I'm up in DC this weekend visiting some friends and watching a lot of football. I enjoy coming up here when possible because it is like taking a trip to another country.
Everywhere you go, every restaurant and bar is packed and people are throwing around money like it's 2007. This city has not skipped a beat during the entire recession and many of my friends up here do not believe me when I tell them what it is like in places in America outside the beltway.
DC is the last great bubble in America. It is the visual representation of our government's ridiculous spending. The Federal government continues to hire workers at a reckless pace and pay them extravagant sums of money with only the promise for pay increases in the future.
They do this as our country is already bankrupt on paper and now only waits for the markets to remove confidence in our debt and end the absurdity. (Just as the market recently did with Greece and Ireland, and they will do to Portugal next)
The market is taking down the smaller weak countries first and they will move to the United States last. After ending Portugal's government spending spree, the market will move on to Spain and then either the UK or Japan.
The United States will most likely be the last government debt bubble to collapse and when when it goes it will explode in spectacular fashion as this is the largest debt bubble the world has ever seen.
In the meantime our country is held together by two components:
1. The food stamp program which is growing at an exponential pace
2. Emergency federal unemployment insurance. This program is set to expire on December 1st and would leave 2 million Americans broke and starving. There would be 6 million uninsured by the first quarter of 2011. Look for this program to be extended soon by Congress.
The following video provides a visual on the growth of the food stamp program from the start of our current depression in 2007 through today. Once the US government debt bubble explodes and they are no longer able to support America through food stamps and unemployment checks, America's true economic power will be revealed. It will be crystal clear that the emperor has no clothes.
In the meantime I will enjoy the rest of the afternoon up here in the bubble, and hope that my friends appreciate the artificial wealth around them before it disappears for good.
