The Cost Of Kidding Yourself

Tyler Durden's picture

Authored by Mark McHugh via Across The Street blog,

Five years ago, every American would have considered a trillion-dollar budget deficit a national tragedy.  If you believe the CNBC parrot show, NOT having a trillion-dollar deficit is now a sure sign of the Apocalypse.  I speak of course of the cleverly dubbed “Fiscal Cliff,” which panicked CNBC apologists are required to mention no less than 5,000 times a day.  We’re told ad nauseam that going over the cliff will drag the US into recession.  Here’s what we’re not told: The US has been in recession 9 of the last 10 years.  It’s in recession this year, and no matter what CNBC’s financial terrorists say or the idiots on Capital Hill decide, it will most certainly be in recession in 2013.

Creating the illusion of economic growth is easy if you can print money.  It’s a prank you can play on an entire country.  Cut the value of the currency in half and the economy’s size will appear to double.  If it doesn’t, you’re in recession (whether you know it or not).   Cavemen probably understood this concept better than America’s best economic minds.

The only way to accurately measure changes in a nation’s economy is to do so relative to the world (see Notes for non-nerds below before protesting).  According to the World Bank, the U.S. represented 31.8% of the world’s economic activity in 2001.  By the end of 2011, that share had dropped to 21.6%, meaning America’s slice of the world economy is 32% smaller than it was a decade ago, and getting smaller every day.  Note that America’s housing bubble did nothing to boost the U.S. on the global stage.

As horrific as these results are, they’re better than Japan’s, whose “lost decade” proved only to be prologue for its “lost-er decade.”  Japan’s share of the world economy fell more than 35% from 2001 to 2011 (literally worse than Zimbabwe) and has now shriveled 54% from its peak.  But Japan’s real collapse did not coincide with the bursting of its stock and real estate bubbles in 1990 and 1991 respectively.  The decline actually began in 1995 when policymakers allowed government debt to exceed 90% of GDP (a milestone the U.S. quietly passed in 2010). 

The more they “fixed” it, the more it broke.  17 years later, the only thing Japan has proved is that smart Japanese economists are about as real as Godzilla.  Time and time again, the country has chosen collapse over admitting failure. On November 19, 2012, Bloomberg reported, “The Japanese government will spend 1 trillion yen ($12.3B) on a second round of fiscal stimulus as it tries to revive an economy at risk of sliding into recession.”  It would be funny if it wasn’t so tragic.

The United Kingdom gets third place in the 2001-2011 major economies’ “Race to Oblivion”, although with a less than 3.5% share of world GDP it’s hard to call this a major economy with a straight face anymore.  While the U.K. printed its way to 24% loss in world GDP, France and Brazil both passed the nation where an actual troy pound of sterling silver now costs about 235 “pounds sterling”.  With government debt expected to reach 88.7% of GDP in 2012, once-Great Britain will soon be seated at the kids’ table at economic summits, if it gets invited at all.

All three of these countries are in death spirals for the same reason:  They believe that they have the ability to avoid recession by simply printing their own money.  As America’s 100-year numbskull (and current Federal Reserve Chairman) Ben Bernanke once mused:

“…the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost.”

True dat, Ben….unless there’s “cost” associated with turning the nation’s currency into the world’s laughing stock….

Oh wait, there is.  So just for fun, let’s project the last ten years growth rates forward another ten years:

And there you have the real New World Order (sorry Freemasons).  In ten years China’s economy will be bigger than those of the U.S., Japan, and the U.K. combined.  What are the chances they will drink the same kool-aid we are presently guzzling?  Will they need, or even tolerate, the opinions spewed by our pundits and politicians?  And more importantly, will the U.S. dollar still be the world’s reserve currency?

Being a war-mongering banana republic isn’t all it’s cracked up to be, and despite what CNBC’s fast-money fuckwits may think, the stock market is not America’s report card.  Wall Street is the white elephant that America can’t afford to feed anymore and China doesn’t have the slightest interest in buying (just take a look at the Shanghai Composite).   Continuing to yield to its tantrums will undoubtedly destroy us.

