Thursday, July 19, 2012

US Fed Chairman Gives Grim Economic Forecast In Senate Testimony

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Appearing before the Senate Banking Committee Tuesday, US Federal Reserve Chairman Ben Bernanke gave a bleak report on the American economy, while providing few clues to possible responses by Fed officials.

Bernanke’s appearance was in accordance with the US central bank’s legal requirement to submit to Congress an official Monetary Policy Report twice a year. The Fed released its semi-annual summary of US economic conditions and prospects on Tuesday to coincide with Bernanke’s Senate testimony. The Fed chairman will appear Wednesday before the Financial Services Committee of the House of Representatives.

In his opening remarks to the Senate committee, Bernanke painted a gloomy picture of decelerating economic growth, declining job creation, a slowdown in manufacturing and business investment, a still-crippled housing market, stagnant consumer spending and a global environment dominated by the European debt crisis and slowing growth in the major “emerging” economies of Asia and Latin America.

The Fed chairman made clear that unemployment in the US, presently at 8.2 percent, with long-term unemployment at post-war record highs, will continue to remain at near-Depression levels for at least several years. He hinted that the Fed’s policy-making Federal Open Market Committee (FOMC) might announce further monetary stimulus measures at its July 31-August 1 meeting, but refused to be pinned down on specifics.

In his opening remarks and in response to questions from Banking Committee members, Bernanke left do doubt that he opposed any spending programs to create jobs or provide serious relief for the millions who have been economically devastated by the crisis. Instead, he reiterated his previous demands that Congress quickly adopt a plan for major cuts in social spending and other deficit-reduction measures, timed for the medium-term rather than the immediate present so as to avoid a deflationary spiral and financial collapse.

He warned specifically against allowing some $600 billion in automatic spending cuts and tax increases to take effect at the beginning of the new year—the so-called “fiscal cliff”—saying that would likely plunge the US economy back into an official recession. Under the provisions of the deal reached last year between the Obama administration and congressional Republicans to raise the federal debt limit, across-the-board federal spending cuts will take effect January 1, 2013. At the same time, if no action is taken by then, all of the Bush-era tax cuts will expire, along with Social Security payroll tax cuts for workers and employers, and extended unemployment benefits.

In response to a suggestion by Tennessee Republican Bob Corker that Bernanke was proposing to “kick the deficit can down the road,” the Fed chief exclaimed, “I’m not advocating an overall increase in fiscal spending or anything like that.”

In his opening statement, Bernanke noted that “economic activity appears to have decelerated somewhat during the first half of this year.” He continued: “After rising at an annual rate of 2.5 percent in the second half of 2011, real gross domestic product (GDP) increased at a 2 percent pace in the first quarter of 2012, and available indicators point to a still-smaller gain in the second quarter.”

He pointed to a drop in average monthly payroll gains from nearly 200,000 in the fourth quarter of 2011 and first quarter of 2012 to 75,000 in the second quarter of this year. Growth in household spending, he said, had slowed in the second quarter, as had manufacturing output and business pending on equipment and software. “In part,” he told the committee, “slowing growth in production and capital investment appears to reflect economic stresses in Europe, which, together with some cooling in the economies of other trading partners, is restraining the demand for US exports.”

The Fed’s downwardly revised projection for GDP growth, he said, meant “the reduction in the unemployment rate seems likely to be frustratingly slow.”

The Monetary Policy Report released Tuesday set the Fed’s projection for US unemployment in the final quarter of this year at 8.0 to 8.2 percent, with the jobless rate remaining at between 7.0 percent and 7.7 percent at the end of 2014. According to Bloomberg News, even these dismal forecasts assume monthly payroll increases of about 150,000 to 200,000 jobs, far higher than the 80,000 new jobs reported by the Labor Department for June.

The report was more blunt than Bernanke’s opening statement in asserting that austerity at the federal as well as the state and local levels would be even more severe in 2013, noting that “budgets for state and local governments remain strained and federal fiscal policy is likely to become more restrictive in 2013.”

It also suggested that the European debt crisis, more austerity in the US and the global slowdown would likely result in even higher jobless rates than those currently projected by the Fed.

The Fed’s grim prognosis was buttressed by an update released Monday by the International Monetary Fund to the organization’s World Economic Outlook. The IMF cut its 2012 world growth forecast slightly to 3.5 percent and slashed its projection for 2013 to 3.9 percent from its previous estimate of 4.1 percent. These are all sharply lower than the 2010 growth rate of 5.3 percent.

The IMF downgraded its projections for US growth in 2012 and 2013. Most ominous were its sharply lower forecasts for China, India and Brazil, economies that largely powered whatever recovery there was from the crash of 2008. The IMF predicted China this year would grow by 8.0 percent, India by 6.1 percent and Brazil by 2.5 percent.

In response to questions from the senators, Bernanke noted that at its last meeting, the Fed’s FOMC had extended to the end of 2012 its so-called “Operation Twist”—the sale of shorter-term Treasury securities in the Fed’s portfolio and purchase of longer-term Treasuries. This program is designed to bring down long-term interest rates, including mortgage rates. He said the central bank had several options if it decided to increase monetary stimulus, including another round of securities purchases to expand the Fed’s balance sheet (so-called “Quantitative Easing”)—the equivalent of printing dollars.

The hearing was punctuated with questions on the expanding Libor rate-rigging scandal and the role of the Federal Reserve in failing to stop banks from manipulating the key global interest rate. Committee Chairman Tim Johnson, Democrat from South Dakota, began his questioning by asking Bernanke, “What did you know, when did you know it, and what did you do about it?”

Bernanke had a pro-forma, prepared response, which was not surprising since Johnson had advised him in advance of the question. Bernanke’s reply simply evaded the fact, revealed in documents released last Friday by the Fed at the request of a House subcommittee, that the then-president of the New York Fed and current Obama treasury secretary, Timothy Geithner, knew of the banks’ manipulation of the Libor rate as early as 2007 and did nothing to publicize the fraud or stop it.

Johnson dropped the issue and passed on to other matters.

Later, Senator David Vitter (Republican from Louisiana) asked Bernanke why the Fed did not investigate back in 2007 the two Wall Street banks it oversees that are among the nearly 20 international banks suspected of rigging Libor. Bernanke dodged the question.

Hillary Clinton’s Incendiary Global Tour

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Secretary of State Hillary Clinton’s extraordinary 13-day tour of Asia and the Middle East represented an incendiary mix of provocation and hypocrisy and signals a new eruption of American militarism on a global scale.

Clinton’s itinerary included stops in nine nations: France, Afghanistan, Japan, Mongolia, Vietnam, Laos, Cambodia, Egypt and Israel. It focused on two interrelated US foreign policy objectives. The first is the elaboration of Washington’s counterrevolutionary strategy for asserting hegemony over the oil-rich regions of the Middle East and Central Asia.

The second is to promote the Obama administration’s “pivot” to Asia, which is aimed at containing Chinese economic, political and military influence through a combination of US military encirclement and the inflaming of regional tensions.

In the course of her travels, the secretary of state proclaimed that “support for democracy and human rights” was the “heart” of American strategy.

