HEY, SMOKERS: Did the President forget to tell you about the 50% surcharge on your health insurance?

Why, I'll be damned: Nancy Pelosi was right. We really did have to pass it, like a kidney stone, to find out what was in it.

Millions of smokers could be priced out of health insurance because of tobacco penalties in President Barack Obama's health care law, according to experts who are just now teasing out the potential impact of a little-noted provision in the massive legislation.

The Affordable Care Act — "Obamacare" to its detractors — allows health insurers to charge smokers buying individual policies up to 50 percent higher premiums starting next Jan. 1... For a 55-year-old smoker, the penalty could reach nearly $4,250 a year. A 60-year-old could wind up paying nearly $5,100 on top of premiums.

...the law [also] allows insurers to charge older adults up to three times as much as their youngest customers.

Second, the law allows insurers to levy the full 50 percent penalty on older smokers while charging less to younger ones.

And finally, government tax credits that will be available to help pay premiums cannot be used to offset the cost of penalties for smokers.

But don't worry: this has to be fair. Because all smokers are rich.

And we hate the rich.

SOUNDS SUSTAINABLE: Using GAAP accounting principles, annual federal deficit increased 30 percent in 2012

The term Generally Accepted Accounting Principles (or GAAP) refers to the standard framework for financial reporting that most U.S. corporations employ. The act of intentionally producing false GAAP statements is a crime.

John Williams, writing at ShadowStats.com (subscription required), used the Treasury Department's latest financial statements and calculates the true 2012 federal deficit, which includes the net present value of unfunded liabilities like Social Security and Medicare) at:

$6.9 trillion

In 2011, using GAAP accounting, the federal deficit was:

$5.0 trillion

Which means the annual deficit grew at a rate of nearly:

30 percent in one year

Anyone who thinks this level of fiscal irresponsibility can last much longer, raise your hand.

As for you Democrats: history will not treat kindly your support of the people who are quite literally stealing our children's futures.

And why the feckless, cowardly, and pathetic Republican "leaders" aren't shouting these numbers from the rooftops at every opportunity remains a mystery for the ages.

PROJECT WAYBACK: Democrats Unveil Master Plan for Gun Control

Foolproof.

Step 1: Construct time machine.

Note: Constructing such a time machine will only add $10 to $12 trillion to the national deficit.

Step 2: Hire deadly assassin who can blend in perfectly in the 19th century.

Step 3: Using the time machine, send deadly assassin back to 1880.

Step 4: Have deadly assassin kill Richard Gatling and Hiram Maxim, thereby "un-inventing" automatic and semi-automatic firearms

*Voila!* Gun problem solved!

Don't laugh. Knowing Harry Reid and Nancy Pelosi, the brain trust of the Democrat Party, this plan is bound to get wide support from the Left.

QOTD: Unconstitutional Official Acts

Unconstitutional Official Acts:

16 Am Jur 2d, Sec 177 late 2d, Sec 256

The general misconception is that any statute passed by legislators bearing the appearance of law constitutes the law of the land. The U.S. Constitution is the supreme law of the land, and any statute, to be valid, must be In agreement. It is impossible for both the Constitution and a law violating it to be valid; one must prevail. This is succinctly stated as follows:

The General rule is that an unconstitutional statute, though having the form and name of law is in reality no law, but is wholly void, and ineffective for any purpose; since unconstitutionality dates from the time of it's enactment and not merely from the date of the decision so branding it. An unconstitutional law, in legal contemplation, is as inoperative as if it had never been passed. Such a statute leaves the question that it purports to settle just as it would be had the statute not been enacted.

Since an unconstitutional law is void, the general principles follow that it imposes no duties, confers no rights, creates no office, bestows no power or authority on anyone, affords no protection, and justifies no acts performed under it.....

A void act cannot be legally consistent with a valid one. An unconstitutional law cannot operate to supersede any existing valid law. Indeed, insofar as a statute runs counter to the fundamental law of the lend, it is superseded thereby.

No one Is bound to obey an unconstitutional law and no courts are bound to enforce it.


