In Response To "Shock" NFP Numbers, Democrats Demand Another Payroll Tax Extension As Republicans Say $4 Trillion Deficit Reduction Plan "No Go"

Tyler Durden's picture

Proving once again that i) there is no idea on the Hill that is so stupid that it can't be recycled again... and again, and that ii) the last thing politicos care about is deficit reduction (yes $4 trillion cut over the next century works... too bad by then the deficit will be measured in quintillions) is the news from Bloomberg that following the "stunning" news from the BLS that "nobody", and certainly not Joe LaVorgna could predict (odd, we do recall saying on Thursday night that anything out of the ADP is and always has been complete garbage, and that the only definite pink slips should be those handed out to its employees) democrats are now demanding more of the same (failed medicine) that did nothing at all to boost Q1 GDP, namely an extension to the payroll-tax cut, which humiliated none other than Goldman's Jan Hatzius into believing it would do something to boost the economy (first see: Goldman Jumps Shark from December 1, 2010 then Goldman Apologizes For Its Horrendous December "US Economic Renaissance" Call, Begins QE3 Discussion). Hint: it won't. It will merely cost another $100 billion in incremental debt that will never be repaid, and a few dollars boost to Apple's EPS, but aside from the few non-edible iPads being bought, that will be about it. Yet that won't stop the screeching parrots from repeating the only word they know: more, more, more: "Senator Charles Schumer of New York, the chamber’s third- ranking Democrat, called for an “immediate jolt” to the economy by extending and enlarging a one-year payroll-tax cut that’s set to expire Dec. 31. He asked for action “as quickly as possible by including it in the final debt-limit agreement.” Jared Bernstein, until recently Vice President Joe Biden’s chief economic adviser, predicted the White House would step up efforts to include in the debt deal additional infrastructure spending or a new temporary payroll tax reduction." Yeah, good luck with that.

From Bloomberg:

In addition to continuing a 2 percentage-point break in the employee payroll tax, the White House may push for an equal cut in the employers’ part of the levy, according to a Democratic official.
“It would be a mistake for them not to ratchet up the urgency on the jobs side, given the labor market really appears to be in a stall,” said Bernstein, now a senior fellow at the Center for Budget and Policy Priorities in Washington. “It’s not something you can ignore.”

The Labor Department reported the unemployment rate in June unexpectedly climbed to 9.2 percent, the highest this year. Employers added 18,000 jobs, the weakest growth since September 2010. Payroll growth for May also was revised downward, to 25,000.
When Obama and congressional leaders meet tomorrow for negotiations on deficit reduction, the jobs numbers will increase pressure on both sides to reach a deal that can be presented as bold, said Dan Schnur, communications director for Republican John McCain’s 2000 presidential campaign.

Funny that: And as we type this, we see AP headlines that Boehner has just dropped his efforts to reach a "comprehensive debt-reduction plan" and has advised Obama that only a smaller package is feasible. Which means that the realization that budget cuts at a time when there is no QE to mop up the economic collapse is not the best idea. It also means the conclusion of the debt ceiling soap opera is almost here. Some boldness. Republicans huffed and puffed, and folded like a cheap lawn chair when they were advised that the teleprompter is naked and chain smoking.

More on the opera, while it continues:

Republican presidential candidate Mitt Romney said the “abysmal jobs report confirms what we all know -- that President Obama has failed to get this economy moving again.”
Former Utah Governor Jon Huntsman, also a Republican presidential candidate, said “extremely anemic job creation” demonstrates “we need free-market, pro-growth policies to spark a wave of job growth.”
The jobs report underscores the challenging economic environment Obama confronts for his re-election campaign next year.
Ronald Reagan, who faced an unemployment rate of 7.2 percent on Election Day in 1984, is the only U.S. president since World War II to win re-election with a jobless rate above 6 percent.
The climbing unemployment rate in recent months, up from 8.8 percent in March, will make it harder for Obama to persuade voters that the country is moving in the right direction.
“Voters already feel like the economy is stuck in the mud,” Schnur said. “Every month that we see a jobs report like this one reinforces the electorate’s sense that we’re not making progress, and that becomes gradually harder to reverse.”

And of course once the next fiscal stimulus fails, which it will in about 2-3 months, there will be only one option left. Monetary stimulus. Enter QE 3/Operation Twist 2.

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lizzy36's picture

Boehner wants a smaller package. He will DM proposal to WH.

papaswamp's picture

LOL! made me whiskey.