Clinton began her trip on July 5 with a conference in France of the “Friends of Syria” and consultations with the French government on operations by the US and its allies to foment and arm a sectarian civil war in Syria and prepare for direct military intervention aimed at regime-change—all in the name of “democracy and human rights.”

At the same time, she issued a dark threat that both Russia and China would be made to “pay a price” for failing to bow to American demands for intervention.

She concluded the journey on July 17 after final stops in Egypt and Israel. In the first country she paid homage to the country’s Supreme Council of the Armed Forces junta and its chief, Field Marshal Mohamed Hussein Tantawi, reaffirming Washington’s reliance on the Egyptian military as the bulwark of counterrevolution against the democratic and social aspirations of the country’s multi-millioned working class.

Officially, Clinton claimed that she was promoting a “democratic transition,” a phrase mouthed by the Obama administration since its failed attempts a year-and-a-half ago to prop up its long-time ally, the dictator Hosni Mubarak.

In Israel, she made new war threats against Iran, insisting that Washington and Tel Aviv are “on the same page” and that the US is prepared to employ “all elements of American power” against Iran’s nuclear program.

The second leg of Clinton’s tour took her to Afghanistan, where, together with the US-backed puppet president, Hamid Karzai, she announced Washington’s designation of the country as a “major non-NATO ally,” placing it on a diplomatic par with South Korea and laying the foundations for its indefinite occupation by tens of thousands of US troops.

Clinton also played the hypocritical human rights card in Asia, using a speech in Mongolia to promote the oligarchical regime there as a beacon of democracy and prosperity, in supposed contrast to one-party rule in China. That the masses of Mongolia live in poverty, while a thin layer at the top has enriched itself off of a mining boom, is of no more concern to Clinton than the endemic social inequality in the US itself.

The New York Times pointed to the real conditions of the Mongolian people in an article Monday, referring to masses living on the outskirts of the capital “in crowded Yurt slums some locals refer to as Mongolia’s favelas. Unemployment is rampant there; electricity and drinkable water are not. The less fortunate take shelter in the sewers, where they huddle beside hot-water pipes when the temperature plunges to 40 below.”

The secretary of state’s claim that Washington’s alliances are determined by “universal principles” of democracy are belied by its close ties to the torture regime in Uzbekistan, a key link in its supply route for the Afghanistan war, and the dictatorial government in Kazakhstan, the world’s largest producer of uranium, not to mention the long historical record of US backing for military dictatorships from Indonesia to South Korea.

Clinton’s tour also included a visit to Laos, the first by a US secretary of state in 57 years. Over the course of a decade, from the mid-1960s to the mid-1970s, American imperialism turned Laos into the most bombed country per capita on the face of the earth, dropping 0.84 tons of explosives for every inhabitant of a nation with which the US was not at war. In addition to the 30,000 Laotians killed in this firestorm, another 20,000 have died since from unexploded munitions.

Clinton told embassy staffers in Vientiane that with her visit, “The United States is deepening our engagement in the Asia Pacific. We’re practicing what I call forward-deployed diplomacy.” In other words, through its “back to Asia” strategy, US imperialism is seeking to turn the scene of its last criminal war in the region into a forward operating base for the next one.

In Cambodia, Clinton participated in the Association of South East Asian Nations (ASEAN) conference, which Washington’s provocative interventions in the region helped bring to a stalemate. For the first time, the participants failed to agree on a final joint statement because of sharp divisions over maritime territorial disputes pitting China against the Philippines, Vietnam and Japan.

Since 2010, the US has invoked its status as a “Pacific power” to claim the South China Sea, with its strategic trading routes and vast potential energy reserves, as an American lake, asserting its “national interest” in the area.

Clinton’s visit to the region is being followed by that of two top Pentagon officials. Navy Adm. Samuel Locklear, the new chief of the US Pacific Command, flew to the Philippines, where he met with top political and military officials and reminisced about his days as a junior officer at the giant Subic Bay naval base, clearly implying that a new US military presence is in the offing to further an anti-Chinese alliance.

Deputy Secretary of Defense Ashton Carter began a 10-day Asian tour Tuesday for what a Pentagon spokesman described as “detailed discussions on what the US military’s approach to the Asia-Pacific will mean in practice.”

The Pentagon’s buildup in the region and the provocations staged by Secretary of State Clinton are both expressions of US imperialism’s strategy of offsetting its economic decline and containing the rise of a potential strategic rival in China through the threat and use of military might.

Driven by the intensifying crisis of US and world capitalism, this reckless strategy carries with it the danger of a new global conflagration, threatening the lives of hundreds of millions.

11 International Agreements That Are Nails In The Coffin Of The Petrodollar

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Is the petrodollar dead? Well, not yet, but the nails are being hammered into the coffin even as you read this. For decades, most of the nations of the world have used the U.S. dollar to buy oil and to trade with each other. In essence, the U.S. dollar has been acting as a true global currency. Virtually every country on the face of the earth has needed big piles of U.S. dollars for international trade. This has ensured a huge demand for U.S. dollars and U.S. government debt. This demand for dollars has kept prices and interest rates low, and it has given the U.S. government an incredible amount of power and leverage around the globe. Right now, U.S. dollars make up more than 60 percent of all foreign currency reserves in the world. But times are changing. Over the past couple of years there has been a whole bunch of international agreements that have made the U.S. dollar less important in international trade. The mainstream media in the United States has been strangely quiet about all of these agreements, but the truth is that they are setting the stage for a fundamental shift in the way that trade is conducted around the globe. When the petrodollar dies, it is going to have an absolutely devastating impact on the U.S. economy. Sadly, most Americans are totally clueless regarding what is about to happen to the dollar.

One of the reasons the Federal Reserve has been able to get away with flooding the financial system with U.S. dollars is because the rest of the world has been soaking a lot of those dollars up. The rest of the world has needed giant piles of dollars to trade with, but what is going to happen when they don't need dollars anymore?

Could we see a tsunami of inflation as demand for the dollar plummets like a rock?

The power of the U.S. dollar has been one of the few things holding up our economy. Once that leg gets kicked out from under us we are going to be in a whole lot of trouble.

The following are 11 international agreements that are nails in the coffin of the petrodollar....

#1 China And Russia

China and Russia have decided to start using their own currencies when trading with each other. The following is from a China Daily article about this important agreement....

China and Russia have decided to renounce the US dollar and resort to using their own currencies for bilateral trade, Premier Wen Jiabao and his Russian counterpart Vladimir Putin announced late on Tuesday.

Chinese experts said the move reflected closer relations between Beijing and Moscow and is not aimed at challenging the dollar, but to protect their domestic economies.

"About trade settlement, we have decided to use our own currencies," Putin said at a joint news conference with Wen in St. Petersburg.

The two countries were accustomed to using other currencies, especially the dollar, for bilateral trade. Since the financial crisis, however, high-ranking officials on both sides began to explore other possibilities.

#2 China And Brazil

Did you know that Brazil conducts more trade with China than with anyone else?

The largest economy in South America has just agreed to a huge currency swap deal with the largest economy in Asia. The following is from a recent BBC article....

China and Brazil have agreed a currency swap deal in a bid to safeguard against any global financial crisis and strengthen their trade ties.

