As China Says No More Stimulus, Obama Comes Begging For More.... While Promising Even MORE Cuts In The Unknown Future

Tyler Durden's picture

Proving once again that when it comes to the definition of Banana Republic, America really has no equal, we first read in China Business News that according to PBOC adviser Li Daokui, China will "basically" maintain its existing monetary policy direction, and won't likely introduce stimulus measures as it did in 2008. Sorry "Rest of the World", you are on your own: China will no longer act as the last recourse economic (confidence) dynamo (because who the hell knows just what is going on in the mainland aside from building empty cities and grounding its entire monorail fleet, an action that was accompanied by so-called objective rating agency Dagong giving the rail ministry a rating higher than that of China itself!... once a rating agency...). However, this action of glaring sobriety does not stop our own fiscal monkeys from throwing feces at the stimulus wall in hopes something sticks. Just as last year the payroll tax was supposed to be the $100 billion gift that keeps on giving, yet crashed and burned miserable within months if not weeks, so this year we find that Obama is once again "recommending that the congressional deficit supercommittee back new measures to stimulate the lagging economy, people familiar with White House discussions said Tuesday." But that's not the funny part! No, the funny part is that even as he demands more alms, our munificent president would also "recommend the committee come up with a package that reduces the federal budget deficit by much more that its mandate of $1.5 trillion over the next decade, a senior administration official said, through changes in the tax code and social safety-net programs." So let us get this straight: more stimulus in the short-term, offset by quadrillions...nay... sextillions of savings at some point in the far future, long after the current administration is at the very bottom of the history books. Brilliant! But an even better idea: Obama should pull a Bryan Gardner and forge a money order from Hank Paulson, making Citi hand out a +/-$1 million check to every American, paid out of petty unaccounted for cash, as was the case before. Obviously, nobody noticed then; it is only Banana Republican that nobody will notice now.

More on this latest farce of short- vs long-termism from the WSJ:

"There's no reason to stop at $1.5 trillion," the official said.


Mr. Obama hasn't agreed to a set of proposals, people familiar with the discussions said, but the White House will begin to decide on elements of the plan in coming days. Mr. Obama is expected to make some decisions by Thursday.


Mr. Obama said in Iowa that when Congress returns from recess in September he will put forward "a very specific plan to boost the economy, to create jobs, and to control our deficit." He will unveil his plan before the Joint Select Committee on Deficit Reduction's first meeting on Sept. 16.


The White House is looking for ways to boost the sluggish economy and bring down unemployment that is now stuck above 9%. Mr. Obama, facing re-election next year, has been pushing Congress for months to adopt a variety of stimulus measures, some of which he could urge the committee to embrace. These include extending unemployment-insurance benefits and a payroll-tax cut for employees, which expire at year end and together cost more than $160 billion a year, and an infrastructure bank that could cost as much as $30 billion. The White House is also looking at a payroll-tax cut for employers, worth perhaps as much as roughly $110 billion, and other tax breaks for businesses of as much as $55 billion.


Mr. Obama's recommendations could complicate the committee's task because the stimulus measures, by increasing government spending and reducing revenue, would worsen the deficit in the short term. But Mr. Obama would recommend ways to offset those effects, and the whole package would still reduce the deficit over 10 years.

Oh please, what would he complicate? At this point only the morons at Fitch and Moody's buy anything coming out of the CBO. Zero Hedge is willing to place a bet of unlimited fiat amount that in 3 years, the CBO's current forecast for the 2014 deficit will be at least 50% off from the reality (obviously in the wrong direction), which in turn will mean that the entire debt ceiling farce was for nothing as the $2.1 trillion in 10 year savings will be swallowed by the tens of trillions in additional deficit funding that will mysteriously appear over the next several years, and be required to keep the US(S) PonzAAi from running into yet another iceberg.

So give Obama what he wants.

At this point the only thing that can save the system is if "they" just accelerate the status quo's crash course with fate, and just blow everything up to smithereens, thereby making a grand reset inevitable.

The longer we pretend something, anything can be fixed, the more pain, suffering and death will come to the people of this insolvent world.

