Why A Balanced Budget Is Impossible In America

Tyler Durden's picture

If the US government cut all government services except Social Security, Medicare, Medicaid, and interest payments, federal spending would still outpace revenues. As we noted here, these four mandatory items dominate costs. All the arguing over sequestration and the fiscal cliff are moot since as Professor Antony Davis notes in this brief clip, there are no specific cust that will enable government to balance the budget; in fact "nothing less than a complete redesign will solve the problem." That redesign begins with determing the proper role of government.


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Dr. Sandi's picture

We also need to remember the chump change spent on our military entitlements.

Tyler Durden's picture

We have. It is in the linked chart: it is the 4th largest use of funds (was third last year) after "Human and Health Services", Social Security and Treasury spending.


Dr. Sandi's picture

The military needs its own income stream like SS has. Maybe we can institute a head tax whereby every government pays the US military if it wants to keeps its heads.

francis_sawyer's picture

That's why we're guarding the poppy crops in Afghanistan...

john39's picture

 we are defending them....

kito's picture

ss stream is slowly turning to a trickle..................................

dlmaniac's picture

Democracy + Debt = Guaranteed Self-Inflicted Bankruptcy.

Mentaliusanything's picture

Relax - you just need a 15% consumption Tax - Problem solved

(its coming and it will make the poor poorer and the rich much richer)

Zadok's picture

And diamonds in Africa...

zerozulu's picture

Legalizing marijuana and taxing 20% on sales will balance the budget.

pods's picture

No way in hell it would do that.  It grows anywhere.  It is nicknamed "weed" for a reason.


zerozulu's picture

No need to raise cows if you get milk cheaper.

sessinpo's picture

That is an inaccurate analogy. The cost of having milking cows, even just one is much higher then growing marijuana plants. And I say this with the bias of legalizing marijuana for economic reasons. Please don't use such bad analogies because you only hurt your argument, not help it.

Handyman's picture

It wont solve all the problems but still....prohibition is a waste of money in these times. Not to mention that If i want to smoke a joint in the privacy of my own home it's NOBODY'S FUCKING BUSINESS!!!!!


If the guv doesn't want profits from pot I guess we'll just keep giving it to organized crime. They don't mind.

smlbizman's picture

handy, i would say they make more profit than anyone...trails, lawyers,judges, gaurds, prisons .23 cents an hour .( know first hand a small local uniform maker just lost 50% of contract to a much cheaper competor)....and laundered funds and the list doesnt stop....so if they get that 5 dollars on that ounce they lose 57 billion on their other enterprise....

Handyman's picture

True...an even more organized crime.

SmittyinLA's picture

LOL they tried that in CA, it didn't work of course the 20% was divied up between the local police, sheriffs, and elected offcials, not used to pay down debts. 

ersatzteil's picture

Even then it can't be that great of revenue; most of the crowd with medical cards don't buy regularly through the legal channels. The card lets you carry as much as a half ounce in the car, which takes the stress out of picking up from a friend.

If they really want to make revenue, find a way to tax the guy who buys from Northern California at 150$/oz and sells in Southern California for 300$/oz. But even then, he doesn't sell it all at once, it's broken into 1/8oz, 1/4oz, and he's gotta find buyers (the hardest part).


ilovefreedom's picture

I always giggle when I see such statements about taxation regarding potential Cannabis sales.

Everyone does realize that the current market economics for cannabis exists largely as a black market and gray market enterprise, right?

Thus, any forecasts, sales estimates, etc. are based on Black Market prices and are unrealistic under a legalization scheme.

They say nationally the current TAM (Total Actual Market) for cannabis is around $18 Billion dollars, at or around the same for Corn.

But Corn is not illegal to grow. If Cannabis consumption and agriculture were legalized prices would plummet around 800-1000% as the current pricing scheme is the same or higher than street black market prices. The only sellers who could get similar prices in a legal market would be boutique product, but the majority of consumers would gravitate towards Wal-Mart priced products as they do on cigarettes and liquor and cigars. How many people that smoke cigars smoke $100/each unit? How many people buy the finest cigarettes and roll their own? How many people buy expensive liquor, beer or champange?

So in reality, Cannabis taxation would not be the salvation of any budget through taxation. The enforcement,"justice system", and prison costs related to these items would by far be the biggest cost savings available to be reallocated in the budget.

