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Grandfather Economic Report
By Michael Hodges
published in the U.S.A. as a public service - - updated regularly
http://grandfather-economic-report.com/ - email Michael
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Each generation hopes their children will have
more freedom and economic opportunity

Certain trends threaten their future

with precious childrenIn some ways we may be SHORT-CHANGING OUR NEXT GENERATION, but blaming it on others will not make it better. Acquiring knowledge and taking action is an individual responsibility.

This is a collection of easy-to-understand picture-reports to increase awareness of certain threats to the economic future & freedom of families and their children, compared to the past - - on family income, debt, savings, government spending, education quality, social security, regulations, taxes, inflation, energy, foreign trade and exchange, voter turnout, trust, national security, and health care.

There are so many great & positive things about our beloved America to celebrate. But, there are many negative trends. Perhaps if more are aware of the negatives even more solutions & positives will result.

The author, a concerned grandfather, was assisted by economists, parents, teachers and students - to help families and youth expand awareness of certain problem trends - - and become better prepared to enhance their future, and their nation's.

Many visitors call this the 'mother' of resource centers of economic & education issues and trends every family and student should understand about today, compared to the past. Regularly updated as a free public service. (you may wish to save this page to your favorites)

Dr. Milton Friedman, Nobel Prize winner for excellence in economics, said in various letters: "I certainly commend you for the Grandfather Economic Report, and for the imaginative way in which you have displayed data highly relevant to very important issues. I am impressed. The analyses are excellent. Your objective is one I fully endorse." (more comments bottom of page)


Knowledge is Power,
provided you have it,
based on hard data.
WELCOME


INDEX of Contents > > >

target the challengesThe chapters of this Grandfather Economic Report series are listed below, grouped by category - - comparing each subject's status today with prior generations - - by use of color pictures few have seen - - helping the visitor easily obtain the wisdom of the quote, "the farther back you look, the better you see ahead."

There are quite a few negative trends shown in the following picture-chapters, but don't get discouraged. While we celebrate the many positive things about our precious America let us also be aware of our challenges - - so we can better protect ourselves and our loved ones, and further improve our great nation for our young generation.

INDEX OF CONTENTS
of the Grandfather Economic Report series
Challenging Trends Facing Our Young Generation

All chapters are grouped by these Quick link categories: Summary - - Government - - Debt - - Economy - Energy - Inflation - - Family - Social Security - - Voting - Trust - - Tax - - International Trade, Exchange - - Education - - Health-care - - National Security - - Tribute - - Celebration - - Jokes - - What's New - - Action - - Links - - Reader Feedback - - Why this Report - - Search by word

If you are short of time, save this Home Page to your favorites, then scan the below list of chapters,
then click the first SUMMARY link below showing core threats.

CATEGORY - - CHAPTERS - - each chapter below includes color graphics & sources.
"A picture is worth a thousand words"
Summary: There are 3 summary sections of this series - - be sure to read the first -

1. SUMMARY of 5 Core Threats by PICTURES - - the main challenges > government size, education quality, soaring debt-dependence, foreign-dependence, and energy/national security - - each a potential threat to families and their children. A MUST READ

2. Full SUMMARY by 12 Serious QUESTIONS - - discussion of all threats, in text format - - comparing today with the past.

3. The Road Traveled - mega trends - 200-year flow of history, from founding fathers to today - - legacy at a critical cross-road - to continue on current road or recapture the core principles of our nation's founders.

Government: Government expansion is shown in picture reports below, which are designed to read in sequence. The first 2 should be read first to understand the big picture; next read the 2 chapters on federal expansion and state & local expansion for causes; next about regulations, trust funds and about an era that challenged prior decades, and finally about disturbing changes in economic reporting:

1. BIG-PICTURE: Total Government Expansion - When government officials say, 'the era of big government is over' - - citizens should ask, 'compared to what?' Three powerful & revealing graphics seldom seen, showing government expanding faster than the economy, squeezing down the share of the economy remaining to the private sector. A MUST READ.

2. EYE-OPENER: Trends of Government Spending & Debt - $5.9 trillion. 49% of the economy (national income) controlled by federal, state & local government spending, compared to 12% before - - now  costing $19.218 per man, woman & child. America has moved away from the principle of Thomas Jefferson: "The government that governs least governs best." A MUST READ.

3. Federal Government Expansion Trends - Federal spending $3.8 trillion, or $12,338 per person - or 32% of the economy, compared to 3% before - spending trends by category - proof the culprit of debt and spending has been social spending, which increased 14 times faster than the economy, as trust in government and voter turn-out rates plummeted. A MUST READ.

