Guest Post: The Debt Deal Con: Is It Fooling Anyone?

Tyler Durden's picture

Submitted by Brandon Smith of Alt Market

The Debt Deal Con: Is It Fooling Anyone?

Alternative economic analysis brings with it a certain number of advantages and insights, but also many uncomfortable burdens. Honest financial research is a discipline. It requires us to not only understand the fundamentals, but to question the fundamentals. It requires us to look beyond what we would LIKE to see in the economy, and accept the reality of what is actually there. With this methodology comes the difficulty of knowing the dangers ahead while the mainstream stumbles about well behind the curve. It means constantly having to qualify one’s conclusions, no matter how factual, because the skeptics and opposition base their views on an entirely different set of rules; farcical rules that no longer (or never did) apply to the true state of our country’s fiscal health.

After a while, you begin to expect that a majority of the public will buy into any number of government or Federal Reserve con games and swindles as the process of full spectrum collapse rolls onward. However, this expectation is not always accurate…

A majority of Americans were against the bailouts, TARP, quantitative easing, the “too big to fail” concept, etc. Sometimes a government action is so fraudulent that even those who aren’t educated on the specifics can smell the grift in play. The recent debt ceiling debate and resulting debt deal are fuming with the hot stench of predigested disinformation, so much so that no one seems to be happy with it, even people who a month ago were begging for it. When you have to parade around a hobbled shooting victim in order to get any applause for your legislation, then you may be in trouble…

Though their reasons and motivations vary, everyone, whether on the so called “Left”, or the so called “Right”, is asking “Was anything really accomplished here?” The question is a valid one. To discern the exact nature of the debt deal, we must first cut through the web of misconceptions that surround it. While no American is satisfied with the final plan, many are disenchanted for the wrong reasons. Let’s clear the fog (or light a match), as it were…

Where Are The Spending Cuts?

Were any cuts actually made in this debt plan that has been painted by the MSM as a “historic landmark” in spending reform? If you think yes, then you have been hornswaggled. Only yesterday I came across perhaps the most profoundly inept New York Times Op-Ed piece I have ever seen (and that’s saying something):

In it, Joe Nocera, a typically impotent mainstream financial hack, proceeds to outline the debt deal snafu in grade school fashion, claiming not only that cuts in spending attributed to the bill will destroy our fragile economy, but that all the blame for this destruction rests squarely on the shoulders of Tea Party Republicans, who are apparently no better than “terrorists”. Yes, that’s right, fiscal conservatives are now terrorists hell bent on our nation’s demise. Gee…we didn’t see that one coming. While I am not particularly happy with the direction the Tea Party has taken since 2010, especially the constant attempts by Neo Conservatives (fake conservatives) to co-opt the movement, the Tea Party is hardly to blame for any destabilization of the economy, if for no other reason than they accomplished nothing in the deal. Nocera’s idiocy is made embarrassingly apparent in his outcries against spending cuts, because NO cuts were actually made.

First, the $2 trillion plus compromise we hear about so often is slated to take place not over the next ten months, but the next ten years! Only $917 billion in cuts are officially mandated by the bill. The final $1.5 trillion will be voted upon at a later date. Only $21 billion in cuts will be applied to discretionary spending in 2012, $42 billion in 2013, and the remaining cuts after 2014. This strategy, by itself, is wholly inadequate in making even the slightest dent in our national debt, being that our government’s spending has grown exponentially with each passing year.

In June of 2009, our national debt stood at $11.5 Trillion. Today, it climbs past $14.5 trillion. That’s an increase of $3 trillion in the span of two years. Now, I don’t know where men like Boehner, Reid, or Obama, learned simple math, but I can tell you their numbers don’t add up. Even if current spending levels stay static (which they won’t), by 2013, we will have to increase the national debt to at least $17.5 trillion, while only cutting $63 billion from the budget. Wow….sounds like progress to me.