JFK.4PREZ's picture

+4 for justice system in quotes 

+2 for the realistic forecast

+0 for not being more enthusaistic about the legalization of pot

Jam Akin's picture

I agree with your main point but please fix your math. Prices can decline by a max of 100% at which point the price would be zero.

Cheaper blunts would be a good thing...

prodigious_idea's picture

"If Cannabis consumption and agriculture were legalized prices would plummet around 800-1000%"


You might want to check you math on that statement.

Flakmeister's picture

Better yet, they pay you to smoke it...

cornedmutton's picture

Introducing the Supplimental Weed Assistance Program (SWAP) for the needy...

Radical Marijuana's picture

Adequate outdoor marijuana can be grown for pennies a gram.

The black market sells it for dollars a gram... 1,000% mark up?

5 cents legal growing ... 5 dollars to sell on the black market!

100 times, times 100, to give per cent, you do the math ...

The point is that NOTHING could compete with hemp!

That was one of the main reasons it was made illegal.

Pot prohibition FIRST started way back in 1898, with the Egyptian cotton industry lobbying to criminalize cannabis, which was something that the international banksters picked up, through the international organizations that they set up to advance their overall agenda. WHY? Well there is no way that cotton could compete with legal cannabis cultivation.

Everything was PERFECTLY PERVERSE! It was due to the runaway triumph of evil, whose longer term consequences automatically get worse and worse, faster and faster. In the USA, the first signs of that perversity arose before that. In 1850s America, pharmacies carried medicinal cannabis. Around 1860, cannabis regulations and restrictions were first instituted. Around the same time, states began regulating pharmaceutical sales, including penalties for mislabeling and adulterated substances. It became a slippery slope toward criminalizing cannabis. After 1906, states began labeling it poisonous. In the 1920, prohibitions began. By the mid-1930s, all states enacted regulations, including 35 under the Uniform State Narcotic Drug Act. Classic slippery slopes, towards the ironic inversions: THE POWER TO PENALIZE MISLABELLING WAS ABUSED BY THE AUTHORITIES, WHO DELIBERATELY MISLABELLED MARIJUANA.

Indeed, ASK: Who will guard the guardians?

Those who gained powers to stop mislabelling then became the worst of all the mislabellers!

The power to force labelling of products was abused, to force labelling marijuana POISON, as another enforced huge lie! Over and over again, the argument for "public safety" was perverted, and turned to become more and more psychotic. That is NOT just the way there is a revolving door between the FDA and the agribusiness and pharmaceutical companies, although that was significant. Profit from junk food, along with profit from disease systems, are two of the biggest root causes of the runaway government budgets being impossble to fix. They are, in fact, even larger domestic disasters than the foreign affairs and war budgets, but most people do not see that economic reality for what it really is! Most people can not, or do not want to understand how much medicine is actually inside of militarism, and thus the money system, controlled by the Fraud Kings, and therefore, cause everything to happen BACKWARDS. Our medical system does systematic death control through the maximum possible deceits, which is an extremely expensive thing to do, but which the government more and more pays for, or forces people to pay for! That has another history whereby the banksters used their power to corrupt everything. Of course, they attacked and denied and suppressed medical marijuana inside of that real context.

It is a thorough system, with the international banksters at the center of that web of deceit and destruction. It is the control of the puppet politicians by the banksters that made it possible to drive the American money system to become PERFECTLY PERVERSE! That is why the numbers regarding the budget ARE INSANE. There are level after level of greater insanities, the more one looks ... which is why we live in a Bizarro Mirror World, where everything is BACKWARDS. One of the most important of those ways, which makes the insane monetary value of marijuana look totally trivial in comparison, was the way the 1947 National Security law destroyed national security more than anything else, and created the situation whereby it would eventually be possible for things like the events on 9/11/2001 to become successful false flag attacks.

The fact that marijuana cost 100 times more than it should, and so, a little bush is worth more than a big tree, SYMBOLIZES how the rest of society is dominated by professional liars, and immaculate hypocrites, and thus, ideas like "public safety" become PERFECTLY PERVERSE! Those who create those laws then finally use them to accomplish totally the opposite of everything they say! That is NO ACCIDENT.  ... Therefore, there is no reason to believe it will stop, but rather, every good reason to believe it will automatically get worse, and worse, faster and faster ... in every possible way that one can imagine!

Having the legal system make marijuana worth 100 times more on the black market than it could cost to grow it legally was a GREAT way to subsidize organized crime!  That got the Mexican drug cartels going in the first place. That has morphed into being the best way to make sure that the privatized, for profit, prison system is one of the best businesses in the USA today.

