This page has been archived and commenting is disabled.

Charting The Treasury's Delusions: Tim Geithner's Latest Projections For US Public Debt

Tyler Durden's picture




 

One of the events that received absolutely no mention last week was the sneakily announced Treasury annual report on public debt this past Friday, alongside the horrendous NFP report. Luckily, courtesy of Congressman Dave Kamp, we have managed to obtain this report which shows the unprecedented level of delusion that exists at all levels of our administration. In a nutshell, the attached report pretends to forecast US debt and GDP levels. What it doesn't pretend to do, is to be the work product of a variety of pathological liars. Even as Geithner anticipates US total debt to hit $19.6 trillion by the end of 2015, somehow, in some parallel universe, he also anticipates US GDP will rise at a 5% CAGR for the next five years! Total US GDP, which was at $14.2 trillion for 2009, is expected to ramp up by 2.7% in 2010, and then really put on the afterburners in 2011 through 2015, averaging almost 6% each year, and hitting a stunning $19.2 trillion in 2015. The ridiculousness of this assumption is beyond comprehension. And even so, total debt/GDP will still be over 100% per the government's baseline assumptions. Alternatively, if one assumes, as PIMCO does, a GDP growth rate of 1.5% for the next 4-5 years courtesy of the 10% unemployment "new normal", total debt-GDP will hit 126% in 5 years. And this obviously excludes GSE, SSN and Medicare off balance sheet debt. Lastly, the Treasury assumes that even with 100% Debt to GDP, the funding cost on US market debt in 2015 will be only 4.7%, compared to the 1990-2009 average of 5.9%.

The chart below shows the US Treasury's baseline estimate. Keep in mind total debt will realistically be much higher than what is projected here. One notable observation is that the Treasury assumes that Intergovernmental Debt (i.e. funding for trust funds such as SSN etc), will only rise at around 4.5% each year.  This is another chimera that will promptly blow up in the administration's face, now that SSN is net cashflow negative for the first time in history, and will need constant cash replenishment from the Treasury.

So far so good. Where things get very surreal is when the government attempts to project GDP for the next five years. As the chart below shows, Geithner believes that after a minor dip in 2009, GDP will continue growing, and in fact, for four of the projected years, overtake the 1990-2009 average of 4.9%!

So instead of taking the government's word for GDP growth, we have decided to adjust the growth rate at a fixed 1.5%. We show the resulting Debt-to-GDP ratio below for both the government's baseline and our adjusted case. The difference in 2015 is material: 101% versus 126%.

The previous chart ties in directly with the next set of critical data: the government's expected all-in blended interest rate on the marketable debt. As the chart below demonstrates, the Treasury anticipates having interest expense outlays exploding from $201.5 billion in 2009 to $653.6 billion. Yet even that amount is a mere 4.7% of the total projected outstanding marketable debt in 2015, which is well-below the 5.9% the US paid in interest on its debt between 1990 and 2019, when debt-to-GDP peaked at 83%.

Here once again we construct a more draconian scenario, in which we assume that the interest rate on debt increases at 1% each year after 2009, starting at 4% in 2010 and growing until it hits 9% in 2015. As the chart below shows, the result of this scenario would be a catastrophe for the US and its already untenable budget.

Our take home from this compendium of incredulous data, is that there is no way in hell for the US to hit any of its estimates for future funding and outflow, except for one case: if the US continues to be the capital safe haven for the next five years. This means that it will be in the US' interest to generate ongoing solvency, liquidity and geopolitical tensions for the next 5 years and likely much longer. Another benefit - the US defense sector's taxable net incomes will soar. All this is completely independent of any debate on whether the US will see inflation or deflation. As we have seen over the past year, even as stocks have been incorrectly pricing in a return of moderate inflation, Treasury rates have hit record lows, primarily as the fixed income market has continued seeing Treasuries as the last safe refuge. Look for this to only become more acute as increasingly more baby boomers retire. Yet the one virtually certain component of the UST's forecast is that conflict and international "contagion" will be a critical part of the equation should the Treasury wish to retain any semblance of control over its even near-term projections. How much of this will be accelerated by the administration, is a topic for another day.

Full report:

 

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Wed, 06/09/2010 - 13:19 | 403599 carbonmutant
carbonmutant's picture

"Hey, Work with me on this..." -TG

Wed, 06/09/2010 - 13:41 | 403689 BlackBeard
BlackBeard's picture

Yeah... sure...whatever the fuck Timmy.

Wed, 06/09/2010 - 13:45 | 403704 Assetman
Assetman's picture

Well, at least Timmy is consistent.

Delusional.

But consistent.

Wed, 06/09/2010 - 14:06 | 403781 Cognitive Dissonance
Cognitive Dissonance's picture

That is until the maniac(s) explode and we're all showered with a mix of human brains and fiat currency.

I just can't get over the idea that some of these people actually believe what they're saying. The beauty of insanity is that it's perfect in form and function. It's self sustaining and ignores all contrary evidence to it's continued existence.

Wed, 06/09/2010 - 23:24 | 405187 carbonmutant
carbonmutant's picture

Damn, that sounds like religion...

Wed, 06/09/2010 - 13:16 | 403606 Cognitive Dissonance
Cognitive Dissonance's picture

All I see are Olympic ski jumps as far as the eye can see.

This won't end well, but it most definitely will end somewhere somehow.

BTW I end my day with 30 minutes of fiction reading before turning out the light. Looks like I have a few weeks worth here.

Wed, 06/09/2010 - 13:18 | 403617 CoopDeluxe
CoopDeluxe's picture

I believe this could be classified under sci-fi too under the Dewey decimal system.

Wed, 06/09/2010 - 13:26 | 403642 Howard_Beale
Howard_Beale's picture

Unfortunately, it's the Special Olympic ski jump for quadriplegics. Right there with the blind hurdle racers. Yeah, I know, I'm deranged. 

Wed, 06/09/2010 - 13:30 | 403656 Cognitive Dissonance
Cognitive Dissonance's picture

I simply MUST remember not to be eating or drinking anything when I read your posts. You're dangerous to my health. :>)

Wed, 06/09/2010 - 14:22 | 403836 LeBalance
LeBalance's picture

Heimlich Defib!

Wed, 06/09/2010 - 14:58 | 403970 Double down
Double down's picture

Wholeheartedly agree.  That is what avatars are for.

Wed, 06/09/2010 - 13:40 | 403684 knukles
knukles's picture

Mayhaps a revised job description for Sec Treas.  Qualifications Must Include Competency.

Wed, 06/09/2010 - 14:28 | 403859 LeBalance
LeBalance's picture

"What we have here is a failure to communicate, some men you just can't reach.  So you get what we have here today.  Now I don't like this anymore than you men."

What we have here is an N-dimensional Event Horizon.  All dimensions are being carefully orchestrated for maximum Wile E. Coyote effect.

Remember how in some Coyote events, he would hit the ground and that would be the end of the segment, but in others there would be a see saw, a rolling rock, a swinging log, a truck from a painted tunnel?  N-dimensional.  It's a party!

