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GOP To Propose $4 Trillion In Spending Cuts Over A Decade, While A Meager $30 Billion Threatens A Government Shutdown
While the government wrangles over a whopping $30 billion in spending cuts for the 2011 budget (with fiscal 2011 already half way over), which threaten to shut down the government yet which we all know will be successfully addressed in the 11th hour, with a compromise of sorts confirming once again that both parties are incapable of dealing with the relentless climb in US government debt (and oh so eager to turn their back on campaign promises when faced with reality), which unfortunately is the only fuel driving the US economy, the GOP's Paul Ryan is expected to announce a whopper of a 2012 budget, one which trims a record $4 trillion in spending over the next 10 years. What this means is that the GOP is about do away with Obama's health care "revolution" and things are about to go back to the way they were. Not only that, but any hopes the Fed may have had that congressionally-mandated fiscal stimuli will take over the central bank's monetary boosts, can be put to rest, meaning that very soon the Chairman et al will be back to the drawing board debating just how much more cash needs to be injected in the economy next time around (as a rough guideline, we expect it will be about 75% of the next debt ceiling increase). And while we expect the current government shutdown crisis will be resolved within a few weeks on the back of promises of massive cuts over the next decade, which will never happen, the only thing to watch for is how big the debt ceiling increase will be when announced some time over the next 3-4 weeks. Everything else is smoke and mirrors.
From AP:
The head of the House Budget Committee, Rep. Paul Ryan, says President Barack Obama is "punting on the budget and not doing a thing to prevent a debt crisis."
Ryan tells "Fox News Sunday" that GOP budget-writers are looking at cutting $4 trillion-plus in spending over the next decade. That's more than even what the president's deficit commission recommended.
Ryan is talking about spending caps and long-term belt-tightening for the Medicare and Medicaid health programs. He wants older people who are wealthy to pay more out of pocket for their health care.
The GOP plan for the budget year that begins Oct. 1 is coming out Tuesday.
And while the government haggles over numbers both too big and too small to matter, here is William Buckler's appropriate summation of where we stand, courtesy of the latest edition of his Privateer newsletter:
The latest proof that the financial authorities will literally do “whatever is necessary” to keep the markets from keeling over has led to a HUGE rebound on global stock markets in the second half of March. The proof that the US government will give no more than the most cursory lip service to any talk of lowering their deficit spending makes this rebound more dangerous the higher it goes.
President Obama is putting pressure on both the Republican and Democratic leaders of Congress to “make a deal” on a proposal to “cut” $US 30 Billion from the deficit in order to finalise a 2011 budget.
That $US 30 Billion includes the $10 Billion which has already been cut to keep the government “in funds” - until April 8. To put this in perspective, the Fed’s QE2 program is monetising just under $US 30 Billion of Treasury debt paper - EVERY WEEK.
No QE3? (and yes, there will be a modest delay between QE2 and QE3 - after all 2011 is following the 2010 script. To the penny.)
LOL
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The $30 Bil is not a cut, it's 'less increase'.
The next thing to watch out for is a collapse of the bond bubble. Then the end game is on, the only tool left in the box will be the Zimbabwe strategy.
Shut that corrupt bitch down in D.C. The world will be a better place for it.
Details on the nice avatar will be appreciated.
with over One trillion of treasuries to rollover just this year, another 5 trillion over the next 5, PLUS 1.6 trillion + dollar deficits per year, the "Zimbabwe Strategy" is already in motion. There simply are not enough foreign + domestic bond buyers. Just a few weeks ago ZH reported the bond auction failures in Russia and Poland. And I think that was a measley couple hundred billion?
The bond auction failures havn't been talked about enough. The MSM ignored it, the tea party groups ignored it.
And if there is no QE 2.1 2.5 or 3.0
Who the devil will buy it?
The bond auction failures havn't been talked about enough. The MSM ignored it, the tea party groups ignored it.
And if there is no QE 2.1 2.5 or 3.0
Who the devil will buy it?
You missed the most important:
Pure communisme. If you got money, you have to spend it. If you don't got money, you'll get it for free.
Where's the incentive to work?
I might be European but I grew up with the American dream where you could become rich by working hard and using your brains.
I also did things where everybody used to say it was to risky, I worked to hard, I was a capitalist...
And now that I've got money, I mostly hear envy and reasons why I should give away more of my money.
This kind of shit really pisses me off!
Without a incentive to work hard, it's also impossible for new starters to get to that goal. If your at the bottom, you'll never be able to crawl out of it thanks to this system. And if you have money, you have to fight to keep it.
Everybody loses with these kind of systems.
Only losers with nothing who "hope" to get out of their missery support this crap but don't realise it's because of a system like that that they are in this kind of mess where they can't get out.
GET BACK TO THE ROOTS OF CAPITALISME!!!!!
RESTART THE SYSTEM THAT MADE EVERYTHING GREAT IN THE FIRST PLACE!!!!!
Be consistent!