Even worse (yes, it gets worse), the spending cuts that were finalized are based not on current spending, but on PROJECTED spending, or what is often called “the baseline”. That means, essentially, that no existing programs or subsidies are specifically facing cuts, only programs and subsidies that have yet to be created! So, Obama could ostensibly forgo an extra $2 million taxpayer subsidized vacation to Hawaii or Manila, and then claim this as a “spending cut”. Imagine it! We could save so much money as a country by not buying all the things we could have bought beyond what we already buy! Huh?

So, no official spending cuts until after elections. No specific programs identified for cutting. No cuts to current deficit spending. Debt ceiling elevated yet again. All that debate and noise, and nothing has changed…

Crisis Averted, Or Aggravated?

What was going on while America was being distracted by the debt talk wrangling and the accusations of fiscal terrorism? What about after the debt deal was passed? Only a full on reversal of the Dow, coupled with the disintegration of the dollar, and an assured downgrade of the U.S. credit rating. Below are just some of the evident collapse signals that occurred in the past two months…

The markets, obviously, were not impressed with the final debt bill. The Dow Jones has plunged several hundred points in the past month, and this plunge accelerated after the debt deal compromise was announced. Only rumors of yet another QE have stalled the implosion:

HSBC; global banking behemoth, known silver market manipulator, and now layoff central, as they announce 30,000 new job cuts. Gotta’ love HSBC:

U.S. manufacturing fell off a cliff last month, posting the slowest growth in two years:

Home prices continue to spiral into the abyss as some banks decide to bulldoze properties and give them away to local municipalities rather than suffer the headache of trying to sell them:

The service sector, which accounts for at least 70% of the U.S. economy, has posted a steep decline in growth not seen since February of 2010:

U.S. consumers tightened their wallets this summer after two years of riding the recovery farce, signaling a sizable contraction in an economy dependent on constant spending:

Cities across the country are edging towards insolvency, as the municipal markets finally give way to lack of investment:

And finally, Vladimir Putin froths at the mouth telling a bunch of kids at a Russian summer camp that the U.S. is a “parasite on the global economy”, and that the dollar’s monopoly must end. China, of course, agrees:

So many negative economic indicators in such a short period of time, all while the debt ceiling debate is raging? What does this mean?

I can’t help but wonder if the debate itself was merely a smokescreen to obscure the complete and utter failure of the Federal Reserve’s bailout and QE measures. Trillions of fiat dollars pumped into the system, and as we warned back in 2008, the U.S. is worse off than when the collapse started. I know it was blatantly designed to obscure the creation of the so called “Super Congress”, which as far as I can tell, is a completely illegal and unconstitutional entity designed to fast-track every piece of totalitarian legislation that has ever gone opposed by the wider public over the past few years. It’s a “Council of 13” for crying out loud! Come on! This has evil written all over it in neon!

The debt decision and the above mentioned dire indicators leave us with two inevitable consequences: One, our credit rating WILL be downgraded, by S&P certainly, followed by Fitch and Moody’s later on. Two, we are, without a doubt, soon to see an announcement from the Fed of a third QE. Both of these items WILL lead to the final abandonment of U.S. treasuries and the dollar by the East, and likely by OPEC, ending in stagflation. That is, if they don’t commit to a dump before hand. What we are looking at is the turning point of the final phase of total structural debasement of the U.S. economy. This is it, folks. This is where illusions are lifted, lies are revealed, assumptions are squashed, and things start to get really ugly.

The Medicine Will Not Be Denied

The debt deal, as with every other absurd measure the government has taken since the credit catastrophe unfolded in 2008, is a psychological stop gap. It solves nothing, but it keeps the masses from rioting in the streets for a few more months. As many alternative analysts have warned in the past, the government is in no way equipped to solve disasters driven by insolvency. Governments cannot create wealth. They can only siphon it away from the citizenry, through austerity, taxation, and inflation. To believe otherwise is astonishing folly. The ultimate problem underlying the tactic of shifting debt rather than paying off debt is that it only works for so long. As I’m sure many have noticed, with each new bailout, QE, or debt deal, the time between visible crises grows shorter. Each subsequent downturn is sharper, more disheartening, and more frightening to those who are unprepared.

