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The Only Two Charts That Matter For The US, And A Q&A On The Fiscal "Debate" From Goldman Sachs

Tyler Durden's picture




 

Lately, there has been a lot of chatter by virtually everyone with some soapbox to stand on, about this and that. That's swell... if mostly irrelevant: by now everyone should be aware that only two charts actually matter, both of which are painfully self-explanatory.

Chart 1: The Federal Budget

Chart 2: The growth of the US debt in relation to the soon to be hiked debt ceiling.

And, for the purists, we'll add another chart, this time showing the continuing persistent deterioration in the budget due to mandatory spending. The question is where, absent someone discovering teleportation or some other revolutionary technological invention, will the paradigm technological step up allowing for a surge in revenues, come from.

And since even the most self-explanatory is supposed to come with some narrative, here is Goldman's most recent Q&A on the Fiscal "Debate" - although we wonder just what debate is being referred to: after all D.C. is nothing but a smokescreen for Wall Street which demands either more dollars in circulation or more public debt issued in order to keep the wheels turning. Without either of these it's game over.

Q&A on the Fiscal Debate

The formulation of federal fiscal policy is typically of interest to markets mainly when it involves large changes outside of the annual budget process, such as the countercyclical policies enacted in 2008 and 2009, or other one-off policy decisions, such as the extension of expiring tax measures at the end of 2010. By contrast, the appropriations process is normally not important to market participants apart from those focused on the effect on individual industries.  However, split control of Congress and an increasing focus on fiscal sustainability have raised the profile of seemingly routine budget matters. In what follows we attempt to clarify some of the issues currently in play that are of particular interest to markets:

Q: What is currently being debated?

A: Discretionary spending for FY2011. Defense and non-defense discretionary spending (see Exhibit 1) are projected to account for $1.373 trillion in federal outlays this year, or roughly 39% of total federal spending (Exhibit 1). But with the current fiscal year halfway over, the spending level is still uncertain. Congress has funded the government through a series of six “continuing resolutions” (CRs) while it has debated full-year spending levels. These short-term spending bills are not uncommon, and are often used to provide funding for a few departments at the previous year’s level while appropriations work is being wrapped up in Congress.

However, it is unusual to be operating under a CR halfway through the year. The most recent two CRs also included a combined $10bn in cuts, and lawmakers are negotiating additional cuts of between $33bn and $40bn from current levels to be included in the funding bill for the full fiscal year. As of this writing, differences have narrowed, but the exact amount and composition of cuts is still unclear. Without an extension of spending authority, either through full-year appropriations (the goal of this week’s fiscal discussions) or another short-term measure (a fallback in the absence of a full-year bill), the federal government would partially shut down until funding is restored. Funding expires at the end of April 8.

Q: Why is there such a great focus on non-defense discretionary spending?

A: Non-defense discretionary is only 12% of the budget, but cuts here are often a first step in fiscal consolidation. While discretionary spending cuts will not resolve the budget imbalance on their own, this segment of the budget is addressed once a year, creating a natural first opportunity for cuts. It also tends to have fewer vested constituencies compared with mandatory spending, which is comprised mainly of benefit payments to individuals. In previous research we have found that the level of non-defense discretionary spending is the most responsive to the debt to GDP ratio, probably for these reasons.

Q: Is the possibility of a shutdown related to the debt limit?

A: The debt limit is a legally separate issue, with potentially more important consequences if action is delayed. For historical reasons that stretch back to the First World War, Congress imposes a legally binding limit on the amount of debt the Treasury may issue. Once the Treasury reaches the limit, a prolonged failure to raise it would require the government to reduce outlays to the amount of revenue it takes in, and would not allow it to smooth monthly revenue or spending fluctuations with borrowing. So while the non-essential functions that would cease in a funding lapse account for a few hundred billion per year in federal spending, maintaining the current debt limit would require outlays to decline by an amount comparable to the budget deficit, which we expect to total $1.35 trillion this year and $1.025 trillion in FY2012.

Q: When will the debt limit be reached, and when will it be raised?

A: Probably in June. Treasury has projected that it will reach this statutory limit no later than May 16 (Exhibit 3). Once the limit is reached, the Treasury has several strategies it can use to create additional room under the limit, but after using these options the Treasury projects the limit will become a constraint no later than July 8.

Q: What about next year’s budget?

A: A debate over additional spending cuts is likely. Even though the FY2011 process has not yet concluded, the process for the fiscal year starting October 1 has already begun. The congressional budget process begins with the budget resolution, which recommends spending and revenue levels for the next ten years. The House budget resolution, which passed in committee this week, assumes a reduction in non-defense discretionary outlays of $79 billion from the CBO baseline in FY2012. Along with changes in other areas of the budget, the House budget resolution proposes to reduce overall spending by $110 billion in FY2012, and aims to reduce the 10-year deficit by $4.4 trillion. To achieve this, discretionary spending reductions for FY2012 would likely need to be at least as large as those being debated for the current fiscal year. No budget resolution has been released yet in the Senate.

Agreement this spring on the budget resolution may be difficult. However, the process can continue without an agreement; in fact, the resolution by definition does not become law, and Congress has failed in several recent years to enact a budget resolution. That said, the House and Senate must agree on appropriations legislation for FY2012—or at least another short term continuing resolution—by October 1, 2011 to avoid risking a shutdown.

Apart from the normal budget cycle, lawmakers must also decide whether to extend the 2-point payroll tax cut and expanded unemployment insurance enacted in late 2010, both of which would expire at the end of 2011 in the absence of an extension.

Q: When will Congress tackle structural reforms?

A: The debate has begun, but major reform seems more likely after the election. While discretionary spending changes occur often, changes to tax policy and mandatory spending programs tend to produce the largest policy-driven changes in the budget balance (Exhibit 4 shows the 5-year fiscal effect on the budget balance of all legislation enacted in a given year, as estimated by the Congressional Budget Office).
Divided control of Congress appears to be a significant obstacle to these sorts of changes at the moment. Moreover, neither party appears interested in changes to the Social Security program that would reduce spending in the next decade. Some lawmakers have put cuts in health-related entitlements on the table, as have the various fiscal commissions, but in the wake of last year’s health care law, which was partly financed with $455bn in Medicare cuts over ten years, the “easy” reductions in that program have already been made.

Q: Does policy uncertainty increase the fiscal risk facing the US?

A: While potentially unsettling in the very short term, multiple upcoming deadlines could actually increase the likelihood of meaningful fiscal reforms. With two important deadlines ahead, fiscal policy will remain in the headlines. It is possible that the potential for a shutdown will return ahead of FY2012, which starts October 1. In addition, enacting an increase in the debt limit large enough to last through the 2012 presidential election could be difficult, as it would likely require an increase in the range of $2 trillion. Since it is unclear whether lawmakers will be willing to pass such a large increase at one time, the issue could be debated more than once.

While all of these deadlines could result in additional uncertainty, they also create multiple opportunities to enact fiscal reforms. At a minimum, additional spending cuts for FY2012 look likely, on top of what is agreed to for FY2011. Moreover, discretionary spending caps and other fiscal rules are very likely to be debated as part of these measures. Although it is likely to be at least as difficult for lawmakers to  agree on multi-year fiscal restraint as it has been to agree on appropriations for this year, there are two reasons to think this could be achieved: first, prior debt limit increases have often been coupled with important budget reforms, so there is a precedent. The 1997 debt limit increase was packaged with significant entitlement reforms. The 2010 increase was combined with statutory pay-as-you-go rules.

Second, now that both parties have opened the door to discretionary spending cuts, imposing hard multi-year caps on this segment of the budget looks like a realistic possibility as these upcoming fiscal deadlines are addressed.

 

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Sat, 04/09/2011 - 22:26 | 1154287 Muir
Muir's picture

And since even the most self-explanatory is supposed to come with some narrative, here is Goldman's most recent Q&A on the Fiscal "Debate" - although we wonder just what debate: after all D.C. is nothing but a smokescreen to Wall Street which demands either more dollars in circulation or more public debt issued in order to keep the wheels turning. Without either of these and it's game over.

-

priceless

Sat, 04/09/2011 - 23:42 | 1154371 Paul Bogdanich
Paul Bogdanich's picture

The chart numbers are deceptive.  In that presentation nuclear weapons research and maintenance expenses are under discretionary costed to the DOE when they should be under defense and the VA is under other manditory instead of defense as are the supplementals for the wars.  Like most of these charts do everything they can to minimize the cash cost of the defense portion of the budget.  In my estimation Homeland Security should also be under "defense" instead of other manditory but at least properly classifying the others would be a start.  Defense was by far the largtest item in the 2010 budget not one of three equally sized portions like that graph makes it appear.   

