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Peter Schiff On The Debt Ceiling Delusions

Tyler Durden's picture




 

Submitted by Peter Schiff via Euro Pacific Capital,

The popular take on the current debt ceiling stand-off is that the Tea Party wing of the Republican Party has a delusional belief that it can hit the brakes on new debt creation without bringing on an economic catastrophe. While Republicans are indeed kidding themselves if they believe that their actions will not unleash deep economic turmoil, there are much deeper and more significant delusions on the other side of the aisle. Democrats, and the President in particular, believe that continually taking on more debt to pay existing debt is a more responsible course of action. Even worse, they appear to believe that debt accumulation is the equivalent of economic growth.

If Republicans were to inexplicably prevail, and the federal government were to cut spending so that its expenditures matched its tax revenues (a truly radical idea) the country's financial mess would be laid bare. The government would have to weigh the relative costs and benefits of making interest payments on Treasury debt (primarily to foreign creditors) or to trim entitlements promised to U.S. citizens. But those are choices we will have to make sooner or later anyway. In fact we should have dealt with these issues years ago. But generations of mechanistic debt ceiling increases have allowed us to perpetually kick the can down the road. What could possibly be gained by doing it again, particularly if it is done with no commitment to change course?

The Democrats' argument that America needs to pay its bills is just hollow rhetoric. Paying off one's Visa bill with a new and bigger MasterCard bill can't be considered a legitimate payment of debt. At best it is a transfer. But in the government's case, it doesn't even qualify as that. Treasury debt is primarily bought by the Fed, foreign central banks, and major financial institutions. None of that will change with a debt ceiling increase. We will just go to the same people for greater quantities. So it's like paying off your Visa card with a bigger Visa card.

According to modern economists, an elimination of deficit spending will immediately cause a dollar for dollar decrease in GDP. For example, if the government stopped sending food stamp payments to poor people, then grocery stores would lose business, employees would be laid off, and the economy would contract. But this one dimensional view fails to appreciate that the purchasing power of the food stamps had to come from somewhere. The government can't create something from nothing. Taxation transfers purchasing power from people living in the present to other people living in the present. In contrast, borrowing transfers purchasing power from people living in the future to people living in the present. The good news for politicians is that future people don't vote in current elections (and current voters don't seem to appreciate the cost to their future selves of current policy).

The Obama Administration has congratulated itself for turning around the contracting economy that it inherited from President Bush. But even if you take the obscenely low official inflation statistics at face value, we only grew at an anemic 1.075% annual pace from 2009 to 2012 (far below the between 3% and 4% that the U.S. averaged post World War II). Sadly, this growth pales in comparison to the accumulation of new debt that we are borrowing from the future.

U.S. GDP is measured at roughly $15 trillion per year. 2% growth means that each year the GDP is approximately $300 billion larger than the prior year. But in the less than five years since Obama took office, the federal government has added, on average, about $1.3 trillion per year in new debt, a pace that is four times higher than the growth. If the deficit were subtracted from GDP, America would be shown to be stuck in a severe recession that Washington can't acknowledge. But such a reality is more consistent with the dismal job prospects and stagnant incomes experienced by most Americans.

The belief that deficits add to the economy, and that debt can be dealt with in an imaginary future (that never seems to arrive) is the foundation upon which the President can chastise the Republicans as irresponsible suicide bombers. Using this logic, he can argue (with a straight face) that borrowing is the equivalent of paying. That the President can make this delusional argument is not so surprising (no lie too great for the typical politician to attempt). What is alarming is that the media and the public have swallowed it so willingly. As they call for limitless increases in borrowing, Democrats have offered no plan to reduce the current debt and they are unwilling to negotiate with Republicans on that topic. Yet somehow they have been perceived as the party of fiscal responsibility.

While the Republicans have a dismal track record of their own when it comes to budgetary management, it can't be disputed that the minor dip in that rate of increase in spending that resulted from the recent Sequester, happened only because they dug in on the issue. Without the 2011 debt ceiling drama, there is no chance that any spending would have been touched.

Democrats had warned that the $85 billion in sequestration cuts slated for fiscal year 2013 (about 2% of the Federal budget) would be sufficient to bring on economic Armageddon. But guess what? We survived. Recently, Senate Majority Leader Harry Reid continued with such rhetoric by declaring that there are no more cuts to be found anywhere in the $3.8 Trillion dollar federal budget. (Apparently he missed last week's 60 Minutes piece on the spreading epidemic of federal disability fraud.)

We have to acknowledge what even the Republicans haven't fully grasped. We are in such a deep debt hole that there is no solution that does not involve serious economic pain. Tea Party Republicans rightly believe that government spending is a drag on economic growth. As a result, they conclude that immediate spending cuts will help with the "recovery". But they are confusing real economic growth with the delusional expansion created by deficit spending (which is actually damaging the real economy). If they cut the deficit, this phony economy may likely implode and cause widespread distress.

So even though a reduction in government borrowing and spending does help the economy, it won't feel very helpful tomorrow. The more we borrow and spend today, the more we will suffer tomorrow when the bills come due. Ironically, cutting government spending now helps the economy by allowing the economic adjustment to happen sooner rather than later. But this type of long-term thinking is very difficult for politicians to consider.

Unfortunately our debts don't leave us much in the way of choices. We can choose to pay now or try to pay later. But the longer we wait the steeper the bill.

 

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Fri, 10/11/2013 - 17:07 | 4046466 Kirk2NCC1701
Kirk2NCC1701's picture

"Pay the LATER"?  Are you mad?  We're NEVER paying them off: We won't be able to, nor are we supposed to.

We're just supposed to be indentured Debt Servant to neo-aristocratic bankers, who control everything.  [Monty Python boot stomps down].

Roll the Goddamn Guillotines already!

Fri, 10/11/2013 - 17:08 | 4046470 centerline
centerline's picture

They are going to rob the pension funds.  Count on it.

Fri, 10/11/2013 - 17:18 | 4046494 Skateboarder
Skateboarder's picture

That's when people will actually start opening their mouths. Maybe. Count on an irresistable pension replacement IOU scheme, and Spiderman towels.

Fri, 10/11/2013 - 17:19 | 4046504 lolmao500
lolmao500's picture

Please. Folks were mad for about 5 minutes after the bank bailouts... then they said : but but but! It was necessary or else the country would have collapsed! They will do the same when their pension funds are stolen.

Fri, 10/11/2013 - 17:52 | 4046570 DaddyO
DaddyO's picture

In the middle of the article, PS started to get up on the perpetual growth bent but redeemed himself towards the end.

Economic growth does not come from .gov, it stems from private commerce, period.

Sometimes private commerce yeilds a profit, sometimes not.

You pays your money, you rolls the dice!

Get the .gov out of the economic growth business and let the citizens get back to running its own businesses.

DaddyO

Fri, 10/11/2013 - 18:00 | 4046599 knukles
knukles's picture

Well, I for one land on the side (And it assumes you want to land on a side that concludes with some progress on stopping the Leviathan's progress) that suggests just holding "them" (Whom ever them might be) hostage until there is no more net new debt issuance.
Then the spending, by definition has to be cut back by a factor of approximately 1/2 as that's about the portion borrowed.

Anything else is another beggaring and nit picking about the edges (Hegelian Dialectic Deluxe!) wherein the whole bloody thing just perpetuates for generations...