Wed, 06/09/2010 - 13:15 | 403607 The Rogue Trader
The Rogue Trader's picture

Thank you...awesome and sobbering

Wed, 06/09/2010 - 13:19 | 403608 DosZap
DosZap's picture

Tyler, here are some more FUN FACTS from Casey.

Scroll down...............This where we're AT, and where we have been......

http://www.caseyresearch.com/displayCdd.php?id=450

Wed, 06/09/2010 - 13:16 | 403609 RobotTrader
RobotTrader's picture

As if all that debt really matters?

10-yrs. just went flying off the shelves, 300% oversubscribed, at 40-year low rates.

I'm sure Bernanke is not the least bit worried.

As we lurch from crisis to crisis, the bid for Treasuries will be permanently sustained.

Just more "Wash, Rinse, Repeat"....

 

Wed, 06/09/2010 - 13:22 | 403634 Sudden Debt
Sudden Debt's picture

Do what every American does. Stop paying the bills and go on a Ipad buying spree with the available cash!

FREE IPAD'S FOR ALL!

Wed, 06/09/2010 - 14:30 | 403867 LeBalance
LeBalance's picture

max kewl

Wed, 06/09/2010 - 14:31 | 403869 trav7777
trav7777's picture

The State and FBI are contemplating the best way to "approach" Wikileaks to prevent disclosure??!!?!

WTF...they really don't know, do they?

They'll have to approach with lead at high speed or threaten to kill his family.

Wed, 06/09/2010 - 14:43 | 403904 Rusty Shorts
Rusty Shorts's picture

HAAAAHAHAHAAAAAA, this is just too good.

 

“If he really had access to these cables, we've got a terrible situation on our hands," said an American diplomat. "We're still trying to figure out what he had access to. A lot of my colleagues overseas are sweating this out, given what those cables may contain.”

 

- I can see them now, sitting around in a think tank, wringing their hands...wtf do we do now, shut down the internets??

Wed, 06/09/2010 - 15:13 | 404026 seventree
seventree's picture

From the New Yorker:

No Secrets: Julian Assange’s mission for total transparency.

http://www.newyorker.com/reporting/2010/06/07/100607fa_fact_khatchadourian

The most mutually hostile governments in the world agree on the sanctity of state secrets. I wonder how long this can go on.

Wed, 06/09/2010 - 16:27 | 404305 Rick64
Rick64's picture

All staff who deal with sources are accredited journalists. All submissions establish a journalist-source relationship. Online submissions are routed via Sweden and Belgium which have first rate journalist-source shield laws. In Sweden, not only does the law provide protection against any official inquiry into journalists’ sources, but it allows a source whose identity has been revealed without permission to initiate criminal prosecutions against an unfaithful journalist who has breached his or her promise of confidentiality.

 

Wed, 06/09/2010 - 13:17 | 403614 Rick64
Rick64's picture

Geithner can't even do his own taxes right and he is doing projections on the U.S. budget?

Wed, 06/09/2010 - 13:19 | 403622 carbonmutant
carbonmutant's picture

+10

Wed, 06/09/2010 - 13:20 | 403627 Sudden Debt
Sudden Debt's picture

+1000 :)

Wed, 06/09/2010 - 13:22 | 403632 cowdiddly
cowdiddly's picture

+1000 He lied on that to.

Wed, 06/09/2010 - 13:29 | 403653 Anonymouse
Anonymouse's picture

It's ok.  He used Turbo Tax to model the revenues in this report

Wed, 06/09/2010 - 14:33 | 403874 TheGoodDoctor
TheGoodDoctor's picture

+34,000! Isn't that what he owed? I can't believe they believe this shit themselves.

Wed, 06/09/2010 - 13:19 | 403621 jkruffin
jkruffin's picture

It's doable, if they crash the DOW to 1000 and pile everyone into treasuries for 5 yrs while the market goes nowhere the whole time.  But Benny Boy keeps pumping stocks, so something has to give.

Wed, 06/09/2010 - 13:26 | 403643 centerline
centerline's picture

Bread and circuses. Perhaps the stock market is just a circus. Dumb money and 'puters doing a big BB circle jerk around the toilet drain. Dead cat bounce. .... just thinking. sort of. maybe.

Wed, 06/09/2010 - 13:31 | 403660 Howard_Beale
Howard_Beale's picture

Let's see...(rounded) Dow 12,200 to 9750. S&P 1220 to 1040. Yeah, he's pumping away.

When you all get over your whiplash from the March 09 to April 2010 BMR, you will once again realize that market forces are bigger than the Fed, or any central bank.

Wed, 06/09/2010 - 16:12 | 404253 Ragnar D
Ragnar D's picture

Well hey, you can't blame them for racing as fast as they can to get government larger than the market.

They did it in Chicago (Detroit, Newark, Baltimore, Philly, New Orleans), so now they're taking that model nationwide.

 

Once Fedzilla payrolls exceed those of private industry (or S&P capitalization is lower than government's budget, whichever), they'll finally have that sweet sweet Control over everything.

Wed, 06/09/2010 - 13:19 | 403623 homersimpson
homersimpson's picture

Timmy before he wrote up the report:

http://www.youtube.com/watch?v=qNUjClJked8&feature=related

Wed, 06/09/2010 - 13:27 | 403647 Cognitive Dissonance
Cognitive Dissonance's picture

"Your f**king up the rotation. Puff puff, give. Puff puff give."

Wed, 06/09/2010 - 15:01 | 403984 Winston Smith 2009
Winston Smith 2009's picture

No, he watched this and incorrectly thought the answer was "no":

http://www.youtube.com/watch?v=QNjSmzJM8FQ

Wed, 06/09/2010 - 13:19 | 403624 Sudden Debt
Sudden Debt's picture

In my country Belgium they wonder why to do a austerity programm and not just spend more because they also think that in 2015 all will be well.

2015 seems to be the magic year :)

Wed, 06/09/2010 - 13:28 | 403649 centerline
centerline's picture

That Mayan 2012 thing is spooky though.

Wed, 06/09/2010 - 13:28 | 403651 What_Me_Worry
What_Me_Worry's picture

Yes, every country must be pointing to the US and saying "but they get to pretend!"

If America jumped off a bridge, would you do it too?  Apparently, the answer that most foreign governments/citizens would give right now would be "yes, point me to that bridge".

Wed, 06/09/2010 - 14:35 | 403879 LeBalance
LeBalance's picture

Ummmm.....Identity issue: the Owners are on one team and the peons are on the other team.  There is no EU or US, just peons and owners.  Changes how one's thoughts are framed.

Wed, 06/09/2010 - 16:16 | 404264 Ragnar D
Ragnar D's picture

Hang on a second.  How can the Euro-Peons be mimicking us, if all we've been doing the past couple years is copying their stagnant model?

It's like trying to follow someone from in front of them.

Wed, 06/09/2010 - 18:08 | 404558 baserunr
baserunr's picture

Hence the term "Circle-Jerk". Or circle the jerks, or watch the circling jerks, or something like that.....

Wed, 06/09/2010 - 13:43 | 403695 knukles
knukles's picture

Early Pre-Mesastoic Calculation Technology.

