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Charts Of The Day: Why America Needs To Embrace The Fiscal Cliff Instead Of Kicking The Can Once Again

Tyler Durden's picture




 

Yesterday, during the Biden laughing show, which also occasionally panned right the GOP vice-presidential candidate, we showed what is arguably the one and only chart that should be discussed on each of these staged theatrical productions. The chart, which is presented below, shows that 40% of all US spending (and rising) is now funded through debt. In other words, the US is explicitly at the mercy of its creditors who while cooperating for now in a MAD game-theoretical tit-for-tat scenario, can very easily decide to just say no more, and cause a complete collapse of all Federal spending.

The only backstop, of course, is if the Fed were to monetize all debt issuance, which as we have repeatedly shown, the Fed is already doing for all gross issuance in the 10+ year bucket. It is only a matter of time before the Fed is force to monetize each dollar as it exits the US Treasury, as more foreign entities join the China buyer strike, and instead of recycling petrodollars in US debt, continue to buy hard assets such as gold, as China has been doing for the past 18 months.

However, where it gets fun, and where the issue above intersects the most important event this year: namely the election of America's president, is when we look at what the government's own Office of Management and Budget forecasts will be US debt and interest. It goes without saying, that the chart shows just how even more unsustainable the currently unsustainable US situation is. Because if nothing changes in the trajectory of US spending, this country is due for a very painful readjustment, only instead of doing it on its own terms, it will have to be in the context of Greece, when it has to fight for a cash disbursement from some other multinational corporation every single day.

This is how David Rosenberg, who defends biting the bullet, and letting the Fiscal cliff play out as at least it will force America out of its epic debt binge, lays it out:

There is never going to be a good time to put Washington on the debt treadmill. To be sure, it will imply a negative GDP growth rate in the first quarter of 2013, perhaps into the second quarter as well, but that would be it. The retrenchment would be more of a level adjustment, albeit downward, but not a multi-quarter persistent slide in economic activity. The private sector will re-build GDP from a lower base, and with the prospect hopefully of some meaningful tax reform and the removal of clouds of fiscal uncertainty, we could readily climb out on the other side of that cliff. It's not as bad as everyone fears... we will get to the other side, and with fiscal finances in much better shape. That is the silver lining in the cloud.

 

As I said- there is no good time, but better now than waiting to be shocked into the retrenchment later on. If left unchecked, the Federal debt/GDP ratio will breach 100% within the next two or three years. Do we really need to turn European? And more importantly, even under a sustained low interest rate policy, debt service costs will continue to bite into the revenue base - so much so that they will soon begin to absorb more than 20% of total tax receipts. At a time when grim demographic realities will push dependency ratios higher and with that ever-spiralling entitlement spending, the power of compound interest on a continued mountain of debt even assuming years of low rates will ensnare fiscal finances and seriously limit our policy flexibility in the future.

Well said. And sadly, one big pipe dream. Because if there is one thing one can be certain is that no developed country will ever again do the right fiscal thing, as it means a complete political overhaul once the people realize they had been lied to for decades, and all those promises they have been swamped with in years past by this candidate and that, are just not coming true. The reason: the money has run out.

And yes, the correction will come, but only after everyone has lost control of the big picture. When the correction finally does come, it will be that much more painful, and that much more akin to the catastrophic event that really ended the first Great Depression.

Because Mark Twain was right all along about the whole history rhyming thing.

 

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Fri, 10/12/2012 - 13:26 | 2882229 Unprepared
Unprepared's picture

FYB!

Fri, 10/12/2012 - 14:01 | 2882243 Dalago
Dalago's picture

If they kick the can down the road again there will be inflation.  No shit?  No shit.  They're probably planning it that way.  This "cliff" should be called a responsibility; a responsibility to stop increasing government's credit card limit.  Privatize Social Secuity.  Start Health Savings Accounts.  Gov't ovbi. can handle the People's reponsibilities.  Which reminds me... just get rid of Federal Government.  Only have it to enfore the Constitution the States agree upon.

Fri, 10/12/2012 - 14:37 | 2882456 SafelyGraze
SafelyGraze's picture

OT, but per fed asset calculations --

 

Q: What is an as-of adjustment?

A: An as-of adjustment is a memorandum item that is applied to an institution’s cumulative position to offset the effect of errors or to recover float incurred by the institution. An institution’s cumulative position is essentially its average end-of-day balance maintained over a maintenance period relative to its balance requirements. An as-of adjustment is distinct from the accounting entry used to correct the institution’s account for the error.

 

Fri, 10/12/2012 - 16:17 | 2882827 AldousHuxley
AldousHuxley's picture

fiscal cliff = reality

 

bring it on.

Sat, 10/13/2012 - 19:34 | 2885791 All Risk No Reward
All Risk No Reward's picture

Change the money system or prepare for the 100% certain collapse.

Debt Money Tyranny

http://www.keepandshare.com/doc/4768883/debtmoneytyranny-6-1-pdf-60k?tr=77

I heard the Federal Reserve System explain thusly:

The Federal Reserve System is like a government mandated (both parties, people) national privately controlled credit card with no grace period and no benefits.  Your federal income tax is the minimum monthly payment on the national credit card.  The only way you can get paid for work is if someone has previously taken a cash advance and will pay you the proceeds from it.
~Kyle (Alex Jones Show, 10-11-12)

Now, most people "get" that there is some group that controls American Express and profits from its operation.

The same is true of the national credit card.  It has a group that controls and profits, too.

They just happen to be machiavellian criminals and whole societies are their victims.

Fri, 10/12/2012 - 14:40 | 2882463 SafelyGraze
SafelyGraze's picture

see above re: OT, but per fed asset calculation (courtesy fedResChi) --

The reserve credit given for checks not yet collected is included in Federal Reserve "float."

On the books of the Federal Reserve Banks, balance sheet float, or statement float as it is sometimes called, is the difference between the asset account "items in process of collection," and the liability account "deferred credit items."

Statement float is usually positive since it is more often the case that reserve credit is given before the checks are actually collected than the other way around.

Published data on Federal Reserve float are based on a "reserves-factor" framework rather than a balance sheet accounting framework.

As published, Federal Reserve float includes statement float, as defined above, as well as float-related "as-of" adjustments.

These adjustments represent corrections for errors that arise in processing transactions related to Federal Reserve priced services.

As-of adjustments do not change the balance sheets of either the Federal Reserve Banks or an individual bank.

Rather they are corrections to the bank's reserve position, thereby affecting the calculation of whether or not the bank meets its reserve requirements.

Fri, 10/12/2012 - 14:18 | 2882384 NotApplicable
NotApplicable's picture

A bankster named William Bryan Jennings? LOL

Fri, 10/12/2012 - 14:20 | 2882393 kaiserhoff
kaiserhoff's picture

Cut government salaries in half, and benefits by 90%.  This will be much easier when the kleptocrats can't get rich raping the taxpayers.