A common argument made during the debt ceiling debate was the assertion that to cut spending now would end in a painful loss of stability. The delusion inherent in this argument is that we can somehow avoid such pain indefinitely. Like a terminal cancerous growth, our national debt along with our vast entitlement program obligations must be removed, and they will be removed, whether by our own hand, or by the hand of fate. If you cannot pay for a thing, you cannot keep a thing. Debating over whether or not social security, medicare, welfare, and other nanny state programs are right or wrong becomes irrelevant. In the end, it all comes down to what you can afford, versus what you cannot afford. At this point in the game, the U.S. is able to afford very little.

The debt deal, I believe, rather than fooling us into further apathy, has clarified this fact for many Americans. Though some are confused on the details of recent events, the country overall is not falling into the trap of false confidence in the markets, or our financial system at large. It may seem like small potatoes to those of us in the Liberty Movement who followed the crash before the crash even “officially” struck, but the first step in shielding a society from disaster is making that society aware of how truly awful the situation is. The greatest con of all is the belief that ignoring the hideous side of one’s life and one’s culture is akin to washing it away. As we have seen over the last few years, this couldn’t be further from the truth.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
wang's picture
wang (not verified) Aug 4, 2011 5:31 PM

and a sneak preview of tomorrow night's episode of Wall Street Week with Louis Rukeyser

jabu's picture

Has anybody learned of the 3.8% tax on home sales that is to go into effect o1-12?  It's in the Obamacare bill?  I think it was actually worded as "property".  I have not verified this because, hey, husband, 3 kids, 3 dogs, 2 cats, several chickens, and a garden.  Kinda busy.  Would like to know if this is true?  Anybody with time and know how to research?


zorba THE GREEK's picture

Finally U.S. investors are waking up to reality, but those who depend on government dole only

look for more handouts no matter what financial state U.S. is in. If dole recipients outnumber

hard working Americans by election time, Obama gets re-elected. Too bad for U.S.A.

louisianagold's picture

No one gets elected or re-elected.  They are simply "selected".

jabu's picture

Do you really think there is going to BE a next election?  Dole recipients won't outnumber taxpayers in just over 1 year, therefore, no election.  Don't know what the excuse will be.  Just know we will not be allowed to vote.  My opinion.


Commander Cody's picture

I agree with the article but must add that to stop at SS, Medicare, Medicaid, and Welfare as the entitlements that need to be addressed is disingenuous at best.  Why not include all socialism, corporate and otherwise?  Do we only cut benefits to the low and middle classes?  What about the billions, nee trillions, of dollars that are doled out to corporations, agriculture, the very wealthy, as subsidies, tax breaks and outright gifts?  Are those still needed?  And, for what purpose?

As for SS and Medicare, they were designed, not as entitlements, but as insurance for seniors to be secure in their golden years from financial ruin.  The system is a contract between citizens and their kleptocratic government - the citizen pays for the benefit through taxation.  Now we are to believe that the contract needs to be broken because the government used the money for other purposes.  That is fraud.

The demise of pensions (at least in the private sector), the attack on SS and Medicare, devaluation of the dollar, false CPI reporting to hold down salaries and COLA adjustments, artificially keeping interest rates low, are all designed to transfer more and more wealth from the working class to the ruling class.  The robber barons get richer while the debt slaves get poorer.