Jon Roland:

Strictly speaking, an unconstitutional statute is not a "law", and should not be called a "law", even if it is sustained by a court, for a finding that a statute or other official act is constitutional does not make it so, or confer any authority to anyone to enforce it.

All citizens and legal residents of the United States, by their presence on the territory of the United States, are subject to the militia duty, the duty of the social compact that creates the society, which requires that each, alone and in concert with others, not only obey the Constitution and constitutional official acts, but help enforce them, if necessary, at the risk of one's life.

Any unconstitutional act of an official will at least be a violation of the oath of that official to execute the duties of his office, and therefore grounds for his removal from office. No official immunity or privileges of rank or position survive the commission of unlawful acts. If it violates the rights of individuals, it is also likely to be a crime, and the militia duty obligates anyone aware of such a violation to investigate it, gather evidence for a prosecution, make an arrest, and if necessary, seek an indictment from a grand jury, and if one is obtained, prosecute the offender in a court of law.

LEGACY: The Zimbabwe-ization of America

Writing in today's Wall Street Journal, George Melloan offers us some of the ominous outcomes of Ben Bernanke's magical printing press, which continues to churn out dollars as fast as the government needs them.

...The Fed's worst fear is that despite its long-term commitment to buying up government debt, it will lose control of interest rates. That's why the early-January upward blip in bond yields was a yellow warning light. If Treasury bond prices decline significantly from the artificial levels that massive Fed purchases have supported, several things will happen, none of them good.

First of all, government borrowing costs will rise, making it even more difficult to control the deficit. Second, the value of the Fed's gargantuan and growing $2.6 trillion portfolio of Treasury and government-agency mortgage bonds will decline. It won't take much of a portfolio loss to wipe out the Fed's capital base. Without capital of its own, it would become a ward of the Treasury, costing the Fed what little independence it has left to defend the dollar...

...Inflation can ultimately destroy the bond market, as it did in 1960s Britain during the government of the socialist Labour Party. No one wants to commit to an investment that might be worthless in 10 years, never mind 30 years.

Throughout history, governments have inflated away their debts by cheapening the currency. That process is well under way through the Fed's abdication to irresponsible government. If Fed policies continue, another huge tax—inflation—will weigh down the American people. The politicians will try to escape public censure, as they always do, by blaming it all on "price gouging" by producers, retailers and landlords. A substantial cohort of the press will buy into that phony rationale and spread it as gospel.

You can almost hear Obama now, demonizing producers, wholesalers and retailers for raising prices and arguing for price controls. And when he says it, know that he is responsible for the catastrophic deficits, he is responsible for debt monetization, he is responsible for inflation, he is responsible for the destruction of the currency, and he is attempting to skirt culpability for his own irresponsible actions.

President Obama's true legacy will be this: the Zimbabwe-ization of America.

CAPTION CONTEST: Madame Tussauds Exhibit or...?

There is no better argument for term limits than this picture:

Frightening thought: these are just two of thousands of career politicians who've grown rich at the public trough. If these people had to earn a living in the private sector their only public statements would be something like, "Wouldja like to super-size that, ma'am?"


Image: The Blaze.

YOU CAN THANK ME LATER: A very special, hand-picked gift for your new member of Congress

If you've been struggling to find that special gift for your new member of the 113th Congress, may I be so bold as to suggest the following?

Yes, it's an exclusive, pre-packaged tar-and-feathers kit hand-selected by Doctor Ross.

Which is the only fitting gift for the tools that operate like this.

BUMMER: Most States Say No to Health Care Exchanges

Leftist tools hardest hit:

Facing Deadline, Most States Say No To Running Their Own Insurance Exchanges

The Obama administration will have to build and operate online health insurance markets for more than 30 states, something few expected when the federal health law was approved in 2010.

With today’s deadline hours away, only 18 states and the District of Columbia had proposed running their own insurance markets, also known as exchanges, a key vehicle under the law to expand health coverage to an estimated 23 million people over next four years.