It will allow their respective central banks to exchange local currencies worth up to 60bn reais or 190bn yuan ($30bn; £19bn).

The amount can be used to shore up reserves in times of crisis or put towards boosting bilateral trade.

#3 China And Australia

Did you know that Australia conducts more trade with China than with anyone else?

Australia also recently agreed to a huge currency swap deal with China. The following is from a recent Financial Express article....

The central banks of China and Australia signed a A$30 billion ($31.2 billion) currency-swap agreement to ensure the availability of capital between the trading partners, the Reserve Bank of Australia said.

“The main purposes of the swap agreement are to support trade and investment between Australia and China, particularly in local-currency terms, and to strengthen bilateral financial cooperation,” the RBA said in a statement on its website. “The agreement reflects the increasing opportunities available to settle trade between the two countries in Chinese renminbi and to make RMB-denominated investments.”

China has been expanding currency-swap accords as it promotes the international use of the yuan, and the accord with Australia follows similar deals with nations including South Korea, Turkey and Kazakhstan. China is Australia’s biggest trading partner and accounts for about a quarter of the nation’s merchandise sales abroad.

#4 China And Japan

The second and third largest economies on the entire planet have decided that they should start moving toward using their own currencies when trading with each other. This agreement was incredibly important but it was almost totally ignored by the U.S. media.

According to Bloomberg, it is anticipated that this agreement will strengthen ties between these two Asian giants....

Japan and China will promote direct trading of the yen and yuan without using dollars and will encourage the development of a market for companies involved in the exchanges, the Japanese government said.

Japan will also apply to buy Chinese bonds next year, allowing the investment of renminbi that leaves China during the transactions, the Japanese government said in a statement after a meeting between Prime Minister Yoshihiko Noda and Chinese Premier Wen Jiabao in Beijing yesterday. Encouraging direct yen- yuan settlement should reduce currency risks and trading costs, the Japanese and Chinese governments said.

China is Japan’s biggest trading partner with 26.5 trillion yen ($340 billion) in two-way transactions last year, from 9.2 trillion yen a decade earlier.

#5 India And Japan

It is not just China making these kinds of currency agreements. According to Reuters, India and Japan have also agreed to a very large currency swap deal....

India and Japan have agreed to a $15 billion currency swap line, Japan's Prime Minister Yoshihiko Noda said on Wednesday, in a positive move for the troubled Indian rupee, Asia's worst-performing currency this year.

#6 "Junk For Oil": How India And China Are Buying Oil From Iran

Iran is still selling lots of oil. They just aren't exchanging that oil for U.S. dollars as much these days.

So how is Iran selling their oil without using dollars?

A Bloomberg article recently detailed what countries such as China and India are exchanging for Iranian oil....

Iran and its leading oil buyers, China and India, are finding ways to skirt U.S. and European Union financial sanctions on the Islamic republic by agreeing to trade oil for local currencies and goods including wheat, soybean meal and consumer products.

India, the second-biggest importer of Iran’s oil, has set up a rupee account at a state-owned bank to settle as much as much as 45 percent of its bill, according to Indian officials. China, Iran’s largest oil customer, already settles some of its oil debts through barter, Mahmoud Bahmani, Iran’s central bank governor, said Feb. 28. Iran also has sought to trade oil for wheat from Pakistan and Russia, according to media reports from the two countries.

#7 Iran And Russia

According to Bloomberg, Iran and Russia have decided to discard the U.S. dollar and use their own currencies when trading with each other....

Iran and Russia replaced the U.S. dollar with their national currencies in bilateral trade, Iran’s state-run Fars news agency reported, citing Seyed Reza Sajjadi, the Iranian ambassador in Moscow.

The proposal to switch to the ruble and the rial was raised by Russian President Dmitry Medvedev at a meeting with his Iranian counterpart, Mahmoud Ahmadinejad, in Astana, Kazakhstan, of the Shanghai Cooperation Organization, the ambassador said.

#8 China And Chile

China and Chile recently signed a new agreement that will dramatically expand trade between the two nations and that is also likely to lead to significant currency swaps between the two countries....

The following is from a recent report that described this new agreement between China and Chile....

Wen called on the two nations to expand trade in goods, promote trade in services and mutual investment, and double bilateral trade in three years.

The Chinese leader also said the two countries should enhance cooperation in mining, expand farm product trade, and promote cooperation in farm product production and processing and agricultural technology.

China would like to be actively engaged in Chile's infrastructure construction and work with Chile to promote the development of transportation networks in Latin America, said Wen.

Meanwhile, Wen suggested that the two sides launch currency swaps and expand settlement in China's renminbi.

#9 China And The United Arab Emirates

According to CNN, China and the United Arab Emirates recently agreed to a very large currency swap deal....

In January, Chinese Premier Wen Jiabao visited the United Arab Emirates and signed a $5.5 billion currency swap deal to boost trade and investments between the two countries.

#10 China And Africa

Did you know that China is now Africa's biggest trading partner?

For many years the U.S. dollar was dominant in Africa, but now that is changing. A report from Africa’s largest bank, Standard Bank, says the following....

“We expect at least $100 billion (about R768 billion) in Sino-African trade – more than the total bilateral trade between China and Africa in 2010 – to be settled in the renminbi by 2015.”

#11 Brazil, Russia, India, China And South Africa

The BRICS (Brazil, Russia, India, China and South Africa) continue to become a larger factor in the global economy.

A recent agreement between those nations sets the stage for them to increasingly use their own national currencies when trading with each other rather than the U.S. dollar. The following is from a news source in India....

The five major emerging economies of BRICS -- Brazil, Russia, India, China and South Africa -- are set to inject greater economic momentum into their grouping by signing two pacts for promoting intra-BRICS trade at the fourth summit of their leaders here Thursday.

The two agreements that will enable credit facility in local currency for businesses of BRICS countries will be signed in the presence of the leaders of the five countries, Sudhir Vyas, secretary (economic relations) in the external affairs ministry, told reporters here.

The pacts are expected to scale up intra-BRICS trade which has been growing at the rate of 28 percent over the last few years, but at $230 billion, remains much below the potential of the five economic powerhouses.

So what does all of this mean?

It means that the days of the U.S. dollar being the de facto reserve currency of the world are numbered.

So why is this important?

In a previous article, I quoted an outstanding article by Marin Katusa that detailed many of the important benefits that the petrodollar system has had for the U.S. economy....

The "petrodollar" system was a brilliant political and economic move. It forced the world's oil money to flow through the US Federal Reserve, creating ever-growing international demand for both US dollars and US debt, while essentially letting the US pretty much own the world's oil for free, since oil's value is denominated in a currency that America controls and prints. The petrodollar system spread beyond oil: the majority of international trade is done in US dollars. That means that from Russia to China, Brazil to South Korea, every country aims to maximize the US-dollar surplus garnered from its export trade to buy oil.

The US has reaped many rewards. As oil usage increased in the 1980s, demand for the US dollar rose with it, lifting the US economy to new heights. But even without economic success at home the US dollar would have soared, because the petrodollar system created consistent international demand for US dollars, which in turn gained in value. A strong US dollar allowed Americans to buy imported goods at a massive discount – the petrodollar system essentially creating a subsidy for US consumers at the expense of the rest of the world. Here, finally, the US hit on a downside: The availability of cheap imports hit the US manufacturing industry hard, and the disappearance of manufacturing jobs remains one of the biggest challenges in resurrecting the US economy today.