God I love the Product of Syllogistic Logic Based Upon Flawed Assumptions 

Wed, 06/09/2010 - 13:21 | 403628 DosZap
DosZap's picture

And as another member posted, Bernake doesn't understand WHY the flight to Gold............

How about doing that, and changing your underwear, after this.

Wed, 06/09/2010 - 14:13 | 403808 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

In context, he doesn't understand why the price is going up WHEN HE IS SELLING SO MUCH OF IT.  "Greenie told me that all I had to do to hold the price down was to sell gold.  Shiet!"

Note to BS, when you are not actually moving the gold, and it is only a notation on a ledger, no body gives a rats ass.

Wed, 06/09/2010 - 13:23 | 403636 contrabandista13
contrabandista13's picture

the devil is always in the assumptions....

Wed, 06/09/2010 - 13:25 | 403639 MarketTruth
MarketTruth's picture

R-E-L-A-X...

Timmy used the newest version of Turbo Treasury and all the numbers worked out fine.

Wed, 06/09/2010 - 13:26 | 403640 Rick64
Rick64's picture

When have these motherfuckers ever got any of their projections right? This is a pacifier for America to suck on until they do their next projections and nobody will question them about the these projections. On and on and on.

Wed, 06/09/2010 - 13:26 | 403641 101 years and c...
101 years and counting's picture

Clearly ZH is falling into the hopium camp.  1.5% GDP growth going forward looks very rosy to me.

Wed, 06/09/2010 - 14:00 | 403693 akak
akak's picture

That was my thought exactly.

Just with the government's laughably downward manipulations of the CPI, they can arbitrarily define reported GDP upward as far as they find convenient.  REAL GDP is already negative, and has been for most of the last decade.  And that doesn't even go into the insanity of ADDING governmental spending (borrowing) into GDP, when in fact it should be subtracted!

Wed, 06/09/2010 - 15:37 | 404106 Busy-Body
Busy-Body's picture

Correct.  Only true organic growth should be considered (not debt-creation of capital injected into the system) towards the assessment of GDP.  Add into that your point of a faulty CPI (done for multiple reasons as I'm certain you know) AND this concept of multinational corporations deriving x% of their revenues overseas, yet somehow the entire amount is calculated into the US GDP.  Good bye, Amerika - I hardly knew ye'............

Wed, 06/09/2010 - 13:48 | 403714 mikla
mikla's picture

+1 ... we won't get to 1.5% GDP.

Remember, we've crossed the Rubicon, and every incremental dollar of new Federal debt now *subtracts* from GDP (because we can't service our debt now).

GDP for the last decade has been entirely due to changes in debt ... we never had 4-6% GDP.  So, 1.5% is *hopelessly* optimistic.  We will not grow out of the debt cycle, despite the fact that that's the unstated assumption behind these "stimulus" and "bailout" plans worldwide.

We are in a deflationary depression, and even flipping to hyperinflation won't grow our GDP.  Sovereign defaults come first.

Wed, 06/09/2010 - 14:19 | 403830 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Once the backside of oil production begins, we will lose approximately 9% of growth a year.  This will directly translate into GDP.  I am convinced that the oilgarchs (Timmah included) know that we are on the doorstep of the downside of oil production, and that they use this to justify their LIES.  Sort of like if you have been lying for so long, you figure it would do more damage to tell the truth.  I know, it makes no sense, but these dudes is nutz!

Wed, 06/09/2010 - 14:35 | 403878 trav7777
trav7777's picture

I sure hope it ain't 9% YoY.  Really hoping for more like 3-4, but the employment of secondary and tertiary extraction techniques in the primary phase now, along with the production curves of post 70s supergiant fields actually keeps me awake at night sometimes.

We took fields with many billions of barrels and basically depleted them (N Sea, Prudhoe) within the span of 20-odd years.  I started getting worried about optimistic decline projections when I was a BPT investor and looked into their 10K production figures as compared to their projections.  Projected was 9% YoY and I was seeing 13-15.

Wed, 06/09/2010 - 14:57 | 403962 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

I am extremely worried about oil production going forward.  There seems to be nothing helping to mitigate the problem either.  First, OPEC is giving rosey reserve stats now, and have been for decades; reserves that may have already peaked (I think the world is now without a swing producer).  Also, improvements in technology will most likely deplete the reserves faster than previously, making the downside come quicker than anticipated (anticipated?).  The method of using sea water by the Saudis is also wrecking havoc on there ever aging fields.  I think that once we move from this plataue, the other energy options are so bad that they will barely mitigate the problem.  Once we try to rely on NG and oil sands/heavy oil it will be like running a marathon dehydrated.  The other options do not offer absolute help either when we consider it always takes oil to build them (it takes energy to make energy/EROEI).

I also believe that the main problem could be the reality shock to people who have not read the Hirsch report, or specifically, considered what life will be like after oil.

Wed, 06/09/2010 - 18:13 | 404579 baserunr
baserunr's picture

But wait!  See the decline in oil production will cause a rise in prices, which will then provide additional tax revenue to the Treserve, and then, and then... oh wait.

Sorry, I had on my Treasury-issued Rose Colored Glasses.

Wed, 06/09/2010 - 13:27 | 403646 carbonmutant
carbonmutant's picture

 This was probably a special report for Steve Liesman and the CNBC groupies.

Wed, 06/09/2010 - 13:51 | 403725 Assetman
Assetman's picture

Did you notice that CNBS is serving a lot more of David Faber and a lot less of the bald guy who claims to be an "economic journalist"?  Even the network has to do something when the ratings get dismal.

Wed, 06/09/2010 - 14:24 | 403837 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

"This just in!"  "Whats that Steve?"  "Well Becky, Timmah Geithner shits skittles!"  "That should translate into huge GDP growth!"  "I know!  I am glad I studied Aristotelian logic because this shit makes sense!  Wacka wacka wacka!"

Wed, 06/09/2010 - 16:21 | 404283 Ragnar D
Ragnar D's picture

The great thing about this place is every day there's one that stops me in my tracks and actually makes me LOL.

 

You officially have the Comment of the Day(TM).

Wed, 06/09/2010 - 13:28 | 403650 Greater Fool
Greater Fool's picture

Are the bulls back from lunch yet? We need to juice the S&P another 100 or so to cheer me up after reading this.

Wed, 06/09/2010 - 14:26 | 403849 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

"I want a ramp job!  And a coke."  "Your coke Mr. Summers."  "Damn it Geeves, on ice!  Do I need to ask?!"

Wed, 06/09/2010 - 13:28 | 403652 Wynn
Wynn's picture

We'll have a new president in 2013 - then it will be his problem

Wed, 06/09/2010 - 13:40 | 403688 bada boom
bada boom's picture

Yes, but it will be Obama's fault. 

New boss same as the old boss.

Wed, 06/09/2010 - 13:47 | 403709 knukles
knukles's picture

Yeah, didju see the topic of his Graduation Address at that Michigan high school:
"Taking Responsibility"

 

Can't make this shit up! 
Whata great fuckin' country. 
No wonder our allies (past tense) are having conniptions. (Read some foreign newspapers ...it's Butt Ugly)

Wed, 06/09/2010 - 13:53 | 403734 bada boom
bada boom's picture

Yes, I think.  Was it the same one where the kid was falling asleep?

