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Senate Nears Debt Ceiling Consensus Which Demands Change In CPI Definition

Tyler Durden's picture


Politico reports that the latest development in the constantly changing and oh so theatric "struggle" to find a compromise on how to raise the debt ceiling by $2.5 trillion, is one which will not only not do anything to fix the deficit situation but will in fact set America back, as a key part of the "savings" will come precisely from the same change in the definition of inflation courtesy of the Chained CPI introduction, which the democrats previously blasted, and for good reason: because it will be an implicit theft from Social Security. Recall that the last time this was proposed the AARP started foaming in the mouth within minutes. The broad strokes of the plan are as follows: "The once moribund Senate “Gang of Six” regained new life Tuesday after Oklahoma Sen. Tom Coburn unexpectedly rejoined the group — and more senators are now coalescing around a new proposal that would cut the debt by as much as $3.7 trillion over the next decade.  According to a copy of the plan, obtained by POLITICO, the group would impose a two-step legislative process that would make $500 billion worth of cuts immediately followed by a second bill to create a “fast-track process” that would propose a comprehensive bill aimed at dramatically restructuring tax and spending programs. The plan calls for changes to Social Security to move on a separate track, and establishes an elaborate procedure for considering the measures on the floor." And here is the kicker: "The $500 billion in cuts would come from a range of sources, including shifting to a new consumer price index to make cost-of-living adjustments to Social Security." Care to wager what the bulk of this $500 billion will come from: that's right - social security, whose deliverable obligations will plunge as suddenly the inflation variable in the actuarial calculation will very mysteriously be cut courtesy of Senate-endorsed theft.

More from Politico:

To enact a comprehensive deficit plan, the group calls for congressional committees to report legislation within six months that would “deliver real deficit savings in entitlement programs over 10 years,” the plan says.

It calls on the Finance Committee to permanently reform or replace Medicare’s Sustainable Growth Rate - an outdated formula aimed at determining the amount to reimburse doctors for treating Medicare patients - by $298 billion.

The Finance Committee would be instructed to deliver “real deficit savings” through simplifying the tax code and raise as much as $1 trillion. It would do this by establishing three tax brackets with rates of 8-12 percent, 14-22 percent and 23-29 percent. It would permanently repeal the $1.7 trillion Alternative Minimum Tax. And it calls for establishing a single corporate tax rate, between 23 percent and 29 percent, and to move to a competitive territorial tax system.

Overall, the group claims it would result in a $1.5 trillion net tax decrease.

The group punts many of the specifics to other committees, which would be asked to find savings in discretionary and mandatory spending. This includes: $80 billion out of Armed Services; $70 billion out of Health, Education, Labor and Pensions; $65 billion out of Homeland Security and Government Affairs; $11 billion out of Agriculture; $11 billion out of Commerce; $6 billion out of Energy and Natural Resources. The Judiciary Committee would be asked to find savings through medical malpractice reform.

Who is pushing the Chained CPI bill?

Senators in the Gang of Six - Kent Conrad (D-N.D.), Dick Durbin (D-Ill.), Mark Warner (D-Va.), Mike Crapo (R-Idaho) and Coburn - discussed the proposal with 43 senators Tuesday morning on the first floor of the Senate, after more than six months of struggling to broker a deal.

And here are the next steps in the theater:

If any committee cannot propose cuts, it would would impose “across-the-board” cuts to programs under the panel’s jurisdiction. It would exempt programs aimed at low-income communities.

To avoid gridlock, floor amendments that upset the deficit-reduction goals would be ruled out of order. Any bill that could receive 60 votes would be held at the desk until the Senate considers the separate Social Security bill.

Once a comprehensive deficit plan has the votes, a measure aimed at ensuring 75-years of solvency of Social Security would head to the floor. The Finance Committee would be required to recommend the Social Security changes.

Bottom line: our initial prediction that absolutely nothing will change now appears been optimistic, as the net result will be a far worse outcome, one which effectively changes the rules vis-a-vis inflation tracking, making stealth devaluation a core premise of this and any other future "deficit reductions."

Once again, middle-class America is about to be raped by its own "representatives" while the banking oligarchy flourishes.



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Tue, 07/19/2011 - 12:41 | 1470673 Nolsgrad
Nolsgrad's picture


Tue, 07/19/2011 - 12:48 | 1470713 Bill the Cat
Bill the Cat's picture


Tue, 07/19/2011 - 13:19 | 1470852 max2205
max2205's picture

I gues I have to ask why we don't just freeze cost increases to Dr's and Insurance Co's for medical costs....oh forgot that they are helping to write this bill....duhoooo

Tue, 07/19/2011 - 14:30 | 1471224 Inibo E. Exibo
Inibo E. Exibo's picture

That and price controls are a guaranteed to create a shortage of services.

Wed, 07/20/2011 - 07:53 | 1473189 XPolemic
XPolemic's picture

Orly? So in the countries where they have socialised medicine, (UK, France, Australia,Canada,etc) there are no doctors right?

Strange .... I haven't noticed a doctor shortage ... but I guess all those US doctors wouldjust just throw away their education, residency, practice and go become wall street bankers if the government ever interfered with their god given human right to charge whatever they wanted.

