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Previewing Four More Years Of The Divided States Of America

Tyler Durden's picture


Do not expect any changes to the trends of polarization and party non-conformists is the message from JPMorgan's CIO Michael Cembalest. As he explains moderates like Blue Dog Democrats and Rockefeller Republicans are now artifacts in the Natural History Museum, having given way to their more ideological offspring (through retirement or after having been beaten in primaries).


If anything, Cembalest believes the House may become even more partisan after apparent losses by moderates in both parties.


After a better than expected night for Democrats given Senate results, the fiscal cliff looms...

With the status quo maintained, a divided government goes back to work to solve the Mutually Assured Fiscal Destruction problem. The President may have picked up some leverage over House Republicans who still have to run again, but we’ll see. The fiscal cliff does not have to get resolved by December 31, since some items can be resolved in the spring and back-dated. Defusing the cliff (see options #1 and #2) would help growth in 2013, and perhaps reignite business capital spending, which has stalled (see chart).


It would also help avoid a relapse in personal consumption, which is growing at a 2% real rate before any fiscal belt-tightening.


However, defusing the cliff contributes to rising Federal debt unless the growth payoff is huge. In recognition of that reality, 80 US CEOs published a letter calling for Washington to strike a long-term fiscal “grand bargain” that includes higher tax revenues (but not in 2013). Here’s our latest Federal debt chart as a way to visualize the problem. The contours show the Congressional Budget Office Baseline Case and Alternative Case. As explained last week, while the Baseline Case represents “current law”, it has become increasingly preposterous, since it includes items that Congress passed but has been deferring for a decade (changes to the Alternative Minimum Tax and Medicare), and a wholesale resumption of 2001 tax rates that Congress has no intention of implementing. The CBO should put a unicorn next to it as an indication of how likely it is to happen.

What might a second Obama administration do on the debt?

Nothing is urgent now, given plenty of public and private sector demand for Treasuries at sub-2% rates. However, we will have to watch how rating agencies react if the Budget Control Act Sequester is unplugged. The President’s proposal (purple square above) stabilizes the Federal debt over a ten-year horizon as per CBO forecasts, almost entirely through higher taxation on those with more than $250k in adjusted gross income (via tax increases and large reductions in allowable deductions and exemptions). The plan does not appear politically feasible given Republican control of the House. If the President only passes increases in tax rates on the top two brackets, then as shown by the green diamond, the debt does not stabilize.


House Republicans could push for more discretionary spending cuts along with tax increases, but after the caps set in the Budget Control Act, discretionary spending is already projected to be very low (chart above).


The elephant in the room is the chart above: close to 100% of US tax revenues are already eaten up by mandatory spending on entitlements and other programs, and interest. However, electoral results suggest the country is in no mood to address entitlement issues right now, will defer them to another day, and continue to shift towards a high-Federal debt economic model that bears some resemblance to Europe and Japan.

As noted last week, in the 1950’s, the solution to 80% Federal debt was not taxation, austerity or inflation, but growth. Will the President pursue a pro-growth agenda? George McGovern, who passed away recently, wrote a 1992 editorial about a post-Senate investment in the Stratford Inn (“A Politician’s Dream is a Businessman’s Nightmare”), its bankruptcy, and how he wished he had known more about the private sector and the impact of government before he took office. He wrote:

“Today we are much closer to a general acknowledgment that government must encourage business to expand and grow. Bill Clinton, Paul Tsongas, Bob Kerrey and others have, I believe, changed the debate of our party. We intuitively know that to create job opportunities, we need entrepreneurs who will risk their capital against an expected payoff. Too often, public policy does not consider whether we are choking off those opportunities.”

The capital spending decline and piles of corporate cash suggest that businesses are reacting to a slow-growth world, but may also be waiting to see which strain of the Democratic Party is embodied by a 2nd Obama administration, and its partners in the Senate. Something tells me that the ghost of the now-disbanded Democratic Leadership Council, composed of pro-growth centrists like Nunn, Robb, Breaux and McCurdy, is not about to reappear.


Full 'Eye On The Money' article PDF here

Source: JPMorgan


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Wed, 11/07/2012 - 09:58 | 2955616 Shizzmoney
Shizzmoney's picture

This gridlock will only lead to investment houses shorting US Treasuries, shorting corporate stocks (who will start to slowly ante off their cash coffers), and of course, those who are long Gold and Silver.

The gridlock is what the establishment investment class wants.  They want to ante off America.  They can't do that if we work together. 

Wed, 11/07/2012 - 10:09 | 2955675 AssFire
AssFire's picture

investment houses shorting US Treasuries


They will make it illegal- just like their Socialist brethren in the EU.

Wed, 11/07/2012 - 10:11 | 2955683 GetZeeGold
GetZeeGold's picture



So who wins the next Ambassador slot in Libya?

Wed, 11/07/2012 - 10:29 | 2955742 MillionDollarBonus_
MillionDollarBonus_'s picture

One thing I would like to see from Obama during his second term, is stronger gun control measures. The disturbing increase in firearm sales in America has been accompanied by lax regulations of the sale and distribution of guns and gun parts. Last year ebay ended its ban on firearm sales and now permits the sales of firearm parts to potential criminals all over America. This is despite the fact that over 500 children are killed every year in firearm accidents. It is absolutely appalling that some outlets continue to profit from the sale of dangerous weapons to Americans.

Wed, 11/07/2012 - 10:33 | 2955776 JPM Hater001
JPM Hater001's picture

Hey, I just realized that this means there are not 1, not 2, but 3 Romneys that have failed to steal the presidency.  If you cant win for dad when you own the voting box what was the point of mom's labor?

Wed, 11/07/2012 - 10:35 | 2955783 Zer0head
Zer0head's picture

Just wait and see what Obama offers to Romney - Treasury Secretary?  My guess he offers him a major role and my guess is Mittens will take it.

Obama's priority now is his legacy (and setting Michelle up for 2016 and 2020 - cause Airforce 1 is a heck of way to get to the vacation house and the links of Hawaii

Wed, 11/07/2012 - 10:50 | 2955849 Flakmeister
Flakmeister's picture

My fuck, you are hilarious...