Now comes the baby boomer vs. the universe argument.  No one, I presume, could have seen the impact of the boomer population on resources.  That is also disingenuous.  It was foreseen and ignored by the kleptocrats.  And now we will use these class/generational rifts to steer the blame away from the true culprits.

fearsomepirate's picture

Actually, Social Security was designed as a way of increasing the government's tax revenue while tricking the working class into thinking they were paying into an insurance scheme. The idea was for the retirement age to be so close to death that the government would pay out only a tiny fraction of the revenue to old folks while spending the rest on bribes, kickbacks, sinecures, and the usual government activity. Even while FDR was on the radio calling Social Security an "insurance" plan, he had his laywers suing in the Supreme Court to include FICA taxes in the general revenue.

What was *not* part of the plan was for people to start living longer, and for those old folks to become politically powerful enough to reject raising the retirement age to anywhere as close to death as it had been.

It's always been a Ponzi scheme, and now the government is out of new suckers.

Kali's picture

My good fellow ZHers, good luck to all. Ya know, I have to give a great big heartfelt thank you to everyone. Even the trolls. If it hadn't been for this site and the com-mentors I would be totally fucked. I think I may get a ZH tattoo or something. Somewhere not normally visible. : ) Don't wanta end up in a Fusion Center or FEMA camp.

DaveyJones's picture

and stop wearing those thongs

DoChenRollingBearing's picture

+ $1645 and a green, Kali


I feel the same way about ZHers, yes even the trolls who make us sharpen our game.  Were it not for this site (and for me, I would be poorer, sadder and feeling really, really stupid.

NONE of our financial problems have been solved!  In fact the Debt Deal makes them worse!

NO ONE of significance has gome to jail!  ALthough we have had lots of Obama's team leave, maybe Geithner is next.


Exploring the rats jumping off the ship metaphor a moment.  First rat off usually is a winner, then next couple as well.  Geithner is one of the last, he will get blamed...  Obama and Bernanke as well.

Re other rats (buyers of gold) who jump off another ship ($ / paper), it works the same way.  First ones to jump (buy gold) win the most.  Last ones may not be able to get any, or will PAY A FORTUNE.  Don't be a slow rat...

gwar5's picture



Even a fifth grader gets it...

We told you so, so here we go!

Debt limit was a sham.

A sham! A sham! said Sam I am.

A rotten sham by Bamm the man!

Damn! Damn! Said Sam I am.


Debt! Debt! We'll have regrets!

Trouble! Trouble! When it doubles!

Damn! Damn! Bamm the man!

Look out now! Another bubble!










TorchFire's picture


The deceivers and their illusion

under the banner of service

armed with the sword of confusion

found their subjects were growing nervous


“We must always remember our goal”

it was said by the government troll,

“We must move at deliberate pace,

until everything is in place”


Yet some of their subjects were bold

and were wise to the treacherous plots

So they sought to own silver and gold

Which enraged the Elites on their yachts


With haste then the bastards on top

did conspire to control every shop

And disaster spun from their own hand

spread darkness across our fair land


Yet we who can hear, see and think

watch and prepare for the day

when the tyrants collapse in a blink

and they're marched to the gallows to sway


© TorchFire 2011

Jasper M's picture

Wow. Thaty first paragraph was a Really wel written description of what I face dealing with my less educated friends.

Id fight Gandhi's picture

Never watch Cramer, but its funny to watch the clown spin this and say it's all because of the debt ceiling talks.

No mention the markets are fed fraud fueled.

zorba THE GREEK's picture

Even clown like Cramer has been telling people to buy gold for some time now.

When all the clowns on MSM say buy gold, it will be time to sell.

Karl Tashjian's picture

And when the markets crash
With everyone left with cash
We'll see QE the third
Let's see how long this rally lasts

WonderDawg's picture

I think we'll see a similar reaction as to the debt ceiling agreement, with a pop lasting about as long as a fart in a tornado, then the continuation of the collapse, maybe even an acceleration.

Gold Man-Sacks's picture

My favorite part is about the cuts pertaining to future expenditures.  How frugal!

gerriek's picture

The problem is that there are more people who vote for a living than there are people that work for a living.