Fun Facts:  Total U.S. GDP growth in the 20th century was $9.93 Trillion, while the  government accumulated $5.5 Trillion in debt.  In the 21st century, the US has borrowed $10.7T and has a grand total of $5.30T in GDP growth.


Notes for nerds: Most of the calculations presented were derived from data compiled by the World Bank which can be viewed or downloaded here.   World GDP was set to 100% and each country’s percentage determined simply by dividing by world GDP.   Japan’s debt as a percentage of GDP from Fred (225% was used for 2011).  Estimate of U.K.’s 2012 Debt/GDP from here.  U.S. GDP stats from (2012 estimate adjusted for 2% growth).  US debt from Debt to the Penny.

Notes for non-nerds:  How much World GDP changes from one year to the next depends entirely on what is being used to measure it.  For example, World GDP expanded by 109% from 2002 to 2011 in USD terms, but contracted (-59%) in terms of gold.  Using the Euro would produce different results (+59%), as would using barrels of oil (you figure it out).  Looking at countries relative to World GDP is an honest measure of their changes.  To say that Japan is still growing (at least in terms of Yen), but everyone else is growing much, much faster in terms of Yen distorts the reality that  Japan is undeniably shrinking relative to the world (no matter what currency is used).

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
samwell's picture

And who Pray Tell Controls our media?  Zionist Jew infiltrators who have no loyalty to the United States or anyone else.  There loyalty ties are with the state of Israel, fellow jews, and Money!!  Wakeup Goy before they have you in one of their Gulag Archipeligos like the Bolsheviks did to the Russian Orthodox Christians in Russia.

Fuck the Zionazis

LFMayor's picture

you the guy that did that vid..

what, what, in the butt?


Or were you just the stunt double for it?

boogerbently's picture

His face they airbrushed to look like a butt.

samwell's picture

I guess I hit a raw nerve with the Israhell firsters and their MEGAPHONIES allies!!!!  the truth hurts when you live in a world of denial doesn't it.  The sooner Israhell figures out that it is not the center of the Universe and that they are in fact a despised pariah state for what they do to other nations and people, not because of their religion or skin color, the better.  Israhell is an apartheid, racist, supremacist state that indeed does need to go quietly into the night and leave the rest of us alone.

AllWorkedUp's picture

The funny thing is that their denial about how they are will be their undoing - yet again. History repeats absolutely.

CH1's picture

And who Pray Tell Controls our media?

Go fuck yourself, troll.

JohnnyBriefcase's picture

Your counter argument is fucking solid bruh.

CH1's picture

Counter argument? You thought that was an argument?

Okay, let me make this very simple for you: I told him that he was a fucking troll.

JohnnyBriefcase's picture

So, are you saying you agree with his assertions? You seem very angry.

CH1's picture

I ... TOLD ... HIM ... THAT ... HE ... WAS ... A ... FUCKING ... TROLL.

HappyCamper's picture

Sorry, I guess that was my primal scream.  I grabbed a cognac and a large dose of hopium and I’m feeling lot’s better now.

NidStyles's picture

You seem like a retarded chimp, but we don't hold that against the chimp.

Tommy Gunner's picture

Two great videos - this one is The Israeli Generals Son - he is a Jew and he exposes the foundation of evil that Israel is built on (the appaling thing is the amount of money that has been spent and the people killed in the name of this massive lie)


This one is another self-hating Jew - he suggests that a deal was done by Zionists that guaranteed a homeland in Palestine if the German Jews sold out Germany in the war... and that was the reason why Hitler turned on Jews....  of course if you are a Zionist banker you wouldn't want that bit of info getting out would you - it doesn't absolve Hitler (what he should have done is hung the Zionist bankers not killed millions) but it sure does spread the blame around

Tommy Gunner's picture


Two great videos - this one is The Israeli Generals Son - he is a Jew and he exposes the foundation of evil that Israel is built on (the appaling thing is the amount of money that has been spent and the people killed in the name of this massive lie)


This one is another self-hating Jew - he suggests that a deal was done by Zionists that guaranteed a homeland in Palestine if the German Jews sold out Germany in the war... and that was the reason why Hitler turned on Jews....  of course if you are a Zionist banker you wouldn't want that bit of info getting out would you - it doesn't absolve Hitler (what he should have done is hung the Zionist bankers not killed millions) but it sure does spread the blame around

boogerbently's picture

ALL major "news" outlets liberal (except FOX).