Wed, 11/07/2012 - 11:12 | 2955939 TrulyBelieving
TrulyBelieving's picture

   Would you, MDB, please show where in the U.S. Constitution that the Fed. gov. has any authority to write law infringing upon gun ownership in any form or fashion. Or tell us MDB, are you of the ilk that thinks it's a good idea that our lawmakers break our own laws.?

Wed, 11/07/2012 - 11:43 | 2956148 Overfed
Overfed's picture

I know that MDB's posts are firmly tongue in cheek, but you can bet that more gun (people) control measures will be coming down the pike.

I'm also betting on a drone strike in the US before 2013 is out.

Wed, 11/07/2012 - 15:23 | 2957484 TPTB_r_TBTF
TPTB_r_TBTF's picture

that sounds like a wager for intrade...

Wed, 11/07/2012 - 11:44 | 2956157 Theosebes Goodfellow
Theosebes Goodfellow's picture

Holy crap, MDB, where the hell do you come up with this stuff? First off, if you want to cut down on the number of children killed with guns, stop glamorizing homicide on television. It's just about all that is on TV these days. "Thou shall not kill" doesn't exist on TV. It is ubiquitous, along with violence against women. The problem with guns is not legal gun owners, it's guns in the hands of criminals.

And please, spare me the "500 children" bit. If you really care about children dying, then let's hold the discussion about the over one MILLION children who never even get a chance to be born because their mothers abort them, 93% due to the child being unwanted by their mother, or worse yet, considered "inconvenient".

Lastly, you do appear to have your "I'm a moron" on full display today. What is appalling about the sale of anything? We are a capitalist free market. Up until Obamacare nobody could force anyone to buy anything. The fact that the republic is in its death throws means we need the sale of weapons now more than ever. And WTF do you mean by "dangerous weapons"? Is that to posit that there are "safe weapons"? Safe for whom? Last time I checked, describing something as a weapon implied that it was dangerous. Were you thinking we should all cowboy up with butter knives or maybe nerf bats?

Wed, 11/07/2012 - 15:25 | 2957499 TPTB_r_TBTF
TPTB_r_TBTF's picture



We are a capitalist free market.



Wed, 11/07/2012 - 10:28 | 2955750 Buckaroo Banzai
Buckaroo Banzai's picture

<--- moving to ID, TX, MT, WY, or OK

<--- Staying put

Wed, 11/07/2012 - 10:35 | 2955784 JPM Hater001
JPM Hater001's picture

<----Colorado is looking very appetizing

<----Where are the chips?

Wed, 11/07/2012 - 11:04 | 2955912 DaveyJones
DaveyJones's picture

come to Washington, smoke a joint and we'll get married

Wed, 11/07/2012 - 11:12 | 2955959 Flakmeister
Flakmeister's picture

Can you meet me in Point Roberts?

Wed, 11/07/2012 - 11:14 | 2955974 WhiskeyTangoFoxtrot
WhiskeyTangoFoxtrot's picture

American Redoubt looking pretty appealing right about now. For now, I'm stuck on a blue island in a sea of red.

Wed, 11/07/2012 - 12:14 | 2956350 Spastica Rex
Spastica Rex's picture

I'm here, dude!

Unfortunately, I see that I still can't grow my own and I'm too poor to ever afford comercial bud; I would have to start letting my kids get free and reduced lunch at school to have enough cash!

Oh, well - cheap bourbon for me.

I'm already married (20 yrs) and not gay, so teh gay marriage thing isn't that attractive, either.


Wed, 11/07/2012 - 15:44 | 2957606 DaveyJones
DaveyJones's picture

there are still tricks to growing your own. Is your wife a doctor?

Wed, 11/07/2012 - 10:40 | 2955809 mess nonster
mess nonster's picture

Thank you for not moving to Alaska.

Wed, 11/07/2012 - 10:49 | 2955844 Spastica Rex
Spastica Rex's picture


Well - enjoy!


Former Idahoian

Wed, 11/07/2012 - 10:54 | 2955870 Flakmeister
Flakmeister's picture

No relation to Hemmingway?

Wed, 11/07/2012 - 10:57 | 2955883 Spastica Rex
Spastica Rex's picture

No, but Sun Valley is very nice.

I lived in Idaho long before I became destitute.

Wed, 11/07/2012 - 11:07 | 2955928 Buckaroo Banzai
Buckaroo Banzai's picture

LOL, feel free to share your experience with the rest of the class.

Wed, 11/07/2012 - 11:18 | 2955992 Spastica Rex
Spastica Rex's picture

Well, I have many stories, but you could watch a few episodes of the old "Twin Peaks" television series to get an entertaining idea of what Idaho is like.

And frankly, dysfunctional government isn't the province of any particular party, and Idaho raises political dysfunction to a high art.

"No matter where you go, there you are."

Wed, 11/07/2012 - 11:24 | 2956025 Buckaroo Banzai
Buckaroo Banzai's picture

True enough. I have no illusions about human nature. But at least I won't be surrounded by a majority of people who consistently vote for the TAKERS and not the MAKERS.

That has to count for something.

Wed, 11/07/2012 - 11:36 | 2956098 Spastica Rex
Spastica Rex's picture

Idaho is very Republican, that's for sure, except not so much in Boise, where almost all the people live. The rural parts (virtually 100% of the state) have kept their gene pools very... tightly knit.

Hayden Lake is beautiful in the Spring time, although its home to a "Peace Park" now.

Wed, 11/07/2012 - 12:01 | 2956261 Flakmeister
Flakmeister's picture

Funny how that where people have to actually live close by to other people that the Democrats seem to do much better....

Wed, 11/07/2012 - 12:13 | 2956347's picture

There must have been scads of democrats in the holds of slave ships.

Wed, 11/07/2012 - 12:19 | 2956379 Spastica Rex
Spastica Rex's picture

Master and servant: pretty much what it's all about, in the end.