.... Entropy.

Yes, I know, blah blah blah...
But unless a hard line is taken, one's actions (Or inactivity as per many of youse folks who won't even vote, so just sit home watch Dancing with the Paraplegics and bitch some more) are immaterially insignificant.

Booyah, motherfuckers.

 

Fri, 10/11/2013 - 19:03 | 4046734 macholatte
macholatte's picture

 

But unless a hard line is taken, one's actions.....

 

Two of the Big Gorillas in the room are now missing from the conversation..... Obamacare and the entitlement of 10-12 million illegals. There is little to be done to stop the damage about to be laid upon what's left of the middle class. Adios motherfuckers!

Fri, 10/11/2013 - 20:06 | 4046822 economics9698
economics9698's picture

When money is created (debt) it goes to xyz federal agency who then outbids the public for resources. We pay today (inflation) for debt paid tomorrow. Future generation pay the interest or with inflation if the federal government decides that is easier route, 1918-22.

Also Schiff is wrong about cutting federal spending. We cut federal spending 45% after WWII (1945 to 1947) and had growth rates of 1.6%-1945, -0.2%-1946, 9.7%-1947, and 10.0%-1948. Yes there would be a crash but society would recover if left alone.

We lose about 55 cents on the dollar when the feds spend money and waste resources.

Fri, 10/11/2013 - 20:33 | 4046893 shovelhead
shovelhead's picture

Dat be some wealth effect comin' atcha.

Fri, 10/11/2013 - 21:01 | 4046948 James_Cole
James_Cole's picture

People need to understand this stuff better, so much ignorance and stupidity peddled by tools like Schiff. 

http://blog.wolfram.com/2013/09/26/is-high-debt-bad-for-economic-growth/

Fri, 10/11/2013 - 21:36 | 4047009 buyingsterling
buyingsterling's picture

I've seen dozens of your posts and they're all pure bullshit.

Fri, 10/11/2013 - 22:07 | 4047071 Enslavethechild...
EnslavethechildrenforBen's picture

Hey Peter Shit - I got one thing to say to you Bitch - GOLD STANDARD - you fucking CUNT

Fri, 10/11/2013 - 22:08 | 4047075 Incubus
Incubus's picture

do you talk to your mother like that?

 

 

Fri, 10/11/2013 - 22:15 | 4047087 Enslavethechild...
EnslavethechildrenforBen's picture

"Delusional Peter Shit on the Imaginary Debt Ceiling Scam"

Fixed

Fri, 10/11/2013 - 22:51 | 4047127 FEDbuster
FEDbuster's picture

"They are going to rob the pension funds.  Count on it."

They already have by diluting the value of the dollar by a trillion dollars (that we know of) per year. 

"In 100 years the FED has devalued the dollar 97%, the next 97% won't take as long.", Dr. Marc Faber

Sat, 10/12/2013 - 04:44 | 4047335 Boris Alatovkrap
Boris Alatovkrap's picture

Boris invite politician class please come and rob Alatovkrap retirement... empty* hole in ground, politician fall in, break head.

(* empty because Boris is already extract copper ore, but that is different story.)

Sat, 10/12/2013 - 01:02 | 4047260 Bunga Bunga
Bunga Bunga's picture

So what, bankers would sell even their mother anyway.

Sat, 10/12/2013 - 01:40 | 4047276 The Big Ching-aso
The Big Ching-aso's picture

I think we ought to stiff everybody out there that we owe money.    Stiff em' good.  What are they gonna do?  Invade us and pry our remote controls from our cold dead hands?

Sat, 10/12/2013 - 04:46 | 4047337 Boris Alatovkrap
Boris Alatovkrap's picture

Boris is sell, rent, or lease mother-in-law, use as pledge collateral, even re-hypothecate!

Fri, 10/11/2013 - 22:15 | 4047083 TimmyM
TimmyM's picture

James_Cole is a statist idiot. The link he provided is pure statistical garbage. Every Countries situation is unique and the macro study of debt and GDP is all crap. Choosing an arbitrary reactive time frame is meaningless. Measuring real GDP is crap. Inflation timelines are highly variable. These types of macro studies can all be designed to say what ever you want.

Fri, 10/11/2013 - 22:42 | 4047114 James_Cole
James_Cole's picture

Timmy (obviously) doesnt understand it = 'statistical garbage'

Sat, 10/12/2013 - 00:43 | 4047243 vaft
vaft's picture

Did you finish reading the article you linked? The conclusion is pretty much exactly what Timmy said -- when looking through the dataset, you can find countries doing well with low debt, you can find countries doing poorly with low debt, you can find countries doing poorly with high debt, and you can find countries doing well with high debt, such that the application of Debt/GDP mathematics provides no rhyme or reason to why this may be so. Obviously, many more variables go into the economic wellbeing of a country besides how laden with debt they are. It sounds like you grasped only the parts of the article that appealed to your own opinions.

Sat, 10/12/2013 - 00:51 | 4047252 buyingsterling
buyingsterling's picture

Exactly. The major difference being that in the low debt countries, the people have not been turned into debt slaves for the benefit of statist elites. Mr. Cole is a statist elite wannabe - he thinks that if he can convince people that we can have 'favorable economic conditions' they will and should accept debt slavery. I'll pass.

Sat, 10/12/2013 - 02:38 | 4047312 James_Cole
James_Cole's picture

When R&R did their study folks like Schiff made a big deal of it, until it was proven the math was all wrong (a point the blogpost I linked sums up). ZH covered it as well.

Anyway, obviously you missed the point, here isolated for easy comprehension:

"So out of the 15 countries I can study at the 90% debt level, 10 or 75% of them are either no worse off or appear to be growing, while 1/3 appear to be getting worse. This does not appear to support the notion that only calamity can result when we cross the magical 90% Debt/GDP threshold.

...

Using the sparse Mathematica code given above, I show that high levels of debt are not a necessary barrier to GDP growth, that there are at least as many countries doing well with high debt as are doing badly, and that it is at least as likely that the causation runs the other way, where slow growth is causing high debt so that we are damaging the economy by cutting back spending now for fear of invoking the wrath of the debt demons. Since these high-level analyses can be carried out conveniently in Mathematica, the errors made by R&R using Excel could easily have been avoided."

Sat, 10/12/2013 - 08:48 | 4047446 StandardDeviant
StandardDeviant's picture

Hmm.  Wolfram's point seems to be more about the superiority of Mathematica (or, presumably, tools like R, SPSS, etc.) over Excel for this kind of analysis, based on how easy it is to make hard-to-spot spreadsheet errors; not so much about the merits of R&R's study itself, or the conclusions to be drawn from it, if any.

(But then: "out of the 15 countries [...] 10 or 75% of them [...]".  Huh?  I don't need Mathematica to tell me something's just a bit off here.)

Sat, 10/12/2013 - 11:25 | 4047691 MontgomeryScott
MontgomeryScott's picture

I read your comments here about the comparisons between sovereign debt and the 'standard of living' with some amusement.

There may be a point which hasn't been discussed, that I would offer.

I ask: WHO compiles the statistics, and WHO is reporting them?

The unemployment rate here in the CONUS is remarkably low, inflation is tame, economic growth is adequate, and the standard of living has never been higher (according to the institutions that report these things for the CONUS government involved). i mean, you BELIEVE them, don't you?