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Yardfarmer's picture

However, this action of glaring sobriety does not stop our own fiscal monkeys from throwing feces at the stimulus wall in hopes something sticks.

pure poetry!

nmewn's picture

Have no fear, he sent Biden.

anynonmous's picture

for those who hate him

and otherwise

Leo's latest

Tuesday, August 16, 2011
Death Cross Looking More Deadly This Time?
Dick Fitz's picture

"a very specific plan to boost the economy, to create jobs, and to control our deficit."

God help me, I re-read that phrase and could actually hear, in my mind, him saying it, in his voice. Thank God I've purged GWBs voice, but now it has been replaced by this moron.

He really is GWB v2.0

We're all fuct

JW n FL's picture

Pay Attention! ALL OF YOU IDIOTS!

1. China has 1,200+% Leverage on every renminbi before the ink is dry!

2. if China's Currency is worthless then ALL that is happening when China is ALLOWED to Purchase U.S. Debt is

3. The United States is Stabilizing China as a WHOLE!


CHINA does NOT Own US! we are stabilizing China's entire Economy going forward!



Fish Gone Bad's picture

Just when things start to look "really fucked up", some banker/politician pulls another rabbit out of his hat.  Eventually someone is going to pull out Frank (from Donnie Darko), and not the Trix rabbit.

AnAnonymous's picture

US wants to split China so telling they stabilize China is awesome.

The bilateral relationship is used in the case of the US debt. Chinese do not convert Yuan into USD to buy US debt. They use USD they collect from the rest of the world to buy it.

China definitively not own the US. For something like that to happen, US citizens should respect their own words. After 200 years running, doubtful the Chinese believe that a single second.

hazek's picture

I wish at least here at zerohedge the proper language would have been used where we'd call things as they actual are in reality.


Why say "the $2.1T in 10 year savings" when in reality it's $2.1T reduction in spending increase? 

TheFourthStooge-ing's picture

Why say "the $2.1T in 10 year savings" when in reality it's $2.1T reduction in spending increase?

Actually, it's even better than that. Obama can increase both borrowing and spending while concurrently eliminating the budget deficit entirely. In our ignore-reality-kick-the-can world, the House and Senate will continue their practice of substituting continuing resolutions for an actual budget. If no budget exists, then a budget deficit is impossible.



TwelfthVulture's picture

spread out over 10 years.

Terminus C's picture

My wife and I are going to save $1 trillion in spending increases next year by not spending $1 trillion dollars.

Fuck we are good!

Lobbelt's picture

I will also be cutting €10 trillion to help solve the European debt crisis. 

legal eagle's picture

Bring it on......PMs storage unit is full.....

pasttense's picture

You must be a multi-millionaire!

spiral_eyes's picture

there will NEVER be enough stimulus. not til america is at least a AAAAAAAAAAAAAA nation with warren buffett: 

Doña K's picture

The only way obama can get re-elected is if he pulls a Paulson and sends every taxpayer in America a direct stimulus to the tune of $2,000 that's $2k X 350MM = 700 BILLION.

That's what the banks got. Maybe more. Some will pay down bebt, some will buy flat screens and ipads, some will buy groceries and some will buy more PM's

KowPie's picture

"You must be a multi-millionaire!"


Shoe boxes aren't that big.

Prometheus418's picture

Sheepishly hanging head....

Yeah... but... at least I'm a multi-thousandaire.  And, from what I gather, that's better than most.

Wait- nevermind.  I've got a ONE HUNDRED TRILLION Dollar Zimababwe note, so I guess that'll have to do.

DeadFred's picture

"Shoe boxes aren't that big." But they hold a lot of gold.

KowPie's picture

Unless of course the shoebox is for a pair of these...

...that would put ones net worth at about $3.50.

trav7777's picture

I know a guy who bought 300k worth of gold in the 90s...cost basis around 400 he said. 

Left Right Wrong's picture

"Include extending unemployment-insurance benefits"


Can someone please explain how this does anything for either the deficit or reducing unemployment?  Perverse incentives anyone?

Threeggg's picture

Last time I checked there are 100 people per (1) "one" (singular) job available.

How do you reduce unemployment by taking away unemployment payments ? oh, that's right isn't that how they track unemployment in this country, by counting claims per week. Cut off all the unemployment compensation and the unemployment rate drops to Zero.

Brilliant !

Alot of people are lazy but 90%+ are hard working and just wan't to provide for their families. Stop blaming the American people for the ineptness and greed of the Corporate, Military and FED complex !

