It's 2008 Again

The Market Ticker ^ | Feb. 9, 2012 | Karl Denninger

[RedMominBlueState]

Worth watching.... and thinking about. But do so soon, because if we don't the system will collapse, and then there will be no benefits at all.

Bill puts into graphs in a couple of minutes what I've been writing about for the last five years. Your choice is to either act on it or go to the store, right now, and buy all the vasoline you can find -- because if you don't act you're going to need it.

http://www.youtube.com/watch?v=u24nH03NccI&feature=player_embedded#!

[RedMominBlueState]

Great video with charts showing what we're up against. In 2011, the U.S. government borrowed 40% of its budget and spent 60% of that money on entitlements. If entitlements aren't reduced, the government will collapse. But how do you get voters (almost 50% of whom aren't paying federal taxes) to support reduced entitlement spending?

[MrB]

I don’t think there’s a way that the system won’t collapse.
No one has the guts to impose the short term, acute pain that would be necessary to avoid a collapse.

It’s going to happen - the only question is,

how badly are you and your family going to be affected by it?

[houeto]

Your assessment appears to be spot on MrB.

[Fee]

The US has a way out. We are blessed with natural resources such as oil, natural gas, soft coal and timber. Get the EPA out of the way and we can mine, drill and harvest them for export (thus income and revenues) and start employing blue collar workers. Next the US needs to halt immigration of all kind (legal and illegal), revamp the system to accept people with skills and assets that add to the US economy, not the ones who can get low paying jobs and immediately qualify for entitlements!!! This strategy increases income from selling of natural resources and eliminate cost to current gov budgets thru doling out entitlements to immigrants.

[DuncanWaring]

There is much pain and unpleasantness that lies ahead, no matter what anyone does.

The only question that remains is “Does it last for a generation or for a millenium?”.

[Obadiah]

The problem is intrinsic. Congress created a whole class of indentured servants. They released people from their obligation to pay any level of tax whatsoever. In return, these indentured servants tacitly agreed to keep voting for those who would maintain this status quo. So we now have 50% of the population who's very livelihood and welfare belongs to the masters they must keep voting for to keep in power. That is the problem which will ultimately prove unsustainable.

[tiki]

The fedgov has millions of acres that it could sell too.

[Terry Mross]

Great ideas! But the only way any of them will come to pass is AFTER a total collapse. Then we can start over.

But until order is restored just think about how it’s going to be when everyone depending on a government check can’t buy food. It will be the armed against the unarmed.

[Jack Hydrazine]

Stop all welfare, entitlements, subsidies, grants, and other forms of aid for individuals and corporations now!

Our debt is going asymptotic and we are now past the point of no return on paying it off. The political aristocracy knew this would happen and have allowed it to come to pass.

[21twelve]

That is how Germany got out of the Depression. Although it complicated things for them as they had to invade other countries and extract THEIR natural resources. But the idea is the same.

And perhaps we do need to “invade” ANWR, the coal land in Utah that Clinton protected, etc.

[cuban leaf]

—It’s going to happen - the only question is,

how badly are you and your family going to be affected by it?—

It’s why I moved from my home of 45 years, Seattle, to a small farm and home in central, rural Kentucky last August.

And all of my non-401k investments are in precious metals.

We’re looking at installing solar and wind power as well.

To be clear, I’m still a business system’s analyst, but if necessary, we can live off this place.

[MrB]

Very similar strategy here.
We’re going to become a society of “if you don’t grow it, you won’t eat...”

[GeronL]

We probably can’t. It looks like the majority of GOP politicians aren’t on the side of common sense either, its just talk from them.

[GeronL]

It’s worse than 2008.

This time it is probably not possible to change it back

[sauropod]

It’s definitely coming.

Sadly.

Because it is avoidable.

[EGPWS]

Ahh yes 2008, the momentus year of political directive is hitting us again.....

[Jacquerie]

The political aristocracy knew this would happen and have allowed it to come to pass.

Quite right, as did those who kept them in office.