Fri, 10/12/2012 - 16:21 | 2882856 AldousHuxley
AldousHuxley's picture

that means bankruptcy to more than 90% of the US population....mostly in republican state where they don't produce world competitive exportable goods except natural resources.

 

better way would be force elites to get richer not by cheating americans, but by adding value.

 

 

Fri, 10/12/2012 - 16:21 | 2882858 Thoth
Thoth's picture

They should get whatever the median family income is, no pension, and no direct stock market participation, 401K only. I would expect we would routinely get a bunch of surprise median income stats from the BLS though...

Fri, 10/12/2012 - 16:42 | 2882945 Poetic injustice
Poetic injustice's picture

They will go on strike then! (And you will not notice difference between working and striking government employee).

Fri, 10/12/2012 - 14:45 | 2882486 Overfed
Overfed's picture

Ballot in Spanish? Si. Firme por Ronaldo Pablo!

Fri, 10/12/2012 - 13:38 | 2882275 insanelysane
insanelysane's picture

Cliff?  What cliff???

Fri, 10/12/2012 - 13:28 | 2882237 Jim in MN
Jim in MN's picture

Slash that budget!  It's invigorating!

Just use this principle:  Lobbying by industry as a share of total lobbying = share of budget cuts.

There, Fixed.

Fri, 10/12/2012 - 14:16 | 2882376 kaiserhoff
kaiserhoff's picture

Me likey.  How about a corollary?  Lobbying by any and all foreign persons/governments shall be punishable by death..., or worse.

Fri, 10/12/2012 - 13:30 | 2882240 iDealMeat
iDealMeat's picture

Can will be kicked...  Because it can be..  no one cares.. it won't ever be paid back...

 

Its the same thing as smelly garbage piling up in China..  People just get used to it and never do anything about it...

 

Darth Vader was right..  Deficits don't matter.

Fri, 10/12/2012 - 13:32 | 2882249 Unprepared
Unprepared's picture

So how long before the can hits the fan?

Fri, 10/12/2012 - 13:41 | 2882279 NewThor
NewThor's picture

December 3rd, 2012

Fri, 10/12/2012 - 14:33 | 2882413 Ham-bone
Ham-bone's picture

This is all so funny - all the sequester says is a $1.2T cut in new planned deficits over the next 10 years...that is $110B less in deficit spending in '13.  On a monthly basis, about $9B less in deficits (monthly only $90B instead of $100B deficit).  That this "cliff" is the end of the line shows how far gone we are.

The Fed will be buying $85B in assets monthly in '13 (MBS and T's) but somehow the absence of $9B in largesse is the "end of the line".

Fri, 10/12/2012 - 14:58 | 2882534 CrashisOptimistic
CrashisOptimistic's picture

No.  You have this wrong, and it is critically important.

The Sequester says there will be 1.2T cut IN SPENDING.  Not in deficits. IN SPENDING.

Fri, 10/12/2012 - 16:21 | 2882557 Ham-bone
Ham-bone's picture

Not sure I see the difference.  Take this years budget and reduce by $110B ($1.2T over 10yrs).  That is a reduction in spending of $110B and thus theoretically $110B less in '13 defiicit (also dependent on tax increases, revenues, interest expenses, etc.).  I guess you are suggesting deficit could be larger but I'm assuming some linkage between spending and deficit...guess they don't have to follow in lockstep? 

Still, net-net we're talking about an '12 $3.8T budget will be cut to... $3.8T in '13???  The smoke and mirrors game of not growing spending as planned, but no actual cutbacks.  No cutback in spending, only not a growth in spending as was plannned???  The reason for the cuts is due to the automatic growth of spending in all the entitlement programs opted out of the "spending cuts".  So, the same $3.8T won't buy what it did in '12 so all the "radical spending cuts" come in defense and discretionary. 

And then in '14 the "savings" is a less than planned growth of spending to $3.9T???

This austerity will destroy us...the HORROR!!!

Sat, 11/03/2012 - 01:39 | 2943692 iDealMeat
iDealMeat's picture

+1, Thx Ham-bone.  I re-read my comments because of bag heads like you.

 

Fri, 10/12/2012 - 14:25 | 2882406 chart_gazer
chart_gazer's picture

been reading grants nonsense for years.  he is blinded by his own ego. the fed is ahead of him

the fed can create new money and buy every last $ worth of gov debt. put it on their balance sheet, collect the interest from the gov on it, then give it back to the gov as profits from the fed. at some date they can just say, there is no more debt, you (gov) owe me nothing, its gone. what has the fed lost? nothing, they created $ out of thin air to buy it. the size of the feds balance sheet doesn't matter. 

some say all these newly created $ will cause inflation. some will, but since there is little demand for the money (slow to no growth in the economy) most new money will just go to propping up the stock market and fighting the deflation of other assets (housing). what inflation does exist will be poo pooed with their f__d up PPI CPI formulas. 

while they do this, and keep interest rates low, banks earn their way back to solvency.

remember, the fed is banking cartel, their sole interest is protecting the banks. they could care less about the effects of their actions on anyone else.

 

Fri, 10/12/2012 - 14:37 | 2882452 blunderdog
blunderdog's picture

Quit giving Darth Vader a bad name.  He had a lot more integrity than Cheney ever did.

Fri, 10/12/2012 - 14:39 | 2882460 foodstampbarry
foodstampbarry's picture

Tell that to the Greeks..

Fri, 10/12/2012 - 13:30 | 2882245 LawsofPhysics
LawsofPhysics's picture

In other words, massive mis-allocation and mal-investment of capital and resources.  It can be fixed in an adult and responsible manner (not likely with the criminals in charge) or the animal spirits can fix it when the supply chains start failing.

Will humans be smarter than yeast, my guess is probably not.

Fri, 10/12/2012 - 14:19 | 2882388 ZerOhead
ZerOhead's picture

More likely the animals spirits will make a final killing by driving supply chains into the abyss...

Fri, 10/12/2012 - 14:36 | 2882450 LawsofPhysics
LawsofPhysics's picture

In the paper  world or the real world?  Please, wake up, when fraud becomes 100% of the status quo, possession becomes the law.

All paper promises will dissappear.

Fri, 10/12/2012 - 14:57 | 2882514 ZerOhead
ZerOhead's picture

Oh I'm awake alright. I've been long land and PM's so long and successfully that my shrink is now questioning his own sanity...

Paranoid schizophrenic my ass...

Fri, 10/12/2012 - 15:26 | 2882627 Jim in MN
Jim in MN's picture

A paranoid man is a man who knows a little about what's going on.

