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Guest Post: The Promises That Cannot Be Kept

Tyler Durden's picture




 

Submitted by Charles Hugh Smith from Of Two Minds

The Promises That Cannot Be Kept

The government's promises, for pensions and healthcare and everything else, cannot be kept. We as a nation will eventually have to have a truthful conversation about that reality.

The fact that the Federal government cannot possibly fund the entitlement/ benefit programs that have been promised to the citizenry is well-known, but remarkably unwelcome. I have addressed this difficult reality dozens of times, as have hundreds of other commentators, for example:
To Fix Social Security, First Ask Why It Is Deep in the Red (January 18, 2011)
Is the Recovery "Self-Sustaining"? Here's a Test (March 22, 2011)
If You Want Solutions, First Pin Down Where the Money Is Going (May 23, 2011)

Bruce Krasting recently penned a wonderful evocation of the bitter "I, Me, Mine" rage this reality triggers in Americans: I go to a 4th of July party (Zero Hedge).

The typical reaction is either denial, mixed with wishful thinking--if only we taxed the rich and cut out war spending, everything could easily be funded indefinitely--or rage against anything and everyone that threatens the individual's own share of the swag.

Krasting brilliantly depicts the net result, which I call internecine conflict between protected fiefdoms in Survival+: the constituency of each fiefdom--Social Security, Medicare, Defense, etc.-- will undermine the other fiefdoms to maintain their slice of the dwindling Federal pie. This leads to a profound political disunity which cannot be overcome with compromises, as that would require deep cuts in all government programs.

None of this is new. Richard W. Fisher of the Dallas Federal Reserve laid it all out very succinctly back in May 2008, before the global financial meltdown. Now of course, the situation is much worse: Social Security is already deeply in the red, for example, a condition that wasn't supposed to occur until 2017. If we removed Federal and Federal Reserve stimulus, the economy would immediately contract 11%.

The entire notion of entitlements based on age requires an ever-expanding population of working contributors and an ever-expanding economy. If either condition isn't met, then the programs fail. Fisher's message is clear: our entitlement programs will fail because there is no way to raise $100 trillion in additional taxes in a declining economy.

Storms on the Horizon:

Please sit tight while I walk you through the math of Medicare. As you may know, the program comes in three parts: Medicare Part A, which covers hospital stays; Medicare B, which covers doctor visits; and Medicare D, the drug benefit that went into effect just 29 months ago. The infinite-horizon present discounted value of the unfunded liability for Medicare A is $34.4 trillion. The unfunded liability of Medicare B is an additional $34 trillion. The shortfall for Medicare D adds another $17.2 trillion. The total? If you wanted to cover the unfunded liability of all three programs today, you would be stuck with an $85.6 trillion bill. That is more than six times as large as the bill for Social Security. It is more than six times the annual output of the entire U.S. economy.

I want to remind you that I am only talking about the unfunded portions of Social Security and Medicare. It is what the current payment scheme of Social Security payroll taxes, Medicare payroll taxes, membership fees for Medicare B, copays, deductibles and all other revenue currently channeled to our entitlement system will not cover under current rules. These existing revenue streams must remain in place in perpetuity to handle the “funded” entitlement liabilities. Reduce or eliminate this income and the unfunded liability grows. Increase benefits and the liability grows as well.

To solve the entitlement deficit problem, discretionary spending would have to be reduced by 97 percent not only for our generation, but for our children and their children and every generation of children to come. And similarly on the taxation side, income tax revenue would have to rise 68 percent and remain that high forever. Remember, though, I said tax revenue, not tax rates. Who knows how much individual and corporate tax rates would have to change to increase revenue by 68 percent?

For the existing unfunded liabilities to be covered in the end, someone must pay $99.2 trillion more or receive $99.2 trillion less than they have been currently promised. This is a cold, hard fact.

Though I've addressed this many times before, let's walk through it one more time. Let's start with the income side of the ledger, Total Personal Income in the U.S.:

Total personal income is defined by the United States' Bureau of Economic Analysis as income received by persons from all sources. It includes income received from participation in production as well as from government and business transfer payments. It is the sum of compensation of employees (received), supplements to wages and salaries, proprietors' income with inventory valuation adjustment (IVA) and capital consumption adjustment (CCAdj), rental income of persons with CCAdj, personal income receipts on assets, and personal current transfer receipts, less contributions for government social insurance.

In other words, total personal income includes all the entitlement spending and government benefits such as extended unemployment, Section 8 housing, etc. As Mish recently explained, personal transfers now eat up all Federal tax revenues: $2.4 trillion in, $2.4 trillion mailed out.

If we set aside our own fond hopes for Social Security checks being deposited into our personal accounts and Medicare to survive long enough to pay for our own care, we conclude this is a staggering imbalance. The promised programs are already consuming every dollar the government collects, and the Baby Boom has barely begun to retire.

Perhaps a few million of the 76 million Boomer generation has started collecting Social Security, and the first Boomers, born in 1946, are just now qualifying for Medicare. That these programs have already expanded to the point that they consume all revenues should give pause to anyone still in the denial or rage stage of the denial/anger/grief/resignation/acceptance cycle.

Earned Income is flat to down. Here is a chart of total income:


 

There are two components of income: wages and non-labor, which includes dividends, interest, capital gains, rental income, and other investment income.




Charts: Conerly Consulting

The handsome rebound in Corporate America's profits--roughly 11% of the entire GDP at $1.6 trillion--and the Fed-engineered "permanent rally" in stocks has goosed non-labor income for the top 10% who own these income streams, but it has also bolstered the pension funds that millions of state and local government retirees depend on. (When the stock and bond markets implode, so will all those pension funds' promises.)

Personal income has "recovered" only as a result of greatly increased Federal transfer payments. If we subtract all those government transfer payments, income has cratered:

 



Government transfers now account for 22% of household income, an unprecedented dependence on Central State checks and benefits:



Click on chart for full-sized chart in a new browser window.

Employment is down and is not recovering. I have addressed why many times, what author Jeremy Rifkin termed "the end of work." So any projections based on a rapidly growing workforce are not reality-based.

 


 

All the "growth" of the past decade was simply borrowed, as our private and public debt has soared. If you borrow cash from your credit card and spend it, is that really "income"? No. Here is the national "credit card" account. Does that look sustainable?


Notice how much of the decade's income was equity extraction during the housing bubble. That source of borrow-and-spend is gone.

The problem is that the benefit costs are not static; they're constantly moving ever higher because the programs are expanding 3, 4 or 5 times faster than the real economy. Here is a chart of local government healthcare and pension costs. Does this look remotely sustainable?

Here is a chart of our national healthcare (a.k.a. sickcare) spending. Compare this rocket-ascent path to the moon with the chart of declining income and the skyrocketing debt.


Many readers suggest that cutting Defense and raising taxes on the wealthy will preserve these entitlement programs. Unfortunately the math doesn't pencil out, for the reason noted above: when expenses are rising by 6% to 11% a year, every year, and your income remains flat to down, then in a very few years, those expenses will eat up your entire income.

But let's do the math. Let's knock a third out of the Defense budget of around $730 billion, saving $250 billion a year. (Never mind the fierce fight that fiefdom would put up.) Let's increase taxes on the super-wealthy (good luck getting them to pay it) and the plain old wealthy and you might raise $500 billion more a year.

That is questionable for a number of reasons, most saliently that the wealthy already pay most of the Federal income tax, which is quite progressive on earned income: The Problem with "Tax The Rich": It Won't Work (May 28, 2010).

The top 5% earn about 22% of the income, and they pay about 60% of Federal taxes. As many readers have pointed out, the total tax burden, including sales tax, property tax, etc. is heavier on lower-income workers as a percentage of income than it is on the super-wealthy (top 1%), who pay around 17% of income in taxes. But no matter how you slice the data, the fact remains that the top 5% already pay a hefty percentage of earned income in taxes, and they also pony up 60% of all Federal income taxes.

The top 1% could certainly stand to pay more than 17%, but the problem there is that capital is mobile now and anyone paying taxes on their global income in, say, Switzerland, cannot be made to pay taxes elsewhere on that same income. (Income and corporate taxes are low in Switzerland compared to the U.S. and Europe.)