BO wins.

GOP needs to buy some news outlets.

They don't need women or minorities or to expand their base.

They need to expand THEIR brainwashing capabilities!

JohnnyBriefcase's picture

Fox is just the exception that proves the rule.


In reality its all just for show. Your "team" doesn't even exist. It was co-opted from it's inception.



JohnnyBriefcase's picture

Perception management is the future.


And the past.

Cognitive Dissonance's picture

Agreed. I was wondering if anyone would comment. Thank you for expanding upon my thought.

Aurora Ex Machina's picture

Oh, the hole goes much, much deeper than some simple user fiddling.

Filter Bubble

Revelance Paradox

The Program

Persona Management


Cubic Corporation

It's all to do with imperfect minds with imperfect information acting in isolation to solve problems, then bunging ill-formed algos at it, and then mis-applying the results.


Messy. In a shit-will-hit-the-fan way.


(Note: all links are public, and thus open to total bullshit)

crusty curmudgeon's picture

In the abstract, people understand that you can't believe what's on the internet.  The problem today is that very few people actually research in, how you say, "libraries"?

Once somebody says something on the internet that another likes, it gets repeated.  Pretty soon, the same (false) fact is multiplied on the internet enough that people assume it's true.  Even those who take the time to "research it" often rely on the internet for their research.  Nobody has the time to fact check everything--we want our (mis)information now.

Aurora Ex Machina's picture

Until philosophers are kings, or the kings and princes of this world have the spirit and power of philosophy, and political greatness and wisdom meet in one, and those commoner natures who pursue either to the exclusion of the other are compelled to stand aside, cities will never have rest from their evils — no, nor the human race, as I believe — and then only will this our State have a possibility of life and behold the light of day.


There's a reason Philosophy is useful.

crusty curmudgeon's picture

Philosophy is hard work.  That is why most men dread it.

Many, many years ago, I came across this gem.  Say what you will about Ayn Rand, this is pure gold:


Aurora Ex Machina's picture

One of the great tragedies of the 20th Century was that Rand was neither a good Philosopher nor a good Economist.


I mean that sincerely; "I'm sure you believe everything you say, but what I'm saying is, if you believed something different, you wouldn't be sitting where you're sitting".


There is hope, however.

crusty curmudgeon's picture

I take no issue with your comment that Rand was not a good economist--I never thought of referring to her as one.  But she was definitely a good philosopher.  Her main problem, it seems to me, was that she couldn't live up to her own high ideals.

Titus Flavius Caesar Vespasianus Augustus's picture

" But she was definitely a good philosopher."


According to whom?  Certainly not most Philosophy Departments...   that in and of itself doesn't prove she's a bad one, of course, but why is it that the most fanboyish fanboys of Rand's 'philosophy' are people who haven't read any other Philosophy?


Kidding aside, I'm not of the view that she was awful, but that she was mediocre - and not just because I sometimes giggled at her unargued assertions and strawmen, or disagreed with some of her 'conclusions.'


I disagree at the end of the day with most of what, say, Karl Marx said - but he, actually, was a very good philosopher.


But philosophy isn't science, and economists aren't even philosophers which is why its especially silly that our whole "economy" is planned and regulated by people like Paul Krugman, who, from a philosophical and certainly scientific point of view - have no fucking idea what they're talking about.


Rand had a strong opinion - she defended a worldview.  How is that rigorous philosophy??

Freedom Pilot's picture

I was always fascinated by Rand's hatred and deep contempt of Kant.  I never could get my head around that--I've read some Kant and enjoyed it. 

Aurora Ex Machina's picture

Put it this way:

She couldn't get through the three critiques.

Not many do.



Only then will you really hate Kant, but not for the same reasons. The reason you'll hate him is because it re-wires your brain to actually understand all three at the same time, and you'll find your appreciation of the sublime gets twisted (oh, and for other reasons, but ZH isn't philosophy friendly).

crusty curmudgeon's picture

You have my attention!  Any elaboration would be greatly appreciated.

Aurora Ex Machina's picture

On Kant?

