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Welfare Nation

Written By Nick Hodge

Posted September 12, 2012

No wonder zombies are so popular…

We’ve turned into a nation of them.

Rail against “the Man” all you want (and I often do), but complacency is certainly an ingredient in tyrannical soup.

Almost 15% of the country — 46.5 million Americans — lived off food stamps in May, a quarter-million increase from the month before.

Number of Americans on Food Stams

The number of people on food stamps is growing three times as fast as the number of people finding jobs. But it doesn’t stop there…

The U.S. population has grown 6% since 2005 — from 296 million to 314 million. But the number of people on disability has grown nearly six times as fast: from 6.5 million to 8.75 million — or 34% — in the same time.

Number of Americans on Disability

Surely the number of disabled workers isn’t growing six times faster than the total population.

What gives?

I’ll tell you what gives: our mentality as a nation.

Nanny, Nanny, You-You

The government has the populace addicted to the entitlement teat. And neither wants to wean. As long as the handouts keep coming, “they” will stay in power.

“Who’s going to vote against free lunch?” the thinking goes.

Meanwhile, the other side is thinking: “I’m gaming the system, getting my groceries for free.” Ahhh, but they aren’t “free,” are they?

For example, here in the Free State, Governor O’Malley frequently touts there are “hundreds of sites around Maryland where kids can receive a free meal.”

What he touts less often is his plan to raise taxes on hard workers who bust their tails to make $100,000 a year, which isn’t all that much with two kids, two pets, and two cars. But that’s ok in the minds of politicians.

There are fewer and fewer people pulling themselves up by their bootstraps to make a respectful living while the zombies are multiplying faster than ever.

And guess what? Their votes are equal. The more zombies created, the more zombie votes, the more votes for more of the same.

This is true of both parties in all states.

“They” throw the masses a few scraps while handing out bones to their largest donors in the form of beneficial policy, tax advantages, and lax regulation — which only furthers the zombification of the hundreds of millions in the middle.

That’s how you end up with charts like this, showing 108 million people receive some form of federal welfare:

100 Million on Federal Welfare

And that DOES NOT include those only benefiting from Social Security (Ponzi) and/or Medicare.

Over one-third (34%) of the people in this country are getting handouts.

It’s only natural that resentment is growing among those working hard for what they earn toward both those giving and receiving handouts…

Not a day goes by anymore that I don’t see or hear a comment like this one:

I volunteer at a charity that pays bills and gives out food, and you see it all the time: After saying they have no food in the fridge, the “poor person” whips out an iPhone to check on their manicure appointment without an ounce of shame or even awareness of the incongruity of their actions. 

Our stack of “cheap healthy recipes” goes untouched as does the “library.”  Saddest was a young girl thrilled with books, but “mom” cursed, “Where the f— you gonna put those things?”

Holding your tongue is the hardest part of the job. 

Many are desperate, but they really need financial management and stability. Growing up in moving households with rotating strangers and no steady job ensures more of the same. They get “the aid,” work odd jobs, bum on street corners ($20/hour — more with a kid) and have no plans for the future except some good lovin’ and fat food. 

And it’s not the right or left that’s to blame. It’s the pacified population that’s traded true individualism and liberty (you know, the American Dream) for dependence on the State.

“The State” (or the collective “they”) love it because they get to stay in power and get expensive dinners on lobbyists’ dimes and only work a few weeks a year and start businesses that take advantage of loopholes they’ve created and profit from deals they know are coming and… and… and…

And the zombies like it because they can pay for their necessities with other people’s money while using the little they do have to get new phones and manicures and sneakers.

So the 110 million people in the country on federal welfare are happy. The couple million I’ve dubbed the collective “they” are happy.

What about the remaining 200 or so million of us?

You’re Seeing It Now

Those making it on their own are starting to fight back. And the incumbents don’t like it.

Surely you heard about the National Weather Service and Social Security Administration buying hundreds of thousands of hollow point bullets, and about the purchase of bulletproof checkpoint booths for Homeland Security.

“They” are planning their contingency for when the majority wakes up to the ruse.

“They” are also starting to crack down on people like you and me, who are starting to speak out against rampant corporatism and the loss of individual liberties…

Consider former Marine Brandon Raub, who was arrested recently for posting anti-government messages on Facebook — clearly within his First Amendment rights.

Police (which have been militarized, dumbed down, and are “their” enforcement arm) used an obscure Virginia law that allows “emergency, temporary psychiatric commitments upon the recommendation of a mental health professional.”

In non-BS speak, “they” can and will detain you if “they” don’t like what you’re saying.

But that’s just one person. Collectively, we’re speaking out, too. There’s a survivalist movement afoot. Expatriation is up…

Congress had just a 12% approval rating in the latest WSJ/NBC poll. Gallup says it’s 10%.

A Pew Research study out recently found 44% of people don’t believe major news organizations. That’s up from 30% in 2002.

The credibility of newspapers, cable, and network news is spiraling downward…

Credibility of News

While engagement in unconventional news and commentary, like this rag, is climbing higher.

People are seeking an alternative — and not just to where they get their (dis)information…

They’re seeking an alternative to the entire system that’s created the state we find ourselves in today — including investments. (If you hadn’t noticed, no one is finding financial independence with mutual funds.)

Money continues to flow away from equities.

Investment Company Institute data show investors yanked $6.3 billion out of mutual funds in June. That was after taking $9.8 billion out in May. Money has flowed out each of the last four months.

Indeed, Morgan Stanley says about $200 billion has been taken out of equities since January 2010.

Equity Fund Flows

Where’s it going?

I think we all know the answer…

George Soros — who, in 2010, said gold was “the ultimate asset bubble” and that it was “certainly not safe” — more than doubled his position in gold in the second quarter.

SEC filings show Soros Fund Management more than doubled its stake in the SPDR Gold Shares (NYSE: GLD) from 319,550 shares to 884,400 shares. That’s $143.4 million worth of gold.

Hedge fund manager John Paulson, who made billions betting against subprime mortgages during the crash, is also increasing his stake in gold.

His Paulson & Co. fund purchased an additional 4.53 million shares of SPDR Gold in the second quarter, bringing his total to 21.8 million shares. He now owns $3.53 billion worth of gold, or about 44% of the company’s assets.

You think they think it’s going higher?

I recently bought precious metals, too.

You can do the same right here, where we’ve arranged for special pricing.

Of course, gold isn’t the be-all and end-all. There are numerous ways you can grow and protect your wealth while remaining outside the system. I’ll continue to cover why that’s necessary — and how you can do it every week — in these pages.

Call it like you see it,

Nick Hodge Signature

Nick Hodge

follow basic@nickchodge on Twitter

Nick is the founder and president of the Outsider Club, and the investment director of the thousands-strong stock advisories, Early Advantage and Wall Street’s Underground Profits. He also heads Nick’s Notebook, a private placement and alert service that has raised tens of millions of dollars of investment capital for resource, energy, cannabis, and medical technology companies. Co-author of two best-selling investment books, including Energy Investing for Dummies, his insights have been shared on news programs and in magazines and newspapers around the world. For more on Nick, take a look at his editor’s page.

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