Fazzie's picture

 "Bohener", "Weiner"  whats next, "Biggus Dickus"?

Problem Is's picture

Why not? Timmay is "Little Dickus Minor"...

jeff montanye's picture

seems several iterations/incarnations have drifted by here.

too bad bho never tried to employ the unemployed.  if you're going to be called a communist, you might as well be a mild reformist (save capitalism from its excesses and all).  obama ......

Fazzie's picture

 Its communism but without the state-asighned jobs because they shipped them off to the real Commies who are more capitalistic.

 Now they want to collect less tax from the dwindling supply of people who actually work for a living, while cutting spending by a whole 2 bil.

 This is the result of the US being so corrupt, the lobbyists actually help pen the laws.

 What the hell form of govt have we evolved to? A kind of uber corrupt quasi socialist/fascist/ abortion without even the good qualities of the suposed bad forms of govt.



docj's picture

Screw it - if they're going to print us into bankruptcy, I mean "prosperity", anyway then why continue taxation at any level at all? End the charade, already. Cut the payroll and income tax levels to zero for everyone and tell Benron to print-up 2-years worth of soon-to-be-worthless FRN's to cover Fed.Gov and junior partner (that would be state) operations - probably about $10-13T should do the trick.

Why not? Can't do any worse than this implosion by a thousand QE's we're living through now, right?

hack3434's picture

I mean "prosperity", anyway then why continue taxation at any level at all?


Because the ability of the Gov't to tax is the only thing that will give confidence to outside buyers. 

docj's picture

So? Benron buys it all. It's all going to be defaulted anyway - why keep-up the ludicrous appearances?

Either go full-Zimbabwe or don't play the print-to-win game at all.

Ricky Bobby's picture

I like that - I want a Tee Shirt

Go Full-Zimbabwe


LudwigVon's picture

Your right, now I want one as well.

docj's picture

Besides, they always have the ability to tax - nobody forces them to use it.

I know, forcing a government to actually use their taxing powers... pretty funny.

oldmanagain's picture

The polling is switching to blaming the Pubs for not wanting to help the country's citizens, preferring their wealthy friends.  

Getting exercised over 100 billion is a little lame.  The problem is how to retire 700 trillion derivatives.  Without gov't inteference?

SWRichmond's picture

The absolute funniest part of this whole thing is watching the pols scramble to try to manage the economy, which is, of course, impossible.  What is revealing about it is this: they still have their heads stuck firmly in the old paradigm, the one they grew up with, inculcated in them by Greenspan, that the Fed has always got their backs, that the system can go on forever based on lies and borrowed money, and that it is possible for a board of wise men (or a Congress) to manage an economy made up of 300 million souls.  It's fucking comedic tragedy at its best.  You can hear them screaming "Why isn't this working?!"

Observations like this reaffirm my conviction that we are going to collapse before anything will truly get any better.  The thing that must die is the notion of managed economies.  Until that dies, nothing improves.  Patience.

Get yourself a #10 can of popcorn from "Emergency Essentials" and enjoy the show.

jerry_theking_lawler's picture

i can't afford a 10# can of popcorn anymore thanks to benron....i can't even afford a 1# can off coffee.

Goldtoothchimp09's picture

the #1 thing this country should do is END the FED. paying compound interest to infinity to a private cabal of bankers is insane. Debt money is insane. The federal reserve system is INSANE!!

oldmanagain's picture

In its present condition it looks insane but the Fed did not create the shadow world of unlisted, undocumented derivatives to the umpteenth degree.  Now with a puny magic wand our heros, the FED, must go forth to save us and the banks.  Well, may be just the banks. Hoping that animal spirits will take care of the rest of us.  First,it looks like we have to be tied down.

Goldtoothchimp09's picture

The FED and the banks are one and the same - i would say, yes, they did create the derivatives.

If our country took back it's right to create it's own currency -- instead of paying trillions of dollars in compound interest to private bankers -- we could solve our financial problems.

For example, instead of stuffing the banks fully of newly printed currency (stealth tax on existing dollars) we could give a stimulus directly to households. 

Pull an obama (like he did to Chrysler's bondholders) and tell the bankers to get fucked !  End the FED and control our own currency again and shed trillions in compounded interest owed to banksters.

Ned Zeppelin's picture

But one of Obama's largest contributors was Goldman Sachs. Obama is a fully paid for mole for Wall Street.  Everything you hear about Wall Street reluctance to contribute to Obama is a conceit to deceive you.  