4. State & Local Government Expansion Trends - explosive growth nation-wide to $2.1 trillion, or $6,607 per person - now 18% of the economic pie, compared to 6% post WW II. Most people know each working person today supports more seniors than prior generations, but few know each must also support more state & local government employees than ever before. Each year the number of these employees increases faster than the national population (40% faster since 1999), creating today's indicated excess of 12 million employees. A MUST READ. (also see companion report on one state- - as a template for evaluating your own state).

5. Regulatory Compliance Cost Impact Report - In addition to government spending, the cost of complying with government regulations is $6,610 per person - $2 Trillion - 17.5% of the economy - and there is zero budgetary control. (Nobel Laureate Dr. Milton Friedman continually stressed the importance of studying this critical area - in various letters to the author. How right he was!). Regulation compliance costs plus government spending consumes 68% of the economy, leaving just a 32% share to the free market economy.

6. Budget Deficits and Trust Fund Siphoning Report - How could nearly every politician in the 1990s claim a federal government surplus when debt went up to a new record each year? To date, all $4.6 trillion of surpluses of various trust funds have been siphoned-off (of which 76% was siphoned from the social security, federal employee pension and medical trusts) - - all spent on non-pension things and not counted in deficit calculations - an illegal act if done by private sector pension funds. (Some political leaders bragged to the general public "we ran more than $100 billion budget surplus in calendar year 1998 and 1999." They also said they wanted to 'save social security'. Listening to such rhetoric citizens might be misled-led to believe the federal government cut general spending to produce general government surpluses so as to save social security and reduce total debt. Fact: they ran an operational deficit (not a surplus) AND, each year since each ended with another increase in debt, to a record high. A MUST READ - including the 6 powerful trust fund articles articles, such as fraud of paying down debt and $70 trillion un-funded liabilities.
NOTE: On 10 July 2001 Treasury Secretary Paul O'Neill told AP that trust funds hold NO real assets.

7. Taxes - (see tax category below)

8. Social Security - (see below)

9. National Security - (see below)

10. The Reagan Era Report - first time government expansion stopped in 4 decades, because of tax cuts - and first time trust in government surged in 2 decades.

11. Statistical Revisionism & Wizardry - a danger to a nation? Since the mid 1990s many statistical measurements of our economy (inflation, GDP, productivity) and education quality have been revised regarding criteria - each 'pumping-up' data as if the nation is on economic 'steroids.' Now, there is almost no clean comparison with the past, to accurately know where we are and where headed.

12 126-year Spending trend Compared to other nations - the U.S. has followed the big-government upward march of others.

Debt: 1. Debt Summary Table - a simple table summarizing all debt in America, by sector. A MUST READ

Two chapters cover debt via color graphics - the first is Federal Government Debt only, the next for all debt (private + government) called America's Total Debt:

2. Federal Government Debt Report - at $14 trillion end calendar year 2010 - or $43,925 per man, woman and child - another in a constant string of new record highs. In the 1990s the federal government created $2.8 trillion of new debt; about the same created in the nation's entire history prior to 1990 - - and another $8 trillion since 2002.
Is the debt going down? Nope!! In FY 2010 federal debt increased $1.7 trillion, or $5,488 per man, woman and child - - or $ 21,952 per family of 4 - the greatest increase in peacetime history. The prior year increase was $1.6 trillion. While saying they were paying down some debt in the late 1990s they did not mention debts to trust funds were increasing even more. Interest on the debt over $50 million per hour, 24
hours per day, 365 days per year. Long-term pictures. Foreign interests own a huge, expanding share of our marketable Treasury debt. Pictures tell the story. A MUST READ.

3. America's Total Debt Report - this highly read report covers the most dangerous pictures, that of all debt in America (government debt plus all private debt, including debt of households, financial sector, and business) - now $59 Trillion at an all time high, and 80% of that total debt was created since 1990 - - showing America more debt-dependent than ever. Last year total debt stagnated as private sector debt fell due to foreclosures and write-offs, said fall off-set by frantic government spending and federal reserve bank money creations of $1.7 trillion.. Run-away debt is an accelerating major threat to the economy, to living standards and to national security. A nation cannot forever borrow its way to prosperity, especially borrowing from others. America has reached a level of debt-saturation as all efforts to drive the economy have been dependent on more and more debt year after year. Instead of allowing an un-wind of debt the government sector has joined with the financial sector to attempt to drive even more debt into all sectors. That's like trying to drive an individual over-intoxicated further with even more alcohol. Color graphics in this report have been seen by very few, showing dramatic trends. A MUST READ.

