Runaway Government
In an April 2011 column (“Maxed Out America: Coming Sooner Than You Think”), I wrote that “[T]here is a consensus (among economists) that a country reaches ‘a critical insolvency threshold’ once its public debt hits 90% of GDP. At that point, lender cutoffs and interest-rate premiums become real possibilities.” At the time, the Congressional Budget Office believed that we were a decade away from reaching that 90% threshold. Based on the true tracks of spending and economic growth, I thought it was more like six years or so. Today, thanks to the 2011 debt-ceiling deal, the proposed parameters of the next, lackluster growth, and the continued lack of any meaningful fiscal restraint, I believe it’s more like three.
Reid expects that any debt-ceiling deal will increase the limit by another $2.4 trillion, bringing the national debt’s grand total to $18.8 trillion and extending the next ceiling hit into early 2015, conveniently, barring another serious recession, after the 2014 congressional elections. If form holds, 91% of the new debt will be “public debt,” increasing its total to about $13.7 trillion. If GDP only grows by an annualized 2.2% during that time — a rate which roughly matches the economy’s anemic performance in the 13 reported quarters since the recession officially ended in June 2009 — the public debt-to-GDP ratio will be about 83%. Rinse and repeat for another year and we’ll hit 90% in the spring of 2016. If we have another recession, “fiscal cliff”-induced or otherwise, we’ll get there sooner — maybe much sooner. All of this additionally assumes that buyers of our debt won’t lose patience with our profligacy and either stop buying our debt or start demanding higher interest rates well before we hit economists’ admittedly arbitrary threshold.
So we have a government on track to function without a budget for a fourth straight year, a Treasury secretary who refuses to advocate any kind of fiscal responsibility while ridiculing anyone who proposes a sane solution, a significant plurality if not a majority of the population which believes that free stuff can and will continue without interruption, a president who believes that his second pathway into the history books (he thinks ObamaCare is the first) is ruthlessly taxing the rich, media apparatchiks who believe we should really return to 1950s-style 90% marginal income tax rates, and a Federal Reserve printing as much money as necessary to accommodate what is intuitively unsustainable.
Perhaps a case can be made for agreeing with Geithner that we should dispense with the annoying inconvenience of having a debt ceiling, given that the discussions over raising it seem to be more about artificial political theater than substantive debate. At least when the inevitable downgrades and increases in borrowing rates occur, Geithner, Obama, Democrats, and the press won’t be able to claim as they did last year (though they will of course try) that intransigent Republicans threatening a government default caused them.
When you think of “public debt”, you probably think that there are bondholders out there….but the sorry fact is that you’re one of them. The Federal Reserve issues money by purchasing Federal securities — US Bonds. Each dollar on your bank statement was issued somewhere along the line by taking equivalent Federal Debt onto the Balance Sheet of the Fed (all the legal ones, anyway — there’s Maiden Lane, MBS, and all that stuff as well). So, effectively, each dollar bill is 1/10,000th of a $10,000 bond. What if the bond goes foom?
During the first Obama term, the Fed’s balance sheet dramatically expanded — we’re in uncharted territory here (http://www.mybudget360.com/wp-content/uploads/2012/04/Fed-reserve-balance-sheet-2012.png). And since then, practically every dollar of each trillion-dollar+ deficit has been funded by the Fed — they’ve long since passed China as being the number one holder of treasuries. The drop in our credit rating wasn’t felt by most Americans because only the Fed is stupid enough to buy treasuries in the first place.
Canceling the bond will have no effect on the existence of notes already in circulation, nor on their legal tender status. It could impact their market value, but that is far from the only way to effect the value of US currency.
Tom, Dont forget QE-Infinity and Beyond!
Re. “At least when the inevitable downgrades and increases in borrowing rates occur, Geithner, Obama, Democrats, and the press won’t be able to claim…”
I doubt it: they will bail out before.
Be succinct, come to the point, Mr. Blumer. The word is tyranny – and we are all prisoners here. The printing unto infinity, the debt increases to never-never land, goaded on by Keynesians whose handiwork is on technicolor display in Europe – these are the central planners wet dream. Japan is on the frontier of this madness and Japan will fail spectacularly this coming year – collapse – with a debt over 220% of GDP. Sovereign default there, and in Europe is the end game as collateral is no where in sight, but the criminals who are in charge will never give up. They are totalitarians and lies are their real currency, and they have suckered the sheep into the pen with freebies and more lies, straw men to hate and assurances of a glorious new era, every other day. The slaughter has just begun.