I guess thats why Americans who live in the North East never cross the border to Canada for medical services, because of Canada's horrendous doctor shortage. Someone better tell Canada about how they could get some more doctors by implementing the US model.



Tue, 07/19/2011 - 13:20 | 1470854 max2205
max2205's picture


Tue, 07/19/2011 - 12:49 | 1470720 TheGameIsRigged
TheGameIsRigged's picture

This is REALLY getting ridiculous.  The Senate is so old and behind the curve of technology that they think they can make these changes (the same types of "changes" they have been making for decades) - except now technology can follow their every move - and can tell America in REAL TIME how they are being screwed....Americans NEED NEED NEED to wake up and start lambasting their congress-idiots.  I truly hope for congresspeople to experience the pain that normal Americans are feeling.


Rage against the Machine, people.

Tue, 07/19/2011 - 13:05 | 1470794 eureka
eureka's picture

Rage is Un-american activity. Rather, tell the old people they should sacrifice themselves for the Federation, since they're gonna die soon anyway, they get to be soldiers - for free and die for the fatherly HomeLand - in Iran, or where ever!

Ask not what the HomeLand can do for you, but what you can do for it.

That's the American spirit. One collectivist tribe uber alles.

Tue, 07/19/2011 - 13:21 | 1470858 Uncle Remus
Uncle Remus's picture

If it is coupled with a take-a-bankster-or-two-with-you-when-you-go program, I think you might have a Wynner.

Tue, 07/19/2011 - 13:24 | 1470868 Gene Parmesan
Gene Parmesan's picture

"Your city thanks you; your country thanks you; your planet thanks you. But the deepest thanks of all is from future generations."

Tue, 07/19/2011 - 13:05 | 1470797 Oh regional Indian
Oh regional Indian's picture

I think the machines won the last round and are still fresh as daisies.


Tue, 07/19/2011 - 13:53 | 1471041 francis_sawyer
francis_sawyer's picture

"and are still fresh as daisies..."

OTOH... In the end... some 'daisies' prove to be just a little too high strung...

Tue, 07/19/2011 - 13:18 | 1470845 SheepDog-One
SheepDog-One's picture

The old coots think they can enter a Model T and win the Indy 500!

Tue, 07/19/2011 - 14:24 | 1471188 I did it by Occident
I did it by Occident's picture

Yes, do to them what they have been doing to the country for years. 

repeat after me "disdain, disrespect, discredit, disrepute..."

Not that they need any help.  the congress is cerainly doing a bang up job all on their own. 


Tue, 07/19/2011 - 12:55 | 1470749 camaro68ss
camaro68ss's picture

grandma should have saved her own money instead of blowing it on woodstock and Cocaine and expecting the goverment to take care of her

Tue, 07/19/2011 - 13:08 | 1470803 DosZap
DosZap's picture


IF Grandma worked, SHE did save(forced SSI/FICA)............the Government spent Granny's money, and now they are going to bend her over yet again.

Got Vasoline?.


Tue, 07/19/2011 - 13:15 | 1470825 TruthInSunshine
TruthInSunshine's picture


This is not in jest: Real study by BLS:

U.S. Bureau of Labor Statistics

First Quarter 2011

  • Consumer Expenditure Survey: Do two live as cheaply as one? Evidence from the Consumer Expenditure Survey (HTML) (PDF)
O RLY? Part II:
Tue, 07/19/2011 - 13:28 | 1470894 Gene Parmesan
Gene Parmesan's picture

If Grandma thought SSI/FICA were the savings she would live off of through retirement then she isn't very bright to begin with.

Tue, 07/19/2011 - 13:34 | 1470928 camaro68ss
camaro68ss's picture

if grandma wasent dumb and trust her goverment then we would have no problems

Under the Supreme Court Case Helvering v. Davis case. On November 12, 1936, "(Social Security payments) are not earmarked for any special purpose." They are (Social Security payments) "true taxes, their purpose being simply to raise revenue . . . available for the general support of Government." This was a Supreme Court decision questioning the constituionality of Social Security

you been lied to bitchez!

Tue, 07/19/2011 - 13:42 | 1470990 Gene Parmesan
Gene Parmesan's picture

SS = separate taxation and welfare programs

Unfortunately few understand this.

Tue, 07/19/2011 - 14:36 | 1471264 I did it by Occident
I did it by Occident's picture

I always thought it funny that it has the same initials as Schutzstaffel (i.e. of 1939-1945 fame). 

Anyways, I believe the Supreme Court "had to" say that it is a tax which the govt is authorized to levy.  Otherwise, it amounts to taking of property without due process, a violation of the 5th amendment.

Tue, 07/19/2011 - 13:41 | 1470978 Thisson
Thisson's picture

@Doszap: Bullshit.  Grandma has gotten way more out of the system than she has contributed.  Moreover, we abandonned gold as our money on her watch.

Tue, 07/19/2011 - 14:50 | 1471344 DosZap
DosZap's picture


I have put a couple of hundred K into that system.BY FORCE,no choice,it's mine,it was a contract,has been since inception.

