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Chart Of The Day: America's Debt Crisis - Who Really Is Responsible?

Tyler Durden's picture


Yesterday we brought you the news that US debt quietly soared by $90 billion overnight to celebrate the new fiscal year end, reaching $16.2 trillion and sending total US debt to GDP to 103%. Needless to say, this comes at an exciting time, with the first Wall Street muppet presidential debate in about 12 hours, where the US debt crisis will be a front and center topic because in about 2 months, the US debt ceiling will again be breached adding to the Fiscal Cliff fiasco, resulting in a flashback to August 2011 when the market had to tumble by nearly 20% for Congress to get the hint that first and foremost its job is to make sure the money on Wall Street keeps flowing, all else secondary. And while it has become fashionable to say that US debt rose by this much under that president, the truth is that the Presidency is merely one of three institutions that are responsible for the shape of the US debt-to-GDP line (which is now going from the lower left to the upper right by default). The other two are, of course, Congress and the Senate. Luckily, to simply things substantially, we have a handy graphic from today's Bloomberg Brief which conveniently plots not only the political affiliation of the presidency, but of the House and Senate, in the chronology of the US debt crisis.

From BBG Brief:

The U.S. debt ceiling and impending fiscal cliff are likely to be important topics at tonight’s presidential debate.


If the government fails to reach a deal to avoid all or part of the $607 billion fiscal cliff by the end of this year, the U.S. economy is at risk of being thrust back into recession in the first half of next year.


A rapidly increasing U.S. debt load, approaching the $16.4 trillion debt ceiling, amplifies potential downside risk. In 2011, failure to raise the debt ceiling led to the first ever downgrade of the U.S. by Standard & Poor’s.


This year, U.S. debt has increased by an average monthly 0.6 percent. If this trend persists, the current debt ceiling may be breached as soon as January, risking additional downgrades and substantial volatility in global financial markets.


The MSCI World Index dropped almost 20 percent between April 18, 2011, when Standard and Poor’s placed the U.S. on negative outlook, and Oct. 4 2011, its year low; 30-day volatility rose to 29.4 from 14.6 during the same period.


The U.S debt ceiling has been raised 17 times since 1995 by an average of 8.5 percent. Four of those increments came during Bill Clinton’s presidency, averaging 9.5 percent. An additional seven increases occurred during President George W. Bush’s time in office, averaging 9.6 percent. Since President Obama took office, the debt ceiling has been increased on six occasions, by an average of 6.5 percent.


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Wed, 10/03/2012 - 08:37 | 2851327 Thomas
Thomas's picture

We are heading for $17 trilion so unbelievably fast. Kotlikoff says the unfunded liabilities are now $220 trillion, which is up from $44 trillion when I first started paying attention to him. This is not the beginning or the beginning of the end. This is heading for the end of the end because exponential functions blow up very, very quickly at the end. 

Wed, 10/03/2012 - 08:37 | 2851339 Badabing
Badabing's picture

 America's Debt Crisis - Who Really Is Responsible?

Our children?

Wed, 10/03/2012 - 08:41 | 2851342 GetZeeGold
GetZeeGold's picture



Pay up Johnny!


I'm gonna have to confiscate that turkey'll have to eat the crap we've approved for lunch. Sorry Amigo.....them's the rules.



Wed, 10/03/2012 - 08:45 | 2851367 JPM Hater001
JPM Hater001's picture

I have encouraged my children to no longer participate in the system.

Of course at 10 and 11 that doesnt do much but I dont think there is any harm in unplugging early.

Wed, 10/03/2012 - 09:11 | 2851416 Dalago
Dalago's picture

Inflation will hit when the US gov't kicks the can down the road by raising their debt at the end of this year.  The People are hemorrhaging with 0 jobs and under employment with lower wages.  So The People's economy is slowing but fascist bitchez don't want that.  Significant movement is at a high/holistic/sovereign level.  Its just easier to control that way.

Wed, 10/03/2012 - 09:48 | 2851579 Pinto Currency
Pinto Currency's picture


Congress is responsible for creating the Federal Reserve - an institution that sets monetary and debt policy (interest rates) - and giving its ownership, ultimately, to a group of psychopathic bankers.

And the bullion banks along with the Fed are responsible for rigging the price of gold and forcing interest rates so low for decades that a debt fueled series of bubbles resulted (and continue).

In the end, the bubbles popped, the debt remains as well as the bloated government structure that appeared sustainable during the bubble years.  Eveyone now screams about the fiscal cliff.  It's the collapsed bubble and failed bank-controlled fiat debt money system we should be shouting about.

Wed, 10/03/2012 - 12:01 | 2852033 markmotive
markmotive's picture

Growth is a temporary (250 yr) phenom.

Thererfore, credit growth is a temporary phenom.

Therefore, the system is a temporary phenom.

Wed, 10/03/2012 - 12:14 | 2852072 Paul Bogdanich
Paul Bogdanich's picture

In reading the posts the ignorance is astonishing.  Under Clinton defense spending went under 40% of the budget as a result of the base closure comission and other reforms of the early 1990s.  Had the person who prepared the graph in the article gone back to 1990 (Clinton was elected in 1992) instead of truncating the graph at 1995, that effect would have been obvious but we awnt to hide that of course so we truncate the graph at 1995.  Under Bush the defense share went to about 56% with the Iraq fiasco.  Under Obama 53% as the expansion of the GWOT is tremendously expensive in particular the drones.  Maintaining an empire is expensive to the poitn where it is killing us as a nation and so long as all the candidates for national office are in absolute agreement that we need to maintain the empire nothing will change and we will go bankrupt.  Just like the Soviet Union in the 1990s.  However, reading these comments its embarrasing how ignorant people are about the cause of the deficits.  I guess all yalls just stupid.  So when they come to cut your social security, eliminate your tax credits, raise your tax rates, decrease your deductibles, impose a national sales or VAT tax and so on all so they can pay for the defense budget (remeber both republicans and deomcrats are in absolute agreement that we need to maintain the empire at all costs) what are you going to say then?  Bloodthirsty and stupid is a dangerous combination but that pretty much describes the population of the United States I'm afraid.          