So what happens when the petrodollar dies?

The following are some of the things we are likely to see....

-Oil will cost a lot more.

-Everything will cost a lot more.

-There will be a lot less foreign demand for U.S. government debt.

-Interest rates on U.S. government debt will rise.

-Interest rates on just about everything in the U.S. economy will rise.

And that is just for starters.

As I wrote about earlier today, the Federal Reserve is not going to save us. Ben Bernanke is not somehow going to pull a rabbit out of a hat that will magically make everything okay. Fundamental changes to the global financial system are happening right now that are impossible for Bernanke to stop.

We should have never gone into so much debt. Up until now we have gotten away with it, but when demand for U.S. dollars and U.S. debt dries up we are going to experience a massive amount of pain.

Keep your eyes and ears open for more news stories like the ones referenced above. The end of the petrodollar is going to be a very significant landmark on the road toward the total collapse of the U.S. economy.

So what do you think the fate of the U.S. dollar is going to be in the years ahead?

How America Became a Country That Lets Little Kids Go Homeless

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It's a searing hot Sunday in the Bronx, and young women and couples with small children sweatily make their way up the ramp to the PATH building, New York City's shiny new intake center, where homeless families with children must go to get placed in shelters. That's the hope at least. A couple that went in right around the time I showed up exits the building about half an hour later, and the man is pissed; it doesn't look like they had any luck today. Everyone looks anxious as they walk up the ramp; clearly this is a situation where there had better be a Plan B if getting themselves and their kids into a shelter is not in the cards.

A young couple with the cutest twin toddlers I've ever seen walks up and sits on the curb. I point this out to their parents and for a second they beam, but then they go back to looking very worried. This is their 3rd trip to PATH this week. The first two times they were turned away, when their caseworkers decided they should stay with Amanda's mom instead. Her mom disagreed. Now, the couple has come prepared, bearing a letter in which her mom assures the Department of Homeless Services just how unwelcome her daughter and grandchildren are. "Hopefully this time it'll work, and we'll have a place to stay," says Amanda, 18, who took her first trip to PATH at 17, when her mother kicked her out of the house for the first time. "We're hoping to get placed in Brooklyn, where I'm from, but even the Bronx would be fine, as long as we have a place."

The twins are crying the whole time. The man picks up one kid and their heavy luggage flips the stroller on its back, upending the other twin, who starts screaming as the dad frantically tries to right the fallen stroller; no one who comes here is having a very good day. It's tough with the twins inside the building too, because they can't bring in food or water, according to Amanda. "We have to pour out our water bottles before we go inside."

To keep out more dangerous things, the building has a full-on security apparatus with metal detectors in the entry way and harried security guards rushing families through. Hanging from each of their belts is an extendable baton, in case any trouble gets past the metal detectors. Outside, a new family walks up the ramp every five to 10 minutes. One woman's baby is only a week and a half old; she's draped a piece of cloth over his stroller to protect him from the heat.

Candace, 26, is heavily pregnant -- she's going to have a baby girl at the end of July. She's anxious to make her appointment because she really needs a place to stay, but before she goes she politely offers that the new PATH building is nicer than when she first came here at 17.

"Everything's clean, everyone is polite," she says softly, then scrunches up her face. "In the old one there was feces, regurgitations, and flies everywhere."

***

After hurricanes Katrina and Rita hit in 2005, advocates for the homeless were horrified to find that the storms had left one in 50 American kids without a home, a record high, according to a report by the Coalition for Family Homelessness. But only a few years later the financial crisis outperformed nature in casting catastrophe on poor Americans. After record foreclosures, layoffs and budget cuts that hit poor families the hardest, America is a country where one out of 45 kids doesn't have a home. That totals 1.6 million children in 2010 without a permanent place to live, an increase of 448,000 in just three years. Forty percent of the kids are under 6.

"As a society, we bear responsibility for creating this second disaster and for responding to its aftermath," concludes the report, before detailing how many states fall short in working to prevent family homelessness and in taking care of families who've lost their homes.

"Many places in the country don't have shelters," says Diane Nilan, an advocate for the homeless who ran several family shelters in Illinois and since 2005 has traveled around the country raising awareness about homeless families (Hear Us). "In some cases, you have to travel five or six counties over to get to a shelter. Often they're filled or gender-segregated. Then the family has to decide whether to sleep in a car, or to farm the kids out to friends, or split up," Nilan says.

The Southern states, which are also some of the nation's poorest, have the worst access to homeless shelters: of Mississippi's (poverty rate 25.87 percent) 82 counties, only 17 offer a family homeless shelter, according to the Red, White and Blue Book, which compiles information about services for homeless families. There are 23 in Alabama. Louisiana's homelessness rate doubled between 2007 and 2009, and that year researchers estimated that 30 percent of the state's homeless families ended up sleeping in their cars or in abandoned buildings.

A motel is another less-than-ideal option. "These are families who have jobs paying minimum wage salaries, so they turn to motels, get stuck in this cycle of having to pay all their income for housing to avoid the streets," Nilan says.

Given how little low-income Americans get paid and how much they get charged for rent in many parts of the country, it's actually a miracle that even more families haven't been pushed out of their homes. In California, the average two-bedroom rental requires a $26-an-hour salary while minimum wage in the state is $8, according to a National Low Income Housing Coalition study.

Here's what happened to a family Nilan met in Florida. The parents both worked at restaurants in New Orleans, but Hurricane Katrina wiped out their jobs and their home and sent them to Nashville. When "the floods came back and upended them again," they asked their 8-year-old daughter where she wanted to go. "Disney World!" she said. Not a bad idea, they figured, since tourist traps are filled with restaurants where they could find jobs. But when they got there they couldn't find steady work (Orlando has an 8.7 percent unemployment rate). Sometimes the mom had a job, sometimes the dad did. Mostly the jobs were part-time and temporary. To make ends meet, Nilan says, they rented one of the beds in their motel room to a 53-year-old homeless vet. DIY homeless shelter.

***

An interesting fact about family homelessness: before the early-1980s, it did not exist in America, at least not as an endemic, multi-generational problem afflicting millions of poverty-stricken adults and kids. Back then, the typical homeless family was a middle-aged woman with teenagers who wound up in a shelter following some sort of catastrophic bad luck like a house fire. They stayed a short time before they got back on their feet.

In the 1980s, family homelessness did not so much begin to grow as it exploded, leaving poverty advocates and city officials stunned as young parents with small children overwhelmed the shelter system and spilled into the streets. In New York City, the rate of homeless people with underage kids went up by 500 percent between 1981 and 1995. Nationally, kids and families made up less than 1 percent of the homeless population in the early 1980s, according to advocate and researcher Dr. Ellen Bassuk. HUD estimates put the number at 35 percent of people sleeping in shelters in 2010.