Stats and spreadsheets are easily manipulated. If you don't count the cost of food, fuel, or other 'non-essential' things, for example, you have an inflation rate that is quite tame...for example.

Yes, 10 out of 15 is .66666...

Sat, 10/12/2013 - 17:16 | 4048421 James_Cole
James_Cole's picture

Yes, 10 out of 15 is .66666...

Gee wiz, you guys are real math geniuses...

Posting here sometimes feels like being at a retirement home, can't anyone do anything on their own, look at the actual article for instance?? 

Seven countries are flat or indifferent at the 90% mark, five are trending down, three are trending up, and five lack the relevant data, probably because they have either never reached this threshold or did so when other reliable data was not available. So out of the 15 countries I can study at the 90% debt level, 10 or 75% of them are either no worse off...

And yes, it is quite obviously advertising their software, but the reason the article is interesting is because it has lots of cool graphs and interaction so you can see exactly where R&R went wrong and compare it to relevent statistical analysis rather than just assume what they (and Schiff) are saying is correct. Though based on peoples (lack of) reading abilities I imagine that unlikely..

Sat, 10/12/2013 - 11:50 | 4047786 LongBallsShortBrains
LongBallsShortBrains's picture

10/15= .66666 or 66%

But if the statists use math, it must be the math that is wrong.

Tool

Sat, 10/12/2013 - 10:25 | 4047523 Turin Turambar
Turin Turambar's picture

Immoral, economic illiterate.  Can't stop confiscating people's property against their will, the GDP number may go down!  Oh Noes!

 

Fri, 10/11/2013 - 22:32 | 4047107 Marco
Marco's picture

The difference is wealth inequality and value of labour ... the basis for economic growth is gone, the consumer class has almost nothing of value to offer to the capital owners any more. The little value labour has left gets diverted into various rents.

Instead of having an army of GIs getting free education entering the workforce ready to consume you have an army of people up to their eyeballs in debt leaving the universities.

Sat, 10/12/2013 - 06:40 | 4047374 Singelguy
Singelguy's picture

You cannot compare 1945 to current circumstances. At the end of WWII, the USA was the manufacturing power house of the world. Capacity had been destroyed in Europe and Japan, and China was a communist back water. Demand for consumer products and building materials was very strong and unemployment was low, despite thousands of soldiers returning from the battle fields.

Today, the USA has off shored much of its manufacturing, faces strong competition from Asia, and functions in a very weak global economy that has already created record unemployment in Europe and stubbornly high unemployment in the USA. Face it, central banks are the only things keeping the global economy afloat.

If the borrowing and printing were to stop over night, the crash would be severe and it would take time, a long time to recover. An abrupt stop in printing and borrowing by the Fed would likely have a global tsunami effect, throwing the whole industrialized world into depression. At that point who or what drives the recovery? It is much more prudent to enact a gradual but significant reduction in borrowing and spending to wean the patient off his addiction.

Sat, 10/12/2013 - 08:37 | 4047433 Keyser
Keyser's picture

I agree with you in principal, but we have passed the tipping point in being able to reduce borrowing and spending without collapsing the system. This, coupled with the fact that most currencies are now fiat only exacerbates the problem. There will be no reduction in spending or borrowing as the beast has taken on a life of it's own. At this point, any tampering brings a collapse. This realization became evident after the Bernank did not taper in September and Yellen was names Fed Chairman. 

 

Sat, 10/12/2013 - 08:53 | 4047450 Cloud9.5
Cloud9.5's picture

Don't forget the pent up demand that resulted from rationing and the built up savings from working in the war industries.

Sat, 10/12/2013 - 01:12 | 4047270 Seer
Seer's picture

Yeah, concentrate on the gorillas when it's the FUCKING JUNGLE that's the issue.

Clearly you're not understanding simple math, that it's SIMPLE FUCKING MATH that's the CAUSE of all of this.  No, not the 10-12 million illegals (wonder whether God would claim anyone as being "illegal?), the stupid fucking notion of perpetual growth on a finite planet.

The "middle class" was, I'm sorry to say, an illusion.  It was based on pure excess from an environment that was as rich as any had ever existed.

750 MILLION folks in India live on $0.50/day.  Was it Obamacare that screwed them?  Or, was it 10-12 million "illegals?"

Sat, 10/12/2013 - 03:40 | 4047323 Moe Howard
Moe Howard's picture

Adios, Amigo and see ya on the other side!!!!!!

 

GERONIMO!!!!!!

Sat, 10/12/2013 - 19:58 | 4048917 boogerbently
boogerbently's picture

If NOTHING is paid for, then obamacare and illegals can be "sacrificed" for the greater good.

The MSM may have been trying to convince that it's "the GOP's fault", but when NOTHING gets paid for, it's the dem constituents that will be hit hardest, and want results.....from THEIR leaders.

Fri, 10/11/2013 - 20:49 | 4046929 Debt-Is-Not-Money
Debt-Is-Not-Money's picture

Lock & Load!

Fri, 10/11/2013 - 18:29 | 4046665 SeattleBruce
SeattleBruce's picture

Let me see if we've got this.  Both major parties have absolutely no real clue how to solve this debacle, nor what consquences await us no matter what we do.  And the Ds are more clueless than the absolutely hapless, clueless Rs.  OK, check.  Prepare accordingly.  Politics may again matter during the Reset - we'll see what happens to these dodo bird parties.

Fri, 10/11/2013 - 18:56 | 4046724 Oldwood
Oldwood's picture

Everyone knows how to fix this, even the democrats. They don't because the solutions are uncomfortable, painful and possibly devastatng for some, but delaying will only make it worse. Our politicians are willing to cut our limbs from our body and feed them to us as a solution to hunger. They see us as a mindless mob that they fear and will gladly feed one of us to another to keep the mob off their door steps.

Fri, 10/11/2013 - 20:17 | 4046847 economics9698
economics9698's picture

The solution is bankruptcy.

Fri, 10/11/2013 - 21:39 | 4047019 buyingsterling
buyingsterling's picture

And not reorganizational bankruptcy, rather, total repudiation of all government debt. Unless we establish, for all time, the inescapable fact that democracies cannot be trusted to borrow money, this whole farce will just be repeated again and again. If we have to raise extra revenue for war or emergency, it should come from increased taxes - that helps to insure it's a legitimate war or a real emergency.

Fri, 10/11/2013 - 22:35 | 4047110 Marco
Marco's picture

US courts have been creating jurisprudence making it impossible for foreign countries to default on their dollar debts ... if the US tried to do the same it would come to bite them in the ass.

Sat, 10/12/2013 - 00:55 | 4047254 buyingsterling
buyingsterling's picture

You're thinking within the constraints of the system. I'm saying the system has to be obliterated once and for all - no more government borrowing, period. Yes, debtholders will be angry. Small price to pay for centuries of freedom from government debt slavery.

Sat, 10/12/2013 - 01:12 | 4047272 Seer
Seer's picture

Bankruptcies usually go through courts.  There's ZERO chance of this all being dealt with in a tidy manner.  And if it did then that would imply that the same System that got us into this mess is the one that will be presiding over the "correction."  Yeah, right...

Sat, 10/12/2013 - 11:36 | 4047725 MontgomeryScott
MontgomeryScott's picture

You guys are kind of silly.