Sat, 04/09/2011 - 23:56 | 1154384 RockyRacoon
RockyRacoon's picture

OK.  Put everything where it belongs.  Does the outcome look any better?

U. S. A.   R. I. P.

Sun, 04/10/2011 - 00:26 | 1154413 Paul Bogdanich
Paul Bogdanich's picture

You say U.S.A.  R.I.P.

 

If you mean USA the Imperial Power then you are correct.  Were it not for what we have spent since 1964 on the military the budget deficit would be about 5% of its current size.  That's another analysis that is seldom if ever presented.  If one tracks debt owed to the public and defense expenses they roughly track each other over the last 40 years.  Anyway unless and until one decides to disolve the Empire there is no way to balance the budget which is the problem here.  The choice is go big or go home and a lot of people would rather go big than give up on the idea that we dominate the World and everything in it.  This would mean more wars where we behave more brashly, drop the democracy bullshit and make the conquered territories pay for what it cost to conquer and occupy them by outright stealing their resources and starving the surplus population.  Kind of like what the Israelis do with the Palestinians.  That's the current danger and I see no reason to believe that our current "leaders" won't go down that path.  They will of course need an excuse to change the political climate and make people forget all this human rights clap trap but this population is dumb enough and bloodthirsty enough where that should not be too much of a problem. 

 

 

 

Sun, 04/10/2011 - 00:42 | 1154442 notofdahsleeple
notofdahsleeple's picture

Trump is that you?

Sun, 04/10/2011 - 10:38 | 1154798 pauldia
pauldia's picture


Obama’s dozens of Social Security Numbers BY COACH COLLINS, ON APRIL 10TH, 2011

 By Suzanne Eovaldi, staff writer

 Discrepancies in Barack Obama’s history “that raise serious questions about his eligibility for the office of President” have been accepted “quietly” for study by the U.S, Supreme Court, according to an Email this web site received just this week.  

 The memo which goes on to refer to “possible fraudulent use of a Social Security number in Connecticut, while Obama was a high school student in Hawaii,” is quite similar to an investigation coachisright.com posted on May 16, 2010.

According to a search done by former British police detective Neil Sankey, now a U.S. citizen and a licensed private investigator in Los Angeles, Barack Obama reportedly has 27 different social security numbers under 21 different personal and/or familial name variations in 22 different states plus the District of Columbia.

 Along with PI Susan Daniels, Sankey generated a large social security public data base in his lengthy research project, titled “List of Properties associated with Barack Obama and his family.”  Sankey’s research is featured in a web video entitled Dossier2MP4 produced by Jim Przybowski.  The Sankey/Daniels social security investigation segment alleges Obama currently is using a Social Security number assigned to someone born in Connecticut in l890!

N.B. There is no indication that the Social Security Administration re-issues numbers upon the death of a number holder no matter how long ago they were originally issued.  

   Sankey and Daniels report that Social Security numbers connected to Barack Obama and the addresses they trace to are as follows:  363 Notlem St., 34982-7358 Fort Pierce, FL.  A Social Security number beginning with zero is connected to “White House, Irvine, CA.”   A number starting with 282 connects to “713 Hart Senate, D.C,”   There was one connected to “White House, Baltimore, MD.”    Six more Social Security numbers beginning in the 400s show up with addresses in Washington, Colorado, Georgia, New Jersey, Tennessee and Maryland.

 Another five beginning with 500 connect to more cities in California, Washington, Maryland, and Georgia.  Two starting with 600, trace to Florida and Texas.  Of the three numbers beginning in the 700s, one is listed as “Pennsylvania Ave., Washington, Utah.”

 Still more. . .. Three 900s connect to addresses in California and Utah postal box numbers.  Fifteen Social Security numbers connect to addresses in Illinois.  The same number appears twice for addresses in Sommerville, Massachusetts.  One goes to 300 Massachusetts Ave., N.W. Washington, D.C.; the other traces to a postal box in Chicago.

  Two odd entries have this same number, but no street address is mentioned.  Three different social security numbers for the spelling “Barak” Obama appear in addresses on Happy Street in Covington, Washington, on Digital Highway, and Video Drive in Los Angeles, CA.

  In the U.K.’s DAILY MAIL, a news story by David Jones, 27th November 2009, said Neil Sankey is trying to prove that “Barack Obama is guilty of the most audacious act of fraud in the U.S. political history, having become President when he was not eligible to run for office.”   “Sankey is a former detective sergeant who served Hampshire police for 26 years and left with an exemplary record,” continues the DAILY MAIL story.  “As a highly regarded young detective, Neil Sankey was once seconded to elite Scotland Yard units hunting down IRA bombers, dangerous anarchists, and organized crime barons,” the reporter says.

  Several calls made to Sankey’s CA office were not returned.  His data base could not be downloaded and apparently is protected research.

No copyright statement was attached to the many, many pages of Sankey’s painstaking research which I analyzed by collating his on-screen names and figures. 

 To contact your Congressional Representative use this link: http://www.contactingthecongress.org/

 To read more use this link

http://www.scribd.com/doc/20976501/Neil-Sankey-Barack-Obama-Addresses-SS-Numbers

 This day in history April 10

 1947: Republican activist Branch Rickey of the Brooklyn Dodgers signs African American baseball player Jackie Robinson to play for his team and become the first African American to play Major League Baseball.
If you are not receiving coachisright.com directly, please signup using the RSS feature on   the home page. It’s easy and always free.

In this world you may have knowledge or you may have repose, but you may not have both. 

 Remember we have work to do. Join your local TEA party and Republican County   Committees to make sure real conservatives get our nominations.

 Comments on this or any other coachisright.com essay can be sent by following the posting instructions below.

Sun, 04/10/2011 - 10:39 | 1154804 blunderdog
blunderdog's picture

Fraudulent SSNs?  Jeez, you idiot, it's worse that than!  He's a demonic space-alien communist!

Sun, 04/10/2011 - 10:45 | 1154812 Pool Shark
Pool Shark's picture

 

Like I said,

Congress is merely rearranging deckchairs on the Titanic.

"Nearer my God to thee..."

 

Sun, 04/10/2011 - 13:31 | 1155148 joshbot
joshbot's picture

Appeal to ridicule, also called appeal to mockerythe Horse Laugh, or reductio ad ridiculum (Latin: "reduction to the ridiculous"), is a logical fallacy which presents the opponent's argument in a way that appears ridiculous, often to the extent of creating a straw man of the actual argument, rather than addressing the argument itself.

Sun, 04/10/2011 - 13:37 | 1155171 blunderdog
blunderdog's picture

Yes, joshbot, very good.  My post was RIDICULE.

However, the post I was replying to was not an argument.  It was a CLAIM.

For your next lesson, learn to distinguish between arguments and claims.

Sun, 04/10/2011 - 11:44 | 1154899 BigJim
BigJim's picture

It's not Obama's past that's the problem.

Sun, 04/10/2011 - 01:25 | 1154479 Dr. Porkchop
Dr. Porkchop's picture

Speaking of spending in the 60s. I'm right in the middle of watching a NOVA doc on Astrospies.. the plan to put an orbiting manned spy station in space. It was going to cost over a billion and a half dollars...that was a lot of money then!!

The MOL program was cancelled before the moon landing. The Russian's ALMAZ capsule was launched into space. They were able to photograph targets, develop the film, and transmit via video camera back to ground control. The thing even had a 20mm cannon on it because they had intelligence the Americans wanted to develop capability to attack enemy sattelites.

 

The Russians successfully operated a manned spy station, but they came to the same conclusion that the Americans did, that it was too complicated to run and fund manned spy stations.

Sun, 04/10/2011 - 04:15 | 1154583 rack
rack's picture

Funny you say that I wonder if they rolled out trump last week to plant into the public psyche the oil grab

Sun, 04/10/2011 - 05:31 | 1154606 Dugald
Dugald's picture

Oh heck! another "Pax Romana"......

Sun, 04/10/2011 - 11:16 | 1154848 Widowmaker
Widowmaker's picture

Excellent comment.

Sun, 04/10/2011 - 00:37 | 1154435 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

America died when Tricky Dick took the dollar off the gold standard.  Oh, woops, was I not supposed to call him that?  Just wondering, because people get so upset when I call the current Emperor "Barry".

Sun, 04/10/2011 - 00:45 | 1154452 Buckaroo Banzai
Buckaroo Banzai's picture

Well, actually America became mortally ill in 1913 when the Federal Reserve was created, and the 16th amendment was passed. Then FDR shot America in the head in 1933, LBJ jpushed America down an elevator shaft in 1965, and Tricky Dick hanged America in 1971.

