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$290 Billion Of Proposed Spending "Cuts" Result From Excel-Reffing Lower Interest Payments
Last night, we already expressed our amusement at the fact $130 billion of Obama's proposed "savings" would come from the change in the CPI calculation to a "Chained CPI" - a rough analogue would be using GRPN accounting to represent EPS as net of all costs and expenses and make it equal to revenue (we said rough; a more fine tuned explanation can be found here). What comes next: Chained Employment? Think of the cost savings (offset by spending on brand new whips of course). Today, we are just as amused at the other key component of the spending cut proposal namely that $290 billion of the savings would come from lower interest payments. And this is where one's Excel refs out, because the interest payment on Treasurys, at least in a non-banana republic, one set to see 120 debt/GDP in 3-4 years, is a function of fiscal decisions (central-planning notwithstanding), and to make the idiotic assumption that one can control interest rates for 10 years (central-planning notwithstanding), just shows what a total farce this whole exercise has become, and also shows that nobody in the administration, or the GOP for that matter, has even modeled out the resultant budget pro forma for the proposed tax hikes and budget "savings" as that would blow up said excel model immediately.
To summarize the spending components proposed by Obama:
- $400 billion from health programs
- $200 billion from mandatory spending
- $200 billion from other programs of which $100 billion from defense
- $130 billion from Chained CPI
- $290 billion from "Interest Savings"
And what makes this plan absolutely insane, is that the offset is increased near-term spending to the tune of $80 billion. In other words: a spending cut plan some time in the future, offset by more spending now.
Bottom line: we are getting a mini "kick the can down the road" worst case outcome, which will need a new Fiscal Cliff just to deal with the outcome of not resolving this Fiscal Cliff in as little as 12 months.
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Forward!
Does any of this plan stop the Beard from printing $16,000/second?
Yes. He stops printing $16,000/second and begins printing $24,000/second on 01-01-2013.
<Problem solved......again.>
$85,000,000,000/30/24/60/60 = $32,793/second after 1/1/13.
What's a decent starting salary every second among friends?
LOL
Soon we'll just be moving decimal points...........daily?
No, we have Plan C now, Plan B lasted less than 8 hours.
Gee, I've heard this song before ... maybe in Greece.
It's working out for them now though, they just got upgraded. Maybe good times re here again!
Circular references bitchez, iteration = 13.
Thumbs down....guess someone is tired of "bitchez"?
In other good news, I have stopped drinking by putting soda labels over my fucking beer.
I tell my wife that when beer is on sale, the more I drink the more money I save. Sounds like the same thing here.
You can buy a case of beer for less than a case of Coke. 12 pack of Pabst was $3.99 at my grocery store.
How in the hell do you get a down vote for reporting the price of beer versus the price of coke? WTF?
it's the CNBC junk-algo ;)
Probably because he called Pabst 'Beer'.
Pabst is canned watery horse piss, not beer - about as close to real beer as FERNS are to real money.
the jokes on you Pabst is not beer
Yeah, but it'll get ya drunk. 5% ABV,
Beats those watered down tourist beers.
I wouldn't pay more than 4 bucks of Pabst either.
You could brew your own for about the same price and still make out like a champ. Not as convenient, but it'll have a flavor that you'll love and all visitors will suffer though...or maybe you've got the knack of it and you'll make more friends. ;)
You'd better get approval from Bloomberg for that first...
I put a beer label on my Bundaberg Root Beer.
It comes in a stubbie.
They should simply pass $10T in spending cuts over the next 10 years, all of it occuring in year 10, declare victory and go home.
essentially that is what they are proposing but with only $1T over 10 years much of that coming from Enronesque accounting
What is amazing to me is that there are people in meeting rooms thinking this stuff up..."how do we show a cut in spending that is really not a cut in spending".....just amazing...these people really think the rest of the world is just going to suck it up and take our crap.....I don´t think so...and I used to think it was years away...this is blatent in your face stuffing and I think the spit it out moment is coming soon...this year soon....we are not changing anything..we are not learning anything..so jump ship they will...
Right...why not just have Boner report that unicorn farts have been bottled and all our problems are over? Same as anything else theyre saying.
When you don't like the results, change the formula.
2+2=unicorn
.
Clearly this game can, will and has to to some degree continue for years because quite frankly the alternative as stated daily here on ZH is not an option for most politicians. I expect everything we see in Europe and China in terms of lying and false optimism to continue which means 2013 should be another year of 12% gains....