The United States has been in receivership since 1933...

http://www.research.archives.gov/description/299829

Trafficant talked about this in Congress, and (of course) was summarily prosecuted:

http://www.apfn.net/DOC-100_bankruptcy.htm

 

I guess the question should be: What happens if you are already in bankruptcy, but can't service the debt? Learn to speak Chinese or Russian or Japanese?

Sat, 10/12/2013 - 01:20 | 4047278 Seer
Seer's picture

Politics solves NOTHING.  Politics is all about deception.  The "idea" is to minimize violence, but that violence, like risk, never goes away.  It comes out no matter.  Just think of taxes as paying others to shuck and jive away in order to hold off violence; sad part is that this only makes things worse as more shucking and jiving is happening than actual stuff that's required to live.

It's the System!  ANY system or entity that requires perpetual growth (our entire economic system is predicated on this) on a finite planet WILL FAIL.  Stuffing new operators on a runaway train headed for the cliff is a hope-based strategy.

"Prepare accordingly."  I think it would have been just perfect had you left it right there.

Fri, 10/11/2013 - 20:14 | 4046838 ObamaCaresHugSquad
ObamaCaresHugSquad's picture

Without government funding for most of the technology we see around us today, we wouldn't be nearly as successful as we are.  Private industry can take risks, but it can't take immense financial risks, the kind that wartime necessity call for, where money isn't an object.  Think of the Internet (ARPAnet), the radio, the microwave, the laser, nuclear fission, the automobile was perfected in war and most car companies today were wartime companies, the airplane was perfected in war and we wouldn't have nearly the aviation advances that we do without government funding for war purposes, I am sure there is much more, those are just the ones I know of.  Private industry absolutely could not do all of that.  I agree that government is wasteful and could be made less relevant in this country, but you can't beat a source of funding that does not care at all about a return on its investment, because it has other priorities in mind.  Of course, in an enlightened future, we could have a source of funding that does not depend on war to be an incentive.

Fri, 10/11/2013 - 20:17 | 4046851 economics9698
economics9698's picture

Drinking that Kool-Aid again?

Sat, 10/12/2013 - 08:46 | 4047445 Keyser
Keyser's picture

He's another of the "you didn't build that" crowd. I just wish he would enlighten us as to gubbamint spending on technology that has benefited the private sector. The gubbamint have spent ZERO on private sector tech infrastructure, unless he means the NSA taps into private data circuits. 

 

Fri, 10/11/2013 - 20:31 | 4046887 MeelionDollerBogus
MeelionDollerBogus's picture

fission RODS are a  big risk, fission on its own, not so bad. Radio: wrong credit. Automobile: wrong credit. Internet: mostly designed by non-government, just the basis was government. They used stolen (tax) money to ensure they had control. Otherwise private industry would have had it much quicker.

What you "know" is garbage.

Fri, 10/11/2013 - 21:05 | 4046959 James_Cole
James_Cole's picture

fission RODS are a  big risk, fission on its own, not so bad. Radio: wrong credit. Automobile: wrong credit. Internet: mostly designed by non-government, just the basis was government.

Gee wiz, rank ignorance from a zh commenter, what a surprise! 

Anyway, speaking of big things worth doing that happen to be tied to government:

http://www.telegraph.co.uk/science/science-news/10370386/US-lab-edges-to...

But I'm sure the private sector will be happy to claim it as theirs after it becomes economically successful. 

Fri, 10/11/2013 - 21:26 | 4046992 ObamaCaresHugSquad
ObamaCaresHugSquad's picture

Ok I wasn't being exact about the radio and the automobile, but both of those inventions got real traction due to the military.  I know they weren't invented by "the government", but very few of those inventions were.  My point was that they all received ample government funding, mostly for military purposes, and I said that before.  Not trying to start an argument, I mostly agree with everything said in this thread, I am just trying to introduce the whole picture so we don't hate on the government as totally useless.  It  historically has funded huge projects without expecting a financial return.  The private sector can not and is not willing to attempt those kinds of huge undertakings.

Fri, 10/11/2013 - 21:43 | 4047028 James_Cole
James_Cole's picture

No need to explain, those who are unaware the internal combustion powered autombile is right near the top of most .gov subsidized devices in history need to do some reading.

Sat, 10/12/2013 - 08:41 | 4047437 Sean7k
Sean7k's picture

You might want to consider WHY any of those inventions were necessary and if the world may have been better off without them or even in a reduced capacity. It is wonderful to get places faster, surf the net and take magic pills. However, what has been the cost?

Massive pollution, over population, sick, fat, feeble humans, poisoned food, water and air. The people are not smarter nor do they seek to improve their societies or create better governance. People are more enslaved than ever, it just seems like a more comfortable existence.

Healthy living in liberty is hard work. Violence is proportional to the number of people competing for resources. The inventions promoted by governments have their purpose in destroying liberty and enslaving the populace. Corpoartions grow wealthy while consuming resources and destroying our environment, protected by regulation and the military.

Since the measure of most people's satisfaction seems to lie in the measure of their tv screen size, the amount of food they eat and what their favorite star says, the question we should be all asking is : " What kind of civilization has our government produced"? 

We live in a world of death, destruction and outrageous disparities in wealth- all caused by government and it's methods of control. Government is NOT your friend, it is the ENEMY. As long as we allow the zionists to run it, we will never see the light of day. It is the mindless desire to protect the small gifts one receives that seems to euthanize the brain, to think necessary industries need a government to function. 

Any product or service, if profitable, will be produced. Otherwise, it is a child of debt financing, and eventually, all debt enslavs the borrower.

Sat, 10/12/2013 - 09:53 | 4047495 NeedtoSecede
NeedtoSecede's picture

Where the hell did the "government" funding come from?  It came from stealing my labor, it came from devaluing my labor, and it came from indebting all of us for generations to come.  I'd trade a few technological gadgets and "progress" for my freedom and being able to keep the fruits of my labor any day of the week.

Government needs to build some roads, protect the borders, ensure the rule of law.  The rest is bullshit and they can leave me the fuck alone.

Sat, 10/12/2013 - 11:01 | 4047598 Landrew
Landrew's picture

Good luck with that NASA thing private. Most of us in science understand private research isn't interested in anything that does not make money. Good luck with that.

Mon, 10/14/2013 - 18:53 | 4054217 MeelionDollerBogus
MeelionDollerBogus's picture

hm well OK, zerohedge aka fight club is not exactly a normal place to not try to start a fight just for fun, but I guess I can go with that this time.
I look at it this way: subjugation of private dollars and/or market forces, even demand for specific types of vehicles, by the government actually re-shapes everything negatively.
Just imagine if we put all the war-machine effort from missiles, drones, tanks and bombers... into purely market-driven civilian uses.
We'd have an entirely different dynamic of how many of each exist, who uses them and what their primary benefit is to civilians.
Every achievement in the technology from the underlying widgets to the over-arching purpose would be bent to reducing cost or increasing quality rather than increasing cost by judging cost as an inferior goal to killing force.
Just think of what we could do.

And when it comes to government funding just think of how much wasted money went to pure paperwork & nonsense before any got to the actual design & manufacture of the vehicles, networks, etc.
Actual corporations not on the government tit simply don't have that luxury. Some can get away with it for a few quarters but then they fail for a long time or go bankrupt.

