Paul Ryan Speaks On The "Catastrophic Trajectory" Of US Debt

Tyler Durden's picture

Shared Scarcity versus Renewed Prosperity

Economic Club of Chicago Remarks as Prepared for Delivery by Paul Ryan

May 16, 2011

Thank you so much, Anne, for the kind introduction.

I want to thank you all for inviting me to speak. It was especially
gracious of you to host me, even though I’m a Packers fan and I assume
most of you are Bears fans.

But that doesn’t mean we can’t work together. As chairman of the
House Budget Committee, I stand ready to do whatever it takes to help
you re-sign Jay Cutler.

I’m here to talk about the economy today – about the need to get four quarters of strong, consistent performance.

That wasn’t another Jay Cutler joke, I swear. It could be, but it’s not.

I’ll come to the point. Despite talk of a recovery, the economy is
badly underperforming. Growth last quarter came in at just 1.8 percent.
We’re not even creating enough jobs to employ new workers entering the
job market, let alone the six million workers who lost their jobs during
the recession.

The rising cost of living is becoming a serious problem for many
Americans. The Fed’s aggressive expansion of the money supply is clearly
contributing to major increases in the cost of food and energy.

An even bigger threat comes from the rapidly growing cost of health
care, a problem made worse by the health care law enacted last year.

Most troubling of all, the unsustainable trajectory of government
spending is accelerating the nation toward a ruinous debt crisis.

This crisis has been decades in the making. Republican
administrations, including the last one, have failed to control
spending. Democratic administrations, including the present one, have
not been honest about the cost of the tax burden required to fund their
expansive vision of government. And Congresses controlled by both
parties have failed to confront our growing entitlement crisis. There is
plenty of blame to go around.

Years of ignoring the drivers of our debt have left our nation’s
finances in dismal shape. In the coming years, our debt is projected to
grow to more than three times the size of our entire economy.

This trajectory is catastrophic. By the end of the decade, we will be spending 20 percent of our tax revenue simply paying interest on the debt – and that’s according to optimistic projections. If ratings agencies such as S&P move from downgrading our outlook to downgrading our credit, then interest rates will rise even higher, and debt service will cost trillions more.

This course is not sustainable. That isn’t an opinion; it’s a
mathematical certainty. If we continue down our current path, we are
walking right into the most preventable crisis in our nation’s history.

So the question is, how do we avoid it?

The answer is simple. We have to make responsible choices today, so that our children don’t have to make painful choices tomorrow.

If you look at what’s driving our debt, the explosive growth in
spending is the result of health care costs spiraling out of control.

By the time my children are raising families of their own, literally
every dollar we raise in revenue will be paying for three major
entitlement programs.

Some of this is demographic – every day, ten thousand baby boomers retire and start collecting Medicare and Social Security.

But a lot of it is simply due to the fact that health care costs are rising faster than the economy is growing. Revenues simply cannot keep up.

It’s basic math – we cannot solve our fiscal or economic challenges unless we get health care costs under control.

The budget passed by the House last month takes credible steps
to controlling health care costs. It aims to do two things: to put our
budget on a path to balance, and to put our economy on a path to

I am here today to stress the point that these goals go hand in hand.
Stable government finances are essential to a growing economy, and
economic growth is essential to balancing the budget.

The name of our budget is The Path to Prosperity.

See, right now, we’re finally having a debate in Washington about how
to address our fiscal problems. But we’re still not having the debate
we need to have.

To an alarming degree, the budget debate has degenerated into a game
of green-eyeshade arithmetic, with many in Washington – including the
President – demanding that we trade ephemeral spending restraints for
large, permanent tax increases.

This sets up a debate in which we are really just arguing over who to
hurt and how best to manage the decline of our nation. It is a
framework that accepts ever-higher taxes and bureaucratically rationed
health care as givens.

I call it the “shared scarcity” mentality. The missing ingredient is economic growth.

Shared scarcity represents a deeply pessimistic vision for the future
of this country – one in which we all pay more and we all get less. I
believe it would leave us with a nation that is less prosperous and less

To begin with, chasing ever-higher spending with ever-higher tax
rates will decrease the number of makers in society and increase the
number of takers. Able-bodied Americans will be discouraged from working
and lulled into lives of complacency and dependency.