While tyranny is indeed the word,playing the all important game of politics– who wins and who looses– is where our futures lie.
If we continue to lose due to the Axelrod psy-ops games being played upon us 24/7 things will never get any better.
For me its all about who controls the press.NO matter what evil deeds or designs the bent axel dredges up from down below its useless without the willing maneuvers of the Drive-by Media.
If we can begin to scare the life out of them, which we are well on our way of doing, right here in the New Media we have a chance of saving the country.
Right now what’s left of the DBM is still controlled by the commie left.
If we go after their sponsors, double down on every issue that they contort, in favor of the left,it shouldn’t take too long before they re-learn what fair and balanced, who, what, where, when, and why really should mean.
Not to do so will get us to the authors 90% really quick.
Our first and biggest feat will be to convince the US citizens that not cutting spending drastically before we sign on to another debt ceiling is insanity.
If we succeed in that we are on our way to victory in 2014 and may save the country from a huge debt debacle in the process.
There is little the obamba administration can do that can’t be undone in a new administration. The glaring exception to that is how much money they spend how fast.
judge arrow, undoubtedly your assessment is correct, irrespective of all the posturing naysayers.
As is said, the proof is in the pudding. As such, the FEDS need to cook their books, as if all is well. Those who have a basic understanding of economics, accounting, taxes too, know when fiscal smoke is blowing their way.
And none of this would be an issue if NOT for the fact that radical, left revolutionaries – one and the same – desire an economic implosion/explosion – http://adinakutnicki.com/2012/08/07/barack-hussein-obamas-deconstruction-plans-green-wise-via-the-economy-disarming-the-citizens-via-gun-control-connecting-the-dots-addendum-to-the-second-term-plans-of-an-obama-presidency-c/
This is really not rocket science, but it does help to have a background in economics/taxation, as well as radical leftism & its twin evil – Islamism. Both are seeking the same outcome – the destruction of the US.
Fiscal questions and the federal debt are critically important, but let’s give a nod, at least, to the other major manifestation of runaway government: the completely unbridled, answerable-to-no-one regulatory bureaucracies.
There’s a lethal synergy between the explosion of federal spending and the metastasis of the regulators: the first pays the employees of the second to make all our productive efforts less profitable, thus “forcing” Washington to seize a steadily increasing percentage of our remaining production through taxation, and a steadily increasing percentage of our savings through currency inflation, to pay the regulators to make it still harder for us to produce!
It feels like one of those “What’s Wrong With This Picture?” puzzles, doesn’t it?
Amen, Brother.
The idiots killed all the real producers through regulation, unions, and multiple layers of taxation. We can’t just all regulate each other to death, but that’s what they’re trying to do.
There really is no one left to pay the bill.
Oops!
Thus is the Wealth of a Nation squandered by fools and knaves, until all the money they’ve stolen becomes worthless, too.
It’s an odd thing: when you talk to the same people who favor this, they are also the one’s who harangue you about “Climate Change” and “Tipping Points” with dire consequences for all. Yet here, they don’t see the “Tipping Point” right in front of them.
Yeah, but you’ve got to look on the bright side, Allston: whether the feral government’s self-declared experts proclaim we need more regulation to ward off terrible ecological calamity or more debt to ward off terrible economic and social calamity, the result identical: more money and control for the better people, less of both for the commoners. See? They’re consistent. Isn’t that proof in itself?
This is the end.The vicious cycle has spun too low.Too many trends on too many levels are at work against us.It’s not so much the painful death I fear,it’s the loss of a beautiful world for our heirs and mankind that I mourn.If only our warnings could somehow be an alarm that might reverse that reality,but alas,the tipping point has been passed.
I wish you would address:
1. The issue of the importance or lack thereof of Intergovernmental Holdings.*
2. If rather then looking at GDP like everyone does, we should be looking at GNP, since unlike GDP, it does not include GDP (which means GDP records out of control government spending as a positive.)
*Is not most of Intergovernmental Holdings held by the Social Security Administration for the benefit of SS recipients, which is much the same thing as if the recipients held them themselves, and therefore much the same as private debt?
Over $2 trillion in Social Security, a couple hundred billion in Medicare, three quarters of a trillion in the Civil Service Retirement/Disability Fund, north of a hundred billion in the G-Fund, and about a trillion more in other funds.