My problem with this government waste, which is never permitted to fail, and is always permitted to make up losses by stealing tax dollars from people who are doing proven work instead of fucking around, means that every project they do is a waste by some % which means every project is a waste, period.

I just want to see that we aren't wasting things under force of violence.
We could do better without a gun to our heads. We're already having our real solid proven work decreased by losing a % value of it to taxes which we already know are wasted to some % by various bureaucrats and frauds.

It's just kind of lucky that any of them are honest enough to do any work rather than just make it all up and at the end of the day say "fuck you, you can't stop us".
And we can't.
And that's why more of them are getting a little too lazy to even lie about it. They're not getting more honest. They just fear no consequences since we never deliver punishment.

Fri, 10/11/2013 - 21:24 | 4046970 TrulyBelieving
TrulyBelieving's picture

Most people don't have a clue or even a thought process concerning a free market and personal responsibility. The ability to prosper or fail on your own merit, to keep the rewards of your own sweat and toil, and the freedom to pursue happiness is long gone and forgotten. And without this knowledge and the virtue gained, you, ObamacaresAHug, will fall for anything.  

Fri, 10/11/2013 - 21:30 | 4046995 ObamaCaresHugSquad
ObamaCaresHugSquad's picture

Well I admit, I depend on the government financially (military disability).  But I seek everything else in life on my own terms.  I don't disagree with your sentiment.  I am just not a born businessman so I must find other ways to survive on my own without being a wage slave.

Fri, 10/11/2013 - 22:54 | 4047131 FEDbuster
FEDbuster's picture

What will happen to you when the teat runs dry?  In the meantime, keep sucking.

Sat, 10/12/2013 - 08:51 | 4047449 Keyser
Keyser's picture

He will wake up one morning like a lot of Americans and the check won't be in the mail. Having not prepared for this eventuality, he willl whinge and whine, throw his toys from the pram and demand that the gubbamint reconnect him to the matrix. The problem is that this is the new economic normal in the US. 

Fri, 10/11/2013 - 23:19 | 4047165 TheMeatTrapper
TheMeatTrapper's picture

Well I admit, I depend on the government financially (military disability).  But I seek everything else in life on my own terms.  I don't disagree with your sentiment.  I am just not a born businessman so I must find other ways to survive on my own without being a wage slave.

You'll forgive me for not being sympathetic. In fact, the more I read your post, and your rationalization for living off the sweat of my brow, the more angry I become. 

People join the military voluntarily. The government sends them to fight wars I don't approve of. They are injured and now I must support them financially for life. I paid their salaries, I paid for their educations, I paid for their food, healthcare and insurance - and then I pay for their lifetime disability benefits - when I never approved of the entire machine to begin with. 

The last military to fight for my rights was the Confederate Army.

When I'm working working a full time job, running my own websitre and sideline business and catching beavers to feed my family - I have a real hard time feeling sorry for people sitting at home waiting on a free check in the mailbox every month.

 

 

Sat, 10/12/2013 - 02:55 | 4047313 James_Cole
James_Cole's picture

"Well I admit, I depend on the government financially (military disability). But I seek everything else in life on my own terms."

Nevermind the idiots downvoting, they like to live in a fantasy world where they're rugged individualists when the reality is they rely on the system just as much without sacrificing anything in return.

Fri, 10/11/2013 - 23:28 | 4047170 HardAssets
HardAssets's picture

ObamaCaresHUgSquad - - - think outside the box. What if government were limited and did not have a source of unlimited funds (money printing) ? What if wars could only be fought with money available.  What if the private central bank hadnt inflated away the purchasing power of your earnings by 98 % and you hadnt paid 50% of what was left in local, state, and federal taxes. What if there were true competitive markets without insiders buying favors and advantages from politicians ?  Might there have been fewer wars, less people killed, more prosperity, and more inventiveness ?  Might people be much better off today ?  The purchasing power of your earnings would be an incredible 100 times greater than they are today, just accounting for 100 years of money devaluation and taxation. Multiply that by several generations of Americans and youll see that the current system has stifled human progress and the prospects for peace and prosperity.

Sat, 10/12/2013 - 07:20 | 4047390 ncdirtdigger
ncdirtdigger's picture

Ah how the statist love to show us the 'benefits' of govco. Meanwhile we can only imagine what we might have accompished had govco not stolen/destroyed what was ours. Even with a pretty spokesmodel standing next to it, pointing right at it, it's hard to see 'what if'.

Sat, 10/12/2013 - 00:50 | 4047250 Ham-bone
Ham-bone's picture

OCHS - Right you are that massive advances in nearly every field have been made due to government spending (major advances in medicine during war, outerspace programs, etc. etc.).  The argument can be made that these advancements would have been made but simply more slowly but I think the biggest issue is if these advancements are made redirecting taxation or done via deficit spending.  Clearly we have periods that were funded by taxation, war time spending finaned by debt but later worked off by combined stronger growth coupled w/ greater tax revenue, orrrr there's now - higher spending via deficit spending and monetization leading to slower economic growth.  So, still things getting done but not at a net benefit to society.

Sat, 10/12/2013 - 00:56 | 4047256 buyingsterling
buyingsterling's picture

B.S.

Sat, 10/12/2013 - 01:26 | 4047282 Seer
Seer's picture

Trollin'?  Is this MDB?

Most of the "inventions" were never intended up-front for public consumption.  They were "gifts" for funneling tax dollars to the lobbyists' corporations.

But, there's an angle in which you might be considered right, and that's that there is no way in hell that would could ever end up with such huge private entities if not for govt support of them.

And then there are these certainties:

BIG = FAIL

ALL SYSTEMS FAIL (and Big Systems fail BIG)

Perpetual growth on a finite planet is not possible, no matter who or what is "in charge."

BTW - Understand what war is about- it's about resource acquisition/control.  REAL funding is based on access to REAL physical shit.  As folks in the ME are learning, if you don't accept the offer from the multi-national oil companies there WILL be war.

Sat, 10/12/2013 - 08:56 | 4047453 Cloud9.5
Cloud9.5's picture

Very little federal funding for the technology explosion in the 19th century.

Fri, 10/11/2013 - 17:57 | 4046585 Landotfree
Landotfree's picture

"They are going to rob the pension funds.  Count on it."

Savings is basically a myth, people have been stuck in a delusion that "savings" really exist and that those pensions exist.  Once the credit system starts it's collapse those pension funds are going bye-bye.  Global trade is going bye-bye, those ATMs are going bye-bye, those federal programs everyone loves are going bye-bye, etc.

"Unfortunately our debts don't leave us much in the way of choices. We can choose to pay now or try to pay later. But the longer we wait the steeper the bill."

Peter is still confused, there is only one result of using the equation.... peak, collapse and liquidation.

Sat, 10/12/2013 - 01:30 | 4047284 Seer
Seer's picture

Yeah, one senses the despair from folks like Schiff who are still in the game and are fighting to stay in it.  He may be correct about how it should be played, but he fails to understand/admit that there's a mathematical problem with us achieving economic nirvana of free trade and perpetual growth on a finite planet.  It does, however, appear that he's starting to own up to the realities that there just isn't any way to get out from under out debts (happens when there's not enough future to pull from).

Kind of hard to be excited about participating in "The End Times."