And by that I mean:
You want stuff, you want to become rich = Capitalisme
You want everything for free and work less = Socialisme
SADLY THOSE DON'T MIX!!!
AT ALL!!
is "capitalisme" french?
I would say: You want to keep everything in the hands of a few and make everyone work their ass off?: Capitalism
You want to make everyone work as slaves and feed them a few slogans to make them feel better?: Socialism
You want to be what you were created to be: a Human being? Then figure out something new and Radical
Your rant makes no sense, unless you're whining over the "loss" of free healthcare as a senior.
You are paying 1.45% (or 2.9% if self-employed) of your income on Medicare, which is clearly money down the drain for a Generation X-er or younger, but otherwise what exactly lowers your incentive to work? And save, so you can pay for your own costs in retirement?
Nice trick, to move all that private bank debt onto public balance sheets, then, once that's complete, demand austerity.
OK, here you go:
- End all 3 wars tomorrow. There's $500b over the next decade.
- Cut the F-35 program. There's nearly $400b.
- Cut off the GSEs and putback every non-qualifying piece of mortgage paper onto the selling bank. There's $500b over the next 5 years.
- Shut down the DHS. $40b annually, going to $60b, for a total of two arrests. There's another $500b.
There, that was easy. It took 5 minutes to find half the spending cuts they need, and the only people it pisses off are bankers and defense contractors.
But...but...Zaaaack....if you do all that wanton 'irresponsible cutting', think of all the jobs you'll be destroying? Why do you hate America? Why must the chilrenz suffer because of your ideas? Dont you care? /sarc
Dude, if that sort of stuff was pushed at high enough levels, I have no doubt the JFK Treatment would be administered accordingly. Still, you're absolutely right of course.
Why would anyone Not hate what America has become?
I wonder if the people that have these kinds of jobs would trade for? Zach only cut the jobs regarding busy work and killing. The reduction to the online porn alone would clear up a lot of bandwidth
+4 Trillion... only 71 Trillion more to go...
It’s Official: Ron Paul Can Beat Obama in 2012http://www.ronpaul.com/2012-ron-paul/ronpaul2012/
End corporate welfare:
General Electric paid no tax at all in America last year and even managed to get a $3.2billion ‘rebate’ from the government.
The utilities giant allocated just 7.4 per cent of its $5.1billion U.S. profits in tax - around a third of what others companies its size are paying.
But through a complex series of measures GE, which is America's largest company, will not even have to hand that over.
Read more: http://www.dailymail.co.uk/news/article-1370001/General-Electric-avoids-paying-tax-entirely-dodges-incentives.html#ixzz1IUQVXkq5"End all 3 wars tomorrow. There's $500b over the next decade."
You have a source for that number? I would have thought it would be higher.
"Cut off the GSEs and putback every non-qualifying piece of mortgage paper onto the selling bank. There's $500b over the next 5 years."
Again, source? I'm just using back of the envelope numbers, but I would think it's closer to 3 trillion than 500b, and where do you get 5 years?
Perhaps spending more than 5 minutes would give you the chance to come up with some real numbers, and they're much bigger than the numbers you casually bounced out there.
This amounts to rearranging deck chairs on the Titanic. This economic ship of state is flooding with debt faster than the tax payers and pump it out. It's slipping by the bow and nothing will or can be done. All we can do is be ready for the day that we become Zimbabwe II.
ZZZZZZZzzzzzzzzzzzimbabwe!
Brickerbracker Firecracker Sis Boom Bah
Zimbabwe, ZimbabUSA Rah Rah Rah!
Will the criminal Bankers blow those annoying Vuvuzelas!
This is pre-election year posturing. The GOP is trying to paint Obama as a big spending liberal. In fact, there is no way either party has the guts to make deep and significant cuts in Social Security, Medicare, Medicaid and Defense. No way.
The US will never produce another balanced budget, and the great R-E-S-E-T button will get pressed.
"there is no way either party has the guts to make deep and significant cuts in Social Security, Medicare, Medicaid and Defense"
It is not about guts. Both parties are part of the kleptocracy. It is about who gets to do the stealing.
+1
Ok, riddle me this Batman, where are they going to find this kind of money unless they are willing to cut entitlements? Or, are they going to default on interest payments? Military spending? Heck, even if they ended all these sacred cows, you still wont get there.
The fat lady is making her way to the poduim....
I always did enjoy Kate Smith's rendition of "God Bless America".
qstion isn't "qe 3?" but "can they get away with it?" b4 "islamic tinderbox" (predictable) and "God annihilates Japan" (not predictable at all) i said "reckoning" and "time to die." specifically "raise cash" 6 weeks ago--anticipation of "war fact" with hapless response. WRONG! new data means new views: qe 3 can be done--much depends however with "Libya." that's WMD's on Europe's doorstep in hands of total looney in K-daff and an amazing "eh, whatever" response. that's tmptation for him. even that seems deal-able tho due to "wrath of Japanese God." in short "fed can monetize this war" for forseeable future (generational-20 years) which in it's own right can create continued albeit anemic recovery. should prez give "The Hamm" the go i see such leadership creating a potentially "re-electable recovery." shall see. btw--sorry for bad typing--thumb crushed by evil fed ex trailer.
