Posted on 12/30/2012 11:15:00 PM PST by neverdem
The fiscal cliff isn't as scary as the looming deficit and debt crisis about to swamp the country
All eyes have been on the clear and present danger of the fiscal cliff—understandably—but there's a sound in the mountain range that's even scarier than the cliff. It's the sound made by an avalanche, the trillions of dollars of debt that's heading our way, gathering speed and mass. For most people, it's out of earshot now, and that's the way our government prefers to play it in its financial statements. Liabilities are not set out there in accordance with the well-established norms of the private sector, where this overhang of liabilities would set off alarm bells in the markets, with boards of directors in emergency sessions.
We'll come to why that's not happening, but let's consider first why we should regard our predicaments as gravely as any private company does on the path to bankruptcy.
We are on a trajectory of cumulative fiscal deficits that cannot possibly be sustained. We have gone from being the world's largest creditor nation, with no foreign debt at the end of World War II, to the world's largest debtor, with roughly half of our public debt held by foreign lenders. Over the last four years, our national debt has grown by more than $5 trillion to over $16 trillion. We have to service that debt. The Federal Reserve is keeping rates historically low but here's the cost of paying interest on the debt for fiscal 2012: $359,796,008,919.49
What do you get for that? Nothing.
The greatest fiscal challenge to the U.S. government is not just its annual deficit but its total liabilities. Our federal balance sheet does not include the unfunded social insurance obligations of Medicare, Social Security, and the future retirement benefits of federal employees...
(Excerpt) Read more at usnews.com ...
Brace for a socialist-induced/orchestrated event. (Why we shouldn’t even be talking about this nonsense,,,socialist-induced debt, socialist-induced drama...putting the socialists on center stage. DEPOPULATE socialists from the body politic. DEFUND their collectives, foreign and domestic.)
Why should I be liable for debt I had no hand in creating?
Print up maps showing the way to the houses of all the fat-ass federal bureaucrats and politicians. Then hand them out to the 30 IQ Morlocks in the big liberal cities and see what happens. We’d need to write stuff on the maps like “Free money, free food, free Nikes” with big arrows pointing the way so that the genuises would get it.
Liberals devouring liberals.
The democrat vote buying scheme has been perfected. Only some huge event will change anything. Or the repubs could just say screw it and go over the cliff. but that would just be a start.
No they wouldn't. Too many are blinded by immediate self interest and plain stupidity.
When Trouble grabs them by the back of the head and smashes their faces against the wall they'll start to develop an inkling that something’s wrong.
This whole situation is creating huge bubble and distortions in our Economy. The US Treasury debt bubble is an obvious one. The flip side of it are the politically necessary policy off keeping interest rates near zero. In “normal” times, capital was scarce and you had to pay to get it. That increasingly less true. Now capital (debt) costs less and less because it is being financed with imaginary dollars. Which means that real dollars (e.g., those we own) are worth less and less—which is why interest rates are so low. If those rates tick up even a little, the curtain goes up on this charade.
Look for negative interest rates—which is effectively a tax on weath. Only a tax on wealth, not income, solves this problem. Because with negative interest, you pay the Government to keep your $$ safe in US Treasuries—so they actually makes $$ on the deficit.
This is why asset deflation is coming big time—to convince people to meekly accept this tax on wealth.
Quite right. While a majority [used to] say they want to lower the deficit, they can never agree on specifics.
If anyone proposes a fix, they are immediately demonized by the MSM. Out come the sob stories of people who would be hurt by this or that cut, no matter how minor. And the Public, especially the women, disapprove.
Now, I’m not even sure a majority consensus exists on this anymore. People just want their free stuff and don’t care much about how they get it or the consequences past next week. In the end, the American people will get exactly what they deserve. Too bad many of us are along for the ride.
"They want their benefits and they want them now!"
Things may get interesting if the price of a Big Mac rises to $200 and the next COLA adjustment is 8 months away. Have we ever seen a welfare state that's undergone high inflation or hyper-inflation?
“Since we print out own money and loan it to ourselves ...”
When our government “prints money”, is that money always distributed in the form of loans, meaning the loans are intended to be paid back, which would remove the “printed money” from the economy?
If that’s the case then my next question is how are the interest rates on the loans determined?
If anyone posts answers to these questions, please don’t use the terms “bond”, “note” or any other word that basically means “loan”.
But hyperinflation is... And that’s worse.
It's called Pauperizing by Degradation of Current Worth
“Obama voters don’t care. They want their benefits and they want them now!”
We may as well be honest that a large number of supposed conservatives are in the same camp as Obama voters.
From the article:
“Our federal balance sheet does not include the unfunded social insurance obligations of Medicare, Social Security, and the future retirement benefits of federal employees.”
Far too many conservatives think that they “earned” Medicare, Social Security, and the sizable contingent of Federal Employees on FR certainly think they “earned” their federal retirement benefits, too.
They don’t comprehend, or even care that we are broke.
Well, we are broke. These “obligations” that Congress gifted to select citizens that come directly from the hard work of those that pay taxes cannot be paid by those that pay taxes - indeed, may taxpayers will jump on the gray train rather than work for those who do not.
That’s the story. It’s not just Obama voters, it’s “conservatives”, liberals and everyone in between who simply want “their” money. They don’t care that it’s not really “their” money.
Such stupidity deserves the consequences in store for them.
Indeed. Our government, our rulers, have promoted a value system of gimmie mine now, that beggars the future and encourages an eat the seed corn mentality. Even those who have an inkling of the future decide to get theirs now betting that they will die before the coming conflagration.
There is deflation unless you buy fuel, groceries and education for your kids. Other than real estate there is no deflation...
Electronics
Electronics are deflationary due to other reasons. Inflation if properly reported would be 10%.
Oh and you think then transactions would go unreported. And you think the IRS wouldn't be tracking EVERY TRANSACTION to expose barter or find cash. And you think there wouldn't be a black market in virtually everything that would make the drug war look like a family spat.
It's spending. Fix that or else.
Deflation is deflation. Inflation is inflation. Doesn’t matter except to specialists what causes either. Some prices are deflating. Other prices are inflating.
LOL
I said this before. The welfare state are going to get hit the hardest (OT minorities and woman hit hardest). That big Mac does not have to get to $200. It will only take rising to $20, along with everything associated with it. And the welfare state will scream for mo' money.
Most unfortunately cannot fathom that the New World Order is real and that a huge scam is being played on not just America but the entire world.
Conservatives cannot get their minds around the reality of a conspiracy that is actually real and is being aided by a media that has also been hijacked by this same “dark side”...
The bottom line is this - Its too late for a political solution, as the game has been rigged for so long that it can’t and won’t be undone.
The financial collapse that will usher in a new world currency is not an accident, but a well planned and thought out Marxist ploy to gain control of the worlds economic systems.
Don’t believe it....just wait.
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