Sun, 04/10/2011 - 22:42 | 1156552 stirners_ghost
stirners_ghost's picture

You're a hundred-some years too generous. The recipe for this shit-cake was penned way back in 1787-- Article I, Section VIII. The Fed (indirectly) stakes its claim to legitimacy (Spook of Spooks and lord of plebes) thereupon.

Sun, 04/10/2011 - 03:06 | 1154557 TheMerryPrankster
TheMerryPrankster's picture

Barry prefers to be called "corporate tool". its more hopey.

Sun, 04/10/2011 - 08:21 | 1154691 Translational Lift
Translational Lift's picture

How bout jus "tool"..........

Sun, 04/10/2011 - 09:03 | 1154719 bonddude
bonddude's picture

PTI-

The man who helped crash IndyMac, Sonoma Valley Bank and several others engages in 

insurance fraud too. Iranian lightening. A half ass bust out on his Reno casino to condo

conversion failed. the place didn't burn all the way. The film listed under Reno Sundowner on

Youtube. But first a happy cartoon about such activity.

http://www.youtube.com/watch?v=G_10L-qYl1s&feature=mfu_in_order&list=UL

Sat, 04/09/2011 - 22:35 | 1154297 Selah
Selah's picture


Default, Bitches...

How many charts and words do you need?

 

Sun, 04/10/2011 - 03:04 | 1154558 Sudden Debt
Sudden Debt's picture

Precisely!

They can explain it any way they want. The US spends twice as much as it should.

Cut 50% off everything. And do this untill the debt is down to 20% of GDP.

The longuer they wait, the more they lose from interest payments and the harder budget cuts will be.

Sun, 04/10/2011 - 05:37 | 1154610 Popo
Popo's picture

Oh, there you go with that "logic" thing again.   How about we just keep on spending like there's no tomorrow (It's easier on the political class, that way).  And when inflation rips every senior citizen a new assh*le we'll deny, deny, deny or we'll call it an Act of God and throw up our hands to the monetary collapse which no one could have seen coming.

Besides... you "logical" / "responsible" types are always coming up with solutions that career-stoppers for anyone in politics.   Why on Earth would anyone ever make a 'hard call'?   We can't even reduce the deficit by a fraction of a percent, let alone reduce spending in any meaningful way.  Please sit back, relax, stop worrying and get a bowl of popcorn: The world as you know it is going to implode, and inflation is going to eat your civilization alive.  

Please enjoy the show.

/sarc

 

 

 

 

Sun, 04/10/2011 - 07:56 | 1154673 Great Unwashed
Great Unwashed's picture

Tsk. That obviously must never happen because then some very important people would lose money, not to mention the fact that some very important people would not get reelected. Find another way.

Sun, 04/10/2011 - 03:09 | 1154560 TheMerryPrankster
TheMerryPrankster's picture

How do you default when you own the default currency and that is backed up by thin air? the Bernank don't even need ink, he just moves a few electrons around and Blam. a billion dollars. Its magic.

Sat, 04/09/2011 - 22:33 | 1154298 Manthong
Manthong's picture

Just asking.. How long has "Social Insurance Tax" been an item on the revenue side?

I thought they just stole, I mean borrowed it from the Social Security Administration.

Sat, 04/09/2011 - 22:38 | 1154301 Pepe
Pepe's picture

If we were Icelanders we may make it...

Sat, 04/09/2011 - 23:25 | 1154355 Troy Ounce
Troy Ounce's picture

http://www.bbc.co.uk/news/world-europe-13027268

BBC: No vote appears ahead in Iceland Referendum.

 

 

Sun, 04/10/2011 - 10:37 | 1154800 NumberNone
NumberNone's picture

Icelanders again reject shackling children with debt of banksters fraud...rumor is that carriers are moving away from coast of Lybia and heading north.

http://www.nytimes.com/reuters/2011/04/10/business/business-us-iceland-referendum.html?_r=1&hp 

Sat, 04/09/2011 - 22:42 | 1154303 High Plains Drifter
High Plains Drifter's picture

they always call it defense spending. what does military spending have to do with defense?  they should call it military offense spending. i can tell you one thing. almost nobody cares about this stuff. nobody. they don't want to know either.

Sat, 04/09/2011 - 23:02 | 1154325 bonin006
bonin006's picture

Before 1947 it was the honestly named Department of War

From 1947 to 1949 it was the somewhat less agressive but still more or less honestly named "National Military Establishment".

Honesty went out of style in 1949, and they changed it to the Department of Defense

 

 

 

 

 

 

 

Sun, 04/10/2011 - 03:18 | 1154567 RichardP
RichardP's picture

The National War College in Washington, D.C. still exists.

http://en.wikipedia.org/wiki/National_War_College

Sun, 04/10/2011 - 08:01 | 1154675 jplotinus
jplotinus's picture

The years 1947-49 incorporate an epochal turning point; namely, election night, November, 1948.  Recall that on that night what we now call "mainstream" "corporate" media proclaimed 'DEWEY WINS'.

That is probably the last time a mistake on that order of magnitude was made.  From then on, whoever corporate media declared the winner, was the winner.  Could it be that democracy was still viable at least up through 1948?  Note, I am not here saying there was any vast difference between Truman and Dewey, but I am saying that it appears the 1948 election was decided on the basis of a vote count, rather than a military-industrial-complex fix.

Recall, too, that by January, 1961, we were warned by Eisenhower that the MIC had, by then, done us in.

Sun, 04/10/2011 - 08:05 | 1154677 Urban Redneck
Urban Redneck's picture

The Department of War was able to win Wars.  Consolidation of the Services within the Department of Defense and the Pentagon seems to have rendered the US incapable of winning a War, though capacity for achieving a decisive victory in Battle remains intact.  Another example of winning the battle, losing the war  Group-think is easier when everyone involved is "just down the hall".   

Sun, 04/10/2011 - 11:48 | 1154909 BigJim
BigJim's picture

Piffle. We beat Grenada, didn't we?

Sun, 04/10/2011 - 11:12 | 1154843 Amish Hacker
Amish Hacker's picture

Orwell's 1984 published June 8, 1949. Newspeak is born! Not coincidentally, the Department of War becomes the Dept. of Defense. Here's how the story begins:

"It was a bright cold day in April, and the clocks were striking thirteen..."

Sun, 04/10/2011 - 01:09 | 1154484 Jim in MN
Jim in MN's picture

Doesn't everyone defend their house by leaving rabid dogs in all the neighbors' lawns? 

It really is...well, seems...through myopic and sociopathic glasses....safer.

Especially when all the pit bull chow money is borrowed.  From the neighbors.

Sat, 04/09/2011 - 22:42 | 1154304 reader2010
reader2010's picture

Run the beast to the ground. Let the NWO begin now.

Sun, 04/10/2011 - 07:15 | 1154644 Dejean Splicer
Sat, 04/09/2011 - 22:41 | 1154306 Crisismode
Crisismode's picture

As the $US continues to swirl down the toilet bowl at an ever-increasing rate of speed, we must all now pause and re-examine where we personally are in this ever-unbelievable scenario.

How many of us are simply hedged against the next day's market move, and how many of us are truly hedged against the coming shutdown of normalcy in day-to-day life?

Methinks that many of the commenters here on the forum think that simply having a couple hundred ounces of gold and a few thousand ounces of silver are all that is needed to tide them over the coming events.

Hmmm, I'm thinking they are a tad short-sighted.

I'm a firm believer in honing and practicing those humble daily-living skills now, while there is a chance to do so, and learning the lessons from that exercise. That will be far more rewarding in the future than simply possessing piles of metal coins.

Sat, 04/09/2011 - 22:59 | 1154323 Manthong
Manthong's picture

I believe in a 50/50 allocation of resources for NWO survival (SW500/M82A1).

Sat, 04/09/2011 - 23:01 | 1154326 Incubus
Incubus's picture

Humble?  I'm a person of few "luxuries."  People who know me occasionally joke that I could be a religious ascetic.  My "satisfaction" comes from knowing I have the will to resist the garbage of everyday life—or what passes for 'life' in modern-day western society. 

When a collapse does happen, I'll be able to handle it, because I'm wired that way.  Hedonism was never really my thing, so I won't miss it much.  

Sun, 04/10/2011 - 00:27 | 1154424 Yardfarmer
Yardfarmer's picture

a hundred ounces of Au? a couple thousand of Ag? bwahahahahahahahahahaha!! 

Sun, 04/10/2011 - 02:29 | 1154541 chistletoe
chistletoe's picture

The main drawback in owning a lot of gold and silver

is the same that it has always been.

The ancient Egyptians found out when they met the Romans.

The Mayans and Incas found out when they met the Spanish.

Gold and silver have very strong magnetic properties.  They attract

lead, particularly the highly-accelerated isotopes.

