the very spirit and essence of this country and that is the opposite individualism – named, collectivism.

Which brings us to our most important question in our journey – I know I cannot rely on the government for my financial security, I know I am relying on the government for my financial security – now I need to know, why am I relying on the government?

The remainder of this journey will change your life.

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