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Friday Tragedy: The US Debt Limit Explained
Ordinarily this space would be reserved for Friday humor, but unfortunately, this is nothing short of a tragedy, especially since as of today the US debt target is $16.394 trillion, a number which will be breached before the end of the year, and possibly before the presidential election in November. As a reminder, in 2011, the US economy grew by 1.7%. It almost, but not quite, offset the growth of US debt held by the public, which grew at a brisk 11.3% pace in the past year...
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I need more babies then!
I understand you're being facetious but you actually bring up a valid point. What doomer libertarians fail to understand is that the investment our government is making is multigenerational, and will be paid down by future unborn generations. Bernanke is capable of keeping interest rates low so that the debt can be paid down slowly by many generations, with minimal impact on the economy.
That's right. More debt to pay debt has minimal impact on the "economy", when said economy isn't really an economy in the traditional sense, but a text book ponzi. Ponzi's can't survive unless leverage is ongoing. The dollar will be debased and interest rates kept low until implosion. Hope your kids and grandkids like being forced into that position.
Silver and Gold must be bought. Benocide is killing the dollar. Don't be fooled by idiocy like the above.
From what I can tell, Ponzi schemes only collapse if either of two conditions is met:
1) insufficient amount of new "investors"
2) too many people try to cash out at once
If the Fed can sit in the secondary market and gaurantee banks they will buy, condition 1 will not occur. As long as the banks have enough liquidity to cover people exiting the scheme, they can keep it going. The trick is to make sure nobody panics and rushes the exit.
Let's all sit down and have coffee and donuts and I'll explain how this will all work out.
This is now as obligatory as the deer in the headlights pic posted on the other common-theme ZH thread:
Senator Barack Obama
Senate Floor Speech on Public Debt
March 16, 2006
It wasn't my fault!
I ran out of gas, had a flat tire, there was a terrible earthquake...LOCUSTS!!!
http://www.youtube.com/watch?v=PIoALj0csAA&feature=related
I hate to break this to you, but Ann Coulter is one of the recommended videos for this post.... Like radiation much?
Thet healthy orange glow that Boehner sports occasionally is a cesium tan, isn't it?
When the Debt Limit Blues Strike...
/2011/01/26/a-ha-ahahaha/
ori
The Fed enabled our huge deficits and debt with falling real interest rates. It's time to liquidate. The markets will bring liquidation early. Federal Reserve policy is about to be treated with the political rubber glove.
Good luck Obama. Good luck Bernanke. You are about to get fucked hard in the ass by the voters of the United States of America.
Don't let the door hit you too hard in the ass.
Print, man, print! It's all you have left! Might as well give it ONE LAST SHOT.
The bastards have been able to beat the clock by three months now compared to historical monetary blow ups. Give Ben some credit.
Good man Economics 1996. I look at mankind's Rulers this way: In 1911 there were 1.8B people and now there are almost 7B. The time of Leaders has arrived because it can be so. That means also that we can and will build more dynamic systems that account for randomization and disequalibrium. This is the last 40 year period before entering the Singularity and mankind's final destiny.
But first we're going to have ourselves a bit of fun. The next 8 years or so are rebalancing and clubbing some louts and a global governance X Prize competition. After, we'll go to Mars just because in 2032. 2052 heralds our last year on earth.
I detect remorse and changing course (repent) from many world leaders while a few others hearts harden into stone. Ben is of the former class and will not be flogged any longer.
We all should forgive and move on but a few on earth want to induce world war instead. These get there war alright, just not in the arena they intend ;)
Debt doesn't matter. Global oil production rates matter.
I didn't notice. She must have been in profile so naturally I didn't see her...lol.
I'll see if I can find a Eric Holder clip without the Oklohoma bomb making material or Marc Rich pardon or Fast & Furious narco gun running or Black Panther voter intimidation recommended vid alongside it, to make it up for you ;-)
America has a debt problem and a failure of leadership.
Americans deserve better.
RESIGN,that would be step one.
The only time he told the truth, when he wasn't responsible.He makes Clinton look like a choir boy.
re-elect obama kept sending me email for donations. i kept politely asking for them to stop.
i finally sent this one:
i will send obama all my savings. he has to do the following:
1 - show his birth certificate - a real one
2 - show his college grade transcripts and pay back his affirmative action college free ride now that
he has some money.
3 - give back his noble peace prize
4 - fire geithner, bernacke and the other idiots.
5 - resign.
seriously - the emails mysteriously stopped. just like that! :) :) :)
Well, at least he eliminated those earmarks and all the associated unfettered corruption ...