 

But guns, too, have always proved themselves to be useless in the end.

Every time one man is killed, you have made ten permanent enemies.

Inevitably, soner or later, they will come up with a bigger gun than you.

 

Of all the assets a person might invest in and own,

his own good name, his ingenuity, skills and hard work,

and the well-being of his friends and neighbors,

have shown themselves throughout history to be the most valuable and long-lasting.

But that lesson seems to be just as lost on many of the readers here

as it is in the halls of The Capitol, The Executive Office Buildings, nd Eccles ...

 

we are in for a cleansing of historic proportions,

and most of the people who believe they will be spared,

won't be.

Sun, 04/10/2011 - 02:45 | 1154547 Mr Anderson
Mr Anderson's picture

+1

Sun, 04/10/2011 - 02:45 | 1154551 European American
European American's picture

Oddly enough, I'm actually looking forward to the "Phase Transition". It's long over due and time to settle things once and for all. Once the dust clears, I suspect, life will resort to nourishing itself in a simpler, softer kind of way. But before we reach Absolute Zero, the Entropy will literally shake us at our core. What a show it will be.

I often look at the various designs on my gold and silver coins and wonder what those forms will look like in a 100 years.

Sun, 04/10/2011 - 05:40 | 1154611 rich_wicks
rich_wicks's picture

If you're a Jain, you might have to drop some of your beliefs to simply survive in the next few years.

Mon, 04/11/2011 - 04:56 | 1156989 Lord Koos
Lord Koos's picture

Maybe not -- Jains have been around for about 2600 years.

 

Mon, 04/11/2011 - 10:21 | 1157592 MrSteve
MrSteve's picture

Do you mean the jains are 2600 years old or their ideals have been around for 2600 years?

I think it is instructive to look at the effect of NDM bugs in India to see where a "next crisis" could develop, outside of immediate monetary problems.

Sun, 04/10/2011 - 06:51 | 1154638 Husk-Erzulie
Husk-Erzulie's picture

Well put.

Sun, 04/10/2011 - 08:25 | 1154692 DoctoRx
DoctoRx's picture

Agree w your sentiments per the next to last paragraph

However, I'd assert that ownership of gold AND lead has historically beaten ownership of only one or the other.

Sun, 04/10/2011 - 08:30 | 1154695 thatthingcanfly
thatthingcanfly's picture

christletoe has repeated some common ahistorical nonsense here. It is the possession of weapons (firearms in particular) by citizens that provides the powerful deterrent effect against 1) invading alien armies and 2) arbitrary usurpation of powers by rulers (to quote SCOTUS Justice Joseph Story). Since roughly 1215 (Magna Carta), we Westerners have maintained relative peace with our own rulers by maintaining the liberty of the citizenry to keep and bear arms (with the notable recent exceptions of the the American War Between the States, and the European Great Wars - examples that were caused by factors separate and apart from the presence of gold, silver, and guns; and, in the case WWII, actually demonstrates the deterrent effect in point 1 vis-a-vis Switzerland).

On a more individual level, the statement that, "every time one man is killed, you [sic] have made ten permanent enemies," is a sweeping generalization christletoe presents with zero supporting evidence. This is demonstrably false, and, more importantly, immaterial! If I shoot a doped-up bank robber threatening a 21-year-old teller with a machete, the number of friends I will have made will AT LEAST equal the number of enemies; but regardless, it's just the right thing to do! A decent man has to accept that he cannot control every contingency, and let the cards fall where they may following a noble act.

Finally, my South American history is a bit weak, but I seem to recall the Mayans and Incas being greatful for the help of the Spanish, who led them to destory the horrible Aztecs, who had been butchering all around them for centuries.

Sun, 04/10/2011 - 09:34 | 1154750 Abby Normal
Abby Normal's picture

If true, wouldn't it be better to just move to say somewhere so diconnected from the world economic system like Chilie, Bali or Roatan and wait out the changes than living in your foxhole trying to trade a gold coin for eggs?

Historically, even during the darkest days of any world conflict, there were people who lived blissfully unaware/unaffected by the war.   For instance, I've never understood why anyone stayed in Paris during the German occupation when they could have moved to Guiana or Tahiti and come back in 4-5 years to pick up the pieces.

As for owning gold versus silver during a war, I could easily see a law requiring you to sell all your gold/silver to the government for a fixed price - or with a huge "windfall profits" tax that would render your gold and silver useless to purchase much of anything as no one would want if if they could be imprisoned for accepting it.  Sure, a few coins would still be squirreled away like during 1932, but you couldn't anticipate to live on selling gold at a profit.  And worse, during the last oil rise to $140, Maxine Waters, recommended just 'nationalizing' all our oil firms....and that's when times were good.   

Sun, 04/10/2011 - 13:00 | 1155064 flattrader
flattrader's picture

My elderly Jewish friends tell me precious gems are where it's at when the SHTF for real.

Gold and Silver way too heavy, hard to hide, transport and even unload.

If motivated, you can swallow a pretty good handful of precious gems and retrive later.

Mon, 04/11/2011 - 14:01 | 1158374 ZeroConfidence
ZeroConfidence's picture

If you can't buy the stones @ the same wholesale prices the gemstone merchants do you will be SCREWED on resale.

The wholesale/retail price spread in gemstones is HUGE.

 

Tue, 04/12/2011 - 02:12 | 1160706 JoeSexPack
JoeSexPack's picture

Remember that diamonds are a scam & can be picked from river banks in Africa.

The DeBeers cartel's marketing & manipulated high prices are coming to an end.

Big mines in Russia, Canada, Australia & other areas outside their control broke their monopoly.

Cubic zirconium & artificial diamond production are settling the issue.

Sat, 04/09/2011 - 22:43 | 1154308 Braindonor1
Braindonor1's picture

The 'Receipts' bar in Exhibit 1 is a telling item for me. The federal government is using the private individual as its revenue mule, while allowing corporations (who bribe congress etc with 'donations') to skate. Nothing that the ZH readership didn't know already, but an excellent illustration nonetheless.

Looking at the 'Outlay' side, I can't help but feel that Defense spending is understated. 

The road to salavation is clear from this data. The sad thing is that we all know that the necessary measures have a snowballs chance in hell of being implemented by those responsible.

Sat, 04/09/2011 - 23:50 | 1154380 pasttense
pasttense's picture

Actually a good case can be made for eliminating corporate taxes entirely by assuming that all corporate income is passed through to the individual stockholders, and thus taxing those stockholders on that income. Now we have a double taxation system whereby corporations are taxed on profits and individuals are taxed on dividends.

Sun, 04/10/2011 - 00:51 | 1154461 Buckaroo Banzai
Buckaroo Banzai's picture

I would like to make the case that corporate income taxes should be punishingly high (like 80%) and personal income taxes should be eliminated.

Corporations are creatures of the state, and thus should be beholden to the state. Furthermore, corporations receive the tremendous privilege of the corporate veil.

personal income taxes must be eliminated because natural humans have the inalienable right to liberty, and as we all know, income tax is slavery, by definition.

Sun, 04/10/2011 - 05:39 | 1154612 rich_wicks
rich_wicks's picture

I would like to make the case that corporate income taxes should be punishingly high (like 80%) and personal income taxes should be eliminated.

Well, there goes all your R&D for every corporation in the United States.

Sun, 04/10/2011 - 08:30 | 1154696 Buckaroo Banzai
Buckaroo Banzai's picture

No, not at all. R&D isn't paid out of profits, it is paid out of revenues. It is a business expense and not subject to taxation.

And besides have you ever considered that a business does not have to be a corporation.

Sun, 04/10/2011 - 19:29 | 1155930 StychoKiller
StychoKiller's picture

Where do Corporations/Businesses get the FRNs to pay "their" taxes?  Check your premises.

Mon, 04/11/2011 - 05:02 | 1156994 Lord Koos
Lord Koos's picture

You might be surprised how much R&D is carried out with tax payers money -- but the corporations benefit from it.  At this point many corporations are the real welfare queens.

Mon, 04/11/2011 - 05:09 | 1156995 Lord Koos
Lord Koos's picture

duplicate

Sun, 04/10/2011 - 07:47 | 1154668 Another Texan
Another Texan's picture

another horrible idea.  some people here sound like bullied teenagers. 

Sun, 04/10/2011 - 08:46 | 1154710 Waterman Jim
Waterman Jim's picture

you must be an accountant who wants more work.

 

Sun, 04/10/2011 - 08:19 | 1154690 Urban Redneck
Urban Redneck's picture

That would seema formula for $0 in tax receipts, as it motivates more corporations to re-domicile, as opposed to simply outsourcing manufacturing, and accelerates the destruction of American jobs.