Respectfully !

Bicycle Repairman's picture

I doubt that UE benefits come close to covering most people's "nut".  The idea that UE benefits promote UE is bullshit.

GeorgeHayduke's picture

Excellent point.

Some folks here seem to think everyone on unemployment is just laying at the beach, kicking back and living the good life. It can't possibly be that there are no jobs to be had could it?

After all, we all know that the libertarian mythology is you just start your own business if you can't get a job. It's easy. And if you don't make it in your new business, then you must be a lazy, good for nothing, low-life bastard. It can't possibly be the utter coruptness of the system itself. No way. The Big Boyz have spent plenty of money to ensure most simple minds never consider this option.

Pay Day Today's picture

Like good capitalists you must always blame the weakest, most disempowered, and poorest in society for all the bad decisions poor judgement calls and bad problems now facing America.


CynicLaureate's picture

You've identified the Liberarian answer, but left out a few steps.  You can't start your own business if the legal and tax structure is stacked against you.  the "Corruptness of the System" is one of the things Libertarians would fight to remove.

And of course every single one of those government obstacles was put there by someone with the best intentions of protecting somebody from somebody else.  One man's "corruption" is another man's "social justice".

You want employers to hire?  Simple: just remove all the employer's costs of hiring.  Benefits, FICA, SSRI, UEC (and escalators).  Make it risk-free to hire, and you'll have more hiring.

Right now we're seeing the break-down of the social contract, because a large fraction of the population has figured out that they don't have to work because the government will take care of them.  What's new is that a large fraction has figured out that working harder doesn't pay, because the government just takes what they earn to pay for themselves and the first fraction.  If you rob Peter to pay Paul often enough, Peter just might decide not to work so hard anymore, and he certainly isn't going to hire a 50th worker and subject himself to the employer mandates of Obamacare.


AnAnonymous's picture

You want employers to hire? Simple: just remove all the employer's costs of hiring. Benefits, FICA, SSRI, UEC (and escalators). Make it risk-free to hire, and you'll have more hiring.

But this solution already exist. Elsewhere and it is called outsourcing.

So again, more of the same to solve the consequences of the same.

Those are the results of Smithian economics.

Pay Day Today's picture

its more profitable to fire staff than hire staff. Taking away regulations won't change that.

If hiring needs to be risk free before a corporate will take staff on it clearly has nothing valuable for those staff to do. Otherwise there would be a positive return on risk ratio, and they would have hired already.

Further large companies are sitting on absolute masses of cash. Hiring costs are not impediment in that situation and they still won't hire.

The US is not going to get any more hiring, its deliberately off shored too much of its GDP now.

All hiring will be done in Asia and South America. Those are the growth markets, not the US.

CynicLaureate's picture

Further large companies are sitting on absolute masses of cash. Hiring costs are not impediment 

NO!  Costs are always an impediment.   As you say, there's nothing for staff to do AT CURRENT COSTS.

The only way to insource jobs is to make the USA employee a better value than the one in China or India.  The 100% markup on labor that comes from our governments shifts the balance to far away lands.  If we cut our costs, the rising cost of oil (and increased shipping costs from China) might help tip the value equation back to the USA.

Lobbelt's picture

Yeah sure, the power elite's carefully planned out government structures are very libertarian indeed. Socialists are the real solution to our problems! Oh wait...

Clearly_Irrational's picture

Personally I'd rather replace it with something at least mildly useful like the CCC.  Ignoring that unlikely event though failing to continue it would certainly cause a significant slowdown in economic activity, which would lead to more corporate belt tightening by way of layoffs, which would reduce spending, etc. etc.  Given the feedback effects inheirent in the economy I think we'd be better off trying to fix things from here rather than go for total meltdown and hope we can build back from there in a reasonable time frame.

centerline's picture

What you put in your anus is really your own business.  Keep it that way.  Sick bastard.

FunkyMonkeyBoy's picture

When you realize that the real agenda of Obama's masters is to destroy America and to pass the baton to China as the world's new No.1 for the next century then the actions of the america's administration suddenly become clear and logical.

nonclaim's picture

Nobody seems to realize that a rogue president is a real possibility.

knukles's picture

Seems to me to be a staple of converstion about these here parts.

spiral_eyes's picture

this shit isn't america's goal.

this shit is kissinger's stupid mistake for cutting a dumb free lunch deal with the arabs and the chinese in the 70s. america thought they were getting free oil and free goods for their shitty paper. but it turned round and stung them.

learn yo history, bitchez: 

Libertarians for Prosperity's picture

When you realize that the real agenda of Obama's masters is to destroy America and to pass the baton to China....