"All of a sudden, around the early 1980s we started to see tons of families who were there because of poverty," Ralph da Costa-Núñez, who worked in Mayor Ed Koch's administration and is now CEO of the Institute for Children, Poverty, and Homelessness, tells AlterNet.

The reasons behind the jump in family homelessness are not complex, Núñez says. "It was the gutting of the safety net. Reagan cut every social program that helped the poor. Then there's inflation so their aid checks are shrinking. Where are they going? Into the streets, into the shelters."

The administration was especially keen to cut low-income housing programs. Peter Dreier writes that Reagan created a housing task force, "dominated by politically connected developers, landlords and bankers." They and the president were in agreement that the market was the best way to address housing for the poor, and instituted cuts in government spending that yielded almost instant results. In 1970, Dreier writes, there were more low-income housing units than families who needed them, but "by 1985 the number of low-cost units had fallen to 5.6 million, and the number of low-income renter households had grown to 8.9 million, a disparity of 3.3 million units."

At a 1985 hearing before the Senate subcommittee on housing and urban affairs, Barry Zigas, the president of the National Low-Income Housing Coalition, called the administration's approach toward the poor a "scorched-earth policy." President Reagan offered a sunnier view on the TV show Good Morning America, saying, "What we have found in this country, and maybe we're more aware of it now, is one problem that we've had, even in the best of times, and is the people who are sleeping on the grates, the homeless who are homeless, you might say, by choice."

"I thought we were going to make it to go away," Nunez tells AlterNet. "And one day I had to tell Mayor Koch, this is here to stay."

Continuing in the tradition of his Republican predecessors, President Bill Clinton's tough-love welfare reforms were especially tough on poor women and children. The Temporary Assistance for Needy Families Act, which replaced a New Deal welfare program for the poorest families, put work requirements and time limits on assistance. As Nunez puts it, their benefits would run out and, "Boom! Where do they go? The shelters and the streets."

TANF decreased welfare caseloads from "12.3 million recipients per month in 1996 to 4.4 million in June 2011" according to a National Poverty Center policy brief, a drop that has been touted as a success even though in many cases families just couldn't get access to benefits they needed -- many had not rocketed out of poverty on their bootstraps. Either way, TANF plays out a whole lot differently today than during the Clinton years when the economy was relatively strong.

A New York Times piece titled "Welfare Limits Left Poor Adrift as Recession Hit" details TANF's downsides in our current predicament -- the caseloads stayed the same during record joblessness, and women and kids have had to resort to desperate measures to make it, like skipping meals, scavenging through trash, and going back to abusive relationships.

If they end up without a home -- whether that means they're staying with relatives, or sleeping on the ground, or in their car, or in abandoned buildings, or in shelters -- here is what their lives look like: To start with, the moms are likely to suffer depression, anxiety disorders, or PTSD, because a large percentage of sheltered mothers "have experienced physical and sexual assault over their lifespan," according to the National Child Traumatic Stress Network. Homelessness itself compounds their trauma, especially if they don't get treatment, both because it's stressful to be homeless and because not having shelter makes the families vulnerable to more violence. Being homeless, or the economic or personal horrors that led to homelessness, or being raised by parents fighting mental problems, means that many kids suffer from psychological disorders. "Half of school-age homeless children experience anxiety, depression, or withdrawal compared to 18 percent of non-homeless children," according to the Traumatic Stress network.

"Homeless children worry about where they will sleep on a given night, and if they have a place to sleep, they are afraid of losing it," the Traumatic Stress Network continues. "Older children worry about being separated from friends and pets, and they fear that they will be seen as different among new peers at school. They also worry about their families: their parents, whose stress and tension is often shared with the children, and their siblings, for whom they see themselves as primary caregivers. More than half of homeless children surveyed also said that they worried about their physical safety, especially with regard to violence, guns, and being injured in a fire. One-quarter of homeless children have witnessed violence in the family."

Being adrift is likely to make little boys aggressive and little girls depressed and withdrawn, according to a report by the Family Housing Fund. Homeless children get sick more often than poor children who have a home. They're more likely to have respiratory and digestive infections, stunted growth, anemia, TB, and asthma. They are prone to dangerous chronic conditions like cardiovascular disease, peripheral vascular disease, endocrine dysfunction, or neurological disorders, according to the Family Housing Fund.

School is a disaster. Since many homeless families have to move constantly, the kids get pulled in and out of school and can end up being held back. Often they are too hungry or stressed to learn. It's tough to do homework, even if they've landed in a shelter, because even the mundane becomes stressful. "Let's say you have six to eight families in a shelter, each in a room, and there are two to three kids in a family" says Bassuk. "That's a lot of kids running around. It's chaos. The whole family sleeps in the same room; if one kid gets an earache, nobody sleeps."

"It's so mind-blowing for me," says Diane Nilan. "No matter what we've done -- and I've been involved in significant advocacy efforts to enlighten Congress -- there's this mindset, I don't know if it's denial or what, to totally ignore the people who are the most vulnerable. You see abysmal conditions that little babies are growing up in. They're in the prime period of human development," she says. "It's a horrible, horrible oversight, the way we are neglecting little kids when they need us the most."

***

The tough-love approach still has its fans. In 2004, New York City Mayor Michael Bloomberg unveiled a plan to slash the rate of homelessness in the city by two-thirds in five years. One curious feature of his Five-Year Plan was to limit priority access to federal programs that put homeless families into homes. Struggling New Yorkers, the administration was sure, were hustling the system by showing up at shelters pretending to be homeless in order to grab up federal aid. So priority Section 8 rent assistance was thrown out in favor of bootstrappy initiatives like the Advantage program, which was designed to teach important life lessons about self-sufficiency and financial responsibility by cutting off aid after two years.

A few years later, one in three homeless families that participated in Advantage ended up back in the shelters. As with everything else, the financial crisis made everything worse. "It's not like rents went down in NYC with the recession," Patrick Markee of Coalition for the Homeless tells AlterNet. "The gaps between incomes and rents has gone higher and higher."

The Advantage program train-wrecked when New York state discontinued its part of the funding in 2010. The Bloomberg administration then gave poor families a great lesson in financial responsibility by killing the program and cutting off payments to participating families last February. Right now, 43,000 people are sleeping in municipal shelters in NYC, 17,000 of them children. It's a 10 percent increase from last year and the highest number since the Great Depression.

"You've got more families than ever," Markee says. "The shelter system is bursting at the seams."

I'm Finally Leaving America's Crazed Police State

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Dudes, I'm done with this. I'm leaving the United States today, and won't be back for a while. I recently visited my childhood hometown and noticed a whole bunch of brand new surveillance cameras at nearly every intersection and street corner; this is just a town, mind you, not some city of national or international significance.

After doing some research, it turns out the cameras are "high-definition" 24/7 surveillance cameras, manufactured and operated by Sprint Nextel Corp, and paid for through federal Department of Homeland Security grants to the town's local police department.

In fact, the number of these cameras in my hometown has reportedly tripled over the past couple years. There are as many as six of them at each intersection, they aren't red light traffic cameras (topic for another article altogether, though). Here's a photo I took of the cameras.

Do you really think these are there to make your 10 minute drive to the Applebee's safe from terrorists? Do you?