My beef is not that it's not that it take it's share,but to hit the least able in our culture to absorb it, is insanity.

The argument of recieving more back than put in applied to MY parents generation,and their parents.Not boomers born after WWII.

You get back a % of whatever you put in.....................I / we did not have a say in those rules either, did we?.

I do not expect younger people to get our mores, and value systems are far apart.

 Besides, any way THEY or YOU want to see it,it's MY money, my earnings, by my sweat of the brow,and I fully intend  to get it one way or the other.

I have yet to recieve one dime back,newsflash to all politicians,get ready for a lubeless f75698ng in 2012.

Wait till the older voters hit the booths.

Tue, 07/19/2011 - 17:41 | 1472033 malek
malek's picture

Give up the belief you paid into an intricate system which somehow guarantees you a return.

You paid the money to the then-retired, and you got a Social Security Trust shoebox full of worthless promises that enough money can/will be extracted from future generations to pay your pension when you are retired. If this won't be possible... politicians will come up with some nice excuses. We're now in the opening ceremony for that game.

Tue, 07/19/2011 - 18:21 | 1472133 JR
JR's picture

Your argument for financial justice, DosZap, is the one that will echo from the Atlantic to the Pacific if this Social Security revision nonsense gets anywhere near passage. If anyone thinks the political backlash from Murdochgate is big, wait till this one whips through Congress.

Former House Speaker Tip O’Neill didn’t call Social Security the third rail of American politics for nothing; he knew more than anyone that Social Security is murderous to touch.

This banker-run government is going through a process of unwinding Western civilization—the people are fighting the same exploiters—the banker-corporate connection. If the fight now begins in earnest, my bet is on the American People.

As for the U.S. Senate targeting the elderly, the historian Albert Toynbee concluded from his study of the world’s great civilizations that a society's quality and durability can best be measured “by the respect and care given its elderly citizens.”

The bankers have almost exclusive say about how America’s government is run, operating as private investment houses while bestowing upon themselves gifts from the U.S. Treasury with no-risk, too-big-to-fail privileges, pumping high-risk investments into no-risk largess backed by the full faith and credit of the U.S. taxpayer.

And if they now have to loot the taxpayers and the old folks and later-to-be-old folks to do it by cannibalizing and bastardizing Americans' paid-up Social Security Trust Fund, so be it say the supporters of Chained-CPI fraud. The Obama-Goldman Sachs-Robert Rubin road map for social security “reform” has long been to increase the retirement age while cutting benefits. We'll see if Congress has the fortitude to just say the bankers. 

Well said, DosZap. 

Tue, 07/19/2011 - 13:09 | 1470807 nah
nah's picture

gramps done had 65 years to figure out how to protect himself... if he doesnt like the system he should call his people


ask me its better than mandatory health insurance at penalty of law for 18yr olds that cant buy beer legally


old folks are better suited to withstand actuarial oppresion.... kids just want to set shit on fire and chase girls when they revolt

Tue, 07/19/2011 - 13:28 | 1470899 caconhma
caconhma's picture

Please somebody explain to me why are Republicans are so eager to help Obama be reelected? Any idea?

Tue, 07/19/2011 - 13:53 | 1471037 Larry Darrell
Larry Darrell's picture

For the millionth, billionth, trillionth, quadrillionth, etc fucking time..........




Even with the re-election of that stupid fuck, the people who are sponging off the system to everyone else's detriment will continue to enjoy said lifestyle.


And one more time for the slow learners.......


D-E-M-O-C-R-A-T = R-E-P-U-B-L-I-C-A-N = F-U-C-K - T-H-E - C-I-T-I-Z-E-N-S


JFC I get tired of repeating myself

Tue, 07/19/2011 - 14:30 | 1471222 CptAwesome
CptAwesome's picture

I hear ya loud and clear, problem is I think I may be the only one listening!

Tue, 07/19/2011 - 16:02 | 1471619 Mr Kurtz
Mr Kurtz's picture

Spot on! At the end of the day both repukenicans and democraps have drinks at the same country club congratulating one another on another hard days work shoving it up the ass of the plebians.

Tue, 07/19/2011 - 17:19 | 1471944 Escapeclaws
Escapeclaws's picture

True enough. Democrats have become Republicans. However, Republicans have not become Democrats. That's why they're the same.

Tue, 07/19/2011 - 15:04 | 1471317 depression
depression's picture

Inflation what Inflation ?

What we got here is a  fangled deflation index

The real plan is clarifying: put the doc's and hospitals on a nice steady cost deflation glidepath, and guess what, all of a sudden it sucks being a doctor. head to the back of the line grannie, now shaddup and eat yer strained peeze.

Tue, 07/19/2011 - 16:36 | 1471744 Tuffmug
Tuffmug's picture

Grandma will be fine. CPI change will reflect the fact Government will slap price controls on the cost of the large cardboard boxes she and you will be living in under the overpass. Inflation in cost of "housing" will be zero.