ThisIsBob's picture

Actually, the markets did not seem particularly fearfull of the debt issue.  But seeing our leaders all over the TV over the weekend, now that was scarey.

I would have sold everything too.  By and large, our nation is governed by incompetents elected by a majority vote of six fingered look alikes.


jmc8888's picture

ROFL, everybody that isn't for Glass-Steagall wiping of the FRAUD is holding SOMEBODY hostage for FRAUD.




So yes, the tea party is holding the economy hostage like terrorists.
Same with those (democrats, non-partisan) who advocate taxes and printing.

We turned a problem of fraudulent debt created by wall street, for wall street, (and the misallocation) into a worldwide problem.

It's a fraudulent problem....worldwide.

Spending money on fraud, isn't a spending's a case of being defrauded!

So this guy is talking about spending cuts, as if cutting spending will solve the problem. IT WON'T! It'll just make the problem worse.

...unless that spending cut is cutting the spending on THE FRAUD. But of course it goes much deeper than that.

You have to wipe out all the fraudulent debt. Put it back on the assholes begging for money to cover their FRAUD, and then liquidate them.

What a fucking idiot. As if whatever they say to cut, besides fucking over the poor and middle classes, would do anything to change our FRAUDULENT DEBT PROBLEM, or the structure of our broken down monetary system that continues to create MORE fraudulent debt layer by layer.

Another tea party idiot. Claims to be different. Wholly stupid just like the dems and repubs. Hey tea party asshole, you are just as stupid and corrupt as either party. Send the fiscal attack dogs named 'patriots' out to slaughter their own on behalf of wall street. That's all these assholes are. Wall Street added a new scam ideology, embodied by the Tea Party, to sacrifice Americans for Wall Street's fraudulent debt, and economic destruction after decades of misallocation have caused. These are the people too stupid to sniff it out.

The fraudulent debt is creating the problem.
So cancel it.

Don't pay it off like some tea party fucktard wants.

Because paying off fraud through austerity is JUST AS STUPID as paying it off through taxes or printing.

Nowhere do I see anything stopping them from putting more on our backs as well. We're about to no doubt see a whole lot more, while the idiot tea party jabs on about useless austerity cuts.

Where are the cuts? Where is your point tea party fucktard?

The guy keeps conflating the two. Wall Street is not America. America is not wall street. Or put another way. Main street isn't Wall street.

The medicine won't be denied? On WHO? The budgets are out of whack...because of WALL STREET IDEOLOGY. Monetarism. Imperialism. Cronyism. So on and so forth. Without this, the budgets would be just fine.

So get rid of the cancer, and you'll notice you won't have to take pain medication.

The budget deficits are a symptom of problem. The numbers reflect the adding of fraudulent debt, the misallocation of resources (opportunity cost that results in lower tax revenues from reduced business activity in the physical economy), the addition of safety net expenditures, free trade, and decreased economic efficiency from reduced investment (think no mag-lev versus free trade world against someone who has mag-lev..or just in the additional resources from having to buy gas to transport these goods added on the top).

Fix the broken monetary system, to American credit system, wipe the fraudulent debt away, end free trade bullshit, invest in real tangible projects and you won't have a deficit.

The deficit isn't an end-all be all. Only for idiots that believe sophistry explains all.

Are you sick with a cough? Or do you experience a cough when you have an ILLNESS which might be THE FLU.

Saying the deficit is our problem is saying you are sick with the cough.

Our flu is FRAUDULENT DEBT. Get rid of that. Right the imbalances in the system. Which will be hard for anyone INVESTED IN WALL STREET. Or any TBTF.

Everyone else will be better off...and magically the cough will go away.

But only if we Glass-Steagall the fraudulent debt, and adhere to its reforms in full 1933 style.

