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Goldman On The Various Deficit Reduction/Debt Ceiling Plans And Immediate Next Steps

Tyler Durden's picture




 

Still confused by all the various plans offered by the two parties? That is to be expected: after all these change on a daily, if not hourly basis, which was great a week ago, but now with just 3 days until the absolutely latest deadline by which congressional legislation has to be enacted, which is this Thursday, some cohesion would have been good. Instead D.C. keeps pushing further apart with no chance of a compromise anywhere on the immediate horizon. And while it does provide daily TV opera, it does nothing to assuage fears that next week America may stop paying out its checks as soon as a week from today (the details of when Treasury runs out of cash are irrelevant: the absolutely drop dead date is August 15, but without the machinery in place to resume refunding well ahead of it, the market will have no choice but to begin discounting that fact). And while we know that S&P has now sided with the uber-fluffy Reid plan, which does nothing at all to address America's encroaching insolvency, the real question here, as in every other topic, is what does Goldman think. Because after all Goldman rules the world. Here is the answer.

From Goldman's Alec Phillips

Two plans, but still no clear outcome. At this point, neither of the proposals released today look likely to become law without further modification/negotiation.  The Senate’s plan looks unlikely to pass in the House, and it is not clear that it will gain the 60 votes needed to pass the Senate.  The House plan may not have enough Republican support to pass the House (several Republicans announced their opposition today), and Democrats in the House are unlikely to support it without modification.  The upshot is that neither bill appears to have enough support to pass both chambers of Congress, and at this point it isn’t clear that either of the bills can even pass their own respective chambers.  Thus further modifications may be necessary.

House Republican proposal: $3trn deficit reduction, $2.6trn debt limit increase, with both accomplished over two stages.  The structure is in line with reports over the weekend: a $1trn debt limit increase coupled with $1.2 trillion in savings over ten years from discretionary caps, which would be enforced with across the board spending caps if not met.  A second debt limit increase of $1.6trn would take effect only if the reforms proposed by a special fiscal committee are adopted. That committee would be charged with proposing deficit reduction of $1.8 trillion over ten years, with a deadline of November 23, and the recommendations would be subject to an up or down vote in the House or Senate (in other words, Congress must vote on the plan, with no procedural obstacles, but it could still reject the proposal if it chose to). The Democratic objection to the House proposal, which was reiterated by President Obama this evening, is that the need for a second debt limit debate would create additional uncertainty and would essentially be a replay of the current debate.

Senate Democratic proposal:  $2.7trn spending cut, $2.4trn debt limit increase, both in one stage.   The proposal envisions $2.7trn in spending cuts over ten years, but while some of the cuts would produce tangible savings, the bill would change the fiscal outlook less than the headline numbers imply.   Among the tangible savings: (1) $1.2trn from discretionary spending caps, similar to the House bill; (2) $100bn in cuts to non-healthcare mandatory spending $15bn from spectrum auctions; $10bn from agricultural subsidies; and unspecified savings from student loan changes.  The remainder comes mainly from capping funding for overseas military activity at $576bn over the next ten years. This would essentially codify what is already an expected outcome related to Iraq and Afghanistan, but would show up as roughly $1 trillion over ten years in savings compared with the CBO baseline. However, most realistic baselines such as the fiscal commission’s “plausible baseline,” CBO’s “alternate scenario,” as well as our own, already assume an eventual phase down of troops similar to what is proposed.  Like the House proposal, the bill envisions a special fiscal committee with instructions to report by November 23, and vote by December 23, 2011. The committee would be given a goal to reduce the deficit to 3% of GDP or less, but there would be no enforcement mechanism to enforce this outcome.

The President’s proposal: Still focused on a grand bargain.  Although neither the House nor the Senate’s approach involves revenues, and neither reduces the deficit by $4 trillion, the President mentioned once again that he would like to see both aspects this evening, while lending support to the Senate’s approach as a fallback.