Tue, 07/19/2011 - 12:45 | 1470676 idea_hamster
idea_hamster's picture

Also, I suspect TIPS investors will get the hose if this new CPI is approved -- look for good old "inflation" to FukushiMorph into "explosive decompression" when those principle hikes don't get paid.

Tue, 07/19/2011 - 13:12 | 1470820 NotApplicable
NotApplicable's picture

Anybody stupid enough to buy gov debt tied to a gov generated inflation index... well that's stupid squared.

Tue, 07/19/2011 - 13:42 | 1470981 scatterbrains
scatterbrains's picture

This should also free up XOM and the like to ramp gasoline prices higher for sale to overseas market without impacting cpi.. folks will switch from cars to bicycles to get around.. see inflation is chained down nicely. I'm looking foward to /XRB skying on this news.

Tue, 07/19/2011 - 17:22 | 1471954 Escapeclaws
Escapeclaws's picture

Quick, somebody show that the new inflation index is based on faulty methodology!

Tue, 07/19/2011 - 12:44 | 1470682 emsolý
emsolý's picture

And we welcome the United States to the ranks of an official banana republic.

Tue, 07/19/2011 - 12:46 | 1470697 SheepDog-One
SheepDog-One's picture

Big yellow banana on a chartreuse background may as well be USA's new flag.

Tue, 07/19/2011 - 12:50 | 1470728 Long-John-Silver
Long-John-Silver's picture

Just replace the 50 stars with one big banana.

Tue, 07/19/2011 - 13:03 | 1470782 Top_Kill
Top_Kill's picture

+ 50 (Bananas of course!)

Tue, 07/19/2011 - 13:09 | 1470808 DosZap
DosZap's picture

Top Kill,

NO 57 Bananas...........our POTUS thinks he's the ruler of the Arab states.

Tue, 07/19/2011 - 13:42 | 1470988 Sudden Debt
Sudden Debt's picture

Those banana's will look jummy with a red background, yellow half moon and a golden sickle.

It will look so great!


Tue, 07/19/2011 - 14:49 | 1471339 I did it by Occident
I did it by Occident's picture

That'd be an awesome T-shirt!  When/where will you be selling said awesome T-shirts?   


Tue, 07/19/2011 - 12:44 | 1470685 redpill
redpill's picture

What a bunch of assholes. Any time you hear any of them say "over 10 years" you know they are fucking liars because it's utterly meaningless.

Tue, 07/19/2011 - 12:51 | 1470735 Confused
Confused's picture

It is laughable isn't it? If this were to really create a public uproar, I would imagine either party would try and rally support by rolling the offending parts back.

Tue, 07/19/2011 - 13:20 | 1470853 Bay of Pigs
Bay of Pigs's picture

Saying they're cutting 3.7T is equally absurd.

Wed, 07/20/2011 - 08:06 | 1473212 XPolemic
XPolemic's picture

Even if it were true, 3.7T over ten years is 370B a year, and the USG is 14.3T in the hole.

lol, wtf?

I would love to call the Credit Card company and say "Yeh, sure I owe you 100 grand, but I am planning to pay back 25 grand of that over the next ten years ... while I still use my Credit Card."

Who are the USG's creditors?


Tue, 07/19/2011 - 12:44 | 1470686 fiftybagger
fiftybagger's picture


Bureau of Lying Statisticians


Tue, 07/19/2011 - 12:47 | 1470698 redpill
redpill's picture

Bad for America, good for John Williams' business.

Tue, 07/19/2011 - 12:51 | 1470731 EscapeKey
EscapeKey's picture


Tue, 07/19/2011 - 12:44 | 1470687 Cognitive Dissonance
Cognitive Dissonance's picture

When you don't like the rules or they are in the way of kicking the can some more, change them.

This is hopium and change you can believe in.

Tue, 07/19/2011 - 13:03 | 1470786 francis_sawyer
francis_sawyer's picture

gr(ANNIE) get your gun!

...on with the show!




Tue, 07/19/2011 - 15:07 | 1471408 depression
depression's picture

CD is right, this is real change I can believe in.

Grannie please step to the back of the waiting line.

Tue, 07/19/2011 - 15:21 | 1471461 takinthehighway
takinthehighway's picture

"Ooooooh, have another hit...of "YES WE CAN"nabis..."

Tue, 07/19/2011 - 12:45 | 1470691 Mercury
Mercury's picture

$100 says public sector COLAs will not be tied to the neo-CPI.

Tue, 07/19/2011 - 12:47 | 1470701 HungrySeagull
HungrySeagull's picture

No one has the money to take the bet, especially the Seniors who know wont know what they will be getting, if anything.

Tue, 07/19/2011 - 13:24 | 1470869 Uncle Remus
Uncle Remus's picture

Then it is moot.

Tue, 07/19/2011 - 12:45 | 1470692 SheepDog-One
SheepDog-One's picture

Move the goal posts yet again....VOILA problem SOLVED! We win!!

Tue, 07/19/2011 - 12:45 | 1470693 youngman
youngman's picture

10 years = never happens

Tue, 07/19/2011 - 13:11 | 1470818 carbonmutant
carbonmutant's picture

Means it's somebody else's problem...