Not only does Michelle announce that the Obamas aren’t going to be exchanging presents this year, but the old girl has banned the word, “Christmas” from public schools and private schools that receive public monies. Furthermore the Queen of Frown country says plans are in the works that will lead to the federal government insisting that every other lunch in secondary school be a veggie lunch.
Obama, of course, has his own changes to shove down America’s throat.
If we go over the fiscal cliff, he’ll naturally insist that it’s the Republican’s fault. Obama’s henchwomen note that “Republicans hate the blacks and the poor who will suffer the most” from an empty pockets treasury.
Eric Holder wants to put his two cents in, too: he’s announced there will be no investigation of voter fraud during the Nov. 6 election. The borders between Mexico and Texas, until further notice, will not be policed.
Meanwhile, President Obama has vowed to save 500 billion over the next three years by closing down 20% of the present U.S. military bases. Incidentally, the service academies will be hit with class size reductions of approximately one half.
Surprisingly, less than half of the U.S. population could give a rat’s ass about any of these mandates; executive orders. And, why not, they’re Obama voters.
What’s more, I’m wondering if anyone caught the masked meaning of Obama saying that Israel had a right to defend itself. The operative implication being; the U.S. won’t be selling Israel the parts they’ll need to fight a protracted war.
JFK would have said an attack using weapons of mass destruction on Israel would be tantamount to an attack on the United States. Obama talks like he’s the President of Cuba.
The truth is, as we all know, Obama, doesn’t have a drop of red, white and blue in his veins. Scratch a member of the Obama inner circle and you find a totalitarian to the core. The Communist Manifesto is the President’s bible.
When the first dirty bomb explodes on the American homeland, in a calm voice Obama will call for another thorough investigation to get to the bottom of things.
The irony, of course being, those who voted for Obama voted to re-elect the bottom of the barrel. They put a mole back into the White House for another four years. And sentenced the United States to a slow, painful death for this was the most crucial vote of our country’s life.
Ever wonder what it was like defending the Alamo in 1836? You’re about to find out. You’re outnumbered, outgunned, and have a President who’s totally out of it; A traitor by every Webster definition.
This country is being run by a citizenry that’s morally bankrupt. Just like the people it elected to govern them. In other words, folks, the barbarians have breached the walls, and are now controlling our government. We are now fighting for our very lives. Praise the Lord and pass the ammunition.
More truth in the above comment than the MSM has given in the last 4 years, and probably the next 4 too.
Simply no substitute for 20/20 vision like yours,,Thanks!
The tree of liberty needs refreshing…
They’ve got us surrounded – the poor bastards!
The logical move by the GOP would be to nix all bills until a budget is voted and signed.
The words heard most often in education are “levelling.” It is stunning how government is seen as an instrument now to hobble the masses and provide privileges and protections to Business Cronies. Who will of course show their gratitude by hiring a workforce that mirrors the population demographic in a new Equity in Credential Attainment World.
The government confiscates from producers and gives to constituents under an assumption the economy is a fixed pie. What happens when the reality that it is not becomes unavoidable?
What happens when the Equity in Credentials has destroyed the Division of Labor? Where the only people doing well besides public and nonprofit employees are the wise souls who took their good minds and work ethic and got plumbing licenses?
Robin, it is no mystery why the Obamacare law included legislation to natioanlize the student loan program and “cut out the middle men” who were providing those private loans (making a profit). This is move towards the Equity Creditial rights you mention, by providing higher education opprotunities only to selected groups, ethnically or politically connected. I wonder how Obama is going to reward to youth voters this last election cycle, forgiving their ridiculous loan burdens, or giving them guaranteed govt. jobs, or both?
Who is posting Dept. of Education figures at Wikipedia?
If they are accurate, nice slash and burn from 2009 on…
Boehner should simple say no Senate budget, no tax or spending deal.
Period.
You must not be aware that Boehner and the republican leadership is in on the deals to split up the spoils.
If there is no deal, then the Bush tax cuts expire automatically and taxes go up for all income-earning Americans. And they go up more sharply the more income one earns.
And that’s why our left-wing counterparts at Daily KOS don’t want any sort of deal either. They just want to wait for the Bush tax cuts to expire automatically.