Wed, 10/03/2012 - 12:35 | 2852149 Watauga
Watauga's picture

Paul--I agree with the majority of your post, but want to be clear that defense spending is (1) one of the extremely limited, valid functions of central governemnt, and (2) the ridiculous explosion of debt since 2008 is NOT attributable to defense spending, but to the Democrats efforts to buy votes through government giveaways, whether to unions, cronies, or welfare/foodstamp recipients.  Clearly, when the Democrats controlled both houses and the White House, the steady rise became an explosion of extraordinary and irreparable proportions.  We are toast, and it is due to the Statists (mostly Democrats).

Wed, 10/03/2012 - 09:23 | 2851449 BLOTTO
BLOTTO's picture

Society demands us to participate in this fuckin PAGAN horseshit.

Try going against the herd mentality and you will be met with fierce resistance from the masses.

The holidays - the calendar in general - rules us commoners.


Get up at 6:30am to the damn alarm clock you wanna smash with your fist - to work 5 out of 7 days of the week - but have the philosophy 'moderation in life'...yea - moderation except for fuckin work...

Go to a job you cant stand and do shit u dont like and be with people you wouldnt otherwise associate have all your hard work and savings in the bank account lose more money then gain in be stressed about the day-to-day activities at work, life, relationships, go home, eat, wash, shave and shit...and go to bed tossing and turning and sweating liek a pig... get ready to do it all over again - for 30 years...then retire...and enjoy 1-2 years of your pension before u fucking turn over and have a fucking stroke/heart attack from 30 yrs of bulshit...

And than at the end of it all - have the grateful attitude that you've succeeded...that - we made

You know what?

-Go and fuck yourself.

Rant is done.

Wed, 10/03/2012 - 09:27 | 2851484 GetZeeGold
GetZeeGold's picture




Dude you just totally pissed off 47% of everyone here.....good job!

Wed, 10/03/2012 - 09:28 | 2851490 Gully Foyle
Gully Foyle's picture


"Try going against the herd mentality and you will be met with fierce resistance from the masses."

Yep, like posting common sense here.

Wed, 10/03/2012 - 09:29 | 2851493 Joe Davola
Joe Davola's picture

Where do I sign up for your newsletter?

Wed, 10/03/2012 - 09:34 | 2851514 Yes_Questions
Yes_Questions's picture



I needed that.

Wed, 10/03/2012 - 09:39 | 2851539 Taint Boil
Taint Boil's picture



That was awesome ....

Wed, 10/03/2012 - 09:42 | 2851556 SubjectivObject
SubjectivObject's picture

Bob Dylan has it

The big dumb blonde

With the wheel gorged
Turtle, that friend of hers
With his checks all forged
With his cheeks in a chunk
With the cheese and the cash
They’re all gonna be there
At that million dollar bash
Ooh, baby, ooh-ee
Ooh, baby, ooh-ee
It’s that million dollar bash

Ev’rybody from right now
Is over there and back
The louder they come
The bigger they crack
Come now, sweet creams
Don’t forget to flash
We’re all gonna meet
At that million dollar bash
Ooh, baby, ooh-ee
Ooh, baby, ooh-ee
It’s that million dollar bash

Well, I took my counselor
Out to the barn
Silly Nelly was there
She told him a yarn
Then along came Jones
Emptied the trash
Ev’rybody went down
To that million dollar bash
Ooh, baby, ooh-ee
Ooh, baby, ooh-ee
It’s that million dollar bash

Well, I’m hittin’ it too hard
My stones won’t take
I get up in the mornin’
But it’s too early to wake
First it’s hello, goodbye
Then push and then crash
But we’re all gonna make it
At that million dollar bash
Ooh, baby, ooh-ee
Ooh, baby, ooh-ee
It’s that million dollar bash

Well, I looked at my watch
I looked at my wrist
I Punched myself
In the face with my fist
I took my potay toes
Down to be mashed
Then I made it on over
To that million dollar bash
Ooh, baby, ooh-ee
Ooh, baby, ooh-ee
It’s that million dollar bash

Read more:
Wed, 10/03/2012 - 18:31 | 2851595 tip e. canoe
tip e. canoe's picture

i had the unfortunate opportunity to visit a Walmart (for the 3rd time ever) this last weekend.    they had the xmas trees already set up in the back ready to go for the subtle hint after being bombarded with halloween costumes & candy.

commerce has completely co-opted the calendar through conspicuous consumption, or rather it has always been a tool of commercial control.   that sick bastard pope Gregory has to be chuckling in his crypt.

Wed, 10/03/2012 - 09:53 | 2851607 Meremortal
Meremortal's picture

I see. Having to work is your real problem. Poor baby.

Wed, 10/03/2012 - 10:19 | 2851716 mayhem_korner
mayhem_korner's picture



His problem is having to work but having the fruits of his labor unduly confiscated and re-distributed to others.  And like so many, he's stuck (coerced?) there because the debt-driven system has imposed so many barriers to going it on one's own.

Wed, 10/03/2012 - 09:57 | 2851625 foodstampbarry
foodstampbarry's picture

Yeah, you just pissed me off! I'm going to go take the dog for a walk now - not gonna clean up his shit and gonna tell the first person I see to fuck off. Thanks for setting my mood.

Wed, 10/03/2012 - 10:35 | 2851768 GetZeeGold
GetZeeGold's picture



Pretty sure that's not against the law.........yet.

Wed, 10/03/2012 - 10:12 | 2851678 A Lunatic
A Lunatic's picture

I hope you can find your way off the beaten path and find the peace and joy of a simple life. I hope we all can.........