One can always strive to be "in the world, but not of it," but then that leads to crazy things like communist Hutterite colonies springing up all over the country side, and we can't have that.

Wed, 11/07/2012 - 14:49 | 2957292 DaveyJones
DaveyJones's picture

It's when masters become materbaters that problems really start to rise

Wed, 11/07/2012 - 12:24 | 2956431 Buckaroo Banzai
Buckaroo Banzai's picture

Pitting the city against the country has been the way politics has worked since 1830. The city people have an unbroken string of wins, so of course they are more prosperous. They've looted the shit out of the rural folks.

That was the REAL reason for the War Between The States, and we've been living with that for almost 200 years.

Wed, 11/07/2012 - 12:37 | 2956521 Spastica Rex
Spastica Rex's picture

Well, enjoy your new life in Garden Valley, ID. You won't find much "making" going on there, but lots of anger directed at the Democrats in the Treasure Valley. As a bit of advice, don't speak too much for the first two years you live there, and avoid eye contact - as an outsider, the folks will perceive you no more favorably than a Democrat. Stick it out for a couple of years, and you might be accepted into your new home. At that time, you will be given pointers on how to screw the government out of the money to maintain your snomobile and quad, your shack in the wilderness, and its five associated aces of timber. Poaching is fun all year; make sure you dump the carcasses down on the Payette River - better to eat the burgers at the cafe. They accept EBT, now.

I come from the rural Idaho gene pool.

Wed, 11/07/2012 - 12:44 | 2956586 Flakmeister
Flakmeister's picture


Wed, 11/07/2012 - 12:30 | 2956469 Totentänzerlied
Totentänzerlied's picture

Funny in a tragic, predictable, cannot-be-otherwise sort of way.

Wed, 11/07/2012 - 13:22 | 2956829 redd_green
redd_green's picture

Buck, old boy, I bet you couldn't distinguish the takers from the makers if you tried.

Wed, 11/07/2012 - 13:27 | 2956855 Lewshine
Lewshine's picture

Look at this market...George Bush STILL fawking with Obama's star power rule!!

Wed, 11/07/2012 - 13:09 | 2956761 Nehweh Gahnin
Nehweh Gahnin's picture

You're gonna get some down arrows from those staying put in "ID, TX, MT, WY, or OK".  But hey, so far there only appears to be 22 newbies rolling in...

Wed, 11/07/2012 - 10:36 | 2955772 Buckaroo Banzai
Buckaroo Banzai's picture

Ferfal's testimony. Heed his words.

"He came out of nowhere but you still voted for him because you wanted change. Between you and me, at first you could hardly spell his full name. Somehow he managed to win the elections and become President. He did appeal to the masses. He talked a lot even without saying anything meaningful. He had made lots of promises, but didn’t deliver any of them.

When he became president, instead of doing anything to improve the situation of the people, he did everything to improve his own position so that he could stay in power. He was supposed to stand for the little guy, but the big corporations he preached against were the ones he benefited instead. Kids would chant his name in schools like some mantra. Supporters would say his name again and again like brain dead zombies. No one understood what he was really all about, he never said it in the first place, but charisma, millions in campaign marketing would do the trick.

The man who was supposed to bring change and for once take the side of the working class ended up repeating socialist blabber on one side, and handing tax payers money to mega corporations on the other. He made sure to milk the middle class as much as possible so as to redistribute it fairly. To him, that would mean giving the biggest chunk of the pie to corporations and then throwing scraps through welfare programs that benefitted him politically, forcing the will of the people with handouts. Whenever he could he would strike against individual liberties. Any form of criticism was no longer considered a natural consequence of debate and observations, but an unpatriotic act that shouldn’t be accepted. Soon enough, you noticed that less and less people criticized him. Even celebrities didn’t dare speak against him, some afraid of being shunned by their peers, who would never accept someone “from the other side”, others were simply in his payroll in one way or another.

When the time came to vote again, people just didn’t learn the lesson. Some couldn’t live without uncle sugar´s money, he made sure of that during his first term. It didn’t matter that the opposition had been demonized, that he had created a new kind of politics, of hatred and revenge. It was as if no one noticed that he had turned a once proud nation into a shadow of its former, glorious self. He simply was unworthy of the Presidency he held. Seems people wanted more of that, and went out and chose that again through their vote. The damage done will take decades to undo. In the end, we got the country we deserved.

His name was Nestor Kirchner and he destroyed my country."

Wed, 11/07/2012 - 11:31 | 2956070 Ident 7777 economy
Ident 7777 economy's picture



Bears repeating: "He came out of nowhere but you still voted for him because you wanted change. ..."


Wed, 11/07/2012 - 12:38 | 2956532 trichotil
trichotil's picture

another heeb wrecked a nation?!? shocking!


109 Locations whence Jews have been Expelled since AD250
Wed, 11/07/2012 - 15:07 | 2957389 prains
prains's picture


You speak as if something else was going to happen instead????

MItts is Big Oils boy with the same coporate control agenda as Obama's agenda is for Wall Street just different rulers for four years. What were you expecting?

You got the same fours because the other four years are no different and probably worse as the Pubs love to false flag their economic stimulus plans more than the dems.


Wed, 11/07/2012 - 21:03 | 2958859 Ident 7777 economy
Ident 7777 economy's picture

-1 Stooooopiiiid

Wed, 11/07/2012 - 23:17 | 2959259 prains
prains's picture

tuck your boobs in ident

Wed, 11/07/2012 - 10:11 | 2955681 sickofthepunx
sickofthepunx's picture

you're showing your true colors TD>

this false equivalency of both parties being extreme and obstrucitonist is pure fantasy.

say what you want about policy, but this administration bent over backwards to include the gop in the process.

the fact that they acted like 2 year olds and said no to everything finally caught up with them



Wed, 11/07/2012 - 10:14 | 2955696 SheepDog-One
SheepDog-One's picture

OMG fuck off seriously, head back to Yahoo!Finance why dont you....way too easy to comment on ZH these the old days you'd have been ripped to shreds.