It's almost as if the U.S. isn't planning to pay back all this debt to anyone ever. If the anyone-evers are that stupid to lend knowing that, then hey they deserve to get screwed too. Because I gotta tell ya, the middle-class is becoming so obviously broke it ain't gonna be able to pay attention. Deduction: looks to me more like the Fed gets screwed first and last when all's said and done. This will look good on Ben's resume.
Those unable to adapt and become REAL productive REAL fast are going to be the biggest losers. Is the American "middle class" savvy enough to run small businesses with profit margins great enough to sustain themselves when the paper game is over and they are forced to start over with a sound currency? Judging by the number of them who just wait around for the job recovery that's never going to happen, I doubt it.
Judging by the number of them who are waiting around for the shitstorm to fall on them, I doubt it.
There, I fixed it. Cart goes behind the horse.
Because there is room in the US economy right now for 10,000,000 new entrepeneurs? Don't think so.
The U.S. was never planning on paying back any of this debt.
Our monetary system is a ponzi.
Think about how money is created. It is created by printing and lending it out, thus an asset and a liability are created.
Remember, the interest is never created, but it must be paid back. This means that all the money 'printed' in all of history is only enough to pay back the principle amount that was created as debt in the first place.
Inescapable conclusion: debt must GROW forever or the system dies. A ponzi.
TPTB don't want you to know this.
[edit] Check out Nope's post above.
[edit] Also check out GernB's post below.
[edit] and watch this video!
http://www.youtube.com/watch?v=Dc3sKwwAaCU
"Inescapable conclusion: debt must GROW forever or the system dies. A ponzi."
I don't think this is entirely true. Let's say I am a soveriegn nation. I create $100 and issue a 30 year bond for the $100, which sells at auction with a yield of 2 percent.
An oil company exports oil from my country to America, and I collect royalties from extracting my nation's resources. I then swap the USD to my money, and buy back my own bonds and retire them. As long as I export more than I import, I can reduce or eliminate my debt. If I bring in more government revenues than I spend, I can get out of debt.
Since not all countries can be net exporters, some will have to inflate or default. Which is where the risk comes in. Or at the least, everyone cannot be net exporters simultaneously, and they have to cycle between net imports and exports.
Another version: I print $100 and sell a bond for $100 plus interest. I buy an asset with the money. later, I sell the asset for more money, and use the money to pay off the bond, and have some left over.
Yet another: I print $100, sell a bond for $100 plus interest, convert my money into another currency, devalue my curency and swap back and pay off my debt.
The key is whether the debt is created and the money is spent productively or not, or whether I can balance a budget. In either case, the debt can be paid off and the money taken out of existence. The problem is, the money supply would shrink if I pay off my debt under this system, unless I am able to purchase my own bonds using someone else's currency.
I appreciate the response, however, if both 'monies' are fiat (and rest assured, all 'monies' are fiat), then it is a zero sum game, and both Countries have the same problem. If however, one Country can take advantage of the other, then that Country can indeed bring new 'money' into their own system, but only at the expense of the other Country. The only cure for running out of 'money' when lending is impossible is to accept payment in assets (gold for instance), and then you have the problem of the banks owning everything. The original sin is inescapable. I mean that Land, Labor, and Capital are not the means of production. Land and Labor are the means of production and prosperity, period. Capital is a man made fairytale that does nothing more than facilitate transactions until you add usury. Usury allows men to make 'money' from 'money', which is not exactly what Adam Smith was talking about when he described the factors of production. Debt is not an asset unless you are a central banker.
Two countries paying down their debts simultaneoulsy:
Country A creates dollars and issues bonds, and purchases Country B's bonds.
Country B runs a governmental surplus, only spending 90% of tax revenues, and uses the remainder to pay down its debts. As a result, its bonds increase in value as they are considered less risky since they now have a lower Debt/GDP ratio.
Country A now sells Country B's bonds it was holding, and uses the money to pay down its own debt. Both countries have now reduced their debts simultaneously.
The view that "debt is an endless cycle and due to interest can never be paid" doesn't take into account how the value of assets can increase, causing more value in the system then the dollars printed.
For example, if 10 people buy houses in a neighbourhood for $50,000, and then years later one of them sells their house for $100,000, now all the other houses are worth $100,000.
There are several ways in which debts with interest can be managed by competant people. The problem is that representative government combined with deficit spending is like giving an opiates addict the ability to self-dose on morphine, and telling them to only use it when it really hurts.
In order to keep getting re-elected, elected representatives become addicts to deficit spending on more and more projects, even when the economy is doing well. Central Banks are enablers in this system, and savers become dealers. I don't know what the solution is.
