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Why Even A Modest Disruption Will Shatter The Status Quo
Submitted by Charles Hugh-Smith of OfTwoMinds blog,
Any modest reduction in debt, tax revenues, consumption or new borrowing will bring the entire Status Quo crashing down.
Consider this clipping from the August 1932 San Francisco Chronicle newspaper:
"Reduction of salaries of municipal employees and limitation of city positions to only one member of a household will be sought by (Supervisor) Adolph Uhl in two amendments to the San Francisco charter. The salary reductions would run from 2.5% for the lowest bracket to 25% on salaries of $500 a month or more."
Thanks to the handy BLS Inflation Calculator we know that $500 a month in 1932 is the equivalent of $8,680 per month (about $104,000) a year.
Imagine the tempest of fury and outrage that would arise should this be proposed the next time local governments run short of funding. Nowadays, the calls would not be for sacrifices from the highly paid public servants but for tax increases of 25% to maintain public-servant wages and benefits while the private sector economy implodes.
This unwillingness to sacrifice for the greater good is now endemic. This is the result of two powerful social forces:
1. The loss of any shared sense of purpose or social good worthy of sacrifice.
2. The ascendancy of maximizing private gain by whatever means are available as the primary purpose and goal of the Status Quo.
The dominance of maximizing private gain by whatever means are available leaves the Status Quo brittle and fragile. Since everyone reckons any sacrifice should fall on someone else, the only possible result is disunity and bitter conflict over modest sacrifices that are too inconsequential to save the system from collapse.
Wishful thinking, mindless optimism and blind adherence to failed ideas also make the Status Quo brittle and fragile. As Michael Grant noted in his book The Fall of the Roman Empire:
There was no room at all, in these ways of thinking, for the novel, apocalyptic situation which had now arisen, a situation which needed solutions as radical as itself. (The Status Quo) attitude is a complacent acceptance of things as they are, without a single new idea.
This acceptance was accompanied by greatly excessive optimism about the present and future. Even when the end was only sixty years away, and the Empire was already crumbling fast, Rutilius continued to address the spirit of Rome with the same supreme assurance.
This blind adherence to the ideas of the past ranks high among the principal causes of the downfall of Rome. If you were sufficiently lulled by these traditional fictions, there was no call to take any practical first-aid measures at all.
A dependence on debt, low interest rates and financial legerdemain also render the Status Quo extremely fragile when the debt become unpayable and low interest rates no longer boost additional borrowing.
The wishful thinking is that we can borrow limitless sums ad leave the debt burden on our children and grandchildren with no consequences. But once the system is dependent on massive borrowing, it becomes acutely sensitive to default, as consumption collapses once consumers can no longer borrow to consume, and asset bubbles engorged by debt-assets (bonds, student loans, mortgages, subprime auto loans, etc.) burst.
Lest you think this implosion from a modest decline in debt and new borrowing is preposterous, please examine this chart of total credit: that tiny wobble in 2008 very nearly collapsed the entire global financial system.
Any modest reduction in debt, tax revenues, consumption or new borrowing will bring the entire Status Quo crashing down. This is the bitter fruit of rampant financialization and the ascendancy of maximizing private gain by whatever means are available.
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Screw it....20% interest rates.
Are we men or mice?
What do we do when black swans are everywhere. Well, for one thing, stop calling them black swans.
And make sure that they become errors in factual judgement.
It's taken 8 trillion in the last 7 years to keep this thing afloat.
The consumer is being consumed, while the producer is becoming a strange and rare bird.
They say home ownership is down to 62%, close to the level of the 1960s. What would that number be if they only included people who actually owned their home, deed in hand?
It's all smoke and mirrors and things outside Plato's Cave are looking bleak. Truth is becoming the Bane of society!
African American swans? #BlackSwanLivesMatter
Our biggest Black Swan, unfortunately, is sitting in the Whitehouse.
Debt to infinity and beyond, or else! Yes Master!
Same as it ever was, or else!
He is no BlackSwan....he is a Black Lame Duck. He has always been a Cronyist from Chicago...Greedy and shallow beyond imagination and stupid beyond possibility on foreign policy.
What do we do when corruption is everywhere? Stop calling it corruption.
The point not brought up in this article is that debt to GDP is increasing geometrically. It takes more dollars for the same amount of GDP then it did last year. So, this has to fail regardless. The PTB have stripped the gears and adding more money results in the same GDP or LESS and this phenomenon will continue until GDP crashes or money becomes worthless (or both). NEWSFLASH, they know this which is why they have militarized the police.
Vince, you are some raptor's dinner. Did that answer it?
Status Quo crashed many years ago.
Banksters and their ilk worship the Status Quo for THEMSELVES. But for YOU? Not so much.
I know I'll be getting my City Pension.
--Rham Emanuel
Who'd have thought that Chicken Little was real?
Coming soon to a town, city, or county near you. Hide the children; it will be very graphic.
Let's do it. Time's wasted. Let's get the apocalypse going already.
This guy was proposing limiting government (city) jobs to one per family?
Too bad that didn't catch on at the local and national level.
If it did, we would not have things like the Bush Crime Family and entire families made up of cops, corrections officers, and other governement hacks.
Bush Crime Family
Thanks for bringing it up.....the current cartel makes those guys look like rank amateurs.
