T-Minus Two Months Until The $500 Billion Rolling Debt Ticking Timebomb Goes Off

Tyler Durden's picture

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Rodent Freikorps's picture

It takes a pot bellied stove to make coal useful to heat a home.

You can buy one on ebay today.

slewie the pi-rat's picture

"not worth a continental"  was a phrase from the revolution, which was financed with these paper dollars.  abundantly, too! 

the mint put out 2 franklin commem dollars (90% coin silver/0.77 toz) c. 2006:  "statesman" & "scientist".  some dealers sell these at a small premium to melt value. 

Ghordius's picture

Franklin was a scientist, he thought in positive potentials terms.

Fiat (unbacked paper) Money is an invention as powerful as nuclear power.

If used properly, in a rational manner by wise people, then with both you get a great gift for all.

If misused... well, you know.

Rynak's picture

If we already assume rational, fair and mutualistic actions by the leaders, then what for do we even need the pretense of democracy (pure representative democracy, isn't democracy in any practically significant way)? I mean, by that logic benevolent dictators should be the best bet?

Or is that just another one of those "split worldview" cases of scientists and engineers?

topcallingtroll's picture

yeah a conundrum

Democracy only works if people continue to make the correct decisions and not fuck up the economy.

Of course a dictatorship probably functions similarly.

I prefer a libertarian dictatorship.  It will take a lot of enforcement to maintain individual liberty and personal responsibility and prevent the government from growing.

Plato observed that democracy always kills itself when people realize they can vote themselves money from the public treasure.

Rynak's picture

So far, it appears the majority of money and economic stability, is initially not taken by the public, but by those who control the gov.

In any case, a "democracy", where the "democratic" part consists of people voting for people to lead a country, and those people being made immune to consequences of their own actions, and where people have no way to affect policies directly - is at best "democracy" by word, and none by reality.

topcallingtroll's picture

If the government didn't have any money, no one would be interested in lobbying it or stealing from it.  Not a perfect solution, but voluntary association and individual liberty with someone around just to maintain the rules of the game (and nothing more) would be austere, but it prevents the problem of corrupted government from ocurring.

Rynak's picture

How can the government be worth no lobbying money, if it is capable of doing anything significant? Or are we going to monitor the wealth of politicians and ex-politicians? If yes, then this specific measure has my "go ahead"... i'm not sure if it will work, but i guess it cannot hurt.

topcallingtroll's picture

I suppose we try to make the federal government incapable of doing anything except enforcing the basic rights and preventing the states from enacting trade barriers.

Everything else should be up to the states.  You then have an option of moving to a similar culture if your own state starts fucking up, such as failing to address pollution, etc.

I would suggest that the more local the important decisions the more likely the people are to have a vested interest in their expense and potential outcome of "doing anything significant."

Rynak's picture

Okay. Hmm, i'll ignore for now that even "small decisions" are worth something, because there is a more pressing matter:

How would things be addressed, that are inter-state? Things that affect the entire "federation"? After all, if there were no such things, there would be no point to the federation, and states may as well be totally souvereign nations. So, how are such "hollistic" matters handled, especially regarding trade conventions (which is just a nicer word for "regulation")?

Would it be addressed purely by consensual cooperation between states (something like a "forum" where they can discuss cooperation and alliances between states on topics)? Would there be something like a "gov", that coordinates and enforces decisions made beforehand by individual states? Or would the gov first design nationwide things on its own, and then ask states for acceptance?

As you can see, there are multiple ways how things can be managed on a nation-level, even if states keep the upper hand (if only because they can veto everything, in the later case).... yet, in many of those variants, lobbying may be profitable, even if the "return" is not as high as in current governments?

(EDIT: I personally prefer the "higher-order" entity designing things, BUT with the lower order entities being able to veto everything, and this way implicitely encouraging a cooperative approach between both. But this doesn't address the corruption issue completely.)

And what about budgets?

knowless's picture

everything is an interstate issue, the separate parties would be held in check by the different regional governments mutual support on issues. if two states had a border dispute involving trade, a party from a third state could be contracted to oversee and mitigate the issue, instead of the federal government itself. the separations would allow for more creative and less invasive solutions to issues between entities.

the federal government rules over all, instead of the states finding solutions that work through mutual aid, think about this distinction when reading the constitution and looking at how america works today.

 

the federal government should be a forum for interstate decision making and nothing more.

