Debt Denial (You'd Better Be Sitting Down Before You Read This)

The Daily Caller ^ | April 9, 2010 | James Rickards

[April Lexington]

A GOP win in November leading to a spit Congress and Obama as Clueless in Chief will not make massive debt disappear. The GOP is about to “inherit” a fiscal nightmare of breathtaking proportion. And, given their track record of governance, we are just as screwed... buy gold and pray.

[misterrob]

The ones that are so going to be in for a rude awakening......just like the Boomer seniors who (as a group) have supported policies that were fiscally unsound and based on what they thought they were entitled to and not what we could afford.

[JasonC]

Gold is a bubble. Track gold to stock prices and watch the wild swings over 15 year time scales. The bugs clamor to buy precisely when it is time to get out. The same happened with stocks 10 years ago.

[JasonC]

Massive defaults by mainstreet deadbeats have already occurred and are peaking at this instant. Private sector debt service to income has already fallen hard from its peaks and is back to mid 1980s levels - walking away from $3 trillion owed kinda does that, and the stiffed bankers not signing up for another round of punishment does the rest.

There is nothing remotely unsustainable about government debt service either. They all have sufficient income to pay their debts many times over, most of them at very low rates. But populists and socialists think giveaways to half the population are a birthright and measure what can be "sustained" after make believe promises to themselves. They can't and they won't. But none of those things is a prior charge to debt service, and nothing but populist idiocy sustains the illusion that they are.

When governments have the support to vote high taxes as well as high spending they don't have this issue. But as soon as they can only remain in office by promising redistribution on the one hand and not actually following through with it on the tax side, on the other hand, debt service will climb as a portion of their expenditure. And that is just fine with me. It is undoing some of the ongoing robbery they are constantly attempting.

Would I rather have a macro economy in which the government takes only 10% of income, than one in which is takes 20% of income and returns 10% of it to private savers as debt service? Sure. But I'd rather have the second, than a government that takes 20% of income and gives all of it to deadbeats for nothing.

[Halgr]

Its good to see others joining Karl Denninger is raising the ALARM. (albeit 10 years too late)

But, at the same time its so incredibly sad to watch America become a third world country....my heart aches for my children and grandchildren.

There are dark forces behind all this, but alas they have done an excellent job at deceiving the sheeple.

We are at the doorstep of the GREAT TRIBULATION.

[Halgr]

There won’t be a “thirty years from now”.......

[Halgr]

See his other recent writings here

http://dailycaller.com/2010/02/01/the-new-depression-and-the-feds-illusion/

[April Lexington]

As usual, Brilliant! But... maybe the government could cut taxes to zero and just borrow all of the money. Why penalize the serfs if the government has more than enough cash flow to cover the debt service? Cut taxes to balance the cash flow with the debt service...

[JasonC]

Maybe government should be funded by a single uniform 15% tax on income from the very first dollar, not deductions or exemptions or games or favoritism of any kind. Maybe if men regarded such a system as their birthright and were as mad about any proposed deviation from it as they are these days about the horrid notion that anything anyone does might benefit someone richer than themselves, governments would control their spending on useless boondoggles and reckless giveaways to deadbeats and lieabouts. Maybe if any government spent too much under such a system of funding, debt servive would instantly begin to eat up their limited and immovable revenue stream, forcing their net transfers and extractions back down again. And maybe the growth and dynamism we'd all get out of such a fair and efficient system, compared to idiotic resentment and envy based mutual hatred that leads nowhere, would produce a rising income stream that would dwarf anything that socialists or populists dream of in their endless and pointless rich soaking campaigns.

Except for the part about "maybe". These things are just so. Any rational and unbiased man can see them.

But where are there any unbiased and rational men?

[April Lexington]

JASON C for PRESIDENT!!!!! Excellent idea. Only make it a national sales tax rather than an income tax. That way, nobody has to file any forms...