Without compounding interest, how do you propose that 90 year old people look after themselves financially? Are we all supposed to hoard money for retirement? invest 100% in equities? Or do you propose euthanasia?
Didn't we already try a housing bubble?
How did that work out for you?
I'm in BC, the housing bubble is still growing bigger. In Vancouver, sales are on the rise, as its the Year of the Dragon, which means prosperity, so the Chinese are loading up on real estate.
In my example, I was talking about assets increasing in value over time; the housing bubble in America was caused by several things outside the scope of the previous post, such as:
1) low interest rates
2) longer and longer amortization periods
3) smaller and smaller down-payments
4) looser and looser standards for credit checks
5) interest-only payments, Option ARMs, and the rest of subprime
6) banks passing the mortgages on to other people via MBS, rather than holding the mortgages themselves
If only qualified buyers had been allowed to purchase with 20 percent down and 25-year maximum amortizations, and the banks had to hold the mortgages, I don't think there would have been a housing bubble.
This is veering far away from whether money created from debt can be sustained. What do you recommend as a superior currency?
gold
Ok. America uses Gold as currency. Canada (and other oil producers) sells oil to America for Gold. America burns oil and has nothing left. Canada gets the Gold, which lasts forever. Now what?
Keep in mind at the same time that people continue shopping at Wal-Mart, and gold flows to China as a result.
Sounds like a dying empire.
[edit] and you've really just answered your own dilemma. Pure consumerism leads to ruin. Neither fiat NOR gold will stop this tragedy.
With fiat money, trade imbalances can be corrected, or maybe don't matter.
With Gold as a currency, the country with a trade surplus acquires all the gold and the game ends much sooner.
I don't know if there really is a solution, since the problem is the decisions made by the people.
agreed.
thanks for the good convo.
#1 Is inevitable because as any ponzi scheme does, the Feds requires exponentially larger numbers of "investors" over time. Eventually there will not be enough governments, people and corporations requiring money to consume the number of dollars that must be printed to hold back deflation. In Japan they called it a liquidity trap, but really it is just not enough people borrowing because you've saturated the market.
#1 occuring makes #2 inevitable.
The idea that the Fed can keep printing money forever is as insane as the idea that you can continue to blow up a baloon forver. Ponzi schemes always collapse eventually.
We already passed that point. The Fed IS THE INVESTOR. The TBTF banks MUST buy the bonds, and then they sell them at a profit bank to the Fed. With QE, the Fed has extended the ponzi beyond the natural point of collapse.
the question is when. as i pointed out on another blog this week - look at o'neal, fuld, greenbergs 2x, mozilla, corzine. the list goes on. the winner was o'neal - he cashed out big time - got to give him some credit. timmy and bennie and big bad bama all watching their friends stack chips up on chips hoping to get a crumb, but who is the one that cashes out first. because once one of these guys pulls his chips - the game goes to zero. everybody knows that. it's just when. i don't think a lot of guys go golfing with stanley anymore. that's the question. anybody seen jon corzine lately? economically it looks like he did pretty good, because he knew the others would have to cover his a.. when he cashed out. but - does he get invited to dinners anymore? that's the trade off.
When you distill it down, the ECB and FED are nothing more than magicians.
The newest alphabet soup program (that's going to fix everything, wink, wink) is the flourish and the money printing is the sleight of hand. Rinse and repeat...
Their only goal is to keep people fooled into believing it can actually work forever. Eventually, the Ponzi becomes too large and the magic tricks don't fool enough people to keep it functioning. That's when it blows up.
The problem with that circular buying scheme is that for the Fed to continue on it's path of buying ever increasing Treasuries is that they are also increasing the money supply, which in turn tends to cause inflation.
Most of that impact has been absorbed by other countries because of the dollar's reserve world currency status, and because the Fed has been paying banks to put much of their deposits in accounts at the Fed keeping it out of circulation. But they're having to do so by paying higher interest rates to those depositors... increasing the amount of money they're "printing"...
It has been a relatively effective scheme of kicking the can down the road, but it is not a permanent cure. It may last a very long time, or maybe not. There have certainly been rumblings about a move from the $ as world reserve currency, and there have been some minor moves in that direction. As inflation edges upward, investor dissatisfaction with low interest rates for Treasuries will continue to grow and accelerate forcing the Fed to buy ever larger percentages of our debt or let rates rise, which isn't really much of an option.
Those increasing purchases, of course, accelerate the spiral.
Your proposed solution is not a viable one long term.
In the long term, we're all dead.
I don't expect this to last indefinitly, but it might last decades.