Worse – when it becomes obvious that taxing the rich doesn’t generate
nearly enough revenue to cover Washington’s empty promises – austerity
will be the only course left. A debt-fueled economic crisis will force
massive tax increases on everyone and indiscriminate cuts on current
beneficiaries – without giving them time to prepare or adjust. And,
given the expansive growth of government, many of these critical
decisions will fall to bureaucrats we didn’t elect. 

Shared scarcity impedes economic growth, results in harsh austerity, and ends with lost freedom. 

In a recent speech he gave in response to our budget, President Obama
outlined a deficit-reduction approach that, in my view, defines shared
scarcity. The President’s plan begins with trillions of dollars in
higher taxes, and it relies on a plan to control costs in Medicare that
would give a board of 15 unelected bureaucrats in Washington the power
to deeply ration care. This would disrupt the lives of those currently in retirement and lead to waiting lists for today’s seniors.

Now in criticizing the President’s policies, I should make clear that
I am not disputing for a moment that he inherited a difficult fiscal
situation when he took office. He did.

Millions of American families had just seen their dreams destroyed by
misguided policies and irresponsible leadership that caused a financial
disaster. The crisis squandered the nation’s savings and crippled its

The emergency actions taken by the government in the fall of 2008 did
help to arrest the ensuing panic. But subsequent interventions – such
as the President’s stimulus law and the Fed’s unprecedented monetary
easing – have done much more harm than good, in my judgment.

In the aftermath of the crisis, we needed government to repair the
free-market foundations of the American economy, as it did under Reagan
in the early 1980s, by restraining spending… keeping taxes low…
enforcing reasonable, predictable regulations… and protecting the value
of the dollar.

Instead, leaders in Washington embarked on an unprecedented spending
spree… enacted a deeply flawed overhaul of financial rules… passed a new
health care law that raised taxes by $800 billion… and encouraged a
sharp departure from a rules-based monetary policy, which created even
more economic uncertainty. 

In the 2010 election, the voters sent a message: This isn’t working. Washington needs to try something else.

We know what that something else must be, because we know what has
always made growth possible in America. We need to answer that call for
new economic leadership by getting back to the four foundations of
economic growth:

First, we have to stop spending money we don’t have, and ultimately that means getting health care costs under control.

Second, we have to restore common sense to the regulatory
environment, so that regulations are fair, transparent, and do not
inflict undue uncertainty on America’s employers.

Third, we have to keep taxes low and end the year-by-year approach to
tax rates, so that job creators have incentives to invest in America;

Fourth, we have to refocus the Federal Reserve on price stability,
instead of using monetary stimulus to bail out Washington’s failures,
because businesses and families need sound money.

Let me deal with each in order.

The first foundation, real spending discipline: it’s pretty simple.
You can’t get real, sustainable growth by continuing to pile on the
debt. More debt means more uncertainty, and more uncertainty means fewer

The rating agency S&P just downgraded the outlook on U.S. debt
from “stable” to “negative.” That sends a signal to job creators. If
S&P is telling them that America is a bad investment, they’re not
going to expand and create jobs in America – not at the rate we need
them to.

Mounting debt also threatens our poorest and most vulnerable
citizens, because those who depend most on government would be hit
hardest by a fiscal crisis. We have to repair our safety net programs so
that they are there for those who need them most. This starts by
building on the successful, bipartisan welfare reforms of the mid-1990s.

Our reforms save the social safety net by giving more power to
governors to create strong, flexible programs that better serve the
needs of their populations. Most important, they make these programs

As we strengthen welfare for those who need it, we propose to end it
for those who don’t. We end wasteful corporate welfare for those such as
Fannie Mae and Freddie Mac, big agribusinesses, and others that have
gotten a free ride from the taxpayer for too long.

All of these steps are necessary to getting spending under control.
But they are not enough. We cannot avert a debt crisis unless we
directly address the rising cost of health care.

Getting health care costs under control is critical, both for solving our fiscal mess and
for promoting growth. One reason that many people aren’t getting raises
is that rising health care costs are eating into their paychecks.

The second foundation addresses the growing scourge of crony
capitalism, in which Washington bureaucrats abuse the regulatory process
to pick winners and losers in the private economy.

Congressional Republicans continue to advance reforms that stop
regulatory bureaucrats from strangling job growth and innovation with
red tape. We’ve advanced legislation to stop the EPA from imposing
job-destroying energy caps on American businesses.