It's too hard to listen to sometimes.

Wed, 06/09/2010 - 14:28 | 403862 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Tell the foreigners to STFU, go watch some 'Mercan Idull from their ipaduh, and put some plastic butter on their popcorn.  jeesh.

Wed, 06/09/2010 - 14:36 | 403885 trav7777
trav7777's picture

Post links.

I watch RT and AJ english sometimes and they just flat fuckin LAUGH at this guy while our MSM cannot get his nuts off their chins

Wed, 06/09/2010 - 15:40 | 404121 Kali
Kali's picture

Yes.

Wed, 06/09/2010 - 14:00 | 403759 DosZap
DosZap's picture

bada boom,

"Yes, but it will be Obama's fault"

Nope, it still will be Bush's fault..........WWII was Bush's fault,(add to the list).

This Admin has taken no blame for anything.........

Never heard of "The  Man in the Mirror."

Wed, 06/09/2010 - 14:31 | 403870 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

To clarify, WWII was Prescott Bush' fault. 

Wed, 06/09/2010 - 14:39 | 403895 LeBalance
LeBalance's picture

Mein Herr Bush waz just fulfilling hiz orderz.

Wed, 06/09/2010 - 14:58 | 403967 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Yeah those Harrimans told everyone what to do.

Wed, 06/09/2010 - 15:38 | 404116 Kali
Kali's picture

Ya mean, a new dictator?  Not sure sure we will have an "election"

Wed, 06/09/2010 - 13:39 | 403683 faustian bargain
faustian bargain's picture

This means that it will be in the US' interest to generate ongoing solvency, liquidity and geopolitical tensions for the next 5 years and likely much longer. Another benefit - the US defense sector's taxable net incomes will soar.

I don't think there's much more to say. Excellent analysis, in my opinion.

Wed, 06/09/2010 - 13:43 | 403697 dis-stressed
dis-stressed's picture

Nice work.  Am I correct in assuming that in the lower GDP growth scenario presented that the tax income implied in Treasury's forecast should also be reduced, further increasing projected shortfalls?

Wed, 06/09/2010 - 13:49 | 403718 knukles
knukles's picture

Or that Tax Increases further Lower Growth and Governmental Revenues?

Wed, 06/09/2010 - 14:07 | 403784 jkruffin
jkruffin's picture

Not if you count census jobs each year like Timmy. LOL

Wed, 06/09/2010 - 14:45 | 403922 GovernmentMule
GovernmentMule's picture

But now we get to count oil spill clean up jobs...

Wed, 06/09/2010 - 13:44 | 403701 sheep92
sheep92's picture

I'm not sure where you are getting your number from but total public debt (that's the amount of stuff that has to be rolled and coupons paid, not the accounting entry of social security) is 8.577 trillion dollars.

If anyone here would like to make a market on US nominal GDP in 5 years and would like to make an offer at 1.5% CAGR I will be a size buyer of the over.

 

Wed, 06/09/2010 - 13:46 | 403708 akak
akak's picture

It would be insulting to even address such idiocy.

Wed, 06/09/2010 - 13:52 | 403730 sheep92
sheep92's picture

Which idiocy would you be talking about.  The number from the treasury department or my willingness to lift an offer?

Wed, 06/09/2010 - 14:11 | 403798 TBT or not TBT
TBT or not TBT's picture

Do you think the infinite backstop + underwater debt of the GSE's should be included?

How about the 100 billion the IMF is short?    The 200 billion stimulus the congress has been working on?

There's a lot of off balance sheet debt that nonetheless represents huge streams of payments that the government is obligated to pay out.

Wed, 06/09/2010 - 14:18 | 403826 sheep92
sheep92's picture

I simply posted the number of outstanding treasuries which are held publicly and not in intragovernmental accounts as of 06/07/2010 as per the treasury website.  I did not state any opinions about anything with regard to them or any other part of the US governments balances sheet or income statement.

The second thing that I posted was an offer to take the over on the change in nominal US GDP over the next 5 years at CAGR 1.5%.  The offer still stands.

Wed, 06/09/2010 - 14:53 | 403950 Bam_Man
Bam_Man's picture

Why are you so blithely disregarding the approx. $5 trillion of USG debt sitting in various "Trust Funds"?

Because "we owe it to ourselves"? And does this imply that it need not be re-paid in full?

Wed, 06/09/2010 - 14:39 | 403894 trav7777
trav7777's picture

SS is cashflow negative, bud

Wed, 06/09/2010 - 13:50 | 403722 johngaltfla
johngaltfla's picture

6% GDP growth. BWAHAHAHAHAHAHAHAHAAHAHAHAHAHAHAHA!

 

I want my free drugs!

I want my free drugs!

I want my free drugs!

I want my free drugs!

Wed, 06/09/2010 - 13:53 | 403733 JR
JR's picture

 "the beginning of the end for the greatest economic machine that the world has ever seen," courtesy the central bankers' Federal Reserve System...

DESPERATE FINANCIAL SITUATION, Biggest Debt Bubble in World History: Fifty Statistics About the U.S. Economy | Global Research | 06.04.10

Most Americans know that the U.S. economy is in bad shape, but what most Americans don't know is how truly desperate the financial situation of the United States really is.  The truth is that what we are experiencing is not simply a "downturn" or a "recession".  What we are witnessing is the beginning of the end for the greatest economic machine that the world has ever seen.  Our greed and our debt are literally eating our economy alive.  Total government, corporate and personal debt has now reached 360 percent of GDP, which is far higher than it ever reached during the Great Depression era.  We have nearly totally dismantled our once colossal manufacturing base, we have shipped millions upon millions of middle class jobs overseas, we have lived far beyond our means for decades and we have created the biggest debt bubble in the history of the world.  A great day of financial reckoning is fast approaching, and the vast majority of Americans are totally oblivious.

But the truth is that you cannot defy the financial laws of the universe forever.  What goes up must come down.  The borrower is the servant of the lender.  Cutting corners always catches up with you in the end.

Sometimes it takes cold, hard numbers for many of us to fully realize the situation that we are facing. 

So, the following are 50 very revealing statistics about the U.S. economy that are almost too crazy to believe....

#50) In 2010 the U.S. government is projected to issue almost as much new debt as the rest of the governments of the world combined.

#49) It is being projected that the U.S. government will have a budget deficit of approximately 1.6 trillion dollars in 2010.

#48) If you went out and spent one dollar every single second, it would take you more than 31,000 yearsto spend a trillion dollars.

#47) In fact, if you spent one million dollars every single day since the birth of Christ, you still would not have spent one trillion dollars by now.

#46) Total U.S. government debt is now up to 90 percent of gross domestic product.

#45) Total credit market debt in the United States, including government, corporate and personal debt, has reached 360 percent of GDP.

#44) U.S. corporate income tax receipts were down 55% (to $138 billion) for the year ending September 30th, 2009.

#43) There are now 8 counties in the state of California that have unemployment rates of over 20 percent.

#42) In the area around Sacramento, California there is one closed business for every six that are still open.

#41) In February, there were 5.5 unemployed Americans for every job opening.

