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ABC Reports Tentative Debt Ceiling Deal Reached Between GOP And Obama

Tyler Durden's picture





 

This could very well be another red herring like the NYT article from two weeks ago that proved to be a dud, but for what it's worth according to ABC's Jonathan Karl, the White House and the GOP have just reached a tentative deal as follows...

  • Debt ceiling increase of up to $2.8 trillion 
  • Spending cuts of roughly $1 trillion
  • Special committee to recommend cuts of $1.8 trillion (or whatever it takes to add up to the total of the debt ceiling increase) 
  • Committee must make recommendations before Thanksgiving recess 
  • If Congress does not approve those cuts by late December, automatic across-the-board cuts go into effect, including cuts to Defense and Medicare.

In other words, virtually the same as the Boehner deal in the actual cuts, which will likely be back-end loaded (we expect about $10-20 billion in 2012 cuts), but the Democrats get what they want in that it will not require a second debt ceiling hike before Obama's re-elecetion as $2.8 trillion should last well into 2013. As for "future cuts", well, that's easily what Congress is so very good at. Indefinite future cuts that is.

Some more recent details from the National Journal:

Here are the outlines of a debt-ceiling deal that congressional leaders and the Obama White House are firming up in preparation for a possible announcement as early as Sunday afternoon. 

In many respects, the deal will, if approved by all parties, resemble the contours of a short-lived pact negotiated last weekend by House Speaker John Boehner, R-Ohio, and Senate Majority Leader Harry Reid, D-Nev. Obama rejected that deal, forcing Congress to wrestle with other inferior legislative options throughout the week.

Among the newest wrinkles, according to informed sources, is an agreement to extend the current $14.3 trillion debt ceiling very briefly to give the legislative process time to work without resorting to emergency, hurry-up measures.

President Obama has said he would only sign a short-term extension (days, not weeks) if it were linked to an extension of borrowing authority that lasts beyond the 2012 election. 

According to sources, the Senate would use the military construction appropriations bill, one currently available for action, as the vehicle for the short-term extension. This element of the arrangement, like everything else, is subject to modification. But those close to the negotiations expect Congress to slow things down without jeopardizing the nation's full faith and credit. A debt extension of days would achieve that goal.

 


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Sat, 07/30/2011 - 22:57 | Link to Comment No Bid
No Bid's picture

Horrendous

Sat, 07/30/2011 - 23:17 | Link to Comment CompassionateFascist
CompassionateFascist's picture

This is called a "trial balloon". A lead balloon.

Sat, 07/30/2011 - 23:50 | Link to Comment DormRoom
DormRoom's picture

they probably want to leak it to see how the T baggers will react.

Sun, 07/31/2011 - 02:50 | Link to Comment XenoFrog
XenoFrog's picture

Only a total blithering retard wouldn't already know how the teapartiers will react.

Sun, 07/31/2011 - 03:00 | Link to Comment Sock Puppet
Sock Puppet's picture

Let us hope they remain strong.

Sun, 07/31/2011 - 09:50 | Link to Comment So Close
So Close's picture

If the "Tea Baggers" fail the result will be much worse in the long run.   Funny how the (True) fiscal conservatives are the best hope for the welfare/entitlement/social benefits class.  I sort of wish the Tea Party would just lay down and allow the debt to be run up until the bond vigalentes/money printing/worse inflation takes the whole ship down.

 

Sun, 07/31/2011 - 08:13 | Link to Comment Raskolnikoff
Raskolnikoff's picture

"T baggers" (this is the equivalent of the 'n' word)

DormRoom, I don't understand how people could continue to to use such inflamatory, downright childish language to describe people they disagree with. 

Anyway, all true lovers of America must be very happy with the actions of those newly elected members of the so-called 'tea party', they have withstood media pressure and obama and have standed strong!

Sun, 07/31/2011 - 08:53 | Link to Comment Landrew
Landrew's picture

Oh you mean like the Democrat Party as Limbo and company use to call the Democratic Party?T-Baggers, what is wrong with that title? A tea bag is a t-bag. I was a t bag until the Cock Brothers took over the party and turned it into a bizzaro world. People on Social Security and Medicare saying they hate Government programs ha! When I was there in 2004 we talked of flat income tax, stopping the wars, replacing the non-marketable treasuries in Social Security trust fund with marketable bonds holding congress responsible for the loans.

Sun, 07/31/2011 - 09:14 | Link to Comment Halobitt
Sun, 07/31/2011 - 11:55 | Link to Comment Mr. Denny Kneel
Mr. Denny Kneel's picture

What a disappointing comment. Being a member of the T-party is a choice last time I checked. Racism based on one's genetic predisposition is only a choice if you are on the giving end.

Nice attempt at trying to distract from the main issues of your cause though.

Sun, 07/31/2011 - 08:42 | Link to Comment oldmanofthesee
oldmanofthesee's picture

Not familar with this poster. Saw one other posting a couple of days ago. Both stupid. Just to help you out, the correct term is Tea partier.

Sat, 07/30/2011 - 23:50 | Link to Comment DormRoom
DormRoom's picture

they probably want to leak it to see how the T baggers will react.

Sun, 07/31/2011 - 01:54 | Link to Comment CrazyCooter
CrazyCooter's picture

Kabuki theatre pupeteers drag this into September scaring the market shitless, then sees Isreal nuke/invade Iran as planned, herding the investo-sheep away and then back into the fold (profiting both ways of course). After driving oil to 200/bbl on a 10% to 20% global export decline with the MENA in flames, slaughters the investo-sheep with a nice fat default.

The world then goes to the much vaunted gold standard (of which we then learn almost no government owns - including the US - oops), all debts (and taxes) then roll into the new global gold backed currency at some fixed rate of gold, rather than hyper-inflating the old debts, and suddenly the elderly are poor and the working class can't afford their obligations. Oh, and the "elite" own all the gold and thus all the money.

To top it off, with oil exports off 20% and the world descending into global execution of anyone with resrources, the carbon tax passes all major governments (for some really good sounding reason) producing a tax incentive to sequestor CO2 and thus saving the world. Oil companies step up, with books full of old lease properties and happily engage in mass "CO2 flooding", filling the production gaps at 200/bbl with a fat subsidy.

Oh, and this means that on top of that mandatory insurance (i.e. you are in trouble if you are not employed), breathing (illegal production of CO2) is now illegal if you can't pay for it (with the job you don't have).

Do I get a prize?

Sorry, been a rough weekend. I have to slather down in (sarcastic)PF-1TLN (sarcastic protection factor - 1,000,000,000,000) to keep the burn away these days. If only my SPF was on par with my C2H5OH tolerance ... I might be actually able to ... ahem ... tolerate collapse at that point.

Regards,

Cooter

P.S. Just venting ... carry on!

Sun, 07/31/2011 - 05:56 | Link to Comment Hobbleknee
Hobbleknee's picture

Great post, but you forgot the death, starvation and rioting.

Sun, 07/31/2011 - 11:31 | Link to Comment FeralSerf
FeralSerf's picture

Death is the solution to starvation and rioting.

Sun, 07/31/2011 - 07:20 | Link to Comment BandGap
BandGap's picture

I hear you and feel your pain.

When the masses believe that breathing is the root cause of a made up global malaise then it's time for all of us to take a trip down the rabbit hole.

My biggest worry these days is my college boy drinking all the liquor I have stored for barter.  Best he get back to school while the gettin's good. Pushed most of my other kid's investements into PMs instead of stock/bonds and already have a 10% return.  That is, if his dreams ever see the light of day.