Wed, 11/07/2012 - 10:22 | 2955725 GetZeeGold
GetZeeGold's picture



Make sure he gets his Nobel prize before he heads back there.

Wed, 11/07/2012 - 10:41 | 2955810 Zer0head
Zer0head's picture

Hey Sicko

WTF you doing here so early?

must be a bummer not getting any skin after the big win last nite

Wed, 11/07/2012 - 10:26 | 2955744 RSloane
RSloane's picture

Yup. Well said, as usual.

Wed, 11/07/2012 - 11:06 | 2955921 e_goldstein
e_goldstein's picture

<---- reintroduce CAPTCHA

<---- fuck math

Wed, 11/07/2012 - 11:35 | 2956090 Coldsun
Coldsun's picture

It wasn't the fact that the CAPTCHA stopped Bots that was nice, it was the fact that it stopped the economic illiterates (mostly liberals). Can't make a retarded comment if you can't do simple math.

Guess I'm just restating the above comment because it is so well placed.

Wed, 11/07/2012 - 11:39 | 2956117 Flakmeister
Flakmeister's picture

I can assure that as a long time poster here that since the Captcha was dropped the quality of the posts have decreased...

Wed, 11/07/2012 - 11:43 | 2956130 Coldsun
Coldsun's picture

It use to be that the comments on here were as insightful as the article or they provided a much needed batch of humor to the dire situation we are in. Now the self righteous zombies come here to voice their misinformed talking points. People like these are the same ones who were unprepared for Sandy, despite all the warnings, and are screaming for big brother to help with indignation.

Yet they call us doomers, look down on those of us who are prepared or are preparing. Most here can see the house of cards for what it is; just waiting for that storm to come and blow away the illusion.

Wed, 11/07/2012 - 11:55 | 2956215 Flakmeister
Flakmeister's picture

You are painting with a very broad brush...

There are matters of opinion and matters of fact.... There is a lot of confusion here on what is the difference between the two...

BTW, the worst stuff re: Sandy were the know nothings *downplaying* the severity of the storm in a less than constructive manner..

The people getting help from the 'gubbmint' were too busy watching their neighborhoods getting destroyed to bother posting here....

I strongly suggest you drop that angle, that dog don't hunt.... 

Wed, 11/07/2012 - 12:04 | 2956283 Spastica Rex
Spastica Rex's picture

I resemble that remark.

Wed, 11/07/2012 - 13:07 | 2956750 Flakmeister
Flakmeister's picture

Believe it or not, you are one of the people that keeps me coming back...

Wed, 11/07/2012 - 13:12 | 2956776 Spastica Rex
Spastica Rex's picture


Same 2-ya!

Wed, 11/07/2012 - 11:59 | 2956253 mick_richfield
mick_richfield's picture

In Sovietski Amerika, tavarishch, math fuck you!


Wed, 11/07/2012 - 12:04 | 2956276 Flakmeister
Flakmeister's picture

Ripped to shreds by fucking nonsense from clowns like Buckeroo???


And remember, I go way back here....

Wed, 11/07/2012 - 10:25 | 2955731 fonestar
fonestar's picture

This administration has bent over backwards to do NOTHING but try and preserve a fraudulent and criminal status-quo.  Whatever it takes be it LYING about the supposed OBL take-down, totallly ignoring the fiscal cliff, the war on whistle blowers, the war on the internet, the NDAA, the fast and furious and now the Benghazi attacks.

As a Canadian I would love to see my neighbors return to their senses and realize their government has been stolen.  I think the world needs a strong United States of America but it looks like we are all headed for more pain together instead.

Wed, 11/07/2012 - 11:09 | 2955933 DaveyJones
DaveyJones's picture

a cold wind from the north

warmly received

Wed, 11/07/2012 - 11:33 | 2956079 Ident 7777 economy
Ident 7777 economy's picture

fonestar +1

Wed, 11/07/2012 - 11:40 | 2956126 MeBizarro
MeBizarro's picture

U.S. is a spent force and we are going broke being the global cop.  When you really add up all of the defense-related spending besides the DOD, the tab is well over $1T annually and increasingly at a very large rate for the VA due to the Iraq/Afghanistan veterans entering the system. 

Sadly the U.S. warmongering isn't going to stop until we have a real fiscal crisis or Americans feel real pain from military adventurism abroad in terms of rationing/direct tax due to war efforts/draft with enough of their sons & daughters coming in boxes or as mangled reflections of their former selfs. 

Wed, 11/07/2012 - 11:40 | 2956128 Flakmeister
Flakmeister's picture

Not from Alberta are you?

Let me guess,  Harper is da man....

Wed, 11/07/2012 - 10:30 | 2955763 Joe Davola
Joe Davola's picture

Have you been awake and non-medicated the past 4 years?

Wed, 11/07/2012 - 11:39 | 2956119 ebworthen
ebworthen's picture

The kids table is in the basement.

Do you need someone to cut the kernels off the cob for you?

Wed, 11/07/2012 - 11:50 | 2956198 earnyermoney
earnyermoney's picture

what goes around comes around. Here's to Barry being thrashed without mercy by Red fascists over his second term just as W was thrashed by blue fascists in his second term.

Wed, 11/07/2012 - 10:13 | 2955691 Gully Foyle
Gully Foyle's picture

Where does Obama go now? The House remains firmly in the hands of militant right-wingers. The Senate will continue to be paralyzed by the filibuster-happy minority and a spineless Democratic majority. Stalemate? Probably not. Second terms are almost always about polishing a presidential legacy, already being harped upon by the withered likes of Tom Brokaw.  Obama will be desperate for some signature legislative victories.


No. Clinton will be his template:  the Clinton who pushed for the elimination of the Glass-Steagall Act, the gutting of welfare and the war on Serbia.  Obama will pursue bi-partisanship with a vengeance. Obama has always been a committed neoliberal, a closeted agent of austerity. Now he no longer needs to even play-act for his political base. He can openly betray their interests.