Sat, 10/12/2013 - 00:50 | 4047248 Seer
Seer's picture

They'll freak at first, then, after looking at their actual account balances, feel relief, as they will feel good about the fact that they don't have much to be stolen!  Meanwhile all the "connected" folks safely get their shit out of the way...  And we will then pretend, some more, that all is well (until, of course, it's not).

Fri, 10/11/2013 - 17:55 | 4046586 vxpatel
vxpatel's picture

why would 'they' need to steal from pension funds when 'they' can keep printing money? 

Fri, 10/11/2013 - 17:56 | 4046593 cougar_w
cougar_w's picture

They print monopoly money for the local economy, and take any real money and use it to prop up the petrodollar.

Fri, 10/11/2013 - 18:02 | 4046601 vxpatel
vxpatel's picture

let's see what happens when china's currency becomes the new petrodollar.

Fri, 10/11/2013 - 21:02 | 4046952 Yes_Questions
Yes_Questions's picture

Yeah and watch the new energy paradigm finally emerge.

Sat, 10/12/2013 - 09:02 | 4047458 Keyser
Keyser's picture

We are heading to a new worldwide monetary system which will not be based on a single reserve currency. It is already happening with countries setting up direct trade agreements with each other where transactions are not be settled in USD. Thus removing those countries need to maintain USD reserves. It will be a death of 1000 cuts for the USD. 

Sat, 10/12/2013 - 00:56 | 4047255 Seer
Seer's picture

Any takers on how long that that will hold?

China is nearing meltdown.  The Chinese are too dependent on selling junk, junk which the rest of the world won't be sucking up quite so readily.

I should think it fairly clear that the "losers" of the cold war will come out ahead.  The Russians know how to play the real game: they know how to take the pain.

Sat, 10/12/2013 - 09:05 | 4047462 Keyser
Keyser's picture

The wild card in the equation is the fact that the US will surpass Saudi Arabia's crude oil production in this decade. The US rode an oil wave before, perhaps it will happen again. If nothing else, we will no longer be dependent on Bandar Bush and his cousins for oil. 

 

Fri, 10/11/2013 - 20:23 | 4046866 seek
seek's picture

When printing becomes too inflationary, they can switch to confiscation which can balance the books but doesn't add any more money into the system.

The switch has to be carefully timed, though, too late and you're confiscating something that's devaluing rapidly.

Sat, 10/12/2013 - 20:02 | 4048927 Elooie
Elooie's picture

step 1) Pension funds must buy Treasuries

Step 2) nationalize 401k/pension funds

step 3) negative interest rates + Mandatory direct deposit + daily/monthly/yearly cash withdrawal caps 

 

Fri, 10/11/2013 - 20:50 | 4046932 Hedgetard55
Hedgetard55's picture

Good point. there is no real difference, is there? They are "stealing" the pension money by debasing it's purchasing power through printing.

Fri, 10/11/2013 - 18:11 | 4046619 RacerX
RacerX's picture

Europe is the model. Haircuts anyone?

Sat, 10/12/2013 - 00:57 | 4047257 Seer
Seer's picture

Hedgetard55 (above) made the correct observation that the US doesn't need to resort to such because it can do it via currency devaluation.  When you have the world's reserve currency devaluation means that the effects can be muted at home: others don't get the buffering component if they devalue their own currency.

Sat, 10/12/2013 - 09:08 | 4047465 Keyser
Keyser's picture

You are correct, but confiscation would be used to retire USD's from the market, therefore reducing the $$$ in circulation and liquidity. 

 

Fri, 10/11/2013 - 21:51 | 4047049 BigSpruce
BigSpruce's picture

As sooon as the people really open their mouths, the powers that be will declare martial law, send out their legions of sociopathic goon squads and herd the people " opening their mouths" off to the camps. I am an optimist by nature but I have recently concluded this country has reached the point of no return.

Fri, 10/11/2013 - 23:11 | 4047154 HardAssets
HardAssets's picture

you don't really think youre gonna actually get the Spiderman towels do you ?  Maybe an IOU for a towel

Fri, 10/11/2013 - 23:51 | 4047207 Trucker Glock
Trucker Glock's picture

That's when people will actually start opening their mouths.

Some may even open their spam cans of russian surplus.

Sat, 10/12/2013 - 10:19 | 4047515 chemystical
chemystical's picture

 

The 22MM private defined contribution participants (in 800,000 plans) and 11MM private defined benefit participants (in 30,000 plans) are far outnumbered by the non-participants (aka "voters").

A not insignificant number of those 22MM have contributed little (or have little remaining after taking early distributions to stave off creditors).   The combined assets of those 2 plans is on the order of 4 trillion (and hardly a dent in the public debt).

The thought that they'd rise up at the ballot box and decide the outcome of elections is wishful thinking.  This is just one more "us vs them" dichotomy.  Even if the public employees took a haircut or had their assets confiscated like the private sector, the Free Shit Army can count on support from public sector plan participants - who by their very nature require sucking assets from the private sector to pay them.  Many would be happy to forego their pensions if that was necessary to ensure their continued employment as paper shufflers and busy bodies.

Fri, 10/11/2013 - 17:26 | 4046517 Chupacabra-322
Chupacabra-322's picture

@ centerline,

"They are going to rob the pension funds. Count on it."

More like "Bank on it."

Fri, 10/11/2013 - 17:44 | 4046554 Rainman
Rainman's picture

and they'll still come up short paying the bills .

Fri, 10/11/2013 - 20:26 | 4046872 Wahooo
Wahooo's picture

At what point do the countries not in debt come knocking and say to us: "you are mine. Submit."?

Sat, 10/12/2013 - 01:02 | 4047261 Seer
Seer's picture

There are countries that aren't in debt?  If so, then I would bet that they don't hold US treasuries, which means they have no reason to come knocking.

When you control the game it's going to be rigged in YOUR favor.  Those joining in are suckers...

Fri, 10/11/2013 - 21:04 | 4046958 PT
PT's picture

That is the important bit to remember, Rainman.  They'll say it is a "one-off", but six months later and another crisis will cause another confiscation, and as long as the sheeple don't bleat too loud, it'll all be repeated again and again and again ...

Sat, 10/12/2013 - 09:12 | 4047475 Keyser
Keyser's picture

The beast will consume itself and everyone in it's path to survive. At some point the host rebels, but alas, it will be too little, too late. 

 

Fri, 10/11/2013 - 17:27 | 4046522 grid-b-gone
grid-b-gone's picture

The big lesson will be don't accept promises from people who will be long gone when it's time for the promise to be kept.

Cities will have a very tough time when workers demand up-front pay and accept a much smaller package of deferred benefits. 

I remember Reagan signing the 1983 Social Security deal and saying the program was secure ... 

"... long-gone when it's time for the promise to be kept."

Chicago 31% pension funding, Social Security survives only as long as the over-printed dollar is not rejected, Detroit ... The list will grow. 

Sat, 10/12/2013 - 01:02 | 4047264 Seer
Seer's picture

Yeah, it's ALL been a big Ponzi.  It could only operate under the premise of perpetual growth.  The phrase "nothing lasts forever" is one that we'll be learning the hard way.

Sat, 10/12/2013 - 09:08 | 4047464 Oldwood
Oldwood's picture

Everything is a ponzi if it is to have "growth". People live for lies as truth is not nearly inspirational enough to get us climbing out of our beds. Reccessions occur when the illusion, the cast of lies, is laid bare. The truth is more than most of us can bare. Drugs, entertainment and politics allow us to maintain our delusions, knowingly and willingly, piling even more delusion on top in hopes it will still all work out in the end. Miracles await us and Obama is our wizard.