Hunker down, let the wave pass, come up for air and help with the clean-up.

Sun, 07/31/2011 - 08:45 | Link to Comment Zero Govt
Zero Govt's picture

CrazyCooter

Good post and what a good Masterplan too ...one tiny 'variable' in this NWO Wonderland, a few billion people!

Got a crazy idea all this Govt control-freak stuff depends on people continuing to fund Govt. Namely paying their taxes. All this planning by the puppet masters of Govt floats on Govt staff (eg. State Police, crones, Depts, the Fed etc) getting paid wages. No tax coming in, no wages get paid, no staff, no power, ratchet or execution of said Masterplan

Crazy i know but if the people are radicalised, which is what major recessions cause (see all Revolutions happen in economic contractions), they might be crazy enough to defund Govt, stop paying their taxes and fueling/sponsoring this scumbag elitist State shit

the parasitical elite are rich but be assured they're parasites used to a constant stream of societies wealth (via Govt) to stay solvent. They require the dozy public and compliant business to continue funelling Govt to keep their State power base and protection racket staffed and equipped ...they couldn't afford to rig, mangle and vandalise free markets all by themselves nor abuse society with Law, Police and Military without your continual $Billions of sponsorship

Stop Paying Your Taxes ....see how quick this NWO Masterplan collapses (in a few weeks not months) ...this shit goes on for as long as we are stupid and dumb enough to keep funding it

Sun, 07/31/2011 - 11:39 | Link to Comment FeralSerf
FeralSerf's picture

It will become very difficult to stop paying "your taxes" when taxes are collected at the source, the plastic "money" that's inevitable.  No more paper currency, only ATM/credit cards with the tax collected whenever it's used.

As long as you hide your money in PMs, you might get away without paying "your fair share", but what good is money if you're not able to spend it on what you want or need?

Sun, 07/31/2011 - 12:14 | Link to Comment A Nanny Moose
A Nanny Moose's picture

Black markets may flourish in such an environment.

Sun, 07/31/2011 - 13:41 | Link to Comment FeralSerf
FeralSerf's picture

Of course they do.  That does not mean that getting what you want for your hard assets is easy though.  The Soviet Union and China in the 1970s are examples.  If someone turns you in for having prohibited assets, you could have been executed.

Like the current illicit drug trade , the more risk, the more profit.

Sun, 07/31/2011 - 06:48 | Link to Comment DrunkHarryReid
DrunkHarryReid's picture

You have to be drunk to doublepost moron.

Sun, 07/31/2011 - 08:26 | Link to Comment Chuck Walla
Chuck Walla's picture

Forgive him, its all the intellectual power he can muster.  He's just one more OFA parrot hoping desperately that, by insulting those he does not understand, somehow, someone might mindlessly vote for Braaaaack. like he will

Sun, 07/31/2011 - 11:43 | Link to Comment Bagbalm
Bagbalm's picture

Trial balloon??  PULL!

Sun, 07/31/2011 - 00:43 | Link to Comment BaBaBouy
BaBaBouy's picture

It's fine!!!

They Borrow $2.8 Trill to last 1.5 years, and they (TRY) to cut $2.8 Trill over 10 years...

AND we are now going into a new recession.

 

Good plan Boyz...

Print more paper Fiats, debt is out of control, and so much for the physcally resposible TEA BAGGERS.

 

Gold/Commods, its the only hope to preserve your wealth...

Sun, 07/31/2011 - 09:00 | Link to Comment Nate H
Nate H's picture

"Gold/Commods, its the only hope to preserve your wealth..."

 

Gold may go up, but the fact is that there is NO way to preserve wealth (if one has > $1 mil).  80%+ of paper claims are going away, and with them large chunks of freedom, services and goods availability. "Wealth" will not be in gold, but in friends, access to resources, natural capital, skills, knowledge, etc. 


Note: I am long some gold and silver but recognize the greater game here is a paradigm shift away from 'accumulation'.  There are lots of possible trajectories (between outright nationalization and currency collapse) but the one thing I am most confident on is that wealth amplitude is going away

Sun, 07/31/2011 - 09:40 | Link to Comment NumNutt
NumNutt's picture

Actually the PM I am thinking might be the best investment at this point in the game would be led, with some brass attached to it.......

Sun, 07/31/2011 - 10:23 | Link to Comment j0nx
j0nx's picture

I think you mean lead, but yeah I agree with you 100%.

Sun, 07/31/2011 - 11:22 | Link to Comment Doyle Hargraves
Doyle Hargraves's picture

copper as well...

Sun, 07/31/2011 - 09:58 | Link to Comment hedgeless_horseman
hedgeless_horseman's picture

Great summary!

 

More of WWBD? (What Would Banks Demand?)

Destroy thrift, and foster debt through low interest rates and inflation.

Sun, 07/31/2011 - 01:35 | Link to Comment BaBaBouy
BaBaBouy's picture

Debt Ceiling Deal:   Why don't Reid and Boehmer just arm-wrestle for it ???

Sat, 07/30/2011 - 22:57 | Link to Comment Rastadamus
Rastadamus's picture

bullshit!

Sun, 07/31/2011 - 01:16 | Link to Comment tom a taxpayer
tom a taxpayer's picture

 

Breaking News:  EPA Toxic Substances Containment trucks were spotted speeding back and forth on Pennsylvania Avenue between the White House and Congress. Metro DC officials requested emergency EPA action after hundreds of pedestrians on Pennsylvania Avenue were overwhelmed by a "sickening stench" beginning about 9:30 pm Saturday night. Local health officials determined the source of the stench was the debt deal package (a.k.a. Senate bill 666: "Stinking Pile of Shit") being shuttled back and forth between the White House and Congress. 

In response, the EPA began shuttling the debt deal package in a hermetically-sealed truck. As the deal-making between the White House and Congress continued during the night, the concessions and compromises increased the stinking pile of shit. The resulting revised Senate bill 666, renamed "Huge Stinking Pile of Shit", requires a convoy of EPA hermetically-sealed trucks to shuttle between the White House and Congress.  

In response to D.C health officials asking when this growing pile of shit will stop, the White House put a positives spin on the "sickening stench" by saying it is a sign that a debt deal is imminent.

 

Sun, 07/31/2011 - 02:05 | Link to Comment TruthInSunshine
TruthInSunshine's picture

New York Grime is reporting this now, too -

What's hilarious (not) is that the proposed new bill would have a vote on a balanced budget amendment, but not require its approval in order to raise the debt ceiling. What a great, great (spineless) gesture:

 

A Mobilization in Washington by Wall Street

 

By and Published: July 30, 2011

After a year of clashing with Washington over new financial reforms, the country’s most powerful bankers have found common ground with regulators in the hard-fought effort to lift the debt ceiling and avoid a default.

Wall Street is no longer watching from the sidelines as the most polarizing political fight in years plays out on Capitol Hill. In the last few days, top executives have been in close contact with Washington in a last-ditch attempt to prod lawmakers toward a compromise by Tuesday, the administration’s deadline to reach a deal.

On Friday, Jamie Dimon, JPMorgan Chase’s chief executive, raised concerns with Treasury Secretary Timothy F. Geithner about the standoff over the debt ceiling and its potential to disrupt the system through which JP Morgan and other big banks disburse federal payments. Mr. Geithner assured him that the Treasury and Federal Reserve had taken steps to keep the payment system functioning smoothly, according to individuals briefed on the call.