In a few months, the president will reach out to his old pal Paul Ryan to take a stroll across that tragic terrain known as the common ground in pursuit of those twin obsessions of the elites: deficit reduction and entitlement reform. In the name of political conciliation, Obama will piously move to slash away at Social Security, Medicare, Medicaid and the last frail fabrics of the federal social welfare programs.  These savage cuts will be enthusiastically cheered by the mainstream press, Wall Street and the Washington establishment.

Wed, 11/07/2012 - 10:24 | 2955738 Beam Me Up Scotty
Beam Me Up Scotty's picture

"In the name of political conciliation, Obama will piously move to slash away at Social Security, Medicare, Medicaid and the last frail fabrics of the federal social welfare programs. These savage cuts will be enthusiastically cheered by the mainstream press, Wall Street and the Washington establishment."

Put the crack pipe down.  There won't be any savage cuts to anything, unless a savage cut is going from a 20% rate of growth to a 17% rate of growth in spending.

Wed, 11/07/2012 - 10:39 | 2955805 MachoMan
MachoMan's picture

Actually, there will be a savage cut to the standard of living of americans and purchasing power of the dollar...  [this would be the same regardless of who was elected though]

Wed, 11/07/2012 - 11:18 | 2955993 pods
pods's picture

Truer words were never spoken!

Slim Jim for you MM.


Wed, 11/07/2012 - 14:24 | 2957175 blunderdog
blunderdog's picture

    Actually, there will be a savage cut to the standard of living of americans and purchasing power of the dollar... 

Personally, I don't think so.

The VAST MAJORITY of Americans are living like the paupers of any modern industrialized state ALREADY.  How much poorer does "poor by US standard" get?

Only about 15% of the population is going to see their living standard *decrease.*  The bottom 80% will continue to bounce along in the gutter and the top 5% won't notice any changes.

Sucks if you're still considering yourself "middle class," though, for sure.

Wed, 11/07/2012 - 15:48 | 2957613 MachoMan
MachoMan's picture

I think that's a bit dramatic on the social strata...

We're not talking about being poor by U.S. standards...  we're talking about being poor...  about an absolute decrease in the standard of living...  I happen to think that if done correctly, being on the social safety net can be pretty cushy [but clearly not enough to make me jump on the train for my free phone].  However, that is all fantasy land...  built upon the concept of the free lunch.  It does not exist and will not exist at an indeterminable point in the future.

This is going to affect the entire food chain...  1% on down.  [but obviously more some than others].  For those enterprising enough, it may provide opportunity as well...  not all bad news...  but the deck is certainly stacked against the plebs.


Wed, 11/07/2012 - 10:39 | 2955808 Bicycle Repairman
Bicycle Repairman's picture

A grand compromise will be reached.  Taxes are going up.  Spending is going up.

Wed, 11/07/2012 - 10:46 | 2955834 Kobe Beef
Kobe Beef's picture

The plutocracy above and the lootarchy below must be proud. USSA Forward!

Wed, 11/07/2012 - 12:12 | 2956333 aerojet
aerojet's picture

They don't need to cut or make any hard decisions--the fix is in.  Everyone will get everything that is coming to the, it just won't buy anything.

Wed, 11/07/2012 - 11:44 | 2956160 MeBizarro
MeBizarro's picture

Yup.  I have this bet this a SVP who thinks Obama is nothing short of the anti Christ.  It has to be a Democratic president who cuts these programs.  I bet he does this now that he doesn't have to worry about reelection.  Only question is do it actually change Medicare to a defined contribution as Ryan advocated and offer privatization of SSI accounts. 

Wed, 11/07/2012 - 12:19 | 2956377's picture



Only question is do it actually change Medicare to a defined contribution as Ryan advocated and offer privatization of SSI accounts.


How about privitization of private property? You know, where we don't have to worry about which government plan we'll be forced into by the purple party.

Wed, 11/07/2012 - 11:22 | 2956014 Panafrican Funk...
Panafrican Funktron Robot's picture

"It would also help avoid a relapse in personal consumption, which is growing at a 2% real rate before any fiscal belt-tightening."

This quote was pretty interestingly incorrect.  The expiring payroll tax holiday and eliminating unemployment benefit extensions (as was proposed in the "least disruptive" option #2) will completely reverse personal consumption expenditures.  This will take about $150 billion dollars that were previously in the pockets of the plebs for consumption purposes, and take them right out.  Such a basic logic fail masks the real intent of the article, which was to advocate for the best option from the owners perspective.  

Wed, 11/07/2012 - 10:00 | 2955626 Oh regional Indian
Oh regional Indian's picture

Fitty % here, fitty % there, and suddenly you feel a deep pain as you  split. The fences move, you stay the same, length and breadth.

A river of red down the middle, drapes of Blue on the edges.  It does not look good America.

Love they neigh-bore? That is for horses in Stalls. But for those on courses, no remorses.

On-ward, down-ward, Brown-ward...



Wed, 11/07/2012 - 10:12 | 2955686 JPM Hater001
JPM Hater001's picture

I get takes a second to really put it together.

Wed, 11/07/2012 - 10:14 | 2955695 Oh regional Indian
Oh regional Indian's picture


Wed, 11/07/2012 - 10:22 | 2955699 Uncle Remus
Uncle Remus's picture

Awful lot of domestic hydrocarbons under that river of red.

Wed, 11/07/2012 - 10:37 | 2955796 Oh regional Indian
Oh regional Indian's picture

Funny isn't it Ream-US, that it's Dem Blue-bloods that profit?

I mean, look at Texas's (and Now Florinda's) first Family, from CanIBunkaPort, Maine...

The hard profits are made in the east, the soft(ware) profits are made in the west.

The center is just a squeeze. 


Wed, 11/07/2012 - 10:04 | 2955633 j-dub
j-dub's picture

My Understanding that I have woken up to a country now wishing that Roseanne Barr was voted in as president the night before is nothing less than astonishing.

Wed, 11/07/2012 - 10:11 | 2955679 buzzsaw99
buzzsaw99's picture

Damn right I would given the other choices.