If it’s going to go up on top earners no matter what I’d rather have it go up on everyone anyway. All those hopey changey middle class voters who voted in Obama have to feel the true cost of his spending. The last thing I want is for him to get away with conning the public into believing that “the 1%” can pay for all his handouts. The scariest thing about the atmosphere isn’t the impending tax increase, it’s the demonization of wealth, hard work, and success by this administration. If they had it their way they’d go back to 90% top marginal rates, and I don’t want them to get away with that before the majority of the country gets hit in the pocketbook too. Maybe when the average middle class voter sees how much is being skimmed from his paycheck, some of them will rethink voting for Democrats.
Yep. And a 10% across the board slash of all discretionary spending will make be fine by me. It isnt like the military isnt gonna be slashed and burned anyways.
I say no deal.
I agree. It is not the rich that is benefiting from government largess why should they pay for it. I we are going to have a nanny state then everybody is to pay.
It’s obvious poor Geithner is jealous that the Obama’s have such unlimited benefits to jaunt off to any corner o the planet for a vacation. He wants to partake in the largesse before he’s booted from office.
What better policy than the one proposed to facilitate his desire?
Ever hear of a ‘runaway diesel’?
A runaway diesel is a diesel engine (obviously) that has unrestricted access to fuel, either through a failure of its fuel system or the combustion chambers having access to their lubricating oil.
The engine will run faster and faster until it suddenly blows apart.
Our government is that runaway diesel, consuming its lubricating oil. It’s end will be just as spectacular.
Someone above mentioned that tyranny has come to our nation. I would agree, except to say that the flavor of that tyranny is one of malice.
Therefore, I suggest to you that everyone from both Obamas and on through his cabinet are traitors to this nation.
Traitors as in Section III, Article III of the Constitution. They know EXACTLY what they’re doing, and they PURPOSEFULLY INTEND to have this nation blow apart. Look closely at Obama’s past and you cannot deny that it is polluted with those who do not subscribe to our nation’s principals and would like nothing better than to destroy it. Every political move made by the White House is purpose-built to inflict the maximum harm upon our economy and our way of life.
We have to come to grips with the fact that this is a nation governed by the plain words and plain meaning of the United States Constitution, and that in the past century our political class has done everything in its power to usurp that document’s standing as our supreme law of the land.
We are either going to stand up and demand that our political leaders follow the Constitution or not. We have already seen that a majority of the citizenry are not willing to do so. Protecting and defending the Constitution from domestic enemies cannot be done at the voting booth. The power of the vote has become tainted by corruption – everything from disenfranchisement via gerrymandering, to intimidation by thugs like the NBP in Philly and trade unions lead by Trumpka, to fraud by illegal immigrants, voting by the deceased, voting by the mentally impaired, electronic fraud, off shore tabulation, etc. The game is rigged. Even the Constitution contains a means of defrauding the purpose of the Founders in the seventeenth amendment.
And I furthermore am completely convinced that this matter cannot be settled peacefully – but just as Lincoln’s house divided could not stand – this nation will become all one thing, or all the other.
Personally, I would not put my money upon the indigent suckling at the teat of a bankrupt government in winning such a conflict.
Once the process starts, it usually takes place much faster than anticipated.
People, businesses, and firms are currently starting to move their assets to safer venues where the tyrannical government cannot seize them.
The government has to take even more urgent action to confiscate what is left, thereby creating even greater panic.
Even with as corrupt a media as we have, they cannot hide the decline.
It will be evident.
I can add and subtract,does that qualify me for a position in the santa-bama administration? Maybe our president is the smartest man in the room by continuing the borrowing from the Red Chinese,with no intention of paying it back? In his hand he holds 2 aces,while waiting to draw the 90% card.When that happens he simply refuses to pay the bill.Who in their right mind would give all of that money to them anyway,then he could just hand the whole mess over to the Republicans in 2016!
As much as I hate to say it, Timmy is right: the Debt Ceiling is a bluff. It was never meant to be anything serious and there is no force behind it. It was only a gimmick created by big spenders to pretend like they were serious about controlling spending and put the ceiling out far enough that most Americans would completely forget about it by the time the next “crisis” came around. Even most Republicans are lying when they say they want to cut the budget, when they really mean is “reducing the rate of growth” rather than actually reducing real spending.
You want a real depressing laugh? Read books from the early 1990′s about the fiscal crises of the day. See how they were worried about programs that cost $80 billion, or deficits in the tens of billions of dollars. How far we have some in just 20 years, that deficits not in the hundreds of billions but trillions are treated as normal. Bear in mind also in 2008 some very quiet Treasury and Federal Reserve experiments were run using Quadrillion dollar budgets. Must be gearing up for the hyperinflation they know is coming.
