Is America Going Communist?

The following is a quick back of the napkin perspective....

For the purposes of this blog, we will define communism as depending on the state, all forms of government, for one's livelihood.....we will not address the issues of civil liberties.

If you think about it, if you depend on the state for your income, you are "owned" by the state. And whether you get a check directly from the state, or indirectly from the state, it really is a difference without a distinction....the original source is the same.

We know about 1/3 of the American population gets their primary source of income from the state whether welfare, social security, medicare, medicaid, food stamps and unemployment etc. We also know that over 10% of the population works for the state earning their incomes. In sum, over 40% of America makes its livelihood directly from payments from government.

Then there are a bunch of people that work in private companies whose primary source of income is dependent on checks directly from the state, such as defense contractors and other contractors. Heck, much of the population of the Washington D.C. metro area fits this category....about 2% of the population.

As you can see, we rapidly approach about 40- 45% of the American population depends on a government check to make their living. The 10-15% that work for the state, including University and College employees, or contractors for the state are relatively high income earners generating a large percentage of consumer sales that drives many jobs.

Then adding in those who benefit indirectly from state entitlement payments, the numbers become staggering. These include businesses where welfare recipients, food stamp recipients and unemployment recipients shop such as WalMart and grocery stores and apparel stores. In addition, OVER 50% of our entire health care system comes from payments from government such as medicare and medicaid benefiting hospitals, clinics, drug companies and drug stores plus factoring the insurance proceeds from government employees and contractors.

If you add it all up, practically our entire economy is now dependent on government spending in one way or another to survive.

If you add in the recent government funding to the banks and massive NOL carry backs to a number of businesses, including home builders, OVER 100% of S&P earnings this quarter comes directly and/or indirectly from government payments. Under the Bush era, the size of government doubled. Now Obama is in control and he is making it a larger and larger percentage of our GDP as the private economy shrinks.

In the mean time, as banks cut credit to a credit dependent society, the private economy will implode further . As the economy contracts but the debt remains outstanding, servicing the debt will take up a bigger and bigger percentage of the revenue stream.

We are rapidly getting to the point where servicing debt will consume the majority of the GDP.....but government will still need to generate revenues someplace. The only place left will be assets, unless we purge the debt.

Under the current direction, if the state stops spending, so will the revenue to the vast majority of Americans, and our economy will crash.....but at least it will be our economy.

Now that you have left the matrix for a moment, the choice is yours on how to proceed.....for now.