You are only looking at one side of the equation; on the other, there are trillions of dollars of derivatives that will either lose value or require massive pay-outs. The Fed is playing a dangerous balancing act game, between run-away inflation and massive collapse.
Matt: "In the long term, we're all dead."
---
I guess my sarcasm meter needs recalibration, Matt. I thought you were being serious in your original post.
---
J.M. Keynes: "In the long term, we're all dead." as justification for his "kick the can down the road" economic philosophy.
---
Once again, I'm not sure if you're being facetious here or not, but I categorically reject it.
Back in my agnostic, seeking the meaning of life days I eventually came to the conclusion that the answer to that question "What is the meaning of life?" had two possible categories of answers...
1. There is no meaning to life. or
2. It has a religious meaning.
Interestingly, virtually everyone, thinks the folks in *the other camp* above should necessarily care about what happens in the world than those in their own. Atheists, for instance, may say that since "religionists" are primarily concerned about "the next life", whether that be Nirvana, heaven or new reincarnation cycles or whatever, this life should mean little to them other than perhaps qualifying them for the next level, or bettering their position therein. "Religionists, on the other hand, figure atheists shouldn't care much about what happens to anyone other than themselves, perhaps, since everyone and everything is merely a collection of atoms and molecules that have randomly "coagulated" into whatever forms are now expressed as life forms, that will likely be rearranged many multiples of times before "the end" if there is one, and what happens to anyone or anything in the meantime is meaningless.
But as I said, from my experience, virtually everyone in either camp rejects the proposition that "It really doesn't matter... Who cares what happens", which seems to me to be another way of saying "In the long run we're all dead."
Matt: "The Fed is playing a dangerous balancing act game, between run-away inflation and massive collapse."
I certainly agree with that. I'd go a step further and say that it is an impossible, unwinnable game. I'd agree with you, though, that the timing of when it all comes unequivocally crashing down is difficult if not impossible to predict.
J.M. Keynes: "In the long term, we're all dead." as justification for his "kick the can down the road" economic philosophy...
Really? You know this because you've read Keynes work. In fact that quote was a rebuttal by Keynes of someone else's relaxed attitude to inflation...they felt that in the long run inflation would sort itself out...that set Keynes's hair on fire. He wrote a great deal on the danger of inflation. The corruption of "Keynesianism" that all the me-too commentators on this site bleat about would not have been recognised by Keynes as anything close to his work.
I've only read bits & pieces of Keynes' work, but from what I've read by him and about him, he thought the emphasis should be on the present and upon the short term rather than upon the long term.
I think that attitude is shown in this statement even though he may have been arguing against inflation at the time, and regardless of whether he was right or wrong in that particular instance. -- Government intervention now, rather than allowing inflation to die down on its own.
The full quote was:
"The long run is a misleading guide to current affairs. In the long run we are all dead."
Between abortion and the baby boomers, this condition has already been ignited. Why do you think they want all those illegals? They have already destroyed as many undesirable American babies as possible and now want illegal, no skin in the game workers to take the load. Except the illegals can all skip merrily back across a border if things go rotten. But reliable voters for Progressives are a gift from the tax-payers so they might as well play the cards.
yep, have a doobie & mellow out, man!
There are any number of ways for any given PonziCollapse; point is, historically, they always find a way. I think the IranWar will suffice for this one.
Our kids who won't have paved roads to drive on
but at least they'll have Sec. 8 and SNAPS , of course. Worry not. Gubmint will provide... somethin.
oogs66 said: "Our kids who won't have paved roads to drive on"
The state in which I live, which is not technically a 'welfare state' as it gives more than it receives (allegedly; but aren't all states welfare states when using actual math?) recently passed legislation essentially mandating that many roads that are "low traffic count" routes will be allowed to crumble to gravel.
Class A roads for log trucks to haul on during spring-breakup, or mud roads for the other serfs....
UP Forester: "Class A roads for log trucks to haul on during spring-breakup, or mud roads for the other serfs..."
And a billiard table smooth NAFTA Superhighway from Mexico through the U.S. to Canada & back, to accomodate Big Box Marts.
Yeah, the Big Box Marts around the super-cities, and everything else "re-wilded" so everyone can be watched easier.
Ours has gotten federal permission to convert an existing interstate to a toll road so that they can have a private company to repairs, maintenance and upgrades and then charge tolls to recoup their money.
Requests for other toll roads have been voted down handily, but a recent news story indicated they think they can legally bypass asking the voters to ok it since it will be a private company doing the collecting.
I imagine we'll be getting a lot more of that type of garbage as the government tries to satisfy its insatiable appetite for more money as the downward spiral starts to accelerate.
Paved roads aren't that necessary for donkey and foot travel.