Tue, 07/19/2011 - 12:47 | 1470694 Hacksaw
Hacksaw's picture

Who needs a COL raise, them old farts don't need no stinking raise.

Tue, 07/19/2011 - 17:07 | 1471879 RockyRacoon
RockyRacoon's picture

I could agree if the prices of granola and bananas would stay the same -- but they ain't.

Tue, 07/19/2011 - 12:46 | 1470695 baby_BLYTHE
baby_BLYTHE's picture

They are going to really massage that CPI with the upcoming mega inflation.

Ben should man up and be speaking out against it since he is the one intentionally stoking the inflation.

Tue, 07/19/2011 - 12:47 | 1470707 SheepDog-One
SheepDog-One's picture

As long as the media can show the numbers are OK, it doesnt matter if it costs $50 for 3 bananas.

Tue, 07/19/2011 - 13:10 | 1470814 francis_sawyer
francis_sawyer's picture

YES... We have no bananas...

Tue, 07/19/2011 - 15:30 | 1471505 TheFourthStooge-ing
TheFourthStooge-ing's picture

As long as the media can show the numbers are OK, it doesnt matter if it costs $50 for 3 bananas.

Which are you going to believe, the facts, or your lying eyes?


Tue, 07/19/2011 - 12:49 | 1470723 EscapeKey
EscapeKey's picture

They need to roll this out before QE3. Not even the current fraudulent CPI calculations can possibly cover up the inflation QE3 will create.

Monthly substitutions will be required, as grandma will go from eating steak, to chicken, to ramen noodles, to rats caught in traps within the year.

Tue, 07/19/2011 - 12:54 | 1470746 pods
pods's picture

I hope it all collapses before we reach ration cards for Long Pig.


Tue, 07/19/2011 - 13:24 | 1470871 Shameful
Shameful's picture

Never fear, plenty of long pig.  And the oligarchy often speaks of population reduction, win-win!  Good news, meat's back on the menu boys!  Just keep your knives sharp, and the grill ready.

Tue, 07/19/2011 - 13:27 | 1470884 101 years and c...
101 years and counting's picture

well, maybe grandma needs to get with the fucking program and start eating the deflationary iPads.


Tue, 07/19/2011 - 13:27 | 1470885 Shameful
Shameful's picture

Will be a laugh riot.  I'm waiting for the basket to be comprised of toxic waste, dirt, and industrial waste.  Price to buy those goods aught to be pretty static after all.  Now just need to find a way to classify them as foodstuffs and bam no inflation.

Tue, 07/19/2011 - 12:47 | 1470699 Fukushima Sam
Fukushima Sam's picture

What a fucking joke.

Tue, 07/19/2011 - 12:51 | 1470702 EscapeKey
EscapeKey's picture

I think they should roll out the C-CPI in stages. First up - salary revisions of Washington politicians.

Tue, 07/19/2011 - 12:47 | 1470704 takeaction
Tue, 07/19/2011 - 16:08 | 1471641 Mr Kurtz
Mr Kurtz's picture

Oh Jesus, that was painful.

Tue, 07/19/2011 - 12:47 | 1470705 silvertrain
silvertrain's picture

still wont stop a downgrade..

Tue, 07/19/2011 - 12:49 | 1470716 SheepDog-One
SheepDog-One's picture

Right, downgrades and rate hikes are still coming....that rug theyre sweeping everything under now looks like a postage stamp on an elephants back.

Tue, 07/19/2011 - 13:23 | 1470864 Bay of Pigs
Bay of Pigs's picture


How long before the Bernank tells eveyone that gold's rise is "transitory" just like inflation?


Tue, 07/19/2011 - 12:47 | 1470708 CompassionateFascist
CompassionateFascist's picture

Long since the case. And none of this byzantine political-financial mumbo-jumbo means a thing. Only hard fact is: UP goes the debt limit. All else will be quickly forgotten. Crooks on the Left, bandits on the Right.

Tue, 07/19/2011 - 12:48 | 1470711 papaswamp
papaswamp's picture

Can't change the numbers...change the definitions....Classic!

Tue, 07/19/2011 - 12:48 | 1470712 Hondo
Hondo's picture

Same old political BS.  They really are making "cuts" they trying to cut the growth rate....a scam which doesn't solve a damn thing.  We are getting closer and closer to having the people take back that building from the squatters.

Tue, 07/19/2011 - 12:49 | 1470715 Long-John-Silver
Long-John-Silver's picture

AARP was found this morning under a bus. For some strange reason the only part of it that survived was the discarded walker left on the sidewalk.

Tue, 07/19/2011 - 12:49 | 1470719 HungrySeagull
HungrySeagull's picture

I think they should CPI the Congress Senate pages out first followed by the staff then the rest.

Military's new budget problem:

"Sir! We have no fuel!"

General: " I know, we used up all our CPI on fuel this month "

"Sir! Call the Senate!"

Tue, 07/19/2011 - 12:49 | 1470724 Overpowered By Funk
Overpowered By Funk's picture

Change CPI = Transitory. See how simple?