#40) According to a Pew Research Center study, approximately 37% of all Americans between the ages of 18 and 29 have either been unemployed or underemployed at some point during the recession.

#39) More than 40% of those employed in the United States are now working in low-wage service jobs.

#38) According to one new survey, 24% of American workers say that they have postponed their planned retirement age in the past year.

#37) Over 1.4 million Americans filed for personal bankruptcy in 2009, which represented a 32 percent increase over 2008.  Not only that, more Americans filed for bankruptcy in March 2010 than during any month since U.S. bankruptcy law was tightened in October 2005.

#36) Mortgage purchase applications in the United States are down nearly 40 percent from a month ago to their lowest level since April of 1997.

#35) RealtyTrac has announced that foreclosure filings in the U.S. established an all time record for the second consecutive year in 2009.

#34) According to RealtyTrac, foreclosure filings were reported on 367,056 properties in March 2010, an increase of nearly 19 percent from February, an increase of nearly 8 percent from March 2009 and the highest monthly total since RealtyTrac began issuing its report in January 2005.

#33) In Pinellas and Pasco counties, which include St. Petersburg, Florida and the suburbs to the north,there are 34,000 open foreclosure cases.  Ten years ago, there were only about 4,000.

#32) In California's Central Valley, 1 out of every 16 homes is in some phase of foreclosure.

#31) The Mortgage Bankers Association recently announced that more than 10 percent of all U.S. homeowners with a mortgage had missed at least one payment during the January to March time period. That was a record high and up from 9.1 percent a year ago.

#30) U.S. banks repossessed nearly 258,000 homes nationwide in the first quarter of 2010, a 35 percent jump from the first quarter of 2009.

#29) For the first time in U.S. history, banks own a greater share of residential housing net worth in the United States than all individual Americans put together.

#28) More than 24% of all homes with mortgages in the United States were underwater as of the end of 2009.

#27) U.S. commercial property values are down approximately 40 percent since 2007 and currently 18 percent of all office space in the United States is sitting vacant.

#26) Defaults on apartment building mortgages held by U.S. banks climbed to a record 4.6 percent in the first quarter of 2010.  That was almost twice the level of a year earlier.

#25) In 2009, U.S. banks posted their sharpest decline in private lending since 1942.

#24) New York state has delayed paying bills totalling $2.5 billion as a short-term way of staying solvent but officials are warning that its cash crunch could soon get even worse.

#23) To make up for a projected 2010 budget shortfall of $280 million, Detroit issued $250 million of 20-year municipal notes in March. The bond issuance followed on the heels of a warning from Detroit officials that if its financial state didn't improve, it could be forced to declare bankruptcy.

#22) The National League of Cities says that municipal governments will probably come up between $56 billion and $83 billion short between now and 2012.

#21) Half a dozen cash-poor U.S. states have announced that they are delaying their tax refund checks.

#20) Two university professors recently calculated that the combined unfunded pension liability for all 50 U.S. states is 3.2 trillion dollars

#19) According to EconomicPolicyJournal.com, 32 U.S. states have already run out of funds to make unemployment benefit payments and so the federal government has been supplying these states with funds so that they can make their  payments to the unemployed.

#18) This most recession has erased 8 million private sector jobs in the United States.

#17) Paychecks from private business shrank to their smallest share of personal income in U.S. history during the first quarter of 2010.

#16) U.S. government-provided benefits (including Social Security, unemployment insurance, food stamps and other programs) rose to a record high during the first three months of 2010.

#15) 39.68 million Americans are now on food stamps, which represents a new all-time record.  But things look like they are going to get even worse.  The U.S. Department of Agriculture is forecasting that enrollment in the food stamp program will exceed 43 million Americans in 2011.

#14) Phoenix, Arizona features an astounding annual car theft rate of 57,000 vehicles and has become the new "Car Theft Capital of the World".

#13) U.S. law enforcement authorities claim that there are now over 1 million members of criminal gangs inside the country. These 1 million gang members are responsible for up to 80% of the crimes committed in the United States each year.

#12) The U.S. health care system was already facing a shortage of approximately 150,000 doctors in the next decade or so, but thanks to the health care "reform" bill passed by Congress, that number could swellby several hundred thousand more.

#11) According to an analysis by the Congressional Joint Committee on Taxation the health care "reform" bill will generate $409.2 billion in additional taxes on the American people by 2019.

#10) The Dow Jones Industrial Average just experienced the worst May it has seen since 1940.

#9) In 1950, the ratio of the average executive's paycheck to the average worker's paycheck was about 30 to 1.  Since the year 2000, that ratio has exploded to between 300 to 500 to one.

#8) Approximately 40% of all retail spending currently comes from the 20% of American households that have the highest incomes.

#7) According to economists Thomas Piketty and Emmanuel Saez, two-thirds of income increases in the U.S. between 2002 and 2007 went to the wealthiest 1% of all Americans.

#6) The bottom 40 percent of income earners in the United States now collectively own less than 1 percent of the nation’s wealth.

#5) If you only make the minimum payment each and every time, a $6,000 credit card bill can end up costing you over $30,000 (depending on the interest rate).

#4) According to a new report based on U.S. Census Bureau data, only 26 percent of American teens between the ages of 16 and 19 had jobs in late 2009 which represents a record low since statistics began to be kept back in 1948.

#3) According to a National Foundation for Credit Counseling survey, only 58% of those in "Generation Y" pay their monthly bills on time.

#2) During the first quarter of 2010, the total number of loans that are at least three months past due in the United States increased for the 16th consecutive quarter.

#1) According to the Tax Foundation’s Microsimulation Model, to erase the 2010 U.S. budget deficit, the U.S. Congress would have to multiply each tax rate by 2.4.  Thus, the 10 percent rate would be 24 percent, the 15 percent rate would be 36 percent, and the 35 percent rate would have to be 85 percent.

http://globalresearch.ca/index.php

Wed, 06/09/2010 - 14:05 | 403773 akak
akak's picture

Don't confuse me with irrelevant facts!

"The One" will save us, now and forever!

 

Yes We Can't!

Chains We Can Believe In!

Wed, 06/09/2010 - 14:06 | 403780 Rick64
Rick64's picture

Yes We Can't!

Chains We Can Believe In!

LOL. I gonna use that on the next Obamite.

Wed, 06/09/2010 - 17:16 | 404436 JR
JR's picture

Priceless!

Wed, 06/09/2010 - 15:06 | 404006 GovernmentMule
GovernmentMule's picture

All that is needed is one properly placed low yield thermonuclear device and the ensuing "safe haven flight to quality" will take care of the rest...

Wed, 06/09/2010 - 16:01 | 404217 WaterWings
WaterWings's picture

Thanks, JR. Emailed to Fs and Fy.

Wed, 06/09/2010 - 20:33 | 404877 StychoKiller
StychoKiller's picture

"Captain Jack will get ya by tonite -- just a little push and you'll be smilin'!"

Wed, 06/09/2010 - 14:16 | 403758 Ripped Chunk
Ripped Chunk's picture

Just to let you know, the brown acid is not neccesarily good.