We can rail against this reality, but capital will flow to the highest returns and lowest tax rates. We should impose the same tax rate on non-labor as we do on labor, and that would raise a a few hundred billion more a year. But let's also recall that the Federal government is borrowing $1.6 trillion each and every year, fully 11% of the nation's GDP and 40% of Federal spending, so even $500 billion more simply isn't going to rectify the budget shortfall or long-term situation.

Studies have found that taxes are remarkably stable at about 20% of GDP. It seems that attempts to raise taxes above that share of the economy trigger blowback in the form of tax avoidance, capital flight, voluntary reductions in income, etc.

But let's say you do manage to strip out $250 billion annually from Defense and Homeland Security/War on Global Terror (GWOT), and boost tax revenues by $500 billion a year (a 21% increase in total tax revenues). Together, that would generate $750 billion annually, or $15 trillion over 20 years.

I haven't found any firm estimates of the unfunded liabilities due in the next 20 years, but since 25% of the entire population (the Baby Boomers) will be retired and drawing on Social Security and Medicare within 15 years, I think we can reckon that about half that $106 trillion will come due in the next 20 years--and that is probably absurdly conservative.

$15 trillion down, $35 trillion to go. Do you see how utterly hopeless this exercise is when Federal spending rises by 6.5% every year even as the underlying economy muddles along at 2% in good years and -5% in poor years, if we subtract borrow-and-spend deficit financing?

In other words, $100 trillion in unfunded liabilities is the number now, but if spending continues rising at triple the rate of the real economy, then that number will only grow.

If we're honest about our accounting, then the U.S. economy hasn't grown at all since 2008; it's shrunk by $6 trillion, a sum we have masked by borrowing and spending $6 trillion in Federal debt, money that replaced the decline of private borrowing and spending.

Please look at the charts of healthcare and local government pension and healthcare costs again. Those rocket-launch lines shooting higher cannot be funded by a national income that is flat or declining.

We need a national conversation about reality, not wishful thinking. We need to grasp the nettle and talk about triage, about conserving Social Security for those with no other sources of income, and about devoting our scarce resources for palliative and preventive care. The Status Quo is completely, utterly unsustainable, but that needn't bring the nation to its knees--unless we actively insist that it does so.

 

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Wed, 07/06/2011 - 11:15 | 1429728 Yen Cross
Yen Cross's picture

 Even the Unions are Effin them selves!

Wed, 07/06/2011 - 11:33 | 1429805 eureka
eureka's picture

So does that mean US empire will prevail?

Wed, 07/06/2011 - 19:07 | 1431166 Buck Johnson
Buck Johnson's picture

Totally to late.  The politicians know this already, but they can't go out there and say it.  If they went out today and said that we will have to cut Medicare and Medicade by 50% and SS will be cut by the same and taxes raised across the board (and this wouldn't help anyway), there would be riots in the streets.  Because most people have maybe maybe 10,000 in savings (probably a few thousands) at retirement and what they can get from SS and Medicare/Medicade.  They are in poverty from the get go, and know these politicians are telling them that they will be even more in poverty from the cuts and tax increases (which will make things more expensive).  I've said this more than once over the few years of this fiasco, and that is we have kicked this can down the road so much that finally we see the end of it and are trying to kick the can via small small kicks. 

When the US empire finally leaves the international stage, it will leave it showing it's Schizophrenia.  Because our populace and our people will be delusional to what they have been told and believed for so long.  We will end up a splintered third world nation, and we be a nation that will be broken into 5 to 6 parts that will be seperate entities (essentially countries) themselves.  I read Plato's republic and he was right about what has to be done in order for a republic to flourish, and we did the opposite.

http://faculty.frostburg.edu/phil/forum/PlatoRep.htm

Wed, 07/06/2011 - 13:27 | 1430243 roadlust
roadlust's picture

We don't have "scarce resources," we have vast misallocation of them.

Until the resources are distributed equitably and sanely, there will be a faux "crisis."  But there is always a "crisis" before the revolution.

Creating tax policies and laws that encourage a middle class again would be a start.  Progressive Taxation for instance. 

Of course we could always just cancel all US Dollars, private property deeds, laws that protect money instead of democracy, etc. and start over.  Why would "smart people" fear that???

 

 

 

 

 

Wed, 07/06/2011 - 14:26 | 1430449 Fukushima Sam
Fukushima Sam's picture

I say we crash this bitch, get some creative destruction going on, and see what kind of phoenix will rise from the ashes.

I recently read "The Fourth Turning" and all this strife seems inevitable once you see it from a historical cycle point of view.  Does Gen X really want to maintain the empire built by their parents and grandparents?  Is a generation alienated and underprotected by its parents then going to take care of them when they need it?  Even if they wanted to, will they be able to?

Wed, 07/06/2011 - 15:39 | 1430695 eureka
eureka's picture

To Roadlust, RE: "Creating tax policies and laws that encourage a middl class again would be a start" - I concur - and in that light Charles Hughes Smith does NOT provide the solution:

The top 1% could certainly stand to pay more than 17%, but the problem there is that capital is mobile now and anyone paying taxes on their global income in, say, Switzerland, cannot be made to pay taxes elsewhere on that same income. (Income and corporate taxes are low in Switzerland compared to the U.S. and Europe.)

We can rail against this reality, but capital will flow to the highest returns and lowest tax rates. We should impose the same tax rate on non-labor as we do on labor, and that would raise a a few hundred billion more a year.

HERE IS WHERE CHS IS DEAD WRONG

1) if the rich want ANY access to any of OUR national markets, OF COURSE we can make them pay - IF WE WANT TO. We can tax imports, live within our means and work toward true energy and manufacturing independence. If we want to!

2) taxing non-labor the same as labor income in a world of out-sourcing and robotization is anachronistic - i.e. plainout a non-solution, i.e. stupid. OBVIOUSLY, one stimulates small and local businesses and employment by encentivizing IT - and not globalist mega corporations.

CHS's observations are fair - his consclusions and recommendations do not stand up, but rather are non-sensical and or globa-capital-collectivist troll'ish.

DO NOT EQUATE SOCIAL PROGRAMS WITH IMPIRIAL MILITARY AND SECURITY PROGRAMS - IF YOU WANT TO BE CONSIDERED A SOBER OBSERVER AND COMMENTATOR.

Wed, 07/06/2011 - 11:43 | 1429851 trav7777
trav7777's picture

the nation is rotten from top to bottom.

From the deadbeat homeowners to the CEO of the banks.  From the union rank-and-file up to their chiefs.  Crooked, corrupt, all on the take.  Ghettofied society.

Wed, 07/06/2011 - 12:50 | 1430130 andybev01
andybev01's picture

Somewhere we them folks got the idea that a strong sense of community was akin to collectivism and shunned all sense of an orderly society.

Within 2 generations (the greatest and their spawn, boomers) we dis-integrated into what we have today; I've got mine so f*ck you.

I gleefully look forward to the coming-soon-to-a-lawyers-office-near-you, battles over family trusts and which third-tier nursing home Ma & Pa are going to.

Wed, 07/06/2011 - 13:32 | 1430262 Spastica Rex
Spastica Rex's picture

God bless the child and whatnot.

We spent the last third of a century nurturing consumption and narcisissm. We built giant houses and flitted about the world and drove land barges to and fro. We worshipped clebrities and scandal. We could have done something else, but we didn't. It's all about choice; none of the problems we have were inevitable.

The 400 or so year experiment of a world without kings is drawing to a close.

Wed, 07/06/2011 - 13:57 | 1430350 wisefool
wisefool's picture

+1. The current idocracy winds down within 10 years or so. Then, as you mentioned, the return of the "peerage." But it aint gonna be like what the sheep saw at the recent royal wedding.

Based on todays headlines, think more like Dune, with Casey Anthony types as bene gesserit. And former steriod abuser athletes as the barons. 

Wed, 07/06/2011 - 18:13 | 1431049 Spastica Rex
Spastica Rex's picture

One of the favorite books of my youth, brought to life.

Wed, 07/06/2011 - 12:51 | 1430134 silvertrain
silvertrain's picture

Bullseye hit.. A large portion of that is the loss of morals..People dont give a fuck..

Wed, 07/06/2011 - 14:17 | 1430429 Oh regional Indian
Oh regional Indian's picture

indeed. The death of empathy precluded this fall.

ORi

http://aadivaahan.wordpress.com/2011/04/15/the-death-of-empathy/

Wed, 07/06/2011 - 13:20 | 1430217 chumbawamba
chumbawamba's picture

And then there are the blog commentators.