In addition, more than a dozen chief executives from the nation’s biggest financial services firms wrote a joint letter to President Obama and members of Congress on Thursday warning of “very grave” consequences for the economy and the job market if an agreement wasn’t reached.

Sun, 07/31/2011 - 02:28 | Link to Comment Sock Puppet
Sock Puppet's picture

Truth you seem pretty smart what is your story?  Are you just a current events junkie?

Sun, 07/31/2011 - 06:16 | Link to Comment lilimarlene1
lilimarlene1's picture

warning of “very grave” consequences for the economy and the job market if an agreement wasn’t reached.

 

Since when did the banksters ever give a crap about jobs?

Sun, 07/31/2011 - 07:07 | Link to Comment Pay Day Today
Pay Day Today's picture

Bankster speak translation: 'job market' refers to the executive career prospects and total remuneration including bonuses that bankster bosses receive from their respective Boards.

It certainly does not refer to the 'job market' for unemployed, unemployable and soon to be out of work plebeians.

The same general principle applies when a Bankster talks about "the economy".

Sun, 07/31/2011 - 08:29 | Link to Comment Chuck Walla
Chuck Walla's picture

More meaningless frivolity for profit (theirs, not ours).  I can hardly wait to hear these lying turds tell us how seriously wonderful this is.

Sat, 07/30/2011 - 22:58 | Link to Comment NuckingFuts
NuckingFuts's picture

Wait and see bitchez

Sun, 07/31/2011 - 00:48 | Link to Comment NewThor
NewThor's picture

Speaking of waiting and seeing...

Maybe it's time for ZEROHEDGE to start following the Elenin - Nibiru data.

there is some very interesting stuff coming out right about now

SOHO 

STEREO A

STEREO B

and the Earth

she is a rumbling.

Has Wall Street priced in Divine Celestial Intervention?

 

Sat, 07/30/2011 - 22:58 | Link to Comment tom a taxpayer
tom a taxpayer's picture

It ain't over til the fat lady sings.

Sat, 07/30/2011 - 23:14 | Link to Comment fellatio is not...
fellatio is not fattening's picture

I hope you are wrong, I have heard Hillary Clinton sing and it still pains me

Sun, 07/31/2011 - 02:15 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

LOL. No. 10 was from me!

Sat, 07/30/2011 - 22:59 | Link to Comment Conrad Murray
Conrad Murray's picture

Keep paying your taxes while we print you slaves into the dustbin. Muahahaha!

Sun, 07/31/2011 - 02:16 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

+ $1625 Conrad, you get a green one from me too!

Sun, 07/31/2011 - 09:44 | Link to Comment Iam_Silverman
Iam_Silverman's picture

"Keep paying your taxes while we print you slaves into the dustbin. Muahahaha!"

True, and sad.  The only consolation offered in this scenario is that we pay our taxes with the same devalued scrip they create!

Sat, 07/30/2011 - 22:59 | Link to Comment tsx500
tsx500's picture

I smell a false-flag 'event' coming sometime by end of 2011. Gonna get real interesting.

Sat, 07/30/2011 - 23:22 | Link to Comment StormShadow
StormShadow's picture

Yep, need a good false flag to justify leaving the defense budget alone.  The MIC reigns supreme, you'll never see it truly cut--only for show.

Sat, 07/30/2011 - 23:46 | Link to Comment Crassus
Crassus's picture

There are plenty of true flags being hoisted to staff heads at the moment.

Sun, 07/31/2011 - 03:03 | Link to Comment oldman
oldman's picture

SS,

This crisis is the 'false flag'.

Sun, 07/31/2011 - 00:22 | Link to Comment baby_BLYTHE
baby_BLYTHE's picture

a false-flag on the anniversary of 9/11 would be a real F-U to the American people

Sun, 07/31/2011 - 00:46 | Link to Comment Oligarchs Gone Wild
Oligarchs Gone Wild's picture

Enough with the stupid false flag crap.  Put up facts and stop pretending there are magical religions and conspiracy running everything.   ZH is a perfect example of an organization that has moved beyond beliefs and voodoo and has dedicated it's existence to the cold pursuit of transparancy through published factual discovery.

Sun, 07/31/2011 - 01:00 | Link to Comment baby_BLYTHE
baby_BLYTHE's picture

Are you talking to me?

First of all I was hypotetically speaking, I never said I agreed one was coming or not. 

Second of all, it would be a lie to say the government hasn't lied about events or created panic to achieve a disired purpose.

The Gulf of Tonkin being one admitted to (Pentagon Papers) that lead to destruction of 60,000 American lives and well over 1 million Vietnamese 

Sun, 07/31/2011 - 01:58 | Link to Comment Conrad Murray
Conrad Murray's picture

Operation Northwoods as well.

Sun, 07/31/2011 - 02:23 | Link to Comment Sock Puppet
Sock Puppet's picture

Baby are you baby Blythe Masters?

 

Sun, 07/31/2011 - 02:46 | Link to Comment baby_BLYTHE
baby_BLYTHE's picture

hellz no.

Death to TBTF, buy silver crash J.P. MORGAN!

Sun, 07/31/2011 - 02:51 | Link to Comment Sock Puppet
Sock Puppet's picture

I thought you might be a troll with the handle of baby blythe, my bad.  Sorry if I said anything shitty to you in the past.

Sun, 07/31/2011 - 11:32 | Link to Comment disabledvet
disabledvet's picture

one would be a fool would he not if he believed money didn't buy things indeed. we only need look at 2008 to see "it bought an entire government" and as we look at Europe today "that's just the beginning."

Sun, 07/31/2011 - 09:29 | Link to Comment SuperRay
SuperRay's picture

Blythe baby, don't apologize for standing for the truth!  That's what the disinformation traitors at the CIA want you to do.  They're really excellent at creating doubt - like how they infused the culture with the term "conspiracy theorist," as a psy ops technique to pre-emptively discredit anyone who speaks out for the truth.  Fuck those motherfuckers!!

The CIA killed both Kennedys (have you seen the video of one of JFK's secret service men being waved away from the car just before he was shot?  they wanted to make sure the line of sight wasn't blocked.  Or the one of three CIA agents at the event where Bobby Kennedy was murdered?  What the hell was the CIA doing at that event?)

The CIA arranged and executed 9/11, along with Dick Cheney.  You think 19 morons with box cutters could take out the entire CONUS air defense system without help?  Are you fucking crazy?!  But you know what Huxley said - make the people believe that 2 + 2 = 5.  Once you've done that, you can anything you want.

It's too late folks.  This debt ceiling bullshit is just the latest distraction along the road to armaggedon.  It doesn't matter.  Me? I'm learning all about solar energy.  trying to get off the grid before it goes down.  Call me crazy, but I still believe that 2 + 2 =4.

btw, if you don't believe this stuff about the CIA, that's probably because you bought into the biggest conspiracy of all, which is that it's valid to have an opinion that isn't based on anything at all.  This one they've been working on for years - change the culture so that all you need to do to say something loud and with conviction long enough, and people will believe it.  They got that one from the Nazi's.  Finally, here's another Go Fuck Yourself if you don't believe me.  I don't give a shit, because I've got actual FACTS and my REASONING ability to back it up.

Have a nice day.

Sun, 07/31/2011 - 11:28 | Link to Comment trav7777
trav7777's picture

this crap is absurd.  Besides, it was ORWELL with the 2+2=5.