On another note, I was recently at a ball game: they now ask you to rise twice to sing the national anthem and pledge your allegiance. As a child, I only remember this occurring once, normally at the start of the game.

It was recently revealed that the NSA, according to a former high-ranking official there, is building "dossiers" on MILLIONS of American citizens and may be routinely spying on countless Americans on U.S. soil, in clear violation of our laws and principles as a nation.

Moving on... The New York Times recently claimed: "Cellphone carriers reported that they responded to a startling 1.3 million demands for subscriber information last year from law enforcement agencies seeking text messages, caller locations and other information in the course of investigations."

That's just last year. And that number is quite conservative, as it does not include shadow wiretapping programs such as the NSA's project(s).

Is it paranoid to think you're being watched.... when you are actually being watched?

America has turned into a full-blown police state. Our economy is sick, and politicians refuse to fix it, choosing instead to fund outrageous, scary, illegal programs which violate our rights and our privacy. Ironically, one of the few sectors where recent grads are finding work is in law enforcement and government-sponsored surveillance.

All of these things would be bad, but I would still have hope if Americans were getting outraged -- if they were demanding answers and asking for a rollback of the new surveillance cameras, the warrantless wiretapping programs, the new invasive TSA procedures, etc.

But they aren't. Most people I talk to just don't care, and they think I'm some kind of weirdo for interrupting them from their reality TV and 40-ounce high-fructose corn syrup soda. It's the apathy and indifference that scares me more than any headline about the government watching us.

I don't see a bright future for us unless we begin to care, and begin to demand accountability. In the history of the world, the combination of a) totalitarian police state b) rapid rollback of civil rights c) blind nationalistic pride and d) a public that doesn't care has NEVER led to improvements in the quality of life. Instead, it normally leads to mass injustice and misery.

I hope people begin to speak up. I hope they email and call their Senators. I hope they share articles like this one with their friends, since the establishment broadcast media refuses to cover the police state's rapid growth -- maybe they are in on it, or maybe (more likely) they realize that viewers want Kim Kardashian segments, not NSA whistleblowers like William Binney.

Sad, but true.

Four Spending Myths That Could Wreck Our World

How Not to Solve an American Crisis

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We’re at the edge of the cliff of deficit disaster! National security spending is being, or will soon be, slashed to the bone! Obamacare will sink the ship of state!

Each of these claims has grabbed national attention in a big way, sucking up years’ worth of precious airtime. That’s a serious bummer, since each of them is a spending myth of the first order. Let’s pop them, one by one, and move on to the truly urgent business of a nation that is indeed on the edge.

Spending Myth 1: Today’s deficits have taken us to a historically unprecedented, economically catastrophic place.

This myth has had the effect of binding the hands of elected officials and policymakers at every level of government. It has also emboldened those who claim that we must cut government spending as quickly, as radically, as deeply as possible.

In fact, we’ve been here before. In 2009, the federal budget deficit was a whopping 10.1% of the American economy and back in 1943, in the midst of World War II, it was three times that -- 30.3%. This fiscal year the deficit will total around 7.6%. Yes, that is big. But in the Congressional Budget Office’s grimmest projections, that figure will fall to 6.3% next year, and 5.8% in fiscal 2014. In 1983, under President Reagan, the deficit hit 6% of the economy, and by 1998, that had turned into a surplus. So, while projected deficits remain large, they’re neither historically unprecedented, nor insurmountable.

More important still, the size of the deficit is no sign that lawmakers should make immediate deep cuts in spending. In fact, history tells us that such reductions are guaranteed to harm, if not cripple, an economy still teetering at the edge of recession.

A number of leading economists are now busy explaining why the deficit this year actually ought to be a lot larger, not smaller; why there should be more government spending, including aid to state and local governments, which would create new jobs and prevent layoffs in areas like education and law enforcement. Such efforts, working in tandem with slow but positive job growth in the private sector, might indeed mean genuine recovery. Government budget cuts, on the other hand, offset private-sector gains with the huge and depressing effect of public-sector layoffs, and have damaging ripple effects on the rest of the economy as well.

When the economy is healthier, a host of promising options are at hand for lawmakers who want to narrow the gap between spending and tax revenue. For example, loopholes and deductions in the tax code that hand enormous subsidies to wealthy Americans and corporations will cost the Treasury around $1.3 trillion in lost revenue this year alone -- more, that is, than the entire budget deficit. Closing some of them would make great strides toward significant deficit reductions.

Alarmingly, the deficit-reduction fever that’s resulted from this first spending myth has led many Americans to throw their support behind de-investment in domestic priorities like education, research, and infrastructure -- cuts that threaten to undo generations of progress. This is in part the result of myth number two.

Spending Myth 2: Military and other national security spending have already taken their lumps and future budget-cutting efforts will have to take aim at domestic programs instead.

The very idea that military spending has already been deeply cut in service to deficit reduction is not only false, but in the realm of fantasy. The real story: despite headlines about “slashed” Pentagon spending and “doomsday” plans for more, no actual cuts to the defense budget have yet taken place. In fact, since 2001, to quote former Defense Secretary Robert M. Gates, defense spending has grown like a “gusher.” The Department of Defense base budget nearly doubled in the space of a decade. Now, the Pentagon is likely to face an exceedingly modest 2.5% budget cut in fiscal 2013, “paring” its budget down to a mere $525 billion -- with possible additional cuts shaving off another $55 billion next year if Congress allows the Budget Control Act, a.k.a. “sequestration,” to take effect.

But don’t hold your breath waiting for that to happen. It’s likely that lawmakers will, at the last moment, come to an agreement to cancel those extra cuts. In other words, the notion that our military, which has been experiencing financial boom times even in tough times, has felt significant deficit-slashing pain -- or has even been cut at all -- is the Pentagon equivalent of a unicorn.

What this does mean, however, is that lawmakers heading down the budget-cutting path can find plenty of savings in the enormous defense and national security budgets. Moreover, cuts there would be less harmful to the economy than reductions in domestic spending.

A group of military budget experts, for example, found that cutting many costly and obsolete weapons programs could save billions of dollars each year, and investing that money in domestic priorities like education and health care would spur the economy. That’s because those sectors create more jobs per dollar than military programs do. And that leads us to myth three.

Spending Myth 3: Government health-insurance programs are more costly than private insurance.

False claims about the higher cost of government health programs have led many people to demand that health-care solutions come from the private sector. Advocates of this have been much aided by the complexity of sorting out health costs, which has provided the necessary smoke and mirrors to camouflage this whopping lie.

Health spending is indeed growing faster than any other part of the federal budget. It’s gone from a measly 7% in 1976 to nearly a quarter today -- and that’s truly a cause for concern. But health care costs, public and private, have been on the rise across the developed world for decades. And cost growth in government programs like Medicare has actually been slower than in private health insurance. That’s because the federal government has important advantages over private insurance companies when it comes to health care. For example, as a huge player in the health-care market, the federal government has been successful at negotiating lower prices than small private insurers can. And that helps us de-bunk myth number four.

Spending Myth 4: The Affordable Care Act -- Obamacare -- will bankrupt the federal government while levying the biggest tax in U.S. history.