Rynak's picture

I've got a 4th option:

Take what you've described, and add:

1. A federal "design" board, that has almost no capital (besides of a rather low income per person working on the board, and a pitiful static yearly budget for electricity bills, communications and stuff). And which's members are elected directly from the population. The board would hav no legislative, judicative and executive power, but instead purely would provide data, stats, tracking and ideas to the forum. So, pure national tracking, information and design concepts as an optional service, with no power to legislate, judge or enforce.

2. The population of a state always being able to overrule state-decisions by direct vote. That is: Normally the state governs a state's population. However, if the population is dissatisfied with certain things, then it can selectively do direct democracy. This way, not even states can strongly ignore their own population.

snowball777's picture

believe it or not, Benjamin Franklin was a huge fan of paper money.

 

He was a printer, and thus a businessman, and smelled potential profit in the contracts to provide said paper money (he even had a tech edge on anti-counterfeiting).

He was brilliant and an effective rallying point for the founding of the country, but ethically weak in many, many ways.

LongBalls's picture

I would bet Boehner took home one hefty "Skin's game" check during his golf outing with Obama. Now to scare the freshmen.

Cognitive Dissonance's picture

Sounds like the perfectly logical and defensible "let it tick until it explodes because we can't defuse it without great pain" argument.

OK, so don't stop the QE because we eventually won't be able to roll the debt. Don't raise the debt ceiling and we won't be able to roll the debt. Don't jail the guilty or fail the big banks because we won't be able to keep the system working. And on and on and on. Sounds like we are the moral hazard around here.

The pain must be felt if the wound is to be cleaned. We are down to denying the wound in order to deny the pain for just a little while longer. Either we scrub the wound clean or we die from the gangrene.

Sounds like we've pretty much agreed to die from the gangrene.

Dr. No's picture

The repubs won this one.  Someone needs to tell Obama, its easy.  Go on T.V., state that the US Congress passed a budget to fund all of the programs in the budget.  The debt celing is preventing the executive branch from executing the budget (i.e. Law) as passed by congress.  In the event the debt ceiling is exceeded, the president will start cutting programs he sees fit by executive order.  end of story. 

In other news, repubs rejoin talks to keep the spending binge equitable.

DosZap's picture

The LAST sob you want cutting programs is what we/some call our leader.

Rodent Freikorps's picture

The obama administration is above the law.

Why would they care about that one, except for the political points?

RockyRacoon's picture

See 14th Amendment, Section 4:

Section 4. The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.

Rodent Freikorps's picture

It is wrong to cherry pick parts of the Constitution.

All, or none.

RockyRacoon's picture

The subject at hand is the debt.  This addresses the debt specifically.

No cherry-picking going on here.

Rodent Freikorps's picture

Okay, lets not question the validity. Let's just not pay it anyway.

RockyRacoon's picture

Point being, Obama can declare the Republicans irrelevant.

Rodent Freikorps's picture

Yeah, that is getting floated by most lefty blogs.

Go ahead, I dare him. Declare the Reichstag irrelevant.

Loose the dogs of war. I look forward to a Constitutional crisis.

topcallingtroll's picture

Shows how scared the socialists are.  They know they are trapped.

yeah go ahead Obama.  I dare you.

krispkritter's picture

+1 Revolution. If that's what it takes.

RockyRacoon's picture

My point is that it's a possible fly in the ointment.  I couldn't care less.

Calmyourself's picture

That would be a very bad idea.  If preserving the bought and paid for liberal voting bloc takes trashing the constitution that blatantly, the end of the beginning is near.

OldTrooper's picture

Rules of construction require a reading to give effect to all of the document - including the power of congress to raise money and authorize spending and the first amendment (which quite clearly states that we can question whatever we damn well please).  The Rodent is quite right IMO.

Of course, that doesn't mean it won't happen.  It's been quite a while since the Constitution really restrained any of the ass-hats in DC.

Quixotic_Not's picture

They've already defaulted, the U.S. Treasury missed a trust fund payment.

*GAME OVER*

topcallingtroll's picture

nothing has to go into default.  There is plenty of money coming in to cover debt payments.  I guess Timmah will just have to prioritize.

TaxSlave's picture

Re: The 14th amendment:

The debt is in the form of BONDS.  Bonds are sold on the assurance that the government that issues them will use threat of imprisonment or death on the citizens to extract payment.  Bonds are BONDAGE.