Tue, 07/19/2011 - 12:53 | 1470740 InconvenientCou...
InconvenientCounterParty's picture

I'd say statistics are transitory but "transitory" implies intersection with the real axis.

Tue, 07/19/2011 - 12:50 | 1470729 Robslob
Robslob's picture

"far worse outcome, one which effectively changes the rules vis-a-vis inflation tracking, making stealth devaluation a core premise of this and any other future "deficit reductions.""

So with inflation being lowered via the old "mark to market" trick this will certainly allow for Ben Bernank to print away as inflation will be non-existent?


Tue, 07/19/2011 - 12:51 | 1470730 InconvenientCou...
InconvenientCounterParty's picture

ARRP should hedge with physical gold if they don't like the statistics from the ministry of truth. There's gold... and then there's "not exactly".

somebody with balls should start a bullion bank.

Tue, 07/19/2011 - 12:51 | 1470732 centerline
centerline's picture

I wish I could say that I am surprised.  But, I am not.  The end game is raiding SS, pensions, 401ks, etc.  SS is just an easy target via CPI manipulation.

Tue, 07/19/2011 - 12:56 | 1470757 Long-John-Silver
Long-John-Silver's picture

They came after the G-fund and Thrift Saving accounts first. 401(k) and IRA accounts should be next in line for theft. Theft of Social Security at this time is really dumb. This group of idiots are truly idiots.

Tue, 07/19/2011 - 13:01 | 1470774 centerline
centerline's picture

Oops.  I forgot to mention what came first.  You are right.  Thanks for pointing it out.  It will be a systematic looting of piggybanks for sure.  The real tragedy is that all that wealth is already toast.  People just don't know it yet because it the system is functioning at lower levels.

Tue, 07/19/2011 - 13:24 | 1470870 Zing
Zing's picture

Of course, just look at the SS "Trust Fund" for the template of things to come.

Tue, 07/19/2011 - 13:18 | 1470837 DosZap
DosZap's picture


Out of ALL the cuts they could make, this was the most ignorant on their part.

WAIT until the 2012 Elections(if we have any).

If there's ONE block that votes, and consistently, it's seniors.

Going to be a of of assholes out of jobs.

Any country that does not care for their elders, is truly a country no more.

Especially since those elders were forced to pay into a guaranteed system.



Tue, 07/19/2011 - 12:52 | 1470737 pods
pods's picture

Really am actually getting tired of all of this.  I hope they dont work too hard on any plan that lasts longer than a couple of years.  

Like planting an oak tree in the yard of your foreclosed house.  

If any proposal takes more than say 20 pages to 'splain, they are merely trying to bullshit us.  I for one am really getting tired of all this pretend la la stuff.  Maybe it is because I already play make believe with transformers and unicorns with my kids and really dont like to do that with adults.  Certainly not the whores running our banana(less) republic.


Tue, 07/19/2011 - 12:56 | 1470754 centerline
centerline's picture

They are up against finite mathematics though.  Choosing to kick the can is still a choice - and that will become more and more painfully clear soon.  The sovereign crisis is being flipped quickly into a full blown political crisis.  That is where it starts to give the public a rash.

Tue, 07/19/2011 - 12:58 | 1470741 TruthInSunshine
TruthInSunshine's picture

How can you have[afford] any pudding if you don't[can't] eat[afford] yer meat?

Tue, 07/19/2011 - 12:53 | 1470743 Superslam
Superslam's picture

We can start reducing deficits by telling the Fed to take a 100% haircut on treasuries. That's instant savings of about $2 trillion.

Tue, 07/19/2011 - 13:01 | 1470773 sbenard
sbenard's picture

YES! And if we add China, UK, and Japan, the would just about cut the debt in half! That's where we're headed anyway, so let's just get there faster! Good idea!

Tue, 07/19/2011 - 13:03 | 1470781 DB Cooper
DB Cooper's picture


Tue, 07/19/2011 - 12:54 | 1470744 ml8ml8
ml8ml8's picture

"The plan calls for changes to Social Security to move on a separate track, and establishes an elaborate procedure for considering the measures on the floor."

Any "elaborate procedure" is almost certainly designed to give certain Congressmen/women a near veto right, meaning Social Security cuts are as good as off the table.

Tue, 07/19/2011 - 13:39 | 1470965 Dr. Richard Head
Dr. Richard Head's picture

Off the table? Surely you jest. When was the last COLA for SS? That is a SS cut. This new rule of changing the CPI ruler is yet another. Pay attention here, son!

Tue, 07/19/2011 - 12:54 | 1470745 buzzsaw99
buzzsaw99's picture

So how much is the senate cutting their own pay and bennies?

Tue, 07/19/2011 - 13:02 | 1470780 Version 7
Version 7's picture

You are supposed to be telling them soon.

Tue, 07/19/2011 - 12:56 | 1470750 Dreadker
Dreadker's picture

Ah another fine example of providing growth and prosperity - i'm off to buy me some more ipads, aapl stocks and another mcmansion or three...


The CPI is dead...  Long live the CPI!

Tue, 07/19/2011 - 12:56 | 1470753 oldmanagain
oldmanagain's picture

Not surprised at Conrad, but Durbin?