“Most analysts did not anticipate that the federal government would end up playing such a big role in the operation of exchanges nationwide,” said Carolyn Pearson, a director at the Washington, D.C., consulting firm Avalere Health.

When President Barack Obama signed the Affordable Care Act, the option to have the federal government run the state markets was seen as a backstop. Administration officials have repeatedly said they hoped most states would run the markets themselves because they know their insurance markets best.

Most experts thought only states with small populations such as Delaware or Montana would seek federal help. Instead, most will rely on the federal government — including two of the most populous states, Texas and Florida, which together account for nearly 20 percent of nation’s uninsured. By law, the state exchanges must be approved by the federal government by Jan. 1, begin enrollment next October and have coverage take effect Jan. 1, 2014.

...For consumers, the new exchanges will operate similarly to online travel Internet sites Expedia and Orbitz in helping people compare benefits and prices. But the exchanges will also have broad powers to determine which plans are available and the types of benefits offered. They will also determine who is eligible for federal subsidies as well as Medicaid, the state-federal health insurance program for the poor.

Did you notice the two highlighted quotes?

• By law, the state exchanges must ... have coverage take effect Jan. 1, 2014 - the federal government? Operating under a strict deadline? Hahahahhahahhahhhaa. Hold on, I'll get the popcorn.

• For consumers, the new exchanges will operate similarly to online travel Internet sites Expedia and Orbitz... - Right. The new exchanges will operate like Internet startups forged in the crucible of brutal, daily competition -- something government, uhm, excels at.

The cluster that is Obamacare will be entertaining in one respect: betting how much of it collapses under its own weight as the central planners all scramble to avoid blame.

AETNA: Health Care Premiums to Double in 2014 Because of 20-oz. Soft Drinks and Obamacare, But Mostly Obamacare

Well, slap me silly and call me Susan.

Health insurance premiums may as much as double for some small businesses and individual buyers in the U.S. when the Affordable Care Act’s major provisions start in 2014, Aetna Inc. (AET)’s chief executive officer said.

While subsidies in the law will shield some people, other consumers who make too much for assistance are in for “premium rate shock,” Mark Bertolini, who runs the third-biggest U.S. health-insurance company, told analysts yesterday at a conference in New York. The prospect has spurred discussion of having Congress delay or phase in parts of the law, he said.

“We’ve shared it all with the people in Washington and I think it’s a big concern,” the CEO said. “We’re going to see some markets go up as much as as 100 percent..." Premiums are likely to increase 25 percent to 50 percent on average in the small-group and individual markets, he said, citing projections by his Hartford, Connecticut-based company.

And industry analyst Robert Laszewski confirms the assessment:

[F]or the vast majority of states there will be rate shock.

I can also tell you that, so far, I have detected no serious effort on the part of Democrats to delay anything. Frankly, I think hard core supporters of the new health law and the administration are in denial about what is coming.

I expect more health insurers to be echoing the Aetna comments in coming weeks.

Surprising, ain't it, considering no one even read the bill.

Obamacare needs to be crushed. Obliterated. By. Any. Means. Necessary.



Hat tip: The invaluable BadBlue News Service.

A HORRIFYING PREVIEW OF OBAMACARE: 6 in 10 Veterans Administration claim denials are in error

So reports Army Times in a sobering report on the state of a typical, government-run health care system:

A new report on an old problem contains some sad statistics about veterans’ benefits claims:

• Thirty-one percent of claims filed with the Veterans Affairs Department are likely to be denied — and 60 percent of those denials will be erroneous.

• Sixty percent of claims will take longer than 125 days to be processed, more than 7 percent of claims will be misplaced, and 4 percent will be completely lost.

• A veteran calling VA’s benefits hotline has just a 49 percent chance of being connected to someone and receiving a correct answer.

...Based on a review of the 870,000 benefits claims pending before VA in 2011 — a number that has climbed to about 900,000 pending claims today... Even faster claims processing might be possible by contracting out administrative services or transferring claims processing from the federal government to states, the report says. It recommends expanded pilot programs to test those ideas.