 

Wed, 06/09/2010 - 14:02 | 403765 deadparrot
deadparrot's picture

Timmy does his forecasting the same way real estate appraisers appraised real estate in 2005 and tech stock analysts analyzed tech stocks in 1999 - you simply start with the result. You need GDP to equal debt in 10 years? Easy, just play with the variables until the result you want gets spit out.

Wed, 06/09/2010 - 14:16 | 403821 TooBearish
TooBearish's picture

Nationalize Pimco, lever 20X and deficit funding problem solved...next....

Wed, 06/09/2010 - 14:21 | 403834 Greater Fool
Greater Fool's picture

Got one for world peace? Preferably one that doesn't involve hiring Blackwater? (Sorry, I mean "Xe.")

Wed, 06/09/2010 - 14:25 | 403848 lobattery
lobattery's picture

Educate me  ZH. If debt is going to grow crazy and it is to give freebies to folks to consume - can't the cunsumption be engineered to increase GDP? i.e. subsidies for battery powered cars, grid, medical IT, energy efficient windows,  caulking, etc.

If the money is uncontrolled then its contribution to GDP is insignificant. Is it even remotely possible they could control how it is spent?

Wed, 06/09/2010 - 15:35 | 404101 faustian bargain
faustian bargain's picture

'controlled' expense is just as insignificant as 'uncontrolled' expense, because when it ends, it ends, either way.

Wed, 06/09/2010 - 14:29 | 403863 hiza
hiza's picture

We all know Timmy can't do math....remember his tax return mistakes using TurboTax.

Wed, 06/09/2010 - 14:36 | 403884 peripatetic86
peripatetic86's picture

If you think those were "mistakes" and not intentional doings, then I have an amazing shiny bridge to sell you.

Wed, 06/09/2010 - 14:51 | 403897 lobattery
lobattery's picture

Saying 'he does'nt know math'..is oversimplification that works to his advantage.

So you think forgetting overseas income are subject to some taxes equates to 'he does'nt know math'? Or did he apply sound logic? I think his logic prevailed.

Wed, 06/09/2010 - 14:43 | 403887 hambone
hambone's picture

So a quick recap for the biz environment for thenext 5-10yrs in which we expect high US GDP, low interest costs, with massive continued T debt issuance-

Taxes increasing

Lower governmental spending? (or at least lessening support via QE, transfer payments)

Health care costs likely net negative

Dollar strengthening potentially (hurting exports...hurting corp earnings coming home from abroad)

High unemployment

Massive overcapicity

Europe in a very slow to no growth mode

Hmmmm, this seems akin to expecting that cats and dogs or lions and zebras will live toghether happily ever after.  Or another way to put it is this is redunkulous or ludicrap or horriful.  I think we need new words just to describe how impossilikely this really is.

 

 

Wed, 06/09/2010 - 14:37 | 403889 TonyV
TonyV's picture

You know, if they want to cut the deficit they can just cut military spending. It counts for 23% of total spending. Over 100 mil for a single F-35 (Pentagon has ordered over 2400 of those) and we still have trouble fighting goat herders.

Wed, 06/09/2010 - 16:34 | 404331 Ragnar D
Ragnar D's picture

This is right up there with Barry's $100 million in cuts as the deficit hits $1,600,000 million.

By all means cut back on the handout-defense for the Europeans, but don't expect it to put much of a dent in the overall problem.

The entire defense budget is something like 1/3 of discretionary spending, which in turn is already closing in on 1/3 of overall spending.  More importantly, that 2/3 in "Entitlements" that gets left out of the argument is all the stuff growing geometrically rather than linearly.

 

Who cares how hard you cut "discretionary" spending in a couple years when it's only 10% of the budget?

Wed, 06/09/2010 - 18:12 | 404577 TonyV
TonyV's picture

Actually, defense budget is exactly 20% of overall spending and discretionary spending is something like 38%. Here is a link:

http://www.nytimes.com/interactive/2010/02/01/us/budget.html

Wed, 06/09/2010 - 14:42 | 403910 trav7777
trav7777's picture

Don't worry...just print FRNs.

The Fed GOT THIS SHIT, NIGGAZ

Wed, 06/09/2010 - 14:44 | 403917 Joe Shmoe
Joe Shmoe's picture

Can't cut the military budget TonyV, we need to grow it, by an order of magnitude, because that's the only Keynesian way out of this mess... WWII ended DepressionI.  WWIII will...?

God I hope there are actual grownups in DC to avoid this line of thinking.

Wed, 06/09/2010 - 14:48 | 403935 AccreditedEYE
AccreditedEYE's picture

Sovereign Default bitches!

Wed, 06/09/2010 - 14:57 | 403961 Brett in Manhattan
Brett in Manhattan's picture

IMO, when debt servicing rises above 30% of tax receipts, this becomes a legit question.

If you think about it from an individual's standpoint, the median American household takes home about 2.5k a month. If $750 of that is going to debt servicing without even dealing with the principle, you're pretty much screwed.

Wed, 06/09/2010 - 15:08 | 404015 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

And this is why the whole entire ass ugly system will fail in the next 6-18 months.

Wed, 06/09/2010 - 15:23 | 404061 AccreditedEYE
AccreditedEYE's picture

That's how I'm betting my worthless fiat currency!

Wed, 06/09/2010 - 15:00 | 403977 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

I may stop junking you if you began to participate in the forum.  Are you not entertained?

Wed, 06/09/2010 - 15:07 | 404007 akak
akak's picture

Agreed.

This person is far from a troll, as they only ever make one post per thread, but I have yet to ever see them make an actual comment, rather than just posting that same link over and over.

Wed, 06/09/2010 - 15:41 | 404127 WaterWings
WaterWings's picture

Numbers game. Have you given in yet?

Wed, 06/09/2010 - 16:19 | 404277 faustian bargain
faustian bargain's picture

I looked once, a long time ago. It's just a chart. Snooze.

Wed, 06/09/2010 - 16:26 | 404301 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

I looked once too! 

Wed, 06/09/2010 - 17:11 | 404425 WaterWings
WaterWings's picture

I'll show you my chart if you show me yours.

Wed, 06/09/2010 - 16:31 | 404317 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Like, "The economy is in recovery...green chutes...etc etc...., psst, are they buying this yet?"  "I don't know BS, keep talking."  "OK, thanks Barry.  The economy is in recovery...green chits, I mean chutes...etc etc..."  BS looks at Barry and he gives the hand movement for 'continue/keep going'.  "The economy is in recovery....."

Wed, 06/09/2010 - 15:24 | 404064 TheSettler
TheSettler's picture

Hey can you get some more of those future charts?

Wed, 06/09/2010 - 14:59 | 403973 Mark Beck
Mark Beck's picture

For the new readers, ZH you should really include the reasons why ZH thinks the proposed government projections are not correct.

The time has come.

ZH should really put undercover correspondants at DC and NYC to flush out the real truth. If this was done, and the truth uncovered, ZH could go mainstream with publication on the web. This could be the start of a ZH "Empire of truth", marching forth towards the dawn of a new era in news, a global free press, the WEB.

----------

The report is what we have come to expect from Treasury or CBO.

