Posted on 05/01/2012 5:43:13 AM PDT by blam
Citi: The Fiscal Cliff Is 'SO RIDICULOUSLY LARGE'
Joe Weisenthal
May 1, 2012
A quick paragraph from Citi's Steven Wieting which we found amusing, the gist of which is basically: The fiscal cliff coming in 2012 is so big, it's good, because it will have to get fixed.
The size of the so-called fiscal cliff at year end, which would unwind a decade’s worth of tax cuts and temporary income supports, is so “ridiculously” large relative to near- term growth prospects that markets may take some comfort in its scale. As Fed Chairman Bernanke warned Congress, the Fed would have “no chance” of offsetting an instantaneous shock so severe and noted he was “hoping” Congress would take action.
Wieting goes on...
The combined size of the year-end fiscal cliff implied in current law seems so flatly ridiculous relative to near-term growth prospects, that markets may in fact be feeling some calm that the resolve to once again delay and diffuse it will be found. In late 2010, figure 1 looked substantially the same before fiscal tightening pains were delayed to the period beyond the November 2012 elections. Since then, the size of the cliff grew with prospective spending cuts. Yet some doubt should remain, and we gather build at some point as to whether Congress and the President will be too divided to find an alternative to current law, particularly before the year is out and the new Congress is seated.
Here are the two charts showing the ridiculous changes in tax receipts and federal consumption.
(Excerpt) Read more at businessinsider.com ...
wait, I thought we were nuts for saying there was a cliff approaching?
“wait, I thought we were nuts for saying there was a cliff approaching?”
YOU ARE, according to the Media. This isn’t the Democrat-approved Current Truth. You must also be a RASSISS!
Around 2007 I argued that this could get as bad or worse than the Great Depression. At the time, I thought I was being a bit of an alarmist, but it now has, according to some statistics, actually gotten WORSE than the Great Depression. It is why I now call the Great Depression “World Depression I” (WDI) and I now call this one WDII.
Around 2007 I said this would probably start recovering from bottom in 2011 or 2012. I thought there was a remote possibility that it could go “apocalyptic”. I now FIRMLY believe it will go apocalyptic. As the title says, this is one hell of a cliff. When all is said and done, it will be the biggest socioeconomic collapse in the history of mankind.
In 2007 I said this could, as with WDI, end with a world war. I now have little doubt that it will. And it will be much worse and much more global (e.g. fighting on US soil) than WWII.
But in that last one is a caveat: I believe that for it to be that bad we will be talking Ezekiel 39, Daniel and Revelation. This means the “Beast” will amaze the “non-elect” with his solution to a problem that appears to have no solution. It means we may soon see this person rise to power.
There is no human solution to our problem. We will fall all the way to the bottom before the phoenix can even begin to rise. It’s gonna leave a mark. Pray for your children and grandchildren.
—Kicking the can...—
And each time it goes a shorter distance. They are about out of kicks.
All TARP and the bailouts did was delay the inevitable, and make it much worse in the end.
Prepper ping needed.
IMO, financial collapse is not only the most prominent threat to bring about TEOTWAWKI,
but it is imminent and unavoidable.
Spending is the problem, yet Wall Street gets spooked by any effort to really cut spending back even to the levels of 5 or 6 years ago. We have to cut spending, period. Then we have to cut it again and again. Our society is addicted to the heroin of government spending. It has to be cut. The irony is that Wall Street seems to think that money is taken out of the economy if the government stops spending. It isn’t. It is just spent by private persons. Even the debt — instead of buying bonds or T Bills, the investor invests in something else. Something productive. This is all so clear to me anymore. You either pay people to not be productive (ie, government spending) or you put money to work in the private sector to invent new products and services to better everyones’ lives. Government spending is a real drag on the improvement of our society.
—The fiscal cliff coming in 2012 is so big, it’s good, because it will have to get fixed.—
Baloney. Greece “has to be fixed”. How’s that going for them?
Any politician proposing the kind of austerity that would be required just to give us a fighting chance would be voted our so fast he’d never see it coming. If he’s running for office he might as well give up. The problem, as in most democracies, is the electorate. They will not support politicians that do the right thing. They vote their wallet.
Ultimately, the final option will be to monetize our way out of this. It is the only “solution” that is politically possible. Of course, with the amount of foreign debt floating around the world this time, that will lead to a very unpleasant war.
—All TARP and the bailouts did was delay the inevitable, and make it much worse in the end.—
Precisely. I told my republican friends that they may not want McCain to win, since whoever won would be labelled as responsible for the coming mess. But the “kick the can” actions have done nothing but delay, at the cost of increasing the height of the cliff dramatically. And there is no such thing as “terminal velocity”. The higher the cliff, the faster we will be going when we hit the rocks below.
I always wondered what would be the mechanism that would FORCE all the countries to give up their currency. Well...now I can honestly see how we get there. Even secular "prepper" types are warning that this is probably the only solution: A world wide "reset."
—Spending is the problem...—
And the REAL problem is that the government spending is so large that the “real” economy has a symbiotic relationship with it. Cut government spending enough to matter, and you ding the economy. It becomes a positive feedback loop, spiraling all the way to the bottom. The time for any “planned” solution has long passed. We are at the point in a head on auto accident where you just instinctively push your hands forward to stop the truck coming at you from passing into your face.
It really is not gonna help. It’s gonna hurt. A lot.
Yep. I see it as a socioeconomic collapse. The biggest in the history of mankind.
Listen to some of this guy’s webcasts:
http://www.kevinswanson.com
The “socio” is inseparable from the “economic”.
The nuclear family is now the minority.
Bastardity has increased 6 times among minorities and 10 times among whites.
70% of “men” are not grown up by age 30.
Remember when they used to say it was all about middle east oil? Whatever sells books, I guess.
$
The final nail for me, regarding the social part, was participating in lots of internet debates about the Martin/Zimmerman case. But the debates about AGW, Obama’s policies, the FACT that many Americans are no longer insulted when you call them a Socialist, and many actually call themselves. socialist.
This isn’t your standard generation gap. This is Dr. Zivago, but on an international scale.
Funny about that “socialist” bit.
I have found that “most” leftists still bristle when they are rightfully labelled as socialist or communist.
Their argument is that their goals and policies don’t fit the dictionary definition of socialist.
To which I reply that, yes, their goals and policies would be more accurately characterized as “fascist”, but I didn’t want to start a fight.
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