Wed, 11/07/2012 - 10:17 | 2955708 roadhazard
roadhazard's picture

No, it's not astonishing. Romney got 62% of the white vote and probably 80% of the white male vote, more than he would have gotten if a white man was running against him. The problem is decades of allowing illegal aliens to come into this country for the CHEAP labor and fathering millions of American citizen children. I have watched it coming for decades. Republicans have had plenty of opportunity to stop it and gave them amnesty instead. And they keep coming. Whites will be in the minority very soon so republicans will continue to be losers no matter what sensational stories they produce against their opponent.

Good luck in the future, hard right wing.

Wed, 11/07/2012 - 10:22 | 2955723 buzzsaw99
buzzsaw99's picture

100% of the cracker vote

Wed, 11/07/2012 - 10:42 | 2955819 Bicycle Repairman
Bicycle Repairman's picture

What percentage of white males said "fuck this" and stayed home?  Or voted Libertarian?  If the GOP doesn't get this straight, they are done.

Wed, 11/07/2012 - 10:50 | 2955852 buzzsaw99
buzzsaw99's picture

I noticed that McCain had 14 million more votes? That means a lot of would-be obama supporters stayed home too since he barely won.

Wed, 11/07/2012 - 12:21 | 2956403's picture


100% of the cracker vote


I'm a cracker and I didn't vote for Mitt. Somebody else did that.

Wed, 11/07/2012 - 10:46 | 2955832 hootowl
hootowl's picture

The blacks, brownies, nesters, fornicators, aborters, and various youthful parasite/ignorami are turning this country into the same moral and economic cesspools they came here to escape.  Good luck with that, libtards.

Wed, 11/07/2012 - 11:11 | 2955955 Buckaroo Banzai
Buckaroo Banzai's picture

LOL, two people made a special trip here from HuffPuff or DailyKos to downvote you.

Probably smoked-out, boozed-out, and fornicated-out from last night's orgy of redistributionism and needed a change of scenery and fresh air.

Wed, 11/07/2012 - 12:24 | 2956426's picture



The blacks, brownies, nesters, fornicators, aborters, and various youthful parasite/ignorami are turning this country into the same moral and economic cesspools they came here to escape.  Good luck with that, libtards.


Maybe if folks were offered an alternative to those policies that didn't involve killing foreigners for laughs things might be different. But it's all just rhetoric. Policies are the same across the purple spectrum.

Wed, 11/07/2012 - 10:03 | 2955637 Trimmed Hedge
Trimmed Hedge's picture

2016 - 60 million Americans on food-stamps

Wed, 11/07/2012 - 10:09 | 2955673 krispkritter
krispkritter's picture

And then Emperor Bammy pulls a Bloomie and goes for a 3rd term...and is elected in an even larger, set, match...

Wed, 11/07/2012 - 10:20 | 2955715 The Navigator
The Navigator's picture

Damn, I was so looking forward to getting the porn site ad links back instead of 'Bammys' new political ads.

Wed, 11/07/2012 - 10:45 | 2955829 Bicycle Repairman
Bicycle Repairman's picture

If Obama runs for a third term, then the GOP must counter with their two-time undefeated champion 'W'.  I'd pay to see that.  No, seriously, they'd make me pay one way or another.

Wed, 11/07/2012 - 12:03 | 2956266 Theosebes Goodfellow
Theosebes Goodfellow's picture

Apparently neither you nor Krispie there have ever read the Constitution. Go back and read the 22nd Amendment. Fuckwits.

Wed, 11/07/2012 - 12:54 | 2956673 krispkritter
krispkritter's picture

And I'm referring, you fuckwit, to Bloomberg successfully amending NY's term limits laws to run for a 3rd term which is factual. And if you think one of these clowns in office won't/don't write Executive Orders that violate the Constution you're living in a dream world. The fact that you can't differentiate between reality and a humorous blog post shows how uptight and ignorant you are...fuckwit.

Wed, 11/07/2012 - 12:55 | 2956676 Bicycle Repairman
Bicycle Repairman's picture

I've read the COG double-secret constitution, and it's OK.  What constitution are you talking about?

Wed, 11/07/2012 - 10:13 | 2955690 JPM Hater001
JPM Hater001's picture

I'm much more oppomistic we'll beat that projection.

Wed, 11/07/2012 - 11:00 | 2955891 Ness.
Ness.'s picture

you set the line.. I'll still take the over.  

Wed, 11/07/2012 - 10:04 | 2955647 peaceful
peaceful's picture

Let's not forget this:

All second term presidents get treated like whores by the Super Pacs.

They make all the tough unpopular decisions and then get thrown under the bus. By my calculation he will no longer be invited to Leno post Fall 2013.

Wed, 11/07/2012 - 10:16 | 2955702 JPM Hater001
JPM Hater001's picture

You know those things on your mind that you just noodle with trying to decide what to do?  Here's what Barry's noodling today:

"What do I name my next book?  How I Birthed a Nation or We should have had... Hmmm."

Wed, 11/07/2012 - 10:48 | 2955841 justanothersucker
justanothersucker's picture

Thats okay.  Letterman and the View will still have him.

Wed, 11/07/2012 - 10:05 | 2955650 buzzsaw99
buzzsaw99's picture

Interest on the debt is welfare for the banks bitchez.

Wed, 11/07/2012 - 11:14 | 2955968 DaveyJones
DaveyJones's picture

(along with those .25 advances)

actually, not losing your job cause you don't go to prison is a pretty nice subsidy too

Wed, 11/07/2012 - 11:27 | 2956039 Panafrican Funk...
Wed, 11/07/2012 - 10:05 | 2955654 mrktwtch2
mrktwtch2's picture

well get short from here as wall street will need to sel lof the spx to 1275 to make congress avoid the fiscal cliff..short stocks long bonds..cant lose trade for the next 3 weeks..