We’ve advanced legislation to revisit the flawed Dodd-Frank law,
which actually intensifies the problem of too-big-to-fail by giving
large, interconnected financial institutions advantages that small firms
do not enjoy.

But most important, we propose to repeal the new health care law and
its burdensome maze of new regulations. It’s bad enough that the law
imposes an unconstitutional mandate on every American; it also imposes
new regulations on businesses, which are stifling job creation.

Let me share with you a figure that serves as a devastating
indictment of the new health care law: So far, over 1,000 businesses and
organizations have been granted waivers from the law’s onerous
mandates. These waivers may prevent job losses now, but they do not
guarantee relief in the future, nor do they help those firms that lack
the connections to lobby for waivers.

This is no way to create jobs in America. True, bipartisan health care reform starts by repealing this partisan law.

The third foundation recognizes that we cannot get our economy back
on track if Washington tries to tax its way out of this mess.

The economics profession has been really clear about this – higher marginal tax rates create a drag on economic growth.

As the University of Chicago’s John Cochrane recently wrote: “No
country ever solved a debt problem by raising tax rates. Countries that
solved debt problems grew, so that reasonable tax rates times much
higher income produced lots of tax revenue. Countries that did not grow
inflated or defaulted.”

Higher taxes are not the answer.

Finally, the fourth foundation calls for rules-based monetary policy
to protect working families and seniors from the threat of high

The Fed’s recent departures from rules-based monetary policy have
increased economic uncertainty and endangered the central bank’s

Advocates of these aggressive interventions cite the “maximum
employment” aspect of the Fed’s dual mandate – its other mandate being
price stability.

Congress should end the Fed’s dual mandate and task the central bank
instead with the single goal of long-run price stability. The Fed should
also explicitly publish and follow a monetary rule as its means to
achieve this goal.

These are our four foundations of economic growth. And the
House-passed budget starts the long, arduous, and necessary process of
restoring these foundations and building a prosperous future.

We lift the crushing burden debt by cutting spending and reforming
those government programs that drive the debt. We reduce the deficit by
over a third in the first year of our budget, putting an end to the era
of trillion-dollar deficits. The House-passed budget doesn’t just put
the budget on a path to balance – it actually pays off the debt over

We can’t achieve this goal by simply rubber-stamping increases in the
national debt limit without reducing spending in Washington.

Speaker Boehner made this clear in a recent speech at the Economic
Club of New York: If the debt ceiling has to be raised, then we’ve got
to cut spending. The House-passed budget contained $6.2 trillion in
spending cuts. For every dollar the President wants to raise the debt
ceiling, we can show him plenty of ways to cut far more than a dollar of
spending. Given the magnitude of our debt burden, the size of the
spending cuts should exceed the size of the President’s debt limit

The House-passed budget also gets health care spending under control
by empowering Americans to fight back against skyrocketing costs. Our
budget makes no changes for those in or near retirement, and offers
future generations a strengthened Medicare program they can count on,
with guaranteed coverage options, less help for the wealthy, and more
help for the poor and the sick. 

There is widespread, bipartisan agreement that the open-ended,
fee-for-service structure of Medicare is a key driver of health-care
cost inflation. As my friend Jim Capretta, a noted health-care policy
expert, likes to say, Medicare is not the train being pulled along by
the engine of rising costs. Medicare is the engine – and the rest of us are getting taken for a ride.

The disagreement isn’t really about the problem. It’s about the
solution to controlling costs in Medicare. And if I could sum up that
disagreement in a couple of sentences, I would say this: Our plan is to
give seniors the power to deny business to inefficient providers. Their
plan is to give government the power to deny care to seniors.

We also disagree about how best to deliver the tax reform that Americans have long demanded from Washington.

Here’s a quick story about tax policy. Twenty-five years ago, GE CEO
Jack Welch introduced himself to this very club by saying, “I represent a
company that doesn’t pay taxes.”

I guess some things never change. 

We have to broaden the tax base, so corporations cannot game the
system. The House-passed budget calls for scaling back or eliminating
loopholes and carve-outs in the tax code that are distorting economic

We do this, not to raise taxes, but to create space for lower tax
rates and a level playing field for innovation and investment. America’s
corporate tax rate is the highest in the developed world. Our
businesses need a tax system that is more competitive.