They will only be prosecuted after a very, very bloody period in world history. That, and more and more debt until then are certainties.
the american empire is run on debt, by jews just like the british empire was........
the debt must grow
"Maximizing private gain"
I love how we phrase things. Private gain I suppose is the same thing as profit? I don't think so....
Gain is an "investment" term, not one any person running a business uses. Business "profits" from their business activities, whereas "investors" "gain" from placing bets, speculating on the needs, actions and consumption of others. Gain is a parasitical virus of something from doing nothing except thinking that you are smarter, luckier, more special than simple chumps trying to EARN a living rather than sponging it off of the productive class. "Gain" is a simple skim, a vig, a cut of the action, and as their cut gets larger and larger, occupies and ever larger portion of our GDP numbers, they bestow upon themselves the title of the indispensable. Their graft has enabled them to acquire an ever greater strangle hold over government policy makers that are dependent upon their largess to retain position and power.
Gain is fucking us in the ass and to suggest they should be more generous in giving back is just stupid. These people are criminally insane and simply believe they deserve everything they get, just like every other thief. And the easier government makes this theft, the more special they think they are
Since its inception a century ago, the fed has depreciated the value of the dollar forced on people to accept as their wages, investments, and savings by 98%. This was done in secret & by deception to enrich a small group of banksters. Everything from domestic policy to foreign wars has this at its base. Its all about protecting Their position.
We, The People, have paid more than our fair share in blood and wealth over the last century.
Unfortunately, the people are purposely kept ignorant. As Henry Ford said, if people truly understood how the system is run - it would be all over.
You can cut the State quite easily and feel no ill effects in the greater economy on a very local level. In fact it would be a boon to other loca businesses...imagine how many landscapers, stone masons, and contractors would have extra work if I didnt have to pay my property taxes.
like most government employees, they exist and steal to justify their salaries. useless eaters
Do you drive on roads? Run water in your house? Flush the toilets? Call 9-1-1? These are all government service provided by government employees. Dont confuse the corruption of the government leaders with the employees.
Straw Dawg .... no one is saying ZeroGuv .... I'm sure many civil servant working diligently .... passing out Obama smartphones .... and screwing white people until they die .... and screwing their heirs afterwards ?
roads, water utilities, and public schools existed before the fedres. as for 911, when seconds count police are minutes away.
Nothing like going to the courthouse every year to drop off a check for several thousand fucking dollars, seeing an entire floor of cunts dressed like it was the emmy fucking awards and there's a huge portrait of "my house" on the wall as it's historic. Makes me realize how I don't really own a damn thing. I've tried more than once to get them to take it down, should've never said anything and just stolen it. Drives me nuts everytime I go into that hellhole. Speaking of which, is a gazzilion pound polished marble monstrosity that looks as if it fell from the sky and landed right on top of the ghetto.
God bless our $150k trash dump and director and our $200k rural electric CEO with his $400 a fucking month electric bills.
The 'system will come crashing down?' No, the unicorn will throw up a rainbow!
If financialization is so critical .... and at this stage of the "Heroin Socialist Addiction" .... it probably is .... why not give us Social Suckers who at least paid in something .... a COLA .... the answer is raycism against the white working class ?
They don't really need our taxes .... they can print all they want .... taxes are to punish consumption .... and to handicap white people .... 20 pounds of sand in your saddle bags ?
Pretty much hit the nail on the head.
Taxes are pointless when you have a central bank buying all govt bonds lol
Only reason we have taxes is to give people with no skills pointless jobs at the IRS.
The purpose of taxes is to keep the facade that FRN's are money, alive. What do you think would happen if the gov't just printed what it needed to keep functioning and growing? The people working would realize that the whole system is bullshit. Folks right now think that taxes finance the gov't but ignore that it only finances about 60%.
I'm not so sure any sized disruption will do shit anymore. We've been whistling past the graveyard for years now. If the shit hits the fan, we'll just whistle louder.
The nominal total of credit doesn't matter.
All that matters is the turn-over rate of money.
If you owe 100$ and cant pay back or borrow 110$ to keep rolling you are in the same boat as someone who owes 1,000,000$ and has to borrow or pay back 1.1M to keep rolling.
Negative is Negative no matter how many zeros you slap on after it.
This is why dips like that can destroy everything.
another blast from the past, week of 11/12/2007 3Q2007 gdp had just come out at 3.9% article goes on to talk about hope that the credit crunch wont hurt too bad, but eocnomists still expect 1-2% growth in q4 2007.
another great example of how wall st and economists cannot see what is directly in front of thier faces. they have no ability to publicly admit something serious might be coming down the pike.
http://www.bloomberg.com/bw/stories/2007-11-11/on-guard-against-recession
Imagine the bolt of stimulus, the new jobs, the economic lifeblood and muscle that would be created Americans suddenly bought real American goods - not phony foreign made "American Brands." And, increasingly, the refusal to buy foreign goods.
Ponzi Casino Crony Capitalism died March 10th 2008, and the Status Quo has known this since September 16th 2008 when they used taxpayer money to fund their criminal largesse with TARP. Moreover, Keynes always said that markets can remain irrational longer than you can remain solvent, America.
Up yours, Lawrence Samuelson Summers, you greedy Synagogue of Satan worshiping money whore.