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Keynes For Muppets: Elmo Explains The National Debt

Tyler Durden's picture




 

Submitted by Mark McHugh from Across The Street

Elmo Tries to Explain The National Debt (Again)

Muppets have received a lot of bad press since Greg Smith realized that he is not, in fact, a one-percenter.  Fortunately Elmo’s back to reclaim his rightful place in the financial world:  Making the seemingly incomprehensible  comprehensible while politely pointing out what should be obvious to everyone not in diapers.  That’s not so easy when the economic views espoused by everyone from central bankers to TV talking heads can only be accurately described as infantile.

It’s hard to get the right answer when you’re counting the wrong stuff, and maybe that’s why Wall Street’s minions never discuss income per capita.  It’s a meaningful measure of economic strength that ordinary Americans can relate to.  Well, that and it exposes “pro-growth” policies for what they actually are:  An excuse to loot the country in broad daylight by focusing on GDP, where government money, no matter how horribly misspent, shows up in the “win” column.  Strip away that illusion and it becomes crystal clear that their path to prosperity is our highway to hell.

In case you haven’t noticed, incomes (not GDP) pay mortgages and support small businesses.  Increasing the National Debt by a can you say “parabolic?” 54% in the last 42 months hasn’t budged income per capita in nominal terms.  If you adjusted for inflation, you’d find that Americans are actually about 12% poorer today than they were in 2006.   We’re not “growing” our way out of this, we’re just going deeper and deeper into hock, courtesy of a government with about as much fiscal discipline as crack-whores with a stolen credit card.  Here’s the thing: It’s your credit card, so maybe you should understand how much they’re spending:

Just to be clear, we’re talking about $400 per citizen per month in new charges alone, month after month after month.  Here’s what me and Elmo can’t figure out: Why would attempting to break this spiral be labeled Class Warfare?  Of course you don’t have to believe  us, there’s far more distinguished schools of thought out there:

Fun facts:

  • From 1947 to 1974 US income per capita grew more than National debt per capita 25 times.
  • In the last 30 years, National debt per capita has grown more than income per capita 24 times.
  • The last time income per capita grew more than national debt per capita was 2001.
  • Ben Bernanke arrived at the Federal Reserve in 2002.

 

I’m going to ask Elmo to leave before this gets ugly…

Sources:

http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo4.htm
http://www.census.gov/hhes/www/income/data/historical/people/
http://www.census.gov/hhes/www/income/data/historical/people/2010/P01AR_2010.xls
http://www.treasurydirect.gov/NP/BPDLogin?application=np
http://www.bls.gov/data/inflation_calculator.htm
http://www.usgovernmentdebt.us/
http://www.usgovernmentspending.com/

 

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Wed, 04/18/2012 - 16:11 | 2355913 RacerX
RacerX's picture

unfortunately the Gen.Pop. doesn't see the money printing for what it really is: gov't sponsored counterfeiting.

Wed, 04/18/2012 - 16:15 | 2355931 SheepDog-One
SheepDog-One's picture

Oh well sucks to be them, I dont really care about what the sheeple get or dont get. Freakin walkers.

Wed, 04/18/2012 - 16:37 | 2355976 Divided States ...
Divided States of America's picture

Elmo explain how it feels like to be fist fucked by Lord Blankfiend and the other thugs on wall street?

Wed, 04/18/2012 - 16:40 | 2356007 ihedgemyhedges
ihedgemyhedges's picture

Speaking of getting f'd, Sallie Krawcheck took it up the arse from the guy club on Wall St.  Is she getting back at them????

http://www.investmentnews.com/article/20120418/FREE/120419924/-1/INDaily01&dailycount=3&issuedate=20120418#

Wed, 04/18/2012 - 16:50 | 2356038 12ToothAssassin
12ToothAssassin's picture

 

I want to wallow in my own chaotic insecure delusions

 

- Tool Aenima

Wed, 04/18/2012 - 16:54 | 2356048 economics9698
economics9698's picture

Asshole of the century-Alan Greenspan.

Wed, 04/18/2012 - 17:22 | 2356167 TruthInSunshine
TruthInSunshine's picture

Awesome first graph with Elmo trying to contain his incredulousness with his chipper mannerism.

Poor Elmo. Even (s)he may give up trying to warn his fellow Muppets about the storm that's spawned and picking up velocity, bitchez.

 

"Elmo does not think printing more green and white colored linen will solve the economic, financial or social crises brewing. Elmo would love to be proven wrong by a Modern Money Mechanic, though."

Wed, 04/18/2012 - 17:24 | 2356171 rqb1
rqb1's picture

i logged in just to give you a +1 on that, greenspan is a tool

Wed, 04/18/2012 - 18:09 | 2356334 Goldilocks
Goldilocks's picture

Tool - Sober [hq - fullscreen]
http://www.youtube.com/watch?v=hglVqACd1C8 (5:05)

Thu, 04/19/2012 - 01:18 | 2357332 Michael
Michael's picture

Here’s what me and Elmo can’t figure out: Why would attempting to break this spiral be labeled Class Warfare? 

Elmo not so smart after all. They don't want "Sector Warfare" to become the spoken meme. That's Private Sector vs Public Sector Warfare for the not so intelligently endowed among us. It's the public sector that gives us the national debt and expects the private sector to pay for it. Fat chance.