I have a soon to be retiring close relative. She is a huge lib and gleeful Obama supporter. Active in local Democrat circles. She owns a fat 401K. I am just waiting for the soon to arrive day that the Treasury decides that 401K is just too rich of a target and she is relieved of it by the IRS….in return for a guaranteed “fair” payout , of course. The squeals of protest will be music to my ears! Or possibly she will just decide to be an obedient socialist and be only too happy to turn it over to the state. Her contribution to the betterment……blah, blah, blah.
These people never see the train until the headlight shines on their eyes. The look down to realize they’re tied to the tracks. It is sort of amazing.
Like it or not secession must be considered an option. The USSR fell not because it wasn’t good at propaganda but because the Ruble bought almost nothing. If you want to fight the propaganda machine with its own inflated crap you can’t win.
i think i saw a movie like this. some guy fell asleep, fell down a hole, or something like that. anyway, he woke up in the future. everybody there was stupid as he11. there was a mean queen. and you were there, and you too.
please tell me there is a way back home from this nightmare. there’s no place like home (click clich) there’s no place like home (click click)… has anybody seen the wizard? help!
better eat hearty this Thanksgiving and give thanks for what we once had. eat, drink and be merry. i have a strong suspicion things are going downhill quickly from here. third world, here we come. at least our perz can lead us up from there. after all, he said he was born in a third world country, and look where he is now. it reminds me of a roller coaster ride, with the big curves and falls just ahead. hope i don’t throw up.
are we still allowed to celebrate Thanksgiving? who are we supposed to give thanks to? quick, somebody read the obamanual on what we can and can’t do. isn’t this just sooomuch fun? chw
when the shtf, i will remember who destroyed our way of life and what i was taught – squueze, don’t jerk.
Another very well researched and most excellent article. My only gripe is if you hope the Libs will understand this you can’t use big words like “intransigent”.
timmy, can we eliminate personal credit card limits too? i want my husband to buy me a G650 for christmas, but our american express limit is only $50 million.
“I would rather be exposed to the inconveniences attending too much liberty than to those attending too small a degree of it.”
– Thomas Jefferson
There are actually three schools of thought about this.
The one accepted by most pjm readers is that government spending and the debt are real, dangerously high, and on a course to destroy the country. We’ll call this one the Adult School.
The second school of thought is held by a large percentage of brain-dead liberals, and is the one in which people deny that such things as budgets and debt are necessary or even exist, at least when it comes to the gubamint, which obviously can create any amount of money it wants. There are plenty of people who take themselves quite seriously who abolutely believe that. We’ll call that school the Kindergarten School.
The third school is the one held by the leaders of the Democratic / Marxist party. They know full well that the view of the Adult School is absolutely correct. The only difference between the third school and the first is that the holders of the third view WANT the United States to collapse. We’ll call that school the Future Emperors.
Sorry, bro, this is America and that thrid group will be the ones with their necks snapped in nooses for high treason, if not a bullet through their skulls.
Pro it is amazing to me the number of hardworking adults I know who have a far left political view and truely believe the Government can print money forever. I would think they believed in Santa as well, except for the religous connection.
We’ll call that school the Future Emperors.
——
Hail the first emper0r….
/sarcasm off/
Call His Majesty’s bluff, Boehner. Get up and walk away when he makes his next double the spending demand. Take the chance that when we go over the fiscal cliff and real pain bites, the Won won’t be able to pull the wool over the eyes of the millions in pain, pain like they’ve never known before. Will the situation be volatile? Yes. Could it tip to the demagogue? Yes. But then again he might end on a lamppost. With Nancy and Harry swinging beside him. And wouldn’t that be a sight for sore eyes. Go ahead. After all, what other arrows do you have in your quiver? I’ll answer that. Not a one. Go ahead, stand up to the tyrant. You might be amazed…
The problem with Boehner and the rest of the Republican leadership is that they are deathly afraid that the Democrats and the lame stream media propaganda machine will call them obstructionist. They would rather be called the party of compromise, even if it bankrupts the country. Leadership requires making tough decisions, not giving away the birthrights of countless generations of unborn Americans. Until we get that type of leadership in our party, we will continue to be the party of the also ran.
This is too delicious to pass up…..
Can’t do a “link” here, but if you enlarge that wonderful image of the train locomotive crashing through the station wall, you’ll make out a blurry…..