Endgame:  A short-term increase, with another shot at deficit reduction later this year?  A two-stage process continues to look like the most likely agreement, since it is very difficult to generate savings of the magnitude being discussed without developing more complex policy reforms in a number of areas, including health programs and potentially tax policy, and those would take time. It is possible that negotiators could try to reduce the uncertainty around the second debt limit increase that the House plan would create, but in doing so an alternative enforcement mechanism for the commission process would need to be identified, which might create more controversy.

Timeline: Senate floor consideration has started, House moving forward for Wednesday vote.   The Senate began consideration today of a debt limit increase this afternoon. At this point the bill is unlikely to come up for a vote before Thursday. House leaders are expected to bring up their bill by Wednesday for a vote. There is a possibility of amendment to either proposal prior to those votes. Moreover, after each chamber passes its respective bill, it can be amended by the other chamber.  The stated deadline for enacting a debt limit extension is August 2.  Although the usual legislative timeline can take up to 8 days for House and Senate passage, if a deal is reached it can be expedited (as it was in April, when a deal to avert a shutdown was reached the evening of April 8th, and was enacted only a few hours later around midnight).   While there is a clear risk that legislative consideration goes past the August 2 deadline, a deal still seems more likely to be enacted just ahead of the deadline. In the less likely scenario that the deadline is missed, spending would be cut sharply but the lapse in borrowing authority would very likely be brief and would almost certainly be resolved prior to the August 15 Treasury coupon payment.

 

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Tue, 07/26/2011 - 08:44 | 1493941 papaswamp
papaswamp's picture

$3 Tril or less in cuts?…with upcoming spending that amounts to zero cuts. Do people not see this?…I know preaching to the choir.

If you are over spending by $1 tril a year over 10 yrs that is $10 T. Thus to be balanced one needs to cut spending/increase revenue by $10 T just to break even…this doesn't even address the existing debt. This is assuming interest rates do not rise in 10 yrs….if they rise it doesn't really matter. Either way the US is toast due to lack of political will.

Tue, 07/26/2011 - 09:02 | 1493993 whatsinaname
whatsinaname's picture

howbig is the August 15 payment due ?

Is that the back-breaker ?

Tue, 07/26/2011 - 09:56 | 1494114 InconvenientCou...
InconvenientCounterParty's picture

Why does anyone expect this amount of debt, accrued over more than 30 years to be corrected in one bulk action? That goes for behavior too. The "zero taxes for all" and "tax cuts for job creators" memes are still in force.

That's the coporatists value system that got the US into it's present state.

Tue, 07/26/2011 - 10:30 | 1494254 Idiot Savant
Idiot Savant's picture

No one expects the debt to be corrected in one action, what they/we expect is to stop the bleeding (i.e. incurring additional debt).  As papaswamp pointed out, this is an utter farce. It's simple arithmetic and no one is pointing it out. Why?

So, we cut three trillion and only incur an additional seven trillion in debt over the next ten years. This is assuming interest rates don't rise and that our budget doesn't increase. This is utter bullshit since our budget increases every year. Just take a look at the last ten years.

Tue, 07/26/2011 - 10:59 | 1494383 InconvenientCou...
InconvenientCounterParty's picture

My position is that the point of no return on debt was passed in the 90's. The action of "paying back" the debt is futile and thus a waste of energy. In this rule set, essentially a currency war, human morals are a disadvantage. The US, for all it's pathetic machinations is leading.

Applied game theory would guide the US to stay on the borrowing/inflative monetary policy because it improves the U.S. position relative to the other players. Doubling down would keep the imperial momentum and China and Iran on their heels.

Fine, the world is going to implode --I'm saying, China first. You simply do not want China and Iran getting stronger. Let Iran worry about domestic unrest rather than their nuclear program. U.S. easing is having pronounced effects on the mid-east. Keep going.