Tue, 07/19/2011 - 12:56 | 1470758 Bob
Bob's picture

Thank God they're so forward looking as to ensure the viability of SS for 75 years . . . with all that "uncertainty" taken care of, taxes can now be cut to get money into the hands of "job creators." 

I'm hoping to see a new AARP partnership with the NRA . . . senior discounts, gun clubs and so on. 

Tue, 07/19/2011 - 12:57 | 1470759 Raymond Reason
Raymond Reason's picture

"...they stabbed it with their steely knives, but they just can't kill the beast." 

Tue, 07/19/2011 - 12:58 | 1470764 Dreadker
Dreadker's picture

"Last thing I remember... I was running for the door... "

Tue, 07/19/2011 - 13:00 | 1470768 TruthInSunshine
TruthInSunshine's picture

Crack that whip
Give the past the slip
Step on a crack
Break your Momma's back

When a problem comes along
You must whip it
Before the cream sits out too long
You must whip it
When something's goin' wrong
You must whip it

Tue, 07/19/2011 - 13:29 | 1470905 francis_sawyer
francis_sawyer's picture

First 3-d live broadcast... ever... Ahead of their time...


Tue, 07/19/2011 - 13:38 | 1470955 francis_sawyer
francis_sawyer's picture


& all time classic (original)

...a victim of collision

on the open sea

nobody ever said... life was free...

so SINK, SWIM... Go down with the ship... Use your freedom of choice...



Tue, 07/19/2011 - 12:58 | 1470761 sbenard
sbenard's picture

Good grief! A Reichstag moment looks more palatable with each passing day!

Tue, 07/19/2011 - 13:00 | 1470766 espirit
espirit's picture

Can't keep robbing the federal employee's pension fund, now can we?

Rob from those that can't fight back.  This is so sick it's not even funny.

Disabled American Veterans receive their disability checks from Social Security.  Sending the wrong message, imo.

Tue, 07/19/2011 - 13:02 | 1470775 Dreadker
Dreadker's picture

You're insinuating that they care about veterans... My father in law was gassed by Saddam in the first gulf/oil war... He can barely pay his mortgage WITH a full time job as well... I just wish us youngsters could opt out of social security... shouldn't be an issue now its safe for 75 years ;-)

Tue, 07/19/2011 - 13:02 | 1470776 EscapeKey
EscapeKey's picture

The way to fix that is to attach some chest-beating name to the bill.

Vote for the Preserve America Act, or you're clearly an anti-patriotic, who wants to torch the nation. What's inside hardly matters, with a name such as this.

Tue, 07/19/2011 - 13:16 | 1470832 Oh regional Indian
Oh regional Indian's picture

Good point Escape.
Bernays and Tavistock Institute come to mind.
These guys really use names and symbols to great effect.

It might even be Save the Homeland Bonds (or will that be Bunds!!!0 soon.
oh and no more frilly teddies. Need them for the war effort a-coming!

Tue, 07/19/2011 - 13:02 | 1470778 Bull v. Bear
Bull v. Bear's picture

Steak & wine to expensive, subtitute chicken & beer, that now too expensive, substitute dog food & water, still too expensive, well then your F'ed...

Tue, 07/19/2011 - 13:22 | 1470863 francis_sawyer
francis_sawyer's picture it turns out... "dog food" must ACTUALLY conform to fda standards of "fit for human consumption"... IT'S TRUE...

"For dinner u ate it it...

There is none left... It was salty, with butter... & it was def...

you proceeded to eat it, cause u was in da mood...

but homes u did not read it was a can of dog food"


Tue, 07/19/2011 - 13:02 | 1470779 Piranhanoia
Piranhanoia's picture

Politico, Washington Times, WSJ.  We aren't going to find reporting or truth unless it can be refined from ore.

Tue, 07/19/2011 - 13:05 | 1470796 Dreadker
Dreadker's picture

I'm going long on Unobtanium mines ;-)

Tue, 07/19/2011 - 13:03 | 1470783 centerline
centerline's picture

So what is the new CPI going on based on now... Leer jets and hot tubs?

Tue, 07/19/2011 - 13:17 | 1470836 Zing
Zing's picture


Tue, 07/19/2011 - 13:48 | 1471012 Oh regional Indian
Oh regional Indian's picture

Nope... boob jobs and bee stings... ;-)


Tue, 07/19/2011 - 14:19 | 1471164 espirit
espirit's picture

Ukrainian Hookers.

Tue, 07/19/2011 - 13:04 | 1470788 Johnny Lawrence
Johnny Lawrence's picture

Bail out banks, Gang rape Granny

Hope and change!

Tue, 07/19/2011 - 13:07 | 1470802 shushup
shushup's picture

Why don't those fuckers cut government pensions instead.

Tue, 07/19/2011 - 13:09 | 1470810 centerline
centerline's picture

Coming.  Just further down the line.

Tue, 07/19/2011 - 13:18 | 1470844 Zing
Zing's picture

Cuts are coming down the line for just about everything (including the defense sacred cow).

Tue, 07/19/2011 - 16:02 | 1471620 TruthInSunshine
TruthInSunshine's picture

Defense budget as of today is biggest in history.