The INSANE ratios of what it costs to grow marijuana, compared to how much it was worth on the black market, was an excellent way for the banksters to drive American society into irreconcilable social polarization. At some point, one has to admit that this runaway social insanity does not have any other way to be fixed, that to finally collapse into insane chaos. That is basically what the budgets of the governments are going to do. They are the runaway triumph of frauds, which therefore can NOT be fixed. The truth about budgets is IMPOSSIBLE to present in the public space dominated by the mass media, controlled by the banksters' buddies. A sane budget would be related to the conservation of energy, and the systems in which that happens. An insane budget takes place inside of fiat money system, state religion. That marijuana has an insane monetary value, a couple of orders of magnitude too much, FITS into the rest of the insane state religion of faith-based fiat money, backed by the force of governments. The ANSWERS to the questions about the fundamental purposes of governments are way, way deeper than most people are willing to ever even begin to think about! ... To again quote another Zero Hedge comment, what we are looking at is NOT mathematics, it is mathemagic. I.e., INSANE NUMBERS, which depend on the triumph of frauds, in order to exist! These numbers are due to trick after trick, illusion on top of illusions, decade after decade, for more than a Century, with accumulating consequences!!! The insane monetary numbers surrounding marijuana merely provide some easier to understand illustrations of that almost PERFECT PERVERSITY.

Radical Marijuana's picture

I agreed with the comments made by ilovefreedom above ...

Cannabis laws are merely the single simplest SYMBOL, and the most extreme EXAMPLE, of the general pattern of social facts. It was BECAUSE hemp was the best plant for people, for food, fiber, fun and medicine, that the laws became based on a propaganda campaign that asserted "marijuana is almost as bad as murder."  Of course, it is just one plant, and that can not fix the problems which are astronomically bigger than any one plant. However, pot prohibition may be a way that people come to understand that the economic laws are NOTHING but legalized lies, backed by legalized violence, on that astronomically larger scale.

One needs to go through a number of levels of waking up to how the banksters and their buddies control civilization through a total social pyramid system of debt slavery, backed by wars based on deceits. The drug wars segued from slavery and racism, which were previous systems running the social pyramid for thousands of years. The drug wars were NOT a "failure" if one understands that what they actually did was what they were intended to do! Drug wars were intended to be excuses to build a bigger fascist police state, to serve the interests of the fascist plutocracy. The banksters that pull the strings of the puppet politicians were the ones that benefited the most, all the way around, from the drug wars. The banksters dominated the funding of politics, in order to drive their systems to become triumphant. The biggest banksters launder the drug money. The banksters are the biggest gangsters, that benefit from creating an entire culture that enables lesser crime gangs to flourish. All of that goes around and around in deliberately driven vicious spiral. More fascist policing, destroying civil liberties, serves the real interests of the fascist plutocracy.

The drug wars are 75% against "marijuana," which was a Mexican Spanish slang word adopted by the propaganda campaigns to rename hemp, so that the assertion that "marijuana was almost as bad a murder" could become the basis of the laws. It is a notorious fact that huge lies work better than small lies, in the context of promoting propaganda. Similarly, the word "pot" was also derived from Mexican Spanish slang. Pot prohibition was deliberately perverse, in order to serve the interests of those who drove that perversion through! It was perfect propaganda to assert that a plant that was actually the single best plant on the planet for people was "almost as bad as murder," and then back up those huge legalized lies with legalized violence, for decades!

Marijuana laws and monetary laws are basically similar. They are BOTH HUGE FRAUDS, backed up by the full force of the legalized violence from law enforcement authorities. Sure, the plant itself is not that big of a deal. Sure, at least 90% and perhaps as much as 99% of the money in marijuana is ONLY there because of the black market. However, it is also true that at least 90%, or more like 99%, of the money from cultivating cannabis for other purposes is not there, because marijuana laws were the excuses to criminalize all cannabis cultivation, for all other purposes. All of that traces back in its real history to racist rationalizations, piled on top of deeper issues surrounding political corruption. Criminalizing cannabis fits into the overall pattern of fascist plutocracy throughout every aspect of North American society that one examines.  The history of alcohol prohibition, upon deeper analysis, was similar in many respects. The profit from junk food, and profit from disease systems, were also consistent with pot prohibition. ETC.!!!