If you've ever worked in government, you know how preposterous your claims are

Sun, 07/31/2011 - 11:43 | Link to Comment ElvisDog
ElvisDog's picture

SuperRay, you are almost a caricature of a conspiracy theorist nut. Let me guess, the CIA faked the moon landings too, right? The comical thing about people like you, for whom conspiracy theory is almost a religion, is that no amount of false predictions ever causes you to question your conspiracy theories. I've been reading about "imminent" Israel invasions of Iraq/Iran/Syria/You-name-it every year since at least 2008. Hasn't happened yet, but just like hot weather in July every year it pops back up.

My own theory is that conspiracy theorists like yourself cling to them because it makes you feel important. You're like Jack Bauer on TV who is the only one who knows the "truth" while the evil CIA is closing in on you and thwarting your attempts to reveal the truth. I'm sure living in a fantasy world is fun for you, but I agree with the original poster that it's fucking boring for everyone else.

And no, I'm not a CIA troll nor have I any affiliation with any other evil government intelligence organizations.

Sun, 07/31/2011 - 13:31 | Link to Comment Havana White
Havana White's picture

SuperRay...  "Conspiracy theorists" took any and all kinds of heat for raising questions about JFK's assassination.  Today it's beyond question the CIA did it.  (A superb recap is the recent "JFK and the Unspeakable" by James W. Douglass, Touchstone, Simon & Schuster.)

The jury's still out on 9/11.  Someday we'll know why Dubya sat for seven or eight more minutes of "My Pet Goat" after being told the nation was under attack, and the answer to other troubling questions.

Your point here is well taken: (Current thinking is that) "it's valid to have an opinion that isn't based on anything at all. This one they've been working on for years - change the culture so that all you need to do to say something loud and with conviction long enough, and people will believe it."

Sun, 07/31/2011 - 01:10 | Link to Comment piceridu
piceridu's picture

USS Liberty part 1 of 7 BBC Documentary with survivors.

False Flag...what false flag?

http://www.youtube.com/watch?v=Ujoc1DYjuPE

Sun, 07/31/2011 - 01:27 | Link to Comment Idiocracy
Idiocracy's picture

Israel admits to it being their "accident".  So, by definition, not false flag.  False flag is a self-inflicted attack that you blame on an enemy.  Let's keep apples to apples.

Sun, 07/31/2011 - 01:32 | Link to Comment piceridu
piceridu's picture

That's funny!

Sun, 07/31/2011 - 02:30 | Link to Comment Ponzi Unit
Ponzi Unit's picture

False flag in the sense that some accuse Israel of attempting to bring USA into the fight by pinning the attack on Egypt.

Sun, 07/31/2011 - 10:27 | Link to Comment monoloco
monoloco's picture

It wasn't an accident, it was engineered by Washington and Israel.

Sun, 07/31/2011 - 12:00 | Link to Comment rwe2late
rwe2late's picture

 Does the definition of "false flag" have to be so narrow?

Pirate and other ships used to fly under a false flag in order to lull a targeted vessel into believing they were on the same side and there was no danger.

If a second party (say the US) were deceptively attacked in order to provoke the US into mistakenly blaming and attacking a third party, is that something "self-inflicted" by the first party?

If the public is duped into believing Iraq is an "enemy" imminently about to attack the US with "mushroom cloud" WMDs in order to justify the launching of a planned US invasion of Iraq, is that imaginary Iraqi "attack" something really "self-inflicted"?

Sun, 07/31/2011 - 14:25 | Link to Comment FeralSerf
FeralSerf's picture

"Accident" means unsuccessful false flag attack.  USS Liberty just wouldn't go down like she was supposed to.

Sun, 07/31/2011 - 01:29 | Link to Comment Idiocracy
Idiocracy's picture

.

Sun, 07/31/2011 - 08:44 | Link to Comment BandGap
BandGap's picture

Wait, wasn't attacking Libya for "humanitarian" reasons a false flag?  I mean, the charges were either exaggerated or made up and the response totally overblown.  Didn't we just send a dozen cruise missiles towards them in the past when shit like this happened.

I think trumping up bullshit and then laying in a beatdown qualifies as a false flag.

Sun, 07/31/2011 - 09:05 | Link to Comment Landrew
Landrew's picture

Read the dictionary.

Sun, 07/31/2011 - 11:46 | Link to Comment ElvisDog
ElvisDog's picture

A false flag would be if the U.S. sunk one of its own ships and then claimed that Libya had done it.

Sun, 07/31/2011 - 12:07 | Link to Comment rwe2late
rwe2late's picture

 How about if the US government falsely claimed Libya was about to attack the US via the "terrorists" Libya was allegedly supporting which were really being supported by the US via the CIA and Saudi Arabia?

Sun, 07/31/2011 - 12:30 | Link to Comment ElvisDog
ElvisDog's picture

In my mind, a false flag attack has to be an actual attack, not one that's only being planned. The U.S. military probably has plans to attack every country on Earth.

Sun, 07/31/2011 - 10:23 | Link to Comment monoloco
monoloco's picture

AmeriKKKa has a long and documented history of using false flags to create conflicts, Spanish American war, war with Mexico, WW1, Vietnam, Iraq.

Sun, 07/31/2011 - 02:08 | Link to Comment joak
joak's picture

Enough of blind people like you bashing people (so called conspirationists) like me in the name of their ignorance.

Make some research on operation Northwoods, Gladio (NATO sponsored terrorism), it's all proven facts... Closer of us, don't you remember the WMD show the US made to justify war in Iraq. There are Al Qaeda guys in Lybia, brought by the US to fight Khadafi (they murdered that general). So man, give us a break and educate yourself, or shut up. I am sick of ignorant and/or naive idiots like you.

Sun, 07/31/2011 - 04:28 | Link to Comment Non Passaran
Non Passaran's picture

And many are sick of reading this conspiracy crap (or history, call it what you will) in comments on every possible article, including this one.

I don't give a shit about war in Nam, I just want to see comments that are related to debt ceiling negotiations.

Sun, 07/31/2011 - 08:49 | Link to Comment BandGap
BandGap's picture

How is it that I watch shows where four retired police officers get together and solve a 35 year old murder with very few resources....and then have to accept that a sitting US president gets gunned down in a major US metropolitan area in broad daylight and that murder can't be solved?

Some conspiracies are real. And when a government can pull off a coup like that, it is possible to do anything.

Sun, 07/31/2011 - 11:49 | Link to Comment Galen Slade
Galen Slade's picture

Oh - It was solved, remember?  Lee Harvey Oswald was the world's greatest marksman - best sniper that ever lived - who managed to fire 5 bullets in just three shots.  Several of those extra bullets were so magic, that they changed direction in mid flight.   Sheesh, didn't you read the Warren report? 

And Jack Ruby was kind of magic, too - sort of like Vincent Foster, who managed to make himself invisible - the only person who ever left the Whitehouse without showing up on any survellience cameras - and who then rolled himself up in a rug, drove to nearby park, and shot himself in the back of the head without leaving any poweder burns on his hands.  Or bleeding.

Nothing to see here folks, just move along.  It's all conspiracy theory.... 

Sun, 07/31/2011 - 10:06 | Link to Comment rwe2late
rwe2late's picture

 The point, I think, about mentioning "false flags" and other government deceptions is counteract the popularized notions about "conspiracies" and "trusting the government".

There are many varieties and purposes of "false flags", political ( electing the other plutocrat party will bring disaster), military (Tonkin Gulf),

or ECONOMIC (TARP, default, debt ceiling, etc.)