Tue, 07/19/2011 - 13:27 | 1470889 DosZap
DosZap's picture


Gv't pensions, and all three branches should be cut as well.All speech payments made to Ex Presidents confiscated, and put into the General Fund.........(Clintons knocked down 75 mil since he left).

Instructions of use of Cigars.

No more giving them selves raises, and no more independent health insurance.

No, you do not get to continue to recieve 100% of your pay, after retirement, and then going to work for JPM, and GS,GE,GM, Chrysler....

Tue, 07/19/2011 - 13:08 | 1470804 CrimsonAvenger
CrimsonAvenger's picture

In related news, "Gang of Six" senators report that they all have foot long penises, now that they shrunk their rulers by a factor of twelve.

Tue, 07/19/2011 - 13:08 | 1470805 Troy Ounce
Troy Ounce's picture


Why do you report this? Really..nobody gives a hoot.

Americans seems to be more than happy to pay 120% income tax or slash social security entitlements while singing the anthem with tears in their eyes.

Tue, 07/19/2011 - 15:23 | 1471474 CptAwesome
CptAwesome's picture

I'll pay whatever just don't take my Dancing with Stars!

Tue, 07/19/2011 - 13:09 | 1470811 Arch Duke Ferdinand
Tue, 07/19/2011 - 13:45 | 1470922 Reptil
Reptil's picture

meet "Ma-On":

landfall tomorrow at the latest. 0__o

Tue, 07/19/2011 - 13:10 | 1470813 Commander Cody
Commander Cody's picture

Did anyone really expect something more from the thieves in Congress?  They will gut the old, sick and retired, while continuing to gorge themselves and their corporate cronies on the feed remaining in the trough.  Disgusting.

Tue, 07/19/2011 - 13:14 | 1470824 Carbon Penguin
Carbon Penguin's picture

Next move: the GAO will be replaced by recently pardoned Arthur Anderson accountants...

Tue, 07/19/2011 - 13:15 | 1470828 glenlloyd
glenlloyd's picture

lets see...under the new rules if ground beef is too expensive....then substitute dog food.

Tue, 07/19/2011 - 13:16 | 1470833 Woodyg
Woodyg's picture

Let's see steal from Social Security while dropping the top rate at the same time won't do a damn thing to decrease the debt - and when will these jackals admit Social Security is separate from the General Budget so those SS monies NOT spent on SS is a defacto tax increase on the poorest Americans?

Tue, 07/19/2011 - 13:24 | 1470865 Bob
Bob's picture

Well, those Americans should have learned to speak financialese . . . I guess. No wonder they're in the position they're in.  /sarc

Important thing to remember: 

Tue, 07/19/2011 - 13:17 | 1470834 carbonmutant
carbonmutant's picture

"The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills" - A Teleprompter Puppet

Tue, 07/19/2011 - 13:18 | 1470843 Dr. Engali
Dr. Engali's picture

Why don't they just forget all calculations and tell us what inflation is? At least they would be honest about what they are doing. Comrades inflation this year was -2% your social security benefits will be adjusted accordingly. Thank you for your service to the motherland.

Tue, 07/19/2011 - 13:19 | 1470848 Reptil
Reptil's picture

Perhaps Jon Stewart can do another "Rally for Sanity", since that made a huge difference last year.

Tue, 07/19/2011 - 13:27 | 1470886 ZeroPower
ZeroPower's picture

Stewart's a tool - bit of humor is required for the plebs who would literally know nothing about whats going on in the world otherwise. A shame too its delivered from such an ass-backwards perspective.

Tue, 07/19/2011 - 13:41 | 1470915 Reptil
Reptil's picture

yeah but it made the hipsters feel really cool about themselves. </sarc>

It sent a clear message: "being angry is uncool".

from their webpage:

“I’m mad as hell, and I’m not going to take it anymore!”

Who among us has not wanted to open their window and shout that at the top of their lungs?

Seriously, who?

Because we’re looking for those people. We’re looking for the people who think shouting is annoying, counterproductive, and terrible for your throat; who feel that the loudest voices shouldn’t be the only ones that get heard; and who believe that the only time it’s appropriate to draw a Hitler mustache on someone is when that person is actually Hitler. Or Charlie Chaplin in certain roles.

Tue, 07/19/2011 - 13:19 | 1470851 There is No Spoon
There is No Spoon's picture

so they're proposing a tax cut?

Tue, 07/19/2011 - 13:20 | 1470855 poor fella
poor fella's picture

Official 'news' must not have leaked out. One would expect the S&P up over 100 points. yay!

Tue, 07/19/2011 - 13:20 | 1470857 onlooker
onlooker's picture

Could this impact Postal Wages and gov employment wages? no raise

Tue, 07/19/2011 - 13:26 | 1470875 Zing
Zing's picture

Their COLA increase has already been taken away.

Tue, 07/19/2011 - 13:23 | 1470862 MachoMan
MachoMan's picture

Domestic default before international default...  the question is only how long can americans take austerity before giving international creditors the bird/repudiating the debt...

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