A simpler, fairer tax code is needed for the individual side, too.
Individuals, families, and employers spend over six billion hours and
over $160 billion per year figuring out how to pay their taxes. It’s time to clear out the tangle of credits and deductions and lower tax rates to promote growth.

The House-passed budget does that by making the tax code simpler…
flatter… fairer… more globally competitive… and less burdensome for
working families and small businesses.

By contrast, the President says he wants to eliminate deductions, but he also wants to raise
rates. That includes raising the top rate to 44.8 percent. That would
amount to a $1.5 trillion tax increase on families and job creators.

The President says that only the richest people in America
would be affected by his plan… Class warfare may be clever politics, but
it is terrible economics. Redistributing wealth never creates more of

Further, the math is clear – the government cannot close its enormous
fiscal gap simply by taxing the rich. This gap grows by trillions of
dollars each year, representing tens of trillions in unfunded promises
to future generations that the government has no plan to keep.

There’s a civic side to this as well. Sowing social unrest and class
envy makes America weaker, not stronger. Playing one group against
another only distracts us from the true sources of inequity in this
country – corporate welfare that enriches the powerful, and empty
promises that betray the powerless.

Those committed to the mindset of “shared scarcity” are telling
future generations, sorry, you’re just going to have to make do with
less. Your taxes will go up, because Washington can’t get government
spending down.

They are telling future generations, you know, there’s just not much
we can do about health care costs. Government spending on health care is
going to keep going up and up and up… and when we can’t borrow or tax
another dollar, we’ll have to give a board of unelected bureaucrats the
power to tell you what kind of treatments you can and can’t receive.

If we succumb to this view that our problems are bigger than we are –
if we surrender more control over our economy to the governing class –
then we are choosing shared scarcity over renewed prosperity, and
managed decline over economic growth.

That’s the real class warfare that threatens us – a class of
governing elites picking winners and losers, and determining our
destinies for us.

We face a choice between two futures. We can continue to go down the
path toward shared scarcity, or we can choose the path of renewed

The question before us is simple: Which path will our generation choose?

In 1979, my mentor, Jack Kemp, captured the essence of why we must choose the path to prosperity:

“We can’t progress as a society by using government to diminish one
another. The only way we can all have more is by producing more, not by
bickering over how to share less. Economic growth must come first… for
when it does many social problems tend to take care of themselves, and
the problems that remain become manageable.”

You know, there’s a question I get a lot from people at town halls.
When you go around the country showing people a chart that shows that
our debt is on track to cripple our economy, people start to ask you
whether any plan, even a plan like the House-passed budget, can save America from a diminished future.

They say, Congressman Ryan, I know you have to sound optimistic in public. But in private, do you really think there’s anything we can do to save this country from fiscal ruin? Or should we just be bracing for the worst?

It’s a difficult question. It’s one that gives me pause. Frankly, it’s one that keeps me up at night.

But the honest answer is the one I’m about to give to you: Nobody
ever got rich betting against the United States of America, and I’m not
about to start.

Time and again, just when it looked like the era of American
exceptionalism was coming to a close… we got back up. We brushed
ourselves off. And we got back to work – rebuilding our country,
advancing our society, and moving the boundaries of opportunity ever

We can do it again. America was knocked down by a recession. We are
threatened by a rising tide of debt. But we are not knocked out. We are
America. And it is time to prove the doubters wrong once more – to show
them that this exceptional nation is once again up to the challenge. 

Thank you.

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66Sexy's picture

you humans are as weak as you are ugly. we are coming for your ships, your planet, your people.

CPL's picture


I for one welcome our draconian alien overlords, only caveate.  Don't fuck up like the previous bone heads, and make sure you use every piece of our filthy human corpses unless you opt to make us into house pets.

plocequ1's picture

Im not human, But i do like pancakes.

Chuck Norris's picture

I'm cool with that as long as you keep your tentacles off my silver.

Sudden Debt's picture

luckely you don't eat brains, because if you landed in Texas first, you'de starve...


NoLongerABagHolder's picture

Ryan is the most dangerous man in America.

He - like most here, do not understand the current monetary system we live in, thus mistaking the current system for the old gold standard. He and many of you would do yourself wonders by spending time learning about Modern Monetary Theory, and understand why the US is not like a household or state government.

Everything ZH rants about would be true if we still lived in the old gold standard way of life. This is not saying the current system is the right way, just saying the idea of a bond market collapse is absurd in the current system.