Wed, 10/03/2012 - 10:26 | 2851739 Sockeye
Sockeye's picture

Superb rant, and shared sentiment.

Wed, 10/03/2012 - 11:29 | 2851931 newworldorder
newworldorder's picture


Better not bring that attitude to work. Only happy people tow-ing the company line are allowed. Just remember, there are millions of your fellow citizens waiting for your job if you are not happy, happy, happy.

(sarc off)

Wed, 10/03/2012 - 13:30 | 2852334 Watauga
Watauga's picture

Try doing all of that to build a successful business, only do it 7 days per week for 12-14 hours per day, then watch your filthy, no-good, lying, sack-of-crap Caesar tell you that "you didn't build that."

Wed, 10/03/2012 - 14:29 | 2852619 RockyRacoon
RockyRacoon's picture

You believe he said that because you want to.  You need to.  Otherwise, you'd have to look in the mirror for the culprit.

Wed, 10/03/2012 - 09:25 | 2851477 bobnoxy
bobnoxy's picture

That's your best hope, because if they get engaged and find out what Dad's and Grandpa's generation did to them, they'll vote for the guy that says he'll put an end to Social Security and Medicare on the grounds the money paid in was already pissed away on other things, so the old farts deserve nothing.

They got what they paid in by not doing enough to curb all the deficit spending and wasteful war costs. So Dad, tough shit. I hope you saved some money.

Wed, 10/03/2012 - 10:58 | 2851802 Kobe Beef
Kobe Beef's picture

Doesn't even have to be a government action...the youth can't pay.

I hope the irony isn't lost on the Boomers: after sending all the jobs overseas (in exchange for a temporarily rising stock portfolio); allowing unlimited 3rd World immigration & subsidizing the exponential growth of the non-productive underclass (so they wouldn't seem racist like their evil parents); borrowing money like crazy (so they could all pretend to be rich) there's no civilization left to pay their fucking entitlements.

Who's gonna pay my Medicare? Who's gonna pay my Social Security? Nobody, you short-sighted, disingenious, greedy fucks. You destroyed Western Civilization. There's nothing left to loot, and nobody left to produce.

Maybe Ben and the NWO has a plan to "take care" of the Boomers, but guaranteed, they aren't going to like it.

"Oh, but we vote," say the Boomers. And if there's one thing a Totalitarian Oligarchical Collectivist Dictatorship doesn't need, it's voters.

Hasta la vista, bitchez.

Wed, 10/03/2012 - 09:29 | 2851494 Gully Foyle
Gully Foyle's picture

JPM Hater001

"I have encouraged my children to no longer participate in the system."

So you and the kids became beggars in India?

Wed, 10/03/2012 - 09:46 | 2851578 SubjectivObject
SubjectivObject's picture

You mean if they're not trigger happy vidiots,

Or phone crazy social fluffties,

It's India for them?

Small bipolar world you gots there.

Wed, 10/03/2012 - 09:32 | 2851505 Gully Foyle
Gully Foyle's picture


You know the approved crap is healthy, like most of the Organic assholes promote here.

The problem is it's a one calorie fits all and doesn't take into account active kids.

Recent articles at Hot air and Ace of Spades discussing this.

Wed, 10/03/2012 - 09:35 | 2851522 GetZeeGold
GetZeeGold's picture



Thought it went without saying actually.

Wed, 10/03/2012 - 09:39 | 2851544 Gully Foyle
Gully Foyle's picture


Which part?

Michelle kicked off the healthy foods thing so no more junk in school lunchs.

But it's limited calorie diet.

So the kids who need more food, the active ones like athletes, can't get it from the approved lunch.

The heavy hand of BIGOV fucked up once again.

Wed, 10/03/2012 - 10:11 | 2851561 GetZeeGold
GetZeeGold's picture



 Which part?


Whatever you want........just keep rolling.

Wed, 10/03/2012 - 09:22 | 2851447 5880
5880's picture

What idiot starts this chart in 1995?

Correlate it also to who voted for which entitlement programs

Full span chart here

Wed, 10/03/2012 - 09:46 | 2851573 Taint Boil
Taint Boil's picture



One of my favorite charts - of course it doesn't show congress or senate but still worth a look. It really doesn't matter who is president, the president has very little power by design.

Wed, 10/03/2012 - 09:50 | 2851593 sdmjake
sdmjake's picture

That's a big build up...gonna need an even bigger war to fix it this time.

At that rate, next thing you know the TSA and SSA gonna have to buy billions worth of hollowpoints...oops...

Wed, 10/03/2012 - 10:23 | 2851725 mayhem_korner
mayhem_korner's picture



The war is already big, and it will be enormous in scale and reach.  It will be very unclear who is fighting who, though...

Wed, 10/03/2012 - 10:46 | 2851812 Kobe Beef
Kobe Beef's picture

We are at war with Eurasia, er- Eastasia. Doesn't matter, Ignorance is Strength.

Wed, 10/03/2012 - 09:25 | 2851473 Stock Tips Inve...
Stock Tips Investment's picture

Clearly debt has been growing very rapidly, especially after 2003. Blame can be a very interesting exercise, but that does not help us out of this problem. I think we should focus on the consequences that generated this huge debt. More importantly, is to focus on finding the solution to this problem. Every day, more people believe that the Fed's plan and liquidity are the solution to the economic crisis. Efforts to reduce the government deficit are very shy. While there is a deficit, the need to continue with more debt finance. It's like trying to put out a fire, throwing more fuel. However, the population, mostly, is not aware of the risks.

Wed, 10/03/2012 - 11:35 | 2851950 newworldorder
newworldorder's picture

Most people dont know shit or dont give a shit about the debt. Like most things they cant control, - Its somebody else's problem.