I'm afraid our kids might not have cars to drive on whatever roads remain.
Fuck, MDB, even at your level of hyper-irony (which many here fail to appreciate or even notice) that is one fucking sick thought--I prescribe you meditate the entire weekend on your motives for posting this hyper-ironic troll copy here whenit involves multigenerational genocide.
MDB is funny sometimes but not tonight. The shit is getting serious.
goober nuts you're supposing that bernank is also a multigenerational entity, he looks like he's only got a few left so i don't get your point
"you're supposing that bernank is also a multigenerational entity"
Holy shit, you've nailed it! The bernank is a multigenerational entity! Aah!! The horror!!
How many future generations are getting bernank'd right now, and how long, if ever, will it take to de-bernankify humanity?
You lost me after, "...the investment our government is making".
What investment?
Its called theft...they call it "investment".
Geithner was pretty clear, without theft (investment) the federal pension plans are toast.
Now you know the score.
Solyndra comes to mind.
And the battery company...
Ener1
it's not even a word...neither is Solyndra, for that matter! They're both like car names or something...
MDB translation = the government plans on inflating the debt away at about a real inflation rate of 10% per year for decades, hoping that there is no one smart enough to figure out the official inflation rate of 3% is bull shit, and hoping bond holders do not realize they are losing money year after year.
Of course if bond holders catch on to the con game bonds will be sold, values plunging, yield increasing, and it will be game over for the federal government.
A repeat of the USSR, 1991.
As long as the new bonds are purchased by TBTF Banks, and they flip them to the Fed right after, the game won't end. And if anyone else tries to sell their UST, the big banks will have to buy them and flip them as well.
PONZI ON!
And they have done this, about $1.6 trillion worth.
I genuinely worry when I see economic illiteracy like this. You do realise that our Federal Reserve is able to buy our bonds right? You realise that China is dependent on our consumer economy right? This is obvious to all apart from doomer conspiracy theorists and redneck silverbugs.
Thank god for those human slaves in china.........not
China will figure out sooner or later that they are better off consuming their own goods that they produce instead of shipping them to the USA for paper that devalues.
I am sure that Chinese workers look at those kitchen appliances they build all day and think to themselves, “I am so fortunate that this will be shipped to America and I will continue making $50 a month.”
Someday they will say “I really want that washing machine in my house.” And when that day comes the US dollar will drop, inflation goes up, in interest rates will go up, the share of interest paid in the federal budget will increase from 8% to 15% then 25%. Game over.
USSR 1991.
What if the washing machine factory moves to Bangledesh before that happens? What if there really is a long, slow inflation, and Asian currencies climb slowly instead of suddenly? What if there is no collapse, no reset, and we really do just muddle through?
Sure, when America gets to 300% debt to GDP, the Fed/Treasury will probably have to issue new Dollars worth 10 old dollars, so the debt goes back to a reasonable 30% of GDP. I'm starting to think that this is a probable scenario.
It certainly is probable but not likely. If China gets desperate they will let the Yuan increase in value to fight inflation. More likely is the realization that bond holders will have, I predict in a year or less, that the USA is insolvent.
For the game to go on there must never be a event, “Black Swan,” that will disrupt the ponzi scheme. Could it go as planned? Yes, but this is real life and there are too many independent variables not under the control of the central banks and the financial sectors.
um....isn't GDP calculated with the new 'dollar' as well then?
600/200 = 60/20 = 6/2... still 300%. Still screwed. Maybe the Chinese and the Russians can write the deadbeat off.
600/200 = 60/20 = 6/2... still 300%. Still screwed. Maybe the Chinese and the Russians can write the deadbeat off.
I somehow doubt the Chinese will let their factories go anywhere.
The Chinese have an export economy, whereas we have a consumer economy. Our economy has a strong retail sector with ample government assistance for consumption, including generously low interest rates. The Chinese simply don't have the stomach to match the hearty American consumer. If they did, they would have a consumer economy like we have.
Funny. You are getting better.
The Chinese simply don't have the stomach to match the hearty American consumer.
That is what the Europeans said about Americans in the '50s. Soon the Chinese will be consumers and Americans 3rd world.
Oh man. That was great. "with ample government assistance for consumption". How do you do that? +1. You should be writing for TOTUS.
Hey, is Tyler paying you to write this stuff, just to keep folks flaming?
It is ironic indeed that even the [fake liberal] libertarians seem to agree that communist China is kicking our ass.
Millions of empty apartments in China == Millions of empty houses in USA?
Who's winning again?