The nonpartisan National Center for Policy Analysis, which specializes in retirement and health care programs, is skeptical about VA’s stated goal of eliminating the claims backlog by the end of 2015.

VA “is barely able to process current claims,” the report says, “and has exhibited little to no progress toward their stated goal of 125 days and 98 percent accuracy for processed claims by 2015.”

The federal government, in general, does a poor job of administering disability benefits and services, the report says, “as evidenced by the state of Social Security Disability.”

“But the Veterans Benefits Administration appears to be far worse.”

When Nancy Pelosi famously opined -- vis a vis Obamacare -- that we had to pass it to find out what's in it, she was wrong.

We know what's in government-run health care: a nice, juicy crap sandwich for everyone involved.

Picture our entire medical system administered by the BMV, the Post Office and the SEIU, combined.


Hat tip: BadBlue News.

CHARTING A GRIM MILESTONE: Federal Government Now Borrows 46 Cents of Every Dollar It Spends

Is there a single Democrat with virtue who will decry this madness? Is there a single Democrat who will condemn this unfolding economic catastrophe?

The federal government borrowed 46 cents of every dollar it has spent so far in fiscal 2013, which began Oct. 1, according to the latest data the Congressional Budget Office released Friday.

The government notched a $172 billion deficit in November, and is already nearly $300 billion in the hole through the first two months of fiscal year 2013, underscoring just how deep the government’s budget problems are as lawmakers try to negotiate a year-end deal to avoid a budgetary “fiscal cliff.”

Higher spending on mandatory items such as Social Security, Medicare and interest on the debt led the way in boosting spending compared with the previous year, which also highlights the trouble spots Congress and President Obama are struggling to grapple with.

...The government is poised to post another $1 trillion deficit in fiscal year 2013, which would mark the fifth straight year. Before that, the record was $438 billion, which came in 2008, President George W. Bush’s last full year in office.

Is there a single Democrat with virtue remaining in Washington?


Hat tip: Mark Levin.

DUDE: Don't show this chart to Grandpa...

He may blow a gasket.

After all, he paid into Medicare for more than four decades, but under Obamacare he will receive lower quality care than illegal aliens, the poor and the indigent who are on Medicaid.

It's all about reimbursements to doctors for services rendered:

The Trustees of the Medicare program have released their annual report... Medicare’s reimbursements to doctors are scheduled to drop by 31 percent on January 1, 2013. Only then is Medicare solvent until 2016/2024. If Congress passes another of its numerous “doc fixes,” Medicare’s insolvency will be even closer at hand. The optimistic insolvency estimate from the Trustees will require “unprecedented changes in health care delivery systems and payment mechanisms,” without which Medicare fees “are very likely to fall increasingly short of the costs of providing those services.”

“For these reasons, the financial projections shown in this report for Medicare do not represent a reasonable expectation for actual program operations in either the short range…or the long range,” writes Foster.

The executive summary: seniors who paid into the system are going to find fewer and fewer doctors accepting Medicare patients; rationing of health care will be the inevitable result.

But remember: the people have spoken! This is what America wanted!

TA-DA! Small Business Owners' Hiring Intent Plunges to 2008 Lows

The people have spoken!

U.S. small-business owners expect to add fewer net new jobs over the next 12 months than at any time since the depths of the 2008-2009 recession...

...In good economic years, net hiring intentions have been in the double-digits. This has not been the case since the recession and financial crisis in 2008-2009 with net hiring intentions reaching a low of -4 in November 2008...

...In November, more small-business owners reported decreasing the number of employees (26%) than increasing (14%), resulting in a net hiring score of -12. That is down from -7 in July and -9 in the prior three quarterly measurements...

It is difficult to blame this on the fiscal cliff, and even more difficult to pin this on Sandy. More than likely, the poor net result is primarily the result of a clear slowdown in the economy (lack of customers).

I believe the US is back in recession and so does the ECRI.

On top of deteriorating economic conditions, also factor in the election and Obamacare...