Tue, 07/26/2011 - 13:34 | 1495099 natureoftheexpe...
natureoftheexperiment's picture

All branches of the federal government are (and always will be?) decentralized; very much like the corporations we hate.. ironic.

Tue, 07/26/2011 - 08:47 | 1493945 monopoly
monopoly's picture

They never, ever talk about how we pay this money back. Because it will never happen.

Tue, 07/26/2011 - 08:53 | 1493958 HowardBeale
HowardBeale's picture

Inflation (print) or Hiroshima (not print; pay back)? No question. And when TPTB have advance notice of everything and can easily avoid currency destruction--and don't give a shit about The People, it inevitably will end in hyperinflation. No payback during this collapse of the civilization

Tue, 07/26/2011 - 09:10 | 1494002 Incubus
Incubus's picture

Paying back the total amount doesn't matter to them.  What they care about is the debt being honored with the blood of proles, and their unwaivering devotion. (by spending their lives laboring away, with the belief that the system is sound)

Money is a false measure.   Debts will be paid. 

 

Just watch their social engineering at work:  the western handlers will demonize the chi-comms and their handlers will demonize us...then it's off to the races. 

More ignorant proles killing other ignorant proles.

Tue, 07/26/2011 - 09:20 | 1494025 GetZeeGold
GetZeeGold's picture

They never, ever talk about how we pay this money back. Because it will never happen.

 

+Infinity

 

Tue, 07/26/2011 - 09:29 | 1494055 Yes_Questions
Yes_Questions's picture

 

 

And that is the point. 

Who Run Barter Town?

The FED run Barter Town...

Tue, 07/26/2011 - 09:58 | 1494121 InconvenientCou...
InconvenientCounterParty's picture

Exactly right. So borrow more.

Yea it's not moralistic. So cover the children's eys and get on with it.

Tue, 07/26/2011 - 08:47 | 1493946 Debtless
Debtless's picture

There's nothing new here - the ceiling will eventually rise.

What does he think about the Triple A rating? That's the news.

 

Tue, 07/26/2011 - 09:02 | 1493992 SheepDog-One
SheepDog-One's picture

This falls far short of 'market expectations', thats what I want to see play out. 

Markets are expecting another huge gift of funny money and I dont see it materializing, so when does the market tempter tantrum happen?

Tue, 07/26/2011 - 09:05 | 1493998 Debtless
Debtless's picture

Don't forget about Jackson Hole II

Tue, 07/26/2011 - 08:47 | 1493948 HowardBeale
HowardBeale's picture

Is Zerohedge actually a Goldman front?

Tue, 07/26/2011 - 08:54 | 1493972 Tyler Durden
Tyler Durden's picture

Not sure about front... But "back"....hmmmm

Tue, 07/26/2011 - 09:00 | 1493988 Popo
Popo's picture

Was that a "denial"???

 

</joke>

Tue, 07/26/2011 - 09:09 | 1494004 BlackholeDivestment
BlackholeDivestment's picture

...naa, Goldman is a Faunt http://www.urbandictionary.com/define.php?term=faunt for zero interest. You must have some kind of inverted xeliayds. Cut down on the municipal water and Fukushima meat, it may help. http://www.youtube.com/watch?v=GM8WK6wvBT4&feature=related

Tue, 07/26/2011 - 08:47 | 1493951 Tense INDIAN
Tense INDIAN's picture

Nifty NExt step...tomorrow also a Down day most probably ..target 5500

http://markettechnicals-jonak.blogspot.com/

Tue, 07/26/2011 - 08:50 | 1493953 espirit
espirit's picture

The plan is a win/win for the Repugnocrats and the Banksters, not for anyone else.

It's all about the 1% haves, not the havenots.