Then start taking care of long term problems like the need for mag-lev, fusion, space program, machine tools, desalinization, NAWAPA, Hill-Burton standard for healthcare, so on and so forth. Not addressing these things will create new imbalances. But we wiping the fraud away gives us the chance to do it.

It's not about 'cuts'. It's not about 'spending'. It's not about 'taxes'. It's not about 'printing'. It's about STRUCTURE. Our current STRUCTURE, says FRAUDULENT DEBT is LEGITIMATE, and we are destroying our economy

Idiot Bachman and many other 'tea partiers' say....we must pay off the debt first. We honor our debts.

Well if the debts are fraudulent, all you are honoring is FRAUD. Meanwhile calling for cuts to honor our fraudulent debt. She is really saying, and others, 'we must honor our fraudulent debt', 'We must honor the check we wrote out to the home invader because we wrote it'.

The tea party missed the boat, and got on the titanic with the republicans and democrats.

Only Glass-Steagall will fix this. Not cutting. Not taxing. Not printing. You (dems, repubs, teas) are ALL terrorists for thinking your idiocy (cut, tax, print) will solve a much bigger problem (fraud, structure). It's a problem of fraud, and a sophistry based structure that foists it upon the world at every turn. Nothing else will fix it. Only Glass-Steagall

We the people deem what we can afford. That's the American Credit System. This guy with all his patriotism, still believes some bankster holds the keys to credit creation. Only in monetary bizarro land. So the reality is, this patriot, still looks at money creation in the realm of British monetarism. When our 'patriots' ' ideas are grounded in British monetarism, oh we are so fucked.

What we can if the banks are the ones that create money in a constitutional America.

Congress can create money for healthcare, social security, projects and improvements at ANY TIME. We've just ceded it to the federal reserve and the private banksters, who in their discretion, will deny it over leveraging things 100x for fx derivatives.

The tea party patriots of british monetarism. Wrong as much as the rest.


Mad Cow's picture

Sadly most people have their brains compartmentalized and can't/won't see the underlying problem.

ViewfromUndertheBridge's picture

you haters should listen to JMC on this one...

My take, this (stupidity of what the Tea Party has become, hello Michelle Bachman) is how inflation (economic phenomenon) becomes hyper-inflation (political phenomenon) as people demand a simple solution.

Did you hear that "Tea Party" guy interviewed about the debt ceiling..."I want them to pass it so that my investments are safe". You cannot outlaw stupid...but you can pander to it.

JMC is right, this article is bullshit. The portion of the debt created by the shadow-banking system should have been left with them...but they were allowed to put it on taxpayers. Fuck that, give it back. The rest of the debt created the traditional ways, by unfunded wars and social safety net promises, graft and special interest subsidies, boondoggles and bloated waste, ok...take that on the chin and sort it out but there needs to be a circuit, instruct The Bernank to cancel the $1.6Trillion in Fed USTs, create a good bank/bad bank Recovery Trust by Marking Assets to Market to work itself out over 25 years...and when it is worked out Bank Licence Fees can revert back from the newly imposed 10% of turnover...but not before. For the life of me I don't know why they didn't say no bonuses until Mark To Market is restored....but, you get my drift as to the appropriate action at this stage..

Either that or blow it all up and reset....preferably before President Bachman.

CompassionateFascist's picture

Bachmann will never be POTUS. In fact, I think the current incumbent may be the Last in that particular orifice for some time to come.

wisefool's picture

Bachmann has one and only one shot, and it is the shot that will fix this mess. I am an idiot, but as I understand from 3 years of training by the unveristy of CNBC/MSNBC: The economy is a three legged stool that the powers that be sit on like an incubus/succubus.

  1. Monetary policy. How much money the fed allows to exist in the various pools. Debt and real money are relatively interchangeable.
  2. Fiscal. What that money gets spent on, either by governments or by the private sector, also influences the price of credit
  3. Tax code. Feedback loops to tweak 1 and 2.