Goldtoothchimp09's picture

Watch the PBS documentary "The Warning" to understand the lengths Greenspan, Rubin, Summers went to keep the derivatives market unregulated and opaque.

The purpose of derivatives is to keep a massive, untenable amount of debt considered off-balance sheet, theoretically hedged - whatever, accounting gimics to keep massive debt hidden.  Because otherwise, it would -- you know -- CRASH THE WHOLE FUCKING SYSTEM!!!

Problem Is's picture

"Greenspan, Rubin, Summers..."

The batting order on Bastille Day:

  1. Alan "Crazy Chester" Greenspan (at 1:50)
  2. Robert "The Rube" Rubinite
  3. The "Brilliant Fat Larry" Summers
  4. ...
papaswamp's picture

The Fed is the banks.....Jamie Dimon Class A Board of Directors NY Federal Reserve. Term expires in Dec 2012.

Urban Redneck's picture


The Fed (and Congress) did create the shadow world of unlisted, undocumented derivatives to the umpteenth degree.

The Fed is the central organ of the world's largest keiretsu.  It differs from the Japanese model in that it is a keiretsu OF banks, built around a CENTRAL bank.  However, this makes sense, as the most significant thing the US actually exports any more is financial SERVICES.

The repeal of Glass-Stegall allowed the regulated/traditional BANKS and SHADOW/Investment banks to merge and join the keiretsu/club (The concurrent passage of the CFMA was also key into integrating the commodities market into the SHADOW/Investment banks).

January 3, 2001, the FED cut the FED funds rate from 6.5% to 6.0% to forestall a recession (housing and dot com bust related) by the end of year (after 9/11), FED funds was under 2% and the first ZIRP, was in full swing.  ZIRP creates two primary products 1) easy and increasing money and 2) a search for increased yield on all money (since no yield = loss of money in real terms).

The search for yield leads to increased leverage and "financial innovation" (e.g. CDS, ETFs, etc.) aka Credit Bubbles, which collapse in order of the weakness of borrowers (sub-prime retail first 2007, then prime retail/sub-prime commercial 2008-including commodities speculators, then prime commercial, finally sovereign).

So here we are, a dozen years later.  Most having learned nothing from the earlier iterations of the present cycle- such as the "relative" ZIRP of the mid-80's and consequent LBO boom and simultaneous portfolio insurance "innovation".  Rinse, repeat.



NorthenSoul's picture

Well Tyler,

Apart from telling us how you really feel about that, tell us what YOU would do to restart that economy.

Goldtoothchimp09's picture

how about my idea posted just above?

Sean7k's picture

Eliminate government and end legal tender laws. It is really that simple.

wisefool's picture

Not Tyler, but when us kids got grandma's "prized yarn" (read: tax code) so twisted it was not "fun"  any more, she would tell us that "I can't make mittens for you all now, but (with several quick snips of the sciscors) see what you can do with this." ( a collection of strings, some just as long as the were before, a couple of knots, and some little peices)

Fix the Tax code or end fractional reserve banking. Those are the only two choices. And the Debt ceiling will NOT be raised. It is the dead canary and we should stop digging the central planning hole for a while.

I_ate_the_crow's picture

Tyler(s) do their part. What do you want them to do, report on why we need to storm the castle, go do it, and then come back and blog about it so we can comment on it?

If you are reading this website, you know enough such that you are directly responsible for and tasked with the burden of making sacrifices in order to restore the rule of law to the United States of America. The Constitution provides us with the tools necessary to succeed. It's time to ask yourself what you believe. It's time to ask yourself what you are willing to sacrifice to the idea of what the Constitution stands for.

ArkansasAngie's picture

I'm there. Been there, bought the T-shirt. I'm ready.

They have devided the middle class from the poor with transfer payments. If the unemployed didn't have the transfer payments we'd have stopped this long ago.

No more wedgies. We know who the enemy is and it is Washington and Wall Street.

The only place for you and I to start is the grassroots level ... your friends, neighbors, family.

What we need is a law and order candidate tasked with cleaning up white collar crime in Washington and Wall Street.

Vote ... it is the preferred method of throwing the bums out.

max2205's picture

Funny to see where fight to safety will go. To T bonds which may not pay interest till Oct?

HungrySeagull's picture

Straight to Gold and Silver.

Goldtoothchimp09's picture

By ending the FED -- we could issue a new currency (greenbacks , new dollars - whatever)

Is it in a society's interest to have individuals with more than, say, $500 million?