China has that all figured out. Once they are able to adequately consume internally, their need for the US is diminished, then the end will be immediately in sight. Why does anyone think they are buying all that gold and cutting currency deals all over the world? Its not because they want to be our bitch forever.
The current Chinese 5 year plan calls for "rebalancing", which means increasing domestic consumption in relation to exports.
"You do realise that our Federal Reserve is able to buy our bonds right?"
lol...with what?
The Fed has $1.6 trillion bonds last time I checked. The dealer buys the bond and resells it to the Fed. Over the last two years the Fed is the primary buyer of US debt.
Well, theres the thing.
The bonds are worthless, in any real fiscal sense. The government is borrowing forty cents of every dollar it spends, meaning, it's broke. To make good, they would have to start selling off assets that they bought with the peoples money.
By natural law, its not theirs to sell for their own stupidity and bad habits. Just like in Greece. The land belongs to the people not their government. Governments have done the awful job of stewardship, not individual people. I can't be held liable for others stupidity unless we're going to turn law on its head.
If so, I'm prepared for that as well ;-)
I've never gone in for the premise that "every American owes" X in order to pay off the national debt. I say, no, the responsible parties who pledged my savings, without consent, owe X.
I was never involved in the public sector union negotiations that granted twice the pay (on average) to the public sector worker than the one who's actually paying the invoice.
So no, its their debts, not mine or yours. They can print into nothingness for all I care because governments come and go through time.
The people always remain.
Well said. Time to stop blaming the 99% who have no say in these poor decisions.
Those are nice sentiments, but I'm skeptical things will play out nicely for the citizens whether it's "fair" or not.
There are precedents for paying for the mistakes of others. Workers get layed off because of the mistakes of management. Stockholders get hammered when managements screws up. Companies pay the price for the stupidity of employees, and can be held liable for their stupidity even when they acted against the direct orders of their superiors. A lot of innocent victims are "collateral damage" in wars, and in peacetime.
I think there are numerous examples of citizens that paid a price for the actions, inactions, incompetence and malfeasance of their governments, whether they signed off on their actions or not.
We're actually probably more liable for the actions of our government than many others have been. We have a Republic where we vote upon and have some control over our leaders. We in essence pick them.
Jeff,
Thanks for the thoughtful response. No, I submitted that I am not. I also was very careful to say certain individuals are not.
To say that I (personally) am responsible for the malfeseance in office of others is to shift the responsibility of outcomes from where it rightly belongs. I have never entered a polling place with the mindset of what can I get the government to steal from others and give to me with this ballot. Maybe others have, I never have.
Each individual will have to search their conscience for the answer that is theirs...and theirs alone.
In fact, it has always been the exact opposite for me. That is, with my casting my ballot, which of these candidates is less likely to steal from me & my neighbor and protect my liberty. A quaint concept to be sure, but it is how I vote. Governments are instituted to keep the people from being thieved, not to facilitate it. They are also there to protect (with force of law) the binding contract of liberty and individual freedom. Not strip it away and sell it off to the highest bidder inside or outside government.
Now, it may be true that someone becomes corrupted once in office.
We've observed this from how they make one set of laws for themselves and another for the masses. From how they allow insider trading to themselves to how they give themselves raises to how their retirement arrangements are made to the patronage bestowed on the unworthy outside of it. It is obviously purposeful by design and across the labyrinth that is its bureaucracies.
This will always be beyond your and my control as it lies within every man & woman who accepts the responsibility to hold the public trust to fight off that urge or go back to the private sector.
Unless we're talking about revolution every other decade. And I don't think we are ;-)
It's a shame more don't have your attitude, nmewn. Of course maybe I'm biased since it is my own, or like to think it is. ;)
I'm discouraged when I see how so many people vote... or don't, though. Our society is like a garden in some ways. It takes a lot of time and effort to keep it productive and to keep the weeds to a minimum. Or as the bumper stickers say... Freedom isn't free.
But I have no illusions that I'll escape unscathed from the incompetent and dastardly deeds of our leaders and fellow citizens.
It is like a garden isn't it?
I guess the best we can hope for is to keep on weeding. Maybe we can at least get the biggest ones before they go to seed.
Because it won't be me who raises my hand against my own countrymen who fervently believe weeds are good in the garden and have been taught so their entire life. Its a long row to hoe but we owe it to them and ours.
Take care ;-)
Greenbacks computer keystrokes magic IOUs Dollars of course
You do realise that our Federal Reserve is able to buy our bonds right?"
lol...with what?
The push of a button...
lol...I like the old biker analogy from the 60's.
Honda's are fun till you get caught riding one ;-)
"...realise..."
A British subject, no less. MDB, bloody good show.