Ben can print more money, but none of it has worked so far. Not for the US, not for Europe, not for anything. On the fiscal side, corps have a huge ammount of cash. The government has and will continue to spend, "shovel ready is not as shovel ready as we thought"

That leaves one thing that has not be tried. fix the tax code. take it from 60,000 pages down to 600. Bachmann can explain she understands the theory of taxation and sound money. Just like a structual engineer can tell you how to safely demolish a structure, to make space for a new one.

Thats my 2 cents.  that or people actually put Ron Paul on the R ticket. He said on the phone today to CNBC he has no plans to run as a 3rd party, and that was when the market was only down 200 or so.... hillarious for them to be beggin him...

buzzsaw99's picture

an enjoyable read.

SwingForce's picture

QE3 is on! 30 yr Tbond up 4 points in one day!  Bravo Bernanke, well done!

sgt_doom's picture

No offense to TD, but his post is lacking.  Evidently, few other than myself actually bothered to read this vile debt ceiling legislation (Budget Control Act of 2011).

Effectively, the repub-Cons, the Obama Administration and the democrats have structured things such that they have destroyed the American jobs base for the foreseeable future.

This should have been obvious when Obama first assumed office, and instead of focusing on jobs, of which there has been ZERO net new job creation since July of 1999, Obama appoints the number one jobs-offshoring specialist in North America, Diana Farrell from McKinsey Global Institute.

The rest is obvious to those who bother to read the legislation and pay attention.



michigan independant's picture

Just because the article of the day does not meet your defintion of attention do not think a misdirect will absolve a opinion. If you have to point to a Beltway article since when has there tip of the spear supremacy thinking helped? ZH is the pickel barrel at the general store. Is the barrel inside or outside and what does that mean to you? If you put some thought into it you know both sides are the issue and not the election cycles. Look for the strings we already know who is pulling them citizen.


ptolemy_newit's picture

Debt con and revenue con is the disiplined ethics of todays world.  Everyone political in office lies everyday and they dont know that it is wrong!  it is messaged facts and common accounting ,ethods used by the goovernment. so why not Business..

Take groupon or linked and try to understand how they mark real revenues.  every day major coporations are staing that they weill reduce their work force and kinked states that it has stronger paying customers who need new workers?

I would bet (have) that 80% of corporation are hiding mark to myth assets.

The coorporate world of accounting is only following the government.   Obama has failed and he has trashed his family name ETHICS!


MacchuPicchu's picture

It's not what we can afford, it's what we choose to pay for. Social Security could be permanently fixed with a very small tax increase. Medicare's another story and I fully agree that what we've agreed to provide is unsustainable, regardless of tax rate, but it pains me to see people shoot down all social welfare programs as responsible for our current predicament. I'm sure some people here would label me a naive/stupid Keynesian but it occurs to me the Keynesian prescription for countercyclical government spending was all about buying shit we could actually use (infrastructure) not blowing freshly-minted dollars up Hank Paulson's ass. Keynes ideas did not include the advocacy of corporate welfare the libertarians routinely ascribe him.

There. I said it. I'll take my junking like a man. 

michigan independant's picture

Just remember some read the whole book and know what he said about balance of trade responsibility's. When the taxpayer can see net working capital issues they ignore they should be fired plain and simple. Should we now try a technique called deep brain stimulation, that involves threading two thin electrodes through the brain, directly into Area 25 and stimulating it with continuous pulses of electricity from a pacemaker in order to jolt it back to normal?

escargot's picture

"It's not what we can afford, it's what we choose to pay for."

Well put, MP.   Blaming social welfare programs for the mess we're in is exactly what the greedy beady-eye'd leather-skinned lizards who run this show want.  It never ceases to amaze me how many people I know who scream and yell about "my tax dollars!" supporting social programs, but they don't seem to complain or even be aware that their dollars are being systematically debased and looted by crooked politicians and financial thugs.