With the new currency - you would have to declare all your assets.  The first $500,000 you get a straight conversion (old dollars to new, 1:1 ratio) -- 500,000 to $1,000,000 the ratio declines -- max $500 million (or other number)



snowball777's picture

So you'd replace a fiat currency controlled by the Fed...with...another fiat currency?

Goldtoothchimp09's picture

let's go with a silver standard.  Gold is too rare and thus, easily manipulated.

Like the Wizard of Oz advocates for:!

you know that's why the movie was about right?!

"The Wonderful Wizard of Oz by L. Frank Baum (Chicago, 1900) is a parable about Money Reform and the 1890s Midwestern political movement led by William Jennings Bryan (1860-1925); three times candidate for President of the United States (see his poster at bottom of this page). From 1891-1895 Bryan served in the House of Representatives, where he advocated the coinage of silver at a fixed ratio with gold, in order to break the bankers’ monopoly and manipulation of the gold-backed currency."

snowball777's picture

- Bryant was arguing for bi-metallism, not a silver standard.

- Silver is actually consumed by industry and, if you've been reading here, you'd know it's as manipulated as Pam Anderson's tits too.

- Do you like bank runs?


Goldtoothchimp09's picture

alright - I'll one up Bryant -- Quad-metalism it is!  Silver, gold, copper and brass balls!

First we've got to exterminate the FED!!!!

LudwigVon's picture

Nope. Ron Paul woul say that you just need to remove legal tender laws. People need to begin to exchange dollars for assets in other denomination. Natural market forces will remove the Fed.

hedgeless_horseman's picture

The sticky wicket is the petrol dollar backed by the US military. Good luck re-arranging all of those relationships without a world war. 

Keep on rockin' in the "free" world.

snowball777's picture

Yes, I'm sure that flea-market will dominate global finance. LOL.

RobotTrader's picture

As I predicted, a "Shock and Awe" stimlulus or tax cut plan will be unleashed by the O Team sooner or later.

It will be known as the "Immediate Jolt Jobs Program" or something like that.

Its pretty much common sense.  O'Bummer has no choice but to do something drastic to save his own hide in 2012.

This explains the market's resilience lately, Big Money has already been tipped off and that is why they have been buying stocks on all dips.

Goldtoothchimp09's picture

then why has bigger money been going into bonds?

RobotTrader's picture

Oh, by the way, we might as well give up on:

- End the Fed

- Audit Ft. Knox

- Reduce the Deficit

- Cap the Debt Ceiling

It's not going to happen in our lifetimes.

Fiat Ponzi Finance, Fractional Reserve Lending, and "Wash/Rinse/Repeat" cycles are here to stay.  The Thugs in Washington will maintain 100% complete control over our monetary  system and will eventually take over more sections of the financial markets.

lizzy36's picture

The can't keep a reversion to the mean or equilibrium from occurring indefinitely.

The can only put off a day of reckoning.

One day in the next 10 years, we will look back at 2008 as the largest wasted opportunity of our lifetimes. And i am not referring to the stock market rally.

Rinse/lather/repeat...will continue to squeeze the bottom 80% and then the bottom 90% and then the bottom 95% and then............

With each cycle the ponzi becomes more difficult to sustain.

In the mean time i am on board with trading the market we have. But make no mistake about it, they do not have 100% control, they merely have the illusion of control. Which is infinitely more dangerous.

Ned Zeppelin's picture

RT is correct, but Liz is too.  Count on it. 

Problem Is's picture

"The can't keep a reversion to the mean or equilibrium from occurring indefinitely."

Yes they can... just lie like a Weiner bitch...

sellstop's picture

If we are going to devalue the USD, at least we could place those dollars in the hands of the lower and middle classes through make work projects.

Let's try trickle up for awhile. Maybe that will work better than this other thing we have been trying for 30 years.


snowball777's picture

Actual Keynesian stimulus? In a recession? Crazy talk.

You're right....let's just give it all to Wall St again and see if we get a different result this time.

zorba THE GREEK's picture

 Obama will shower fiat (IOU) money on everyone for now, but as election nears he will

 shower massive money on swing states to win re-election. Roosevelt did same thing and

 was re-elected 3 times.

snowball777's picture

Have you seen the contenders? He probably won't have to.

sabra1's picture

keep your eyes on Perry. he met with the globalists in Switzerland last month. they choose who will become president after oBLAHmas one term. Perry will come in as the savior, but alas, it is just an illusion, for in Perry's right pocket, rests the last coffin nail.