Wed, 07/06/2011 - 13:57 | 1430351 andybev01
andybev01's picture

*PSST: where's your signature?*

Wed, 07/06/2011 - 14:20 | 1430419 eureka
eureka's picture

RE: "...all on the take" - exactly, and especially the elite and its military & security complex.

"Government transfers now account for 22% of household income, an unprecedented dependence on Central State checks and benefits" - DOES THAT INCLUDE WAGES AND EQUIPMENT PAYMENTS FOR THE MILITARY & SECURITY COMPLEX's COMPLETELY USELESS EXISTENCE? 

80% of US citizens have zero net worth - so what assets do they have to protect? NONE!

THE ONLY REAL TAX - IS THE ONE YOU PAY WITH YOUR LABOR.

FUCK THE RICH, FUCK THE MILITARY & SECURITY COMPLEX, AND FUCK THE EMPIRE - I.E. THE ELITE THEY ALL SERVE - THEY, ARE THE VAMPIRES, THE "ENTITLEMENT" RECEPIENTS.

Wed, 07/06/2011 - 11:22 | 1429749 carbonmutant
carbonmutant's picture

What we have is a nation that wants to ignore the news.

We voted for change it's not our fault...

Wed, 07/06/2011 - 11:36 | 1429821 Xibalba
Xibalba's picture

And...green. 

Wed, 07/06/2011 - 12:25 | 1430031 lynnybee
lynnybee's picture

  " We voted for change it's not our fault..."

correct.  we were lied to & scammed & stolen from.    but, we can claim stupidity.    i know that i was extremely dumb until i started studying & doing my internet research (thank you,ZEROHEDGE) .   ....... I'm not dumb anymore; but, 99% of the citizenry is still uneducated & ill-informed.

 

 

Wed, 07/06/2011 - 13:59 | 1430363 Steaming_Wookie_Doo
Steaming_Wookie_Doo's picture

That's the point that's missed. That SS trust money was "reallocated" (plundered) in the 70s. No one is really acknowledging that, nor has anyone been charged with any crime. We've also held interest rates artificially low, which has helped contribute to that deficiency as well.

Now of course, we will blame the those present and future SS claimants who've been told that the $$s there, no worries. Now that the time has come to make a claim, these people, who had money deducted from all their paychecks, are considered lazy criminals. Of course, once someone quits their job, they are usually destined for poverty, which necessitates the monthly SS check. One can say "well you shouldn't retire", but some folks get forced out of their jobs, have physical breakdowns, etc that come into play.

I'm sure the (unspoken) solution will be that lots of folks will have to die to save on medical/benefits costs. How many of the 75 million boomers will have to die to "rebalance" the books? Wanna bet they could all be dead and we'd still be fucked?

Wed, 07/06/2011 - 11:21 | 1429751 High Plains Drifter
High Plains Drifter's picture

http://www.aimsurplus.com/product.aspx?item=F3YugoSKS&name=Yugoslavian+S...

may i suggest that you all, purchase things like this. you will need them soon. such things as this are the poor man's assault rifle complete with pig sticker, so that when you get near them you can give them something to remember you buy(at least for a few minutes) , up close and personal, which is the only way to do it when you are dealing with traitors. George Washington, would agree with this message , I bet........

Wed, 07/06/2011 - 11:52 | 1429903 MassDecep
MassDecep's picture

and to think, i just aquired an fn scar! Looks like a pretty nice sticker, 7.62 x 39 no less. Capacity of mags needs to exceed 30! ahhh, the scar is too sweet though.....

Wed, 07/06/2011 - 13:07 | 1430168 High Plains Drifter
High Plains Drifter's picture

they make adapters for that problem.

Wed, 07/06/2011 - 13:11 | 1430170 Pegasus Muse
Pegasus Muse's picture

My preference:  http://www.sigsauer.com/CatalogProductDetails/sig556-classic-swat.aspx 

The Trijicon ACOG should ship this week.  

Wed, 07/06/2011 - 13:17 | 1430208 High Plains Drifter
High Plains Drifter's picture

very nice. expensive, but very nice.  i want one of those too.  right now, i have my eye on a us optics sn3 for long ranges. i have to go get my college degree so i can use it effectively.

Wed, 07/06/2011 - 14:10 | 1430404 Jason_1sandal
Wed, 07/06/2011 - 11:59 | 1429933 Yen Cross
Yen Cross's picture

 I have my " High velocity" tools HPD. The liberal junksters  are a hoot!

Wed, 07/06/2011 - 13:09 | 1430174 High Plains Drifter
High Plains Drifter's picture

cool.  i know many of you do.  i know many of you think that my mind is not in a good place. well perhaps you are right. many of you perhaps think that my mind is one evil thoughts about the government.  well perhaps you are right about that one too.

 

what else should an American think these days. It is time to deal with these issues one way or the other.

Wed, 07/06/2011 - 14:37 | 1430470 eureka
eureka's picture

RE: "what else should an American think these days?"

There IS no "America", no "Americans" - only the mythical concepts these terms allude to.

There is only a corrupt, elite-run Federation, manipulating a mass of atomized, pseudo-individualized, self-absorbed gamblers/leverage-players and consumers.

"America" - i.e. the US Corporatist Federation - is demolishing all remnants of social cohesion and common, national identity/purpose, replacing it with individual self-absorption.

AMERICA IS DEAD. AMERICA IS A PHANTOM CHARACTER OF A VAIN MIND.

Wed, 07/06/2011 - 15:16 | 1430643 Clark Bent
Clark Bent's picture

Shhhh, that's "liberation" ya got there. Just quiet down and accept yer gay "marriage." After all, we need to be liberated from all these regressive institutions. 

Wed, 07/06/2011 - 21:49 | 1431492 RockyRacoon
RockyRacoon's picture

20 Not So Good Categories That The United States Leads The World In

   
The Economic Collapse
July 5, 2011

Is the United States “number one”?  Many Americans take deep pride in their nation and the truth is that the U.S. has a lot going for it.  The United States has the largest economy in the world.  The United States also has the most powerful military on the entire planet.  The United States has produced most of the greatest movies that the world has ever seen.  But the United States is also number one in a lot of categories that are not go great.  If we ever want to turn this country around, we need to be very honest with ourselves.  We need to take a long, hard look in the mirror and realize that it is not a good thing that we are number one in divorce, drug addiction, debt, obesity, car thefts, murders and total crimes.  We have become a slothful, greedy, decadent nation that is exhibiting signs of advanced decay.  Until we understand just how bad our problems really are, we won’t be able to come up with the solutions that we need.

A lot of people that write articles like this have a deep hatred for America.  But that is not the case with me.  I love the United States.  I love the American people.  America is like an aging, bloated rock star that has become addicted to a dozen different drugs.  America is a shadow of its former self and it desperately needs to wake up before it plunges into oblivion.

If you do not believe that America is in bad shape, just read the list below.  The following are 20 not so good categories that the United States leads the world in….

#1 The United States has the highest incarceration rate in the world and the largest total prison population on the entire globe.

#2 According to NationMaster.com, the United States has the highest percentage of obese people in the world.

#3 The United States has the highest divorce rate on the globe by a wide margin.

#4 The United States is tied with the U.K. for the most hours of television watched per person each week.

#5 The United States has the highest rate of illegal drug use on the entire planet.

#6 There are more car thefts in the United States each year than anywhere else in the world by far.

#7 There are more reported rapes in the United States each year than anywhere else in the world.

#8 There are more reported murders in the United States each year than anywhere else in the world.

#9 There are more total crimes in the United States each year than anywhere else in the world.

#10 The United States also has more police officers than anywhere else in the world.

#11 The United States spends much more on health care as a percentage of GDP than any other nation on the face of the earth.

#12 The United States has more people on pharmaceutical drugs than any other country on the planet.

#13 The percentage of women taking antidepressants in America is higher than in any other country in the world.

#14 Americans have more student loan debt than anyone else in the world.

#15 More pornography is created in the United States than anywhere else on the entire globe.  89 percent is made in the U.S.A. and only 11 percent is made in the rest of the world.

#16 The United States has the largest trade deficit in the world every single year.  Between December 2000 and December 2010, the United States ran a total trade deficit of 6.1 trillion dollars with the rest of the world, and the U.S. has had a negative trade balance every single year since 1976.