Tue, 07/26/2011 - 08:50 | 1493957 Mineshaft
Mineshaft's picture

(the details of when Treasury runs out of cash are irrelevant: the absolutely drop dead date is August 15, but without the machinery in place to resume refunding well ahead of it, the market will have no choice but to begin discounting that fact)

Recently you have taken to trying to make the facts fit your thesis.  You say in the article that This Thursday is the drop dead date, then you say August 15th is the drop dead date.

How is it the details of which date the treasury runs out of cash irrelevant when the topic of the entire discussion is;  The details when Treasury runs out of cash?

Tue, 07/26/2011 - 08:57 | 1493979 Tyler Durden
Tyler Durden's picture

Perhaps reading this article from yesterday would help with your confusion. And for the ADD impaired here is the chart that matters:

 

Tue, 07/26/2011 - 09:15 | 1494016 SheepDog-One
SheepDog-One's picture

How about the $200 billion or so Treasury have dipped out of the govt pension funds? Where does that get plugged in?

Tue, 07/26/2011 - 09:25 | 1494030 knukles
knukles's picture

Charts are so Luddite, old fashioned, hard to read. 
Can I get a graph?

(grabs phone, continues texting)

Tue, 07/26/2011 - 09:18 | 1494019 No Bid
No Bid's picture

A couple firms came out last night with analysis that SS, medicare, and the debt could be funded for another two months at least.  I think it was UBS, C, or WFC.  Anyway, mayhem would ensue if we ever got to a bare bones situation like that, so I don't expect it.

 

Buttttt I wouldn't be surprised if part of the Republicans arsenal is a mild tanking of equities, assuming they can give reason for volume to appear out of nowhere.

Tue, 07/26/2011 - 09:24 | 1494038 SheepDog-One
SheepDog-One's picture

Riiiight, we're bankrupt, on purpose, but theyre not going to allow any of that, Shittybank or Wells Fargo gun dealers said so. And 'republicans' want the stocks to drop since theyre so in control and all. What is Ron Paul going to call Bernanke and tell him he wants a -100 DOW day? LOL big deal. At this point the drugged up american population wouldnt even care if markets were down 3,000 points today, they always assume all will just be fixed now.

Tue, 07/26/2011 - 08:51 | 1493959 bob_dabolina
bob_dabolina's picture

There is no other option than to write the President a check for trillions with carte blanche. If not your grandmother will starve to death, and A.I.D.S will go airborne.

-Tim Geithner

Tue, 07/26/2011 - 08:52 | 1493961 the not so migh...
the not so mighty maximiza's picture

No matter what the outcome we are screwed.  They have to increase the DEBT ceiling again in ether 5 months or 18 months with ether plan.   They will never stop spending, balance the check book, and pay down the credit card.

Tue, 07/26/2011 - 08:58 | 1493984 Dreadker
Dreadker's picture

Agreed - and in either situation its just giving me more time to dip into PM's and get other stuff...  I think most here accept that the US is boned fiscally, which when that falls apart will lead to boning in other areas ;-)  It's a shame really - i came to the US after 2008 looking for the "American Dream"... discovered within months it was a nightmare and now stock everything for a post collapse US... ;-)

Tue, 07/26/2011 - 09:56 | 1494070 BlackholeDivestment
BlackholeDivestment's picture

...if you really want to get the true American return with the golden BTFD Cup, buy RTN at 40 before the Q ball rolls off Chairsatans tongue and into your pocket, there's a big joint Israeli 2012  missile drill coming up right on time for the ballistic Q up before that launch sequence. http://www.jpost.com/Defense/Article.aspx?ID=230974&R=R1  If you are going to go full demand destruction QE 1 2 3 count down to perfect zero, gold 10 gazillion, may as well drink the Guayana Punch eh?

Tue, 07/26/2011 - 08:57 | 1493974 youngman
youngman's picture

What is amazing to me is all the talk about the "need" to raise the debt ceiling.....like the Titanic "has to hit the iceberg.....they cannot grasp the thought that we are spending more than we are taking in.....but a huge amount..its not a credit card limit we are talking about....its a whole bank......Thr Republican plan will add 1 trillion every year to the debt..the Democratic plan will add 2 trillion...so in one plan the Titanic sinks slower or faster...but IT STILL SINKS.....when this passes...the first auction is going to be very interresting..who is going to buy this crap?????