Here is a little economic secret for the ZHer's. If you want to see what the inflation rate is, more or less, ignore the CPI. Look at the PPI. People think the Producer Price Index reflects FUTURE prices but this is incorrect. The PPI is reflecting current prices as producers bid up the price of imputes.
Austrian economists know everything.
So if you want a realist look at prices here the are;
2005-01-01 7.3 2006-01-01 4.7 2007-01-01 4.8 2008-01-01 9.8 2009-01-01 -8.8 2010-01-01 6.8 2011-01-01 8.9So to assume the inflation rate in 2011 was 8.9% would be correct. Certainly not this bull shit fed to the press;
2005-01-01 3.4 2006-01-01 3.2 2007-01-01 2.9 2008-01-01 3.8 2009-01-01 -0.3 2010-01-01 1.6 2011-01-01 3.1so in 2009 there was 8.8 percent deflation? Without QE and the other Fed programs (ZIRP, etc) there would be 10% plus deflation each year?
@ milliondollarbonus
Wow man...I'm not even sure what color pill you must have swallowed...or how many of them.
Seriously, if you cannot see the flaw in what you just said...or should I say flaws...then you best get off of ALL PILLS...blue, red, and otherwise.
I think he is a federal employee pretending he is at work thinking like a federal employee thinks. Just a guess.
I think you're a typical humorless, gullible libertarian doomer goon who simply can't fathom the concept of satire or comedy.
Max Fischer.
I am a Libertarian but it’s not like they accept me or anything.
Confession: sometimes I log in the ZH just to read MDB_
Sometimes I watch FOX for the same reason. It makes me laugh, but then it makes me deeply sad.
The other news stations arent much better.
If MDB from Citi, he must change to 300,000 Dollar Bonus.
Top quality troll, still not as good as Dr. Paul Krugman though.
Wow it is sad how spot on this video is.
http://ericsprott.blogspot.com/
Is that how we went from a multi billion dollar economy to a multi trillion dollar economy? Government investment? I thought it was inflation of the money supply and debasement of purchasing power. Silly me.
and steve jobs and his dead liver transplant and glorification of stupidiy and his pancreatic cancer will be cured by the time his body is unfrozen. ozymandias. and despair. i have one question open on this blog. what drives bernake? i just don't get it, him.
Gentle Ben's just doing his job. Kind of like you've been doing on this site.
He worships at the Keynesian altar (or perhaps an Illuminati one...)
He's an Ivory Tower academic who lives in a world of theory, trying his hardest to save America using his flawed idealogy.
The problem is, no one else is doing what they are supposed to. The Government is not doing any useful stimulus, banks are expanding their derivatives exposure instead of winding them down, and companies and households are not deleveraging voluntarily.
You are making a fatal assumption that the inflationary pressure the fed is placing on the economy does not eventually create an equal and opposite deflationary pressure. The Fed has not been able to pare back easing measures as fast as deflationary pressure has grown to make new easing necessary. The debt bubble grows with each easying and with the larger debt comes more deflationary presure. They have used nearly every arrow in theri quiver and they are down to only a few. Interest rates are as low as they can go and still it is not enough. It is only a matteer of time before promises of longer term low interest rates and QE are not enough to hold back deflation. When the Fed runs out of arrows nothing will be left to stop the comming contraction. Deflation will start and the as incomes and taxes decrease the debt service will grow until it simply can never be paid off. The US willl be forced to default. And future generations will blame you and me for the collosal stupidity that forced this upon them.
Exactly. If the masses have no money to invest into anything the value of money will increase. This is also known as deflation. Creating more debt will not help because people have already borrowed their share and more. Mass default becomes the norm.
Who let this milliion dollar baby dude in here?
Who let you in here? Who let any of us in here? Why did you make this comment?
I'm sure by "investment" you actually mean "debt."
MillionDollarBonus_
No, its YOU who do not understand, NONE of this will ever be paid down, or off, by any Generation, wake up and smell the bat guano on your shoes.
Inflation (aka money devaluation, aka printing) is a universal tax on everything and everyone. Everything you have, and the stuff you need - food, energy - becomes more expensive. We are all paying for this, right now!
PHEW! I feel so much better now that that's cleared up. YOU ARE FREE TO RUN FOR RE-ERECTION, i mean...YOU ARE FREE TO RUN FOR RE-ELECTION!
im pretty sure what you're trying to say is that they slowly pay back the interest while creating more principle on money borrowed (created) at a lower rate, which ultimately destroys the currencies value and creates inflation, but i can kind of see your "minimal impact on the economy". Bernanke is keeping rates low because HE HAS NO OTHER CHOICE, the game is on the way out.