That said shifting the structural balance from income to consumption, utilization, transportation, and/or transfer/capital gains etc. would allow for reduction or elimination of income as a source.  

Sun, 04/10/2011 - 08:37 | 1154702 thatthingcanfly
thatthingcanfly's picture

Buckaroo sounds like nothing so much as Sean Penn's puppet in Team America: World Police. "The corporations fund Team America. Then they go sit up in their Corporation buildings; and they're all corporationey, hmmmph!"

Sun, 04/10/2011 - 00:56 | 1154468 bobzibub
bobzibub's picture

Or conversly, individuals by and large work for corporations so the individuals ought not to be taxed because their employers already are.

Sun, 04/10/2011 - 11:08 | 1154840 Bobbyrib
Bobbyrib's picture

You are assuming every corporation is publicly traded. I don't think that is the case. Corporations use the infrastructure of this country far more than I do, why should they not have to pay taxes, while I do? Probably half of the traffic lights in my state were placed at the location they are, because a corporation demanded it.

It's puzzling to me that people worship corporations, because they provide jobs. It's as if consumers, the buyers of the corporations products don't count. No consumers, no revenue. If we ever passed a flat tax, I would not use my discretionary income for anything.

Sun, 04/10/2011 - 16:34 | 1155635 Bob Sacamano
Bob Sacamano's picture

No - shareholders do not pay corporate taxes, consumers pay corporate taxes.  At the end of the day, only individuals pay all taxes.  

Corporate taxes should be eliminated because a) it would make clearer the taxes individuals pay (not buried in the price of a product) and b) would reduce corporate lobbying efforts with politicians (since they would then lobbying only over regulatory issues and not corporate tax issues). 

We need to have all taxes only applied to "entities" that vote - i.e., individuals.  Then we might better understand how much in taxes we are really paying and, one might hope, that more folks would suggest we have more than enough government already.

 

Sun, 04/10/2011 - 19:32 | 1155933 StychoKiller
StychoKiller's picture

An argument can be made that Corporations are "buying" more than one vote!

Mon, 04/11/2011 - 08:03 | 1157135 Bobbyrib
Bobbyrib's picture

You would have to be a communist to argue we don't have more than enough government.

Prices most likely wouldn't go down if corporations paid less taxes. Look at the prices of goods produced overseas. An I-Pod cost how much? A TV cost how much? They may be deflating now during this depression, but during the Bush economy (credit bubble) prices of these products did not come down too often. The price of products mostly go up, not down. It is not only due to inflation, check profit margins as well (at an all time high *edited and added* "pre-Bernanke").

Sun, 04/10/2011 - 02:02 | 1154519 Quantum Nucleonics
Quantum Nucleonics's picture

Individuals provide 100% of receipts.  Corporate taxes just get passed along to consumers.

Sun, 04/10/2011 - 13:48 | 1155218 citta vritti
citta vritti's picture

+ 1120

Sat, 04/09/2011 - 22:52 | 1154316 Conrad Murray
Sat, 04/09/2011 - 22:57 | 1154319 Sub Dude
Sub Dude's picture

From a 2003 article http://www.cbpp.org/cms/index.cfm?fa=view&id=1311 :

 

  • The share that corporate tax revenues comprise of total federal tax revenues also has collapsed, falling from an average of 28 percent of federal revenues in the 1950s and 21 percent in the 1960s to an average of about 10 percent since the 1980s.

 

Sat, 04/09/2011 - 23:30 | 1154359 straty01
straty01's picture

The dollar is under attack big time. That in itself 'could' be the big contrarian move to make now. If the fed implements QE3 its over for the dollar as the reserve currency. The fed/us govt is already an embarassment to itself and the world, the only way out is to have the correction needed to stabilize this whole mess, ie the USD rises for some time via an ending of QE2 and a hint of interest rate rises.

Therefore, short the aud/usd and eur/usd crosses, then buy precious metals again after a big correction. This ponzi scheme will end eventually but who knows when.

Sat, 04/09/2011 - 23:08 | 1154333 Abby Normal
Abby Normal's picture

Other than gold and silver, how else does one, as of today, position yourself against the "Great Correction"?

1) mining companies - but won't higher energy prices affect production costs?

2) Foreign stock Index - like Australia? - already all time high AUD/USD....

3) Apartment REITs leveraged with 5% debt - any specific ideas? or will collapse be so broad, rents fall?

4) Farmland in the US or property overseas?  If so, how and where?

5) Other Ideas?

I'm curious what others are thinking about the magnitude of the collapse and the endgame...I don't envision living as survivalists, but I also can't see any sort of continuation of the market/investments as we know it.

Sat, 04/09/2011 - 23:35 | 1154364 Selah
Selah's picture

 

If you can't hold it, or maintain possession of it, you don't own it.

All you have is what you own.

Be happy with that...

 

 

Sun, 04/10/2011 - 00:03 | 1154388 RockyRacoon
RockyRacoon's picture

And possession is not possible until the Tax Assessor accepts the produce from my Victory Garden in payment for real estate taxes.   Fiat is a forced system since only it can be used to pay taxes.   The recent State moves to accept PMs as payment for taxes is a first step.

Sun, 04/10/2011 - 00:39 | 1154439 Yardfarmer
Yardfarmer's picture

The recent State moves to accept PMs as payment for taxes is a first step.

bwahahahahahahahahahahahahaha!! please stop it, you're killing me!! hahahaha!

Sun, 04/10/2011 - 00:45 | 1154448 tiger7905
tiger7905's picture

So if I have paper in one hand and PM's in the other, why on earth would I willingly give the PMs to the government!!!

Sun, 04/10/2011 - 03:18 | 1154565 TheMerryPrankster
TheMerryPrankster's picture

Bingo!!

Sun, 04/10/2011 - 11:09 | 1154837 RockyRacoon
RockyRacoon's picture

Narrow-minded bunch of cretins.

The IDEA of gold and/or silver is the point.   Fer chrissakes, do you really think anyone is actually advocating giving the States real metal?  

Do you guys just get up in the morning with the intent to trash any rational thought?

Sun, 04/10/2011 - 09:49 | 1154762 Uncle Remus
Uncle Remus's picture

Well there's your confiscation scheme.

Sun, 04/10/2011 - 00:09 | 1154394 Fish Gone Bad
Fish Gone Bad's picture

In the book Dying of Money (by Jens O. Parsson) they author discusses what happened in Germany.  The people who saved money as cash, bonds, and treasuries, got wiped out.  Stocks got the crap kicked out of them, but they came back, well at least those that were of companies that had real products.

I have discussed this problem with my wife.  If we lived in a different area we might invest in some infrastructure upgrades for the house like photovoltaics.  The thought here is that if there is/was a currency crisis, we would always have electricity.  I wouldn't mind getting a natural gas vehicle with a home filling station as well.  The range is limited, but with gasoline going higher and higher, at least I could tool around town for cheap.

Sun, 04/10/2011 - 00:32 | 1154430 Boxed Merlot
Boxed Merlot's picture

at least I could tool around town for cheap...

 

What if no one else was as smart or resourceful as you? What good is tooling around town?..

Sun, 04/10/2011 - 00:30 | 1154432 Yardfarmer
Yardfarmer's picture

 a home filling station? tool around town for cheap? bwahahahahahahahahahahaha!!

Sun, 04/10/2011 - 03:24 | 1154570 TheMerryPrankster
TheMerryPrankster's picture

Forget the natural gas, buy a still. You can make fuel and booze from sugar and yeast. Sugar will last decades, its too dry for insects, it dessicates them. Stock up on sugar, its a great barter good and as mentioned a fine source of booze and fuel. Distilling liquor or fuel in your state or country may be illegal, and this should not be viewed as an endorsement to violate any laws. Fuck typing this is probably against the law somewhere. we are men in a cage and they keep poking us with sticks.

Sun, 04/10/2011 - 08:27 | 1154694 Urban Redneck
Urban Redneck's picture

Do you have an gas well in your backyard?

If you have a large enough yard, a bio-diesel still would require a much smaller capital investment than an oil or gas well.

In countries that experience a currency crisis, dependable 24hr public services tend to be one of the first things to go.

Sun, 04/10/2011 - 11:10 | 1154839 CrazyCooter
CrazyCooter's picture

I looked long and hard at converting a vehicle to NG when I lived in Texas. Should you decide to do it, I reached the conclusion that the only economical approach was to get an old cauburated vehicle, preferably a truck. The conversions are much less expensive. As soon as you introduce EFI (Electronic Fuel Injection) your conversion just got much more complicated.

If you look into it, you might also be able to bi-fuel and switch back and forth.

NG is local, because pipelines are required, so this is a good way to ensure you have transportation at a reasonable price.