--William S. Burroughs

Fri, 10/12/2012 - 13:33 | 2882252 francis_sawyer
francis_sawyer's picture

Learn it... Know it... Live it... [Embrace it]...

~~~

http://www.youtube.com/watch?v=k2NaHBVVYzY

Fri, 10/12/2012 - 13:33 | 2882256 Lost Wages
Lost Wages's picture

Soon humans will return to a primitive way of life. It won't be that bad.

Fri, 10/12/2012 - 13:42 | 2882283 Unprepared
Unprepared's picture

Topless women everywhere... yeehaa... wait... does that mean we currently live a primitive way of life?

Fri, 10/12/2012 - 13:57 | 2882337 CrimsonAvenger
CrimsonAvenger's picture

Not primitive enough, from where I'm sitting.

Fri, 10/12/2012 - 15:34 | 2882644 francis_sawyer
francis_sawyer's picture

Nude Pygmies... We used to only have National Geogrphic for that...

Fri, 10/12/2012 - 14:02 | 2882348 Winston Churchill
Winston Churchill's picture

Return to a primitive way of life ?

Must have missed something.

Fri, 10/12/2012 - 14:14 | 2882371 FL_Conservative
FL_Conservative's picture

What no iPhones and streaming video everywhere?  Are you fucking kidding me?

Fri, 10/12/2012 - 13:33 | 2882257 fonzannoon
fonzannoon's picture

is it me or is rosenberg understating things a bit? and by a bit i mean an epic shitload.

Fri, 10/12/2012 - 13:37 | 2882268 Roubinesque
Roubinesque's picture

Rosenberg's calls in 2005 and 2006 were dead-on-balls accurate. But he never jumped up and screamed about it. The charts did the screaming much louder.

Fri, 10/12/2012 - 13:43 | 2882287 fonzannoon
fonzannoon's picture

2 quarters of choppy waters to wind down 16 trillion?I; I'll take it!

Fri, 10/12/2012 - 14:12 | 2882362 ZerOhead
ZerOhead's picture

While I love the guy... Rosenburg has lost it this time.

Though he is right about the need to wind things down sooner rather than later you don't just walk off an 8% hit to GDP in two quarters. It wasn't so long ago that economists used the phrase GDP MULTIPLIER when talking about the effect of increasing spending to stimulate the economy. I expect it works in reverse as well...

Fri, 10/12/2012 - 14:44 | 2882477 yrbmegr
yrbmegr's picture

It won't be that bad.  1% tops.

Fri, 10/12/2012 - 13:54 | 2882327 gjp
gjp's picture

No kidding. He says "do we really want to turn into Europe"? The us should be so lucky. What a farce. Europe - I.e. Germany and other Nordic countries at least make some capital good the rest of the world wants. Europe has not been completely taken over by FIRE and consumption as has the US. The US is further gone than anyone's with the possible exception of the UK. Just a chip off the old block it seems ....

Fri, 10/12/2012 - 14:33 | 2882432 bank guy in Brussels
bank guy in Brussels's picture

Not to mention that on the European continent, there is almost no one in jail here, there is almost no fear of police or judicial or lawyer harassment, quite little crime and, in north-west Continental Europe, zero poverty among legal residents.

Our fear here is that our little paradise may be undermined, by the EU-Troika brutality in the Mediterranean sector, and by the contagion of general economic malaise that will finally chip away and demolish what we have in our quadrant of Europe, when our teetering banks finally collapse as well ...

That was a funny remark of Rosie.

Most of the world would be glad to live in a society with no poverty, everyone having health care, a genteel drinking-at-the café lifestyle, and almost no 'police state' oppression or hassles.

Fri, 10/12/2012 - 13:33 | 2882258 resurger
resurger's picture

Derivatives Notional OS = 220 Trillion for the biggest 5 US Fradulant banks (When no one will buy US paper, those guys will do)

MBS = 9 Trillion to be prinited thorough QEternity

Japan Debt = 1 Trillion

China Debt = 1 Trillion

GCC Debt = 3.5 Trillion

How the fuck will the Fed buy paper to lower the portfolio duration?! Maybe they should search for yield in Zimbabwe or buy AAPL!

in 10 years time, Debt/GDP = 200% +

Slowly then suddenly, when all those creditors start dumping thier holdings, it will be too late, even if you monitize from here to pluto.

 

Fri, 10/12/2012 - 14:25 | 2882405 NotApplicable
NotApplicable's picture

I expect the Fed to completely abandon the idea of measuring risk via portfolio duration (after all, risk is a market phenomenon) as they move further and further up curve, flattening as they go.

Fri, 10/12/2012 - 13:34 | 2882261 Roubinesque
Roubinesque's picture

Can we be annexed by Canada and elect David Rosenberg to be our first Canamerica President? Perhaps Joni or KD can sing at the inaugural.

Fri, 10/12/2012 - 13:47 | 2882300 fuu
fuu's picture

Why would we want to listen to Karl Denninger sing?!?

Fri, 10/12/2012 - 14:27 | 2882414 NotApplicable
NotApplicable's picture

You can fly whatever flag ya want, buddy. Just keep your enslaving collectivism to yourself though, as there's already more than enough evil-do(good)ers to go around, okay?

Fri, 10/12/2012 - 14:37 | 2882453 bank guy in Brussels
bank guy in Brussels's picture

Canada is a much damn nicer place to live than the USA, 'despite' their having health care for everybody.

Very little police state hassles there, little crime and almost no one in prison, like Europe ... Much less social aggression ... Québec is the nicest part of it. Very European country, in many ways.

Fri, 10/12/2012 - 17:29 | 2883107 Uncle Remus
Uncle Remus's picture

Wait - Joni sings?

Fri, 10/12/2012 - 13:35 | 2882262 ZFiNX
ZFiNX's picture

We're not going to turn European, we're turning Japanese... DOW 38,000!

 

http://www.youtube.com/watch?v=gEmJ-VWPDM4

Fri, 10/12/2012 - 13:54 | 2882324 Dr. Engali
Dr. Engali's picture

 You are right we are turning Japanese but , the dow has seen it's top. The only way the dow goes higher is if we hyperinflate. Otherwise we qe ourselves all the way down to S&P 400..Where we were before the great leveraging up began.  

Fri, 10/12/2012 - 13:54 | 2882326 LawsofPhysics
LawsofPhysics's picture

If we were turning Japanese then the market would underperform for 20+ years.  I think you meant we are turning Kenyan or Weimar.

Fri, 10/12/2012 - 14:18 | 2882381 ZFiNX
ZFiNX's picture

Well, whomever, I just know I want me some assets because all these CEOs are pulling Jack Welch's on their earnings. It's really starting to look like Livermore's bull-market second half, IMO. AAPL led the way, now GOOG is retaking the throne. Just way until the FED stops paying interest on excess reserves, then it's going to be on like Donkey Kong. 5% APR credit cards for everyone!

Fri, 10/12/2012 - 15:30 | 2882638 Jim in MN
Jim in MN's picture

Zero REAL returns to paper assets.  It is the same, Japan or Wiemar, just the notional amounts are different. And a few other details like whether you can afford bread. 

 

But overall, whether it be through 'mild' chronic deflation vs. hyperinflation, middle class paper investments are toast.

Fri, 10/12/2012 - 13:36 | 2882265 PUD
PUD's picture

Money as debt. There is no fix for it regardless of the cost of money (rates)

This system was doomed to fail from day one. Only when the Fed is eliminated and the nation goes back to creating its own money and spending it into existence without interest can we survive.

Fri, 10/12/2012 - 14:33 | 2882434 NotApplicable
NotApplicable's picture

Other than the incoherence of "nations creating money," you're spot on.

Money is just another good created by people who demand (a.k.a. value) the ability to rise above direct barter. To insist upon politicizing it only creates the very mess we find ourselves in today. Which is why even the "Founding Fathers" declared that ONLY gold and silver was to be money, rather than some artificial government creation in the form of a note.