Be a man of principle and leave. I won't say it two more times.
im pretty sure what you're trying to say is that they slowly pay back the interest while creating more principle on money borrowed (created) at a lower rate, which ultimately destroys the currencies value and creates inflation, but i can kind of see your "minimal impact on the economy". Bernanke is keeping rates low because HE HAS NO OTHER CHOICE, the game is on the way out.
im pretty sure what you're trying to say is that they slowly pay back the interest while creating more principle on money borrowed (created) at a lower rate, which ultimately destroys the currencies value and creates inflation, but i can kind of see your "minimal impact on the economy". Bernanke is keeping rates low because HE HAS NO OTHER CHOICE, the game is on the way out.
this is a sick joke right? you're not serious that you beleieve what you typed are you?
.
Dear MillionDollarBonus,
I live in Illinois and our powerful speaker of the house, Mike Madigan, recently stated that it is time the local taxpayers started paying into the Teachers Retirement System to cover the massive shortfall in funding caused by generous pension giveaways, underfunding, and outright theft, so he can balance the state budget. We really have a wonderful and benevolent state gov't here in Illinois.
I want to thank you for lifting my spirits on a gloomy friday night.
Your comments are truly a godsend. Thank you, brother. God bless
Ha! That's a good one. Let us know how it goes!
MillionDollarBoner, have you ever thought about stand-up comedy? You've got to be a Million Dollar SARCASTIC ASSWIPE, along with your 11 greenie friends, OR you're just ONE GIGANTIC PEARL STUDDED SCROTUM TROLL. But thanks for the "color"...................
Why do you think he's letting all those illegals in here for. They will inherit the debt as the domestic birth rate continues to decline. Simple.
Libertarians are not gloomy about the human condition but about those who seek power through duplicity, bribes and force - preferential treatment of supporters, confiscatory taxes, so many laws as to ensure one will be broken, endless debt and assaults on liberty. Despite overwhelming evidence, many still can't grasp the connection between economic and political freedom. The real question is: Who can provide best for human society - markets and choice or States and mandates?
Wouldn't this require Bernanke's immortality?
The debt is too big to be paid of by future labor.
It will be paid of by past labor, watch both your money and
assets lose value, this is whats happening now.
Not if future labour gets paid 10 times as much. As long as income grows faster than the coupon rates on the bonds, it could happen. unlikely, but possible. The problem, as I see it, is that the Federal Reserve is trying to get things fixed using the limited tools it has, but Washington is not.
The (non)Federal (non)Reserve trying to fix things? Really? Matt, we already have one MDB; don't think we need another.
Cockup before Conspiracy.
The only thing they leave out is that the family also has both sets of parents retiring and they are responsible for their living and medical expenses. (unfunded Social Security, Medicare and Medicade) Two parents would also be overwieght and one would have some form of diabities
Here's one, a hottie with all the qualifications (warning: brain not included):
http://www.youtube.com/watch?feature=player_detailpage&v=qQdhMSEqhfg
You can only hope she'll learn something from that,
you have kids _ put them back in quick
And Geithner held a teleconference today to announced that taxpayers are on the hook for 1 million principal writedowns. These guys make Greece look fiscally responsibe.
http://confoundedinterest.wordpress.com/
Don't Buy Stuff You Can't Afford
http://www.youtube.com/watch?v=VL3KuaFvOSc&feature=related
Sounds confusing!
Just don't buy stuff.
Funny, you don't look very austere.
Evil twin.
"It almost, but not quite, offset the growth of US debt held by the public, which grew at a brisk 11.3% pace in the past year..."
Growth Bitchez!
Shit, these bastards were too stupid to put in an auto ramp before elections. Let's see.....by my math we have another 130 D/GDP clicks to catch Japan on the debt train.
Right, can't they just program the HFT bots to ramp the indices a few months before the election (call it program "O re-elect") and not torture us with all of these stupid debates and marketing efforts?
Timmay must have convinced the critters he can make it work until November 7. He ain't gonna be around come February no matter what happens. Clever.
Timmay will order the NY Fed to crash the markets before Nov as his final "Fuck You" to Ogolfer.
Funny how everything becomes clearer when you drop the 0s and relate it to everyday life ! Funny how economists still have not integrated the basic principle of modern physics and that is that natural laws are the same across space and time. When will they realize that micro and macro must rest on the same foundations...and they call themselves a "science"..hahaha....
US citizens aren't going to repay this debt/shit ...the politicians, who spent it without any plan in place to repay it, had better get working reals sharpish like ..c'mon Barny Frank, about time you did a days work in the past 40 years
nice job spending other peoples money isn't it Washington?