You do that, and you will finally have answers why the whole system didn't fall apart and the stock market end up at 500 like you all thought it would.

And you will udnerstand why Gold is not already at $5000 like you were sure it would be.

MrPike's picture

You can take "Modern Monetary Theory" and cram it up your ass. It should not be given sucha scientific sounding name.  Instead it should read "How to Central Plan," because that's all it is.  

NoLongerABagHolder's picture

You show your idiocy in that you obviously don't get it either.....

Bartanist's picture

I did not understand MMT, so looked it up on Wikipedia. It seems to be one of those things that just because it says "Modern" does not mean that it is actually modern or good for the economy. A similar example might be the Commodity Futures "Mondernization" Act of 2000 which made bucket shop bets, banned in the 1920s legal again... and so the whole derivaties Ponzi was created, allowing the unhedgable to be hedged on paper.

In its contemporary form, MMT states that there are four essential features to most fiat monetary systems in existence today:[7]

  • A floating exchange rate;
  • Fiat money is used as a means of exchange, and is not convertible into gold or any other commodity;
  • The government has the exclusive right to issue the particular fiat currency;
  • The government only accepts its own fiat currency for payment of taxes and any other liabilities owed to the government.

Although MMT is a monetary theory, theorists avoid the use of the imprecise term money, and prefer instead to use the term financial assets. This term is used to refer to any non-physical assets such as cash, bonds, bank deposits and stocks. Within this framework, MMT broadly describes the following areas of the economy:

  • Vertical transactions between the government sector and the non-government sector. This considers the effect of government spending and taxation, and concludes that government spending adds financial assets to an economy, whereas taxation removes it.[8]
  • Interaction between government and the private banking sector. This examines the mechanics of government spending, specifically, the effect that interest rate maintenance by the central bank has on the economy. It concludes that if a central bank wishes to maintain a target interest rate, it is always forced to intervene in the government bond market. Effectively, the central bank has no control over how much the government spends, and thus the government is not constrained in its spending desires.[9]
  • Horizontal transactions refers to transactions between private actors in an economy. This concludes that net financial assets cannot be created by private banks since loans always create deposits. However, the money supply can certainly be expanded via the issuance of private credit, and in this sense, MMT overlaps with monetary circuit theory. Both MMT and monetary circuit theory therefore reject the mainstream idea of the money multiplier.[1]
  • The external sector, which studies the effect that imports and exports within an open economy have on the economy of a fiat currency regime with a floating exchange rate. MMT uses horizontal theory to point out that a nation’s currency ultimately never leaves that nation; similarly, MMT then points out that foreign holdings of government debt do not affect government solvency. MMT also concludes that imports are a benefit and exports are a cost to a nations, but conversely accepts the possibility of negative currency shocks on an import-dependent nation.[7]
[edit] Criticism

Within the framework of Chartalism, some criticize the details of these assumptions. For example, Febrero[10] argues that modern money draws its value from its ability to cancel (private) bank debt, particularly as legal tender, rather than to pay government taxes.

In the couple of minutes that I have taken to think about this, there seem to be some inconsistencies:

a) the Fed is not the US government. It is a privately owned bank. And it taxes through manditory interest owed to it, just as the government taxes through multitudes other means... The banks tax and not necessarily in conjunction with the government.

b) the Fed put a lot more money into the economy than the US government did with TARP. It exchanged large amounts of financial assets (money) for small amounts of financial assets.

c) there is no accounting for the misallocation of resources. All money is treated as if it is the same thing whether it goes to build a bridge or bribe a Congressman. Yet, one has value in utility and the other not.

d) in MMT there does not appear to be any connection between value and money. Value is created through labor and money is created out of thin air.

e) exchange rates do not necessarily float. They may move, but they don't necessarily float as they would in a free market economy.

MMT has the smell of a rationalization "after the fact" and while in essence it may be true that this is the system that we live under, it seems to not judge the consequences of its existence.... such as the implied inflation of the money supply and ever declining purchasing power under a government and country that continually creates and spends money, but never produces anything... other than war. It works until the "take my money in exchange for your physical assets or I'll kick your ass" method of diplomacy no longer is effective.

falak pema's picture

That's what DSK was trying to explain to that girl Ophelia : MMS!

A private special lesson on MMS, what's known as a crammer course.

That dumb judge and the NYPD just don't get it!