The children are definitely in charge, reminds me of the star trek episode "and the children shall lead" Roddenberry was way ahead of his time...
Bonk bonk on the head...bonk bonk...LOL.
"Entitlement" spending is the problem that needs addressed.
http://www.heritage.org/Research/Reports/2010/06/Federal-Spending-by-the-Numbers-2010
Anyone can dispute the source of the link...but the numbers are very real...but it's not all bad I guess;
"Washington will spend $2.6 million training Chinese prostitutes to drink more responsibly on the job."
Can't see how this equates to more "bang for the buck" though ;-)
Nice link. I always thought it odd that our postal monopoly deemed it necessary to fund Lance Armstrong's early TdF victories to the tune of ~$40 million, with questionable revenue results...for the agency that is.
http://sports.espn.go.com/oly/cycling/news/story?id=6019436
http://usgovinfo.about.com/cs/consumer/a/uspslance.htm
Hadn't heard about that one, not surprised.
Of course they throw money around as if it wasn't theirs to throw around...oh wait...it's not ;-)
Just bitchin, all of CONgress giving public lip service while doing bankster Lewinsky's behind the scene. Meanwhile Barama will officially announce that he wants to be prez (again) in 2012 and 2016 and...
Silliness. Federal government spending will never be reduced because there is no mechanism by which it can be reduced, and the numbers are simply too vast. At most, the rate of spending acceleration will occasionally flatten before resuming its inevitable upward trajectory. Until the final, spectacular collapse of course. Then we wind up and start all over again. But that is 20 or 30 years away at least.
Not gonna make it to 20 years before we start crossing interstellar numbers on the debt load. Trillions will seem like hundreds. Start thinking quintillions and you'll be closer than you probably think. Unless of course the 'RESET' button gets pressed....which I believe will be the case....long before then.
<<< Unless of course the 'RESET' button gets pressed....which I believe will be the case....long before then. >>>
Agreed.
In the saner world of yesterday, I would agree with you. But these are very different times we're living in.
* Coordinated, centrally-planned global economy.
* Bond market price fixing.
* Vastly more powerful and expansive central governments.
* Widespread practice of ignoring laws and Contitutional limits.
* Expanding and more sophisticated methods of population control.
Yes, I do believe we're headed for a crash of epic scale, but it is a long way off. They will kick this can further down the road than anyone would have imagined possible. We have decades to go, not months.
Totally agree. The Elites have established a system allowing them to move any unpayable debt onto the backs of any taxpayers, anywhere on earth. Mathematically it can go on until all earning power is consumed by the taxes required to service the debts.
Meanwhile the ability to run the printing press allows the elites to conficate all the (paper) savings of all of the citizens of the world.
Humans are not known for thinking or taking action until the alternatives become too painful, and even then the choice of "think or die" is a crapshoot. As angry as we ZH'ers are, we are decidedly in the minority.
One exception this time around could be that the elites are, for the most part, a bunch of group-thinkers (this was covered in an earlier ZH post a few months back) who genuinely believe they are genuises. Jim Sinclair was in Davos trying to talk to the intellectuals and central bankers about a Gold Standard and the thing he noticed was that no one wanted to talk about it because no one really knew what it was. The idea of basing money on an object wasn't something they disagreed with, it was something that just seemed like a bizzare relic of the past that must have been abandoned for a good reason, otherwise we'd still have it.
Our elites appear to be people who have no concept of a monetary system outside of various fiat monies all valued against the fiat US dollar. If the US dollar starts to shit the bed, our elites may honestly not know how to understand what is happening and what it means. Their status as elites will convince them that stubbornly clinging to business as usual is the right thing to do, since the people then screaming the loudest will all be poor.
That would be the uncontrolled collapse scenario, and it would be sheer terror for all involved. On the other hand, at least it would be interesting...
For some of us it would be sheer delight. Uncontrollable collapse that is.
I guess some here think that other countries will want to continue to fund our profligate lifestyle in perpetuity ('a few more decades'), all at the expense of their own people. I respectfully disagree and think their patience will wear thin much more quickly.
There you go. That's the kicker, and the one really significant variable that tends to get overlooked. When enough people get pissed off enough, there will be change. Catastrophic change, probably, but I don't see this going on for decades. I'm in the camp that thinks we can time it in months or maybe a couple of years, max. The collective social mood (globally) is moving with celerity toward the pessimistic end of the spectrum. That's my conviction, so I'm making my preparations for that scenario. If I'm wrong, well, I won't have to buy rice or beans for a while.
"But that is 20 or 30 months away at most". Fixed it for ya. YW.
We are so fucked. Historians will surely call ours the Age of Delusion. Is there something in the fucking water?