Well, this site, and a good portion of the people here continue to try to apply legitimate rules to an obviously illegitimate scenario.
If you can't simply admit that it's a rigged piece-of-shit then you'll never get past trying rationalize this bullshit.
Geez, they just flat out ass fuck the SPX up another 10 handles thus far in a straight up fashion.
Just to be perfectly clear....THEY WILL DO WHATEVER THE FUCK THEY WANT TO DO EVERY FUCKING DAY.
Sad, but so very true. There are no rules.
Never have been.
The only thing different is they don't even bother to hide the fact anymore.
A whole $100B (over ten years?) from defense. Whoopie!
When does the mass selling of the dollar begin? That is what I want to know.
Sell into what? You see, it's an international FED Bank screwjob. They've fucked us 7 ways since Sunday. Every central bank in every nation except Iceland is printing. They've collectively decided monetize the debt. No one can sell dollars and buy Eurotrash because the Euro is printing as well. They're doing it every where... and somehow holding down PM's. There is nowhere you can go.
I vote for breaking the SNB.
Dude....bail? Dude.. Bail? - YouTube
Great article. I can't wait the hear the bullshit spouted by CNBC when I workout this morning.
You mean how Obama promised to cut the deficit in half by the end of his first term. Yet continued to increase the yearly deficit every single year.
So we can hope that $290 billion in cuts will only end up being $960 billion in spending increases over ten years.
AND THE MARKET TAKES OFF BECAUSE THE HEADLINES CLAIM COMPROMISE!!!!
Yes, one doctor wanted to cut off your right arm, the other doctor wanted to cut off your left. They compromised and cut off both, along with both legs for good measure. Your lawyer claims you are better off with the compromise because you no longer need to worry about walking or feeding yourself.
no its more like they compromise and cut neither sick arm off.....and you end up dying....you could have lived had they cut off your arms....
Why go thru all this tedious boring 'numbers' stuff, just announce that the debt cliff has been paved over with unicorn farts and pixie dust and the media and americans would cheer!
Dude....you workout to CNBC?
That's like......
makes sense to me, angst is a great workout motivator
eggsackery. It's on when I use the stair machine.
Yea, that's all interesting and everything...
Now, can we get back to blatantly ASS SLAMMING the market higher?
You didn't think they would let the lowest volume month of the year go by without taking full advantage did you?
Yea and I wonder where the 'end of year panic selling due to increased taxes coming' is, huh weird. Nope, markets can now ONLY go higher no matter what....debt cliff no longer even a concern and all they have to do is say someone is more optimistic about something.
Sorry, I can't respond. I have a fucking pop-up ad to wrestle with virtually every god damn time now.
They can't hide from reality. They can try to fool the audience, but that will only last until it all comes crashing down.
Real people suffer from real inflation. Gerry rigging the formula to say inflation is non-existent doesn't really do away with inflation. I've been updating the inflation numbers this morning. it looks like inflation really jumped on the YoY calcs. from 11.4% to a 12.9%.
Oh, and corporate said no raises this year. They're worried about the coming year and want to be cautious. Swell. Looks like I'll be cutting the church offering back. Or, maybe I'll just stop paying the mortgage.
#ref! ?! More like #Winning!
Actually, they might be right. The more debt the Fed purchases, the more interest on Treasury securities they remit back to the Treasury in the form of Fed "profits".
Oh yeah, but only AFTER they pay the legally required 6% preferred dividend to the OWNERS - this is payable for every share of Fed stock, which every member of the Fed SYSTEM (JPM, GS et al) is required to own based on their capitalization - check it out. jd.
Check it out where?
Last I checked this stuff was (relative) peanuts.
"Profits" to the Treasury were paltry few billion dollars.
It's not the FED dividends that boost the banks' bottom lines, it's the banks' spread when the FED is loaning its members unlimited free $ at 0%, and passing the (inflationary/dilution) costs onto the actual "users" of said $...
But it all pales into insignigicance by the fact that we are not at war with Andorra. Trillions upon trillions have been saved by that fact.
This shit is better than reruns of "Pee Wees Playhouse"... These idiot politicians picked up the ball right where the ECB fumbled it, and are running full steam ahead into the "crack house"...
It's all meaningless.
As long as political careers are in jeopardy the hard fights will just be swept under the rug.