Wed, 10/03/2012 - 09:27 | 2851483 Gully Foyle
Gully Foyle's picture


Fuck the children!

You raise the little bastards and all they want to do is dump you in a home.

Wed, 10/03/2012 - 09:19 | 2851358 JustObserving
JustObserving's picture

Here are the details on US unfunded liabilities (fiscal gap) per Laurence Kotlikoff and Scott Burns:

The U.S. fiscal gap, calculated (by us) using the Congressional Budget Office’s realistic long-term budget forecast -- the Alternative Fiscal Scenario -- is now $222 trillion. Last year, it was $211 trillion. The $11 trillion difference -- this year’s true federal deficit -- is 10 times larger than the official deficit and roughly as large as the entire stock of official debt in public hands.

This fantastic and dangerous growth in the fiscal gap is not new. In 2003 and 2004, the economists Alan Auerbach and William Gale extended the CBO’s short-term forecast and measured fiscal gaps of $60 trillion and $86 trillion, respectively. In 2007, the first year the CBO produced the Alternative Fiscal Scenario, the gap, by our reckoning, stood at $175 trillion. By 2009, when the CBO began reporting the AFS annually, the gap was $184 trillion. In 2010, it was $202 trillion, followed by $211 trillion in 2011 and $222 trillion in 2012.

Part of the fiscal gap’s growth reflects changes in policy, such as the Bush and Obama tax cuts, the introduction of Medicare Part D, and the expansion of defense spending. Part reflects “natural” growth of existing programs, including growth in Medicare and Medicaid reimbursement rates. And part reflects the demographic time bomb U.S. politicians are blithely ignoring.

Unfunded liabilities are currently $1.94 million per taxpayer.


Wed, 10/03/2012 - 09:39 | 2851541 Coldsun
Coldsun's picture

Fuck that, I'm out. Where can I get my Obama phone?

Wed, 10/03/2012 - 09:50 | 2851599 duo
duo's picture

you mean like dis?


Wed, 10/03/2012 - 14:33 | 2852652 RockyRacoon
RockyRacoon's picture

That would actually be a Reagan phone:

“The free Obama phone is an important program, especially for low income families that would otherwise not have access to basic communications,” the homepage of reads.

The site does, however, clarify that Obama did not start the program and that there's no such thing as an "Obama phone."

"It’s true that government provides free cellphones to the poor and disabled people," the site reads. "But the Obama part is not true as Obama didn’t initiate this program. It’s on the run [sic] since the administration of Reagan."

Read more:

Wed, 10/03/2012 - 08:44 | 2851363 Floodmaster
Floodmaster's picture


Wed, 10/03/2012 - 09:23 | 2851470 Gazooks
Gazooks's picture

Beginnings and ends are cyclical measures of subjective linear perceptions in transitional space/time continuum.

Beginning to see an end implies transition to subsequent beginning and vice versa.

Observable velocity of transition is subjective to positional perspective.

Stack and get the fuck out of the way.


Wed, 10/03/2012 - 09:38 | 2851529 DavosSherman
DavosSherman's picture

I emailed Kotlikoff because I didn't understand the math (83t +16t+21t=120t) [Medicare, Social Security and Prescription Drugs].  He said he carried them forward.

John Williams and Bill Gross use NPV and come up around 66t-75t.

Anyway we look at it, "it" is a mess with the Enron off balance sheet Arthur Shithead Anderson bullshit fucking accounting.

Wed, 10/03/2012 - 09:56 | 2851619 PD Quig
PD Quig's picture

Sorry, but this graph is too simple-minded. The seeds of the debt problem were sown with the creation--and acceleration--of entitlement program benefits into the teeth of the Baby Boomer retirement bulge. It is all about the unfunded liabililties in Medicare and Social Security. You can throw in some wars and tax rate reductions that were 'not paid for', but the real problem is spending, not revenues. Even Clinton era surpluses were actually far smaller--because they began to add what was then a Social Security "surplus" into the overall budget numbers in the mid-1990's. Now that SS is cash flow negative the real fun begins...hence Obama's $1T deficits as far as the eye can see.

The End. My only friend, the End. It is coming and it will be bracing. Ammo-up, my precious.

Wed, 10/03/2012 - 11:31 | 2851938 gckings19
gckings19's picture

The baby boomer genreation has destroyed this country....i hate them and i blame them for everything.

Wed, 10/03/2012 - 18:27 | 2853762 LMAOLORI
LMAOLORI's picture



You must have had some pretty shitty parents you should seek help

Wed, 10/03/2012 - 08:38 | 2851331 I am more equal...
I am more equal than others's picture

Democraps adding it up....boooooyah









Bush was really a demoncrap.  He couldn't pass the IQ test to be a republican

Wed, 10/03/2012 - 08:36 | 2851332 lizzy36
lizzy36's picture

Another off balance sheet war with Iran should solve everything ;)

Wed, 10/03/2012 - 08:38 | 2851343 Joshua_D
Joshua_D's picture

I got 536 problems and a bitch ain't one, bitchez.

Wed, 10/03/2012 - 08:54 | 2851381 GetZeeGold
GetZeeGold's picture



Mel Gibson could loan you one. I'll give you his number if you're interested.


Wed, 10/03/2012 - 10:39 | 2851793 falak pema
falak pema's picture

what, the bitch or the bitch's itch?

Wed, 10/03/2012 - 08:40 | 2851347 buzzsaw99
buzzsaw99's picture

it's only clownbux

Wed, 10/03/2012 - 08:40 | 2851348 knukles
knukles's picture

Ya'll know there's a Wizard behind the curtain, dontcha?

Wed, 10/03/2012 - 09:38 | 2851534 Spastica Rex
Spastica Rex's picture

Is he a humbug?

