[blam]

Posted earlier:

G20: The Time For Stimulus Is Over, Long Live Fiscal Austerity

[Repeal The 17th]

You are so filled with good news.

[VOA]

bump

[EverOnward]

bump for reference

[givemELL]

Yes. A 40% decline in GDP has a corresponding decrease in the tax base. Hausers Law...no greater than 19.5% of any US GDP by year has ever been collected in the US no matter what the tax formula was. The fate of 308 million people is not sustainable with a 40% decrease in GDP. Have figures been published yet as to how far the tax receipts of April 15th 2010 have fallen from 2008? In 2009 they had fallen about 20% nationally, and a similar amount for the states in 2009.

[BenLurkin]

Prepare how?

[Psalm 144]

Jars and fruitflies.

[ozzymandus]

Got me a case of chili and a case of ammo.

[Nick Danger]

Most of this article is a fairly straightforward description of the Socialists — here and abroad — finally running out of other people's money. We always knew it had to happen; well, here it comes.

But the article also contains this fairly bizarre statement:

what should happen is what I described in my last post - that is, the fraudsters and scammers in the banking and "finance" industry who sold you, and the nation, on the premise of ever-increasing debt being sustainable, should be the ones who are put out of business at the same time.

I call it 'bizarre' because blaming bankers for people borrowing money is like blaming Smith & Wesson for armed robberies. Used responsibly, the products are good and necessary things.

It's even more bizarre when the problem is government borrowing. C'mon, we know what causes government overspending: voters. It's the voters who think that 'federal funds' are the equivalent of 'free money', and who continually support politicians who promise endless free stuff. Bankers are responsible for that? I don't think so.

To top it off, the author contradicts himself several paragraphs down:

The sustainable long-run percentage of debt in the system is about half of what is now present. If we were to shrink "financial instruments" and "non-financial business credit" by 60% and household credit by about half we'd be in the upper part of the sustainable range.

Here the author agrees that ever-increasing debt can indeed be sustainable... you just have to keep it at a reasonable percentage of your GDP as your economy grows. All profitable corporations do this; the only reason a government can't do it is that the voters will toss out politicians who refuse to keep the freebies flowing.

Since the quoted paragraph makes no sense, is contradicted by the author's later comments, and in the end does not even advance his argument, I have to conclude that it's in there as populist noise... the author thinks that readers want to hear some "bankster bashing," and he's gonna tell them what they want to hear.

[2ndDivisionVet]

BLOAT!

[The Comedian]

I've gone Galt Squared.

I contribute nothing.

I earn nothing.

I demand and receive entitlements.

I consume everything available.

Instead of being productive enough to support myself, my family, my employees, and a dozen full-time bureaucrats as I have been doing my entire life, I am now a number with a bold minus sign representing a net loss to the System.

I am nearly completely self-sufficient, but am saving those assets until the government cheese runs out. I'm saving my batteries until the power goes out. Until then, I'm sucking wall current with the AC on and the doors open.

I have sworn to be a burden to the government at every turn and in every area I can. And I will continue to do so until some semblance of Constitutional government returns to DC (which, frankly, I don't see happening until after the upcoming Mad Max-style collapse).

Time to Alinsky the Parasite King's minions, and Cloward-Piven the Man.

I encourage everyone to follow my lead.

Frowning takes 68 muscles.
Smiling takes 6.
Pulling this trigger takes 2.
I'm lazy.

[dajeeps]

I’m not sure I follow what’s being said here, it doesn’t make that much sense to me. It seems like he’s saying that “stimulative” spending is propping up the economy and if it’s slashed GDP will contract by the difference between the slashing and what’s still spent.

This premise seems to be somewhat mainstream, that we need the government to spend to keep the economy from collapsing, but I don’t agree with it for a couple of reasons.

First is that economic activity today is a refelction of expectations for the future, and the more spending the government does the higher the expectation for sub-optimal growth and higher taxes to support it. The TIPS spreads are an excelent indicatior of where the markets think we are headed, and they contracted by almost 2% last month - which shows there isn’t a lot of confidence that our economy will come roaring back any time soon.

Government, by itself, has no wealth and it does not create wealth by borrowing and spending. All that does is cause money to circulate, like the little boy who breaks the shopkeeper’s window with a rock, but what it spends will have to sucked back out when the piper comes calling. Government spending does not prop up the economy, it makes future expectations look not so rosy.

There is also something about this that is neglected when folks talk about stimulus being somehow beneficial. Any hope of reinflating a deflating economy with fiscal policy can be counterbalanced by the Fed. If the Fed is set on a ~1% inflation target which it seems to be, and interest rates are only one of many tools for carrying out monetary policy, it means we get almost no intended benefit if there was any to be had in the first place.

Ronald Reagan atriculated these ideas best and I think he had a track record to back up his claims that no one can be as economicly productive as the people. Government needs to get out of the way, stop taking our money and let us do what we do best if we want to have a bright future.

[PGalt]

Good article; great thread. Thanks to all posters.

[Jet Jaguar]

BTTT

[jiggyboy]

Permanent link to this specific article http://market-ticker.denninger.net/archives/2375-Prepare-NOW-They-Get-It.html

[PatriotGirl827]

Do you have a ping list?

[jpsb]

Looks like it’s time to make ANOTHER supply run. Suggestions? Got ammo, got canned goods, got garden.

[bmwcyle]

The New World Order is almost here.

[mad_as_he$$]

No they do not get it Mr. Denniger. Addicts rarely do. They are all addicts to power at our expense. The only way they will “get it” is in one brief moment just before the blade drops.