That debt is literally intended to enslave me. It is therefore illegal and void.

So much debt has been sold that we are to be enslaved for generations to pay it back, though it can never be paid back.  Nobody questions whether it can be paid back.  Nobody believes it can be paid back.  In our dream world, it need never be paid back, just keep borrowing more and more.  It will never be paid back.  The only question is whether we will allow ourselves to be enslaved by the debt.

Two crimes happen when the Fed prints money and loans it to the government.  The first crime is counterfeiting.  When the government spends that money into the economy, that money devalues your savings and the value of your labor.  The second crime is the theft of even more from the victim in order to pay back the counterfeiter with real wealth, in exchange for zero value delivered.  It is the second crime that is the worst, most pernicious.

No debt to a printing press is valid.

You don't own me.  It's not my debt, and I'm not paying it!

Dr. No's picture

Agree they are above the law.  I am just outlining a political strategy.  I am indifferent to the outcome eitherway since i realize there is nothing I can do about the situation.  Politically, Obama could threaten draconian cuts to republican programs to get their attention.  Since he is not, I have to assume a deal is already done.

sun tzu's picture

What are Republican programs?

The military? Then how will he fund his Libya kinetic action?

Foreign aid? Go ahead.

Welfare? Go ahead.

Agriculture subsidies? Go ahead. 

Green energy? Go ahead. 

Social security and medicare? Go ahead

ATG's picture

Go on T.V., state that the US Congress passed a budget to fund all of the programs in the budget.

Minor detail:

The D Congress hasn't passed a budget for two years

Dr. No's picture

When is the last time truth found its way into a presidential speech?

Silver Dreamer's picture

I never agreed to anything.  They did.  As usual though, your post is spot on.  We are screwed.  Them?  I guess it depends on how well they invested in security.

WaterWings's picture

This.

When someone includes me by saying "we" have made mistakes, I have to correct them.

I do not consent to be governed by criminals.

lesterbegood's picture

Nor do I.

The US Federal Corporation is not my government. 

http://republicfortheunitedstates.org

Rynak's picture

The US government is not a corporation. It may however be used like a sockpuppet by megacorps and banks.

That may sound as if there is no difference, but there is a difference: If the US gov were a corporation, and the politicians shareholders, they would have a stake in national finances. They don't, and neither do the mentioned megacorps and banks. No one except of the population is forced to be affected by consequences of the actions of the gov. A traditional government is all "The politicians decide, the population is affected."

Good old subject/object split in the form of a causal break.

topcallingtroll's picture

the founding fathers could find no way out of this dilemma.  They decided the only way to adress this was to keep government as limited as possible.

Rynak's picture

What? They really were aware about this? What in...... this is fatal. How many of the biggest problems in human civilization, including the oh so..... "objective"... sciences..... (wave/particle dualism anyone?).... are subject/object dichotomies? Everything in civilization is fucked up because of this repeating pattern... and yet they were satisfied with a hackfix, and built an entire nation on this?

From what i have red and heard so far of the founders, i have a lot of respect for them. But if the above is true, then they knowingly fell short of addressing the root issue of everything. Crap, in the case of finances, they could at least have attempted a better patch.... like, even just affecting politician wealth by democratic means, after they did their job.

topcallingtroll's picture

They didn't use the exact same words as you, but I have just been amazed at what I have read in the federalist papers and other writers of the enlightenment.  The whole premise of  a limited, self government was to try to avoid the split and its consequences.

As to finding a better patch.  They did the best they could with the cacophony of voices around them and the inevitable compromises.  No solution is perfect

snowball777's picture

They had plenty of negative examples of intrusive government from which to derive motivation.

Rodent Freikorps's picture

The Intolerable Acts were less outrageous than what we live with daily these days.

Man Bear Pig's picture

If the US were a corporation, shareholders would be dollar holders (a dollar is a stake in the FUTURE productivity of US citizens and assets), politicians would make up the various levels of management, and the lowly peons that actually do the work and generate the revenue would obviously be the US taxpayer. Actually we are, in every way, a corporation.

Like any other corporation, we cater to the shareholders, not the laborers.

Mr Lennon Hendrix's picture

If the debt ceiling is not raised, the US will be downgraded?  What the...?

faustian bargain's picture

Don't you remember what whats-his-name - Pete Stark - said? "The more debt we have, the richer we are!"