 Mentioning such as Tonkin Gulf, the USS Maine explosion, Lusitania (which was coverty transporting war materials), Pearl Harbor, the unnecessary A-bombing of Japan (willing to surrender on the same terms before the bombing as afterwards), USS Liberty, the evidently US-approved attack on Ossetia by Georgia, and just about everything officially said concerning Kosovo, etc.

all serve to remind us that our (the US) government lies, and has a rich history of doing so.

Sun, 07/31/2011 - 11:54 | Link to Comment ElvisDog
ElvisDog's picture

I think there is a difference between acknowledging that false flag events have happened throughout history and subscribing to the conspiracy theorist conviction that there is a vast, all-powerful organization (CIA or whatever else) that is controlling much of the world events. On one hand, you have a small group of desperate people, or even a single individual, who plan and execute an event. On the other hand, you have this vast sinister entity, like SPECTRE of the James Bond novels.

Sun, 07/31/2011 - 12:22 | Link to Comment rwe2late
rwe2late's picture

 But neither are the ruling elite disconnected from one another. They have a confluence of interests, which leads to cooperation, coordination, and attempts at control through a number of forums and organizations they meet and  head (the BIS, IMF, NATO etc.).

Sun, 07/31/2011 - 12:35 | Link to Comment ElvisDog
ElvisDog's picture

Now, that I agree with but only in the sense that at the present time the interests of the oligarchies of the individual countries are aligned. So, it's not that these leaders are part of a SPECTRE-like organization that meets around an enormous round table in a secret lair but rather that there is no reason at the moment for them to be in conflict. But I think these periods of interest-alignment don't last long historically. It's when the interests of the oligarchies no longer align that things are going to get interesting (in the Chinese proverbial sense).

Sun, 07/31/2011 - 09:30 | Link to Comment SuperRay
SuperRay's picture

Where are your facts, asshole?

Sun, 07/31/2011 - 00:41 | Link to Comment rcmullins
rcmullins's picture

"False Flags" are coming more often, and they are not just big events.  Many events that the media pressures to the surface in order to scare people into allowing the government to pass laws that tyrranize those same people are false flags.  "Vote in the TSA or your kids will get raped by white, anglo-saxon Muslims."  Now we get our balls fondled in public.......not that there's anything wrong with that.

Sun, 07/31/2011 - 02:35 | Link to Comment Ponzi Unit
Ponzi Unit's picture

Gotta have false flags, otherwise we have no enemies. The target of the war on terror is the American civilian population. The us gov is the greatest source of terror on the planet.

Sat, 07/30/2011 - 23:01 | Link to Comment Joe Sixpack
Joe Sixpack's picture

"2.8 trillion should last well into 2013"

"Should" is a key operative phrase here.

Sun, 07/31/2011 - 02:59 | Link to Comment qqqqtrader
qqqqtrader's picture

that's like $5,400,000,000 spent each day until Obummer gets re-elected... oh god, why would anyone ever want to be Prez next term!?

Sat, 07/30/2011 - 23:02 | Link to Comment AUD
AUD's picture

future cuts.... a bit like suspending temporarily convertability of the dollar into gold?

 

Sat, 07/30/2011 - 23:38 | Link to Comment Man Bear Pig
Man Bear Pig's picture

"future" cuts... a bit like "temporarily" suspending convertability of the dollar into gold?

Sat, 07/30/2011 - 23:04 | Link to Comment papaswamp
papaswamp's picture

This is fucking hilarious! The best part will be the banks, rating agencies and the market singing praises.

Get ready kids...quick dip in gold/silver will present a short term buying opportunity until the realization that debt to GDP percentage will cross the 100% threshold sets in...day or 3 maybe.

Sat, 07/30/2011 - 23:07 | Link to Comment IBelieveInMagic
IBelieveInMagic's picture

As long as the other significant global players such as China does not break rank on the global fiat system, the can can be kicked for much longer...

Sun, 07/31/2011 - 07:15 | Link to Comment unum mountaineer
unum mountaineer's picture

its every man/ nation for themselves. china and iran are implementing contingency plans. others nations are strong net buyers of PM's. perhaps the msm meme is that all is well in the global fiat system, but we should know better by now.

Sat, 07/30/2011 - 23:19 | Link to Comment CompassionateFascist
CompassionateFascist's picture

It already has: there's 5-6 trillion of crap mortgages festering away at FM % FM.

Sat, 07/30/2011 - 23:28 | Link to Comment StormShadow
StormShadow's picture

For once BTFD will not be a joke around here.  Need one last PM dip to take on my final holdings, then sit back and enjoy the fireworks going forward.

Oh God this would be funny if it weren't so damn serious.  Public is 100% clueless.  Why does no one study their history anymore?  Been going on for centuries, yet the trap works every time.  When will society learn?

Sat, 07/30/2011 - 23:41 | Link to Comment papaswamp
papaswamp's picture

right there with ya

Sun, 07/31/2011 - 02:26 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

I have enough (?), but one more round where they bash gold down once more would be very welcome.

Greens to all above in this sub-thread.

The irrepressible Chumbawamba reminds us that gold is still CHEAP at a hair over $1600.  They may take it down more than a bit, but I will be RICH as long as society still functions...  If not, that is what my weapons and various preps are for.

DON"T TRUST the SOBs in DC!  Looks like another SLIMY DEAL, maybe the worst yet in the history of humanity!

Sun, 07/31/2011 - 00:53 | Link to Comment espirit
espirit's picture

Print, baby, print.

Ramp those markets one more time before the Eurozone collapses, and I'll BTFD in PM's one more time... no brainer.

RoboTurd, go long AAPL & LULU. lol  (No offense to T.F.)

Sun, 07/31/2011 - 04:36 | Link to Comment Non Passaran
Non Passaran's picture

100% is unimportant (I hope). The Rogoff figure (90%) is the popular and publicized one.

This should be good for stocks. I don't think we will see much of a dip in PM prices (my guess is 2-3%), but I will consider selling a third of non-physical ETF I hold.

I am usually wrong.

Sat, 07/30/2011 - 23:08 | Link to Comment golfrattt
golfrattt's picture

What's that loud metallic noise...??

A can kick record...

Sat, 07/30/2011 - 23:21 | Link to Comment coded language
coded language's picture

And the record is skipping. 

Sun, 07/31/2011 - 10:45 | Link to Comment MobBarley
MobBarley's picture

we went streaking in the dark

skinny dipping in the park

then had a menage-a-troi

last friday night

this friday night

do it all again

 

Sat, 07/30/2011 - 23:18 | Link to Comment Kneecap Shalls
Kneecap Shalls's picture

DO NOT BELIEVE THIS DOES "ANYTHING" TO RELIEVE ANYTHING ABOUT ANYTHING.  SORRY, just trying to be as vague as them.  If the Pubs pass this, they have sold out their constituency.  If the DEMS pass this, they have sold out their constituency.  If Obama passes this, he's screwed and so is our rating.  This bill would solve NOTHING.  Therefore, it goes nowhere. Done.

Sun, 07/31/2011 - 01:26 | Link to Comment dolly madison
dolly madison's picture

It's just kicking the can.  They are not going to take from the oligarchs & they are not going to cut from the military that the oligarchy uses, but if this passes it looks like they are not going to do too much austerity yet either.  I think they don't want to cause uprising here because the oligarch's military is from here.  They might lose their military if they screw us too bad.  They might not be ready for that just yet.

Sun, 07/31/2011 - 11:58 | Link to Comment ElvisDog
ElvisDog's picture

There is a difference between cutting the pay and benefits of soldiers, which they won't do, and cutting expensive weapons programs, some of which the armed services don't even want. And withdrawing from Iraq and Afghanistan (I know, fat chance) would save at least $100B a year right there (Hell, it would save $20B in air conditioning costs in Afghanistan alone).