Rule #1; Remember Congress will shoot the messenger. Do not be the bearer of bad news, and act like you are surprised when the expected happens. Rosy projections are fine, because no real action will be taken until crisis, so have your numbers show optimism.

However, I would like to be there when they pull these numbers out of their ass. What exactly do they say to one another? The projection trend data looks like it was put together by a high school student who had to write a report, but cheated by fudging the numbers.

----------

The report GDP projections are not correct because they do not mention the following:

1) Impact due to de-leveraging of debt.

2) Removal of Gov/FED stimulus.

3) Impact of Debt on growth.

4) Effects of deflation.

5) Effects of taxation.

----------

The report does talk about Treasury increasing the number of debt instruments in order to increase the churn towards the short end.

The report does not talk about the influence of the FED $300B buy program in FY2009.

----------

What the report does say is that Kemp has been told that debt could hurt jobs. But, Kemp just does not get it, they do not care about jobs.

What kemp should be aware of is debt will cut benefits.

First it will be Cobra for newly unemployed, wait, that just happened.

Next unemployment extensions.

Next it will be cuts in state aid for social programs. Then cuts in:

Medicaid, Medicare, and SS.

The choice will be to fund programs or make interst payments, the government will make interest payments.

Austerity = Loss in Benefits.

Prepare yourself.

Mark Beck

Wed, 06/09/2010 - 16:12 | 404252 JR
JR's picture

ZH should really put undercover correspondants at DC and NYC to flush out the real truth…

Great work, Mark!

"Every thing secret degenerates, even the administration of justice; nothing is safe that does not show how it can bear discussion and publicity." John Emerich Lord Acton

Wed, 06/09/2010 - 16:38 | 404341 Ragnar D
Ragnar D's picture

Unemployment has been extended half a dozen times from 26 weeks to 2 years.

Seems like we're heading the other direction, aren't we?

Wed, 06/09/2010 - 20:49 | 404899 Mark Beck
Mark Beck's picture

The two year number is not a guarantee. The emergency benefits limp along from extension to extension.

----------

It is possible unemployment emergency teir benefits could be dropped out of the bill. In the 2nd of the three proposals between House and Senate it was omitted, it is back in now.

The senate should vote next week on the bill.

The extensions are coming about every quarter up for review. The problem is no real improvement in unemployment. The last extension was only 1.5 months if my memory is correct. In the most recent version of the bill, unemployment benefits came back in at the last moment. The unemployed are an easy target for fiscal chest beating. So, we will see.

Mark Beck

Wed, 06/09/2010 - 15:27 | 404075 Cognitive Dissonance
Cognitive Dissonance's picture

Very Nice.

Wed, 06/09/2010 - 15:35 | 404100 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

haha, and BS looks like he just came from woodstock.  this is good.

Wed, 06/09/2010 - 20:48 | 404897 Hulk
Wed, 06/09/2010 - 15:21 | 404056 Marvin_M
Marvin_M's picture

hmmm, very curious...it seems that some may not percieve the gentle art of politically fraudulent forecasting...you see, the forecasted results are horrible even if they are true, but of course everyone realizes they are not true and the that the truth is far beyond horrible, so the forecast is published and accepted by everyone who either can't stand to face the real truth or won't be around to take responsibility when the real shit hits anyway.

You all have been reading's CD's series on collective insanity, right?

Wed, 06/09/2010 - 15:31 | 404088 Cognitive Dissonance
Cognitive Dissonance's picture

Nice summary of this particular piece of insanity.

And to think that by the time Chapter 5 is published, I will have subjected everyone here to 35,000 words explaining what you beautifully summed up in about 80. :>)

Wed, 06/09/2010 - 15:40 | 404123 faustian bargain
faustian bargain's picture

LOL, that would make your articles the GLD ETF of the essay world... ;-)

(I don't really mean that, I'm just making a funny.)

Wed, 06/09/2010 - 16:33 | 404322 Cognitive Dissonance
Cognitive Dissonance's picture

LOL

That's actually extremely funny on many levels, considering the bullshit going on in the ETF and the layers of deception in the prospectus and the entire Gold "industry".

Maybe I can get a job there as a copy editor. Or the holy grail, chief writer. Nobody will read it because I'll have them crying by page 6. :>)

Wed, 06/09/2010 - 16:16 | 404265 seventree
seventree's picture

At 0 cents a word, who can blame you?

After all a guy's gotta make a living...

Wed, 06/09/2010 - 16:33 | 404324 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

CD is our free Descarte (First Metaphysics, aka the good Descarte).

Wed, 06/09/2010 - 16:35 | 404334 Cognitive Dissonance
Cognitive Dissonance's picture

Hey, the price is right. Ya get what ya pay for. :>)

I was going to subject everyone to Chapter 4 this morning but ZH was missing in action. Must have been a defensive position by Tyler to protect you from me. :>)

Wed, 06/09/2010 - 16:57 | 404395 Marvin_M
Marvin_M's picture

sir, have you considered that it may be highly probable that your magnificent (if somewhat voluminous) tome is responsible for the site going down in the first place... another server quick!  CD is getting ready to upload!

Wed, 06/09/2010 - 18:48 | 404669 Cognitive Dissonance
Cognitive Dissonance's picture

LOL

They've got a built in excuse for the next 10 years. Or as long as my articles remain on the server hard drive.

Tyler - "Shit, someone accessed CD's Chapter 1 and crashed the server......again. This is the third time this week. I told you we should have revoked his contributing privileges back before he got out of hand Marla but nooooooooooooooo, you said he was harmless."

Wed, 06/09/2010 - 16:01 | 404215 jkruffin
jkruffin's picture

Very interesting piece that someone posted over on Yazoo,  but this gives you the best picture oh how the Democrats have steered you towards socialzation for many decades:  Here is a little Q&A........

 

Your Social Security
Just in case some of you young whippersnappers (& some older ones) didn't know this. It's easy to check out, if you don't believe it. Be sure and show it to your kids. They need a little history lesson on what's what and it doesn't matter whether you are Democrat or Republican. Facts are Facts!!!

Social Security Cards up until the 1980s expressly stated the number and card were not to be used for identification purposes. Since nearly everyone in the United States now has a number, it became convenient to use it anyway and the message was removed

An old Social Security card with the "NOT FOR IDENTIFICATION" message.

Our Social Security
Franklin Roosevelt, a Democrat, introduced the Social
Security (FICA) Program. He promised:

1.) That participation in the Program would be
Completely voluntary,

No longer Voluntary

2.) That the participants would only have to pay
1% of the first $1,400 of their annual
Incomes into the Program,

Now 7.65%
on the first $90,000

3.) That the money the participants elected to put
into the Program would be deductible from
their income for tax purposes each year,

No longer tax deductible

4.) That the money the participants put into the
independent 'Trust Fund' rather than into the
general operating fund, and therefore, would
only be used to fund the Social Security
Retirement Program, and no other
Government program, and,

Under Johnson the money was moved to
The General Fund and Spent

5.) That the annuity payments to the retirees would never be taxed as income.