Wed, 10/03/2012 - 10:33 | 2851761 falak pema
falak pema's picture

humbug fiat oligarch, gold bug on the quiet. Jitter bug for his concupiscent, concubinal spinal chord of django reinhardt guitar band. Dig that beat! 

Wed, 10/03/2012 - 08:40 | 2851349 the not so migh...
the not so mighty maximiza's picture

Not to be a proofreading nazi

I agree with the article but the word Congress means both chambers, House and Senate.  You should use the word House or House of Reps instead of Congress.   

Wed, 10/03/2012 - 10:00 | 2851636 Cosimo de Medici
Cosimo de Medici's picture

Wish you'd posted sooner.  I was so confused and embarrassed I already signed up for Remedial Civics at the Khan Academy.

Wed, 10/03/2012 - 08:40 | 2851350 Shizzmoney
Shizzmoney's picture

It's the black people's fault.

Wed, 10/03/2012 - 08:42 | 2851355 GetZeeGold
GetZeeGold's picture



Naw....just blame it on the new Sheriff.



Wed, 10/03/2012 - 09:09 | 2851422 phat ho
phat ho's picture

He said, "The sheriff is near-er"

Wed, 10/03/2012 - 09:14 | 2851435 GetZeeGold
GetZeeGold's picture



The sheriff is what?

Wed, 10/03/2012 - 09:32 | 2851508 Ctrl_P
Ctrl_P's picture

Bernanke-gram for Mongo!

Wed, 10/03/2012 - 09:40 | 2851545 GetZeeGold
GetZeeGold's picture




Mongo only pawn in game of life......why do you torment him so?


Wed, 10/03/2012 - 08:41 | 2851352 firstdivision
firstdivision's picture

Wow, big shocker here.  Both parties are responsible.  Here's my shocked face -_-

Wed, 10/03/2012 - 08:43 | 2851353 Mercury
Mercury's picture

...the truth is that the Presidency is merely one of three institutions that are responsible for the shape of the US debt-to-GDP line (which is now going from the lower left to the upper right by default). The other two are, of course, Congress and the Senate.

Congress = The US House of Reps. and the Senate. 

Wed, 10/03/2012 - 08:44 | 2851364 GetZeeGold
GetZeeGold's picture



Turns out it was too they consolidated it.


But even's still not working very good.


Wed, 10/03/2012 - 08:48 | 2851373 Mercury
Mercury's picture

Well, he could have said two out of three branches of the federal government...or four if you count the Fed.

Wed, 10/03/2012 - 09:06 | 2851411 JPM Hater001
JPM Hater001's picture

I have a question.  Why is no one talking about the Supreme Court?

Those are the unelected-life time appointed-unrelentingly wrong assclowns that were suppose to stop pretty much all of this.

That and the 17th Amendment destroyed America.

(16 wouldn't have mattered if the 17th hadn't cut the state governments direct contact out of Federal Government loops)

Do your research

Wed, 10/03/2012 - 09:15 | 2851439 LULZBank
LULZBank's picture

Stick to the programme please.

Wed, 10/03/2012 - 12:17 | 2852087 juangrande
juangrande's picture

Not disagreeing here, but they do call house members congressman/wom. and Senate members, senators. Nothing simple or straightforward in that town!

Wed, 10/03/2012 - 08:42 | 2851354 Lucius Corneliu...
Lucius Cornelius Sulla's picture

We all know that the can kicking will continue.  The true point of inflection will be when the credit marks cry uncle.  So the question remains, "How much longer can the monetary debasement continue without a credie market 'event'".


Wed, 10/03/2012 - 08:48 | 2851372 buzzsaw99
buzzsaw99's picture

3 years here and you still believe in a credit market? Skittle shitting unicorns is all we got bub.

Wed, 10/03/2012 - 08:48 | 2851370 mvsjcl
mvsjcl's picture

Shouldn't that be House and Senate?

Wed, 10/03/2012 - 08:56 | 2851391 GetZeeGold
GetZeeGold's picture should.

Wed, 10/03/2012 - 08:52 | 2851374 Dr. Engali
Dr. Engali's picture

I would just love to see China do an over night shit dump of treasuries and put an end to this madness. But alas it will never happen.

Wed, 10/03/2012 - 08:56 | 2851386 honestann
honestann's picture

So would I.  However, I'm sure we both know what would happen.  Even if every holder of every US debt instrument tried to sell everything, the federal reserve will simply create fiat out of thin air and buy them.  Poof.

What comes next is the question.  At this point in history, humans are so completely clueless, guessing reactions and consequences gets increasingly difficult.

Wed, 10/03/2012 - 09:15 | 2851441 youngman
youngman's picture

I think what you would see is an immediate devaluation of the dollar...50-75% cut in people will not accept it anymore....the haves(commodity owners) will no longer want the have nots ( fiat holders)....there will be shortages in commodities in the USA...and we know econ 101...inflation in those commodities...1000% overight...overseas Americans will be hated...hunted down...and removed...and everything they own will be stolen...because those countries will want something of value for the USD´s that they with the USA will stop one will care what Geitner has to say..or Bernanke..or Obama...and in two years after the event...the USA will be in a civil war...I am not sure what the sides will be...probably many different sides..and it will no longer be a world economic will be done....the suvivors will rebuild...kind of like post Black Plague.....but there is always a potential of an attack by another country at that time while the USA is at its weakest....Hawaii is an easy target..Guam...our Islands....Alaska...the USA will be broken up...OK..I have had enough coffee thinking...but that is one idea

Wed, 10/03/2012 - 09:59 | 2851632 A82EBA
A82EBA's picture

Long Wolverines!

Wed, 10/03/2012 - 09:04 | 2851405 darteaus
darteaus's picture

No one dumps the paper they own.  Halfway through the dump, the market catches on, and the value of your remaining holdings become worthless.

China will simply stop buying new paper and buy commodities instead.  They'll simultaneously hedge/slow sell/trade their holdings down.