It's as if our political and economic choices (as if there is a difference) boil down to a flip of a coin upon which is imprinted the leering face of stark raving madness.
The best lack all conviction, while the worst
Are full of passionate intensity.
-Yeats
Apparently fluoride is the culprit...eq to roman lead.
Pseudo estrogen in the Potomac River, for reals.
Used to be signs all along the potomac, in DC, stating that the water is polluted and not to be touched...
Time again to vote
Flip the coin of liberty
what the fuck? both heads.
" . . . the GOP's Paul Ryan is expected to announce a whopper of a 2012 budget, one which trims a record $4 trillion in spending over the next 10 years. What this means is that the GOP is about do away with Obama's health care "revolution" and things are about to go back to the way they were."
The GOP's gonna start REALLY cutting in 2012, you just wait and see. For reals, this time. Just vote us some more power, we'll get it right. You just watch. Give me a fucking break, Tyler. This is just political grandstanding.
I thought you were better than this.
<<< This is just political grandstanding. >>>
Agreed. The GOP controlled the White House and Congress for 6 years with G.W. Bush. We got two wars and significant budget deficits.
There is ZERO chance that either party will make deep and significant cuts in Social Security, Medicare, Medicaid. This is posturing.
My guess is TD isn't pom-pom-ing Paul Ryan or the GOP. Merely reporting what the man is proposing. I don't think there is one reader here on ZH who actually believes Ryan's proposal will ever see actual implementation. Everyone here knows the 2012 campaign cycle is getting cranked up, so with each passing week we'll hear more of what we want to hear from the District of Criminals.
The only way any of this ever changes for the better is when 1776 Episode II goes live. All else is just political theatre. IMHO that is. Hope I'm wrong.
Too right. By the time October 2012 gets here the Repubs will claim to want to cut $400 Trillion in 10 years and the Dems will propose unionizing the unemployed.
Pretty much. For the GOP, it's more serious, though. To my ardent Republican friends geeked up on Tea Party tea leading into the election, I said, 'Prepare to be very disappointed'. It's happening right now, this pathetic little social-program targeted cuts, nothing nearly like the Tea Partiers were expecting. So, in order to control their right flank, the GOP will promise 'really really big cuts this time, you just gotta vote us some more power. Then you watch and see.' Of course, they'll trim out some more minor Lefty stuff, a little window dressing for their base, but leave almost everything significant in place, including the world's most bloated defense budget.
We do need to take 1776 live.
I would prefer the French 1789 route.
Ah, you little tease.
"It was the best of times, it was the worst of times..."
I wrote this back in the middle of 2010 and it still holds true:
Current politics is best represented by a two headed dragon. Pols pay lip service to opposing ideologies but both the Republican and Democratic parties are part of the same big government dragon body. The body is moving in one direction; bigger and more powerful government. More control over the electorate. Having the two parties serves a greater purpose though....it divides the populace into two camps that are always at each others throat. I think this tactic is called divide and conquer. Until we wake up and get away from the 'Repubs this....' or 'Dems that....' blame game then we will be slowly boiled...just like a frog...all while the dragon stands by watching and laughing.
+1776
Couldn't have said it better myself. The two party system is broken, from the perspective of We the People. From the banksters and politicians' perspective, it's a beauty. Get people fired up and distracted over emotionally-charged bullshit issues, and keep hidden from view the most significant threats to our economy and our futures.
Obviously the economy is just not bad enough yet, for some.
Thank goddness the GRAND COLLAPSE is only 1-3 years away.
All this talk of budget cutting is useless since the dollar is going to soon be totally worthless!
I think you didn't get the message:
If there are no cuts (by whatever party) then inflation will do the cuts (orderly scenario) or a currency collapse (disorderly).
While the government wrangles over a whopping $30 billion in spending cuts for the 2011 budget (with fiscal 2011 already half way over), which threaten to shut down the government yet which we all know will be successfully addressed in the 11th hour, with a compromise of sorts confirming once again that both parties are incapable of dealing with the relentless climb in US government debt (and oh so eager to turn their back on campaign promises when faced with reality), which unfortunately is the only fuel driving the US economy, the GOP's Paul Ryan is expected to announce a whopper of a 2012 budget, one which trims a record $4 trillion in spending over the next 10 years.
ZeroHedge has definitely contributed to the rise in the NFP with new writers.
Anyone find it odd that "they" can plan 10 years out, but they can't plan 6 months out?
+1.7 ($T)
Like WH spokes-weasel Carney said the other day, their plan is "organic", and evolves as circumstances warrant.
Translation: "We're gonna keep spending until someone chops our hands (or other appendages!) off!"
1.5 Trillion deficit a year-
4 Trillion 10 yr = $400 billion
Thats still 1.1 Trillion deficit per Year.