Let me guess....  libertarian?

tmosley's picture

Let me not guess--you're a lying sack of shit racist.

Libertarians for Prosperity's picture

Good to see you tonight, Cliff. 

While I have your attention, I've been meaning to ask you a question....  did you ever buy a new trailer when silver got near $50? 

I remember a post of yours from Oct/Nov where you said if silver hit $25 you were going out for a "swanky dinner." If silver hit $50, you were going to buy a new trailer.  And if silver got to $75...pop the champagne and roll out the double-wides! This redneck done gone make himself some coin!

As someone who is obsessed with becoming an oligarch, moving out of the trailer park would be a good first step. *LOL*  It's amazing how the oligarchs of today are so different from the oligarchs of yesterday.


tmosley's picture

A TRAVEL trailer for VACATIONING, you lying sack of shit.  All you do is lie, and you act as though you expect people to buy it.  Then you call anyone who doesn't buy your lies "paranoid" or "doomer goon".  SO fucking tired.

And no, I didn't buy a travel trailer, because it didn't go above $50.  

trav7777's picture

yeah sure, know that's not what you meant and so did everybody else.

tmosley's picture

Reason number 92845928457 why Trav is a moron--he is unable to put together a proper sentence.

Trav is FOREVER ALONE, after his wife and kids left him for a rich jewish divorce lawyer of African decent.  So sad.  But good, because he can't beat his kids any more, like the weak loser he is.

Libertarians for Prosperity's picture

jesus christ, mosley.  You must be hitting the refresh bar like a coked-out lab rat. 

Correct me if I'm wrong, but oligarchs neither live in trailers, nor vacation in them. You won't see Prince Alwaleed Bin Talal Alsaud pimpin' around Lubbock, looking for trailer park. Your pompous claims of being so wealthy are running into a brick wall.  If you were as rich as you claim, you wouldn't need silver to hit some magic number before you buy a trailer or eat a "swanky dinner." 

Your claims of having cured both HIV and cancer, and your pompous bullshit about being so wealthy are looking really ridiculous.  Could it be that you're just a paranoid doomer goon with delusions of grandeur?

tmosley's picture

I like how you can't tell the difference between the present and the future.

Who says I "need" to have silver hit some "magic numbers", rhater than merely using it as a gimmick to get the family interested.

But then, what do you care about any of that?  You just want to take any and all statements by anyone you don't like out of context and use them as fuel for ad hominem attacks because you are too weak minded to refute any of my actual arguments.  Much like Travy-boy above, who can't beat me in any form of logical debate, and thus waits for others to make an opening so he can try to pile on, but he only ends up looking like a weak idiot.  You guys aren't brothers, are you?  Perhaps you attend the same KKK meeting?

Burnbright's picture

crap can't remember your old name. The Hitler mustache is fitting for you.

Silverballs's picture

wow your actually read some of what these scumbags have written over the decades... i think when the self-proclaimed geniunses finally realize the global elite doesn't give a shit about them AT ALL maybe they'll figure it out... there is a reason david rockefeller praised maoist china

DormRoom's picture

fiscal stimulus of about a trillion dollar will

1)get the US economy growing, raising GDP, more employment, and tax revenues

1b) more tax revenues gives the ability for deeper cuts at the tail end

1c)expanding GDP will lower the US debt:GDP


But you need a trillion dollars, and 18-25% of it to go to infrastructure, so the 2million unemployed construction workers can have gainfrul employment.  Thus the economy will be self sustaining, as new bubbles form in health care and green tech to absorb the previous bubbles.


AngryVoter's picture

And why do we need to borrow the money?  Why not just print it for real.  Consumption has taken a real hit since the consumer can not take on more debt.  Why do we need the fractional reserve system to create money in debt form?  Why not print the money and reduce the tax burden.

IrishSamurai's picture

That's the Underpants Gnomes' plan:

1. Print 1 quadrillion greenbacks.

2. ???

3. Profit.

You sir are a fecking genius ...