Promises of spending cuts in the future in trade for more spending today is just idiocy. I find it hard to believe they can look the people of this country in the face when they talk about this crap.
When people make promises to do things 'next year' who can be surprised when next year never actually arrives....
And to think we pay these people......
The Jump
Thus far, humanity has been quite exceptional, at creating black holes. Look at Frisco. No matter how much Bernanke prints, fewer and fewer are capable of doing less and less, spending more and more, on less and less, with a delay relativity circuit to infinity supporting their make-work, on display in your December issue of San Francisco now.
And the following middle class layers are right up their a-, like flies on sh-, waiting in line, for the cascading die-off, each event horizon pushing the one behind it off the cliff to temporarily save itself, as designed by capital to preserve the nonperforming counterweight, which is rapidly approaching the cliff itself, hiding the problem only from itself and the middle class by monetizing the phantom tax base in the pension ponzi.
We are going to make the jump this time, to sustain the fusion/fission reactor, with or without the majority of people on this planet. It’s not my job to care. Theoretically, you have provided your children with love and security in the first year, exposed them to social fear and given them techniques to offset it in the second, and set them loose to explore the extending fence line, and are now waiting for the springback in adolescence when their training begins to reassert itself, just when the middle class and capital kids are being anchored in the past. Two hydrogens form helium…
San Francisco has all the steps on the ladder required to re-ignite economic mobility, the economy, but everyone is waiting in ever-growing lines to scale the ladder, because there is no circulation, watching these a-holes replicate nonperforming capital just as fast as they can. No intelligent kids to complete the circuit (all of whom the middle class and capital want to put at the end of all the lines, to wait for another line, to give away their ideas) results in no circulation, surprise, surprise. Apple, Facebook (Boeing, Microsoft) all shams, surprise, surprise.
You go into town to look for work and what do you find, but a bunch of lines, because everyone is a government prescribed hammer looking for a nail, employing the Internet to increase the size of the line, artificial demand for make-work, trying to play God. If your organization cannot take someone off the street at random and make that person a productive participant more times than not, you have no business being in business. When you create a line for that job, you slow everybody in that line down, leaving them no recourse but to enter another line as the economy slows, to infinity. That’s why the USA is becoming the USSA.
So, let’s say you go in to get your GA, government assistance. You need work boots, eyeglasses, a drivers license, temporary shelter, and a food card, to go get that job and keep it. Guess how many lines you are going to get into, to keep all the make-workers busy, while they pray that they are not going to be next on the layoff block. Why does anyone wonder why there are no jobs at the end of all these lines, which have no end? The job is on the back end when it’s supposed to be on the front end. That’s it, don’t make room for others that you cannot control in your business, and then complain about government, because enough is never enough. We have already proven that Bank must print to infinity without labor. What are you waiting for?
I am not responsible for providing for you, so you can continue to go out and do stupid a- sh-, as an example to be followed by your children and everyone around you. The world is what we make of it, and yes, the last couple of generations have made a sh-y a- mess of it. You’ll have that. Get off you’re a- and do something about it.
My three exes are bankrupt, and they can’t do anything about it, because they are addicted to the past. I can. I don’t have anything because I don’t want a flock of seagulls following me to tomorrow, and I have no use for existing capital, which is not going to be here tomorrow. Just as soon as I can find a female that does not have her head up her own a-, her mother’s a-, or someone else’s a-, I will get married, have more children and go back to work. Until then, everyone else can go f-themselves, Bank can continue to print to infinity, the middle class can get wiped out, and capital can go over the cliff, because all of labor feels the same way I do.
I understand the frustration. I’ve had a lifetime of it, but you have to take what God sends to your door, when it shows up. On that Burlington Hospital job, I inherited a crew of kids that liked nothing other than to go down into the basement and cook heroin or pot. Do I support that behavior? No. Do I have to deal with it? Yes. Half those kids turned out to be pretty good laborers, once they saw a path to the future, half self-selected themselves out, and one turned out to be a really good laborer, always where he was needed just before he was needed.
If you take the first person that comes to your door when you are in a position to create a job, what you lose in sub-system efficiency you will make up for many times over in system-wide organic growth. Don’t be an idiot trying to play God, or you will lose everything, over time. When you rent the oxygen you breathe, it’s not a good idea to choke off the source, happy that your competitor is going to go out of business first.
Life has always been a leap of faith, for which there is no insurance plan.