The morning will come where US paper is no longer wanted and all the good assets are pwned.

Wed, 10/03/2012 - 09:05 | 2851412 Dr. Engali
Dr. Engali's picture

I know but I can wish can't I? It's better than this slow slide to perdition.

Wed, 10/03/2012 - 09:12 | 2851428 darteaus
darteaus's picture

...and the call is...SAFE at perdition!

Wed, 10/03/2012 - 11:51 | 2851993 falak pema
falak pema's picture

current religion of first world is : C banks can print to infinity; money they will NEVER redeem. They will keep control on debt interest with ZIRP and pump inflation into system that writes off debt over sixty/hundred years.

"Our money your problem" is now with us for the 21st century. Pity the 99% of first world are now included in the sheeple category. 

The only thing that puts a stop to this situation is when the OTHER Oligarchies want out from Pax Americana. 

THen "your money" becomes "your problem". 

Thats when we go to war. So when is that?

Right now, its a question of keeping the situation under control in Oil Oligarchy land. And sending a message to China they ain't ready to take on PAx Americana.

That is Potus's brief for next election. Bernanke's is to  print and Zirp and Twist and turn with Super MArio right behind him.

Meanwhile the money pile piles up for the 1% and the debts pile up for the 99%, and the young stay at home and wait for the nightingale to sing  them "spring is here you have a temp job!"

Wed, 10/03/2012 - 10:02 | 2851639 Cosimo de Medici
Cosimo de Medici's picture

They don't need to, (besides not being able to afford it). Bernanke, via Twist, is taking all long duration and letting China and Japan reduce their own longer term holdings. China can just let the short stuff mature, and sell anything long dated to Ben. It's slow, but they'll get out unscathed.

Bernanke is the best bid they'll ever get. Until Twist, the Chinese were long stay guests in the Roach Motel. Bernanke now has showed them a way to check out.

If they decided to dump, Goldman and JPM would just drop the bid and pick up the whole portfolio on the cheap. Pensions and insurance companies, hungry for yield, would also be happy to take the whole portfolio at a yield of, say, 8%. The Chinese would get hosed. As soon as they were done, rates normalize pretty much where they were.

Wed, 10/03/2012 - 08:54 | 2851383 Jason T
Jason T's picture

This is the destiny of America.. blame the laws of the Universe... I'm serious.  

Wed, 10/03/2012 - 09:18 | 2851452 pods
pods's picture

Absolutely correct.  There is a very simple answer, the rest is politics.


Going through this mental masturbation is to delude ourselves that we are actually in control of this.  If the system doesn't care who is in charge, the assclowns in government are nowhere near as important, are they?

Instead we would focus on banks. Fractional reserve banks.  Fractional reserve banks who own the regional Federal Reserve banks.

And we cannot address the real problem now, can we? 


Wed, 10/03/2012 - 10:52 | 2851832 Kobe Beef
Kobe Beef's picture

Don't forget the Foundations (owned by the same families who own the banks) who subsidized the rot at the remaining institutions of Western Civilization.

Wed, 10/03/2012 - 11:52 | 2851998 newworldorder
newworldorder's picture

Excellent reminder. This is where most of the untaxed money since the "Gilded Age" has ended up at. It funds a lot of the  "new world order" agenda.

Wed, 10/03/2012 - 08:59 | 2851384 Widowmaker
Widowmaker's picture


Congress is a peep show of perverted politics, a distraction.  Anyone with a synapse in their skull can see colors don't matter.  Your argument is akin to the prettiest horse at the glue factory.

Get a clue, Trader.


Wed, 10/03/2012 - 08:56 | 2851392 darteaus
darteaus's picture

The political class is responsible for the spending and the lying about the spending.

The voters are responsible for not paying attention.

The banksters are responsible for exploiting the above.

Wed, 10/03/2012 - 09:17 | 2851444 A82EBA
A82EBA's picture

+1, it's on us, the collective 'we', over time, economic illiterate supermajority, like rabbits blaming wolves for eating rabbits, that's what wolves do, since 1913, wake up rabbits or get eaten, its only natural. The only problem is we're surprised by it

Wed, 10/03/2012 - 11:35 | 2851947 zapdude
zapdude's picture

Suggest you swap "rabbits" with "sheep" and you have the perfect analogy. 

Stupid, follow-the-leader herd animals who cannot think more than 2 minutes into the future or see past the butt of the sheep in front of it. 

I see them every time I mistakenly wade into a Walmart -- the conditioned dregs of sheeple is demoralizing and depressing.

Wed, 10/03/2012 - 09:02 | 2851406 cnmcdee
cnmcdee's picture

Unfunded liabilities are irrelevant, their never going to be paid, so they don't even matter.

The beauty of the coming system is it will have oppressive taxation and zero benefits!!! (just like Greece, soon Spain) 40% of your cheque will go straight to the elite banking interests and you will receive *nothing* in return but pay for your own enforcement arms to oppress you.  They will be required to deal with the 4th generation welfare recipients that have lost their funding and with their 65 iq's figure it's smart to just go around shooting people, and taking their stuff.

The Secret Freedom Fighter is a interesting read, it's online at

Wed, 10/03/2012 - 10:18 | 2851707 Cosimo de Medici
Cosimo de Medici's picture

We're all going to pay for what we've already gotten, and we are not going to get what we've already paid for.

Wed, 10/03/2012 - 15:43 | 2852931 RallyRoundTheFamily
RallyRoundTheFamily's picture

Looks promising, the read not our future.

Wed, 10/03/2012 - 09:03 | 2851407 youngman
youngman's picture

If you look at those graphs...its going to be very very hard to one...slow them make them turn negative......and to get them back to zero....just the first part to slow is down is very do you tell people that you are not going to get the freebie anymore...after they have been eating at the trough for so long..that they no longer know how to forage for food...I personally think we need the civil war to reset the button......if the status quo is what happens....we just keep going into debt by the trillions and fast...and many will go Galt.....

Wed, 10/03/2012 - 09:07 | 2851417 proLiberty
proLiberty's picture

Who is responsible?  We all are because we all have been trying to live at the expense of others which is the specious economic theory at the core of socialism.   Those who are familiar with the Ten Commandments should now see how that violates the Commands that forbid coveting and theft.  That we all will be better off by doing this is a lie, and another Commandment violated.  

Wed, 10/03/2012 - 09:09 | 2851423 the not so migh...
the not so mighty maximiza's picture

It is a very exotic form of money laundering(theft).

Wed, 10/03/2012 - 09:10 | 2851424 Robslob
Robslob's picture

The answer is and always has been WAR!

War solves the employment problem

War solves the overpopulation problem

War makes "oligarchs" whole on their investments

War justifies more Government Debt

War is better than a depression

War relieves our 3 houses of liability or blame

War is the solution...wait, only problem with globalism is who is going to loan who money to bomb their own country?

Wed, 10/03/2012 - 09:18 | 2851453 A Middle Child ...
A Middle Child of History's picture

No need to borrow money from other countries; our benevolent leaders will confiscate 401ks "just until the crisis blows over and the economy improves".

Wed, 10/03/2012 - 09:22 | 2851466 rubearish10
rubearish10's picture

"War is the solution...wait, only problem with globalism is who is going to loan who money to bomb their own country"

Let's just destroy all bankers!

Wed, 10/03/2012 - 09:25 | 2851476 Bay of Pigs
Bay of Pigs's picture

Central banks dont care who gets bombed.

Lew Rockwell: War and the FED

Wed, 10/03/2012 - 09:27 | 2851486 Zero Debt
Zero Debt's picture

War does not solve the employment problem any more because warfare is becoming increasingly capital-intensive and automated.

Same thing for the overpopulation problem, war does not kill as many people as in the past.

Wed, 10/03/2012 - 10:54 | 2851838 Kobe Beef
Kobe Beef's picture

So, anyone for a guerilla war on oligarchs, then?

Wed, 10/03/2012 - 09:17 | 2851446 HAhyperion
HAhyperion's picture

Decades of "debt" based "wealth" creation have lead all of the western world to the abyss.  Since we are being lead by the global criminal banking enterprise (lend only to themselves make no invstments only "turn" money, with increasing velocity - albeit not real, since not deployed in the broader economy) and politicians are bank-owned children screaming "I know you are but what am I..." 

The pied piper leads us to the cliff...childrens games...I am reminded of

musical chairs...tag you're it...the global debt "hot potato," houses of cards, house of mirrors..and this being October (Halloween) a house of horrors

"Ashes, Ashes, WE ALL FALL DOWN"


Wed, 10/03/2012 - 09:19 | 2851457 GetZeeGold
GetZeeGold's picture



No yer damn peas....and then we'll read you the ending.


Wed, 10/03/2012 - 11:17 | 2851899 HAhyperion
HAhyperion's picture

I have eaten my peas and they are quite delicious ... the ending is war...the abliteration of "debts" being either literal or metaphorical..

the end is the old will become new again

Wed, 10/03/2012 - 09:18 | 2851454 phat ho
phat ho's picture

imo no one has an inkling of what this will look like when it comes out the other end. The system has been abused for so long and every iota of turnip blood squeezed out of it it will be a reset of epic proportions and hopefully hopefully a more equitable system will result from more level heads presiding. The debt ceiling is an aberration of what has become of maintaining the status quo, and especially the tbtf's logic if we go down it will take alot of you with us. Sort of like, by preventing forest fires; which is natures natural cycle of rejuvenating life and clearing out debris, it builds up to a point that it is all the more devastating when it does occur. Both parties are horns of the same goat.

Wed, 10/03/2012 - 09:40 | 2851548 CitizenPete
CitizenPete's picture

Hope is NOT a strategy

Wed, 10/03/2012 - 09:20 | 2851459 yogibear
yogibear's picture

We still have plenty of room to boost it up another $14 trillion. In 4 years boost it up to $30 trillion. 

With all the 10,000/day baby-boomers adding onto Social Security and medicare as well as Food stamps it's no problem.

Many radio stations promote food stamps. Companies are all jumping on the entitlement wagon.

Government handouts are big business and it's getting bigger.

Bernanke and the rest of the fed members can just print the US out of debt (sarc).



Wed, 10/03/2012 - 09:23 | 2851467 pods
pods's picture

The system we set up and use is responsible.

Fractional reserve banking, whether debt based, gold based, or tulip based always end the same.

You create so much debt that you cannot service the debt (interest) due to the function being one of exponents and then it implodes.

Then they find a scapegoat (war) to distract you while they create a fresh new fractional reserve banking system.


Wed, 10/03/2012 - 09:24 | 2851468 GeezerGeek
GeezerGeek's picture

The chart probably should be adjusted by 9 months to a year to show when political control actually had an effect. Attributing conditions in 2001 to Bush, for instance, ignores the fact that Clinton was president when the budget for fiscal year 2001 was enacted. Similarly, the Democrats taking control of the Congress - both houses - doesn't mean that they immediately had an effect on the budget, since the first budget they had control over was the 2008 one. I suggest that all readers do the mental exercise required to shift the debt plot 9-12 months to the right and then reconsider the results with different parties in charge.

Wed, 10/03/2012 - 09:33 | 2851510 surfsup
surfsup's picture

should be one color on the chart -- dem repub thing is total crowd management BS

Wed, 10/03/2012 - 09:35 | 2851517 surfsup
surfsup's picture

oh and by the way -- its INTEREST that is the responsible party here not debt...      Usurpation without representation.



Wed, 10/03/2012 - 09:49 | 2851555 RiverRoad
RiverRoad's picture

The Debt Crisis and Fical Cliff better be topics tonight.  Those questions are so damned skewed.  Seems like the Fed writes 'em up the night before.

Wed, 10/03/2012 - 09:48 | 2851580 NEOSERF
NEOSERF's picture

If you didn't see this, this is how future Presidents get to make claims in the future of "moving people out of poverty" and "America is still the land of dreams".

Wed, 10/03/2012 - 09:53 | 2851605 fredquimby
fredquimby's picture

Breaking: ECB able to improve its balance sheet by 45 billion Euros over night....


3 October 2012 - Consolidated financial statement of the Eurosystem as at 28 September 2012 Items not related to monetary policy operations

In the week ending 28 September 2012 the increase of EUR 45.5 billion in gold and gold receivables (asset item 1) reflected quarterly revaluation adjustments.


Pop the Boll bitchez



Wed, 10/03/2012 - 10:05 | 2851651 Uncle Remus
Uncle Remus's picture

Until people (including corporations) learn to provide for themselves what they have come to expect from the government, this will not end or end well.

Wed, 10/03/2012 - 10:13 | 2851680 mayhem_korner
mayhem_korner's picture



What's the Vegas line on that happening...?

Wed, 10/03/2012 - 10:12 | 2851676 mayhem_korner
mayhem_korner's picture



Mr. Owl, what do you call a limit that is never enforced?


Wed, 10/03/2012 - 10:37 | 2851710 falak pema
falak pema's picture

So, to resume the situation : according to Grant, the ECB balance sheet has 16T Euro non collateralised liabilites and the US has 16T $ public debt and 600T private OTC derivative mountain nominal swaps and debt arbitrages; on which the long and short of it is unknown to the Devil himself.

We will require a cataclysmic unwind to tell us where the dead bodies lie and what the resultant stench will be first in TBTF private banking implosion, subsequent public central bank transfer of debt in de-facto nationalisation. 

We are talking about amounts of cumulative debt that would make the real 60T world GDP feel like a pygmy from Bantuland....Heil Money-Honey Das Kapital. 

"Where are you Schultz?? TEll me who is responsible for this crap house, Schultz, I want a quick reply!"

"Yes Mein Concentration kamp Fuhrer, immediately! I will round up the usual suspects. All socialist and dangerous terrorists."

"I want a total list and written confessions of all these socialist criminals. None must be left free; all to be sent to the gas factory!"

"Most prominent amongst them, their witch doctor, as you know Mein Furhrer, is this Lord Keynes!  And then there is chief henchman Krugman. They are the ones who have spread this disease in our great New World Order, Mein Fuhrer."

"Immediately put them behind bars, Schultz. To think they mislead our kind Doktorr Bernanke and all those good hearted souls of the FED, our best university lights. And their comrades in big business, those who build our radiant future in Chindia, land of serfs. All led down this Keynesian garden path of deficit spending! I tell you its all Keynes's fault!"

"Just one problem, Mein Fuhrer, Keynes has been dead for over sixty years."

"Just dig him up and send him to Tussauds for a face lift. We can then publicly try him. Nobody will know the difference. He will of course stay silent. How could it be otherwise, the proof is so damning!"

"Oh Mein Fuhrer you think of everything. We can count on the support of MSM. They will be only too pleased to oblige."

"A thousand year Reich, I tell you, a thousand year Reich, thats what awaits us Schultz, if we get this right!"

Have a nice debate as icing on that cake.


Wed, 10/03/2012 - 10:27 | 2851741 American Sucker
American Sucker's picture

The US uses debt as money.  If you need more money, you have to take out more debt.  Who made the US use debt for money?  The capitalist state with its banker ruling class.

Wed, 10/03/2012 - 10:28 | 2851744 odatruf
odatruf's picture

Tyler - Congress is the House and the Senate, in combination.  It's one branch of government made up of two bodies. Because U.S. Representatives (those in the House) are also called Members of Congress, it's an understandable nuance.  But Senators are Members of Congress, too. They just never go by that moniker.


Wed, 10/03/2012 - 10:59 | 2851850 lolmao500
lolmao500's picture

From my maths, the debt ceiling will be reached around December 5... Of course that SOB Geithner can play games to delay it a few months...

But I would wager that the lame duck congress will pass a debt ceiling hike before the year is out and they might even do it on Christmas or on New Year's Eve...

Wed, 10/03/2012 - 11:05 | 2851871 Burticus
Burticus's picture

Of course, the ruling ElephantJackass Party has no solutions to the mess they have created, but are making sure to exclude anyone who would have solutions from the "debates," which are nothing more than reruns of the Elephant n' Jackass sock-puppet show. However, there has been some backlash.

Apparently, major corporations have pulled their sponsorships of the choreographed Obamney "debate" (following their choreographed conventions) due to shady deals and blatant exclusion of viable contenders to the ruling ElephantJackass party.

Anheuser-Busch and Southwest Airlines are getting clobbered on their Facebook pages.

Wed, 10/03/2012 - 11:49 | 2851983 Blkhat117
Blkhat117's picture

I can see it now The American Debt Crisis of 2015. bond yields branched past 6%, the dollar index is below 60pts and gold above $3000 oz...

Wed, 10/03/2012 - 12:15 | 2852078 Monk
Monk's picture

Everyone. Take a look at household and corporate debt as well.


Wed, 10/03/2012 - 13:25 | 2852321 Sandmann
Sandmann's picture

So giving every American Citizen a Vote didn't solve anything after all. All that Civil Rights stuff indoctrinated in Schools and noone knows how they spent $16 TRILLION more than the country generated in tax revenues.........

Wed, 10/03/2012 - 13:34 | 2852367 q99x2
q99x2's picture

Count me out. I'm not paying.

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