#17 The United States spends 7 times more on the military than any other nation on the planet does.  In fact, U.S. military spending is greater than the military spending of China, Russia, Japan, India, and the rest of NATO combined.

#18 The United States has far more foreign military bases than any other country does.

#19 The United States has the most complicated tax system in the entire world.

#20 The U.S. has accumulated the biggest national debt that the world has ever seen and it is rapidly getting worse.  Right now, U.S. government debt is expanding at a rate of $40,000 per second.

So are you convinced that we are in trouble yet?

The truth is that America has changed.  Most of us don’t even say hello to our neighbors anymore.

Wed, 07/06/2011 - 12:01 | 1429944 MachoMan
MachoMan's picture

holy crap those things keep going up in price...  If someone is going to go this route, I would suggest trying to pick up an sks variant that accepts AK mags from the factory...  

Wed, 07/06/2011 - 13:10 | 1430180 High Plains Drifter
High Plains Drifter's picture

yeh you used to see them for about a hundred bucks, but i think aim got ahod of some nice ones and they don't want to give them away.

Wed, 07/06/2011 - 15:14 | 1430630 WaterWings
WaterWings's picture

Since I can only fire one rifle (accurately) at a time I have decided to spend a lot more than that to protect MY ONE LIFE.

Sell what you must.

http://www.springfield-armory.com/armory.php?clicktype=rifles

Wed, 07/06/2011 - 15:20 | 1430651 Clark Bent
Clark Bent's picture

Those are fine choices. I think the best handgun I have laid hands on is 

 

http://www.berettausa.com/products/px4-storm-full-size-9mm/default.aspx

Wed, 07/06/2011 - 15:28 | 1430674 WaterWings
WaterWings's picture

Which is great if you also have the CX4.

I should have been more specific with the above link:

SCOUT SQUAD, BITCHES:

http://www.springfield-armory.com/armory.php?model=19

Wed, 07/06/2011 - 12:05 | 1429949 Doyle Hargraves
Doyle Hargraves's picture

Another plus to the 7.62x39 is most of the foreign troops that come to collect what they are owed use that particular load. Will make it easier to "acquire" ammo...probably wouldn't hurt to get one of these

 

http://www.ruger.com/products/gp100/models.html

 

 

Wed, 07/06/2011 - 12:45 | 1430114 Lednbrass
Lednbrass's picture

Not many real militaries geared off of Soviet weaponry use this round anymore, they went to the 5.45X39 with the AK 74 30 some years ago.  Only MENA nations still seem to use it.

I used to have a GP100 that I had to sell soon after I became a parent, it is a nice pistol.

Wed, 07/06/2011 - 13:11 | 1430184 High Plains Drifter
High Plains Drifter's picture

when they were in chechnya , they had problems with that round. it would bounce off of leaves and twigs etc real easy. so many of them changed back to the 7.62 x 39mm rifles.

Wed, 07/06/2011 - 14:34 | 1430472 Fukushima Sam
Fukushima Sam's picture

Given that logic you don't even need that gun now.  Just get any old gun and then when the time comes you can "acquire" the gun you need, as well as the ammo in it.

Thu, 07/07/2011 - 11:00 | 1432481 Doyle Hargraves
Doyle Hargraves's picture

You sound like my Dad, Sam. He says the same thing, why buy high cap semi-autos when you can just dust off one of the enemy and take their fully automatic and ammo from em.

Wed, 07/06/2011 - 12:28 | 1430048 Lednbrass
Lednbrass's picture

A very good and reliable weapon that will take abuse and still go bang.  Not great at distance but effective out to 200 yards or so and relatively inexpensive.  Good choice for limited budgets.

Wed, 07/06/2011 - 13:13 | 1430190 High Plains Drifter
High Plains Drifter's picture

agreed. just like a old green beret i listen to said one time. it is a falsehood to think that we will all be snipers hiding out and shooting from long distances. he said, that almost all of your action will be within a hundred yards or less

Wed, 07/06/2011 - 13:43 | 1430284 Doyle Hargraves
Doyle Hargraves's picture

Very true statement...for that kind of engagement I trust my mini 14...can hit anything up to 3-400 yards spot on. SKS, AK is very durable but lacks the accuracy. If I am out at long distances I will take a Garand over everything else out there, little recoil, heavy barreled for accuracy and .308 it is about the best round there is for long distances (barrett arms are pretty much outlawed here, of course if it came down to using these for what they are for I doubt there would be too many 'laws' being enforced anyway).

Wed, 07/06/2011 - 12:28 | 1430049 Lednbrass
Lednbrass's picture

A very good and reliable weapon that will take abuse and still go bang.  Not great at distance but effective out to 200 yards or so and relatively inexpensive.  Good choice for limited budgets.

Wed, 07/06/2011 - 12:28 | 1430050 Lednbrass
Lednbrass's picture

A very good and reliable weapon that will take abuse and still go bang.  Not great at distance but effective out to 200 yards or so and relatively inexpensive.  Good choice for limited budgets.

Wed, 07/06/2011 - 12:28 | 1430051 Lednbrass
Lednbrass's picture

A very good and reliable weapon that will take abuse and still go bang.  Not great at distance but effective out to 200 yards or so and relatively inexpensive.  Good choice for limited budgets.

Wed, 07/06/2011 - 12:28 | 1430052 Lednbrass
Lednbrass's picture

A very good and reliable weapon that will take abuse and still go bang.  Not great at distance but effective out to 200 yards or so and relatively inexpensive.  Good choice for limited budgets.

Wed, 07/06/2011 - 12:28 | 1430053 Lednbrass
Lednbrass's picture

A very good and reliable weapon that will take abuse and still go bang.  Not great at distance but effective out to 200 yards or so and relatively inexpensive.  Good choice for limited budgets.

Wed, 07/06/2011 - 12:28 | 1430055 Lednbrass
Lednbrass's picture

A very good and reliable weapon that will take abuse and still go bang.  Not great at distance but effective out to 200 yards or so and relatively inexpensive.  Good choice for limited budgets.

Wed, 07/06/2011 - 12:28 | 1430056 Lednbrass
Lednbrass's picture

A very good and reliable weapon that will take abuse and still go bang.  Not great at distance but effective out to 200 yards or so and relatively inexpensive.  Good choice for limited budgets.

Wed, 07/06/2011 - 12:28 | 1430057 Lednbrass
Lednbrass's picture

A very good and reliable weapon that will take abuse and still go bang.  Not great at distance but effective out to 200 yards or so and relatively inexpensive.  Good choice for limited budgets.

Wed, 07/06/2011 - 13:14 | 1430193 V in PA
V in PA's picture

There's a pill for that.

Thu, 07/07/2011 - 14:25 | 1433371 Guy Fawkes Mulder
Guy Fawkes Mulder's picture

Since when did fucking Michael J. Fox become a ZH-er?

Wed, 07/06/2011 - 12:45 | 1430060 Lednbrass
Lednbrass's picture

wtf

Wed, 07/06/2011 - 12:53 | 1430140 andybev01
andybev01's picture

Hiccups?

Wed, 07/06/2011 - 15:07 | 1430607 Blano
Blano's picture

That's one itchy trigger finger ya got there.

Wed, 07/06/2011 - 17:03 | 1430889 MachoMan
MachoMan's picture

someone didn't remove all the cosmoline from their sks and is bump firing the shit out of it.

Wed, 07/06/2011 - 13:09 | 1430165 Pegasus Muse
Pegasus Muse's picture

***

Wed, 07/06/2011 - 11:21 | 1429754 baby_BLYTHE
baby_BLYTHE's picture

We need a national conversation about reality, not wishful thinking.

 

I swear the next time I hear this out of a politician's mouth...

No one is going to a fix a damn thing until the entire edifice blows to pieces.
It is not politically viable to vote for austerity, as we have seen in Greece and elsewhere. Therefore nothing of substance will ever be done.

Wed, 07/06/2011 - 11:39 | 1429834 trav7777
trav7777's picture

Reality is totally passe...we have American Idol now and AutoTune

Wed, 07/06/2011 - 11:46 | 1429864 bob_dabolina
bob_dabolina's picture

Don't forget Ice Loves Coco.

I personally thought Flava Flav was a genuine role model that all Americans should strive to emulate.