….” Chemin de Fer
de L’Oc’Est ” or maybe something close to that.
….which means literally ‘Road of Iron’ (Railway),
then I take the second line to read something like “Occident (abbreviated) East. Accurate corrections are of course most welcome, the point is the FFFRenchinesss of it all.
<;-D
Let us play “what if”. Suppose this cycle continues: (a) Congress continues to not pass a budget (blocked by the Dems in the Senate) so (b) the federal government continues to fund itself by selling treasuries at auction and (c) the Fed continues to buy the treasuries. Now why is this not a financial perpetual motion machine?
Well…in a way this is funny money that only goes into circulation when the federal government spends it on actual goods and services like federal employee salaries, social security, medicare, defense, etc. This slowly inflates the money supply, dollars are worth less, and health care costs and other items cost more.
But as long as this happens slowly…they can keep running the machine. And unlike earlier eras there is no wage inflation because they can ship jobs overseas to people who work for one tenth the labor rate in the USA — and they automate a lot of jobs via machine intelligence. Thus the unemployment and underemployment rates slowly rise. But those people get fed benefits also.
Therefore we all sink slowly, so slowly into poverty BUT — since goods are of higher quality and cheaper every year we are the RICHEST poor people ever.
I used to think we would see a big crash when foreigners abandoned the dollar but — their economies suck even worse. And if they don’t buy treasuries the Fed will just pick up the difference.
So this might actually go on for quite a long time — a lot longer than I used to think it would go.
I like to compare our government and economy to a model rocket launched straight in the air. While the motor is firing the rocket accelerates upward against the force of gravity. After the motor stops the rocket continues to rise for awhile on its upward momentum despite gravity acting on it. Eventually it comes to a stop and begins to fall, picking up speed.
The rocket motor is capitalism. That shut down sometime around 2009 and never really started back up thanks to the hoard of regulations and expenses strangling it, Obama’s policies in general. We continue to rise slowly for awhile on our momentum, but eventually the gravity of unfettered regulation and unlimited money printing takes hold and we slow, then crash. Obama and his cronies don’t understand gravity in this sense, they think that just because the upward momentum masks the downward accelerating force they’re applying that things can go on peachy forever. But companies big and small are already starting to pull in, consolidate, and move offshore, gear up for hiring only part time employees to escape Obamacare, and other such steps needed to survive in the Obama economy. This process takes time, just as it takes the rocket time to slow and fully stop even after its engine dies. The “new normal” that Obama apparently wants will be a long, slow, but accelerating spiral downward.
This administration WANTS to see capitalism fail.
Here is a prescient cartoon.
http://the-sport-of-poker.3724000.n2.nabble.com/SPEND-SPEND-SPEND-td4719960.html
I can’t really get through this article; what debt ceiling?! There is obviously no such thing. Even if you buy that these momentary thresholds minutely choke things for a few days, what of all of the derivative and shady (out-of-site) debts / obligations that go on and on?
It’s like that episode of StarTrek NG where Crusher is informed by the computer that the haul has failed b/c of a ship design flaw: it’s bigger than the universe. This debt / spending is outside of the realm of rationality.
Senate bill rewrite lets feds read your e-mail without warrants Proposed law scheduled for a vote next week originally increased Americans’ e-mail privacy. Then law enforcement complained. Now it increases government access to e-mail and other digital files. by Declan McCullagh November 20, 2012
http://news.cnet.com/8301-13578_3-57552225-38/senate-bill-rewrite-lets-feds-read-your-e-mail-without-warrants/?part=rss&subj=news&tag=title
Message to John Boehner: Give Obama what he wants. Higher taxes on the rich? Sure! why not they don’t pay their “fair share” anyway. More stimulus funding? Absolutely. The government creates lots of permanent jobs not private enterprise. We saw that happen in 2008. Don’t you dare touch spending. Let it automatically increase due to baseline budgeting. Print more money. Darn right! Remove the pesky debt limit altogether like Turbo Tax Tim wants. Double down on the whole lot. Party ’till you puke. Paul Krugman for secretary of the treasury!
Ok, now without sarcasm. The conservatives lost the election. It may very well be easier to clean up this mess to actually give the village idiots what they want and hasten, not simply defer what is obviously coming.
I don’t think this will happen because the career “conservative” leadership in the house are already working on their next election campaign. Like their opponents, their number one goal is to stay in power. The run up to the fiscal cliff negotiations will look a lot like the prelude to a WWF cage wrestling match. The actual show will also resemble a “wrestling” match – a complete show biz fake.
