I have only one question on the subject. How have the clowns in the federal government managed to kick the can this far down the road without total collapse? Never mind kicking it another generation, I really don’t understand what gets us through next month. I have been saying for decades that there is no hope for this country in the long run and the run has already lasted longer than I ever expected. It would appear that in truth we are in FAR worse shape than during the thirties but the smoke and mirrors keep people from realizing that.
The clowns in dc have been able to kick the can down the road by borrowing against future tax receipts on paper.
This go round, the regime borrowed to the point that the debt is no longer managable. The interest payments alone would swamp a smaller country. The fed has been quitely buying up parts of our debt and bernanke has been printing money. Look at what groceries cost compared to two years ago.
It is actually simple economics, spending more than you take in will eventually cause your economy to collapse. Despite what “economists” say, the same rules apply to individuals and national economies.
A huge portion of Americans are dependant on income transfers and a huge portion of Americans are no longer paying into that system because they are out of work.
Combine that with the fact that we are backstopping an out of control Europe and you bet we are heading toward financial poopstorm.
Most Amerians don’t get it because they either don’t feel or see it yet, or they listen to the major media who confuses reality with lots of fluff intended to cover for the current rulers.
Your comment is far closer to the reason why everyone is complacent as compared to the article. Remeber when even the stallwart conservative Dick Cheney said "deficits do not matter"? I have felt the country would go bust for 25 years. We have been playing financial games (as you note in your comment) for 50+ years and have apparantly, somehow , gotten away with it. The naysayers (like me) have been crying foul for over 40 years and the party keeps on rolling and more programs are invented. Why not be complacent? The naysayers have been wrong day in and day out for decades. This time it is different? I know this is going to unravel, but we still have several trick we can play, including paying off our debts with our own money. another part of the problem is that the naysayers, like me, base their arguments on morality rather than knowing the true nature of the balance sheet. Most people are not into morality based arguments. What has been going on for the last 50+ years is morally wrong and we have expected to see punishment for it...The punishment never comes and we look like silly little preachers (rememeber..deficits do not matter?). But we know in our hearts that the day of reckoning will come, who knows maybe it will happen in our lifetime.
Smoke and mirrors is almost right. Americans are deceived by television these days. As long as we take our cues from the idiots on the tube, there is no hope.
——It would appear that in truth we are in FAR worse shape than during the thirties but the smoke and mirrors keep people from realizing that.——
It’s hard to know.90% of our debt is Medicare and SS IOUs written to ourselves. If this debt is repudiated, it will cause societal convulsions, not all of which would be bad.
Families would have to move in together to support the elderly, both for long term care and to pay medical bills. With charities filling the gaps, we could survive this relatively easily, in comparison to the Depression.
The remainder of the debt would require real, annual budget cuts of 5% per year, until annual spending is brought under control.
This approach to debt resolution would allow the economy to flourish, perhaps even increasing tax revenue.
None of this can possibly happen until the alternative is worse: hyperinflation, etc., which would hammer the productive sector.
They do a tremendous, tremendous job of lying to the public, the finance sector, the business sector and a buttload of bullying, frankly.
Unfunded liabilities are horrible, the economy is horrible (still), unemployment is much larger than the government publishes - they’ve even skipped the auction thing and are letting China buy its T Bills Directly from the Federal Government! Amazing! These are all acts of a desperate government that so far has been able to hold it together - through paper and electronic disbursements.
The one group that will tip the whole shebang over the cliff are this country’s entitlement group - WICs, EITC, AFDC, Section 8, SNAP, SCHIP, PELL Grants & Student loans, EBT, SSDI, SSI, SS. When the feds don’t have even the wherewithall to printup trash or spew worthless electronic bits, this whole debacle will come crashing down.
Smart, thinking people will have long since made other financial arrangements like getting their money in a more liquid position beyond the Fed’s Tap and Grab ability...
Yessiree. Those people are gonna riot like all hell’s broke loose.
How have the clowns in the federal government managed to kick the can this far down the road without total collapse?
COMPROMISE is the tool they use to pry defeat from the jaws of victory. They are all as spineless as jellyfish.
I have pondered this question since the late '70's. My theory is the following:
In past history, governments always, eventually... hit SOME kind of hard limit that forced reality back into the system. You could only mint so many coins, print so many bills, etc....
With the advent of computers, world leaders now have the ability to create virtually infinite supplies of money.. thus, creating the illusion that "all is well".
Reality still settles in on SOME countries... those that lack the ability to compute their own money... places like, Argentina, Iceland, Greece, etc.... But, not us... not yet.
I'm still not sure: Can the game go on forever?
I think, "No".
Our ability to inflate faster than ever simply has meant that our balloon has filled up BIGGER than anytime in the past. But, eventually... this too shall pop.
The bubble has moved through various parts of the world's financial system. Now, it has landed on sovereign balance sheets... That's the last stop.
Ths only thing missing now is, the initiator.
You watched Bill Clinton do it for eight long years -- that's all he did. All he ever did was midnight basketball and welfare reform, the latter only because Congress crammed it down his throat, so he stepped up and took credit.
Of course, Obama undid it his first day in office -- "Gittin' the FO'KES some HE'P!!!" And keeping them on the 'Rat Plantation.