WIN
No legislation at all affecting anyone making under $250K. Haul CEOs in front of Congress to testify how many jobs they sent offshore. Have former employees who can state under oath their jobs were offshored and Tata Consulting Services in the room. Last time I looked, your corporation's name was stamped in the lower left hand corner of your W2 form. It takes the IRS about three-five days to withhold taxes, and that, folks, is how long it takes to calculate the unemployment rate in the US. If you can testify your job was sent offshore, your house is yours, your credit card balances are zero, and if you want to retrain in health sciences, you do so free.
Take Greenspan at his word that health sciences are the only jobs left in the US. Mandate that all high school degrees include, at minimum, a registered nurse license. Carve out the rules to implement this in a way that excludes all banks: no student loans, no tuition in high school, no enormous textbook costs. Use technology to cover the holes in the high school faculty, lab rooms, lab supplies. Students do fieldwork in the closest hospital, nursing home, or hospice center. Keep the bankers and Greenspan out of the loop at all costs.
Oh, I have a loop to put them into at any cost.
Open American facilities to train American-born doctors, nurses, etc. so that all desiring positions in medical professions can be trained and certified
$4T over 10 yrs is $400B per year, which less than the Federal government has raised spending since the financial crisis began. Only a politician or an ignorant electorate would call this a cut. Both parties are whores' unions- out to maintain funding for their idealogical interests and those of their campaign financiers.
Would that fiscal wisdom be more like that of Reagan or Nixon?
Please hold the onions on that shit sandwich.
Q: what do you call $400b per year in budget cuts?
A: a good start.
no sane pol is going to slash and burn the gov which is now 35% of the economy..unless they want to be voted out..our socialist system and the dependent drugged citizens cannot stand this shock..we all are going to make do with smaller crumbs as the top elite steal more wealth ..only a coup by the military can save us and it would not be guarantied that a military rule would be better than Hitler was for Germany...so rule by kleptocrats or a military dictator..what a sad world either way.
Everybody in first world countries stopped having kids 20 years ago. That means populations will go down, demand will go down, and prices will follow.
You may have some inflation here and there, but it will be nothing in comparison to the wave of defaults. Policy will take the path of least resistance. If that path was inflation, companies wouldn't be hoarding $1 trillion in cash right now. They don't want to spend it because they all have the same projections - less demand, lower prices, as far as the eye can see. Until people start having kids again, this is not going to change.
Ummm....you may want to rethink that whole 'people aren't reproducing' concept. Now, if you meant average middle-class 'non-minority' families, then yes. Check birth-rates among the latino and middle-eastern communities in first world nations. Not exactly what I would call a reduction in reproduction.
As for companies hoarding cash, they have to have the cash to hoard in the first place. Unless they're part of the TPTF Club, they're probably leveraged to the hilt and one missed debt-rollover from bankruptcy. The banks ARE hoarding the free taxpayer trillions though. Using it to repair comically insolvent balance sheets and redepositing the payola for a federally-guaranteed return...right back with the Fed.
Prices will go down for Escalades and 65-inch 3-D flatscreens, but most things inside a grocery store, or found on a utility bill....will keep spiraling upwards as we skip into utopia.
I would like to see 400b per year or for that manor 4t cut over ten years and what would be the affect on the top 1% (rule makers) bottom line. Exactly. That why there is no chance of that happening voluntarily.
Lets start by fixing the budget deficit and America the easiest way.
Income Tax scenerio- with no deductions
Producers- 8%
Services- 20%
Financial Services- 35%
One of Americas problem is that we have had a brain drain away from our production/ag society into the Financial services sector. A flat 35% would help to drain those employees back into the industrial sector.
Furthermore- Bonus's in the finanical sector taxed at 80%. This will push the boards of banks to think carefully about the bonus's they pay out as 4/5 of that will go to help recouping the losses the govt (people) took on taking the toxic assets of bank books.
How about I just tax you whatever I think is fair?
Like now you mean?
So you see the budget deficit as primarily a problem of revenue?
Not at all.
The problem is expectations and perception.
People expect to be taken care of in retirement, people expect to retire. People expect that the government should pay to ensure their health. People expect our National forces to be the police force of the world. They expect all this and lower taxes.
the government perceives that they can grow their way out of this problem. The government also perceives that it can centrally plan through the use of tax credits/breaks/deferments.
Those tax rates I put, would likely not increase tax revenues but decrease them. It would also decrease the tax refunds.
Not to mention its illegal (which is why it was sarcastic)
But you led off your post with "Lets start by fixing the budget deficit and America the easiest way" followed by a list of suggested tax rate adjustments. If you were trying to make a point about "expectations and perception" it was certainly not obvious to me. You rather clearly suggest that the budget deficit can be "fixed" by higher taxes. Whether or not that was the point you intended to communicate, it is wrong. The problem is on the spending side of the balance sheet, not the revenue side.
I think it is fair to say most of the ideas put forth on ZH are in a minority in America.
The majority expect these services. The elderly have been promised these services.
To fulfill these obligations the government elected by the majority- must raise taxes. The spending cuts to be put forward by the reps. $400 Billion per yr. still leave a 1 Trillion deficit per yr.
(so the easiest way to "start" filling the hole will be to raise taxes). remember who runs the govt.
Since the majority can't cut or you'll not get re elected. Can't raise taxes or you'll not get re elected. Well the only other option is to monetize the debt.
The sarcasm was based on the fact of tax rates based on job profession type, and the fact that the tax rates would drain the brainpower from the financial sector back into the productive sectors of the economy. It was sarcastic because being a producer I wouldn't trust a banker to watch my cattle. If I wouldn't trust one to watch my cattle I sure wouldn't trust one with my money.
You are correct I could have put forth a stronger argument for what I was trying to point out.
Ever studied the FairTax? Repeal the 16th Amendment, implement the FairTax, and gov't tax revenue will go up almost immediately. A flood of capital will be infused into our economy, jobs will be created, and the trillion dollar underground economy would then be taxed, also. Our tax code is so fucked up, no wonder GE and other congolomerates work around it, it only makes business sense, since they have to answer to their stockholders, they'll do what makes the most business sense.
The FairTax, bring back Glass-Steagall, and prosecute the systemic fraud in the mortgage/banking system, and we'd be on our way out of this depression. The first year might be tricky, but the population would be so elated to see banksters getting prosecuted that most people would be willing to go through an adjustment period if they could see the light at the end of the tunnel.
I'd vote for a fucking cross-eyed homosexual leprechaun that ran on that platform.
Oh, and legalize weed, too.
You are wrong. The easiest way to start filling the hole is "hidden" inflation, the one type which somehow doesn't show in CPI and COLA...
Suggest you obtain a copy of:
"Dreams Come Due, Government and Economics as if Freedom Mattered", ISBN: 0-671-61159-3, by John Galt
The book is dated, but many of the things it talks about are still valid today.
OT:
I wonder if we could interest them in some barely abused Treasuries ;-)
Is it possible that the fed and treasury can roll over the newly created money with each other? For example, the fed created all this new money and has lent it to the treasury for long term and short term bonds. Can the fed just lend to the treasury short term and just keep rolling it over. Remember, the fed remits all profits to the treasury. So is it possible that the fed can just roll over at least half of the current deficit? Current deficit is 1.5 trillion, so $750 billion can be rolled over from treasury to fed, with as little new money creation as possible. However, there is going to be leakage as money lent to the US Gov will be spent in the US economy and only a percentage will be mopped up via taxes. However, that which is mopped up simply gets remitted to the fed which in turn gives it back to the treasury. Maybe tricks like this can buy us more time.
The bottom line for me is that the powers that be will do everything they can to maintain the status quo. Have things changed in the past 4 years? Absolutely. But they haven't changed that drastically as things are more or less the same. Home values have fallen but people are beginning to accept that. Auto dealers that shut down are springing back to life slowly (I can testify to at least 4 lots that were recently occupied again). Construction industry is still in shambles and will remain this way for quite some time. But the financial institutions, the most powerful group in the country (and the world) continue to reign and have gotten even larger then they were before. Accounting rules no longer matter as these firms simply operate on a cash flow basis, and when you can borrow for free nearly anyone can make money. I don't see anything bringing these banks down soon, with the only conceivable risk is the treasury bond market going to shit. But consider that there is roughly 10 trillion in treasury paper and a ton of money in 401k's. I believe that in the event of inflation and rate risk if the fed can no longer print the gov will mandate that a certain percentage of 401k's have to be in treasuries and voila a massive source of funding is tapped. It may be years before huge cracks (along the lines of 2008) in the system appear again. The only thing you can do is make money, enjoy life, buy silver.
"We will go through our federal budget – page by page, line by line – eliminating those programs we don't need"
-- candidate Barack Obama, 2008
"Together we Thrive"
-- same asshole, different year
"Together we Thrive"
HHAHAHAAHHAHAH
Look, the dope misspelled Starve.
They did, and decided they needed every program plus more programs to help support those programs!
They can't help but to lie...its in their DNA
It's difficult to explain to people who live outside of the DC metro the conversations and the associated attitudes of the people who dwell in DC. It's not just the politicians and idealogues who back this bullshit. It's an army of busybody former student council class presidents and monsterously untalented and unoriginal bureaucrats. You can't reach these people with your complaining. They view you as radicals when you tell them that the entire country is completely dissatisfied with the current setup. They love talking about what they think, but are mostly talking past you. As if you're quizzing them on the official position.
But they view the politicians as the designated punching bags to obsorb the vitriol of the masses. You have to take this fight to the streets of DC, and not the national mall. You need to take it to Capitol hill, du pont circle, Georgetown, Alexandria. Otherwise, they'll keep making their budgets and increasing their pay and resources and look at you with six heads when you suggest that people are not going to put up with this shit.
you people are talking like the Politicians are going to do ANYTHING......they are not....30 billion or 300 billion still is not enough.....the end game is that the Fed will monitize the debt....commodites will skyrocket...our trade will cease....no one outside of the USA will want dollars...so they wil demand payment in gold or silver...or some other "backed" security...then things really get interesting....as programs like social security goes...they will not raise the payouts so people will be broke and starving...inflated dollars buy less....and so the destruction of the USA goes...down down until there are riots in the streets..gangs killing for food and valueables..which is gold..silver..guns and ammo....the Army Reserves will be overwhelmed....all the relief supplies will go to the reserves familes and friends..politicians...just like a third world country..and we become a joke to the world ...more than we are today.