He's dense; he's German; he's logical; he's hard.

Most people (even philosophers) barely read two of the critiques, and even then, they skip the tough bits. Reading all three, and synthesising them into a coherent whole within your noodle does three things: a) it requires you to think like Kant,  b) it radically alters your perception of reality and c) Kant really was a good enough mind that the three are designed to be a cohesive whole.

Anyone claiming they understand Kant, who hasn't read all three? Call them on their bollocks. Once you have understood them? It's the 19th Century version of listening to Led Zeppelin.


He's the corner-stone of European thought for a reason; partly because understanding him fully is like smacking your head with an expertly trimmed limestone cornice. Three times.

crusty curmudgeon's picture

Hmmm...I'm not sure if I want to try to tackle these now or not. 

mccoyspace's picture

The Critiques were written in the 18th Century, not the 19th. 

The theory of the sublime in the 3rd critique is great, but I never could understand his position on artistic genius in that work. It seems to fly in the face of the metaphysics laid out in the 1st Critique.

Aurora Ex Machina's picture

You're correct, excuse the mis-type there, I had 20 minutes before a meeting, and was typing too fast. Not to say Kant didn't radically alter the 19th C either though.


The Sublime; yep, that's the nexus [and way too gone to discuss this atm, I apologise]. Suffice to say ~ it influenced entire realms of art.

NidStyles's picture

Kant, really? What is with the obsession with Kant, sure he was rather ahead of his time, but there have been far better minds since.

crusty curmudgeon's picture

I owe Rand a great deal because she got me interested in philosophy.  As anyone who has read much of Rand knows, and as Freedom Pilot pointed out, she really hates Kant.

I always wanted to read Kant to see if he's half as bad as she makes him out to be.  I don't believe in relying on one person's opinion of another without going to "first sources" and seeing for myself.'s picture




Metaphysics and Epistemolology

The man who . . . closed the door of philosophy to reason, was Immanuel Kant. . . .

Kant’s expressly stated purpose was to save the morality of self-abnegation and self-sacrifice. He knew that it could not survive without a mystic base—and what it had to be saved from was reason.,_immanuel.html's picture



Put it this way:

She couldn't get through the three critiques.


I couldn't get through a single minute of Jersey Shore. Those folks must be geniuses.

CH1's picture

she was definitely a good philosopher." According to whom?  Certainly not most Philosophy Departments

A Philosophy Department? In a state-approved institution?? You think that is a stamp of truth???

Open your freeking eyes. Universities are cesspools of coagulated bullshit.

They have condemned themselves by knowingly enslaving their students to an evil Debt Regime.

Aurora Ex Machina's picture

There's Universities outside of 'Merika, where you often don't have to pay much. In fact, many of them don't subscribe to the US model, and even when they do, their maximum fees are ~$12k a year (even for Law or Medicine HOLY FUCKSHIT BATMAN).

Look it up sometime; quiet shockingly in the last 4,000 years, the vast majority of philosophers weren't Americans.  Even more shockingly, the best Universities for philosophy aren't in America. 

To add to this, since you magically picked up two greens in the space of me typing this:

American Universities have had terrible philosophy departments outside of political philosophy for the last 50 years. Behaviouralism? Ugh. Simply put: your system has removed most decent philosophy as it tends to point out the logical fallacies and bullshit of your profitable MBAs. And your politicians. And your Religious nutters. And Randians. And so on.



America is only #1 in three things, remember?

crusty curmudgeon's picture

"America is only #1 in three things, remember?"

Remind us again, please.

Aurora Ex Machina's picture

Military Spending, Prisoner per population and Medical spending [not medical efficiency mind you, US ranks about #37 on actual medical benefits to citizens].


I'm paraphrasing, if you want sources, I'm happy to provide them.



Sorry, totally lied, it's four:


Energy expenditure / person capita [Germany is next, coming in at ~average 2/3rds of America - and if you break that into an economic output co-efficient, America is like #9th]

crusty curmudgeon's picture


1.  Too many people confuse "military spending" with "defense spending" and couldn't see collossal waste if it hit them between the eyes.  This is apart from the issue of why we have so many bases in foregin countries.