Society ends up being controlled by the people who were the best at being dishonest, and backing that up with violence. Criminalizing all cannabis, because they said that "marijuana was almost as bad as murder," was the one particular way in which they went the most overboard doing what they did everywhere else, regarding everything else! One SHOULD go through several more turns of that worm to understand the deeper reasons WHY that situation evolved, as our REAL human ecology and political economy! Answering the question WHY the best plant for people is treated as if it is almost as bad as murder leads on to better ways of answering all the rest of questions regarding why our monetary system is the almost total triumph of runaway frauds!

Of course, comparing marijuana laws to money laws is like comparing something that is 0.000001% of the problem, to something that is 99.999999% of the problem. However, the same basic pattern is there! Our monetary system, inside of which reaching a balanced budget is totally IMPOSSIBLE, is due to the FACTS that our whole financial accounting system is fundamentally fraudulent, and as backwards as it could possibly get!  The inherent structural problems within the "money-as-debt" systems, that perverts the meaning of the word "money," to become the opposite to what money meant before, MUST drive that deliberate debt slavery system towards debt insanity! The budgetary problems of the USA are IMPOSSIBLE to fix within those established systems! The same ways as that marijuana laws are INSANELY BACKWARDS, since marijuana has never killed anyone, but the laws are based on saying that "marijuana is almost as bad as murder," the entire monetary system, within which the budgeting processes attempt to be done, are BACKWARDS, because they were set up under the control of the Fraud Kings! Marijuana is NOT that important in itself! However, it is very important as a social symbol! The government picked on pot to transform into a tool of persecution. The government loaded all its symbolic weight onto that plant! The changes which we need, and should go through, would be symbolized more by REVERSING the ways that the government treats hemp, than by anything else!

However, it is way more probable that only fake legalization, in the worse possible ways, is politically possible within the foreseeable future. Indeed, genocidal world war, along with democidal martial law, are way more probable events than fully legalizing marijuana. If we did not live a runaway INSANE WORLD, then hemp would have never been criminalized, and cannabis would still be cultivated as one of the biggest crops in the world. Remember, the first American flag, and the Bill of Rights, were both actually made out hemp!  It is NOT an accident that those were criminalized, by the international banksters, who took control of the government, in order to deliberately destroy the American democratic republic, while making a fantastic profit from every aspect of them doing that! The powers of We the People were taken over to be used against the People. Too many Americans are now nothing more than Zombie Sheeple. They have been buried under such massive amounts of bullshit throughout their entire lives, that therefore, marijuana laws became a symbol of the money laws: HUGE LIES, BACKED BY VIOLENCE!

The symbolic significance of marijuana laws, and changing those laws, takes place within the context that nearly EVERYTHING ELSE that the Federal government of the USA is doing is LEGALIZED LIES, BACKED BY LEGALIZED VIOLENCE, serving the established social systems of fraud and robbery, which benefit tiny elites fantastically, while screwing the vast majority of the public worse and worse ... which overall system has become such an out of control spiral of self-destruction, as is demonstrated by the insane numbers regarding the governmental budgets! The debt slavery system has grown to the point where it IS DEBT INSANITY. That is simply the result of the runaway triumph of FRAUDS. The entire established systems of mass media, and puppet politicians, are feeding that monster, so that it constantly is getting bigger, faster. Therefore, there is no reasonable hope for the future ... Maybe some fake legalization of marijuana, that will actually make things get still worse, as while the overall monetary system has it problems also "resolved" in bogus, bullshit ways, that actually make things get still worse too!

There are NO other good solutions, than some practically impossible Second American Revolution. There are NO possible reforms that could work within the established systems, which are the totally backwards achievement of the Fraud Kings, operating HUGE LIES, using the powers of government, against the interests of the vast majority of the people, who have mostly been reduced to acting like Zombie Sheeple, already almost totally brainwashed to believe in the biggest bullies' bullshit, so that enough of those Zombie Sheeple will continue to vote for the puppet politicians, that actually work for the banksters, while they continue to pass laws that legalize lies, and thereby, destroy the lives of more Americans, worse and worse, in the foreseeable future.

I WISH that there was some other outcome to this, than that terminal social sickness killing us. However, I do not find any realistic reasons to actually believe in such a hope. Evidence and logic means nothing to systems based on lies, backed by violence. Thus, more truth about marijuana NEVER made any difference to marijuana laws. More truth about the monetary system NEVER made any difference! The ONLY things that the established systems care about, and WILL DO, is back up their lies with more violence. That applies to both the marijuana laws, as well as the astronomically worse money laws. Too bad. So sad. ... IN FACT, inside of that real context, it is practically guaranteed that it was a waste of my time to bother to write this, and the only real effects from doing so will more likely backfire upon me, rather than change anything else to get any better ...