That is called a revolution and we will not be the only country facing these dire circumstances.
These peaceful protests in the Developing World are coming here. They are accustomed to being hungry. Americans have not been hungry since the great depression. Our culture doesn't do well with an aching stomach. When money doesn't fill their stomachs, they will use guns to. When the neighbor (who has a gun as well) doesn't have any food they will band together to find someone who does.
The food on your plate tonight most likely traveled 1500 miles to get there. The city dwellers will have a hard time feeding themselves if hyperinflation hits because the agricultural producers will have little reason to sell their commodities if the money they receive is worth 50% tom.
Stagflation- When commodity prices rise while asset prices plunge. Sounds like a good time to be a farmer.
....a well armed farmer that is......
Every well armed farmer needs well armed friends. Farmer has to sleep sometime. What are you doing about this time next year?
Well, cutting $2 trillion of gummit deficit spending would drop the GDP by almost 15%.
How could the 'conomy possibly continue its recovery?
That is correct, economic output would plunge if we balanced the budget. We have crossed over the 'point of no return'. It takes a huge amount of debt to create a small amount of growth, and at some point in the future, interest rates will rise above the ratio of debt/growth. That moment is called 'the end'.
2008 was a dress rehearsal for would happen if the treasury could not fund the deficit at a reasonable rate of interest (or volume of $).
Dollars to donuts this "plan" is nothing but more happy lies. We've seen all this shit before, and we've seen "Young Gun" Ryan's stuff before:
Stupid fucking lies, obfuscation, enough to declare themselves fiscally conservative. When do we get the part about enabling real economic activity by:
Smoke and mirrors and record bonuses for fraud, failure, disposing of the rule of law, and the systematic annihilation of the common man since 1913.*
*This advertisement sponsored by the US Senate, Inc.
From CBS.com:
Oooh, how "mean-spirited" of anyone to propose that the US Budget suffer some cuts! Fsck you Harry Reid!
The BIS issued a report that said that any combination of program changes, spending reductions, or tax increases that amount to 10-14 % of GDP (depending on ave. interest rates) to balance the budget and pay for all the promises.
That's 12 % x 14.5 Trillion = 1.75 Trillion per year for 30 years.
400 billion is just the beginning.
Unfortunately, when push will come to shove, I am afraid both republicans and democrats will succumb once again to the wishes of the UberClass and chop away at what is left of the middle class.
As 90% of the population drinks the koolaid of a 'free' economic system, as they await to 'become rich', they can't come to grip with the reality of 'no-more-unions', stagnant-wages, don't-take-vacation-otherwise-I-am-fired, no-paid-maternity-leave, lucky-to-have-a-job even if you have to work your a$$ off, forget-family-leave.
As the Country does not default, but the middle class disappears, the losers will be able to watch everything unfold on their latest mobile devices as they multi-task their way to poverty trying to be more and more productive.
+1, well said
smoke n mirrors
4 trillion of 'cuts', 400 trillion of QE
Until we as a people quite dicking around with this D & R nonsense, nothing will be done.Forget the blame game already. The US cannot continue on its path. We need some brave souls to talk to us like adults and tell us the truth- that the US is broke and we cannot keep spending and giving away everything.
My kids future is at stake and I am one pissed off clown.
Guns, gold, silver, lots of ammo, that is the only thing that will count in 5 years.
There won't be cuts in social security or medicare because seniors are greedy and vote against anyone who proposes cuts to their free money. I wouldn't blame "elites" that much. I would blame dumb and/or self interested american voters. Everyone knew about entitlement problems 25 years ago, but no one did anything because Americans didn't want to take care of their problems. Now it is time to pay...
Who decided to spend all that money that was collected for SSN and Medicare? If that was truly placed in savings accounts, can you imagine the size of it today???
That's how those programs were sold to the public.
Current Defense budget 700B, add in all related "protection" related expenses it approaches 1,000 B.
In 2000, the defense budget --- in today's dollars --- was 300B.
That's 400B of growth just for defense. Add in all the other bullshit and you can get to 1,500 real easy.
Here's the bottom line: Its doable!! All we need are pragmatic pols and policies. Just taking an across the board cut of 5% will get you another 300B.
Tweek a few programs, and you are there.
Again.....20% cuts across the board. Fair to everybody. Pain spread evenly. Nobody can complain any more than anybody else. Time to suck it up.