Or you could do what I did and move to Alaska. The SE part of the state is a temperate rain forrest. For example, 30s for most of winter aint' all bad:

http://www.wunderground.com/history/airport/PAJN/2011/4/10/MonthlyHistor...

I would also note if you are a degreed professional of some type, Juneau is the state capital (govy work), the state has a surplus at the moment (economy/budget runs on commodities revenue - primarily oil), the town itself is about 30k people, and you can't drive here as the only way in/out is a boat or an airplane.

Regards,

Cooter

Sun, 04/10/2011 - 00:27 | 1154423 slewie the pi-rat
slewie the pi-rat's picture

what the hell is this?  trick question day?  AbbyNormal wants to know how to position oneself against the "Great Correction" other than gold or silver?

uhh, Abby, if you've been taking on physical gold and silver for a while, especially US Mint coinage physical, and are pretty much out of every other "game" i don't see why you are worried?  you have the correct answer.  stop begging the question. 

tyler does it, too:  where is the influx of revenues going to come from, except maybe teleportation, or something?  have you not heard?  the FED has an invention called the printing press! 

can't print gold or silver, is all.  which is why Abby's first question has the answer it does.  no tricks.  these are the answers to these questions. 

Sun, 04/10/2011 - 00:36 | 1154436 Boxed Merlot
Boxed Merlot's picture

1) mining companies

5) Other Ideas?

When push comes to shove, companies depend on a rule of law to enforce "ownership" of the resource/commodity/geographic location.

At this point knowledge of location, location, location actually has value. What about exploration/known reserves?

Sun, 04/10/2011 - 00:56 | 1154470 Abby Normal
Abby Normal's picture

I personally think it's always risky to put all your assets in a single type of investment - that and TPTB have made gold ownership illegal once - and they could easily do it much more easily again.

I'm guessing that anyone that really wanted to know who owned gold could digitally compile records of sales or even names of people on websites promoting/selling gold like this if they chose to.  I doubt things get that dire, but honestly, gold forever and ever?  Never anything else to invest in?  Seems a bit fatalistic to bet on complete and eternal collapse of the entire world...

Sun, 04/10/2011 - 04:55 | 1154597 OldPhart
OldPhart's picture

They did gold already, I suspect that any new confiscation of a scarce national resource will be silver.  As discussed here on ZH, and other sites, the realization is dawning that silver is being consumed in industrial use in greater quantities that ever.  This makes silver the PM that will be in higher demand simply for military interests, driving the need to acquire it from any source and any cost.

Gold, while glamorous, has been stockpiled into inert, unused and dubious vaults, and the industrial demand, in my opinion, is tilted towards consurmer use in jewelry.  Gold is in relatively good supply and is not being truely consumed.

Silver will be the confiscation metal of the very near future.

Sun, 04/10/2011 - 11:18 | 1154853 CrazyCooter
CrazyCooter's picture

It is my belief there is and will be plenty of silver. The problem is that the price of silver is grossly out of whack to the low side. The process of Nucleosynthesis suggests the ratio of silver atoms to gold atoms at roughly 15:1 (see the log chart at wiki link). As you point out silver is consumed where gold is not. World mines produce ~700 million ounces annually, of which only half is used by industry. The other half is jewelry, investment, and such.

Make no mistake, there is plenty of supply, but not at current prices. The investment consumption is doing a moonshot as people attempt to flee fiat. This silver is sequestered. THAT is creating a shortage.

Regards,

Cooter

Sun, 04/10/2011 - 02:47 | 1154550 Arkadaba
Arkadaba's picture

A contrary contrarian:

http://cluborlov.blogspot.com/

Sun, 04/10/2011 - 09:00 | 1154720 Waterman Jim
Waterman Jim's picture

create a beer cellar. World class artisan beer will hold it value, keep you alive and be worth more than gold when the SHTF. 

 

Sun, 04/10/2011 - 09:51 | 1154764 johnnynaps
johnnynaps's picture

Wrong! Beer skunks too easily and is not a good use of space:alcohol% ratio. Switch to liquor (best decision I have made the last 3 years)!

Sun, 04/10/2011 - 11:07 | 1154838 Abby Normal
Abby Normal's picture

Agreed.  I bought a still last year (ebay) - great fun and only 3 things you can sell in any market:

drugs, sex and rock & roll....and I'm thinking people will be drinking a lot more in the coming months/years!

Sat, 04/09/2011 - 23:09 | 1154336 Sub Dude
Sub Dude's picture

And here - http://news.yahoo.com/s/yblog_thelookout/20110407/ts_yblog_thelookout/de...

"Suppose that instead of roughly 1.5 percent of GDP, corporate tax revenue made up 6 percent, as it did 50 years ago. So instead of totaling around $221 billion this year (2010 GDP was estimated at around $14.7 trillion), corporate tax revenue would total around $884 billion--making the deficit $663 billion less than it is."

Sat, 04/09/2011 - 23:20 | 1154348 Abby Normal
Abby Normal's picture

Wouldn't  that $663 billion be passed through to shareholders as dividend and employees as wages and taxed anyways?  And/or the additional taxes would be passed onto consumers as higher prices?  The effects of raising corp tax rates would have to be offset by these 3 other impacts reducing the net gain.

Sat, 04/09/2011 - 23:32 | 1154362 Conrad Murray
Conrad Murray's picture

Dude, it's not The Bernank printing us into oblivion. It's not endless war bleeding us dry. It's not profilgate spending sending us over the cliff. It's "the man" and his greedy ways destroying the country.

/me passes the hopium

Sat, 04/09/2011 - 23:34 | 1154365 robobbob
robobbob's picture

please review:

"D.C. is nothing but a smokescreen for Wall Street which demands either more dollars in circulation or more public debt issued in order to keep the wheels turning. Without either of these it's game over."

it doesn't matter how much you increase the revenue streams. the game is exponential growth and will overun any attempt to feed it. all you would do is buy some more time for the fraud to continue. 

the needed paradigm shift isn't technological.

Sat, 04/09/2011 - 23:11 | 1154337 I am Jobe
I am Jobe's picture

Fuck the bitchez in congress. WTF.

Sat, 04/09/2011 - 23:15 | 1154343 I am Jobe
Sat, 04/09/2011 - 23:17 | 1154347 Pepe
Pepe's picture

Jean Paul Sartre: No Exit

Sat, 04/09/2011 - 23:21 | 1154351 straty01
straty01's picture

turn our backs on this system, after all its designed to keep us all slaves. Feudalism never ended, as long as 1% control 99% of the world's wealth we will continue to live in dis-harmony with the universe.

Sat, 04/09/2011 - 23:24 | 1154353 Pepe
Pepe's picture

Paul Ryan cuts basic health services for the elderly and the poor.

Years later he finds himself in the ICU suffering from septic shock 

after receiving "first class medical care" from incompetent, unethical

health care workers in a for-profit Hospital where the only thing that counts

is profit. Then he learns the lesson just before meeting his maker

Sat, 04/09/2011 - 23:58 | 1154386 robobbob
robobbob's picture

alternate universe.  Anyone talking fiscal restraint are labeled as domestic terrorists and are confined to the cell next to Liberty Dollar man. Ben rejoices as now he can just set printer to infinity and go on vacation.

Pelosi, Reid, Obama, Gramm, standing in ivory tower bowing to new global overlords thanking them for their wise and generous assistance while using burning constitution to light cigars.

Average Americans are standing in line swapping food vouchers to get get last roll of single ply toilet paper from the shelf, talking about when there used to actually be hospitals you could go to without having to know someone to get you in, or when "aspirin" used to be an approved treatment.-but quietly. talk like that and you might get locked up like those domestic terror cranks who thought gold was money, or the way to get out of debt was to stop spending and borrowing

we're broke broke broke. there is no money. do you understand that the pols "lied" when they promised all that crap to everyone? you didn't actually believe them did you?

Sun, 04/10/2011 - 02:25 | 1154537 Kickaha
Kickaha's picture

You're about half right.

You've left out a proper litany of Republican traitors, leading with Reagan and Bush, who only mention fiscal restraint as a phony justification to punish their political enemies and eliminate programs they object to on religious grounds, while spending the country into oblivion.

And history repeats itself today, as the minimal proposed spending cuts specifically target programs chosen for political and religious reasons, not fiscal ones, and are heavily if not entirely tilted towards punishing Democratic Party supporters.

Yes, we are broke, broke, broke.  But the bigger part of the problem is that the Republicans have succeeded in delivering their promises to their constituents without regards to cost.  You don't actually believe that Republicans are the party of fiscal restraint, do you?

Sun, 04/10/2011 - 19:39 | 1155959 StychoKiller
StychoKiller's picture

You don't actually believe that the Republicons are a different party than the Decepticrats, do you?