Wed, 04/18/2012 - 17:43 | 2356254 Kayman
Kayman's picture

T'ain't of the century- Ben Bernanke.

Wed, 04/18/2012 - 17:55 | 2356292 Everybodys All ...
Everybodys All American's picture

We are in a new century and that a-hole pales in comparison to this centuries. Bernanke. Carry on.

Wed, 04/18/2012 - 17:10 | 2356116 Au_Ag_CuPbCu
Au_Ag_CuPbCu's picture

Learn to swim, I'll see you down in Arizona bay...

Wed, 04/18/2012 - 19:01 | 2356466 killallthefiat
killallthefiat's picture

@ihedgemyhedges

 

Interesting that Hathaway from Toqueville is on it, but General Wesley Clark?

Wed, 04/18/2012 - 20:12 | 2356725 mickeyman
mickeyman's picture

La la la la. La la la la. Elmo's world!

Wed, 04/18/2012 - 16:35 | 2355985 battle axe
battle axe's picture

And on the next episode on "Seaseme Street" is we all live like that Muppet in a garbage can on the street (I forget his name). 

Wed, 04/18/2012 - 16:40 | 2356008 Divided States ...
Divided States of America's picture

Oscar? yeah thats not too bad, we could be worse off and end up living like Ernie and Bert.

Wed, 04/18/2012 - 16:48 | 2356025 battle axe
battle axe's picture

Oscar, that is the one. 

Thu, 04/19/2012 - 10:10 | 2358110 DaveyJones
DaveyJones's picture

a gay couple in denial?

Wed, 04/18/2012 - 17:36 | 2356214 Chuck Walla
Chuck Walla's picture

Oh well sucks to be them, I dont really care about what the sheeple get or dont get. Freakin walkers.

 

You'll care when people get hungry and come looking for things to eat or trade. They have guns, too. And extreme motivation. Its hard to contain or control an armed man under duress with extreme motivation.

 

So, yeah, you better care. Got Glock?  Now, tickle me, Dammit!

Wed, 04/18/2012 - 18:36 | 2356404 TheGardener
TheGardener's picture

I have associates trading in guns from the lowly`s.
No threat from them or them going berserk because the chicks
they think they own get tats with down and down payment type
of rates.

And for a mouthful of "extreme" the desperate get offered
about half and get settled for less , if any.

Wed, 04/18/2012 - 18:14 | 2356353 Drachma
Drachma's picture

And soon, a means of surveillance.

Wed, 04/18/2012 - 16:13 | 2355916 Rubbish
Rubbish's picture

Teh funny part is I'm not paying my share.

 

Pony up beetchez.

Wed, 04/18/2012 - 16:56 | 2356056 RoadKill
RoadKill's picture

Me eiather

When do you think the Chinease will figure out that the majority of US citizens don’t feel like we owe them a dime?

I’ve thought of starting an online petition Thisisnotmydebt.com

Dear China – The following citizens of the United States would like to inform you that we disavow any responsibillity for repaying the money you are lending to our poloticians.  We want to make it very clear that you are lending money to Barrack Obama, Nancy Pelosi and Barney Frank – not to the people of the United States.  As such, when it comes time to collect, you will need to collect from them.  We the under signed have no intention of entering into indentured servitude to repay you.

Get a few million petitions and get on the MSM and interest rates will start to rise and the game will be over!

Wed, 04/18/2012 - 17:17 | 2356138 SilverIsKing
SilverIsKing's picture

I love it except you need to add this:

 

....................../´¯/)
....................,/¯../
.................../..../
............./´¯/'...'/´¯¯`·¸
........../'/.../..../......./¨¯\
........('(...´...´.... ¯~/'...')
.........\.................'...../
..........''...\.......... _.·´
............\..............(
..............\.............\...

Wed, 04/18/2012 - 18:18 | 2356368 i-dog
i-dog's picture

 

"you are lending to our poloticians"

Correction: the money those workers are lending to you ... every time you buy an iCrap, or fill up your SUV, or install a new granite countertop, or buy a new item of clothing to fit your bloated body, or......

Do you understand how sympathetic the rest of the world will be when you awake from your hangover after that massive self-indulgent banquet? (Hint: How sympathetic have Americans been towards the Greeks?)

Wed, 04/18/2012 - 19:01 | 2356480 o2sd
o2sd's picture

You will do what you are told, and you'll like it biatch.

 

Thu, 04/19/2012 - 00:54 | 2357309 Lednbrass
Lednbrass's picture

Once again The Onion managed to frontrun reality by a few years-

http://www.theonion.com/video/us-government-stages-fake-coup-to-wipe-out-nationa,14356/

This could happen...

Hail Octavia!

Wed, 04/18/2012 - 16:14 | 2355917 Scalaris
Scalaris's picture

Much less ominous when explained by Elmo.

Wed, 04/18/2012 - 17:53 | 2356281 AetosAeros
AetosAeros's picture

"Much Less Ominous..." until you realize that someone from DHS has their fist shoved up the muppets bumhole doing the 5 finger cavity search and wiggling the 'gold member' to get the little guy to bounce on command. Then it becomes scary as shit and hope you can get out of the theatre quickly before all the muppets on the stage start yelling 'FIRE' and your crushed by the stampede of fools trying to get out.