4. Paying Down Debt? - some claim the government ran a surplus in the late 1990s and paid down debt, yet total federal debt increased each year - - meaning they ran operating deficits every year. So, where did they get the money? Answer: they siphoned-off trust fund surpluses to spend on other stuff and issued non-marketable IOUs with no redemption plan.

Economy: 1. Inflation Report - 89% decline in buying power - 1,000% inflation my life-time - - inflation rates still higher than past and still above major foreign competitors - long-term CPI chart by old and new methods - housing up 1,300%. A MUST READ

2. Energy Report - Declining U.S. oil production & reserves, soaring consumption and imports oil & natural gas - - more dependent than ever on others. A very serious issue. A MUST READ

3. Productivity Report - picture of 49-year results, long-term downward trend despite recent up-turn following revision to measurement criteria. There are many reasons to ask: "What productivity?"

4. Family Savings - Americans have not saved so little since the depression of the 1930s, down 91% - a spending binge & household debt build-up well beyond income growth, despite the 1990s economic 'boom'.

5. Statistical Revisionism & Wizardry - a danger to a nation? Since the mid 1990s many statistical measurements of our economy (inflation, GDP, productivity) and education quality have been revised regarding criteria - each 'pumping-up' data as if the nation is on economic 'steroids.' Now, there is almost no clean comparison with the past, to accurately know where we are and where headed.

6. Manufacturing - 60% decline in ratio of manufacturing jobs, impacts median incomes and trade balances.

7. Financial Terrorism Against Seniors - - crushed incomes and international buying power.

8. Lawyers compared to other nations - It is interesting that the chart ranking of the nations regarding lawyer concentration correlates with the same ranking concerning trade competitiveness and inflation rates.

The U.S. Dollar's Two-Step - - article > Devaluation of the dollar - - internally and internationally. Should we expect differently than the past? We can always hope our dollar-based savings and assets will be under pinned by a stronger dollar, both domestically and internationally, in the future than in the past. History, with such long-term negative trends in place, is a powerful teacher - - requiring uncommon "bravery" to bet against, wanting to believe that this time it will be different.

Family: The chapters below provide color graphics showing impacts on working people: family incomes, social security, inflation history, savings, and a report celebrating progress:

1. Family Income Report - depressed inflation-adjusted income for 3 decades, despite economy consuming 2 wage-earners per family compared to one before - record low savings with record high household debt and yesterday's dollar worth less than 11 cents today. 64% of married mothers, with children below 6 years old, are in labor force - 6 times higher than before. Families will understand why it seems 'hard to get ahead.' Color pictures show the facts. A MUST READ.

2. Social Security Report - 5 times higher family tax rates than seniors paid - fewer benefits expected - while government consumed all $2.4 trillion trust fund surpluses to date on non-social security stuff. Dramatic color picture of approaching demographic bulge. Did politicians 'save social security' by siphoning-off all surpluses for non-pension spending? $99 trillion in un-funded contingent liabilities for social security & Medicare, and a cleaned-out trust fund. Now that the trust fund has been drained with zero commitment by either political party to pay back that which was siphoned-off, all of a sudden politicians cry about social security costs, never discussing why they do not make good the $2.4 trillion drained from its previous surplus trust fund. A MUST READ.

3. Social Security Trust Funds - today's workers pay much higher FICA tax rates than ever before, not just to cover current retirees but also paying extra to create a trust fund surplus for their own future - - yet every penny paid-in to create more than two trillion dollars in surplus has been siphoned-off and spent on non-pension things. Trust Fund articles that tell all.

4. Financial Terrorism Against Seniors - - crushed incomes and international buying power.

5. Inflation Report - (see above)

6. Generation Celebration Report - to balance various negative trends shown in other chapters, this sub-report shows some compelling improvements compared to prior generations, about which we can all celebrate - such as higher life expectancy.

7. Family Savings - Americans have not saved so little since the depression of the 1930s - down 91% - a spending binge & household debt build-up well beyond income growth, despite the 1990s economic 'boom'.

8. Taxes - (tax category below)

9. Household Debt - America's Total Debt Report - higher debt ratios, than ever before.

10. Health-care - - (health-care category below)

11.House Price inflation - -Mortgage Rate Inflation.