Sun, 04/10/2011 - 02:40 | 1154544 Antipodeus
Antipodeus's picture

Don't be sad, Pepe.  The number of 'junks' (8 as at this time) simply indicates that at least 8 noroms have read/'commented on' your post.  Cheer up!  Ryan could get run over by a bus tomorrow and do everyone else a favour.

 

Sun, 04/10/2011 - 10:16 | 1154780 nmewn
nmewn's picture

"Paul Ryan's budget is a positive step

By Alan Simpson and Erskine Bowles - 04/05/11 03:45 PM ET

Fiscal Commission and Moment of Truth project co-chairs Erskine Bowles and former Sen. Alan Simpson released the following statement offering their thoughts on the FY 2012 budget proposal unveiled by House Budget Committee Chairman Paul Ryan (R-Wis.).

The budget released this morning by House Budget Committee Chairman Paul Ryan is a serious, honest, straightforward approach to addressing our nation's enormous fiscal challenges. We applaud him for his work in putting forward a proposal which will reduce the country's deficit by approximately the same amount as the plan of the President's Fiscal Commission."

http://thehill.com/blogs/congress-blog/economy-a-budget/154033-paul-ryans-budget-is-a-positive-step-

"Going forward, anyone who issues an alternative plan to Chairman Ryan's should be held to the same standard when offering their own solutions. We simply cannot back away from these issues."

Offer up an action plan of your own that doesn't involve the strangulation of the productive class in this country...maybe another government bailout bill disguised as "shovel ready jobs"...perhaps some more tilting at windmills and ethanol subsidies...how about ramming through another ObamaCare mandate to purchase products & services from corporations thus increasing revenue to government & corporations (if the numbers don't work, screw it, you can amend it later to really jack up costs on citizens...some call it extortion, but let's not get bogged down in details here)...how about they just listen to crackpot college professors and monetize the debt & crash the dollar, oh...wait, they are.

You and Pepe should cheer up...we could be hit by an asteroid tonight and none of this will matter...but for the rest of us, we're not going to count on Divine Intervention.

Ryan's plan achieves the same results as the Deficit Commission's...it's easy to sit back and take pot shot's from the peanut gallery...if you or Pepe has another plan, put it forward or shut the fuck up, stay seated and reload.

Sun, 04/10/2011 - 13:40 | 1155186 flattrader
flattrader's picture

>>>Offer up an action plan of your own that doesn't involve the strangulation of the productive class in this country...maybe another government bailout bill disguised as "shovel ready jobs"...<<<

Here's a couple of ideas...

How 'bout we cut off tax breaks of all varieties to big oil companies (Ryan has refused to do this) which are on track to have record profits this year.

How 'bout we cut these fuckers off--

http://abcnews.go.com/Politics/tea-party-hypocrisy-lawmakers-tea-party-t...

While the majority of American farmers receive no government money at all, at least 23 current members of congress or their families have received government money for their farms -- combining for more than $12 million since 1995 according to a new report from the Environmental Working Group.

The biggest recipient was Rep. Stephen Fincher, a Republican from Frog Jump, Tenn.

While the self-described Tea Party patriot lists his occupation as "farmer" and "gospel singer" in the Congressional Directory, he doesn't mention that his family has received more than $3 million in farm subsidies from 1995 to 2009, according to the Environmental Working Group.

When asked whether he would be willing to see all his subsidies go away, Fincher would not directly say he would no longer take any more subsidies.

"We need a good, better, we need a better farm program and we need to streamline it," he said. "We need to look at many many options. And that's a long way off."

Rep. Vicky Hartzler, R-Mo., who also was swept into office with the Tea Party movement, received $774,489 in farm subsidies over the same period, according to the EWG's numbers.

Neither of these assholes and the other mentioned in the report seem like they are members of the "productive class."

Maybe if we cut these hypocrites off at the knees, we can keep the voucher assistance for homeless disabled vets.

Sun, 04/10/2011 - 17:30 | 1155731 nmewn
nmewn's picture

"How 'bout we cut off tax breaks of all varieties to big oil companies (Ryan has refused to do this) which are on track to have record profits this year."

All for it.

AND...restructure lease payments (where oil companies are required to keep paying to lease land for oil exploration that has proven to be unviable for production)...AND...streamline some of the ridiculous regulatory hurdles they have to go through in order to even explore for oil...let alone go into production to extract it.

"While the majority of American farmers receive no government money at all..."

Well, I don't know what "majority" winds up meaning (at least 51% I suppose, leaving 49% that do get a government check to not grow anything or to grow whatever crop)...but again, yes...cut them off at the knees...Grassley is one of the biggest jerkoff's around with his promotion of limitless ethanol subsidies...I'm more interested in taxpayer theft than partisan politics.

Another problem with farm subsidies (you may not be aware of this) is there are more Department of Agriculture employees than there are actual farmers...think about the efficiency of that...LOL.

And the only disabled vets that are homeless are homeless of their own choice...don't even go there.

If they have a drug or alcohol or psycological problem we have government programs out the wazoo for them (I was in the doctors office just last Thursday and ran into two of them in the hour I was there). If we're giving checks to illegal aliens and running their children through our puppy mill education system we damn sure ain't cutting off disabled homeless vets.

Sat, 04/09/2011 - 23:31 | 1154360 EveningInAmerica
EveningInAmerica's picture

The can must be kicked further down the road: crash risk assets (including PMs) to prop up FRNs and UST debt. The flash crash algo which ran on May 6th of last year was a test run. It's other purpose was to build support for QE 2 and to give a wink and nod to Congress that passing any over-zealous financial regulations were out of the question. With DXY on the brink, another event is necessary to kick the can.

Sat, 04/09/2011 - 23:34 | 1154363 EveningInAmerica
EveningInAmerica's picture

By no means am I advocating this action, and as a PM investor I would hope that I'm wrong, or if I am right that PMs don't take much of a hit. Just a casual observation of the ebbs and flows.

Sat, 04/09/2011 - 23:44 | 1154374 Pepe
Pepe's picture

PM's will keep up. Need to keep inflation up and keep on destabilizing

outside markets, flooding the world with cheap dollars. 

Sun, 04/10/2011 - 00:16 | 1154404 EveningInAmerica
EveningInAmerica's picture

So...multiple wars/revolutions/breakdows all over the world, but not in US. Keep the risk on trade moving, but also create inherant stability in FRNs. I hear ya. To be honest that looks like the plan so far as evidenced by the CIA ops in North Africa, and when things flared up over there that was my immediate thought. But it hasn't stopped buckys decline. In your estimation is the recent turmoil only a warm-up to condition us for a larger conflict? And would that really help the dollars situation given what another major conflict might mean in terms of further debt?

Sat, 04/09/2011 - 23:31 | 1154361 Pepe
Pepe's picture

Same fate to you Blankfein. You will inhabit a world devoid of beauty

and poetry, but full of the things you cherish. Dumb ass

 

Sat, 04/09/2011 - 23:39 | 1154367 CulturalEngineer
CulturalEngineer's picture

Don't be such a Debbie Downer...

It's not as bad as it looks.

Sure the monetary system is about to collapse...

And the financial sector ranges from stupid to corrupt.

And the FED is a groupthink cluster f*&K...

And both party establishments are sellouts...

But once we clean that shit up we'll be fine.

It's up to us.

Can you do 50 cents a week?

50 cents a week times 50 weeks times 150 million people equals $3.75 Billion.

Well then it's up to you...

(liberate the networked one-button micro-transaction in campaign finance... and back the Commons-owned, User-controlled General Purpose Internet Wallet... a new design for a needed institution too important to belong to government OR corporations.

Transaction between humans pre-dates banking.

I'm suggesting that the Peer-to-peer transaction MUST be returned to the Commons and unburdened under universal ownership. And I believe I have a pragmatic model for doing that.

Chagora Assumptions

http://culturalengineer.blogspot.com/2009/01/chagora-assumptions.html

Sun, 04/10/2011 - 00:34 | 1154434 Yardfarmer
Yardfarmer's picture

I'm suggesting that the Peer-to-peer transaction MUST be returned to the Commons and unburdened under universal ownership

bwahahahahahahahahahahaha!!

Sun, 04/10/2011 - 10:50 | 1154817 Spastica Rex
Spastica Rex's picture

b.o.r.i.n.g.

Sat, 04/09/2011 - 23:38 | 1154368 Bansters-in-my-...
Bansters-in-my- feces's picture

>after all D.C. is nothing but a smokescreen for Wall Street which demands either more dollars in circulation or more public debt issued in order to keep the wheels turning. Without either of these it's game over"

This does not seem to bother most American citizens.