Wrong again. According to the Congressional Budget Office, this health-reform legislation will reduce budget deficits by $119 billion between now and 2019. And only around 1% of American households will end up paying a penalty for lacking health insurance.

While the Affordable Care Act is hardly a panacea for the many problems in U.S. health care, it does at least start to address the pressing issue of rising costs -- and it incorporates some of the best wisdom on how to do so. Health-policy experts have explored phasing out the fee-for-service payment system -- in which doctors are paid for each test and procedure they perform -- in favor of something akin to pay-for-performance. This transition would reward medical professionals for delivering more effective, coordinated, and efficient care -- and save a lot of money by reducing waste.

The Affordable Care Act begins implementing such changes in the Medicare program, and it explores other important cost-containment measures. In other words, it lays the groundwork for potentially far deeper budgetary savings down the road.

Having cleared the landscape of four stubborn spending myths, it should be easier to see straight to the stuff that really matters. Financial hardship facing millions of Americans ought to be our top concern. Between 2007 and 2010, the median family lost nearly 40% of its net worth. Neither steep deficits, nor disagreement over military spending and health reform should eclipse this as our most pressing challenge.

If lawmakers skipped the myth-making and began putting America’s resources into a series of domestic investments that would spur the economy now, their acts would yield dividends for years to come. That means pushing education and job training, plus a host of job-creation measures, to the top of the priority list, and setting aside initiatives based on fear and fantasy.

Spying on Americans through Cellphone Carriers

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What most Americans are blissfully unaware of is the fact that they carry in their pockets what have been described as near-perfect spy devices: their cellphones.


When Congress passed the FISA Amendments Act (FAA) in 2008, a privacy-killing law that gutted First, Fourth and Fifth Amendment protections for Americans while granting immunity to giant telecoms that assisted the National Security Agency's (NSA) warrantless wiretapping programs, we were assured that the government "does not spy" on our communications.

Yet scarcely a year after FAA was signed into law by President Bush, The New York Times revealed that under Hope and Change™ huckster Barack Obama, NSA continued the previous regime's illegal practices, intercepting "private e-mail messages and phone calls of Americans in recent months on a scale that went beyond the broad legal limits established by Congress last year."

The wholesale vacuuming-up of private communications by the sprawling Pentagon bureaucracy were described by unnamed "senior officials" as the "'overcollection' of domestic communications of Americans;" in other words, a mere technical "glitch" in an otherwise "balanced" program.


But what most Americans are blissfully unaware of is the fact that they carry in their pockets what have been described as near-perfect spy devices: their cellphones.


Earlier this week, The New York Times disclosed that "cellphone carriers reported that they responded to a startling 1.3 million demands for subscriber information last year from law enforcement agencies seeking text messages, caller locations and other information in the course of investigations."


The report by carriers, made in response to congressional inquiries "document an explosion in cellphone surveillance in the last five years, with the companies turning over records thousands of times a day in response to police emergencies, court orders, law enforcement subpoenas and other requests."


"I never expected it to be this massive," said Rep. Edward J. Markey (D-MA), the co-chair of the Bipartisan Congressional Privacy Caucus, "who requested the reports from nine carriers, including AT&T, Sprint, T-Mobile and Verizon."

Markey told the Times that the prevalence of cellphone surveillance by law enforcement agencies raised the specter of "digital dragnets" that threaten the privacy of most customers.


While the sheer volume of requests by local, state and federal police for user data may have startled Congress, which by-and-large has turned a blind eye when it comes to privacy depredations at all levels of government, it is hardly a complete picture of the pervasive nature of the problem.


In 2009 security watchdog Christopher Soghoian reported on his Slight Paranoia web site that just one firm, Sprint Nextel, "provided law enforcement agencies with its customers' (GPS) location information over 8 million times between September 2008 and October 2009. This massive disclosure of sensitive customer information was made possible due to the roll-out by Sprint of a new, special web portal for law enforcement officers." (emphasis added)


According to Soghoian, "Internet service providers and telecommunications companies play a significant, yet little known role in law enforcement and intelligence gathering."


"Government agents routinely obtain customer records from these firms," Soghoian averred, "detailing the telephone numbers dialed, text messages, emails and instant messages sent, web pages browsed, the queries submitted to search engines, and of course, huge amounts of geolocation data, detailing exactly where an individual was located at a particular date and time."


While there are indeed "exigent circumstances" which may require law enforcement to demand instant access to GPS data or other customer records--a kidnapping or child abduction in progress--in the main however, it appears that most warrant-free requests fall under a more sinister category: fishing expedition.


Commenting
on congressional revelations, ACLU legislative counsel Christopher Calabrese informed us that data supplied to the Times represents "a vast undercount of the number of Americans who have been affected by this tracking. Sprint disclosed that it received approximately 500,000 subpoenas in 2011 (a subpoena is a written request for information from law enforcement that isn't reviewed by a judge) and that 'each subpoena typically requested subscriber information on multiple subscribers.' In addition, several carriers disclosed that they sometimes provide all the information from a particular cell tower or particular area".


Although several geolocation privacy bills that require warrants to obtain records are pending in Congress, it should be clear there is no consensus among ruling class elites for protecting the privacy rights of Americans or reining-in overly-intrusive police agencies.

In fact, the opposite is the case.


Under Obama, illegal surveillance programs once hidden behind code-named black projects such as STELLAR WIND and PINWALE have been greatly expanded. Indeed, the bipartisan consensus which encourages and permits the secret state to carry out warrantless wiretapping and data mining have been "regularized" to such a degree (under the rubric of "keeping us safe") they're no longer even regarded as controversial.


More than three years ago, Obama promised to "fix" illegal policies which surfaced under the previous Bush government. However, an anonymous "senior official" told the Times there were certain "technical problems" that led the agency "to inadvertently 'target' groups of Americans and collect their domestic communications without proper court authority. Officials are still trying to determine how many violations may have occurred."


It was further revealed that some of the groups "inadvertently" targeted by NSA and other spy satrapies (CIA, DHS, FBI, et. al.) included Muslim Americans, anarchist and socialist groups, libertarians, civil liberties organizations, antiwar activists as well as individual supporters of the secrecy-spilling web site WikiLeaks.


Just last week the Bradley Manning Support Network disclosed that "A letter dated May 18, 2012, which purports to originate from the US Army Criminal Investigative Division (CID), rejects a Freedom of Information Act (FOIA) request submitted for data the government has collected on the Bradley Manning Support Network. The letter states that 'an active investigation is in progress with an undetermined completion date'."

As readers recall, Manning is the Army private accused by the government of releasing hundreds of thousands of secret files to WikiLeaks. He currently faces charges that could lead to decades of incarceration.


"At this time," Network supporters wrote, "it is unclear whether the investigation cited in the FOIA denial simply refers to the government's ongoing legal retaliation against Bradley Manning, or whether there is actually some other separate investigation targeting the Support Network."


It's a sure bet, given the administration's ongoing war against whistleblowers, that the Army as well the Justice Department has the Manning Support Network--along with WikiLeaks--in their gun sights.


And with the construction of NSA's giant $2 billion Utah Data Center nearing completion, as James Bamford reported in Wired Magazine in March, the agency's ability "to intercept, decipher, analyze, and store vast swaths of the world's communications as they zap down from satellites and zip through the underground and undersea cables of international, foreign, and domestic networks" will soon take a qualitative leap forward--at our expense.