Fri, 10/11/2013 - 17:51 | 4046574 Stuck on Zero
Stuck on Zero's picture

The Government won't rob our pensions funds.  The government will save us.  Big difference.  The Whitehouse will announce that all the pension funds have gone haywire and will all be gone and everyone will be destroyed.  Panic will ensue.  The almighty Government will then save everyone by transferring pension assets to government bonds and everyone will breathe a big sigh of relief and think they've been saved.

 

Sat, 10/12/2013 - 09:23 | 4047478 Keyser
Keyser's picture

"Bail-IN" is the new thing with Cyprus being the canary in the coal mine. It never fails to amaze me at the number of people I know, both educated and laypeople, that haven't a clue as to the financial status of the US and the world in general. Everyone is oblivious to anything outside their bubble, which is centered on their gadgets and superficial perception of reality. Woe be unto those who are not prepared for what is coming. Those I know that are awake often ask the magic question, when will the black swan happen that brings down the house of cards? 

Fri, 10/11/2013 - 18:02 | 4046602 AynRandFan
AynRandFan's picture

They already borrowed from Americans' retirement.  $2.7 trillion from Social Security alone.  $4.8 trillion overall in intra-governmental debt.

http://en.wikipedia.org/wiki/Social_Security_Trust_Fund

Fri, 10/11/2013 - 18:10 | 4046615 1100-TACTICAL-12
1100-TACTICAL-12's picture

And everything else they can get their fucking hands on...

Fri, 10/11/2013 - 18:10 | 4046616 Serfs_Up
Serfs_Up's picture

Can anybody say BAIL-IN?

Fri, 10/11/2013 - 18:29 | 4046663 TeamDepends
TeamDepends's picture

Nope.  But we can send you a HEAD-SHOT.

Sat, 10/12/2013 - 09:27 | 4047480 Keyser
Keyser's picture

I think Obamacare is the head shot and a bail-in would be the double-tap. These two actions would push joe sixpack over the limit of being able to support himself and his family. 

Fri, 10/11/2013 - 18:20 | 4046643 Randoom Thought
Randoom Thought's picture

I am sure that they have already written some law or made some B/S executive proclamation, that says that they own the pension funds and retirement. Theft by decree ... ain't government great?

Fri, 10/11/2013 - 20:28 | 4046877 seek
seek's picture

Dodd-Frank is the law that enables bail-ins for banking in the US, so I'm sure pension funds are just an interpretation away from the same treatment.

Sat, 10/12/2013 - 01:33 | 4047285 Seer
Seer's picture

"Dodd-Frank is the law that enables bail-ins for banking in the US"

Hey!  Can you provide a link to a reference of this?  Thanks!

Fri, 10/11/2013 - 18:29 | 4046664 mjk0259
mjk0259's picture

Pretty much the only people with pensions are in the government so this is unlikely.

 

Sat, 10/12/2013 - 09:31 | 4047483 Keyser
Keyser's picture

Do you have an IRA or a 401K? The term pension was being used in a boarder sense. In fact, I don't think the gubbamint would be able to touch pensions, just IRAs and 401Ks.  As an example, my pension will be paid out lump sum into an annuity and is currently being held in a trust, so no way they could attach it. 

 

Fri, 10/11/2013 - 19:14 | 4046755 WhackoWarner
WhackoWarner's picture

And please be aware Canadian readers that a serious look into RRSP and "TFSA"  (that is Tax Free Savings Accounts)  is the target.  And I think TFSA accounts will come under heavy fire.  I used to believe these were great. Now I am worried. I have "physical gold held in custody of the Royal C. Mint" in mine at the moment.

I am looking to take delivery while I can.  Which is now.  Premiums and the hoops to jump through are silly but I will.  I am taking the good advice of Get Out of the System.  Maybe a Credit Union if the books are good.

Fri, 10/11/2013 - 19:27 | 4046773 WhackoWarner
WhackoWarner's picture

And just to add; for Canadian readers.  I have asked questions regarding the separation of funds within Canadian brokerages.  Asked the BC Securities regarding the safety. I cited the MF Global and Sentinel decisions and asked if this could repeat in Canada.

I was assured that securities laws here did not allow the mixing of client and company funds.  However this does not make a "bail in" situation impossible.

 

The TFSA here has always been suspect to me.  The government has allowed a defined contribution yearly since 2009.  This is promised to be tax free forever. 

However I have recently come across tax cases where the CRA has prosecuted people for deliberatly transferring assets from a RRSP into the TFSA with "prior knowledge" they would gain in value.  Gain Big.

A desperate gov.  will grab.  I have no confidence in this Canadian gov. to keep their fingers off
TFSA accounts, as promised.

 

z

Fri, 10/11/2013 - 20:25 | 4046874 MeelionDollerBogus
MeelionDollerBogus's picture

transfer is supposedly forbidden, I've been told. You can sell from the RRSP and take cash + pay penalties, then you can move that now clean cash to anything you want, one choice of which is the TFSA. You can't directly move any stock or option from RRSP to TFSA or vice versa.

Sat, 10/12/2013 - 01:37 | 4047286 Seer
Seer's picture

Of fucking course it's going to change!

As soon as you folks up there realize that you've been sitting on one of the biggest housing bubbles is when you're going to see how quickly it all can change.  As the realities in China start to develop there will be a big vacuum up there, which will pull the plug on the housing market.

Canadians have been WAY delusional.  It's scary!  And more teetering by the US will only make things even worse for Canada: sorry, not being self-centered here, just pointing out the dependencies (it's a global economy don't you know).

Fri, 10/11/2013 - 20:25 | 4046868 MeelionDollerBogus
MeelionDollerBogus's picture

That's why my primary savings is stacked and my primary use of the TFSA is for options.

I've only been told by my broker for the TFSA trading account that they "don't know" what the implications are for the new bail-in laws, the details have not yet been clarified. I simply responded that I would "hedge accordingly".

Fri, 10/11/2013 - 19:21 | 4046764 chart_gazer
chart_gazer's picture

They have already. The debt ceiling is $16.394 T and expired 12/31/2012.  Their accounting tricks have allowed them to raid government pension funds supposedly w/o violating the law to allow them to go to $16.7+. Just like when Clinton borrowed (permanently) from the social security fund to claim he balanced the budget.  It won't be until private pension funds are raided that the people will come out of their stupor.   

Fri, 10/11/2013 - 21:21 | 4046982 Incubus
Incubus's picture
“So long as they (the Proles) continued to work and breed, their other activities were without importance. Left to themselves, like cattle turned loose upon the plains of Argentina, they had reverted to a style of life that appeared to be natural to them, a sort of ancestral pattern...Heavy physical work, the care of home and children, petty quarrels with neighbors, films, football, beer and above all, gambling filled up the horizon of their minds. To keep them in control was not difficult.” 

 

 

"Until they become conscious they will never rebel, and until after they have rebelled they cannot become conscious."

 

- George Orwell, 1984

Sat, 10/12/2013 - 01:02 | 4047263 Bunga Bunga
Bunga Bunga's picture

Government workers will feel like Russians in Cyprus.