Voters
and Trust:
Color graphics of trends regarding citizen support for government:

1. The Voting Turn-out Report - 40-years of declining citizen participation, despite record campaign spending and registration drives - record low turnout in 1996 & 2000 with 25 million missing voters compared to 1960 - a very serious issue for representative democracy. A MUST READ.

2. The 2000 Presidential Election Report - 4 dramatic graphics show how major population center voting nearly overwhelmed voting in 80% of the nation's counties. Is the power of the Constitution's mandate for the Electoral College weakening in its intent to give recognition to the greater diversity as prescribed by our founders?

3. The 2004 Presidential Election Report - 2 dramatic graphics show the results of the 2004 presidential elections.

4. Trust in Government Report - 69% do not trust - a massive increase in lack of trust from 3-decades ago - and 80% believe government has too much power - - troublesome for representative democracy and legitimacy of officials - long-term graphic. Evidence that trust in government plummets once consumptive social spending rises above 5% of national income - said ratio is now 3 times above that level, and trust is half of what it was. Latest poll shows citizen trust in ethics of elected officials, news professionals and lawyers decline to new low. A MUST READ.

Taxes: 1. Tax Report - Citizens now work more than 5 months each year just to pay all federal, state & local taxes - - many months more than prior generations. Families paid more inflation-adjusted taxes than ever before. A MUST READ.

2. Tax History Report - how far we have come from the intention of our founders. This article sketches the flow of taxation history. "To the Founding Fathers, the primary purpose was to block the central government from using the power of direct taxation - except in times of national emergency."

3. Social Security Drain Report - tax rates 5 times higher than seniors paid when working, with less benefit in return and a negative return for young workers - demonstrated via color pictures.

International: America is impacted by the growing global economy - - more than ever:

1. Foreign Trade Report - exploding negative trade balance to new records, now $15 billion/week - World's largest debtor nation, yet 4 times more dependent on global trade than before - Foreign interest own increasing percentage of our marketable debt - color graphics of long-term trends. Issue so serious that a U.S. Trade Deficit Commission was recently established, all members agreeing the situation is not sustainable nor is a solution seen. The 61% manufacturing base shrinkage in a major negative regarding trade balance, and a major negative impact on U.S. economic independence and future living standards. A MUST READ.

2. International Value of the Dollar Report - color trend graphic shows long-term trend in international value. Will the 1997-2001 up-tick in the dollar prove temporary considering prior negative trends and today's exploding trade deficits? Seems so, as the dollar's exchange rate and foreign buying power of citizens plummet - down a whopping 43% vs. the Euro in the past several years. A MUST READ.

3. International Education Performance (education section below) - The Organization of Economic Cooperation & Development: "the effectiveness of U.S. primary and secondary education system can broadly be characterized as mediocre at best." Our kids perform at the bottom of the heap. A MUST READ.

4. International Trends Government Spending-Dependence - this report contains a dramatic graphic of 126 year trend of the growth of government spending-dependence of the U.S. economy vs. 16 other nations, as the US followed upward march of others. While other nations restrain internal demand and expand government and regulatory burdens, a case is made for America, considering its reduced manufacturing sector and trade deficits, to implement plans setting combined federal and state & local government spending ratios (to national income) and regulatory compliance cost ratios on a planned downward path, while reducing the economy's dependence on government and private sector debt. A MUST READ.

5. The U.S. Dollar's Two-Step - - article > Devaluation of the dollar - - internally and internationally. Should we expect differently than the past? We can always hope our dollar-based savings and assets will be under pinned by a stronger dollar, both domestically and internationally, in the future than in the past. History, with such long-term negative trends in place, is a powerful teacher - - requiring uncommon "bravery" to bet against, wanting to believe that this time it will be different.

THE U.S. DOLLAR'S TWO-STEP

Education: 1. The Education Report - a revealing chapter with color graphics comparing education quality & spending today vs. prior generations and to foreign students - - long-term 71% decline of the Education Productivity Index since quality declined while spending zoomed, yet class size shrank - - $44,000 waste per student - articles by economists, teachers, business leaders, students & parents - - implications of centralized power - negative correlation between quality & spending - less quality than 3 decades ago - error-laden textbooks and unacceptable math teaching methods - honors science texts less comprehensive than general readers 50 years ago - non-teaching employees increase faster than students - - colleges reduce standards to meet poor quality high school output, as 60% require remedial work. Two sub sections of the main Education Report above, (2) International Education Section shows clear differences, and (3) International Math & Science Test Series, show US students at the bottom of all nations in math & science. Parents need to understand and take control to better assure their children's future. A MUST READ.
Health Care: Health Care Report - graphics show we celebrate increased life-expectancy and quality care relative to our past, but it's less than achieved by other nations - yet we spend 82% more of our economy on health care than others, including higher government spending ratios. A MUST READ.
National
Security:
National Security Report - our founding fathers called national defense the #1 principal reason for establishing a federal government, yet we note a dramatic long-term down trend in defense spending ratios and much less war-time economic mobilization surge potential than was available for those who faced WW II. We have been surprised before, and may be again. A warning. A MUST READ.
Actions: 1. Action Targets and Plan Report - a format to downsize Government SPENDING to a lower share of the economy and to reduce total government DEBT (both that owed to the public and that owed to trust funds) close to zero balances - - demonstrated by color graphics.