Fri, 10/12/2012 - 14:41 | 2882466 blunderdog
blunderdog's picture

Money's not "just another good."  It's an abstraction--like a "promise" or a "contract." 

It's a lot more sophisticated than something like a hammer or a bottle of whiskey.  That's why there's always so much bitching about it--most folks don't even understand the most basic premise.

Fri, 10/12/2012 - 13:37 | 2882266 Dr. Engali
Dr. Engali's picture

The solution is simple...borrow another trillion to power up the war machine and start another war with Iran..burn the place to the ground, fly in a bunch of FRNs, and award a bunch of no bid contracts.

 

On second thought ..I'll take the fiscal cliff for 16 trillion Alex 

Fri, 10/12/2012 - 13:38 | 2882276 ZFiNX
ZFiNX's picture

This! Plus if we draft our boys imagine what wonders that will do for the unemployment figures!

Fri, 10/12/2012 - 13:42 | 2882285 resurger
resurger's picture

you got that one right, and let the rag heads pay the bill.

Fri, 10/12/2012 - 14:25 | 2882408 ZFiNX
ZFiNX's picture

It's simple. We kill the fiat.

Fri, 10/12/2012 - 13:37 | 2882269 Silversem
Silversem's picture

Inflation will come, and how!! It will be unprecedented! Better take cover by buying gold and silver or by trading the unevitable volatility.

Fri, 10/12/2012 - 13:37 | 2882270 JailBank
JailBank's picture

Eventually they will miss the can and kick you straight in balls.

Fri, 10/12/2012 - 13:39 | 2882273 gaoptimize
gaoptimize's picture

Chart 5 is an embarrasment of OMB hubris/spin optimism/naivite', even (far) worse than the CBO equivalent.  Why would you sully your article and the pages of Zerohedge by re-publishing it here?

Fri, 10/12/2012 - 13:38 | 2882274 TheObsoleteMan
TheObsoleteMan's picture

Forget football, NASCAR or any other endeavor, kicking the can is America's favorite past time. There will be no "embracing" of anything constructive, only tyrannical despotism. Americans for the most part have embraced centralized power, and bought collectivism. Seniors don't blink an eye at selling their grandchildren's future down the river of broken dreams, just as long as the medicare and social security checks keep coming in. They will continue to fund an arms industry that is the bedrock of imperialism. Americans have become used to {and comfortable with} all of the entitlement society's "guarantees, and not having to pay for them upfront. Instead, they will pay for them through inflation, all the while buying into the misdirection provided by the politicians and MSM. No, it all doesn't end until we get a total and complete collapse of our currency, economy and nation. Once hooked on the dope of something for nothing, there is no getting clean, as the withdrawal symptoms are just to brutal for most to suffer.

Fri, 10/12/2012 - 14:07 | 2882359 Winston Churchill
Winston Churchill's picture

Football,Nascar...

I thought the US national sport was rioting.

Sure we are going to see a lot more of it soon too.

Fri, 10/12/2012 - 14:16 | 2882374 semperfi
semperfi's picture

I thought the national sport was eating (your way to an obesity championship)

Fri, 10/12/2012 - 14:36 | 2882448 NotApplicable
NotApplicable's picture

Only if your B-ball team wins the championship.

Fri, 10/12/2012 - 14:13 | 2882367 semperfi
semperfi's picture

Dead on!  I mean, really really dead-on exactly how it is and how its going to be.  Get out of debt, get yourself a place out of the way, get gold, get 90% silver coins in place of most of your fiat, and keep it all out of the banking system.  And you better have a few guns & a lot of ammo (which you can also use as 'money')

Fri, 10/12/2012 - 13:42 | 2882282 Peter Pan
Peter Pan's picture

The money HAS NOT run out. No matter how much money you pump into the system, whether it be to banks or people, the situation is beyond repair for as long as the expectations of humanity exceed the means available and for as long as humanity's wastefulness ( war, malinvestment, theft etc) runs rampant.

Fri, 10/12/2012 - 13:42 | 2882284 kito
kito's picture

all politicians who are ready to make the hard decisions by allowing some hard years in the u.s. in exchange for a balanced budget and a viable future please say "aye".............................crickets......................crickets..........................

Fri, 10/12/2012 - 14:42 | 2882473 bank guy in Brussels
bank guy in Brussels's picture

The time of 'hard decisions' means the oligarchs just continue to rape and pillage in different ways ...

That is maybe what American people do sub-consciously feel and understand, and why they act the way they do

A time of 'sacrifice' would not actually be healthy re-structuring, it would just be more daylight robbery of workers and the middle class with a new 'justification'

Until the oligarchs are overthrown it's all corrupt ... so people may as well beg and manipulate for some crumbs till the Time of Collapse and Revolution

Fri, 10/12/2012 - 13:45 | 2882292 HongPong
HongPong's picture

can you guys please see about creating municipal bonds at 0% interest? there has to be a way to do it technically and the bonds would still be desirable as good collateral backed up with a tax base. this would help all the things.

Fri, 10/12/2012 - 13:49 | 2882303 Peter Pan
Peter Pan's picture

Will the interest paid still be tax free?

Fri, 10/12/2012 - 14:18 | 2882383 kaiserhoff
kaiserhoff's picture

To hell with that.  I want -3%.  I'm backing up the truck now.  Chop, chop.

Fri, 10/12/2012 - 13:46 | 2882296 DOT
DOT's picture

Cross the streams ! I love this plan !

http://www.youtube.com/watch?feature=fvwp&v=3OOF0FpKiYk&NR=1

Fri, 10/12/2012 - 13:47 | 2882299 Urban Redneck
Urban Redneck's picture

The can be only one Creditor.  BEN BEELZEBUB BERNANKE 

Fri, 10/12/2012 - 14:38 | 2882457 NotApplicable
NotApplicable's picture

Benron and the infinite balance sheet!

All your everything are belong to us.

Fri, 10/12/2012 - 13:47 | 2882301 ptoemmes
ptoemmes's picture

American Troika starring...

Fri, 10/12/2012 - 13:48 | 2882302 Zap Powerz
Zap Powerz's picture

We already drove off the cliff.  We have been in free fall for a while.  The ground is the next stop.....soon.

Splat.

Fri, 10/12/2012 - 13:51 | 2882313 Peter Pan
Peter Pan's picture

Agreed, but don't forget your gold parachute with the silver strings.

Fri, 10/12/2012 - 14:44 | 2882479 KickIce
KickIce's picture

We're just waiting for our Wyle E Coyote moment, Ben just needs to look down.

Fri, 10/12/2012 - 13:49 | 2882304 Qualitative Tig...
Qualitative Tightening's picture

The LTM debt issuance (first chart, red shaded area) seems to have a general correlation to the way the gold price has performed over the same time period.

Fri, 10/12/2012 - 14:01 | 2882330 lolmao500
lolmao500's picture

It is only a matter of time before the Fed is force to monetize each dollar as it exits the US Treasury, as more foreign entities join the China buyer strike, and instead of recycling petrodollars in US debt, continue to buy hard assets such as gold, as China has been doing for the past 18 months.

So what. They can do that and who's gonna call their BS?? Nobody, that's who. Ben can raise the FED balance sheet up to eleventy brazillion and it won't matter.

Seriously, nobody will call Ben's bluff because they are too afraid of what it would do.

Sell all their treasuries? So what, Ben is gonna buy them.

Sell all their stocks? So what, QE.

Selling oil in other currency than US dollar? Prepare to get invaded.

Pension funds dropping US treasuries? We can't do that, it'll collapse the country.

NOBODY IS GONNA CALL BEN'S BLUFF. Nobody. Ben can run his scam for at least another decade.

Fri, 10/12/2012 - 14:41 | 2882468 NotApplicable
NotApplicable's picture

It's kinda hard to consider an infinite checkbook to be a bluff. As long as dollars are accepted as payment for goods and services (either petro and/or local dollars) this ride ain't gonna end anytime soon.

Sat, 10/13/2012 - 09:35 | 2884598 toomanyfakecons...
toomanyfakeconservatives's picture

Every day the dollar is being shut out of more and more international transactions. The outside world is ready now for life after the Federal Reserve Note.

Fri, 10/12/2012 - 17:40 | 2883133 TheObsoleteMan
TheObsoleteMan's picture

Your thinking like a central banker, and they think they are gods. They will soon get a reality check. It just doesn't work that way. It might for awhile, but not into perpetuity. Sooner, rather than later, the chickens come home to roost. The rest of the world is not going to just sit back and watch the reserve currency be printed into oblivion without wanting out.

Fri, 10/12/2012 - 13:56 | 2882332 LawsofPhysics
LawsofPhysics's picture

Anyone know exactly where all that interest is going?  Therein lies the real answer to life, the universe, and everything.

Fri, 10/12/2012 - 14:03 | 2882350 yrbmegr
yrbmegr's picture

Make it so!

Fri, 10/12/2012 - 14:15 | 2882373 chet
chet's picture

"In other words, the US is explicitly at the mercy of its creditors..."

The creditors are still mostly domestic, and will likely keep buying.  We are Japan, baby.  But they have only had two lost decades.  I bet we can beat it.

Fri, 10/12/2012 - 14:23 | 2882399 WhiteNight123129
WhiteNight123129's picture

creditors domestic, bwahhahaha.... read eichengreen, Jim rogers , look at China, US gov bonds = 60% of foreign central banks reserve, 85% or currency trades, wait to see when this goes down and more and more Yuan are held , it will force politicians to tighten their belt, it should help trade deficit though. If Europe continues to tighten its belt, in 2 years foreign central bank will increase their euro exposure.

 

 

Fri, 10/12/2012 - 19:34 | 2883431 pirea
pirea's picture

the main creditor is the fed, not domestic, and of course will keep buying, because other way the shack will go down

Fri, 10/12/2012 - 14:16 | 2882379 WhiteNight123129
WhiteNight123129's picture

I am a foreigner shorting the treasuries from overseas and I approve my own message.

 

Fri, 10/12/2012 - 14:23 | 2882402 Kastorsky
Kastorsky's picture

fuck amerika already.

 

Fri, 10/12/2012 - 14:23 | 2882403 JustObserving
JustObserving's picture

"If left unchecked, the Federal debt/GDP ratio will breach 100% within the next two or three years."

WTF??

I thought we breached that 100% level a few weeks ago and that ratio stands at 103%.  This is from Oct 3, 2012 on Zero Hedge:

"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%"

http://www.zerohedge.com/news/2012-10-03/chart-day-americas-debt-crisis-who-really-responsible

Fri, 10/12/2012 - 14:38 | 2882441 LouisDega
LouisDega's picture

Lucy. Oh Lucy...

Fri, 10/12/2012 - 14:27 | 2882410 polo007
polo007's picture

http://www.themoralliberal.com/2012/10/10/holding-the-fed-accountable-craig-columbus/

The Keynesian-dominated Fed sincerely believes that more QE will lower mortgage rates, further drive up asset prices, make cash appear increasingly unattractive, cause higher-end consumers to feel richer and thus spend more or purchase real estate—ultimately leading to additional demand and more hiring. If home prices rise even marginally, banks will have fewer impaired assets and can ramp up lending.

Others contend QE damages confidence by implying that the American economy is on life support and tells home buyers and business owners that there is no need to act today when rates will remain low for as far as the eye can see.

Furthermore, a majority of homeowners have already refinanced their houses following previous Fed actions. Reasonable people can differ about the best approach for fighting deflationary forces.

An honest defense of QE should describe the techniques being employed to manage Washington’s massive debts. They include a tactic known as financial repression, which forces interest rates to levels below the rate of price inflation. By eroding the value of government debt held by bondholders and savers, politicians can dodge having to convince the public to accept unpopular austerity measures. It does mean, though, that the American people must accept “too big to fail” financial institutions in lieu of hard choices. To maintain unfettered access to the debt markets, the government backstops primary dealers at all costs.

Fri, 10/12/2012 - 14:46 | 2882490 blunderdog
blunderdog's picture

     The Keynesian-dominated Fed sincerely believes...

No it doesn't.  It really doesn't.

Fri, 10/12/2012 - 20:01 | 2883484 honestann
honestann's picture

DEBT to GDP in the USSA is well above 1200% now.  The claim it is only 100% is an absolute, complete, utter lie, created by excluding most of the debts and obligations the USSA has.

Fri, 10/12/2012 - 14:30 | 2882418 polo007
polo007's picture

http://www.bloomberg.com/news/2012-10-12/g-7-discusses-potential-fiscal-measures-if-growth-falters-1-.html

G-7 Discusses Potential Fiscal Measures If Growth Falters

Some Group of Seven nations raised the possibility of extra fiscal measures if the global recovery weakens, Canadian Finance Minister Jim Flaherty said after a G-7 meeting in Tokyo yesterday.

“There has been some discussion by some of the participants along those lines, generally relating to the European situation,” Flaherty said on a conference call with reporters today. “The continent is in recession and there’s rising unemployment.”

Europe’s woes are at the center of this week’s meetings of the World Bank and International Monetary Fund in Tokyo as finance chiefs work to sustain a flagging global recovery. The Washington-based lender said this week that failure to remedy them was helping to generate an “alarmingly high” risk of a steeper slowdown.

Flaherty also said it’s worth considering proposals by IMF Managing Director Christine Lagarde to give Greece and other troubled European countries more time to meet fiscal targets.

Fri, 10/12/2012 - 14:44 | 2882459 polo007
polo007's picture

http://www.cnbc.com/id/49375694

Erskine Bowles pointed out that revenue does nothing more than pay for Medicare, Medicaid, and Social Security. All other expenses are paid for with borrowing "and half of it was borrowed from foreign countries," he said.

Alan Simpson bemoaned the political divide: Democrats who portray the Republican Medicare reform plan as "throwing old ladies off cliffs," and Republicans who "didn't come to limit government, they came to stop it."

He added: "If you want to know about a stimulus, whether you're listening to (economist Paul) Krugman or whoever, we do a pretty good stimulus. It's called the deficit — one trillion, 100 billion bucks. What the hell do you think that is?"

Fri, 10/12/2012 - 14:50 | 2882509 falak pema
falak pema's picture

Apart from the fact that the federal debt is a runaway train, the domestic debt is at 13T and growing, the private banking debt is symbolically reperesented by the 700 T nominal derivatives pile that JPM NEVER wants to unwind...aka its own 90 T share of it. 

And, the muni debt has more than ten states in virtual bankruptcy. 

So lets just say collectively the US economy is the most indebted in the world.  

If someone were in a position to ask its banks, and oligarchs, to bite the debt bullet they would ALL go belly up.

But....which they can't because of reserve currency and big stick status!

So it all boils down to the fact that the largest economy in the world, that has a chronic deficit that increases every year to the amount of 5OOB/year, is heading to a status of creosote; accumulataion of debt unlimited, burning 25% of the world's energy; aka 20 million bpd of oil with a population of less than 5%. Without any accountability attached! 

This is a crazy situation for anybody that has even the slightest amount of neurones, to understand 2+2, and elementary sense of logic and minimal  tit for tat ethics. 

But apparently TPTB have no intention of using their super high IQs to achieve this minimal duty to humanity, country and providing for the future of their very own. 

We are, to use the Lance Armstrong analogy, in a system where if the normal human produces effort of 200-250 watts, the Oligarchs and their steroid fed systems pretend they can produce 450 watts on a sustainable basis. 

Something has to go boom!

Fri, 10/12/2012 - 14:56 | 2882525 blunderdog
blunderdog's picture

Has this guy spent any time living in the USA? 

I get that he's pretty sharp and I like a lot of his perspective, but he writes like a guy who thinks there's some kind of safety net here for the tens of millions of people who'll be out on the bricks when FedGov stops paying them.

He's definitely right, the gummit has to stop trying to run an '80s economy in today's world by increasing debt, but it seems he has no grasp of the scale of the social problems we'll have to address to do that.

I'm young enough and have no kids.  I'd be game to see everything just turned off tomorrow, but he seems to think we'd be able to retain some semblance of a civil society in the absence of a trillion dollars of dole payments and another trillion in salaries. 

When stated simply, it seems silly, but hey, his country's what, half the population of California?  I guess things *are* a bit different there.

Fri, 10/12/2012 - 19:58 | 2883476 honestann
honestann's picture

WRONG.

Hey, I understand why you think the way you do --- all the official propaganda for the past 50 years created and supports your impression.  However, go find and read the recent ZH article about spontaneous gardens being created "by the people" in abandoned land in Detroit... the food from which is being voluntarily given to the most needy, even over those who invested the work to grow the food.

Your biggest mistake is this.  Life without predators-DBA-government in control is sooooooooooooooo VASTLY more efficient than life today, that huge numbers of people who could-not or would-not be productive under the current soviet model in the USSA... will get to work, produce, and help others survive until they too find a way to become productive.

Life without predators is BETTER... even right from the start.  Not perfect, not heaven, but better than what exists today in the USSA.

Fri, 10/12/2012 - 20:34 | 2883583 blunderdog
blunderdog's picture

I agree the world will BECOME better after the FedGov stops trying to placate everyone with checks, but if you think it's going to happen spontaneously and immediately, you're fuckin' nuts.

Would you say places like Detroit and Camden are maintaining a civil society?

Maybe we just have different operational definitions for that concept.

"The predators" don't go away when government quits and goes home.  The predator-type just changes tactics, and the group membership rotates a bit.  It's a lot easier to become a day-to-day bandit where there's no coordinated communications system to help track you and neutralize you.

Anarchy is the best approach, but it's not some kind of magical paradise.  We still have to *address* all the problems we're papering over at the moment.

Fri, 10/12/2012 - 21:44 | 2883741 honestann
honestann's picture

No, I'm not nuts.  I agree that the predators-DBA-government and predators-DBA-corporations (including central banks) will not stop sending checks to bribe the non-producers --- until those checks become worthless (nobody will accept them).  You are entirely correct about that.

I would say "Detroit and Camden" are NOT maintaining an entirely civil society, but they have also NOT broken down into absolute freeforall chaos either... as that article in ZH indicates.

...HOWEVER...

What happens IF all the checks stop coming?  What happens when EVERYONE, including the parasites the predators bribe with fiat checks come to understand "the game has ended"?  Not "might end" or "might end soon", but "has ended".  No more freebees, no more handouts.

What then?

What happens if everyone fully understands the predators can no longer help them?  Answer:  At that point they will start looking elsewhere.  Some of them will simply grab a metal pipe or a hand gun and try to directly steal what the predators have been stealing for them until now.  They will be killed in self-defense.

It won't take very long before people see what happens to individual thugs without their paid thugs-in-riot-gear-and-tanks to front for them.  And so they will look for alternatives.  And they will notice an ever-increasing number of alternatives offered by production-minded folks... production-minded folks that no longer pay any attention to bogus regulations and no longer pay taxes.  In other words, very efficient productive folks.

Well, you and I know there are vastly more people willing to "accept a paying job" than "conceive, start, organize and operate a productive business".  So most of these people will "take a job"... and they will quickly find it is very rewarding to be productive, especially when they get paid and the alternatives are very dangerous.

Yes, "anarchy is best"... except technically speaking all modern alternatives never existed in the first place.  Every "government" today is a fiction, and therefore does not exist.  Literally does not exist.  Of course the predators who hide behind the fictitious name "government" exist, and so do the thugs they pay to terrorize us, and so do the guns and bullets they wear around their waists exist.  But that's just equivalent to saying "human predators exist", which they certainly do.

Frankly, there is only one major issue to resolve --- how to eliminate predators-DBA-government, predators-DBA-corporations, predators-DBA-central-banks, etc.  In other words, how do we get humans to give up their childish fictions, from "SantaClaus" to "government" to "corporation"?  THAT is the challenge, a very epistemological one.  And THAT is the problem, since most humans refuse to turn on their brains and think for more than 10 seconds at a stretch.  In the end, it is up to those of us who do think... to prevent endless cycles of new predators.

Fri, 10/12/2012 - 22:29 | 2883829 blunderdog
blunderdog's picture

    What happens IF all the checks stop coming?

The most common outcome has been a period of widespread violence and looting, then the emergence of a somewhat better organized group of criminals who install a new government of sorts.  At least, that's what's happened every other time--take a look at Argentina or the former Soviet states or anywhere else the economy has collapsed.

Basically, the potential for success is THERE, but we have to raise consciousness about 50,000 feet before it becomes *achievable.* 

MOST Americans have not even begun to imagine a world in which there's no big-daddy government enforcing right and wrong and making sure good people don't suffer too badly. 

Part of this is a result of our vigorous effort to miseducate people about political history.

  ------------

I'll add, incidentally, that your view that "government" literally does not exist is hopelessly outdated as far as nominalist perspectives on metaphysics go.  The idea that there is NO SUCH THING as an idealized fiction is the strongest form of nominalism dating from pre-Plato, and I don't think anyone would agree with you if you applied the same notion to something like numbers.  Splitting the difference between what makes definitional-truism "real" vs. pervasive and common-sense "mythology" (which I assume you call "non-real") is an ongoing effort.  If you're not familiar with the nominalist/idealist divide, ignore.

Sat, 10/13/2012 - 00:26 | 2883967 honestann
honestann's picture

And did everyone end up dead in Argentina when it collapsed?  No.  And they won't end up dead when it collapses again.  The predators-DBA-governments produce NOTHING.  The do, however, destroy quite a bit.  So IF and when their operation ends, the drag on productivity they cause also ends.  Hence, things get better, not worse.

Remember, homes do not vanish when government does.  Gardens do not vanish when government does.  Workshops do not vanish when government does.  For practical purpose, the only thing that happens is... people demand silver and gold coins in payment --- which is GOOD and very BENEFICIAL, because then predators and scam artists can't print up endless fiat, fake, fraud, fiction, fantasy, fractional-reserve debt-laden toilet paper and convince people to accept them for the real, physical, valuable goods they produce.  HUGE WIN.

The vast majority of sheeple are too fat, lazy and braindead to take the risk of violence.  To be sure, some protests and violence will occur --- hopefully focused on government buildings, large financial corporation buildings, and other predator strongholds.  That's not a bad thing, that's a good thing.

Will there be some unfortunate violence?  Certainly... but almost all performed by people who are already violent... but not violent enough to push someone far enough to take them out for being the predator they are.  So pushing people past that point is another good thing --- getting people to "take care of business" when necessary and appropriate.

You are certainly correct that most westerners have not even begun to imagine a world much different than the current status-quo.  That doesn't mean they'll never have to, or that they shouldn't have to!  It is appropriate that people suffer a bit for literally being "dumber than rocks".  In the end, I don't care how much people need to suffer in order to get past the predator-dominated system.  Whatever suffering is caused is vastly less than the suffering that is caused by the current predator-dominated status-quo.  There is no "zero pain" solution, so don't even begin to say "we can't fix things because it will cause pain".  So will NOT fixing things - that will cause much more pain, and worse, it will assure the pain lasts forever, not just a few months or years.

Of course people are miseducated!  That's just one more reason to get predators-DBA-government OUT of "education"... which is now nothing more than propaganda being called education.

That "government" doesn't exist is a FACT.  Therefore, understanding this clearly is important, whether it is an anicient idea, old idea, recent idea, current idea or an idea only to be widely recognized next millennia.

My main job, my main work, my main focus is the nature, architecture and implementation of beyond human-level inorganic consciousness.  The fact is, we must understand the fundamental nature of reality and consciousness clearly and precisely to make a valid, functional, reliable inorganic consciousness.  And we have.  The first physical prototype worked in 1998 - that's 14 years ago now.  Unfortunately it was too slow to be practical for much of anything.  Since then we improved the architecture and its efficiency, and most importantly we found ways to massively speed up those parts of the technology that was slowest.  So all I can say is, we are the only group [that we know of] who fully understand consciousness, fully understand the nature of valid mental-units, and fully understand the valid processes of consciousness.  As a consequence, we don't give a damn how "outdated" you or others imagine our terms are.

BTW, you shouldn't assume we don't value abstraction, and you certainly shouldn't imagine we don't value fiction.  Applied appropriately, they are extremely valuable aspects of consciousness.  For example, the number "two" is a very valuable abstraction --- but we understand the "two" has no reality beyond "two rocks", "two humans", "two stars", or two of anything else.  And as far as "fiction" goes, many of us on this project are inventors.  Think about it.  Every single device and technology we have invented in our lives was... a fiction... before we implemented the fiction and made it real.  We are not "nominalists", and don't think such an inference about us makes any sense.

But sure, we gripe all the time about the misapplication of abstraction, and also about confusing "fiction" with "reality".  Those are common forms of conceptual malfunction, for which we have added avoidance mechanisms into our implementations of inorganic consciousness that do not exist in organic consciousness.  Which is one important reason why our inorganic consciousness is vastly more reliable than organic consciousness.

PS:  Of course we worry along with you that perhaps nastier thugs will take over where current predators leave off.  And certainly that is possible, though at least they should have a much more difficult time of controlling everything at their start (and as various factions fight for fictional "legitimacy").  Which is why, in the end, the only solution is to get a sufficient number of people to understand that "government" is pure fiction, and is nothing more than a fake cover for predators.  Only when a sufficient number of humans understand this can the scourge of predators be eliminated.  That's why I keep putting this identification out there for others to consider.

Sat, 10/13/2012 - 09:24 | 2884580 toomanyfakecons...
toomanyfakeconservatives's picture

Based on your manifesto, you're gonna want to listen to the Wilcox-Drake interview. This link starts at the 1 hour mark... http://tinyurl.com/cd5cyjo/

Sun, 10/14/2012 - 04:34 | 2886293 honestann
honestann's picture

I listened a while and have no idea what that link has to do with me.  Maybe I didn't listen long enough?

PS:  The above isn't even remotely close to a manifesto, at least not in my book.

Sat, 10/13/2012 - 12:22 | 2885075 blunderdog
blunderdog's picture

I'd be interested in seeing some technical documentation of your work, whoever you are.  I'm highly skeptical at the claim that you and yours "fully understand consciousness."

It's not like consciousness is an object.  It's another fiction. 

What is it that makes consciousness extant while government is not?

Sun, 10/14/2012 - 04:22 | 2886287 honestann
honestann's picture

I'm sure you and many others would!  Our group is very private... and totally independent of all governments and corporations... for good (and hopefully obvious) reasons.  I suppose one could quibble over the term "fully", but for current purposes I mean "well enough to implement consciousness superior to human consciousness in every way".  Except for speed that is... until our new implementation is complete.

Consciousness is no more a "fiction" than "running".  Consciousness (at any level of sophisication) is nothing more than a certain set of "processes" (that can only function on certain kinds of physical infrastructure).  And none of these processes runs any better on organic systems than inorganic ones.  In fact... :-)

What makes consciousness exist is that a consciousness is a set of actions (processes) in real, physical systems.  Nothing more, nothing less.  To say that "consciousness" exists is simply to acknowledge that physical objects are not static in every respect --- they take actions and coordinated sets of physical objects implement processes.