Tue, 07/26/2011 - 09:25 | 1494042 Yes_Questions
Yes_Questions's picture

 

 

Iraq.  Iraq will buy UST with petrodollars and re-valued Dinars.

That's it.  That's the Ticket.

Probably the FED will hold a much greater proportion of UST in the next few years as the US fumbles toward an inevitable re-direction of funds toward infrastructure and jobs.  Even with an attack on Iran, Syria (EastAsia) whatever.

Tue, 07/26/2011 - 10:13 | 1494178 BlackholeDivestment
BlackholeDivestment's picture

...you mean, how can the medium income handle the zero interest at the register, when that pyramid scheme scene in their hand requires more than a hand full more than before? It's called, honey we can't afford any more kids and we have to eat the mistake we have now, they justed printed a new bucket full of kid zero hole, so pass the government cheese please, this kid tastes like copper still, we did not take time to drain all the blood out before dinner with the Vampire Squids and as long as we can get others to help flavor up supper we can still have people over since we don't have to pay the mortage. http://www.youtube.com/watch?v=8Sp-VFBbjpE

Tue, 07/26/2011 - 08:56 | 1493975 SheepDog-One
SheepDog-One's picture

So the Goldman posts are supposed to be contrary indicators to us? Assume the opposite of what they say? I really dont get the point of all the Goldman posts.

Bottom line to me this is debt ceiling 'lite', we're screwed and everyone knows it and their 'proposals' are debates about whether a bandaid or a bit of gauze on the severed leg is a better field dressing. And 'who's to blame', which unfortunately even ZH readers are buying into the lameass puppet show for the mercury vaccine crowd. 

Really sad.

Tue, 07/26/2011 - 08:57 | 1493977 lizzy36
lizzy36's picture

My plan is to learn as little as possible about either parties work of fiction.

I have a hunch both plans are mostly smoke and mirrors.

Nothing will change with either plan. Trade accordingly.

Tue, 07/26/2011 - 08:57 | 1493981 buzzsaw99
Tue, 07/26/2011 - 08:57 | 1493982 DOT
DOT's picture

Take a vote to make it;

Take a vote to break it.

 

The process is corrupted to the point that any vote is meaningless.

 

I'm sick of popcorn. 

Tue, 07/26/2011 - 08:59 | 1493985 slaughterer
slaughterer's picture

Master Plan:

1.)  Pass Reid plan.

2.)  End the wars to save money. 

3.)  Bring the troops back.

4.)  Increase unemployment by another 1.5-2% with unemployed troops.

5.)  QE 3 (on increasing unemployment rate, part of Fed duel mandae)

Mission accomplished.

 

Tue, 07/26/2011 - 09:06 | 1494000 SheepDog-One
SheepDog-One's picture

Only problem with that to those who study whats going on knows soon we open new war fronts in Syria and Iran, its fine to say 'wars are ending' but its not reality. So those costs go way up, and who's paying for it?

Tue, 07/26/2011 - 09:22 | 1494033 Spastica Rex
Spastica Rex's picture

Wars over + troops home = American Empire finished.

Tue, 07/26/2011 - 09:03 | 1493991 HowardBeale
HowardBeale's picture

S&P has truly written the final chapter in this tragicomedy, as when they "reapprove" the AAA rating after the miraculous plan comes from nowhere to be approved (nobody saw it coming), they will have proven, beyond a reasonable doubt, to all other inhabitants of the planet that weren't quite convinced yet, that the U.S. government is S&P is Goldman Sachs is JP Morgan; the result? Universal (more complete than the partially universal) condemnation of the failed superpower and a concerted effort by the world to disassemble what's left of it.