Sat, 07/30/2011 - 23:13 | Link to Comment bob_dabolina
bob_dabolina's picture

RT  Dem familiar with situation disputes ABC report

-whitehousepresscorps

tweet from just moments ago

Sat, 07/30/2011 - 23:12 | Link to Comment Long-John-Silver
Long-John-Silver's picture

The TEA Party in the House will not vote for it and they can't be bought off. They are holding out for a Balanced Budget Amendment or they will blow it up like suicide bombers.

They do not care and are not playing politics as usual.  I've stocked up on popcorn and gallons of soda cause this is no where near the end on this show.

Sat, 07/30/2011 - 23:19 | Link to Comment Bananamerican
Bananamerican's picture

if they manage to pull off a LAST second deal i will be truly impressed with the stage craft of it all...

"politics is show business for ugly people"

Sun, 07/31/2011 - 00:01 | Link to Comment slobbermut
slobbermut's picture

The thing is they don't need many, if any, of the Tea Partiers to pass this total sell-out.  Gotta be impressed with that bunch, but too little too late I'm afraid.  by the time we get rid of Obama and maybe elect a few  more TP types into the House and Senate....it will be too late, likely already is any way.  Oh well......"let not your heart be troubled, neither let it be afraid"....

Sun, 07/31/2011 - 01:13 | Link to Comment Bananamerican
Bananamerican's picture

uprated for bible quoting on ZH...that, sir, takes balls...

Sun, 07/31/2011 - 00:46 | Link to Comment Bonesetter Brown
Bonesetter Brown's picture

The Tea Party will not vote for this.

It will be a Democrat and Boehner Republican (i.e. non Tea Party) bill.

Teat Party position is strengthened down the line when this bill does absolutely nothing to fix the long term problem.

Sun, 07/31/2011 - 00:47 | Link to Comment nmewn
nmewn's picture

"The TEA Party in the House will not vote for it and they can't be bought off."

Exactly.

Any BBA must contain explicit language that real spending cuts (not a cut of the >>>baseline<<< in government spending growth) is the only option within a BBA or no deal...ever.

The purpose of this clause is to not allow contortion of the BBA as an excuse or an actual mechanism to raise taxes by them for doing absolutely nothing and ever again crashing into the debt ceiling.

It would be a force on them to actually do the damn job they are sent there to do!

Sun, 07/31/2011 - 02:29 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

+ $1625 and greens

Sun, 07/31/2011 - 00:52 | Link to Comment g
g's picture

Agreed.

Sun, 07/31/2011 - 02:37 | Link to Comment Tom Servo
Tom Servo's picture

I'm from Missouri....

So, i'll believe it when i see it... I'm in the kabuki theater camp

Sun, 07/31/2011 - 02:41 | Link to Comment KowPie
KowPie's picture

"They are holding out for a Balanced Budget Amendment or they will blow it up like suicide bombers."

Hope you're right on that one. Odumbo would love to see it slide on through with his caviat...

President Odumbo has said he would only sign a short-term extension (days, not weeks) if it were linked to an extension of borrowing authority that lasts beyond the 2012 election.

...if he gets that he'll cream in his golf slacks and buy more shares in Breyers for Michelle. Fire up the press Bennie! And the sitcom is extended another season.

Sat, 07/30/2011 - 23:16 | Link to Comment Mr.Kowalski
Mr.Kowalski's picture

Long-John: The Tea Partiers only number perhaps 60-70 mombers of the 435 US House Reps. If the other 370 or so agree to leave the Tea Partiers behind.... 

Oh well, whats not to like ? After all, it's only the working serfs and their children who'll pay. Let them eat cake. 

 

Sun, 07/31/2011 - 01:57 | Link to Comment LetThemEatCake
LetThemEatCake's picture

Yes?

Sun, 07/31/2011 - 04:40 | Link to Comment Non Passaran
Non Passaran's picture

Striker.

Sun, 07/31/2011 - 08:05 | Link to Comment cahadjis
cahadjis's picture

Ah, just in time, all baked?

Sun, 07/31/2011 - 09:53 | Link to Comment Iam_Silverman
Iam_Silverman's picture

"Let them eat cake. "

"The cake is a lie"

Sun, 07/31/2011 - 11:35 | Link to Comment disabledvet
disabledvet's picture

apparently it includes the entire state of South Carolina however as every member of that State's delegation voted no.

Sat, 07/30/2011 - 23:18 | Link to Comment Ramboy
Ramboy's picture

Song remains the same.  Unending fear mongering and then climbing the old wall of worry by squeeze upon squeeze upon squeeze.  

Sat, 07/30/2011 - 23:21 | Link to Comment Caviar Emptor
Caviar Emptor's picture

Deus Ex Machina!

Sat, 07/30/2011 - 23:45 | Link to Comment wisefool
wisefool's picture

sarc: LLMs in tax have been worried for a long time that they might get wrapped up into popular economics and music.

non sarc: If the hoopleheads of the north american continent want to do this right thing they would stage up alot of drama with Bachmann and Bernanke to explain why student loans for their personal,respectable/respective degrees are not collateralized assests.

Tax code. Fin. Atleast andrea mitchell is a journalist when not jocking greenspan.

Sun, 07/31/2011 - 02:01 | Link to Comment Witchsmeller Pu...
Witchsmeller Pursuivant's picture

Deus Ex Printing Machina

Sat, 07/30/2011 - 23:21 | Link to Comment Mae Kadoodie
Mae Kadoodie's picture

So cuts are going to kick in time for the holidays?  Merry Christmas.

Sat, 07/30/2011 - 23:34 | Link to Comment FUN160
FUN160's picture

Government spending cuts are always back-loaded. Tomorrow never comes, so the cuts are never real.

Moreover, the "cuts" can actually be (and often are) an increase in spending. By "cut" they mean that the spending increase isn't as big as they'd planned.

Sun, 07/31/2011 - 00:34 | Link to Comment SilverIsKing
SilverIsKing's picture

They must mean cut, as in cut ones wrists.

Go Lions!

Sat, 07/30/2011 - 23:23 | Link to Comment Derpin USA
Derpin USA's picture

I don't get how some of the people here are rightfully upset about monetary policy unfairly benefitting the richest amongst us, yet they're completely against taxing those profits to help cut our defict.

There's an obvious over-capitalization of the market. Supply-side can do no more for us. Anyone in their right mind recognizes that. Why is it so difficult to see that demand-side shouldn't be cut but instead increased?

Cuts to entitlements are tax hikes. They are tax hikes on the lower and middle classes who will continue paying the same amount of tax but receive less in return. You can't say with a straight face that's not a de facto tax hike.

I have yet to hear one Tea Partier say how it makes sense to maintain tax cuts for the rich yet enact de facto tax hikes for the proletariat.

Sat, 07/30/2011 - 23:28 | Link to Comment Missiondweller
Missiondweller's picture

They are tax hikes on the lower and middle classes who will continue paying the same amount of tax but receive less in return.

 

You referring to the 50% that pays no income tax?

Sat, 07/30/2011 - 23:32 | Link to Comment StormShadow
StormShadow's picture

Cracks me up when that same lower 50% gets a tax "refund".

Sat, 07/30/2011 - 23:34 | Link to Comment Derpin USA
Derpin USA's picture

They sure do pay SS and payroll taxes though, don't they?