Unlike you, however, I will not taking my junking like a man.  I will scream like a woman, tear out my hair, and pound my fists on the keyboard. 

Sathington Willougby's picture


You argue for thieving at gunpoint.  What does that make you?

mess nonster's picture

Theives! The nation is thick with them! Before explaining the obvious, which is that some theives steal from rich people (taxing communists) and some theives steal from poor people (social welfare cutting capitalists), I'd rather look at theivery from a biological standpoint- thievery is parasitism. A tapeworm steals your food- if he's (he- draw a face on your tapeworm- Obama? Boehner? Kenneth Lay? all very nice)  smart about it, he steals just under the amount that would be noticeable. If he steals more than that, alarms go off, and the host tries to get rid of him. Or, the tapeworm develops another strategy-he secretes immune-suppressant chemicals. If he succeeds, then he gets immunity, and can grow until he kills the host.

The American system of checks and balances was designed as an immune system, but it's been suppressed by corporate money to congress. Corporate theives talk a lot about free will and independence, but independent people are only food to big corporations, that is until... wait just a minute.

The other theives are those who cry out to band together in a socialist sense to fight the corporations. Meet the old boss, same as the new boss, or something like that, it doesn't make any difference.

The only free men and women are those who are able to produce their own sustenance from their own land, and have the ability to defend it from those who would take their production from them. They band together with other land-based producers for defence, and to secure their god-given rights- otherwise they leave each other alone.

When was the last time you saw a sociaty of free landowning productive people? I think the remnants of such societies live(d) in the mountains of pakistan and Afghanistan.

If you live in a little box and don't produce enough of your own food to survive, then why compain about which gang of theives is stealing from you? They will come at you from the right and from the left, and they will not cease until your bones have been picked clean.

Moe Howard's picture

It is a unpleasant [but true] thought that the only free people left are those in the lawless areas of the world. Thanks for the post, mess nonster.

Thievery Corporation's picture

Imitation is the sincerest form of flattery.

BlakeFelix's picture

Imo QE done right is the only way out. If they averted deflation with a national dividend instead of funneling all the money to insolvent bankers Keynes might have saved the day. Well assuming our government didn't figure out some other way to fuck everything up .

fearsomepirate's picture

Social Security grows at an exponential rate higher than the overall economy.  You can raise tax rates, and all that does is introduce a linear shift into revenues.  It doesn't change the rate of growth; it just staves off the day when the spending outpaces revenue yet again.

It's the fundamental problem with Ponzi math.  Your pyramid eventually needs a bigger base than you can cull from the population.

alien-IQ's picture

Wonderful article. Right on the money.

Arch Duke Ferdinand's picture

Why Speculators Should Sell Their Gold Now

Four Factors That Could Stall Gold’s Price Rise...

OT: hilarious 2 min video...

toady's picture

'When you have to parade around a hobbled shooting victim...'

I am SO stealing that one!

JustACitizen's picture

If my pitiful investments (relative to many others) are wiped out - I will be unhappy - but I will live.

Retirement is over-rated - I will probably live longer and enjoy my time off more if I work. Scarcity is what gives something its' value.

If the "system" collapses under its' own weight of fraud - perhaps people will rediscover values and virtues that have been discredited or devalued.

Change is inevitable and I need to accept that.

However, I do sincerely hope that the so called leaders, captains of industry, "job creators" - roflmao - all suffer in measure to their contribution to the coming debacle. Justice should not be denied.


Sathington Willougby's picture


Glad I'm not the only one who thinks super congress is a heinous banana republic act of treason.




Thievery Corporation's picture

the plan is the debt grows no matter what

Shocker's picture

A fooled man can't be fooled again.. I think thats how it goes

Grand Supercycle's picture

S&P500 head and shoulders target is 1,176 and further downside

As mentioned for some time - S&P500 monthly has been tracking sideways this year. This extensive distribution signified a bearish big picture and that a significant downtrend would follow.