I know....crazy .....aint it

Sun, 04/10/2011 - 19:46 | 1155985 StychoKiller
StychoKiller's picture

In a casino, most of the playas are sitting in front of slot machines, never realizing that the real bucks are being made by the "Owners" of the casino...

Sat, 04/09/2011 - 23:42 | 1154369 booboo
booboo's picture

and Pepe rides to the rescue on a skittle shitting unicorn named Puff O Shit to save the elderly and infirm with OP money and everyone lived happily ever after.

THE END,(no really, I mean THE END)

 

 

 

Sat, 04/09/2011 - 23:51 | 1154379 Pepe
Pepe's picture

good ending

Sat, 04/09/2011 - 23:46 | 1154373 dbTX
dbTX's picture

Thanks Tyler, even I can understand these charts, and they are ugly!

Sat, 04/09/2011 - 23:50 | 1154376 Caviar Emptor
Caviar Emptor's picture

Will the cuts reduce the standard of living of the average American? 

We can easily assume so for those on fixed income, and those who are retired or disabled or who are poor. But what about the great middle? The knock-on effects of globally decreased government spending will send deflationary ripples through the economy. Starting with healthcare, one of the few sectors that has been adding jobs since the crisis. The sector will be downsized as a result of medicare/caid reductions, especially hospitals most of which which are heavily medicare dependent. But also big pharma companies, distributors and retailers as reimbursements get cut. Same with medical device and supply, home care, nursing homes and chronic care facilities. Lots of ripples. 

Sun, 04/10/2011 - 00:08 | 1154395 robobbob
robobbob's picture

and that's what happens when you have government involved with everything.

simple financial decisions spiral into out of control social policy fights that lead to the status quo safety continuing on.

the up side is most of the ugly debt occurred over the last few years. maybe a rollback before it gets entrenched will only be slightly painful instead of catastrophic.

Sun, 04/10/2011 - 00:13 | 1154400 Caviar Emptor
Caviar Emptor's picture

For a mature, post-industrial economy there aren't too many alternatives to just decreasing the standard of living. Call it what you will. But to deny it is simply sticking one's head in the sand, a popular pastime these days

Sun, 04/10/2011 - 00:23 | 1154412 RockyRacoon
RockyRacoon's picture

Most folks don't mind a reduction in living standards, but they like everyone to participate.  The sense of fairness is just human nature.   Corporate "fat cats", the "top 1%" keeping their booty, and big business paying no taxes are just a few of the things that get the bile stirring in the low and middle classes.   It will take some balance in austerity measures to make anything work.   Personally, I take care of me and mine and find little to discuss with these articles.  I don't expect fairness, and, part of that is the necessity to ignore the noise.  That's the only way to stay productive and sane.  Getting bent out of shape and "believing" things that are yet to be resolved won't be ameliorative to my own cause.  That cause is surviving and being reasonably happy.

Sun, 04/10/2011 - 08:34 | 1154699 DoctoRx
DoctoRx's picture

Most folks don't mind a reduction in living standards

100% of folks (minus you perhaps) "mind" a reduction in their personal living standards.  Of course, hypertechnically, perhaps you meant that most people don't mind a reduction in living standards of other people than themselves, but somehow I doubt that was what you meant to say.

Sun, 04/10/2011 - 11:14 | 1154846 RockyRacoon
RockyRacoon's picture

I meant to say what I said.   If misery is shared it is more easily endured.  There is an "entitlement" class and theology in the U. S. for sure.   It doesn't take much to foster an atmosphere of shared austerity, however.   Think back to the days when wars were actually paid for, not borrowed into existence.   Scrap metal and paper drives were a way to actuate people into a common objective.   There was an upper class then as well, but they paid for things like movie production (considered propaganda, naturally), and supported other civil and social projects.   The "haves" who didn't do something like that kept their mouths shut and stayed the hell out of the way.

Sun, 04/10/2011 - 10:01 | 1154770 johnnynaps
johnnynaps's picture

I agree. But, it's even worse than that. The same assholes that are going to cause the decline in stardards are the same ones that will reap the profits from it. I don't mind a small decline myself either, but I do mind that the guy causing my decline is flaunting his good fortune.

Sun, 04/10/2011 - 11:18 | 1154854 RockyRacoon
RockyRacoon's picture

Sure.  It's just common sense.   Remember the movies of the 30s with Fred Astaire and Ginger doing all the dancing and crap.   It was a dream world created for the mollification of the masses.   There was not much of that going on in real life.   (Ever see any newsreel footage of same?)   The public knew the movies were an escape and that was OK.   IF the stuff was news instead of make-believe all hell would have broken loose.   That is the mistake that dictators and despots make -- showing off at exactly the wrong time!

Sat, 04/09/2011 - 23:53 | 1154381 russwinter
russwinter's picture

They have overestimated tax receipts this year and next.  So far in calender year 2011, tax receipts are running flat, and they were actually down for March and the first five days of April:  $238.8 billion versus $249.7 billion YoY.  The current budget projects receipt growth, not a stall. By Monday, April 18, we will have a very good idea about the revenue collecting trends of the Treasury, including more on corporate taxes (extremely weak in the March quarter) and the true condition of the US economy. If it is weak, then we will see the FY 2011 deficit start blowing out, easily swamping the token cuts just enacted, and we can just add that to the tipping points of the end game. To me, it looks like 100% debt to GDP ($14.8 trillion) will be breached before the end of the September 2011 FY. I will post the updates here: 

 

http://www.wallstreetexaminer.com/blogs/winter/

Sun, 04/10/2011 - 00:08 | 1154396 Caviar Emptor
Caviar Emptor's picture

They're overestimating tax receipts because they refuse to understand that the real economy is in a deflationary depression. Tax receipts will continue the trend down. And if there's big cuts to government spending that will actually get worse, not better, as big layoffs are to be expected in Federal and state government, healthcare, pharma, education, research and other areas. 

Sun, 04/10/2011 - 00:03 | 1154389 Pepe
Pepe's picture

The great middle will suddenly come to the realization that they are slaves

riding on the "American Dream" of neat manicured lawn neighborhoods, 

a boat and a few jet skies, maybe a Yacht, a vacation house, constant tele

phone calls and text messages, an annual physical, an alianeted significant

other, hundred of "friends" in facebook, children with an uncertain future,

football games, beer, shit wine at $20 a glass, living in a sick society 

where someone like sarah palin is someone...WOW what a nightmare!

Sun, 04/10/2011 - 00:20 | 1154411 Boxed Merlot
Boxed Merlot's picture

Hey,  Neighbor!!!

 

 (I do mow my own lawn though.)

Sun, 04/10/2011 - 01:52 | 1154516 Bananamerican
Bananamerican's picture

racist

Sun, 04/10/2011 - 11:57 | 1154931 LongBallsShortBrains
LongBallsShortBrains's picture

My goat burns less gas than your mower, and i dont have to push it or ride it. It just mows. I do miss the neat look of the mowed lines in the lawn, as teaching Nana to mow in parallel paths is difficult. ( the milk taste better than gas exhaust too). Of course, she leaves the "clippings" in little balls around the yard. I don't have the bag to empty. And she also gives me a couple of baby mowers a year...... 8)

Sun, 04/10/2011 - 00:27 | 1154421 Incubus
Incubus's picture

sudden realization?  not gonna happen, man.

The only time the these cow-people will rise up is when they're starved enough, or deprived of media for a long enough time. And they'll only fight to try to get back to "normal": i.e. the mind-numbing suburban/urban American life, full of simulacra, but never anything of actual worth.

 

"These distraction-oholics. These focus-ophobics. Old George Orwell got it backward. Big Brother isn't watching. He's singing and dancing. He's pulling rabbits out of a hat. Big Brother's holding your attention every moment you're awake. He's making sure you're always distracted. He's making sure you're fully absorbed... and this being fed, it's worse than being watched. With the world always filling you, no one has to worry about what's in your mind. With everyone's imagination atrophied, no one will ever be a threat to the world." - Chuck Palahniuk

 

 

Sun, 04/10/2011 - 00:51 | 1154458 Pepe
Pepe's picture

"The soul in its essence will say to herself: No can buildthe bridge in which

you in particular will have to cross the river of life-no onebut yourself.

Of course there are countless paths and bridges and demigods 

ready to carry you over the river, but only at the price of your own self"

F. Nietsche

Sun, 04/10/2011 - 19:55 | 1156021 StychoKiller
StychoKiller's picture

"We are condemned to be free!" -- F. Nietszche

Sun, 04/10/2011 - 00:17 | 1154410 TexasAggie
TexasAggie's picture

Most of this issue because Congress (and the by definition - the people), have major items not identified in the Constitution as mandatory pay items.  I think the only mandatory pay items would be interest o nthe national debt, so why did SS and Medicare become mandatory pay?

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