This history of the Obama administration could be titled Worse and Worser.

CONGRATULATIONS, DEMS! "Get ready for some startling [health care] rate increases"

From the party that brought you Fannie Mae, Freddie Mac, Social Security, Medicare, "Great Society" and every other bankrupt exercise in central planning, comes the ultimate in epic fails

The Affordable Care Act: Ten Months to Launch “Obamacare”––Get Ready for Some Startling Rate Increases

...I conducted an informal survey of a number of insurers... On average, expect a 30% to 40% increase in the baseline cost of individual health insurance to account for the new premium taxes, reinsurance costs, benefit mandate increases, and underwriting reforms...

In states with the least mandates or for health insurance companies with the tightest underwriting now, the increase could be a lot more...

[E]xpect individual health insurance rates for people in their 20s and early 30s to about double…

Will the feds be ready to provide an insurance exchange in all of the states that don’t have one on October 1, 2013?

I have no idea. And neither does anyone else I talk to inside the Beltway. We only hear vague reports that parts of the new federal exchange information systems are in testing.

The former CIA director couldn’t get away with an affair in this town but the Obama administration has a complete lid on just where they are on health insurance exchanges and haven’t shown any willingness to want to talk about their progress toward launching on time––except to tell us all not to worry.

We are all worried. I would not want to be responsible for the work that remains and only have ten months to do it…

The Republicans said this would not work. If it does not launch on time, or does with serious problems, I would not want to be an incumbent Democrat.

I told them not to call this the “Affordable Care Act.”

I can't wait for these losers to try and blame this SCOAMF on Bush.

Oh, and let's come up with a more appropriate name for the Democrat Party:

The Bankruptocrat Party?

The Crashocrat Party?

The Lying-Sack-o-crat Party?

The Failocrat Party?

Help me out here, folks.


Image hat tip: Looking Spoon.

CHEERY: The Debt Dam Bursts In Two to Four Years

Economic writer Robert Wiedemer's assessment matches those of former House Ways and Means chief Chris Carter and Paul Ryan: we have two years -- four years at the outside -- before the federal government's Ponzi scheme implodes.

...this dollar bubble and this government debt bubble – will burst. It is not as if it will not burst for 15 or 20 years. We say it is somewhere in two to four years. You need to be prepared for it.

The debt will always be funded as long as the Federal Reserve stands willing to buy all the bonds that the government sells. At some point, that creates inflation: that pushes up interest rates. The Fed will fight those interest rates going up. At first, they can do it. They just print more money. That keeps interest rates down, but ultimately that inflation will force them up. We cannot just pull the money out and raise interest rates now; it's going to pop the real estate and stock bubbles.

What is going to happen is the Fed is going to lose control of those interest rates. When you print too much money, it gets you control short-term, but it is a recipe for losing control long-term. With those interest rates going up, what is going to pop? The stock market and real estate bubbles. All of that is what kicks off the big problem going forward. Normally you would say the bond market is going to be the problem, but I would tell you that it is actually going to be more stocks and eventually even real estate combined. Then ultimately, the bond market starts to go down, and down quickly once it starts.

When the dam finally breaks, it will break quickly. Literally, it is in a matter of months or certainly no more than a year once it really starts to go.

You get very, very high inflation. We could have stock market holidays and things like that.

The big difference between now and the depression is that the government is also in trouble at this point. We are really not going to have a huge failure until the government kind of comes to its wits' end. It will, but it comes as a last massive orgy of money printing to try to save everything - unlike anything you have seen yet. QE1, QE2, QE3 is nothing like what the Fed has to do when this thing starts to fall. They have to print, buy, and buy, and buy, and try to keep up the falling house. They will not be able to do it, but that will be the reaction.

Then at some point, it is not going to work and the whole thing goes.

As Mark Levin observes, the only bright spot is that the progressive kooks are going down the tubes along with the rest of us.


Chart: Wikipedia.

LAUGHINGSTOCK: The Washington Post Commits Suicide

Is there anyone on either side of the aisle that takes The Washington Post seriously?