That "half don't pay income tax" is a statistic which is used to garner outrage but is really a superficial ploy to manipulate you into worshipping your "job creators" in a 9% unemployment environment and attack your friends and neighbors who struggle to make it.

22% of that half are SS recipients whose incomes are not taxed. The rest of the majority are people with very low incomes whose child tax rebates explain their lack of income tax.

Sun, 07/31/2011 - 00:13 | Link to Comment HL Shancken
HL Shancken's picture

Since you seem so statistically astute, what percentage of government borrowing represents transfer payments in the form of welfare payments to the huddled masses you would have us believe you weep for every night before you lay down your head on a downy pillow and drift off to a utopian dreamland?

Sun, 07/31/2011 - 00:26 | Link to Comment Derpin USA
Derpin USA's picture

That one I don't know, but I do know red states are net-beneficiaries of federal aid and programs. They are the biggest teat suckers of all.

It has nothing to do with a utopian dream land. It's basic economics that even Austrians can understand.

We all understand equities and commodities are artificially inflated by monetary policy. So, the question is, do we alter that monetary policy, or do we work in tandem with it to get things moving properly?

I tend to think a 25% drop in market value and increased interest rates would probably be pretty undesirable and detrimental to macro economics. The pessimism and decreased confidence would create a self-sustaining feedback loop that we should seek to avoid.

On the other hand, we can keep that going and use it to our advantage.

Demand, consumer sentiment and business sentiment are all lacking. They all need to be increased. Demand increases through public policy can be achieved. We can fix our failing infrastructure as an investment in the future and create jobs by doing so. The consumer sentiment and business sentiment will follow suit.

This plan has a chance of working so long as the bubble is not continually inflated as it was last time. It also requires taxation of those who have benefitted most from the monetary policy. I know it's ugly, but it's a lot better than civil war.

I'm under no illusion that the recovery will be short or that it will resemble other recoveries. What I'm saying is that it's the only way we can recover.

The alternative is deflationary collapse followed by hyperinflationary collapse.

Sun, 07/31/2011 - 00:36 | Link to Comment TruthInSunshine
TruthInSunshine's picture

I tend to think a 25% drop in market value and increased interest rates would probably be pretty undesirable and detrimental to macro economics. The pessimism and decreased confidence would create a self-sustaining feedback loop that we should seek to avoid.

I'm under no illusion that the recovery will be short or that it will resemble other recoveries. What I'm saying is that it's the only way we can recover.

 

Are you The Bernank's personal ball washer?

You sound just like a clueless Krugmanite.

In my infinite wisdom, I thought that private sector job CREATION along with rising wages were the key to any real, organic, lasting recovery.

But you've bought into The Bernank's virtuous cirle theory, whereby PCLN at $1800/share is going to lead to a true recovery as Americans look at a soaring PCLN and decide to go out and buy a bunch of shit, because they're so confident and wealthy, huh?

Great theory, Cochise. It's working out so well, we might as well double down.

This is an awesome V shaped recovery, no doubt. /sarc/

Sun, 07/31/2011 - 00:46 | Link to Comment Derpin USA
Derpin USA's picture

Look, I actually think the Democrats and Obama have done a terrible job with their stimulus programs. I'm not a fan of his. I'd end all the wars and bring all the troops home before ever raising taxes, but that's just not going to happen, is it?

There can be no organic job creation and wage increases in an environment of decreasing economic activity.

You can mock the "wealth effect" all you want, but if you're really honest, you'll acknowledge that psychology is the most important factor in economics. A 25% drop in equities will create undeniable pessimism. To say otherwise is to be obstinate because you sense conflicts with your rigid ideology.

In an economy that's 70% based upon consumer spending, it's absolutely vital that the consumer actually spends. I'm one of the biggest detractors of materialism, but that doesn't mean I can't recognize the truth of the matter.

In all reality, we are probably going to crash and fail hard because we've built a country and a society on that very disgusting notion of materialism and hedonism. Perhaps we're getting our just desserts.

But again, from a rational, logical point of view, if your desired outcome is to keep this whole thing going, your beliefs are counter-intuitive to that desire. Your ideology will undoubtedly bring about the crash you seem so concerned about.

Sun, 07/31/2011 - 01:02 | Link to Comment TruthInSunshine
TruthInSunshine's picture

So, to clarify your position, we can have rising unemployment, a slowing or contracting economy, stagnant or falling wages, rising inequality (whereby the middle class is genuinely getting cut down at the knees), rising inflation (especially on inflexible goods and services), ALL BORN OUT OF DETERIORATING ECONOMIC FUNDAMENTALS...

...but if the government and its media proxies repeat the lie enough that things are getting better, and the rigged equity markets rise some more, then there's a good shot that things will get better?

Is this what you're saying?

Let me know how that virtuous circle is working out for the economy when the unemployment rate rises by another 25%, 5o%, and so on, when inflation hits 10% per annum, and so forth, and when we're back in GDP contraction, even by the government's criminal liptick-on-a-pig statistical analyses.

Sun, 07/31/2011 - 01:08 | Link to Comment Derpin USA
Derpin USA's picture

I'm saying that the demand side has to grow before organic growth can take hold. Demand and supply side are lopsided. They need to be reversed.

If we cut government spending on entitlements without ending our wars and raising revenues enough to balance the budget, the economy will undoubtedly suffer a contraction and consumer and business sentiment will decline. It will likely be the beginning of the last decline before the implosion. It will undeniably slow the economy and drive unemployment higher.

The thing about creative destruction is that it doesn't just stop at "real" values. It continues further down by quite a large margin. We are seeing that in the real estate market now. Property values are probably about where they should be, but they will continue to fall further because that's how it works.

The same phenomenon will occur with the overall economy if the budget were actually balanced. I'm a firm believer that it would not stop where it ought to really be, but would continue on and on and make the government's fiscal situation even worse. It would create a negative feedback loop of epic proportions.

If you want to destroy the whole thing and start again, your ideology will accomplish that. Just don't try and tell me it'll somehow be a savior of the system. That's bullshit.

Sun, 07/31/2011 - 01:17 | Link to Comment TruthInSunshine
TruthInSunshine's picture

You are blathering nonsense and ignorance.

The trend in the U.S. economy is not supporting your position.

Lying to the American People in order to instill confidence, so as to bolster short or even intermediate term demand and consumption, assuming that this could work (at a time when many are waking up to the discrepancy between what they're being told by the media and government and what they're seeing in their neighborhoods and cities), is not a viable strategy for economic growth.

Your pet theory of how to grow the economy in any lasting, significant way would not only not do so in real life, it's not doing so in real life, as we can witness.

Hence, Bernank's virtuous circle theory of economics is complete and total bullshit on an epic scale.

Sun, 07/31/2011 - 01:32 | Link to Comment Derpin USA
Derpin USA's picture

Make up your mind. Do you want to save it or do you want to destroy it and start again?

You can disagree with my ideas all you want. I understand why you do. But please, don't lie to me and yourself by saying that radical austerity without tax increases will be what saves America. It will undoubtedly, if put into effect, be the straw that breaks the camel's back.

If that's what you want, that's fine. Just say it and be honest about it.

Sun, 07/31/2011 - 01:40 | Link to Comment TruthInSunshine
TruthInSunshine's picture

Radical austerity?

WhoTF said anything about that?

Are you saying that not raising the debt ceiling is tantamount to "radical austerity?"

If so, either you are blathering nonsense again, or then, yes, I am pro-radical austerity.