2.  The prison population issue is deeply disturbing...unfortunately, I don't see that changing anytime soon.

3.  As P.J. O'Rourke famously quipped, if you think healthcare is expensive now, wait until it's free.  We are in serious crap.

Aurora Ex Machina's picture

On 3).

Actually, even GS internal reports bascially agree that if you ripped out the predatory Insurance / combatitive pricing models, you could achieve total health care for about 50% less than is currently spent. (Presuming you went with a UK model, which still has split Private / Public choice, rather than EU models).



The political issue is that this (ironically) will wipe out a whole slew of jobs ~ a lot (can't remember the numbers, and I'm pressed for time).'s picture



t if you ripped out the predatory Insurance / combatitive pricing models, you could achieve total health care for about 50% less than is currently spent.


How much more could be saved if governments permitted a free market to develop in insurance and medical care? And what is "total health care?" More than one Obama adviser has said that old folks shouldn't receive the care they've been promised. One even said we should let old people die.

CH1's picture

There's Universities outside of 'Merika

Yes, but do you know what kind of crap they teach at Euro Universities? It's just as bad in most cases. Worse in others.

Try... please try... to discuss philosophy in Europe. Get down to axioms and see what you find.

Aurora Ex Machina's picture

I found the entire basis of:

A) Modern Logic

B) Modern Computing

C) Modern Ethics

D) Modern...


Oh waaaait. You're from 4chan, right. Sorry, I was being nice about the Avatar, but hey... even a silver-back is still an ape.


p.s. "Philosophy". You keep using that word, I do not think it means what you think it means.

joe90's picture

You reckon "pure gold"?  Sorry, there's a turd in your punchbowl.

"and "imperialism" is the name given to the foreign policy of this country, which has never engaged in military conquest and has never profited from the two world wars, which she did not initiate, but entered and won. (It was, incidentally, a foolishly overgenerous policy, which made this country waste her wealth on helping both her allies and her former enemies.) Something called "the military-industrial complex" — which is a myth or worse — is being blamed for all of this country's troubles."




WezTheJuic's picture

Well, I guess this would be a matter of ones belief in your fellow man/woman, call it, a section of this species.  I will use myself as an example, "From what I have seen within many of the people within ZH, there are those that do have levels of sight inwhich we all can learn.  Hence, which is why, like others, have decided to join."

After all, what is the purpose of "open source"?  Namely wikipedia.  And source code, along with many others applications of this ideal.

Which leads me to this question. 

YES, there many within ZH that do have some genuine applicable insights into the economic/political/social environments within our different shared western societies.  Yet, how many of you have, that internal balance between your logical and emotional sides to not just see, but to see through?

Optimist am I?  Perhaps. Yet how about this, "WE ARE NOT DONE."



Ps.  Which also means, I myself will be dropping by more oftern as well.

Aurora Ex Machina's picture

Philosophy, at its "basic axioms" (just to take the piss out of a prior poster), is about "nurturing the cognitive abilities of a human to be able to analyse information".

That's it. There's 4 strands, and each allows significant analytical ability into each realm they touch (logic, epistemology and two others).

There's a lot of other stuff surrounding this, and there's a lot of pseudo-intellectal nonsense on the intarweb claiming you can do it "faster, harder, smarter" [usually from the tech boys in Silicon Valley who then get raped by VCs, and then IPO to the muppets ~ case perhaps proven], but the bottom line is simple: Most Philosophy PHDs are the best macro-analysts I know. My teacher advised on the entire 1st strike policy for the USA, because back then philosophers were trusted to make "hard calls" coupled with "ethical rationality". [Aka, when RAND first started]


Then people started using really, really shitty computer models, and <poof> the whole thing goes bang. That's not to say the computer models haven't got better, but let's just say, Ma/Phys PHDs aren't in the business of real-world modelling to quite the same degree. Empirical data point: most philosophers get laid a lot; most math/physics bods are still virgins when they get their MAs. Sexist, and due to weighting balance, but bottom line: Aspergers can't get you "the ladies".

The actual serious point is that without empirical knowledge to back up theoretical knowledge, you tend to make really shitty models. Hello, Cybernetics and Ecology! (That went well. Ooops).


QED, perhaps.



Ooooh wait: I see Snooookie