That's a rhetorical question.

"Obama takes a hard line on debt"?

"Obama takes a hard line on debt"?

"Obama takes a hard line on debt"?

Here's the real debt that Barack Obama and the Democrats have created since January of 2009, depicted in red.

You see that tiny little sliver of green? That's Obama's proposal - to generate about $80 billion by raising taxes on "the rich".

That's what The Washington Post calls "a hard line on the debt."

This egregious deficit spending cannot be sustained much longer: two, three years tops, according to former House Ways and Means Committee Chairman Bill Archer, before the system begins to unravel.

We are headed for a societal collapse. We are headed for runaway inflation, a collapse of the currency, and civil unrest... in that order. We are seeing it break out in Europe now, we saw it in Argentina a dozen years ago, and we saw it in the Weimar Republic before the rise of Hitler.

Inevitably, the laws of economics overtake the politics.

And The Washington Post is led by people so criminally dishonest and so infected with partisan greed that they are willing to lie -- boldfaced -- to the American people time and time again, as the country prepares to walk off the real economic cliff.


Photo of headline: @EmilyMiller.

AND NOW FOR SOMETHING COMPLETELY DIFFERENT: A Brief Conversation In the Park

TRAMPLING INDIVIDUAL LIBERTY: The Hobby Lobby Letter Everyone Is Talking About

Editor’s Note: David Green is the founder and CEO of Hobby Lobby Stores, Inc., which is challenging the Obamacare contraceptive mandate. This letter is an excellent illustration of how unconstitutional, authoritarian, and centralized federal policies crush individual liberties. It is but one illustration of the amoral collectivism which is the hallmark of a nascent tyranny.

When my family and I started our company 40 years ago, we were working out of a garage on a $600 bank loan, assembling miniature picture frames. Our first retail store wasn’t much bigger than most people’s living rooms, but we had faith that we would succeed if we lived and worked according to God’s word. From there,Hobby Lobby has become one of the nation’s largest arts and crafts retailers, with more than 500 locations in 41 states. Our children grew up into fine business leaders, and today we run Hobby Lobby together, as a family.

We’re Christians, and we run our business on Christian principles. I’ve always said that the first two goals of our business are (1) to run our business in harmony with God’s laws, and (2) to focus on people more than money. And that’s what we’ve tried to do. We close early so our employees can see their families at night. We keep our stores closed on Sundays, one of the week’s biggest shopping days, so that our workers and their families can enjoy a day of rest. We believe that it is by God’s grace that Hobby Lobby has endured, and he has blessed us and our employees. We’ve not only added jobs in a weak economy, we’ve raised wages for the past four years in a row. Our full-time employees start at 80% above minimum wage.

But now, our government threatens to change all of that. A new government health care mandate says that our family business MUST provide what I believe are abortion-causing drugs as part of our health insurance. Being Christians, we don’t pay for drugs that might cause abortions, which means that we don’t cover emergency contraception, the morning-after pill or the week-after pill. We believe doing so might end a life after the moment of conception, something that is contrary to our most important beliefs. It goes against the Biblical principles on which we have run this company since day one. If we refuse to comply, we could face $1.3 million PER DAY in government fines.

Our government threatens to fine job creators in a bad economy. Our government threatens to fine a company that’s raised wages four years running. Our government threatens to fine a family for running its business according to its beliefs. It’s not right. I know people will say we ought to follow the rules; that it’s the same for everybody. But that’s not true. The government has exempted thousands of companies from this mandate, for reasons of convenience or cost. But it won’t exempt them for reasons of religious belief.

So, Hobby Lobby – and my family – are forced to make a choice. With great reluctance, we filed a lawsuit today, represented by the Becket Fund for Religious Liberty, asking a federal court to stop this mandate before it hurts our business. We don’t like to go running into court, but we no longer have a choice. We believe people are more important than the bottom line and that honoring God is more important than turning a profit.

My family has lived the American dream. We want to continue growing our company and providing great jobs for thousands of employees, but the government is going to make that much more difficult. The government is forcing us to choose between following our faith and following the law. I say that’s a choice no American – and no American business – should have to make.