2. To-do List for Individuals & Families - concerning education quality, savings, and debt. Present your own prescription.

Tribute: 1. A Tribute to Dr. Milton Friedman - a national treasure - with his comments on this Grandfather Economic Report series.

2. Famous Quotes of America's Founding Fathers - including, "The further backward you look, the further ahead you can see."

Celebration: Generation Celebration Report - to balance various negative trends shown in other chapters, this sub-report shows some very compelling improvements compared to prior generations, about which we can all celebrate - such as higher life expectancy.
Feedback: 1. Feedback samples from readers of the Grandfather Economic Report attest to accuracy and interest from all walks of life and many nations. - - from economists, professionals, teachers, parents and students.

2. Email to Michael Hodges, author of the Grandfather Economic Report series

3. About the Grandfather Economic Report, its author and data creditability

Other Links: Links to related sites - - excellent articles and sources.
What's New: What's New in the Grandfather Economic Report series - - short summary of new reports and updates.
Jokes: Grandfather Jokes Page - A time to smile. Question: Why did the chicken cross the road? Question: Could Noah build an ark today? Question: Why did Florida delay electing a President?
Answers here. Add to the list.
Search Search the Grandfather Economic Report series - - using Googol
Contact Others: Send E-Mail to your Congressman - click this link then on its next page type your ZIP code under the section 'Write elected officials.'

Send a link to this page to others you think might benefit

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We can try harder to become more proud of our bequest to our young generation

I hope the above reports help expand your awareness & knowledge - and, make you even stronger

Knowledge is Power if you Seek It !

May each of us try harder to make our nation better -
by reversing each negative trend shown in these reports

  • you are encouraged to share this information with family members, friends and others - - at least the SUMMARY -
  • you may contact your congressman or senator by Sending Congress E-Mail, via last link in above index list-
  • you may wish to bookmark this page with its table of contents of the various reports to make it easier to return. Visit often to take advantage of frequent updates -
  • Send a link to this page to others you think might benefit
ACKNOWLEDGMENT - - and, about the Author
Creation of this Grandfather Economic Report series was inspired by
  • the beautiful, trusting, and loving eyes of my infant grandchildren - and
  • by my admiration, respect and gratitude for Nobel Laureate Economist Dr. Milton Friedman - - for his internationally-acclaimed valuable works in economics, and for his many personal letters to this author generously providing information, reference sources, insight, guidance, critique, inputs and encouragement for this project.
    In various letters Dr. Friedman wrote: "I certainly commend you for the Grandfather Report and for the imaginative way in which you have displayed data highly relevant to very important issues. I am impressed. Your objective is one I fully endorse. Your charts and analyses are excellent. Very well done. I congratulate you and applaud your continuing effort." In December 2000, Michael Hodges received a surprise package from Dr. Friedman, which included a copy of Dr. Friedman's recent book of memoirs, 'Two Lucky People,' where Dr. Friedman and his wife Rose made this endorsement: "For Michael Hodges, whose Grandfather Report is spreading the good word. With respect and admiration." Signed - Milton Friedman and Rose Friedman. (see 'A Tribute to Dr. Milton Friedman')

"By highlighting economic threats to our young, actions may result such that negative trends become positive trends - - and my generation can become more proud of our bequest to the next generation." Michael W. Hodges, author (email Michael). (About the Author contained within Tribute to Milton Friedman. Additional information about the author and about data creditability see Bio).

WISE WORDS FROM A FOUNDING FATHER OF OUR GREAT NATION
"There is in the nature of government an impatience of control that disposes those invested with power to look with an evil eye upon all external attempts to restrain or direct its operations. This has its origin in the love of power. Representatives of the people are not superior to the people themselves." Alexander Hamilton - Federalist Papers, 1787.

Michael Hodges welcomes questions, constructive input and links - to Michael's email

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