Oct 7, 2017 Employment Explosion
June 26, 2017 Why's the FED Panicking?
May 25, 2017 LFPR anyone?
Apr 26, 2017 What's up with the FED?
March 10, 2017 Feb Employment Situation
Oct 10, 2016 Tax Burden
Aug 1, 2016 Here Comes the Debt
June 26, 2016 Moribund US Economy
June 16 2016 Labor Update
Mar 10, 2016 Spring Renewal for Labor Markets?
Feb 21, 2016 GDP Gap
Feb 16, 2016 FED and Monetary Policy
Jan 19, 2016 Employment Gap Age Groups LFPR
Jan 10, 2016 A look at the Employment Situation
Dec 30, 2015 Fed Funds Rate up 25 Basis points...so what?
Dec 15, 2015 Fed Funds on the rise? Has Yellen 'Fell-in'?
Oct 15, 2015 Labor Markets Seven years of misery
Oct 6, 2015 Sept: Horrible Month for Labor
Sept 30, 2015 The FED: Interest Rate Angst
Sept 11, 2015 FED on the Monetary Policy Front
July 31, 2015 Trade and Foreign Exchange Rates
July 20, 2015 Economic Growth?
July 10, 2015 Labor Picture by Age Group
July 2, 2015 Disastrous Month in Labor Rpt
June 19, 2015 Minimum Wage - Income Distribution
Jun 5, 2015 Encouraged Worker Effect
May 8, 2015 Updated Employment Situation for April
May 4, 2015 Languishing Labor Markets
Apr 7, 2015 LFPR Doldrums on the Labor Front
March 8, 2015 Less than Zero Interest Rates - Trade War
2014 Articles
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2012 Articles
2011 & 2010 Articles
Dec 23, 2011 Revisionist History Depression
Dec 10, 2011 Depression & Now Part 1
Dec 5, 2011 Lies, Damned Lies, Statistics
Nov 16, 2011 Taxes Part 2
Nov 8, 2011 Taxes Pt 1
Nov 1, 2011 Demographics
Oct 12, 2011 Fed-FOMC
Oct 6, 2011 Fed's Operation Twist
Sep 30, 2011 What Price Bailouts?!
Sep 9, 2011 Trade Deficit - States
Sept 3, 2011 Unemployment Ongoing Challenge
August 22, 2011 Restricting Oil Supply
August 11, 2011 Credit Rating-Taxes
August 8, 2011 QE3? What to do?
Aug 5, 2011 Employment Update
August 1, 2011 Competitive Free Mkt Capitalism
July 26, 2011 Cradle of Democracy
July 16, 2011 Capital Ratios
July 10, 2011 Unemployment Again
July 1, 2011 QE2 Over-Apres Moi, le Deluge
June 11, 2011 Unemployment
June 8, 2011 Net Worth Collapse
May 18 2011 Credit Collapse '08-'10
May 15, 2011 Fed Miracle-Mayhem
May 10, 2011 Unemployment
Mar 30, 2011 Puppet Show
Mar 18, 2011 Locked-in-Effect
Mar 10, 2011 Bummer Days
Feb 12 2011 Inflation by Decontenting
Feb 6 2011 Unemployment
Jan 14 2011 Money Supply
Jan 12 2011 Trade Deficit
Jan 6 2011 Printing Press Myth
Dec 18, 2010 College Pricing
Dec 7 2010 Debt & Deficits
Dec 2, 2010 J-Laffer Curve
Sep 24 2010 Competition
Sept 23 2010 Trade Deficit China
About us
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Definitions & Miscellaneous

Economic Newsletter for the New Millennium

December 7, 2010 

Donald R. Byrne, Ph.D.

Associate Editor
Edward T. Derbin, MA, MBA

Note: To print/save a hard copy of this blog, click on the following link for a PDF download…


Federal Debt, Federal deficits, & the Prophecies of the timeless/timely Alexis de Tocqueville


“The American Republic will endure until the day Congress discovers it can bribe the public with the public’s money”. 

Alexis De Tocqueville, Democracy in America, 1835.

Folks, you have just read the perfect definition of Congressional earmarks and bailouts.  In economics you learn there is no such thing as a free lunch.

It is not the one eating the ‘free’ lunch but some other sucker not eating the free lunch, but paying for it by drinking overpriced watered down beer and pretzels.

Congressmen must legislate earmarks and bailouts in order to become elected for life.  So we are experiencing annual federal budget deficits well in excess of $1,000,000,000,000.  That, good readers, is one million-million dollars, or one-thousand billion dollars.  To be more precise, one trillion three-hundred billion dollars for this fiscal year: $1,300,000,000,000.  That is close to 10% of the current outstanding federal debt.  

U.S. Department of Treasury

Bureau of the Public Debt


As of December 3, 2010, the U.S. Debt was $13,833,511,738,992.20, that’s thirteen trillion, eight-hundred and thirty-four billion dollars.

In normal years, the interest alone on the current federal debt would be would be about $500 billion or $500,000,000,000 or one-half trillion dollars, just for the interest on that debt.  

The just adjourned, presidentially appointed and so called bipartisan deficit reduction committee wants to significantly reduce Medicare, national defense, and Social Security, for example, to reduce the coming federal deficits. 

What about earmarks and bailouts?  

Are their priorities your priorities?  

This year’s interest on the federal debt it will be less because the Federal Reserve System is keeping interest rates down so the U-6 unemployment rate is kept below 20%.  It is currently above 17%.  

U.S Labor Department

Bureau of Labor Statistics (BLS)



Page 27 (Table A-15. Alternative measures of labor underutilization)

Short-term interest rates are close to zero.  To keep interest rates down, the FED has purchased and is continuing to purchase both private sector and government securities in order to keep their prices up.  In financial theory you learn that the prices of financial securities and interest rates are negatively or inversely related, they move in opposite directions.

Income, Poverty, and Health Insurance Coverage in the United States: 2009


Households in the lowest quintile had incomes of $20,453 or less; those in the second quintile had incomes ranging from $20,454 to $38,550; those in the third quintile had incomes ranging from $38,551 to $61,801; those in the fourth quintile had incomes ranging from $61,802 to $100,000; and those in the highest quintile had incomes of $100,001 or more.


Page 48 Table A-2

Many of the senators and representatives in the two houses of Congress are certainly not poor, nor middle class in income and not without significant wealth.  “The current salary (2010) for rank-and-file members of the House and Senate is $174,000 per year.”  This puts them at the top 5% of income earners based on household income.  Assuming their spouse or other members of the household earn even a modest income, this would place them, as a household, well into the top five-percent income earners.

Salaries and Benefits of US Congress Members

Pay and Perquisites of Members of Congress, Including a History of House and Senate Salaries

“Congressional members scored big during the steep downturn in the market, posting a 16% gain collectively between 2008 to 2009…”
Members of Congress Getting Richer, Despite Market Meltdown

Daily Finance Dawn Kawamoto 11-17-10


Mr. de Tocqueville, how right you were…are.