Elmo freaks me out, but not as bad as the other muppets running around..... they freaking terrify me.

Wed, 04/18/2012 - 16:12 | 2355918 Bartanist
Bartanist's picture

I wonder what species "the Bernanke" actually belongs to?!? What a schmuckasaurus!

Wed, 04/18/2012 - 16:17 | 2355934 I Am Not a Copp...
I Am Not a Copper Top's picture

Bankerus Judeus

Wed, 04/18/2012 - 17:11 | 2356121 WTFx10
WTFx10's picture

Jooish Mafiosa

Wed, 04/18/2012 - 17:25 | 2356179 in4mayshun
in4mayshun's picture

imbecilus rectus

Wed, 04/18/2012 - 16:43 | 2355994 Bunga Bunga
Bunga Bunga's picture

Sociopathus Elitus?

Wed, 04/18/2012 - 18:32 | 2356402 Pairadimes
Pairadimes's picture

Whitecollarcriminasaurus Rex?

 

Goldmanflufferus Maximus?

Wed, 04/18/2012 - 16:15 | 2355921 easypoints
easypoints's picture

Oscar the Grouch would have been better. He knows what it takes to live within your means.

Wed, 04/18/2012 - 16:21 | 2355947 buzzsaw99
buzzsaw99's picture

Cookie Monster

Wed, 04/18/2012 - 16:46 | 2356023 slewie the pi-rat
slewie the pi-rat's picture

muppetsRgreat, buzzZ, but they have trouble learning to

Count
Wed, 04/18/2012 - 16:39 | 2356006 withnmeans
withnmeans's picture

Couldn't have type it better myself "withnmeans"....

Oscar may have been a GROUCH, but he understood what his trash was worth !!

Wed, 04/18/2012 - 23:27 | 2357116 Decolat
Decolat's picture

And with an honest attitude.

Wed, 04/18/2012 - 16:15 | 2355922 Trimmed Hedge
Trimmed Hedge's picture

Who carez? Dick Clark dead..  : (

Wed, 04/18/2012 - 16:32 | 2355974 LouisDega
LouisDega's picture

I saw that. Sad. 

Wed, 04/18/2012 - 16:37 | 2355990 Hippocratic Oaf
Hippocratic Oaf's picture

What's sad was propping him up for the last several New Year celebrations. Forcing the public to watch his demise.

Wed, 04/18/2012 - 16:39 | 2356003 Dr. Richard Head
Dr. Richard Head's picture

The last few New Year's Eves with Dick on reminded me of watching our economy being talked up on CNBC.  They talk of the beauty of the corpse as it rots in front of our eyes. Morbid fun for everyone.

Wed, 04/18/2012 - 17:28 | 2356197 in4mayshun
in4mayshun's picture

I'm sure Dick Clark screwed someone to achieve success too

Wed, 04/18/2012 - 17:11 | 2356117 WTFx10
WTFx10's picture

Who carez that dick head is dead ?

Wed, 04/18/2012 - 16:14 | 2355927 MunX
MunX's picture

I don't think muppets read ZH.

Wed, 04/18/2012 - 16:30 | 2355970 Sudden Debt
Sudden Debt's picture

I don't know... There's people who will visit the site just for the elmo pictures.... Some of them might even start to read some stuff...

Thu, 04/19/2012 - 00:03 | 2357223 natty light
natty light's picture

Given your avatar I thought maybe you knew him in the biz.

Wed, 04/18/2012 - 16:38 | 2355999 citta vritti
citta vritti's picture

I don't think muppets read -

 

there, fixed it for ya

Wed, 04/18/2012 - 18:02 | 2356321 TheGardener
TheGardener's picture

they made you read to be a muppet

Wed, 04/18/2012 - 19:03 | 2356488 Ghordius
Ghordius's picture

.

Wed, 04/18/2012 - 16:15 | 2355933 lasvegaspersona
lasvegaspersona's picture

wow...there wasa time...a few years in fact ...when incomes grew faster the debt per capita...this will be like explaining nickle candy bars to the grand kids.

Wed, 04/18/2012 - 16:51 | 2356033 mayhem_korner
mayhem_korner's picture

 

 

And soon enough, you'll need to explain to them what a nickel was.

Wed, 04/18/2012 - 17:01 | 2356071 NotApplicable
NotApplicable's picture

Not true! My grandkids are going to get bucketfuls of them.

Kyle Bass, FTMFW!

Wed, 04/18/2012 - 17:05 | 2356078 mayhem_korner
mayhem_korner's picture

 

 

I lost all of those kinds of nickels in a boating accident.

Wed, 04/18/2012 - 17:07 | 2356089 NotApplicable
NotApplicable's picture

Damn! Mine are wooden!

Thu, 04/19/2012 - 05:29 | 2357531 I only kill chi...
I only kill chickens and wheat's picture

douche chills, noT A

Wed, 04/18/2012 - 16:16 | 2355938 SheepDog-One
SheepDog-One's picture

Oh, and FUCK YOU Bernank!