AurorusBorealus's picture

I agree that Ryan is dangerous, because he appears, to the dim-witted, reasonable and responsible, willing to work within the existing system to reduce the inefficient misallocation of resources that our government money-printing machine produces.  He is the reformer, the practical man: a tweak here and a tweak there and everything should be fine.  The fact of the matter is that tweaking the broken machine of the American state is no fix.  Bold vision and decisive leadership is required, not the consensus-crafting and team-building that holds hostage American's limited imagination of what constitutes good leadership.

Perhaps it is you who do not understand modern monetary theory or the reality of money.  Fiat currency holds value only because people believe in the state.  State money-printing by banks or treasury, linked to debt or conjured from Treasury alchemy, leads to crony capitalism, fascism, and the misallocation of resources: all of which destroys faith in the state.

Just like they used to say in the Soviet Union, "We pretend to work, and they pretend to pay us."  Have a look at the vast horde of Americans working in government agencies and crony capitalist industries.  Indeed they do pretend to work, but actually produce nothing of consequence.  That is your modern monetary theory in action.  Economics is much more than academic theories about money supply, velocity, statistics, and probability.  The purpose of an economic system is to distribute scarce resources in a just manner and allow for human ingenuity to improve the capacity of man.  Show me how your MMT does this.  In practice, it is a complete farce.

NoLongerABagHolder's picture

You say: "Fiat currency holds value only because people believe in the state."

This statement is foundationally incorrect, and part of the reason for the constant doom and gloom. Any currency from the state holds value because they have the laws and guns to put you in jail if you don't in fact pay them their taxes in the currency they tell you to pay it in. Which is why you will never be able to buy things en masse for gold. You will first have to convert that gold into whatever the currency the state tells you to pay taxes in, because the businesses you want to buy from have a tax liability in US Dollars, not gold. Therefore, they exchange labor and goods and services to get their hands on the state money to extinguish the tax liability and stay out of jail, and hopefully have some left over.

If the tax system breaks down (think Greece) then you have some problems.

ZH'ers miss this key point. They keep saying "quit ruining OUR money" It's not your money. It's the states money and you are being coerced into having to get your hands on some in order to stay out of jail. That is the true crime. Even though you think Gold is real money, it's not, because you still have to exchange it for the state issued currency in order to extinguish your IRS liabilities and stay out of jail.

MMT should be renamed Modern Monetary Reality. It isn't "theory", but aptly describes the system we are in..... and no - it is not Keynsianism and Paul Krugman does not in fact understand it either.

Take the time to get your head around it, and you will see with clarity why Japan, with 250% debt to GDP - still struggles with deflation, and why we will be heading down that long fight for years.

ColonelCooper's picture

" They keep saying "quit ruining OUR money" It's not your money. It's the states money and you are being coerced into having to get your hands on some in order to stay out of jail."

You are every bit missing the "point" as much as the ZH'ers you chide.  We understand this concept, and reject it.  You seem to be willing to polish statist knob, while the people you label as dense have already choked and are beginning to take back what is ours.  Will we be successful?  Quite likely not.  I hope you are comfortable in your pussy ass servitude.

NoLongerABagHolder's picture

Quit sniffing glue.....

You reject it?

Yet you still work for dollars and have them and buy and sell in them?

You haven't rejected anything. You have ideals but are too pussy to do anything about it.

I'll believe your bravado when you are sitting in prison because you won't transact business or pay taxes in US dollars, and are standing up for what you believe in.

You haven't rejected anything but reality at this point.

toady's picture

This is an interesting string of comments. Rejecting the dollar DOES create problems. What will happen when the world rejects the dollar? We will be glad we spent all that money on those aircraft carriers... Thats the extream edge of dollar rejection. On the level of this discussion, dollar rejection is difficult. As stated, citizens are forced to pay in dollars or face imprisonment, but most people (I hope!) are smart enough to get around the problem. I keep most of my assets in stores other than the dollar, and leave just enough in dollars to pay 'the Man' in his prefered currency.

Dugald's picture

 "Bold vision and decisive leadership is required"

You can't handle it!!!!!!!! Ergo, you are cactus fucktus 

RexZeedog's picture

Modern monetary theory is based in large measure on fiscal stimulus programs which are justified via the false premise of a "multiplier effect".