 

And it not that, then something else...

Tue, 07/26/2011 - 09:03 | 1493994 El Viejo
El Viejo's picture

Washingto needs to look at the NFL / Players deal.  That is God talking.  Ignore at your peril.

Tue, 07/26/2011 - 09:15 | 1494014 Bindar Dundat
Bindar Dundat's picture

OK but all they will do is get Goldman to look at it!  This is what they will say:

 

 Redskins are  "down and out" or maybe we should " go long" with the Washington....

Tue, 07/26/2011 - 09:05 | 1493999 oogs66
oogs66's picture

Master Plan:  Use government money to get as much facetime as possible in front of the voters without dipping into your campaign stash.  Do enough that you can say you did something, but not so much that you can't run an election on it.  Get re-elected and collect government money for 2-6 years.  Live off the big fat pension and lobbyists.

Tue, 07/26/2011 - 09:33 | 1494061 knukles
knukles's picture

Are politicians the cause of ADD? AHAD/ADAH/whatever it's called now. 

Tue, 07/26/2011 - 10:02 | 1494137 El Viejo
El Viejo's picture

Please see response below @  9:53  (Dyslexic computer this morning)

Tue, 07/26/2011 - 10:16 | 1494191 El Viejo
El Viejo's picture

Really inciteful question:(but backwards)  You might say that ADD has caused politicians.

Tue, 07/26/2011 - 09:10 | 1494005 AUD
AUD's picture

Yields on 10-year notes increased one basis point - Bloomberg

Tue, 07/26/2011 - 09:11 | 1494006 Iriestx
Iriestx's picture

Ford showed profitability this quarter.  In this bizzaro world that trumps the default of the US Government.  Expect a +200pt day.

Tue, 07/26/2011 - 09:12 | 1494010 SheepDog-One
SheepDog-One's picture

No one cares about Ford they refused govt bailouts.

Tue, 07/26/2011 - 09:20 | 1494026 No Bid
No Bid's picture

I think you accidentally added two zeroes.

Tue, 07/26/2011 - 09:12 | 1494007 SheepDog-One
SheepDog-One's picture

Remember too with any 'plan' they need to take off $200 billion to refund what Treasury took out of govt worker pensions over just the last 1.5 months, so the first year of 'savings' are already gone. This is a clownshow, delay tactic,  and the amounts they are talking about are not close enough to keeping this market bubble afloat.

Bottom line I believe its a cover for austerity measures, rob americans to keep the bonuses coming, and to benefit the top .01%. Too bad all americans are just spectators in their own demise.

Tue, 07/26/2011 - 09:12 | 1494008 All is chosen
All is chosen's picture

You are done It's all done without any of that European (Latin-based) double speak.

You owe it all to the language of invasion, English.

Default is the intention isn't it? - Just to see what happens? - Nothing teaches like experience? - Hardship is relative? - (The weeping & nashing of theatrical teeth foreplay is for CNN viewers?) 

Tue, 07/26/2011 - 09:19 | 1494022 SheepDog-One
SheepDog-One's picture

This puppet show is to keep the CNN mercury vaccine crowd entertained...bottom line to me obviously is its stealth austerity and designed to get people to beg for it. It doesnt curb any spending, and guarantees benefits will be cut and taxes will be raised, all to feed your overlord top .01%.

Tue, 07/26/2011 - 09:36 | 1494074 Twice a Day
Twice a Day's picture

Clearly, spending must be curtailed in all .gov agencies, no fuzzy math. Compromise is so bad; the idea of a special team to make the tough cuts is the bane of us all.

Why hasn't repatriation of corporate profits been discussed with tax reform benefits; allowing these funds to seed hard corporate asset and market improvements within our boundaries ie., drilling, energy improvements, etc., and not bonus or salary enhancements. How can we on ZH benefit from this move?