The government cannot force you to follow laws that go against your fundamental religious belief. They have exempted thousands of companies but will not except Christian organizations including the Catholic church.

Since you will not see this covered in any of the liberal media, pass this on to all your contacts.

Sincerely,

David Green, CEO and Founder of Hobby Lobby Stores, Inc.

Thanks to: The HayRide.

WELFARE'S FAILURE AND THE SOLUTION: A Phenomenal Presentation from the State of Pennsylvania

Tyler Durden -- via "When Work Is Punished: The Tragedy Of America's Welfare State" -- points us to an exceptional presentation by Gary Alexander, the Secretary of Public Welfare for the State of Pennsylvania. Read the whole thing.

READ THE REST

Promoting innovation and competition between the states? Saving money for the federal government? Makes perfect sense, as long as you're not a radical Leftist.

Which is why the Democrat Party will ignore these and all other reforms. They're not trying to fix big government -- they're trying to expand big government.

Which is why the entire system is headed for collapse.

THE REAL CRASH: Surviving America's Bankruptcy

Author and business analyst Peter Shiff was one of the few pundits to predict the 2008 financial crisis. His latest book, "The Real Crash: America's Coming Bankruptcy---How to Save Yourself and Your Country", describes the nature of the crisis yet to come.

The main problem--and where most of the other problems begin--according to Schiff, is the Fed's manipulation of interest rates. By interfering with the free market value of money, and making it cheaper than the market would dictate, the Fed encourages financial bubbles that then necessarily pop. When a bubble pops, the market needs to correct itself; however, over the past 20 years, the Fed has not really allowed this correction to take place, as every time a bubble pops the Fed has lowered the interest rate even further, causing more money to enter the system and a new bubble to form. First it was dot-com stocks, then it was housing, and now it is government spending.

As a matter of fact, while government spending has reached new and mind-boggling heights in the recent past, it has actually been ballooning in this direction for years, spurred on largely by the low-interest rates that the Fed has provided. The government has used this borrowed money to maintain and extend social programs (such as Social Security and Medicare), and, more recently, bailout packages for failing businesses and entire industries. All the while, the government has been going deeper and deeper into debt. A big part of what has allowed the American government to borrow as much as it has (and to keep on borrowing now) is the fact that the American dollar is the world's reserve currency, which means it is always in demand, and hence people and organizations have been willing to act as creditors in order to get it. For Schiff, though, the sheer size of the debt, and the fact that it is running away faster and faster everyday (and has no realistic chance of ever being repaid) will sooner or later turn investors away from considering the American dollar a valuable reserve--at which point it will lose its status as the world's reserve, and investors will stop investing in it.

At this point, the American government will have but two options. It can either declare bankruptcy, or it can print the money it needs to pay its debt. In either case, an enormous crash will result, for in the first case, an astronomical sum of money that the economy had assumed existed will suddenly be wiped away, and in the latter case hyperinflation will set in, and the American dollar will be whittled down to worthless.

...the country will be forced to start over. For Schiff, this may not be such a bad thing, for, according to him, the nation has simply put itself in an unsustainable position, and the sooner it starts over the better. At that time, Schiff argues, America can finally get back to the small government and free-market forces that the country's founding fathers designed the nation around. While much of the book is focused on how the country can do this now, before the crash hits (in such areas as banking & finance, taxation, healthcare, education, the military, et. al.), Schiff very much believes that nothing can actually prevent the crash from coming, and that therefore, most of the rebuilding will have to be done after The Real Crash.

As Chris Cox and Bill Archer -- former members of President Clinton's Commission on Entitlement and Tax Reform -- explain in today's Wall Street Journal, the official national debt figure of $16 trillion is woefully understated.

The real figure is in excess of $87 trillion -- or roughly 550 percent of GDP.

And what do we hear from Democrats and Repubicans in Washington? Nonsense about taxing the top two percent, which wouldn't amount to one-tenth of one percent of the real debt.