Take a few minutes and read the 1st three articles on which show up in this google search:

NoLongerABagHolder's picture

Wrong yet again. MMT has thouroughly shown time and again that the multiplier effect is a sham and it breaks down...... which is why QE is a non-event.

You need to keep reading so you understand what it is you are arguing against.....

and even better:

NotAllowed's picture

all your bases are belng to us

JLee2027's picture

The GP is just starting to learn about sound money and the need for it. The pols won't do squat until the public is screaming in pain for it.

Clorox Cowboy's picture

Hmmm...the two-headed monster turns on the Fed?  Me likey :)

redpill's picture

OT: The Nipponese Black Swan Continues to Soar

Fukushima Disaster is a Complete Triple Meltdown in Reactors 1-3, Tepco Finally Admits

carbonmutant's picture

Swans are beginning to Flock...

I Told YOU So's picture

X-rated swans? haha flock, not f*ck......sorry

The Profit Prophet's picture

Good work RP....please keep it up! It's absolutly amazing to see the large-scale apathy over this unprecedented tragedy now playing itself out on a site like ZH.  I hope the fool who junked you has been buying and eating Cesium 137 California strawberries  "because he just can't believe the awesome price lately"!!!

T.E.I.N. everyone!

NOTW777's picture

"The Fed’s recent departures from rules-based monetary policy have increased economic uncertainty and endangered the central bank’s independence."

way too polite for chairsatan

lolmao500's picture


 In the coming years, our debt is projected to grow to more than three times the size of our entire economy.


lieutenantjohnchard's picture

the true deficit is $5.5 trillion if you add in fannie and freddie gse's and use gaap accounting. the numbers he cites are correct.

dexter_morgan's picture

By BS, I suspect you mean it will be much larger.........

lolmao500's picture

Not will be, it's ALREADY bigger than that. The true US debt is something like 100 trillion and the real US GDP is like 10-12 trillion...

downwiththebanks's picture

I couldn't bear reading the whole thing.  

How many wars for the contractors who own him and bailouts for the banker-gangsters who own him does he project over this time?

bob_dabolina's picture

Cash will be king by the time this is all said and done.

gorillaonyourback's picture

your rational for that statement is?

bob_dabolina's picture

I've explained this ad nauseum so I'll just make this as quick and pithy as possible.

#1 The two sides won't agree

#2 Imagine all those pensioners who have been spending their retirement checks on gold/silver. Well, let's assume they get cut off from those checks, what do you think they are going to do? How about the clamoring for dollars by every single government agency? EVERYONE is going to want dollars.

That's as far as I'm willing to go right now, there's lot's of other stuff, I'm just tired of typing it over and over again.

tmosley's picture

Then cut and paste it.

Also, I lol that you think retirees on fixed incomes are buying any significant amount of gold or silver.  That is quite possibly the dumbest PM bear rational I've ever heard.

bob_dabolina's picture

Like I said there is a lot to it, that is just one small facet.

Maybe I will do that. I'll just write one long post and save it to my desktop, so I can copy/paste it in the future. That's about the smartest thing I've ever heard come out of you tmosely. Good job, keep up the good work.

The Profit Prophet's picture

Great idea! I can't wait to junk to full unedited version of the twisted drool that that would comprise such an idiotic perspective.

T.E.I.N. everyone!

bob_dabolina's picture

I see. You're the type of person who can't hold a family together...if you have kids they probably despise and have no respect for you.

I can see why. If junking my comments helps your self-esteem then I feel happy I can assist in the rehabilitation of your emotionally torn up ego.

The Profit Prophet's picture

Once again you have proven your analytical skills to be adolescent at best. Your statements above are almost as far-off as your view on fiat.

I would advise those paying for your comments to put you administrative review.

T.E.I.N. everyone!

knowless's picture

i would like to know in detail why you think the dollar will live.

in a deflationary event people will hock whatever for whatever dollars there are, then once they get the dollars, people holding key assets will still seek profit after hocking what they had for the same minimal dollars to purchase scarcity, so no matter what, people who end up with necessities will demand more than people can accumulate.. a reciprocating cycle of people with no wealth playing into a system which takes profit.. why would people keep playing that game when they are starving?


i am a dishwasher, all be warned.


SilverDOG's picture

"EVERYONE is going to want dollars"


Excluding any country exporting to the USA.

Your shelves will be EMPTY for EVERYONE.

The boomers dollar/cash training will work as well as their Viagra addiction. 

Making them stiff.