The repatriation of corporate profits will be used to get Obama re-elected along with his dolts in Congress (so sad). I'm sure this card will be played in 2012 as hail to the king; it's a done deal already, not talked about so much any more. Be aware!

Twice a Day

Tue, 07/26/2011 - 09:44 | 1494087 All is chosen
All is chosen's picture

Fab new software. Type: highlight: hit strikethrough; shows as a line through; post; strikethrough doesn't show. WTF???

Tue, 07/26/2011 - 09:47 | 1494092 Snidley Whipsnae
Snidley Whipsnae's picture

I'll go with what Jim Rogers said yesterday...

Jim Rogers: The U.S. Already Has Lost AAA Rating

“Everyone already knows that the U.S. has lost its AAA status,” Rogers said. “Anyone who knows what is going on, already knows that the U.S. is now the biggest debtor nation in the history of the world. It’s only S&P and Moody’s that haven’t figured out what is going on. The investment world knows that the U.S. is not AAA.”

Rogers also called the current debt negotiations in Washington a political “charade.”

“I don’t expect them to have real spending cuts. They have been talking about this for 40 years, talking about how they are going to solve the problem of the deficit. Remember the Grace Commission? Remember the Gramm-Rudman act? The Gramm-Rudman act said we couldn’t have deficit spending 25 years ago. They forgot about that.”

source: http://edegrootinsights.blogspot.com/ and... http://blogs.wsj.com/marketbeat/2011/07/25/jim-rogers-the-u-s-already-has-lost-aaa-rating/

Tue, 07/26/2011 - 09:53 | 1494108 El Viejo
El Viejo's picture

ADD describes people who have a hard time switching hats from viewing the forest to viewing the trees. They either hyper focus or stare into space. ADHD adds Hyperactive behavior to this characteristic. Another characteristic is the constant desire for stimulation(not the monetary kind, but there may be a connection)  American fore-fathers were risk takers just by coming to this country. Therefore it has been proposed that the population here is genetically 'salted' with as much as 10%-15% ADD tendencies and risk taking behavior. That bahavior could bifurcate into say, risky sexual behavior or risky investment behavior. Risky investment behavior has resulted in a need for stimulation of a different kind.

Tue, 07/26/2011 - 10:01 | 1494132 El Viejo
El Viejo's picture

Response to post above @  9:33

Tue, 07/26/2011 - 10:18 | 1494204 Scroto Gaggins
Scroto Gaggins's picture

Government Sux;  Did anyone notice their 350:1 leverage that should have been 10:1 during the crash of 08? 

I guess money can buy you anything.

 

"Give me control of a nations money supply and I care NOT who makes its laws" 

Tue, 07/26/2011 - 10:34 | 1494273 jack stephan
jack stephan's picture

Master of Death: [his jugular fatally slashed] Your technique is magnificent.
[voiceover]
Master of Death: When cut across the neck, a sound like wailing winter winds is heard, they say. I'd always hoped to cut someone like that someday, to hear that sound. But to have it happen to my own neck is ridiculous.

Tue, 07/26/2011 - 11:03 | 1494400 CrashisOptimistic
CrashisOptimistic's picture

 

The dirty little secret is that both plans use the CBO baseline FOR REVENUES, and those presume vibrant growth with low/no inflation and low interest rates as far as the eye can see.

If we uncork a GDP recession in Q3 or 4 of this year and FY2012 arrives with something like 1% GDP, these numbers will all disintegrate.

Tue, 07/26/2011 - 14:29 | 1495296 Vinny
Vinny's picture

I know how to fix everything. Just get North Koreans to print out another 2 trillion US dollars.  Then get China to invade North Korea so that they can get their hands on all that money, and split the pile with the Chinese. Then give 985 billion to Europe to bail out PIIGS, and we'll be left with 15 billion dollars to help get us out of the red this August.

Tue, 08/23/2011 - 22:58 | 1593370 karmete
karmete's picture

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