Wed, 07/06/2011 - 11:51 | 1429897 baby_BLYTHE
baby_BLYTHE's picture

MTV used to be a music channel. Now it is nothing more than garbage reality shows about young girls getting pregnant and becoming as dependent as possible on government handouts

Wed, 07/06/2011 - 11:58 | 1429930 bob_dabolina
bob_dabolina's picture

Art imitating life

Wed, 07/06/2011 - 12:20 | 1430012 V in PA
V in PA's picture

or... Art influencing life.

 

Just sayin'.

Wed, 07/06/2011 - 12:18 | 1430006 NotApplicable
NotApplicable's picture

I can still remember the good old days, watching Ol' Dirty Bastard cash his welfare check.

Wed, 07/06/2011 - 13:23 | 1430228 legal eagle
legal eagle's picture

Yes, are you old enough to remember cable TV was supposed to be transmitted with no commercials?  MTV "all music, all the time."  That is how they sold it.  What most folks dont know is a good old fashioned roof antenna can get most digital stations in most cities, with no monthly fees.  Talk to the good ol boys at Radio Shack.

 

 

Wed, 07/06/2011 - 11:53 | 1429905 slewie the pi-rat
slewie the pi-rat's picture

there is a new pollen in the air
which will surely cause many to lose their hair
as the blossoming becquerels from the new fuk_u strain
enter the air, the water, the food chain
the horizon of hope now moved out ten years
yakety-yak blow the saxes of the seers
we were preening, adjusting cravats, zipping dresses
to award ourselves for our wondrous successes
when the show got cancelled
our limos were stuck
in the traffic jams of our own fuking messes

Wed, 07/06/2011 - 12:02 | 1429948 Yen Cross
Yen Cross's picture

 Slewie my man! Lets rock!

Wed, 07/06/2011 - 17:29 | 1430124 slewie the pi-rat
slewie the pi-rat's picture

we gonna boogie till we puke, Y/C
so, the $/yen 81.0 thingy you called has been a-hoppening
nicely
so now what?

Wed, 07/06/2011 - 12:01 | 1429943 Yen Cross
Yen Cross's picture

 Blythe, you are starting to grow on me. Sort of.

Wed, 07/06/2011 - 13:21 | 1430220 Dr. Richard Head
Dr. Richard Head's picture

Assuming her picture is her, how could one not like a beauty with a brain to boot?  Sure you may not agree with everything she says, but to appreciating a girl for her mind is a terrible thing to waste.

Wed, 07/06/2011 - 16:02 | 1430761 slewie the pi-rat
slewie the pi-rat's picture

doc---you've been a round long enuf that this is either trolling or shit-stirring, probably both.  hahaha.  the baby_B is enigmatic as an avatar model agency disguised as a model avatar. 

Wed, 07/06/2011 - 12:06 | 1429966 Dane Bramage
Dane Bramage's picture

True that.  Ours is a crises-driven society.   Nothing is ever fixed until after it fails.  The (fiat) economy is like a levy, reality is the hurricane, river-surge, etc.,.

Wed, 07/06/2011 - 12:49 | 1430013 whstlblwr
whstlblwr's picture

"No one is going to a fix a damn thing until the entire edifice blows to pieces."

They fix edifice. It new magic bullet:

Sen. Kerry sees progress on his bill for an infrastructure bank.

http://thehill.com/blogs/on-the-money/appropriations/165357-kerry-sees-p...

Sorry this old news, someone just forward to me.

Wed, 07/06/2011 - 11:22 | 1429761 fbrothers
fbrothers's picture

There will be blood in the streets.

Wed, 07/06/2011 - 11:24 | 1429770 JW n FL
JW n FL's picture
Top 10 corporations which paid no taxes

Here is Sen. Sanders’ list of the 10 worst corporate income tax avoiders:

1) Exxon Mobil made $19 billion in profits in 2009. Exxon not only paid no federal income taxes, it actually received a $156 million rebate from the IRS, according to its SEC filings. (Source: Exxon Mobil’s 2009 shareholder report filed with the SEC here.)

2) Bank of America received a $1.9 billion tax refund from the IRS last year, although it made $4.4 billion in profits and received a bailout from the Federal Reserve and the Treasury Department of nearly $1 trillion. (Source: Forbes.com here, ProPublica here and Treasury here.)

3) General Electric made $26 billion in profits in the United States over the past five years and, thanks to clever use of loopholes, paid no taxes.(Source: Citizens for Tax Justice here and The New York Times here. Note: despite rumors to the contrary, the Times has stood by its story.)

4) Chevron received a $19 million refund from the IRS last year after it made $10 billion in profits in 2009. (Source: See 2009 Chevron annual report here. Note 15 on page FS-46 of this report shows a U.S. federal income tax liability of $128 million, but that it was able to defer $147 million for a U.S. federal income tax liability of negative $19 million.)

5) Boeing, which received a $30 billion contract from the Pentagon to build 179 airborne tankers, got a $124 million refund from the IRS last year. (Source: Paul Buchheit, professor, DePaul University, here and Citizens for Tax Justice here.)

6) Valero Energy, the 25th largest company in America with $68 billion in sales last year, received a $157 million tax refund check from the IRS and, over the past three years, received a $134 million tax break from the oil and gas manufacturing tax deduction. (Source: the company’s 2009 annual report, pg. 112, here.)

7) Goldman Sachs in 2008 only paid 1.1 percent of its income in taxes even though it earned a profit of $2.3 billion and received an almost $800 billion from the Federal Reserve and U.S. Treasury Department. (Source: Bloomberg News here, ProPublica here, Treasury Department here.)

8) Citigroup last year made more than $4 billion in profits but paid no federal income taxes. It received a $2.5 trillion bailout from the Federal Reserve and U.S. Treasury. (Source: Paul Buchheit, professor, DePaul University, here, ProPublica here, Treasury Department here.)

9) ConocoPhillips, the fifth largest oil company in the United States, made $16 billion in profits from 2006 through 2009, but received $451 million in tax breaks through the oil and gas manufacturing deduction. (Sources: Profits can be found here. The deduction can be found on the company’s 2010 SEC 10-K report to shareholders on 2009 finances, pg. 127, here.)

10) Carnival Cruise Lines made more than $11 billion in profits over the past five years, but its federal income tax rate during those years was just 1.1 percent. (Source: The New York Times here.)

http://www.greenpartywatch.org/2011/04/30/top-10-corporations-who-paid-no-taxes/

 


http://research.stlouisfed.org/fred2/series/BASE 3 Years 300% More Dollars Printed Out of Thin Air! Trickle Down! FAILED!!

 


50k jobs a Month for a decade sent to China? Tax Benefits for Eroding the Tax Base? http://goo.gl/8Hqe1

 

Wed, 07/06/2011 - 11:25 | 1429776 JW n FL
JW n FL's picture

http://www.newsbusters.org/blogs/matt-hadro/2011/06/29/anderson-cooper-again-hits-bachmann-over-farm-subsidies-lead-segment-cnn

For the second night in a row, Anderson Cooper opened his regular news cast Tuesday touting a story about Michele Bachmann's hypocrisy in benefitting from federal agriculture subsidies.

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

Rockefeller Gets Farm Subsidies From Taxpayers

Wed, 07/06/2011 - 11:32 | 1429797 Caviar Emptor
Caviar Emptor's picture

That's why they had to silence Leona Helmsley when she said "Taxes are for little people". She was right and she was in a privileged place to know it was true. 

Wed, 07/06/2011 - 11:50 | 1429879 DaveyJones
DaveyJones's picture

Yup, reminds me of the second illinois governor to go to prison. When caught, at first he said, "what? this is how the system works!" He was punished for his mental truths

Wed, 07/06/2011 - 12:13 | 1429984 wisefool
wisefool's picture

The left/progressives are still trying to thread the needle. 10 years ago, their schtick was "Why do you people vote republican? you will never be rich like them"

Somebody pulled them aside and said "Stop that crap. If you keep brow beating them, they will figure out that the rich pay almost no taxes, and your constituencies get lives of subsidy because these people you are trying to convert are the ones who pay taxes. Nobody else does or will. Even if we print money we still have to tax or people call banana republic. So stop that crap. go bleet about gay marriage or something to get your rocks off on them."

If Bachmann (post graduate tax law phd) makes it to the head of tea party leadership, John Stewart is going to have to retire from broadcasting because:

#1. Nothing is ever going to objectively be funny anymore after the Tea Party makes an IRS enforcer "their" president.