They will cave in. They have to. It’s in their DNA.
You are just too astute to argue with so I will just nod my head in agreement. As they say, they SHOW must go on.
Dear China:
I’m writing to tell you that we have no intention of paying you. Go ahead and sue if you want.
Yours, truly,
America
I think Japan is now the top sucker (I mean lender).
Just remember that we have seen all of this before, and we conservatives are the new Jews. Plan accordingly. All is progressing according to plan, more or less, for the powers that be, except for those occasional bumps in the road.
When things get really rough, as they will, the detentions and disappearances can accelerate. Never let a crisis go to waste!
“We conservatives are the new Jews:” A very good comparison Dutch. Like Israel, we may be surrounded, but also like Israel we are not unarmed.
All the rational people who are of the understanding 2 + 2 = 4 miss the point of what Obama is doing. In Obama’s view of the world 2 + 2 = 5. Obama believes in the corollary of the Keynesian economic model. The GDP is defined as the sum of all goods and services, therefore the more money printed and spent by government agencies is added to the GDP. Therefore printing money is a net positive to the economy.
Add to this understanding by Obama are the actions of the Federal Reserve. The Fed leant out $16 trillion over a period of 3 years according the audit of the Fed ordered by Congress. Where did the Fed get $16 trillion to loan out to the banks? They didn’t have those assets stored anywhere nor did they have stacks of freshly printed $100 bills moved via super tanker sized ships. They wired ones and zeros to these banks as a near zero interest loan and the banks added this amount to their balance sheets.
Now add these two Keynesian thoughts together and what therefore is the conclusion? A government can feed and clothe all its citizens even if every industry is shutdown with the exception of essential products such as farms, textile firms and medical care providers. The government can print money, pay the essential services with this money and never ever have a budget never mind balance one. What does this mean? First, the money becomes worthless when it can not be traded for anything from a non domestic source. A currency only has value if people believe it does. Second, the definition of slavery is working for nothing against your will via force or coercion. If you are being paid in worthless money, this means you are working for nothing and that means you are a slave. This is exactly what the former Soviet Union did. As the old saying went: “So long as the bosses pretend to pay us, we will pretend to work.”
Under the utopian vision of liberals (communism), no one has to be paid for anything, we all should work for nothing because it is about giving back to the community that gave you birth and supported you when you were a child and will do so when you grow too old to support others as a worker. Of course in those utopian societies where everyone is supposed to be equal, getting the same pay, the elite get special privileges that the peasants do not as compensation for their burden of leadership and responsibility. Bigger house, vehicle, jets, maids, butlers, gardeners as befitting their position… As for the peasants, if you don’t work to your potential you get nothing as the community is not compelled support those who refuse to support it, i.e. you starve to death. Ask the Kulaks about it.
Of course we should the debt ceiling. Obama fully intends to become a dictator in his second term and Harry Reid is very willing to let him. He has already spent billions illegally to get re-elected (for example, 8 billion to save Medicare Advantage from Obamacare for a few more months). We just need to convince the House leaders that the only way to get control of the Senate in 2014, indeed the only way to save the GOP, is to use the power of the purse to force the Ryan budget on the Democrats. So what if they get blamed for shutting down the government! Who’ll get blamed when it collapses?
“No budget? No debt limit? No problem…”
Up until very recently that has been true. It is no longer the case but BOTH parties believe that it is.
There are NO incentives to get the printing and spending under control as such business as usual WILL CONTINUE until it cannot.
Endless money printing and spending, ZIRP and QE forever, always ends in hyperinflationary collapse as the currency detonates.
That is the change your getting… and you will like it…
Published on Nov 13, 2012 by: Rand Paul
George Orwell’s dystopian novel continues to come true in too many ways.
http://www.youtube.com/watch?feature=player_embedded&v=ALN7LTeLxtI#!
War is comming…..prepare.
Michael Reagan: Dad’s Still Waiting for Democratic Spending Cuts Thursday, 21 Jul 2011 By Martin Gould
http://www.newsmax.com/InsideCover/MichaelReagan-RonaldReagan-spendingcuts-/2011/07/21/id/404471
Daily Caller News Foundation GM debuts new taxpayer subsidized mini-electric car 11/27/2012
http://dailycaller.com/2012/11/27/gm-debuts-new-taxpayer-subsidized-mini-electric-car/