 

What would have been nice, to be perfectly honest, is if we could get a relatively free market economy back in the U.S., whereby all live and die by the logic used in the decisions they make, no one gets bailed out when they not only fail to employ logic, but make decisions with their heads up their asses, taxpayers and savers don't get the shaft in the form of forced subsidization of the TBTF asswipes. and financial engineering and Wall Street get displaced by real engineering and Main Street, in terms of the core nuclei of our engine of growth, with a now captured legislative branch getting tossed aside so that they can't keep subsidizing financial engineers of WMD with dollars shaken down from real engineers of value added products.

But, yeah, that's so unlikely as to border "never going to happen."

Sun, 07/31/2011 - 02:18 | Link to Comment Derpin USA
Derpin USA's picture

Yes, it would require radical cuts to spending in order to maintain the debt ceiling.

Are you seriously that ignorant? Have you just been spewing Randian philosophy and Tea Party talking points without the facts?

A truly balanced budget with no tax increase would require a 25% reduction in spending, none of which we can assume will come from ending the wars. So yes, it would be radical and it would hurt the poorest the most. It would cause a severe drop in GDP, consumer spending and business sentiment. Unemployment would undoubtedly rise.

This of course doesn't take into account any rising of interest rates, nor the likely downturn in tax receipts from a dwindling economy, which would only force further spending cuts if taxes were not hiked.

You really didn't know this?

Sun, 07/31/2011 - 03:01 | Link to Comment coffee_sponge
coffee_sponge's picture

Two men dig ditches for a living. The Obama Democrat uses a pick and shovel. The Tea Party Republican uses a backhoe.

 

The Obamite works very hard long hours. He doesn’t get a lot of ditch dug, and only earns subsistence.

 

The Tea Party Capitalist doesn’t have to work nearly as hard, works fewer hours, and makes a lot more money.

 

The backhoe makes the Tea Party worker much more productive; there is an economic return to capital investment. However, the backhoe is very expensive and requires a lot of savings and capital accumulation.

 

Capital  accumulation and investment makes workers more productive, and hence, richer.

 

Taxes consume and destroy productive capital. Excessive government spending and taxation makes workers poorer.

 

No one can spend themselves rich. The government certainly cannot tax us rich, nor can it spend us rich.

 

Economic activity does not depend upon spending. Resources that are not spent (i.e. consumed and destroyed) are saved and invested. Rich people don’t stuff their wealth into a mattress, they invest it. Taxing away the wealth of rich people takes away from savings and investment and causes unemployment and underemployment.

 

You really didn't know this?

Sun, 07/31/2011 - 03:20 | Link to Comment Derpin USA
Derpin USA's picture

Of course I understand capital investment. I give great deference to supply side economics, but I also recognize that it is not he be all and end all. Demand side economics is a truly important factor as well.

Your mistake is assuming that unlimited free capital wil always be rationally invested and never misallocated, and you also wrongly assume that more capital invested is always better. As we can see from the previous housing bubble and the current equities bubble, excess capital will be misallocated. Hell, that's Austrian economics, isn't it?

That's the situation we face right now. There is an over-abundance of capital. We can either burst the bubble and risk a likely complete collapse, or we can work with what he have and adjust it.

You seriously need to understand that no amount of capital investment can overcome a lack of demand. Period.

Why do you think so many companies are sitting on piles of cash and not hiring? Because demand is too high? They have EXCESS CAPITAL.

Sun, 07/31/2011 - 04:05 | Link to Comment coffee_sponge
coffee_sponge's picture

The examples you cite, the bubbles in housing and in equities, were caused precisely by the big government you seem to worship. Government requirements that loans be made to non-credit worthy individuals coupled with fiat credit expansion caused the mess, along with government intervention in the markets.

 

You are confusing capital with loanable funds. Capital is the means of production.  Loanable funds are claims to the means of production (i.e. money or some monetary equivalent) that people have saved and are willingly giving up the use of for a while so that borrowers can use the capital for awhile and then later return the capital along with a use premium (interest).

The over-abundance of capital you refer to is in reality an over-abundance of loanable funds, which the fed has created out of thin air (credit inflation).

 

If your Keynesian nonsense actually worked in real life, our economy would be humming right now because of the historic spending spree our government has been on.

 

Our economy had its greatest expansion in the late 19th century. Government spending was so low in those days it didn’t even require an income tax to finance.

 

Finally, many companies are sitting on cash because they are afraid to invest when we have a Marxist administration that creates an extremely hostile environment for business and continuously threatens new taxes and regulations that could well turn new investments into losses.

 

Frankly, when the Philips Curve fell out of bed in the 1970’s stagflation, Keynesian economic theories were virtually untenable, although politicians and drones who love to slop at the public trough continued to embrace the Keynesian specious excuse for spending money we don’t have.

 

Your mistake is in assuming that everything your professor tells you must be true.

Sun, 07/31/2011 - 04:14 | Link to Comment Burnbright
Burnbright's picture

Demand side economics is a truly important factor as well.

You seem very confused about demand. People have infinite demands, they just don't have infinite money.

Your mistake is assuming that unlimited free capital wil always be rationally invested and never misallocated, and you also wrongly assume that more capital invested is always better.

We don't assume that. Actually its a fact that capital will be misallocated, but companies that misallocate capital go belly up and they have to liquidate assets which frees up capital for someone else to invest in.

As we can see from the previous housing bubble and the current equities bubble, excess capital will be misallocated. Hell, that's Austrian economics, isn't it?

The housing bubble was not caused by free market economics. I actually talked with a realestate agent 2 weeks ago and he told me something I hadn't heard before. He said that during the Clinton administration that a bill was passed (housing affordability act or some such) which I knew about but what he said that interested me was the fact that lenders were no longer required to verify incomes in order to get a loan on a house. It didn't matter what you made, the loan officer would just tell you to write that you made more.

That's the situation we face right now. There is an over-abundance of capital. We can either burst the bubble and risk a likely complete collapse, or we can work with what he have and adjust it.

You don't understand what capital is. Dollars are not capital, fiat money is not capital. Capital can be money, and it should be if it is to be sound money. Capital is simply the product of labor. Take anything you can think of that you use or eat and ask yourself how many people it took to get that item into your possession. This concept is related to why you don't understand demand. You seem to think that the cart pulls the horse, that some how money is what creates demand to give people jobs to make more money. The reality is the real world doesn't work that way, it only seems like it works that way because we live in a society in which a small group of people can create money. The problem is you think that people need money in order to buy something which is true, but what you are forgetting is that in order to have money in the first place you have to EARN it. Printing money is what causes artificial demand. You wonder why people have poor spending habits or why a lot of people have less than 5% saved? It is because they treat money like its free, if people actually had to earn money before they spent it, rather than having credit cards they could default on etc they would make much better choices with their own money because they would know and understand the cost of the savings they were about to spend.

Sun, 07/31/2011 - 08:42 | Link to Comment Hooter Shaker
Hooter Shaker's picture

Yes.  The tee shot went into the lake.  We need a mulligan.

Sun, 07/31/2011 - 08:51 | Link to Comment BandGap
BandGap's picture

Don't get pulled into the weeds by this kind of crap.  It's what they do best.  And you know better. 

 

 

Sun, 07/31/2011 - 00:56 | Link to Comment HL Shancken
HL Shancken's picture

I can't help but notice that you ignored my question in your response, but I will say that you made a credible case for centrally-planned soviet-style economics. Incidentally, I'm in favor of civil war.

 

EDIT: ah, I was interrupted in my response and I see that in fact you did address my question in an edit of your own. Such a clever man you are. You're destined for great things!

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