Sat, 10/12/2013 - 19:38 | 4048863 DosZap
DosZap's picture

They are going to rob the pension funds.  Count on it.

And, look for a Bail In,using any and all acoounts.

Fri, 10/11/2013 - 17:14 | 4046484 wee-weed up
wee-weed up's picture

It's make the hard choices now...

Or there will be NO choices later - just collapse.

Fri, 10/11/2013 - 17:18 | 4046493 McMolotov
McMolotov's picture

Math will catch up to us at some point and kick everyone square in the nuts. We're leaving the hard choices for our children, but the system won't last that long.

Fri, 10/11/2013 - 21:49 | 4047027 wee-weed up
wee-weed up's picture

 

 

I agree, the system will not last that long...

Specifically because the current crop of congresscritters...

(except for a tiny few who are crucified by the MSM)

Don't have the balls to do what it takes to fix things...

They'd rather "kick the can" further down the road.

Let's hope, comes the revolution...

They'll be first against the wall - and/or first strung up on the lampposts.

Sat, 10/12/2013 - 09:35 | 4047484 Keyser
Keyser's picture

We won't have to wait for our children to pick up the tab for this as it will happen in our generation. There is no path out of this except default. What comes after is anyone's guess. 

 

 

Fri, 10/11/2013 - 17:40 | 4046550 James-Morrison
James-Morrison's picture

Rolling debt from Credit Card to Credit Card worked; until it didn't. 

Hard choices will never be made until they are forced.

Who's going to force it?

"Infinity and Beyond" will be cursed by our offspring. They'll scratch their heads and say, "what were those bastards thinkng?"

Pointing out that the Emperor doesn't have any clothes, is at first treated with contempt. 

Fri, 10/11/2013 - 18:32 | 4046675 TuesdayBen
TuesdayBen's picture

"They'll scratch their heads and say, "what were those bastards thinkng?"  ...as they grind up our strangled corpses for use as garden fertilizer...

Fri, 10/11/2013 - 18:34 | 4046676 SeattleBruce
SeattleBruce's picture

'"Infinity and Beyond" will be cursed by our offspring. They'll scratch their heads and say, "what were those bastards thinkng?"'

I think that'll be clear - and it sure wasn't about them!

Fri, 10/11/2013 - 23:43 | 4047200 kchrisc
kchrisc's picture

Oh, we're going to pay alright. And so will those that stole us here.

Is it time for the guillotines yet.

Fri, 10/11/2013 - 17:07 | 4046471 Dr. No
Dr. No's picture

The government would have to weigh the relative costs and benefits of making interest payments on Treasury debt or to trim entitlements promised to U.S. citizens

 

There are a couple of other choices in there too:  Cut foreign aide, cut NSA, cut DEA, etc, etc.

Fri, 10/11/2013 - 17:11 | 4046478 centerline
centerline's picture

All of which prop up the petrodollar one way or another.

Fri, 10/11/2013 - 17:20 | 4046506 kaiserhoff
kaiserhoff's picture

Yes, when was section 8 housing ever an entitlement?

Fri, 10/11/2013 - 17:55 | 4046587 NOTaREALmerican
NOTaREALmerican's picture

Re:  Yes, when was section 8 housing ever an entitlement?

When the OldFarts decided that motorscooters and multiple hip-replacements were an entitlement?

The problem with Big-Gov scams like Big-Ag and Big-MIC is once a few people are in a the scam, everybody wants their own scam too.  

So,  half the population is now living off of:  Big-Ag, Big-MIC, Big-Road, Big-Water, Big-Airport, Big-Energy, Big-Ed, Big-House, Big-Fin, Big-OldFart, Big-OldFartHealthcare, Big-AntiDrug, & Big-PoliceState .

Show of hands of people who are willing to cut their Big-Gov scam before the others do?

Fri, 10/11/2013 - 17:36 | 4046541 grid-b-gone
grid-b-gone's picture

Cut the five departments Ron Paul proposed. Cut corporate line-item give-aways. Cut many subsidies, especially tobacco that just drives up health insurance premiums.

Embrace weak GDP if malinvestment is being reduced.

 

Fri, 10/11/2013 - 17:07 | 4046473 lolmao500
lolmao500's picture

The popular take on the current debt ceiling stand-off is that the Tea Party wing of the Republican Party has a delusional belief that it can hit the brakes on new debt creation without bringing on an economic catastrophe.

Hmm no. If anyone made their homework, they know GDP is gonna go down 15% or so when the deficit is cut to 0... which NEEDS TO HAPPEN.

Fri, 10/11/2013 - 17:27 | 4046521 ejmoosa
ejmoosa's picture

Who gives a damn if the fake GDP number falls by 15%?  

Only those that are clueless.

 

As you state-IT NEEDS TO HAPPEN!

Fri, 10/11/2013 - 17:09 | 4046474 dick cheneys ghost
dick cheneys ghost's picture

Dick Cheney: ''Reagan proved that deficits dont matter''

Fri, 10/11/2013 - 17:20 | 4046510 McMolotov
McMolotov's picture

Dick Cheney: "I shoot my friends in the face for fun."

Fri, 10/11/2013 - 17:38 | 4046545 Teddy Tenpole
Teddy Tenpole's picture

 

 

"I shoot my friends on the face...".

 

fixed it fer ye ;)

Fri, 10/11/2013 - 18:19 | 4046637 akak
akak's picture

I hope your friends have had their rabies shots.

Fri, 10/11/2013 - 18:24 | 4046650 TheFourthStooge-ing
TheFourthStooge-ing's picture

"I'd shoot my friends in the face, if I had any." - Teddy

Fri, 10/11/2013 - 18:42 | 4046683 akak
akak's picture

"Speak loudly and carry a small stick."  -Teddy

Sat, 10/12/2013 - 20:05 | 4048937 DosZap
DosZap's picture

Dick Cheney: ''Reagan proved that deficits dont matter''

 

When Regan was in the BOOM cycle caused by Boomers, it didn't,we always had the abilty to pay if off anytime,no longer.

Fri, 10/11/2013 - 17:10 | 4046476 monad
monad's picture

This is when the serfs rise up and 'nationalize' the loot.

Fri, 10/11/2013 - 17:14 | 4046490 A82EBA
A82EBA's picture

the serfs dont know anythings wrong and give us strange looks

Fri, 10/11/2013 - 18:11 | 4046618 Serfs_Up
Serfs_Up's picture

Everybody going SERFIN' ... SERFIN' USSA ! ! ! !

Fri, 10/11/2013 - 17:12 | 4046481 Possible Impact
Possible Impact's picture
Peter Schiff for President.
Fri, 10/11/2013 - 17:19 | 4046499 lolmao500
lolmao500's picture

Schiff for FED chairman. Fuck Yellen... well don't fuck her literally because that would be disgusting...

Fri, 10/11/2013 - 17:36 | 4046543 alangreedspank
alangreedspank's picture

Fuck Yellen, Yuck Yellen.

Fri, 10/11/2013 - 17:27 | 4046523 Teddy Tenpole
Teddy Tenpole's picture

 

 

 

Peter Schiff is a wanker.  how hard is to be negative all the time.  Just like the rest of you boomer doomers.,. work till you die!  All you safe investments represent the bubble.  But hey, like I said, you're already paying the orice for the bond bubble -- cunts for stesling from the future generation.

On another note, Happy Friday :)

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