Wed, 11/07/2012 - 10:08 | 2955669 buzzsaw99
buzzsaw99's picture

wall street welfare babies. azzholz

Wed, 11/07/2012 - 10:06 | 2955655 krispkritter
krispkritter's picture

I just can't wrap my brain around how any amount of 'growth' is going to pop this debt pimple on America's ass. I started rearranging the deck chairs into a raft a few years ago. Not sure how long I can stay afloat when this turd sinks but it's a far sight longer than most of the sheep I know...

Wed, 11/07/2012 - 10:11 | 2955684 SheepDog-One
SheepDog-One's picture

Yea thats about all Ive got too, I can last longer than any of my sheeple peers at least.

Contrary to what most believe today 'pretty much the same going forward' I think we're in the eye of the Shiticane and about to get hit hard and fast.

Wed, 11/07/2012 - 10:44 | 2955828 MachoMan
MachoMan's picture

If there's any lesson to learn from the last 5 years, it's that timing decisions are fools errands.  Don't worry about when it will happen, just get your raft sea worthy and full of goodies.

Wed, 11/07/2012 - 10:48 | 2955840 Kobe Beef
Kobe Beef's picture

Cloward-Piven says: Use welfare bennies to pay for your preps.

Wed, 11/07/2012 - 12:47 | 2956618 Thulsa Doom
Thulsa Doom's picture

Going Galt.

Wed, 11/07/2012 - 15:52 | 2957632 Kobe Beef
Kobe Beef's picture

Go now, brother, along your path to liberty. Never look back, and never doubt the choice you have made.

Wed, 11/07/2012 - 10:48 | 2955839 Bicycle Repairman
Wed, 11/07/2012 - 10:07 | 2955665 JPM Hater001
JPM Hater001's picture

" The CBO should put a unicorn next to it as an indication of how likely it is to happen."

Fucking classic

Wed, 11/07/2012 - 10:08 | 2955671 Flakmeister
Flakmeister's picture

We will now see if Congress is willing to actually do something constructive...

Fiscal cliff will hurt defence more than health care, the MIC will insist that a deal be done...

Wed, 11/07/2012 - 10:18 | 2955701 GetZeeGold
GetZeeGold's picture



We just need somemore Chevy Volts......chicks dig them. Throw some solar panels in the back and you're good to go.


Wed, 11/07/2012 - 10:28 | 2955751 negative rates
negative rates's picture

Barney and Fred wore out a few pair of shoes, doin just that.

Wed, 11/07/2012 - 11:51 | 2956203 MeBizarro
MeBizarro's picture

We should have made harder policy choices a long time ago.  Instead for the past 30 years, the US policy has been to pushe to increase global oil supplies and keep the cheap light, crude flowing.  Well, there is a problem with that because the easy accessible of $20-$30/barrel light crude outputs have leveled off and you have a huge surge from India and China for the go-juice.  We haven't 'peaked' on global oil but no we have to go after resources like shale oil which isn't economically viable unless oil is at $60-$65/barrel and tar sands which isn't economically viable until you get to $80-$90/barrel.   


Wed, 11/07/2012 - 14:59 | 2957351 DaveyJones
DaveyJones's picture

we have peaked on global oil some time ago, at least the classic stuff 

we have not peaked on self delusion

Wed, 11/07/2012 - 10:28 | 2955754 Cruel Aid
Cruel Aid's picture

Defense is the only place to get his walkin around money going forward.

Wed, 11/07/2012 - 11:18 | 2955990 DaveyJones
DaveyJones's picture

if history is any marker, most empires keep the military fires burning till the end. Diverts blame, keeps people in fear, and makes money for a few

Wed, 11/07/2012 - 12:46 | 2956612 Flakmeister
Flakmeister's picture

Yes and that was what I was hinting at...

Wed, 11/07/2012 - 10:10 | 2955678 LawsofPhysics
LawsofPhysics's picture

long black markets and anything physical of real value, bring it!!!

Wed, 11/07/2012 - 10:11 | 2955680 Orly
Orly's picture

It is interesting that in the last great economic crisis in the US, in the 1930's, there was the least partisan bickering and the most cooperation from Congress.  Now, it is the highest it has ever been.

I only wonder how this bodes for a resolution of the problems in the US economic situation.  My guess is not good.


Wed, 11/07/2012 - 10:37 | 2955800 machineh
machineh's picture

Cembalest believes the House may become even more partisan

Cool! Looking forward to seeing some heads busted like ripe melons as Depublicrat thugs arm themselves with sticks of broken furniture and cripple the smirking punks across the aisle.

Blood and circuses!

Wed, 11/07/2012 - 12:29 | 2956461's picture


It is interesting that in the last great economic crisis in the US, in the 1930's, there was the least partisan bickering and the most cooperation from Congress.  Now, it is the highest it has ever been.


And that cooperation laid the groundwork for the welfare-warfare state with which we are plagued to this day. Better there should be gridlock.

Wed, 11/07/2012 - 10:13 | 2955692 kralizec
kralizec's picture

Quit working, get all the free shit you can from the Free Shit Party and crash this motherfucker quick!

Wed, 11/07/2012 - 10:17 | 2955710 GetZeeGold
GetZeeGold's picture



Appears to be the plan.

Wed, 11/07/2012 - 10:44 | 2955823 Buckaroo Banzai
Buckaroo Banzai's picture

Yep. Get your AGI down to $49,999, start collecting EITC, get at least 50,000 rounds put by, load up on PMAGs, and crack a beer and wait for the fun to start.

Wed, 11/07/2012 - 10:46 | 2955836 MachoMan
MachoMan's picture


those and some circle 10 mags are on the christmas list!

Wed, 11/07/2012 - 11:37 | 2956103 Overfed
Overfed's picture

USGI mags for me. And avoid Beta-C mags like the plague.