To save myself the time I am copying something I posted a couple months ago after the new Republican majority in the house. Suffice it to say, that unless the Ron Paul wing of the Republican party takes over, neither party will cut government sufficiently. That makes PM's and commodities the best bet since the wheel was invented.
Additionally, I would cut the Tea Party some slack. I know a lot of them. They have the right instincts but are not sure how to solve the problem. Without knowing that it is hard to support the right people. Just having an "R" by their name is insufficient as Bush, Specter, McCain, Crist and others show us. They are big government guys, too.
Here is my earlier post I offer for thought, especially to those of us who favor the libertarian route: From 12/2/10.
"I don't want to depress anyone but no Republican or Democrat administration will cut the bureaucracy. I watched Boehner after the Republican election victories and knew we (those who advocate minimal or at least fiscally responsible gov't) had lost already. He announced going back to 2008 budget levels. That's a nice sentiment but even Boehner doesn't understand the shark they are riding.
The reason both parties will be unsuccessful is first, virtually no Dems want to do anything but grow gov't and more importantly the Republicans will not quit asking the gov't to do "stuff". As long as the missions you give gov't remain the bureaucracy will remain and grow. That's the nature of the beast. They all grow, amass power, never work on efficiency (there's no competition, no profit motive and no necessity to make happy customers) and with union help will purposely hire useless people and give raises if they can. To truly CUT government you must eliminate the missions...whole agencies.
The dept's of Education, Energy, EPA, EO, subdepartments, etc. could be permanently cut and savings accrued. That will NOT happen. Only Libertarians would do it and there are not enough in the Republican party. The press, the Dems, unions and the numerous constituencies that suckle that particular gov't teat will all ally to provide a serious beat down to anyone that tries. Barney Frank got reelected for God's sake! He is ground zero for the Fannie-Freddie mortgage meltdown! The concentrated interests (special interests) will always defeat the diffuse interest (general public).
I like this article but I challenge anyone to name any agency outside the military that has ever taken permanent cuts. It does happen more at the state and local levels because of more rigorous budget rules, but bureaus still prevail over time.
The only way this changes is with a peaceful political revolution (i.e. elect libertarian type politicians) or if the system continues to evolve till it destroys itself. We will be impoverished and live in an autocratic society before that happens. Even the Soviets couldn't make it work with gulags and guns. It won't work here, either. However, we are going to try it."
What about we end the FBI,ATF,TSA,DHS,CIA,DEA,Federal Marshall,IRS. Defund these organizations because these are the armed wing of big govt. Get rid of the Education,Energy,Agriculture deptartments as well.Then close every military base on places we do not need them there(UK,Italy,Germany,Iraq,Saudi Arabia,Egypt,South Korea,Colombia,Japan,Bahrain etc). Then cut the $1 trillion defense budget down to at least 300 billion.Also end the war on drugs and legalize drugs. Tax it heavily if a drug is bought for recreational purposes.
Get rid of foreign military aid to Israel,Egypt,Turkey,Pakistan,Iraq,Jordan,Saudi Arabia,Oman,Bahrain,Kuwait,India,South Korea,Colombia etc.End the wars in Iraq,Afpak,Libya. Then end all farming subsidies, end welfare only for those who really in need and at the point they cannot find work. However for those lazy welfare queens will lose their paycheks and find work. Reform Social Security,Medicare and Medicare. Then get rid of the income tax and introduce a flat tax in which everyone pays.
Alas these measures will never be introduced because both parties represent the warfare/welfare state that is bankrupting us. Washington will realize it is a problem when it is too late. By the end of this decade debt interest will be the same amount as we pay of defense today. At that point it will be too late for cuts.
I am actually for most all of that. I don't even like the current police forces as they serve the state not the public. I'd rather hire private neighborhood security companies that won't harass you and use stupid thing like speeding tickets to raise revenue. No foreign aid is OK by me, especially till we balance the books. Count me in!
Yeah, good ideas - let's put them on the list of things to do in the post-apocalyptic world.
You got it. We just need to survive it, first.
In any case, as soon as they announce the debt ceiling increase, and they will, yields soar and Bubble Ben's stock experiment will crashola.
"The future will be better tomorrow..." - DQ
Right - they can't even trim a measly $31B from this year's budget (approx. 2% of the projected deficit for this year) to get them to the pathetic $61B "cut" they backed-down from then still pathetic $100B "cut" they campaigned-on less than 6-months ago...
... but seriously they pinky-promise to get serious about cutting the fed.gov, starting next year.
Anyone stupid enough to believe that ought to actually be voting Democrat.
Pudding yesterday, pudding tomorrow, but never pudding today.
Amen. Even Rand's 400bil won't get us there, especially since the government simultaneously wrecks the economy.
D.C Douche Bags.
That covers it.
$4-trillion per decade? Farse! They need to cut $4-trillion per year until the federal budget is zero.
Then close the federal doors, let the states decree that any 99.9% or purer gold or silver coin denominated in grams or ounces is legal tender, and close the book on the horribly failed experiment with "central government". It didn't work, and that's a gross understatement.