#2. The lefties are all going to rapture for the same reason. (Utter and complete joy)

Unless she pulls a "I have seen the light" moment and says her training allows her to implement a flat income, cap gains, and compartmentalized consumption tax.

Wed, 07/06/2011 - 12:17 | 1430004 Caviar Emptor
Caviar Emptor's picture

Taxes are and always will be political. It's the main reason people lobby. No different than "pork barrel" spending. Same difference if it's all coming out of the same pocket

Wed, 07/06/2011 - 12:40 | 1430100 wisefool
wisefool's picture

"_____Insert quote about democracy becomes a mob. In good or bad times voters implement policies against thier long term best interest, etc, etc ________ "

Hedge fund managers pay 10% effective tax rates, to play with the money off Big Bens Printing press. They guy who keeps the lights on probably makes $75k and pays a 27% effective tax rate.

Which of these two careers would you tell your kid to take up?

Wed, 07/06/2011 - 12:17 | 1430005 JW n FL
JW n FL's picture

http://www.youtube.com/watch?v=s-rpcb9iSJY

 

The TEA PARTY is owned by the Koch Brothers! thusly...

Wed, 07/06/2011 - 14:40 | 1430496 divide_by_zero
divide_by_zero's picture

And the Democrats/MSM are controlled by George Soros.

Wed, 07/06/2011 - 19:21 | 1431206 JW n FL
JW n FL's picture

http://www.politifact.com/truth-o-meter/promises/obameter/rulings/promise-broken/?page=1

A Lobby Whore is a Lobby Whore is a Lobby Whore!

Death of America Movie http://t.co/wpZqChk

Wed, 07/06/2011 - 12:59 | 1430155 Alcoholic Nativ...
Alcoholic Native American's picture

Teatard alert.

Wed, 07/06/2011 - 11:40 | 1429837 trav7777
trav7777's picture

Corporations can't pay taxes idiot.  Consumers pay taxes.

Wed, 07/06/2011 - 12:05 | 1429961 Yen Cross
Yen Cross's picture

 relax/ become human and learn.

Wed, 07/06/2011 - 12:12 | 1429972 MachoMan
MachoMan's picture

This...  and the real story is whether the stakeholders of the corporation paid taxes, not whether they suffered double taxation...

Kind of a goofy argument when an S corp (no C tax election), LLC, et al, all have pass through taxation (no entity level taxation)...  but yet provide the same limitation of liability...  and many jurisdictions have even done away with the requirements for limited partners to not materially participate in an entity's operation without jeopardizing their limited status...  [limited partners in LLLPs seem to enjoy double protection].

So the argument then becomes, THOSE CORPORATIONS SHOULD PAY TAXES!!! BUT THESE OTHER SIMILAR ENTITIES SHOULDN'T!!!!  I AM NOT TOTALLY ARBITRARY!  LOUD NOISES!  Or, alternatively, if Exxon was to become an LLC or LLLP, then they shouldn't have entity level taxation... 

In the end, it simply displays someone's rudimentary equity theory and viewpoint that someone else's sandbox is bigger...  I see prowess larger than mine, therefore something is amiss.

Wed, 07/06/2011 - 12:26 | 1430030 V in PA
V in PA's picture

+100

I can't believe someone junked you. How brainwashed must someone be to not realize that, in the end, consumer's pay all taxes.

Wed, 07/06/2011 - 12:52 | 1430137 Almost Solvent
Almost Solvent's picture

 

Tax drugs and hookers and we might make some progress.

 

Lower expenditures and raise revenue.

 

Too simple.

Wed, 07/06/2011 - 12:04 | 1429954 Yen Cross
Yen Cross's picture

 I like you! I'm just having trouble understanding you?  

 

    YEN...

Wed, 07/06/2011 - 12:13 | 1429986 JW n FL
JW n FL's picture

Yen you have to be around for a while to figure me out.. you know me, you have trouble with the "Pot Stiring", "Trouble Making", "Fight Club Initiating" Me.. It's All Good! You are fine! no worries! Do you see me bashing you? ever? then you must be doing something right! Everyone here, who has been around a while gets it.. or I think they do.. they are smart enough to understand things far more complex than my bouncing around and getting the juices flowing!

Wed, 07/06/2011 - 12:36 | 1430079 Solid
Solid's picture

Corporations do not pay taxes...ever. They are ALWAYS passed on to either the shareholders or customers.
There should be no corporate income tax.
Viva the Fair Tax!

Wed, 07/06/2011 - 12:58 | 1430150 SamuelMaverick
SamuelMaverick's picture

 Exactly.  A bigger Corporate tax = higher prices on end products.  A carbon tax = higher prices on end products.  Too many supposed smart guys on this blog just dont get this basic premise. Every time you raise the cost of doing business thru more taxes and or more regulations, all the evil rich / evil corporations are going to do is pass those costs onto the end user.  The bottom line is that lefty tax the evil rich schemes end up being a massive hidden tax on the poor and middle class.

Wed, 07/06/2011 - 15:41 | 1430714 Clark Bent
Clark Bent's picture

true, true, and true, but you forget perhaps another insidious aspect of the corporate tax scheme. Most corporations are small, and challenged by significant competition from other small businesses. An increase in the amount of tax (ore regulatory burden, or the cost of tax preparation even) is likely to simply extinguish them, or prevent new entrepreneurs from entering the field. So, less jobs, and more dependency upon large corporations that enjoy government protections. Wages decline as more workers have fewer options. Remember supply-side economics? This was an aspect Reagan talked about, the hidden negatives of corporate taxes and regulations. 

Wed, 07/06/2011 - 11:25 | 1429777 SP666_OnTheWay
SP666_OnTheWay's picture

And on the other side of all those parabolic moves, comes a crash of immense proportions.  Deflation like the world has never seen before.

Fking bankster criminals and their media shills are going to hid the truth right until the very end, build their short positions on everything under the sun, and then collect the biggest payoff imaginable ....

http://eleninandbankers.webs.com

Wed, 07/06/2011 - 11:32 | 1429778 Dre4dwolf
Dre4dwolf's picture

So the only way to re-inflate the housing bubble is to clear out the old debt (set-off/discharge it/reduce it to pennies on the dollar) , and then allow more debt to pile on as peoples income stabalizes from labor earning more from people improving/spending money on their homes.

Bernakke must be thinking about it.... I think the only way is to have a "federal direct mortgage consolidation loan" option instituted, where borrowers can refinance their 8+% (comes to like 20% after all the fees and garbage they slap on but w/e) bank debt into 0% federal debt with a 60% prinicpal reduction.

 

I think it would balance out a lot.

 

Gota get these mortgages off the backs of the Americans that still have jobs so that they can start spending and making jobs on main street.

Jobs means income, income means tax revenue, which means states that can spend more on improvements/repairs to infrastructure which means more jobs.

America is only as healthy financially as mainstreet is, if mainstreet is burried in debt there are no jobs because people will lay off people so that they can afford to keep their standard of living that they worked 30+ years to achieve.

 

PS: LOL at those charts, there is no sign of a "recovery" the recession/depression is not over, that measly "bump" that they call a recovery is just people being delusional and trying to pay down whats impossible to pay down the debt will collapse the economy its just a matter of time, days months.

Wed, 07/06/2011 - 11:26 | 1429780 lynnybee
lynnybee's picture

but....but, the central planners in our government knew at least 30 years ago that this day was coming !   i thought they were preparing for this day; after all, Alan Greenspan himself doubled the social security tax in 1983 so the baby boom generation could fund both their parents' retirement & their own retirement !   i remember how painful it was for me when i saw my paycheck with more money being withheld .     the looting of the system is just so painful to watch.   & that's the facts, people, that the system has been looted.    you & i, the little people didn't do anything to make this mess, all we did was contribute from every paycheck we ever earned.   Funny, trillions for Wall St. , but a bag of coal for the elderly ........... merry christmas.