Wed, 11/07/2012 - 13:01 | 2956714 Thulsa Doom
Thulsa Doom's picture

Cloward-Piven is the only way to "save" the country now. The economy needs to collapse before the infrastructure is fully in place to enslave us all - if that is still possible, I don't know. Going Galt now is paying off your debts such that they become assets, quit working and get a brainless job making just enough to pay the bills, and start collecting the bennies - food stamps, heating assistance, medical assistance, school lunch, home energy efficiency money, earned income tax credits, property tax refunds, et al. Use your excess cash to buy precious metals and other assets and strip the capital right out of the economy. Enough productive people switch to non-productive and the system crashes. That is the modern equivalent of going Galt.

Wed, 11/07/2012 - 10:17 | 2955707 caimen garou
caimen garou's picture

I have been saying this for the past ten years, get out of debt and invest in hard assets! pulled the last of paper investments today. will get a good night sleep tonight!

Wed, 11/07/2012 - 10:53 | 2955867 MachoMan
MachoMan's picture

Yep.  I keep harping on it on here, but one has to deleverage and contemporaneously purchase inflation hedges...  Personally, I have a strong bias towards deleveraging in the make-up, but I recognize that there are a myriad of perfectly acceptable weight variances.  The bias towards deleveraging being in place to help eliminate the "two front war".

The problem of course is that while anyone can deleverage, most people are incentivized not to given, among other things, it means the spending party is over.  Essentially, virtually all the deleveraging to date has been forced deleveraging.  The reluctance to file for bankruptcy is fairly practical in that the ability to beg/borrow/steal post bankruptcy will probably be impaired, albeit, potentially immaterially (heard plenty of credit card offers only weeks after a discharge), but in all likelihood with a lower credit limit.  This means giving up some of life's luxuries and, well...  not going to happen unless forced.  The other aspect, practically speaking, is that even if one were to get their debt in order, there is no guaranty they will be able to compete and earn any decent living after deleveraging...

At any rate, if you can, deleverage and put the money saved on debt service into inflationary hedges.

Wed, 11/07/2012 - 11:58 | 2956245 MeBizarro
MeBizarro's picture

Agreed but a tough call on what exactly will serve as an inflationary hedge and how some of the historical physical asset classes will vary.  Been having a hell of a time trying to figure but have been investing in a broad mixture includig precious stones (diamonds are down but other precious gems including emeralds and rubies are up double digits the past year and I always love my annaul trip down to South America), some precious metals (largely gold and silver coins, gold jewelry), and housing assets (near by that I can do most of the maintenance through sweat equity myself or with my uncle and have an ROI of at least 8% annually). 

Always good to have a huge wad of US paper too.  One of the lessons of the Great Depression and the last time we had bank runs is that it is always good to have a pile of US dollars at home or in easily accessible areas.  Keep at 50k in cash on hand that is easily accessible. 

Wed, 11/07/2012 - 15:41 | 2957588 MachoMan
MachoMan's picture

Nailed it, but I'd add that you seem to be very well off (ZH's general demographic).  The process for folks of less means (not $50k in cash sitting around or playing with diamonds) is vastly more difficult and vastly more susceptible to total derailment if a wrong move is made.  I would add that there are plenty of very cheap, but yet very good deflationary and inflationary hedges, e.g., a garden, fruit trees, neighborhood meetings, guns, ammo, pressure cooker, vacuum sealer, etc.  In large part, one of the best hedges is to become more self sufficient... 

At the end of the day, if you know some useful trades or skills, then you have value to society...  any society...  whether in the throws of depression or shuffling wheelbarrows full of money to the bread store.

Wed, 11/07/2012 - 12:12 | 2956335 Panafrican Funk...
Panafrican Funktron Robot's picture

This is really the most sound, practical, and simple advice that's been stated on these boards, and everyone would do well to follow it.  It does the best job of covering all potential scenarios, and anyone who doesn't buy into the idea that all scenarios are still on the table is living a fantasy where people can predict the future.  Trust that we cannot.  Hell, most of us can't even comprehend the past.


Wed, 11/07/2012 - 13:07 | 2956748 Thulsa Doom
Thulsa Doom's picture

Eliminate debt so that nothing has any leverage on you. Get out of the system as much as you can so you do your part to hasten its demise - buying precious metals takes that capital right out of the system. I'd also argue for quitting productive work and getting a brainless job such that you qualify for all kinds of government bennies, to further hasten the demise of the system. That is going Galt.

Wed, 11/07/2012 - 10:21 | 2955719 Benjamin Glutton
Benjamin Glutton's picture

Jack Welch must have put the fear of God into the CNBC slaves...funny to hear them demand GOP policy be adopted despite the Romney loss.


Drink a shot of Jack every time CNBC says fiscal cliff????

Wed, 11/07/2012 - 12:02 | 2956264 MeBizarro
MeBizarro's picture

More unfunded tax cuts and massive defense spending increases.  Romney's budget was just as full of sh!t as Obama and both are financial disasters.  That's the rub and why I found it so frustrating to vote for either.  Left that category blank on purpose on my ballet. 

At a bare minimum, America desperately needs to do away with the Electoral College, enact popular vote electing the President, and open up the primaries at the state and local levels to prevent this corrosive 2-party system from continuing.  Strangling and killing America.   

Wed, 11/07/2012 - 10:21 | 2955721 adr
adr's picture

At my next city council meeting I am going to propose that all productive citizens in my city should stop paying thier mortgages, credit cards, and medical bills.

The stand should be started there. If the banks or the administration dares to try and throw a entire city out of their homes, then that is what our guns are for.

The blacks may have won the election for Obama, but they still can't eat without the whites. It's time to let that be known once again.

Wed, 11/07/2012 - 10:24 | 2955734 buzzsaw99
buzzsaw99's picture


Wed, 11/07/2012 - 10:34 | 2955781 greendick
greendick's picture

Karl Rove??!!!  What are you doing here?

Wed, 11/07/2012 - 10:35 | 2955786 GMadScientist
GMadScientist's picture

Here's a lamp; search on, Diogenes!

Wed, 11/07/2012 - 10:41 | 2955813 machineh
machineh's picture

'The blacks may have won the election for Obama, but they still can't eat the whites.'

Right, they need some vienna sausages to make soggy crackers like you palatable, boy.

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