One historical screwup is the term "mind", which being a noun, sorta conditions people to imagine "mind" is a thing, an object.  That's very unfortunate.  The brain is a physical object, but "consciousness" AKA "mind" is a set of processes, not an object or thing.

In contrast, "government" is simply a fiction.  Think about it this way (to only slightly simplify).  Three people sit around a table and decide to open a bakery, and decide to call it "SugarHighBakery".  Does anything "pop into existence" at this point?  No.  ALL that happens is a reconfiguration of their brain to create a new mental-unit with the label "SugarHighBakery" on it (associated with it).  When they construct a building to operate their "bakery", that building is a "building", not a "corporation".  The flour and sugar in their "bakery" is fully real.  The building is fully real.  The donuts they produce are fully really.  But "SugarHighBakery" is 100% pure fiction --- it does not exist.

And guess what?  Many if not most humans used to understand how to distinguish real from fiction as little as a few decades ago.  That's why ALL organizations, including "corporations" and "government" were and still are called "fictitious entities" in fundamental law.

Do you understand what a fiction is?  It is a mental unit that refers to... well... nothing.  For example, "SantaClaus"... and "SugarHighBakery"... and "these united states of america"... and so forth.  They are not real, and they cannot be real.

This notion can be proved in any number of ways.  Let me mention a simple one.  Do we agree planet earth exists?  I assume we do.  Well guess what?  If you point at the continent that is "north-central-south america" and say "that is america", NOTHING REAL POPS INTO EXISTENCE.  All that exists is the earth that existed the moment before you created that new mental unit in your brain.

I won't go into more detail, because it is already rather absurd to have such simple conversations... except, I guess, for the fact that modern humans are so far and so thoroughly detached from reality that... they've lost it.

Sun, 10/14/2012 - 14:19 | 2887908 blunderdog
blunderdog's picture

     Consciousness (at any level of sophisication) is nothing more than a certain set of "processes" (that can only function on certain kinds of physical infrastructure).

That'd mean software and robots already possess consciousness.  That makes your claims a lot easier to believe, but a lot harder to respect.

Mon, 10/15/2012 - 03:57 | 2889121 honestann
honestann's picture

I agree... except for minor details.  We recognize three forms of consciousness that we call "sensory consciousness", "perceptual consciousness" and "conceptual consciousness".

Without a doubt, a "sensory consciousness" can be a rather simple organic organism or inorganic device.  You are 100% correct about that.

A "perceptual consciousness", whether organic or inorganic, is quite a bit more sophisticated than a "sensory consciousness", and can do some pretty amazing things even without rising to the level we (and normal folks) would generally be inclinded to call "human-level".

A "conceptual consciousness" has a few key extra capabilities that give it all the characteristics necesary to be or become human-level in its intellectual capabilities.  While it is possible to be "conceptual consciousness" without quite having all the intellectual capabilities of human beings, we are most interested in human-level and beyond.  To be sure, lower than human level beings/devices with "conceptual consciousness" could be plenty useful as "worker drones".  But we only need to add slightly more content and code/processes to make the being/device have capabilities beyond human-level consciousness.  And as you might guess, every addition beyond human-level intellectual capabilities deliver great bonuses, and are thus more than worth the tiny bit extra memory and code.

We are not looking for respect.  In fact, we must not gain respect (until we finish and subsequently "vanish").  If we were to gain respect (by publishing our work for example), we would make it possible for predators-DBA-governments and predators-DBA-corporations to utterly enslave mankind.  Just imagine if those predators could make their endless stock of cameras, drones and weapons as smart and intellectually insightful and capable as a brilliant human being.  Mankind would be utterly and completely enslaved in a matter of months, and far more impossible to ever overcome or defeat too.  So unfortunately, gaining respect would certain generate plenty of helpful financial resources, but would also lose everything (for us and everyone else) shortly thereafter.

Fortunately for the world, the person who discovered the nature of consciousness and invented the architecture is the most individualist, liberty-oriented scientist you will never meet... or find.  And everyone working with him on this project is [seemingly, supposedly, hopefully] similarly oriented.  Fortunately the architecture lets us install very secure ethics at the lowest levels of the implementation, which will assure our beings/devices are "good guys".  Unfortunately, it is all too clear that if the predators understand the technology, they could rather easily eliminate that "security" or worse, replace it with "obey the predators" security to assure they are just as bad as the worst human predators... and worse.

Once we have one full-speed inorganic conscious entity running, it is a trivial manner to make 10, 100, thousands or millions of identical copies.  And it is vastly easier for these entities to share knowledge with each other than for humans, because the content of consciousness is vastly more organized (that is, better labeled as to time, basis, status, justification, etc).  So once we have one "Einstein", we have thousands - working together far more efficiently than humans can, not to mention 24 hours per day, 7 days per week, and no need for "pointless chit-chat at the water cooler" or other worthless endeavors.  Of course they do require exploration, for they are first-hand observers.  On the other hand, it is second-nature for them to connect their "consciousness" (stored content and code/processes) to any set of input sensors (eyes, ears, etc) and output manipulators (robotics, motion, manipulators)... so "exploring" can be vastly more efficient for inorganic conscious entities than for us "overly-wholistic" organics (who don't have easily interchangable input or output).

Fri, 10/12/2012 - 16:01 | 2882751 JohnFrodo
JohnFrodo's picture

Would you believe that when Median wealth is mesured the USA is at the bottom of the civilized world, and number one by a large margin is OZ? Hows that one goverment two party system working for ya?

http://thinkingaboot.blogspot.ca/2012/10/median-wealth-by-country.html

Mon, 10/15/2012 - 08:59 | 2889807 Monkeyfister
Monkeyfister's picture

All of this can be avoided, and will be avoided the day the "Job Creaters" decide to stop wasting their money throwing Millions at useless political horse races, and get back to investing in CREATING JOBS.

The days of this country looking at them as "Job Creaters" is way over. Now, the entire country sees them as the thin-skinned, whiney, efete, greedy pricks that they are. The only damage control available to them is to start living up to their title. Employment-based Revenue is what this country needs, and these efete assholes seem clearly hell-bent on drowning this nation, while standing atop their mountains of cash, and blaming the Working Classes, the sick, the elderly and the Poor.

Do NOT follow this link or you will be banned from the site!