Wed, 07/06/2011 - 11:29 | 1429788 Caviar Emptor
Caviar Emptor's picture

In the 1980s: The Reagan Administration tripled the Federal Deficit while preaching small government

Wed, 07/06/2011 - 11:43 | 1429856 disabledvet
disabledvet's picture

which led to the massive surpluses of the 90's.  right up there with $12 a barrel oil.  we'll never see it again.  it's every state for itself--as our system and we the people are designed to be.  a plan for enslavement by the Fed's simply accelerates the Federalism.  Here, let me show you how it will play out:

http://www.youtube.com/watch?v=gL99ErEuqWs&feature=player_detailpage

Wed, 07/06/2011 - 12:20 | 1430014 Caviar Emptor
Caviar Emptor's picture

Deficits don't lead to surpluses. That was the crap they tried to feed ya. Like "Reagan proved that Deficits don't matter" -Dick Cheney. We're in trouble with them now because of poor stewardship of the country. The national credit card is maxed

Wed, 07/06/2011 - 15:47 | 1430727 Clark Bent
Clark Bent's picture

With all due respect, your comment is that of an idiot. Reagan resisted Congressional efforts to hugely expand expenditures and increase taxes. He was saddled with a Congress that refused to act responsibly even when tax revenues generated by his policies hugely increased revenues to the government, they still spent these up and borrowed more. Don't imbecilically try to disparage legitimate policies by misstating the source of deficits. 

Wed, 07/06/2011 - 11:37 | 1429825 baby_BLYTHE
baby_BLYTHE's picture

It is funny how Greenspan talks about raising taxes now after he single handedly imposed a world tax of around 20%, killing the purchasing power of the currency by that amount during his tenure

He is the largest counterfeiter in the history of the world, soon to be replaced by the current chair occupant.

Wed, 07/06/2011 - 12:18 | 1430007 White.Star.Line
White.Star.Line's picture

The "Maestro" certainly knows how the music goes, and the notes that are ringing sour today he put into the transcript.

Wed, 07/06/2011 - 11:27 | 1429782 Caviar Emptor
Caviar Emptor's picture

Please realize this is not news! People have been warning about this for 30-40 years.

The first national debt clock was placed in Times Square in 1989!

Every smart alec "deficits don't matter" type was smugly insisting that we do it more more and more! And that was most people. 

Being a fiscal conservative in that time was like being alone in a forest. I remember. Everyone had a ready excuse, explanation, song and dance and they thought they were the smart ones.  They scoffed at anyone with concern. 

Wed, 07/06/2011 - 11:37 | 1429829 Oh regional Indian
Oh regional Indian's picture

Debt clock was my personal a-ha moment.

http://aadivaahan.wordpress.com/2011/01/26/a-ha-ahahaha/

ori

Wed, 07/06/2011 - 11:43 | 1429852 Caviar Emptor
Caviar Emptor's picture

Yup. When it was first put up in Times Square it was mighty impressive. But people just grinned and went into the denial shell that still exists today. Head squarely in the sand was the response to a serious discussion. 

Wed, 07/06/2011 - 13:10 | 1430172 Dr. Richard Head
Dr. Richard Head's picture

You could put up a picture of Ben Bernanke anally raping a train of puppies and the fucking people would only see the puppies in the picture.

Only with pain will those in the United Zombies of America see that all is not well. Problem is those same people will scream for government to fix it.

99 shots of whiskey to go, 99 shots of whiskey. Drink it down, room will spin round...

98 shots of whiskey to go...

Wed, 07/06/2011 - 15:50 | 1430734 Clark Bent
Clark Bent's picture

But the sky didn't fall, and we were told that we owed the money to ourselves. Here comes the sky now. 

Wed, 07/06/2011 - 12:32 | 1430069 jemlyn
jemlyn's picture

@CE  You are right, sir. 

That earlier comment about how to fix everyone's mortgage simply keeps people in homes they never could afford and punishes those who managed their money responsibly.  It would make fools of people who live in a paid-off, modest, older home.  They should have bought into the boom and upgraded extensively if the government is going to get them off the hook.

Wed, 07/06/2011 - 11:28 | 1429785 buzzsaw99
buzzsaw99's picture

Sure, now that the maggots have stolen all the money we need to cut social security. That should stimulate the economy. [/sarcasm]

Wed, 07/06/2011 - 11:30 | 1429792 LaLiLuLeLo
LaLiLuLeLo's picture

Baby boomers really thought 401Ks were invincible? Utterly hopeless indeed

Wed, 07/06/2011 - 11:54 | 1429910 NotApplicable
NotApplicable's picture

Thought? Why no, of course not.

Believed perhaps, if the apathy is ever disengaged at all.

Wed, 07/06/2011 - 11:31 | 1429793 monopoly
monopoly's picture

I do believe we are at the end of our rope. While it may not happen this year, America will face the music, no matter how much they try and avoid the piper. He Will be paid.

Miners, gold, silver. Anone see Robot? :)))

Wed, 07/06/2011 - 11:32 | 1429804 Caviar Emptor
Caviar Emptor's picture

Robo out collecting copper pennies

Wed, 07/06/2011 - 13:11 | 1430182 Dr. Richard Head
Dr. Richard Head's picture

...in front of a steamroller it seems, based on his investment advise. 

Wed, 07/06/2011 - 16:30 | 1430834 akak
akak's picture

Afterward, he and leo are going to go huff Bernanke's farts --- it doesn't make them high, but all that foul Keynesian hot air really gives them both raging hard-ons.

Wed, 07/06/2011 - 11:32 | 1429800 Critical Path
Critical Path's picture

It only goes on until it can't.  And for anyone confused about what politicians will do, don't worry, they've already set a precedence.  They will do nothing, we've got a one way ticket with destiny that is going to be epic in historical terms.  Liabilities increasing at multiples beyond gdp, good luck with that expirement.

Wed, 07/06/2011 - 11:33 | 1429806 Cleanclog
Cleanclog's picture

Leading news story today and yesterday were Roger Clemmens trial and Kacey Anthony verdict. Blogosphere and twitter were twitching with excitement, thinking Obama's statement was going to be about the Anthony verdict - despite it being announced as about the debt ceiling negotiations.  And then the tweets went crazy with disappointment and imploring the President to address was mattered - their prurient interest in the Kacey Anthony case.

And that, people, is what you society has come to.  Hope out the door.  Magical thinking . . . and willful ignorance.

Wed, 07/06/2011 - 11:34 | 1429811 oldmanagain
oldmanagain's picture

First off, SS is not broke, the fund is owed the amount stolen from the trust fund and it is trillions when compound interest lost is also figured in.  The current propaganda that it is broke is the same scam as 1983-84.  Create a surplus, mainly paid by those not making over a low amount, currently more or less 100K.  Then use the surplus to keep high end income tax low. Then say that the payroll tax is not a tax but necessary funding.

Medical costs are very high due to the profit of so many entities. Around the world, excellent care is provided at much less cost.  Same with education.  Others build maglev's. Our wealth distribution is the problem. And large part of that wealth imbalance is going overseas.

We have just witnessed a stimulus plan for the rich, but they still cry all day on CNBC that the problem is the lazy poor.

Wed, 07/06/2011 - 11:41 | 1429842 trav7777
trav7777's picture

wealth distribution is not the cause, it is a symptom.  You must remember that

Wed, 07/06/2011 - 11:53 | 1429908 disabledvet
disabledvet's picture

exactly.  SS (that would be the benefit not the Waffen) is not broke--and the easiest fix is to jam the entire Federal Oedifice Complex into it and say "welcome to your retirement plan" and "we thank you for your contribution to the war effort as well."  The same should be true of all Federal employees vis a vis medical benefits:  the President's plan is the law of the land and once the workout is complete between medicare, medicaid and the President's formulation the entire federal workforce get's that "singularity" as well.  "This is what retreat looks like."  Obviously if you are a vet you have the choice of using the VA as it is the law.  Indeed should the entire system breakdown as it clearly can that may be what separates "the entirety of the American people" and "those who even have insurance" let alone those who can afford it namely "did you serve and meet the requisite requirements of said service or not?"  Obviously the war "thingy" isn't going away but is in fact becoming more violent.

Wed, 07/06/2011 - 12:26 | 1430036 MachoMan
MachoMan's picture

It hasn't been too long ago that doctors performed their services for whatever clients could give them...  whether it was chickens, pigs, canned jellies, or tickets to a basketball game...  once the government teet is removed, you'll have a return to this...  people will still get healthcare...  it just won't cost as much...  and will probably involve far less "testing" by cost prohibitive machinery.