Wed, 04/18/2012 - 16:38 | 2355993 12ToothAssassin
12ToothAssassin's picture

While I generally agree, do you think he really has any choice in what he is told to do? And do you think that if he wasnt in that position that someone else wouldnt do what they are told to do? 

Wed, 04/18/2012 - 17:02 | 2356067 TWSceptic
TWSceptic's picture

Ultimately it's a scapegoat to blame 'the system' if that system is kept in place by people. It's not like Bernanke doesn't have free will.

Wed, 04/18/2012 - 17:09 | 2356113 NotApplicable
NotApplicable's picture

Free will to get heart-attacked? Scandalized?

One simply doesn't make it into these positions of power of while retaining the ability to escape from them. These people are not only groomed for power, but vetted to the nth degree.

He's a hired gun. Either he shoots as advertised, or they turn his ass into a plowshare. Or he goes Bud Dwyer (the only true "out").

Wed, 04/18/2012 - 17:05 | 2356083 NotApplicable
NotApplicable's picture

The really interesting thing is that most of "the elites" have no choice but to follow orders, or be evicted from the club in some publicly disasterous scandal (as all closets have skeletons). They like to call this system "loyalty," but it's really just the same ole Mutally Assured Destruction.

As always, it's a MAD, MAD, MAD world!

Wed, 04/18/2012 - 16:18 | 2355941 Sudden Debt
Sudden Debt's picture

HELLO ELMO!

Wed, 04/18/2012 - 22:07 | 2356985 tawdzilla
tawdzilla's picture

It is sad when a fucking sock puppet garners more respect than a politician. 

Wed, 04/18/2012 - 16:18 | 2355942 W10321303
W10321303's picture

The last 30 years....hmmmm, How many wars was that? With no forced saving but in fact a major propaganda campaign to increase spending for consumption?....hmmmmm.....it seems that the obsession here is to find anyone to blame other than the crypto-facist militaristic war-mongering zombies who know that by exercising control over oil and natural gas supplies, they can print as much funny money as they want.....

Wed, 04/18/2012 - 16:32 | 2355961 surf0766
surf0766's picture

How many trillions have been spent to keep the underclass the underclass by giving free stuff to them to keep them in tune with the agenda?

Wed, 04/18/2012 - 16:34 | 2355983 john39
john39's picture

both military spending and the welfare state are the problem...   the puppet masters are great at getting people to buy into one side or the other... and fail to see that BOTH are the problem.  But the banker empire needs the military.  without the war machine, the entire plan falls apart.

Wed, 04/18/2012 - 17:22 | 2356154 trembo slice
trembo slice's picture

You're exactly right.  The bankers need the military to keep international dissent in check.  If it weren't for our "liberation" of Iraq, Saddam Hussein would have been exchanging Iraqi Oil for Euros and other currencies.  Iran would have already followed suit and the inevitable abandonment of the petrodollar standard would already be underway.  

Wed, 04/18/2012 - 16:33 | 2355981 Vagabond
Vagabond's picture

"it seems that the obsession here is to find anyone to blame other than the crypto-facist militaristic war-mongering zombies who know that by exercising control over oil and natural gas supplies, they can print as much funny money as they want....."

 

Nobody with half a brain actually thinks this works on the long term, not any of the central planners (with a brain), and not anyone else who is paying attention.  You simply cannot consume more resources than you produce, and the world most definitely has a limited supply of resources yet the "way out" is to consume ever more.

Wed, 04/18/2012 - 16:21 | 2355946 surf0766
surf0766's picture

My 60 year old neighbor told me everyone pays federal taxes. He had no idea. Then said he likes when they print so his market account goes up and he can golf more. People are clueless

Wed, 04/18/2012 - 16:28 | 2355960 Sudden Debt
Sudden Debt's picture

People are clueless beyond belief...
99% doesn't even know what's happening.
And when it will all be to late: THOSE WILL BE THE MORONS CALLING THEMSELVES THE 99%!!!!

me? I'm a future evil PM speculator.

Wed, 04/18/2012 - 16:30 | 2355967 catacl1sm
catacl1sm's picture

You should have punched his old ass out and then curb stomped his teeth in, then ask him how he likes market account.

Wed, 04/18/2012 - 16:35 | 2355986 surf0766
surf0766's picture

He has absolutely no skills. is amazed that I am still eating food from my garden from last year. I think I'll wait to smile....

Wed, 04/18/2012 - 16:38 | 2355996 Vagabond
Vagabond's picture

I'd ask him how he feels about loading up his kids and grandkids with massive amounts of debt.  Then I'd say "Way to live at the future's expense you baby-boomer douchey asshole.  Go play golf while your kid's and my kid's future circles ever quicker around the drain."

Wed, 04/18/2012 - 17:13 | 2356123 NotApplicable
NotApplicable's picture

Cuz the boys in the hood are always hard.

Come talking that trash, and we'll pull your card.

Knowing nothing in life, but to be legit.

Don't quote me boy, I ain't said shit.

Wed, 04/18/2012 - 17:24 | 2356176 krispkritter
krispkritter's picture

Overheard an elderly woman today, speaking to a grandkid: "No, see, it's made in China. No more. Put it back. Find something from the USA..." They're not all clueless. Go Grandma!

Wed, 04/18/2012 - 16:24 | 2355950 buzzsaw99
buzzsaw99's picture

Without central bankers we wouldn't have colorful words such as schmuck and schlong. lulz

Wed, 04/18/2012 - 16:26 | 2355957 Dr. Richard Head
Dr. Richard Head's picture

We probably wouldn't have Wal Mart greeters either.  Every time I see one of them I just think to myself, "SOUND MONEY, INFLATION, DON"T RELY ON THE GOVT".  Yes, I scream it to myself.

Wed, 04/18/2012 - 16:40 | 2356004 Vagabond
Vagabond's picture

Everytime I see them and get welcomed, I respond "I love you".  I just can't get that scene from Idiocracy out of my head.

Wed, 04/18/2012 - 16:25 | 2355952 LouisDega
LouisDega's picture

Does Elmo pay taxes?

Wed, 04/18/2012 - 16:30 | 2355963 Sudden Debt
Sudden Debt's picture

About 20%..... and that criminal calls himself a president of the people...

Wed, 04/18/2012 - 16:29 | 2355964 Dr. Richard Head
Dr. Richard Head's picture

Lalalala lalalala
Bernanke’s world
Lalalala lalalala
Bernanke’s world
Bernanke loves his printer
Inflation too
Dadada
That's Bernanke’s WORLD
YEAH

Wed, 04/18/2012 - 16:24 | 2355953 Jason T
Jason T's picture

I am watching out for productivity output per hour as when that falls.. inflation.  

Wed, 04/18/2012 - 16:26 | 2355958 Gloomy
Gloomy's picture

Preparing for armageddon:

 

Betting on a municipal-bond default just got a bit easier.

Earlier this month, a group of banks and money managers made what might seem like a trivial change to the way credit-default swap contracts for muni bonds are written: Most muni CDS contracts now have the same terms governing payouts. Under the old system, each contract was drawn up individually with its own terms.

Proponents of the changes say keeping contracts uniform should make CDS on municipal bonds easier to trade and also encourage more investors—from insurers to hedge funds—to use them.

Wed, 04/18/2012 - 17:09 | 2356105 shuckster
shuckster's picture

Yes, but will they pull a Greece and tell the CDS buyers that when the muni's stop making payments that it doesn't actually constitute a credit event and that CDS stands for Crap Diarhreah Shitpaper and that they will not be getting a payout?

Wed, 04/18/2012 - 18:51 | 2356446 Bastiat
Bastiat's picture

Dude, reality is so 20th century! 

CDS create the appearance of a credit immunized portfolio. 

More importantly, every time one trades Wall St makes money.

.

Wed, 04/18/2012 - 19:09 | 2356512 Ghordius
Ghordius's picture

+1 two perfect reasons = bonuses

Wed, 04/18/2012 - 16:32 | 2355971 debtor of last ...
debtor of last resort's picture

Elmo should be executed just for bringing this message. JPM pays for the funeral. Thank God JPM has insurance at GS.

Why do i write JPM and GS with more capitol letters than God?

Elmo?

Wed, 04/18/2012 - 18:03 | 2356320 rqb1
rqb1's picture

Use lower case for jpm and gs, it will make you feel better.

Wed, 04/18/2012 - 16:32 | 2355972 Sophist Economicus
Sophist Economicus's picture

You know, one day we're gonna have the real culprits labelled schmucks.   Bernanke is doing what he needs to do, which is, buy US Treasurys.    Did Bernanke tell Harrisburg to overspend on a Sewer system?  Build the Murtha International Aiport in bum-fuck PA?  Pass Obamacare?   Constantly increase the mandates of Social Security?   Claim that in order to live a 'life of dignity' the welfare class should get their hand-out from Uncle Sam (i.e., productive citizens)  .vs. Charity organizations without any recourse of citizens to expect work for that check?    Increase unemployment benefits?   Give student loans to anything with a pulse to keep the education lobby happy?   Mandate union collective action clauses? etc, etc, etc.

 

Shit on Bernanke for his CENTRAL BANKING skills, but shit on the political class for their subterfuge of the Republic and the stupidity of the American citizen for allowing it to happen

Wed, 04/18/2012 - 16:37 | 2355992 Dr. Richard Head
Dr. Richard Head's picture

Benny was the enabler and the political system/voting population is the addict.  Many of those addicts have stopped "driving past the liquor store on the ride home from work" though.  Probablem is, we are getting the ponzi booze poured down our gullet whether we like it not. 

Wed, 04/18/2012 - 16:43 | 2356014 citta vritti
citta vritti's picture

new form of waterboarding?

different from the tylers' shot admonitions, which it seems are voluntary

Wed, 04/18/2012 - 16:51 | 2356034 Sophist Economicus
Sophist Economicus's picture

Nope.   The central bank has its hands tied.    If the government didn't spend money they didn't have, there wouldn't be a need to prop up the bond market.   However, if you can give me an example where the FED led the way, I'm all ears

Wed, 04/18/2012 - 16:56 | 2356052 odatruf
odatruf's picture

Cheap money makes it not only possible to spend out the ass, it makes it almost the responsible action.

 

Wed, 04/18/2012 - 16:59 | 2356066 Dr. Richard Head
Dr. Richard Head's picture

This is a chicken/egg argument at the end of the day. 

Wed, 04/18/2012 - 17:05 | 2356079 Sophist Economicus
Sophist Economicus's picture

I agree...I just hope when the ropes and pitch forks come out, BOTH the chickens and the eggs get theirs

Wed, 04/18/2012 - 16:54 | 2356045 odatruf
odatruf's picture

Soph - I up arrowed you because I agree that the political fucks have done far worse than Bernank. But he could have been part of the solution rather than pouring gas on the fire lit by the DC imbeciles. For example, if he took the step of making government borrowing cost more, then the political class would have little recourse but to address the problem.  Yes, it might violate the twin mandate in the short term, but it is critical to fulfilling it for the long term.  That's how I'd answer the challenge when asked.

 

Wed, 04/18/2012 - 17:03 | 2356062 Sophist Economicus
Sophist Economicus's picture

I agree that in an ideal world, the FED should have just told Treasury to go pound sand, and that they wouldn't support the bond market and it would be up to investors to bid.    Of course, that cannot really happen.   Treasury would never be held hostage by a private institution.    Any FED chairman wouldn't last two seconds.    Also, I believe that Treasury could just deposit a check at the FED in that situation and just get the cash and spend it anyway.

I don't know what hand I would play if I were Bernanke, and I'm glad I'm nowhere near that job to find out

Wed, 04/18/2012 - 16:34 | 2355988 DavidJ
DavidJ's picture

Thanks Elmo.  All I can see is lots of red.

Wed, 04/18/2012 - 16:35 | 2355989 hellas4life
hellas4life's picture

This is all that needs to be said about our debt

military spending 50% of all spending

http://www.warresisters.org/files/FY2011piechart.pdf

http://www.youtube.com/watch?feature=player_embedded&v=kFeduoDWKj4#!

29 trillion in bailouts for the zombie banks (socialize losses privatize profits)

http://www.levyinstitute.org/pubs/wp_698.pdf

4-6 trillion cost for iraq

http://articles.marketwatch.com/2011-12-15/general/30778140_1_iraq-war-i...

 

Just two policies dating from the Bush Administration — tax cuts and the wars in Iraq and Afghanistan — accounted for over $500 billion of the deficit in 2009 and will account for $7 trillion in deficits in 2009 through 2019, including the associated debt-service costs. [7] By 2019, we estimate that these two policies will account for almost half — nearly $10 trillion — of the $20 trillion in debt that will be owed under current policies.[8] (The Medicare prescription drug benefit enacted in 2003 also will substantially increase deficits and debt, but we are unable to quantify these impacts due to data limitations.) These impacts easily dwarf the stimulus and financial rescues, which will account for less than $2 trillion (less than 10 percent) of the debt at that time. Furthermore, unlike those temporary costs, these inherited policies (especially the tax cuts and the drug benefit) do not fade away as the economy recovers.

http://www.cbpp.org/cms/?fa=view&id=3490

 

Wed, 04/18/2012 - 18:21 | 2356379 Lednbrass
Lednbrass's picture

You are playing games with the numbers by claiming that spending in one area causes debt but not another. someone else can say its the $800 billion a year on social security and another $800 billion on Medicare.

Military spending is certainly out of control, but in no way is the now $900 billion DoD budget 50% of all spending.  That simply is not reality. We are burning through roughly 3.6 trillion which leaves a still ridiculous 25% but thats nowhere near what you claim.

Wed, 04/18/2012 - 20:09 | 2356714 hellas4life
hellas4life's picture

Military isn't just dod. Watch the video and look at the methodology of the 50% number. https://www.warresisters.org/content/how-pie-chart-figures-were-determin...

Ss/Medicare have a direct revenue stream attached to them. That is the difference

Wed, 04/18/2012 - 23:57 | 2357212 Lednbrass
Lednbrass's picture

The methodology there is a bit mushy, they make claims on where the information was derived but provide no direct links. As we have barely begun Fiscal Year 2012, I am unable to understand how their claimed source the "Analytical Perspectives Book of the Budget of the US Government, Fiscal Year 2013" can provide anything but opinions and guesstimates.  The fact that no budget has come out of Congress in years makes me scratch my head even more- what budget are they talking about, much less for a year that hasnt happened yet?

They then say this-

*Analysts differ on how much of the debt stems from the military; other groups estimate 50% to 60%. We use 80% because we believe if there had been no military spending most (if not all) of the national debt would have been eliminated.

Which is making some major assumptions, it could also be argued that if there had been no military spending at all the nation would have been eliminated which would render the entire debt discussion moot.

Wed, 04/18/2012 - 20:33 | 2356761 dogbreath
dogbreath's picture

Led

I have to comment here to your comment to me on that RB thread.   I would like to agree that wide ranging opinions are welcome at ZH, but I don't need to listen to the marxist dialectic to have diversity of opinion or believe that I need to includ them, afterall look where it got the Russians before 1917.  I am not here to be entertained though I am sometimes amused.

Point Taken   

Wed, 04/18/2012 - 23:46 | 2357181 Lednbrass
Lednbrass's picture

As you like sir, my feeling is just hammer them silly then. Verbally abuse them- give a rhetorical knee to the nose, poke to the eye, and boot to the crotch.

I just dont see fresh meat/live bait as a bad thing. ;-)

Thu, 04/19/2012 - 04:18 | 2357470 dogbreath
dogbreath's picture

understood, my friend. :)

Wed, 04/18/2012 - 16:42 | 2356010 suckerfishzilla
suckerfishzilla's picture

Can I pay my 49 grand up front now before it gets any higher?   

Wed, 04/18/2012 - 17:15 | 2356135 NotApplicable
NotApplicable's picture

Sorry, no escapees allowed. Even if you pay, they'll still keep you on the hook.

Wed, 04/18/2012 - 16:47 | 2356026 Fix It Again Timmy
Wed, 04/18/2012 - 17:05 | 2356029 TWSceptic
TWSceptic's picture

I didn't know Elmo is a terrorist?

Wed, 04/18/2012 - 16:55 | 2356051 MrBoompi
MrBoompi's picture

The Federal Reserve and the US Government seemed to have lost their sanity in 2001.  Either that, or they know exactly what they're doing.  Either way the story doesn't end well for most of us.

Republicans and Derocrats are busy pointing the finger at each other when they should be looking into the mirror.  They have saved a very small percentage of people and thrown the vast majority to the wolves and will forever be responsible for it.

Wed, 04/18/2012 - 16:58 | 2356061 dbTX
dbTX's picture

Surely Elmo is confused

Wed, 04/18/2012 - 17:06 | 2356087 besnook
besnook's picture

income is money. money is debt. debt is income. it is all good. print until the cows come home. let the good times roll. happy days are here again.

it is difficult to believe people so smart can be so stupid so it follows that they are doing this on purpose......unless smart people can be really stupid because they think they are so smart that the rules of human nature do not apply to them.

Wed, 04/18/2012 - 17:31 | 2356211 Vince Clortho
Vince Clortho's picture

"... so it follows that they are doing this on purpose....."

 

Then none of this is accidental?

Wed, 04/18/2012 - 18:05 | 2356293 Angus195
Angus195's picture

ABSOLUTELY NOT!!!   The 'central planners' and 'central bankers' understand this!  They are going to run this ponzie scheme until it collapses.  It has always worked that way throughout history.

Wed, 04/18/2012 - 20:35 | 2356770 lotsoffun
lotsoffun's picture

bennie is the dealer. timmie the cashier.  big bad bama is both the hawker at the door and the main event at the microphone.  welcome to the casino.  after the owners at each of the casinos, bac, citi, etc wipe out the punters, they sit down to play at the big game.  the big game ends when one of them decides to take his chips off the table.  really guys, rinse and repeat.  look what happened in 2008.  stan o'neal and mozila were brilliant - they took the chips off.  greenberg 1 and 2, fuld got soaked.  lloyd boy got bailed.  it's a big game of chicken.  the three stooges all know they get tipped good for good work.

 

Wed, 04/18/2012 - 17:06 | 2356093 Angus195
Angus195's picture

What most don't get is that under the current Keynesian Economic Model, the national debt CANNOT be paid back, and it was borrowed with the understanding that it would not be paid back.  Because our money is debt, if the national debt was eliminated (paid off) there would be no money in the system.  Further, because only the 'principal' is created, and we are currently paying interest on the debt.  There isn't even enough money in the system to pay it back even if we wanted to.  Try and explain this to the average individual. 

Wed, 04/18/2012 - 17:55 | 2356284 TWSceptic
TWSceptic's picture

Absolutely correct. And it's not that this wasn't known at the time it was created. They knew from the start that this was the case. This makes the system not just stupid, but also fraudulent. And last time I checked fraude is still a crime and a violation of civil law.

Wed, 04/18/2012 - 17:58 | 2356303 Angus195
Angus195's picture

It's the worlds greatest 'scam' - makes 911 look like childs play.

Wed, 04/18/2012 - 17:09 | 2356106 Agent P
Agent P's picture

I think Count von Count should have been called up on this one.

Wed, 04/18/2012 - 17:31 | 2356208 krispkritter
krispkritter's picture

Yeah, Count von Count. "I love to (bleep) sheep!".  And if you take out 'baby' in the first skit and substitute 'Bernanke', it works just perfect...

http://www.youtube.com/watch?v=4zamP0j2aVc

 

Wed, 04/18/2012 - 18:00 | 2356314 slewie the pi-rat
slewie the pi-rat's picture

i tried...  only to be junked by bilary-bots

Wed, 04/18/2012 - 17:10 | 2356108 ziggy59
ziggy59's picture

La..la..la..that's elmos world.

Wed, 04/18/2012 - 17:14 | 2356124 dwdollar
dwdollar's picture

Sorry to burst your bubble... but this is rocket science for the average American. You need to dumb it down even further for them to understand. I suggest using sex/sport/alcohol/drug based analogies.

Wed, 04/18/2012 - 19:50 | 2356656 Temporalist
Temporalist's picture

Right or perhaps when Kim Kardashian is in government she can explain it to them better...or one of the spikey haried douchebags from Jersey Shore.

Wed, 04/18/2012 - 17:16 | 2356137 GreekGod
GreekGod's picture

Did you remove Gov. spending from GDP per capita to get the income number?

GDP per capita 48,387 $

USA gov. spending 42.2 percent of GDP.

GDP capita without gov. spending = 27,967 $

 

Wed, 04/18/2012 - 18:27 | 2356392 Lednbrass
Lednbrass's picture

Just for giggles I looked up annual GDP since 1980 and factored out inflation and deficit spending.  We had minute growth for two years, every other year has been a steady deterioration. The addiction to economic crack has reached a point that either continuing or ending is is certain destruction, there is no way out anymore.

Wed, 04/18/2012 - 18:01 | 2356309 Everybodys All ...
Everybodys All American's picture

There are alot of evil sobs in this country to blame but imo Bernanke is going to serve time for his part in this I guarantee.

Wed, 04/18/2012 - 18:09 | 2356337 skepticCarl
skepticCarl's picture

The misunderstanding of the first graph, and our out-of-control debt problems, by the Zero-groupies is epic.  Bernanke is not respsonsible for the increase in the national debt.  He is responsible for allowing it to grow with ZIRP, quantitative easing, and outright Treasury purchases.  But it the US gov, and we the sheeple who support these turds, were nto so stupid, lazy, greedy etc., that debt would not be growing relative to income, and no one would know who the hell the Fed Reserve chairman is.

Wed, 04/18/2012 - 18:08 | 2356341 Eric L. Prentis
Eric L. Prentis's picture

Dear Mark McHugh;

 

Your piece, “Keynes For Muppets: Elmo Explains The National Debt” is exceptionally well done, and should have the widest distribution possible. Would do well on Huffington Post and Truthdig.com, and the NYT may see the light and publish it.

 

The Congressional vote on raising the debt ceiling should be coming up just before the presidential election. This is your chance to make a big impact. Good luck!

Wed, 04/18/2012 - 22:21 | 2357009 mark mchugh
mark mchugh's picture

Thanks very, very much, Eric.

I've actually thought about approaching Huffpo, but then I always remember that I hate Huffpo. 

Anybody (with the lone exception of seekingalpha.com) is welcome to my material, so if the NYT wants it, they can have it.  I'm just trying to make people aware of how the national discussion gets misframed, remind them that it's OUR country and let people know that the discomfort that they're feeling isn't just in their heads, and is on track to get much, much worse.

It just seems less depressing with Elmo.

As far as the election goes, I do have an idea for the American people to send a unified message (sadly it does not involve Elmo). The working title is "Operation 337" and the idea is simply to remove every last POS politician who voted for the Emergency Economic Stabilization Act of 2008/TARP bill (there were 337).  For me that was the moment America was hijacked, and I hope others would agree (of course we all know it was brewing for a long, long time).  I'm so sick of the red pom-poms against the blue pom-poms.  That vote showed how much respect/fear they have for us.  I think if we could flush the 337 out, we'd prove that we're not as mush-minded as most think.

E pluribus Unum

Thanks again.

Wed, 04/18/2012 - 19:27 | 2356578 ebworthen
ebworthen's picture

Love it.

Not sure an economist can understand it, but I love it.

The first chart needs to be on the cover of Time and USA Today - but instead they'll put a BLS chart of the "improving" unemployment rate or AAPL stock price since 1999, or Bernanke as Person of the Year (*cough*).

 

Wed, 04/18/2012 - 19:28 | 2356595 Hohum
Hohum's picture

GDP/total credit market debt: in recession since about August 15, 1971.

Wed, 04/18/2012 - 19:37 | 2356603 Zero Govt
Zero Govt's picture

Great lesson Elmo

you could beat a years worth of most economics Professors curriculums with this 5min slideshow

..in fact it's slaughtered Bernankes understanding of debt and recovery for all his years in office

..which reminds, any chance you could go round Paul Krugmans house and beat the crap out of him seeing as US drones only have Presidential orders to take down US citizens and not red muppets ...you'd be doing us all a huge favour

Wed, 04/18/2012 - 22:23 | 2357016 mark mchugh
mark mchugh's picture

I sometimes dream of being in an elevator with Krugnuts....

Wed, 04/18/2012 - 22:35 | 2357035 BlackholeDivestment
Thu, 04/19/2012 - 00:06 | 2357225 quartshort
quartshort's picture

And the middle class ends up like Snuffalufagus.

Thu, 04/19/2012 - 06:25 | 2357570 Sathington Willougby
Sathington Willougby's picture

The majority are ones who buy the big gov brand, huffalottagas'.

Thu, 04/19/2012 - 04:35 | 2357485 e-recep
e-recep's picture

Elmo works for Al Qaeda.

Thu, 04/19/2012 - 06:23 | 2357566 Sathington Willougby
Sathington Willougby's picture

The biggest threat is deflation.  That's what we have to worry about.  Deflation.  Cower in fear of deflation and fucking ass terrorism by snuffalufagus.

Thu, 04/19/2012 - 06:28 | 2357576 Sathington Willougby
Sathington Willougby's picture

Silly Elmo, the only real way out is aliens.  Repelling a full blown alien invasion is our only way out of this mess.

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