With FAA currently up for renewal, and with congressional grifters on both sides of the aisle pushing for a five-year, amendment-free extension as demanded by the administration, the secret state is refusing to provide privacy advocates--both in and outside government--with any information whatsoever on how just many violations have occurred on a regular basis under the law's admittedly loose guidelines.


In May, senators Ron Wyden (D-OR) and Mark Udall (D-CO), members of the Senate Select Committee on Intelligence asked NSA to divulge information about how many Americans communications have been spied upon by the agency.


The Office of the Director of National Intelligence responded by saying that it was "not reasonably possible to identify the number of people located in the United States whose communications may have been reviewed under the authority of the FAA."


Both senators oppose FAA's extension on civil liberties grounds and in the face of the government's stonewall, Wyden placed a "hold" on the legislation.

In a statement published on his web site Wyden explained why he was blocking unanimous consent requests to pass FAA's five-year extension.


"The purpose of this 2008 legislation was to give the government new authorities to collect the communications of people who are believed to be foreigners outside the United States, while still preserving the privacy of people inside the United States," Wyden wrote.


"Before Congress votes to renew these authorities it is important to understand how they are working in practice. In particular, it is important for Congress to better understand how many people inside the United States have had their communications collected or reviewed under the authorities granted by the FISA Amendments Act."


"I am concerned, of course, that if no one has even estimated how many Americans have had their communications collected under the FISA Amendments Act," Wyden averred, "it is possible that this number could be quite large. Since all of the communications collected by the government under section 702 are collected without individual warrants, I believe that there should be clear rules prohibiting the government from searching through these communications in an effort to find the phone calls or emails of a particular American, unless the government has obtained a warrant or emergency authorization permitting surveillance of that American."


Ludicrously enough, in response to the senator's requests I. Charles McCullough, the Inspector General of the Office of the Director of National Intelligence wrote that the NSA Inspector General "and NSA leadership agreed that an IG review of the sort suggested would itself violate the privacy of U.S. persons." (emphasis added)


McCullough's irony-rich obfuscation, published by Wired, argued that even providing an estimate on how many Americans were spied upon would be "beyond the capacity" of the NSA's in-house watchdog. "I defer to [the NSA inspector general's] conclusion that obtaining such an estimate was beyond the capacity of his office and dedicating sufficient additional resources would likely impede the NSA's mission."


Just as the Bush administration scotched citizen lawsuits that demanded accountability from the nation's telecommunication providers over their collaboration with NSA's illegal programs, so too has the Obama regime sought to derail government accountability by invoking an alleged "state secrets privilege."


Recently, the Electronic Frontier Foundation reported that "Three whistleblowers--all former employees of the National Security Agency (NSA)--have come forward to give evidence in ... EFF's lawsuit against the government's illegal mass surveillance program, Jewel v. NSA."


In a July 2 motion filed in U.S. District Court in San Francisco, "the three former intelligence analysts confirm that the NSA has, or is in the process of obtaining, the capability to seize and store most electronic communications passing through its U.S. intercept centers, such as the 'secret room' at the AT&T facility in San Francisco first disclosed by retired AT&T technician Mark Klein in early 2006."


Those three former NSA officials--William E. Binney, Thomas A. Drake and J. Kirk Wiebe--were themselves targets of government persecution over allegations that they provided information to The New York Times in their 2005 revelation of illegal domestic spying by the Agency.

Drake, who pled guilty last year to a misdemeanor after the Justice Department's Espionage Act charges collapsed, was initially prosecuted by the administration--as a spy no less--for providing evidence to The Baltimore Sun of massive waste, fraud and corruption in NSA's Trailblazer program.

The $1.2 billion corporate boondoggle, overseen by the Science Applications International Corporation (SAIC) and project partners Boeing, Computer Sciences Corporation and Booz Allen Hamilton was eventually shut down in 2006.


In the wake of initial reporting by the Times, USA Today disclosed that NSA "has been secretly collecting the phone call records of tens of millions of Americans, using data provided by AT&T, Verizon and BellSouth."


In fact, the same firms who assisted the Agency in creating "'a database of every call ever made' within the nation's borders," are busy as proverbial bees providing geolocational information to law enforcement and secret state agencies.

As EFF averred, "Jewel v. NSA is back in district court after the 9th U.S. Circuit Court of Appeals reinstated it in late 2011. In the motion for partial summary judgment filed today, EFF asked the court to reject the stale state secrets arguments that the government has been using in its attempts to sidetrack this important litigation and instead apply the processes in the Foreign Intelligence Surveillance Act that require the court to determine whether electronic surveillance was conducted legally."


While EFF should be commended for their efforts, prospects for a full accounting of serious state constitutional violations of Americans' right face an uphill battle.


As the World Socialist Web Site pointed out Monday, "The latest revelations about cell phone monitoring, when added to the long record of antidemocratic attacks carried out since the declaration of the 'war on terror'--from the establishment of the Guantanamo Bay prison camp to the Obama administration's assertion of the right to summarily execute anyone, including US citizens, anywhere in the world—provide chilling evidence of the real and growing threat of an American police state."


Efforts in that direction by the Obama administration are gathering steam.
The Electronic Privacy Information Center (EPIC) also reported Monday that "The White House has released a new Executive Order seeking to ensure the continuity of government communications during a national emergency."


That Executive Order, issued July 6 by the White House, grants new powers to the Department of Homeland Security, "including the ability to collect certain public communications information," EPIC averred.


But it does far more than that. "Under the Executive Order the White House has also granted the Department the authority to seize private facilities when necessary, effectively shutting down or limiting civilian communications."


As researcher Peter Dale Scott disclosed in numerous analyses on so-called "Continuity of Government" planning, COG is code for the suspension of constitutional guarantees and the imposition of martial law by the National Security State.


In 2010, Scott pointed out in Japan Focus: "Clearly 9/11 met the conditions for the implementation of COG measures, and we know for certain that COG plans were implemented on that day in 2001, before the last plane had crashed in Pennsylvania. The 9/11 Report confirms this twice, on pages 38 and 326. It was under the auspices of COG that Bush stayed out of Washington on that day, and other government leaders like Paul Wolfowitz were swiftly evacuated to Site R, inside a hollowed out mountain near Camp David."


In fact, the first ninety days after 9/11 "saw the swift implementation of the key features attributed to COG planning ... in the 1980s: warrantless detentions, warrantless deportations, and the warrantless eavesdropping that is their logical counterpart. The clearest example was the administration's Project Endgame--a ten-year plan, initiated in September 2001, to expand detention camps, at a cost of $400 million in Fiscal Year 2007 alone. This implemented the central feature of the massive detention exercise, Rex 84, conducted by Louis Giuffrida and Oliver North in 1984."


The proposed five-year extension of the FISA Amendments Act, coupled with indefinite detention provisions of the 2012 National Defense Authorization Act (NDAA), the president's "kill list" and now, a new Executive Order granting DHS the power to "seize" private communications' facilities in the wake of a "national emergency" have accelerated these dictatorial trends.