Antifaschistische's picture

bring back pillaging and plundering!!   hmmm, does oil count?


Brings up a very good thought. What is freedom from military conquest worth to the american people. Is it worth the cost of a coke, or a meal a day?  Worth the cost of an Ipod. Im not arguing about the military engagements overseas and the large defense programs that have rewarded contracts in 50 states (remember the B1 bomber reincarnated becuase it was produced in 48 of 50 states)

I would love to see a cost benefit model of the ability to walk relatvely free (personal liberty attacks aside) . When you think about the beenfits that we receive, it makes you wonder why each of us, inclluding the 47% who pay no federal income tax, don't have a right to shirk their portion toward the defense of the country.  What is it worth to you. to me, waking up every morning and not walking through Syria makes me willing to put my first $ in tax to what it takes to keep the country strong. Just saying


lolmao500's picture

Every country where there's US bases should pay a big tax to the US to pay for the military. Any US ally should pay a tax. Every NATO country should send money to the US.

Matt's picture

I think we already do, it's called US Dollar Hegemony, where we have to hold a certain amount of US Dollars as reserves and buy a certain amount of US Treasuries. That's why most countries have radically different "Net" vs "Total" debt.

Mentaliusanything's picture

Hey!!!  we don't get a choice - they just land, unpack and never leave. its like a creeping Jesus or a horrible smelly relative that won't leave the basement.

How about we hear that old line "Yankee go home" - Fuck are you deaf and stupid. Just go home and stop inflaming the tension. Tell Hillary that she is Haggard, Fat, Ugly and has the brains of a smashed crab.

Just stop tying to give your "Freedoms" to Sovereign States, who, before you came thought they were happy. Once you arrived they knew and understood they were really happy. Your security is their nightmare.

FreedomGuy's picture

I agree. I would even bet that of all government agencies some people would actually send MORE than they owe in taxes to that one department. I don't know about your "head tax" but I do believe every citizen who has any income should pay Federal taxes.

e-recep's picture

"The military needs its own income stream like SS has. Maybe we can institute a head tax whereby every government pays the US military if it wants to keeps its heads."

... says a man hailing from the land of the free.

geez... no wonder hatred against the amis is growing all around the world.

Tijuana Donkey Show's picture

Does this include the shadow budgets? The NRO, CIA, NSA, and others often don't report due to "national security"

francis_sawyer's picture

They don't call him [POPPY] Bush for nothin'... & all along you thought it was because he was Jr. duncecaps dad...

Clashfan's picture

In your address bar, type in illuminati backwards, then .com

See where it takes you. Bitchin'.


Try to guess before you do it.

Bob's picture

Back to the misleading misrepresentation of SS payments in the language of "outlays" I see, ignoring the fact that the money was already paid in . . .

pods's picture

Not misleading at all.  The incoming funds go into the general fund, so the outgoing payments are outlays.

You cannot call the incoming funds revenues on one side of the ledger and remove the payouts from the other. Well, unless they want to.  


Bob's picture


Nothing butt-hurts the finance community worse than investors who don't get ripped off like they're spozed to:


MachoMan's picture

part of the money was paid in...  however, the past, present, and expected future outlays far surpass this amount... 

FreedomGuy's picture

It was stolen and helps hide the real deficit.

Chewybunny's picture

Except that's not how it works. Everyone is entitled to SS, regardless of whether they paid in or not. Point in case: My grandparents who we brought from Soviet Russia with us in 91'. They've been living on American Social Security, and she hasn't contributed a penny into the system.


Furthermore, the money going into it will never outpace the money taken out. If I put $5 in today, in 30 years that $5 will be equivelant to today's $3. The expendetures will be higher.

Matt's picture

Wow, that has got to be the most optimistic post I have ever read on the future value of American Dollars. 

kito's picture

am i missing something with that video?...the colored block for the interest payment on the u.s. debt was only a  sliver..............yet the govt paid over 400 billion last year on interest:


the graph in that video should have the interest payments nearly as big as the military spending



redd_green's picture

Kito, bingo, spot on.  The "professors" numbers are bunk.   

hmmtellmemore's picture

His numbers look fine to me.  Look up Net Interest paid on the US debt, its less than the 15% number.

redd_green's picture

Last year interest was over 454 billion, many times what the "professor" indicates on his little graph: