This Time The Debt Ceiling Hike Really Is Different

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Wed, 07/27/2011 - 10:49 | 1497752 Cognitive Dissonance
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<---------But this time it's different. Honest.

<---------We are all going to die.


h/t to Cheesy Bastard Insta-Poll

Wed, 07/27/2011 - 10:56 | 1497826 GeneMarchbanks
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This... this... poll taking. It's going to become a theme isn't it?


Wed, 07/27/2011 - 10:59 | 1497842 Long-John-Silver
Long-John-Silver's picture

This... this... poll taking. It has become a theme!


Fixed it for you.

Wed, 07/27/2011 - 11:00 | 1497848 TruthInSunshine
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Paul Krugman has an op/ed piece out yesterday where he endorsed the plan to print an amount of USD equivalent to our existing national debt, with which to use to pay off said national debt, and we'd have a fresh start.

What an amazing idea, and just one example of why the man is a Nobel Laureate, after all.

I wish I had thought of that, but then again, that's why he wins the prizes and gets a such a prominent podium.

Wed, 07/27/2011 - 11:23 | 1497963 ElvisDog
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Krugman holds sway over his disciples precisely because his models and "solutions" are never put into practice. That way he can claim "I'm right and if TPTB would only do what I say I would be proven right". I almost wish they would do his money printing scheme to expose him for the retard that he is.

Wed, 07/27/2011 - 12:33 | 1498248 Vinny
Vinny's picture

Being a tard is the new normal. He should become an airplane pilot.

In the movie Idiocracy, that so perfectly captures the modern world:

"President Camacho: Now I understand everyone shit's emotional right now. But I've got a 3 point plan that's going to fix EVERYTHING.
Congressman #1: Break it down, Camacho!
President Camacho: Number 1: We've got this guy Not Sure. Number 2: He's got a higher IQ than ANY MAN ALIVE. and Number 3: He's going to fix EVERYTHING.
Wed, 07/27/2011 - 14:03 | 1498562 aerojet
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I like that film even though it was horribly, horribly flawed.  Hey, even "Not Sure" could fix everything if everyone else got out of his way.  Our problem is that there are so many cooks and so many special interests that it is impossible to produce clean legislation.  It is also a huge problem that government is designed only to grow, never to shrink or right-size itself.

Wed, 07/27/2011 - 11:01 | 1497853 trav7777
trav7777's picture

<------- LOVE me

<------- hate me


But anyway, the debt grows exponentially, the tax receipts don't.  Or even if they do, at a lower growth rate.  Which, deep enough into the curve, anyone who does math can assume that there is no growth because A>>B

Wed, 07/27/2011 - 11:09 | 1497900 karzai_luver
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I voted luv & hate. I mean I wanted to be fair and balanced while not tipping over backwards.


However you are correct on this one.


Perhaps a trending or some cool flames could be added to the "system" next,k?




Wed, 07/27/2011 - 11:04 | 1497857 Cognitive Dissonance
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What doesn't kill you will make you laugh until you piss your jeans.

I suspect this unauthorized use of the junk arrows is the black swan event for Sacrilege's new UI interface. He never saw it coming. This is what he gets for letting several thousand ZH regulars loose in a new UI. :>)

It will run its course and then die an ugly death.

Wed, 07/27/2011 - 11:02 | 1497861 redpill
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Wed, 07/27/2011 - 11:17 | 1497936 A Nanny Moose
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Since we are all presently, mostly alive. Wouldn't it in fact be different if we all died?

I sumbit that it is all of the above. We're going to need more arrows.

Wed, 07/27/2011 - 11:22 | 1497953 fuu
fuu's picture

On a long enough timeline the survival rate of everyone drops to zero.

Wed, 07/27/2011 - 11:32 | 1497995 CassandraDoomsday
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Quote from "the trader" today


Same same…. Posted on by the trader

A speech says more than a thousand words? Presented without comment….

Quote by Obama 2006:

The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can not pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. Increasing America’s debt weakens us domestically and internationally. Leadership means that, “the buck stops here.’ Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.” - Senator Obama, March, 2006


This time is different?






Wed, 07/27/2011 - 10:47 | 1497757 iamse7en
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Please bring back full RSS feeds! Or at least comment on why you changed the policy...  Thank you.

Wed, 07/27/2011 - 10:51 | 1497781 slewie the pi-rat
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according to tyler, the money is better spent on booze

Wed, 07/27/2011 - 10:53 | 1497792 Tyler Durden
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How about clicking on this button, the same one as where it says RSS above

Wed, 07/27/2011 - 10:56 | 1497819 g
g's picture
ha ha ha ha ha ha ha ha ha, that is great
Wed, 07/27/2011 - 10:58 | 1497835 slewie the pi-rat
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pull my finger?

Wed, 07/27/2011 - 12:31 | 1498240 trav7777
trav7777's picture


Wed, 07/27/2011 - 12:57 | 1498346 g
g's picture

So what

Wed, 07/27/2011 - 13:45 | 1498513 slewie the pi-rat
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he wants that 5th 7


Wed, 07/27/2011 - 14:15 | 1498639 iamse7en
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Thanks dizzog... for some reason I had this link instead (which always showed full posts) until the server update. New one works great. Thanks.

Wed, 07/27/2011 - 14:20 | 1498658 iamse7en
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Except that it seems your feed link updates a lot slower than the one I was using. RSS is confusing.

Wed, 07/27/2011 - 10:47 | 1497758 Frog-And-Toad
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If I make $100,000 a year, and am given a credit limit by Amex of $1,000,000, and I put $999,999 on that limit, the solution isn't to have Amex raise my credit limit to $1,500,000... The solution is to begin to pay off my debt and attempt to live within my means... Yes those things I bought with my debt are nice, but really they are not reality.

Same applies to the government...

Wed, 07/27/2011 - 10:48 | 1497768 dwdollar
dwdollar's picture

SInce when did the government play by the rules it binds us with?

Wed, 07/27/2011 - 10:54 | 1497799 Watson
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Never willingly, but a lack of debt buyers *could* force the issue.

Wed, 07/27/2011 - 12:05 | 1498128 keepmydollar
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Can the number of debt buyers get any lower?  Right now there is only 1, the printing press in Ben's basement.

Wed, 07/27/2011 - 10:50 | 1497775 tmosley
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But Ben Bernanke told me that math is different when you use big numbers.  Surely you trust him, right?  I mean, he's got a PhD in Economics!

Wed, 07/27/2011 - 10:54 | 1497807 flacon
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...from an IVY LEAGUE University - Princeton, the same place where Einstein worked. LOL!

Wed, 07/27/2011 - 11:08 | 1497893 sbenard
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Are you sure? I thought his Phd was in Hubris!

Wed, 07/27/2011 - 11:31 | 1497990 A Nanny Moose
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Yeah, the debt is so large that it has its own gravity. Eventually it becomes a singularity. Everything is pulled into it and crushed. Not even light will escape its grasp.

Wed, 07/27/2011 - 12:26 | 1498228 DaveyJones
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no light has escaped washington for some time now

Thu, 07/28/2011 - 03:50 | 1500474 BlackholeDivestment
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..,now that's a sugular finest Moose call posted today. lol hole ...Bitchez.

Wed, 07/27/2011 - 20:06 | 1499952 StychoKiller
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Georg Cantor  STILL could teach The Bernank a thing or two!

Wed, 07/27/2011 - 10:53 | 1497793 A Man without Q...
A Man without Qualities's picture

Remember that in this political system, the credit card bill gets passed to someone else to deal with....  

Wed, 07/27/2011 - 11:04 | 1497872 Frog-And-Toad
Frog-And-Toad's picture

Thus is the problem with Career Politians, and thus is the problem with increased power to the Federal government...

They can promise the moon and Mars, and they never have to worry about the repercussions of their irrational concepts... 

I say make them accountable... I still want war crimes trials for anyone involved in lying us into our conflict in Iraq... But hey, Saddam COULD have killed many people so it's ok according to the Obama doctrine.  

Wed, 07/27/2011 - 11:16 | 1497930 Dr. Richard Head
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I have decided that I will only vote for the politician that will give my two princess daughters a pony.  Pony up CONgressbitchez....pony up.

Wed, 07/27/2011 - 10:56 | 1497822 T-roll
T-roll's picture

But What do u do when ur annual bills are $150K?

Wed, 07/27/2011 - 12:25 | 1498226 Ahmeexnal
Ahmeexnal's picture

add another credit card to your wallet each year.

Wed, 07/27/2011 - 10:57 | 1497830 StormShadow
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The debt will NEVER be paid...EVER. No one is talking about paying it down, just possibly slowing the rate of debt accumulation (and even that is highly dubious). The only possible outcomes are hyperinflation or default. Either way the result is eventually the same. The US is screwed, ergo the world is screwed. But it may take longer than many think. The creativity of politicians may keep up the charade for quite some time. You have to remember that 99% or more of the people have no idea. Once they finally see what's really going on it's going to get really ugly. The Great Depression will look like good times in comparison.

Wed, 07/27/2011 - 11:04 | 1497868 T-roll
T-roll's picture

Agree 110 percent. Never underestimate a govt's ability to kick the can. Many thought 2008 would be the death blow but the Fed came to save the day. We need to default now on our own terms before we end up like Greece and have foreigners dictating our future.

Wed, 07/27/2011 - 11:06 | 1497881 sbenard
sbenard's picture

You plagiarized that thought from me! Thief!

And I "thought" I had that thought copyrighted!


Wed, 07/27/2011 - 11:19 | 1497942 Dr. Richard Head
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America and the world will not be screwed.  Only those dependent on the government for either their wealth (Goldman, Oracle of Omaha, JP Morgan, Wells Fargo, etc) or sustaining their life (welfare) will be hurt in the collapse. 

On second thought, yeah, much of the world will be screwed.  Bringit on. 

Wed, 07/27/2011 - 11:58 | 1498098 kridkrid
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We're all dependant on the same doomed system.  Having your ducks in order isn't having a good job and no debt, it's having the means to support yourself if the entire mirage of an economy ends tommorrow (which it could). 

Wed, 07/27/2011 - 11:34 | 1498004 Havana White
Havana White's picture

"It may take longer than many think."

The "it" is a nebulous thing.  For some, it has set upon them, miserably.  For others, the "no phones, no tv, it was fantastic" open-ended corner-of-the-world escape could be made to work out pretty well.  And all "its" in between.

Wed, 07/27/2011 - 11:54 | 1498083 Escapeclaws
Escapeclaws's picture

The national debt is the same as this scenario:

The American taxpayer is like someone with such a large balance on his credit cards that he will never be able to reduce the principal, and the interest that he fails to pay is added to the principal which further increases the amount of interest due, ad infinitum. In effect, all the national debt does at this point is funnel the interest on the national debt to the top 0.1% who are increasingly the sole recipients of this source of income. There is no point, at this point in time, in worrying about the size of the deficits (maybe Cheney was right in this sense and he knew it). Increasing the debt ceiling or cutting back on expenditures makes no difference. The debt will go on increasing faster than any attempts to reduce it. This is where the analogy with household finance breaks down. To make this comparison with household finance is to be a sucker for austerity measures. These are not to pay down the debt or reign in government--impossible and not in the interest of the owners. They are strictly a disciplinary measure to demoralize and render more docile the population.

To understand the underlying reason why the debt can never be paid down and will in fact continue to grow no matter how great an effort is made to pay it down, please see the following article by Antal Fekete--his best, in my opinion, because it does really lay out the underlying mechanism. Warning: Math Kills! That said, the little math there is in the article is first year highschool algebra and the article can be understood without it. The article also explains, as an added bonus, the nefarious role of super-low interest rates in aggravating the problem.

Wed, 07/27/2011 - 12:23 | 1498218 kridkrid
kridkrid's picture

Great paper, thanks.  Here is how I have tried to explain it in the past, and the math is even easier, I think.  In our monetary system all money is created as a liability (debt) with interest that begins to accumulate the moment the money is created into existence.  The creation of a treasury, the extension of mortgage, etc.... these activities create money/debt.  To retire that debt, they system needs to pay off the debt PLUS the interest due.  Only there isn't any money in the system to pay the interest.  That money was never created.  So the process to pay down debt requires the creation of more debt (this issuance of more fiat money... it's the same thing).  The moral of the story... debt must always expand, it is, in fact, the very nature of the system.  This is the system that we have selected to facilitate economic production.  And it works, for a time, until the cost of maintaining the debt overwhelms the productive capacity of the underlying economy. 

Here is what it looks like in a graph:  - this is where the collapse of our monetary system begins.

Wed, 07/27/2011 - 13:12 | 1498394 Escapeclaws
Escapeclaws's picture

Very nice. However, I'm wondering on your graph how to explain the private sector debt being so much greater than the government. Perhaps the huge difference in private sector interest rates (think credit cards, etc) has something to do with it. Eventually, public borrowing should crowd out private borrowing.

Wed, 07/27/2011 - 12:48 | 1498322 Max Hunter
Max Hunter's picture

You have to remember that 99% or more of the people have no idea.

I was talking to my accountant today. I explained to him that the Federal Reserve was owned only partially by the Government.  He looked at me with astonishment. I was filling him in on so much stuff and he was just taking it all in (money creation, fractional reserve).. He went to get coffee.. I looked behind me and saw all the degrees on his wall.. Thought to myself.. Jesus.. we are in trouble.. He's one of the smart guys.. LMAO

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