I still can't fathom why the government repays the service provider directly...  while they've been a little better about sending forms to patients to tattle on the providers, it requires a non apathetic patient...  and, when you're incentivized to be apathetic due to someone else picking up the tab (government), then the tattling is small and unsuccessful.  However, if you put an old person on the front lines and they have to make the call whether or not they're likely to get reimbursed from the government, I promise you they will have less medical costs.  If it becomes cheaper not to pay into the system, then so be it...  opt out.  Force the insurer to reduce rates.

SS is broke...  just like the entire complex...  Do you think that banks who buy large insurance contracts on financial events are not broke when the counterparty can't pay on the contract, but yet the banks have to pay out their hedges?  If I have zero assets other than accounts receivable and those accounts are from indigents, am I broke or not?

Further, you run into the same issue that UT did with its gold...  unless you have it in hand and in your control, you have dick.  On the one hand, we objectively have to admit these funds are slush funds for general government expenditures, but on the other we're going to try and claim their sanctity will not be violated in even more turbulent times?  No way Jose.  Even if the money was there, now, they have a credibility issue...

Wed, 07/06/2011 - 15:56 | 1430746 Clark Bent
Clark Bent's picture

Yes, but what about the "lockbox?" Are you trying to say there is no lockbox stock full of incorruptible value units that can be whipped out anytime to cover these shortfalls? 

Wed, 07/06/2011 - 12:45 | 1430116 fxrxexexdxoxmx
fxrxexexdxoxmx's picture

The VA is required by law to treat you without cost for your service connected disabilities. If you go to the VA and have insurance they bill your insurance for any treatment for your service connected disability. Hows come I gotta pay twice? I get nothing from the VA but another bill from my insurance. The VA is corrupt. Since they started charging my insurance which costs me abouy $8K a year I now use a private doctor because I am not paying for crappy service from another barely trained VA care provider.

Wed, 07/06/2011 - 11:56 | 1429919 SheepDog-One
SheepDog-One's picture

Socialist Security lost $1.2 trillion dollars last year. All it has is what it can take from others.

Wed, 07/06/2011 - 13:16 | 1430201 Dr. Richard Head
Dr. Richard Head's picture

To my understanding taking from others is the entire government m.o.  They get the masses to accept this premise based upon how much the masses believe can get from that pot of stolen property.  Problem is that what the masses thought they were getting is going to the same people that took it in the first place.  Theft of the many by consent, distribution to the few - Democracy

 

Wed, 07/06/2011 - 14:00 | 1430365 Oh regional Indian
Oh regional Indian's picture

Pithy description of DemonCrazy there. Distribution to the few.

I find it to be fallen monarchy in decline. Note the double fall there.

ORi

Wed, 07/06/2011 - 11:56 | 1429922 NotApplicable
NotApplicable's picture

"...the fund is owed the amount stolen from the trust fund..."

Owed by who? Why you, of course.

Good luck collecting on yourself.

Wed, 07/06/2011 - 12:02 | 1429946 Hedgetard55
Hedgetard55's picture

+55

Madoff's fund was "owed" the money Bernie stole from, it, as well.

Wed, 07/06/2011 - 12:22 | 1430019 NotApplicable
NotApplicable's picture

Honestly, it was just an accounting irregularity.

Wed, 07/06/2011 - 13:16 | 1430203 Dr. Richard Head
Dr. Richard Head's picture

transitory no?

Wed, 07/06/2011 - 12:34 | 1430074 DonnieD
DonnieD's picture

I'm convinced oldmanagain is Paul Krugman. Apparently he is under the assumption that the trillions owed are stowed under the government's mattress and once the money is returned everything will be fine.

Looks like the Social Security Trust Fund is learning a lesson in counterparty risk.

Wed, 07/06/2011 - 11:39 | 1429833 bigwavedave
bigwavedave's picture

fucked...bitchez

Wed, 07/06/2011 - 11:40 | 1429836 Caviar Emptor
Caviar Emptor's picture

Single payer healthcare system like in most developed countries is the only way out. 

Wed, 07/06/2011 - 11:46 | 1429868 petridish
petridish's picture

Single-payer healthcare system AND state owned banks.

Wed, 07/06/2011 - 11:53 | 1429878 Dr. Engali
Dr. Engali's picture

Yeah just add more entitlements for the non producers. That's smart. Let the government have more control over your life. We know they can be trusted to do the right thing.

Wed, 07/06/2011 - 12:11 | 1429982 Caviar Emptor
Caviar Emptor's picture

The whole medical system is already funded and overseen by government.

Wed, 07/06/2011 - 12:29 | 1430061 MachoMan
MachoMan's picture

the former yes, but they're pretty lax on the latter...  that's how you get really good healthcare...  money is no option...  rationing becomes a different story...  now that unkie sam has a funding problem, we'll see rationing.

So, yes, it's already funded by the government, but that only matters when something is actually demanded for those expenditures, or they're actually "medically necessary".

Wed, 07/06/2011 - 11:41 | 1429840 bob_dabolina
bob_dabolina's picture

We need to grasp the nettle and talk about triage, about conserving Social Security for those with no other sources of income, and about devoting our scarce resources for palliative and preventive care.

Explain again why taking care of people with no other source of income is my responsiblity? If I could opt out of this system I would in a heart beat. People should be taking care of themselves or relying on charity, not the forced taking of my income. I'll pay into this system my entire life and never see a dime of return for myself as it will be diligently redistrubted to people I have no desire taking care of. Talk about outright theft.

 

Wed, 07/06/2011 - 11:46 | 1429866 Caviar Emptor
Caviar Emptor's picture

Why care for anyone that is sick? In a Darwinian world that makes absolutely no sense at all. 

Wed, 07/06/2011 - 11:50 | 1429887 bob_dabolina
bob_dabolina's picture

Nothing as long as it is voluntary in nature. Don't take my fuckin' money and promise me retirement while you're shoveling my money to fat lazy people on SS disability.

I should have the freedom to donate my money to whatever charitable causes I want to.

If we didn't have so many entitlement programs in this country it wouldn't be so fucked up. How do we have an obesity problem in this country when we have a record amount of people on food stamps? Let that marinate.

Wed, 07/06/2011 - 11:57 | 1429926 disabledvet
disabledvet's picture

what if their sickness caused you to become sick and die?  would you still be screaming "i don't want to pay" then?  insofar as "obese people marinating" i'm trying to "wrap my mental arms around that one."  makes for a tough dance partner i must say.

Wed, 07/06/2011 - 12:06 | 1429951 bob_dabolina
bob_dabolina's picture

what if their sickness caused you to become sick and die?

Last I checked being fat and lazy wasn't contagious. However, if I was to become ill I have health insurance provided by my employer. Ya know, because I'm responsible and have a job and stuff. I also have retirement, and money set aside for a rainy day. If you don't have a job that has health benefits you can join the military or go back to school in pursuit of becoming more competitive in the workforce.

Wed, 07/06/2011 - 12:14 | 1429989 Caviar Emptor
Caviar Emptor's picture

Like I said: why care for anyone who gets sick? That's a waste if ever I've heard of it. THe sickest are the least productive leeches on earth. They take from, not give to the system. 

Wed, 07/06/2011 - 12:58 | 1430153 Greenhead
Greenhead's picture

Well, aren't you morally superior!!  You are missing the point and you are doing it deliberately.  We have created an entitlement mentality that all folks should get the best and highest level of treatment out there, whether that be medicine, dwelling, sustenance, cell phone and internet availability, you name it.  Services free for all, just for the signing up.  What is happening is rationing.  Like it or not, we are coming to grips with the idea that we can't give all things to all people because there aren't enough resources today to be able to do that.

So, some personal responsibility is in order.  Trying to buy votes by taking from Peter to give to Paul isn't really going to work a whole lot longer.  Get over it.  You take care of your family first, and then, if you are charitably inclined, feel free to help others.  Please though, stop the morally indignant outrage that you express which comes from some in the audience not wanting to be coerced into giving even more of their "stuff" to the causes you think deserve the "stuff".

Wed, 07/06/2011 - 12:42 | 1430106 LetThemEatRand
LetThemEatRand's picture

A lot of people who are responsible and have jobs and stuff have shit for benefits and are economically wiped out when they have a health problem.  But screw them, they can go get shot at if they don't have sufficient IQ to work for a company that offers benefits that cost more than the average American makes in wages.  If they are too old to join the military to fight, they can be decoys or bomb sniffers or something.   I'm on the life boat, so everyone else can just go get stuffed.  Yep, that's what all Americans should aspire to.  Me, me, me, me, me, me....

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