Under Clinton & Gore
Up to 85% of your Social Security can be Taxed

Since many of us have paid into FICA for years and are
now receiving a Social Security check every month --
and then finding that we are getting taxed on 85% of
the money we paid to the Federal government to 'put
away' -- you may be interested in the following:

Q: Which Political Party took Social Security from the
independent 'Trust Fund' and put it into the
general fund so that Congress could spend it?

A: It was Lyndon Johnson and the democratically
controlled House and Senate.

Q: Which Political Party eliminated the income tax
deduction for Social Security (FICA) withholding?

A: The Democratic Party.

Q: Which Political Party started taxing Social
Security annuities?

A: The Democratic Party, with Al Gore casting the
'tie-breaking' deciding vote as President of the
Senate, while he was Vice President of the US

Q: Which Political Party decided to start
giving annuity payments to immigrants?

AND MY FAVORITE:

A: That's right!

Jimmy Carter and the Democratic Party.
Immigrants moved into this country, and at age 65,
began to receive Social Security payments! The
Democratic Party gave these payments to them,
even though they never paid a dime into it!

Then, after violating the original contract (FICA),
the Democrats turn around and tell you that the Republicans want to take your Social Security away!

And the worst part about it is uninformed citizens believe it!
If enough people receive this, maybe a seed of
awareness will be planted and maybe changes will
evolve. Maybe not, some Democrats are awfully
sure of what isn't so.

But it's worth a try. How many people can YOU send this to?

Actions speak louder than bumper stickers.

AND CONGRESS GIVES THEMSELVES 100% RETIREMENT FOR ONLY SERVING ONE TERM!!!

Wed, 06/09/2010 - 16:53 | 404387 JR
JR's picture

Thanks for that incredible! info, jkr.

Economic “recovery” embraces wealth transfer, with an additional impact to come from the lucky “32 million” who now will be "eligible" for health care “reform.” When government policy accelerates the transfer of wealth in our society on such a vast scale, it’s difficult to admire the recent “integrity and fairness to all” message from Obama's IRS Czar Douglas Shulman.

Shulman, in his IRS Mission letter introducing his 1040 instruction booklet for 2009 taxes featuring the We the People portion of the Constitution lying atop the American flag, condescended to inform We the People:

[T]he Earned Income Tax Credit was increased for families with three or more children (read Mexican-American)… Eligibility for the Additional Child Tax Credit also increased, meaning millions more low-income earners can claim it.

Czar Shulman then issued this warning to tax"payers": The American people who play by the rules every day further expect the IRS to vigorously enforce the tax law.  Rest assured, we are pursuing those trying to evade paying their taxes.

According to Results.org: 

For tax year 2008, approximately 24 million taxpayers received over $49 billion in EITC benefits. The average net EITC amount was $2,068. However, the IRS estimates that between 20 and 25 percent of eligible taxpayers are not taking advantage of the credit. ...  It also produces a ‘multiplier effect’; it is estimated that every $1 paid out in the EITC generates $1.50 to $2.00 in local economic activity. The EITC does not generally affect eligibility for Medicaid, Supplemental Security Income (SSI), SNAP benefits (food stamps), or low-income housing…

 “The EITC works by reducing the amount of federal tax owed by those who claim and qualify for the credit. What makes it so effective is that the EITC is fully refundable; if a tax filer's EITC exceeds the amount of taxes owed, he/she gets a full refund of any remaining amount, even if the worker’s tax liability is zero. In order to receive the EITC, low-income workers must file a tax return (even if they do not owe any federal income tax) and the amount a family receives from the EITC depends upon their combined earned income and number of children..."

Results charts show: The maximum EITC Benefit in 2009 for “2009 maximum eligible incomes and benefits” was $5,657 for “Three or More Qualifying Children; $5,028 for Two Qualifying Children; $3,043 for One Qualifying Child: and $457 for No Children.

http://www.results.org/issues/us_poverty_campaigns/economic_opportunity_for_all/earned_income_tax_credit/

Wed, 06/09/2010 - 20:58 | 404911 StychoKiller
StychoKiller's picture

There was an article a few weeks back (on CNN.com I believe) that reported

that Prison inmates were receiving an average tax refund of around $4,700 -- while being incarcerated!

Wed, 06/09/2010 - 21:06 | 404919 Mark Beck
Mark Beck's picture

Nice summary.

I would like to add a few points:

In FY2010 SS will not have a surplus.

SS FICA is a tax and not a benefit, meaning you have no right to money you payed in as a benefit. Ruled by the supreme court.

----------

And now the sad truth.

The money paid in is gone. Money generated from labor was taken and replace with an IOU in the form of debt. This is about as close to being stolen as you can get. The only way to pay for any outgoing check from the US Treasury is to take in the money from wages, or borrow the money.

And now for the even sadder truth.

The easiest benefit to cut politically is SS. When push comes to shove SS outflows will be cut. It will be called something else, probably restructure, but it will mean less money to retirees.

Prepare yourself.

Mark Beck

Thu, 06/10/2010 - 02:21 | 405351 Rusty Shorts
Rusty Shorts's picture

nice jkr, just examined my SS card, issued 1978.

Wed, 06/09/2010 - 16:22 | 404287 kaiserhoff
kaiserhoff's picture

Simultaneous depression and hyperinflation would suit the government's needs, and destroy the private sector.  Is that a polka dot swan or a quilted swan? 

The whole thing would be absurd, if it were not the clear trend of things, and the probable goal of our Marxist/Stalinist obergroupinfuhrers. 

Wed, 06/09/2010 - 16:34 | 404330 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Pink elephants....

Not sure they are Marxist....

Wed, 06/09/2010 - 17:37 | 404463 hambone
hambone's picture

Gotta say,

we spend a lot of time discussing the causation of our current debt crisis and speculate how the event will play out (deflationary atrophy / inflationary cancer / or hyperinflationary massive heart attack).  None exactly good.  Ok - we're all agreed it ain't gonna work and only disagree on the mechanism(s) of the crisis.

What I'm really curious about now is the truly unknown...and asking folks to think a bit more granularly.  What will the nature of the other side of this crisis look like?  What will true demand look like w/out credit?  Will we be resetting to a 1950's style America where you actually save for something and then purchase?  Assuming real demand based on real savings would crater, wtf do we all do for work (I work for a company that makes expensive sports gear that will be featured in this weeks world cup in S. Africa...how many more pairs of shoes, t-shirts, sweat suits will regular folks "need").

Seriously, it's time to leave the pedantic discussion of why the #'s above don't make sense to discussing what does make sense and how we prepare for it.  I don't want to watch the slow motion accident anymore...I want to determine wtf a guy like me (and most of you) with no particular skills does to provide food and safety for my family (yeah, yeah, I've got gold, cash, food, no debt...blah blah but that's only short term bridging).  I want to start planning for the new destination on the other side of that bridge and need your insightful thoughts on that topic.

Is Rogers right that we should prepare for a more agrarian society and learn how to farm?  Do folks think the crisis will lead to war or famine or depopulation and planning for these isn't exactly possible?  Do we just shake this off and slowly return to things as they were? 

Are ZH'ers taking action now to prepare themse lves for this eventuallity?  Learning how to farm or how to ??? 

Do NOT follow this link or you will be banned from the site!