Government Math…FOR KIDS!
By Keith Johnson
Luke: She’s rich.
Han Solo: [interested] Rich?
Luke: Rich, powerful. Listen, if you were to rescue her, the reward would be…
Han Solo: What?
Luke: Well, more wealth than you can imagine!
Han Solo: I don’t know, I can imagine quite a bit.
from Star Wars-Episode IV-A New Hope
Hello, boys and girls!
Did you know that you and I can create millions, billions and even trillions of numbers just as easily as the Federal Reserve? All you have to do is use your imagination. Let’s try it!
I’ll use the number proposed by Obama for his 2011 Federal Budget. Its numerical value looks something like this:
Translated into words, that number is pronounced as three trillion eight hundred billion.
That’s a big number, huh? It only took me three seconds to produce that number. Let’s put a dollar sign in front of that:
Now, let’s take that number and put it in the deposit column of our checkbook ledger and add that in to what we have on account. For me, that figure would add up to be:
Let’s do the same for the Federal government. Let’s take that $3,800,000,000,000 that Obama wants for his 2011 Federal budget and put it into the deposit column of what the Federal government has on account.
Wait a minute! The Federal government has no money on account. As a matter of fact, they are this many dollars in the hole:
O.K., so if the Federal Reserve gives the Federal government $3,800,000,000,000, does that bring the number down to:
Well, it would be if the Federal Reserve actually gave that money to the Federal government. Unfortunately, that money is only a loan. So, if we add what the Federal government already owes to the Federal Reserve to what it wants to borrow in the future, that number would be:
Did you catch that minus (-) figure I inserted before the dollar sign, children? That ((MINUS!!!)) represents what you and your children and your children’s children and their children will be expected to pay back to the Federal Reserve the minute they’re born.
Now, if you’d like to spare your children all that grief and pay off your share of that debt right now, all you need to do is cough up $42,265.41. But that doesn’t quite get you off the hook because starting next year, you’ll have to come up with about $1500.00 per month to pay for your share of the 2011 Federal budget.
Let’s pretend that this milk cow represents YOU and that this CHAINSAW represents the Federal Reserve.
Now, let’s pull this cord and get this baby warmed up!
Hear that? That’s the sound of TYRANNY! Smell that gasoline? That’s the armpit of the policeman who’s got you in a chokehold for exercising your 1st amendment right to complain about it! See those teeth? That’s just a reminder that they can slice you into T-bone steaks any day you decide to stop producing milk.
Oh, now, stop crying! At least you get something in return for all that money, right? Well, if your name happens to be Israel then that may be true—they get about a million dollars per day. If your name isn’t Israel, then all you get are a bunch of wars to die in, ugly buildings you aren’t allowed to enter and a whole lot of alphabet soup agencies that take away things you aren’t willing to give up voluntarily. Here’s some examples: The NSA takes away your privacy, the ATF takes away your guns, the IRS takes away your money and the TSA takes away your dignity. Any questions?
Let’s break that Federal budget down and I’ll show you what I mean.
Wow, looks like I was right! The biggest chunk of that bill is for war and alphabet soup—I mean—national security. $721.3 billion goes to the Department of Defense, $2.7 billion is for FBI counter-terrorism, $54.2 billion is for International Affairs, $20.9 is for defense related projects with the Energy Department, Veteran’s affairs gets $66 billion, Homeland Security gets another $54.7 billion, $8.5 billion pays for NASA satellites, $58.4 billion for Veteran’s pensions (a good thing), $7.5 billion for miscellaneous expenses and $228.1 billion goes towards interest on the debt incurred in past wars. That brings us to a grand total of 1.223 trillion dollars or roughly 1/3 of the entire Federal budget.
Get a pad and paper ready, kids, cause I have a lot more figures to throw your way.
33,000,000,000 are the number of dollars the GOP doesn’t want to spend on an unemployment extension. The GOP wants the unemployment to rise so they can use that number to embarrass the Democrats seeking reelection this November.
58,900,000,000 are the number of dollars the GOP does want to spend on additional war funding in Afghanistan, but only as long as it doesn’t come attached to an additional bill adding new education funding that would avert teacher layoffs.
You see? It’s all about priorities. War comes first and you and I come last!
Ready for some more numbers?
600 are the number of dollars spent each second on the drug war.
690,000 are the number of homeless people sleeping in the streets on any given night.
2,800,000 are the number of homes that went into foreclosure in 2009.
2,380,000 are the number of people currently incarcerated in U.S. prisons.
245,000,000,000 are the number of dollars spent to bail out banks and other financial institutions.
145,000,000,000 are the number of dollars spent to bail out Fannie and Freddie.
80,000,000,000 are the number of dollars spent to bail out the automobile companies.
48,000,000,000 are the number of dollars spent to bail out AIG.
I think Senator Dirkson said it best, “A billion here, a billion there and pretty soon you’re talking real money.”
Of course, the government doesn’t want you to be aware of these numbers and will take every opportunity to make the actual numbers appear much smaller. This is what we call “Government Math.”
Let’s take the Consumer Price Index (CPI) for instance. The CPI is a list of things that the average American needs—like a gallon of gas, a sirloin steak, etc. It used to be simple to calculate the CPI. You simply took the price from the previous year’s list of goods and compared them with the current price. However, in the late 1980’s, Federal Reserve Chairman Alan Greenspan and friends tweaked the model, adding an assumption known as “Product Substitution”. In other words, they assumed that people would switch to cheaper goods if the price of any given commodity got too expensive.
They assumed that if the price of steak went up, people would buy hamburger, and the cost of living would go down instead of up. So instead of using the CPI to measure a standard of living, it was changed to measure what it takes for one to survive. That way the government could reduce everything from interest payments on the national debt to cost of living adjustments to social security payments.
But that’s not the only thing they changed on the CPI. Geometric weighting assumes that as prices of goods got too expensive, people would simply stop buying those goods and, as a result, were therefore given less importance in the index. This is what is known as a “Hedonic Adjustment,” which assumes that as the quality of goods improves, the overall price in those goods declines as well.
The government also likes to play with the unemployment numbers. Right now, the government tells us that the unemployment rate is at 9.3%. Actually, unemployment is more realistically somewhere in the neighborhood of 22%. That’s a big difference, huh?
The problem is how unemployment figures are now calculated. The government low-balls the number by excluding those who fall under the contemporary definition of ‘discouraged worker’ and those who can only find ‘part-time’ work.
Today’s definition of a discouraged worker is one who has not found work within the last year. Before 1994, a discouraged worker was defined as one who had not found work within the last month. That’s a big discrepancy isn’t it, children. If we add those people back into the equation, we come up with a more realistic unemployment rate of right around 22%.
There are other numbers that the government likes to play with as well—like the gross domestic product (GDP), the money supply, the actual value of the dollar, gold….
…am I losing you?
O.K., I’ll tell you what. Let’s take a break and view this short video that demonstrates how numbers can be manipulated to produce any desired result.
Did you like that, children? Now you know how the Federal Reserve does it. All you need is an imagination and a gullible public to believe anything you tell them. If you have those two things? The world could be yours!
OOOPS—sorry! I forgot. This world’s already taken.