All of this is an excellent summary of our problems on the public side, but perhaps even a larger problem is looming on the PRIVATE side with regards to out-of-control debt. Rather than try to clumsily explain this myself, I suggest watching the interview with Australian economist Steven Keen.
http://www.youtube.com/watch?v=ZKanqxd5ZW4
The interview starts right after the 12:00 break.
Thanks to Jslovely, I located the other source that outlines where the USA fits compared to many other countries w/r/t debt sustainability.
It’s Moody’s Aaa Sovereign Monitor (Dec 2009) report.
One can question the assumptions used (they could very well be too optimistic).
However, note how clearly it shows for the spectra and assumptions used, how dire (unsustainable?) the USA way of life and governance is…even compared to other countries. The spectra of assumption demonstrate how serious and dependent we are to unrealistic economic growth projections, and impossible spending and debt levels.
Encourage those who are interested to further consider CM’s points to review and consider and then read the report.
Two words to offer…sobering and chilling.
Nichoman
Erik,
I think you’ve got it exactly right. The only question is how the debt will be defaulted. ONce I realized this I actually started to feel better and not get so worked up over the incompetence we see in DC. None of this extra debt matters much because it won’t be repaid. I think that the choice will be to attempt to inflate away the debt, which I think is also the fairest way to go when you consider future generations. Deflation would make debt slaves of the current and future generations while inflation(probably hyper-inflation) would destroy the savings and capital of the current generations and the young people and the future generations would start their working lives and savings in a new revalued currency. Of course, all of us will be living in much reduced circumstances but that is inescapable when our energy situation is considered. The only way to have a fresh start is to default the unpayable debt in the system and face our reduced circumstances squarely and begin to deal with it with our eyes wide open. I do hope we will get a bit more time to prepare however.
Kevin
lawmakers are considering boosting it by as much as $1.9 trillion in one fell swoop with the hope (fingers crossed) that nobody will notice if they do it over the holidays.Hum...let me see if I have this straight?? Too BIG to fail is their mind set & they have proven this strategy has obviously worked...just look at the BIG banks right now (LOL). So the bigger the numbers the better it all works......we must be too BIG to fail!
Here a trillion there a trillion…yippie de do da I have to do some more Xmas shopping to help this old Gov. out…1st on the list is more Gold!
To keep my sanity with all this sad reality I have to laugh with Tim Hawkins.
This is a bit late on the uptake here but I wanted to comment on Jags post regarding a possible scenario on how things could play out. IMHO I think that congress, wall street and the executive branch are all being paid by the same employer…the central banks who also are the stockholders of the Fed. How things are "played out " on the big cinema of MSM is simply contrived to keep the sheeple entertained and gulled into thinking that there is still a level of governance going on at Capital Hill. Congress has zero huevos to to anything about anything.
The next step is simply to decide who will push the toast down. The “darkness” is set to maximum! I trust my instincts… it is going to come out BLACK with possibly some yellow flames at the edges. Preparation is everything but will it be enough?
Coop
Hi,
Looking at this graphic (http://upload.wikimedia.org/wikipedia/commons/3/3b/USDebt.png) it seems it was far worse during the 40s than it is now (as a fraction of GDP). I think I might be missing something, but I’m not sure what. Was the GDP being calculated differently back then?
Thanks,
Bogdan.
Of course we’re furious. However, what exactly is anybody expecting when we prop up failed models?
[quote=Nichoman]
Does anyone know (with data) how the USA government spending imbalance(s) compare with other countries?
Seen a couple of charts in the past month that show the combination of: 1.) Our rate of increase; and 2.) Percentage debt to GDP, is the highest of all major OECD countries. In other words, were going over the cliff faster than all others. One was on Glenn Beck this past week, other can’t recall.
These seem to be two key metrics to our fate…
If charts I’ve seen are true, this should seal the fate of the dollar (and our country)…both overall and relative to other countries.
Can anyone elaborate on this (confirm/deny) as accurate, and cite data sources to monitor as we ride this roller coaster of folly?
Thanks,
Nichoman
[/quote]
Don’t know if this helps don’t have a chart handy but www.usdebtclock.org has the numbers for the math on GDP to debt. Gets really interesting when you add in the off balance debt.
Bogdan,
The debt increased during the WWII wartime effort, it was widely seen as a temporary episode as businesses were converted towards a single focus, winning the war. The debt outpaced the underlying economy at that time but the most interesting point in that graph is not immediately revealed:
The debt never went down after WWII as you would assume from the chart. What actually happened was that the economy outpaced the debt (remember that this chart is debt divided by GDP). Watch my videos on the subject.
Steve
This article goes hand in hand with Adjustable rate Nation. Raising the debt limit is the first step, but we still need to figure out how to pay for it. That is the step Congress keeps forgetting! Like the theme in the Crash Course, things just keep spinning quicker and quicker. IMHO, I think it is past fixing and those of us paying attention are left trying to position ourselves to be prepared for the inevatible collapse of the fiat money system. Everything we grew up believing in and trusting in is being ripped up from under us. TRUST is gone and I am not sure how we can earn that back. I just can not see how this can be propped up for the next several years. Our government does not seem to even care right now. Opinion polls are dropping like a rock and not one of the politicians seems to care. Elections are less than one year away and Washington just keeps moving forward like business as usual. Maybe they see it coming to a head in the near future and they are not concerned about next November??
My thoughts on Chris’ post is that I thought he would at least mention that the US (and most other countries with a central bank) possess an exponential money system. Don’t you think that it would be completely natural for the debt to have shorter and shorter doubling times?
I’m going to recommend that Chris watch the Crash Course by this great philospher Dr. Chris Martenson. He could learn something from that guy.
By the way… the tongue is completely in the cheek…
Steve
Quite agree, my man. We live in a managed democracy. Elections aren’t going to change anything, as long as the only parties running are the Democrats and Republicans. Both of them are just errand boys for the banksters.
Here’s a simple litmus test. By any rational measure, the United States cannot afford its overseas military empire. It can’t afford NATO. It can’t afford bases in Japan and Korea. It can’t afford occupations in Iraq and Afghanistan.
As long as the firehose of useless military spending continues, debt will continue to metastasize in exponential fashion. It makes no difference whatsoever who is in office. The forces driving us down this road to ruin aren’t public officials anyway. Politicians are their servants.
Supposedly the average American has about 14 years of formal education. It isn’t working. People who can’t figure out that we’re going backrupt, after forgetting to demobilize for 64 years after the world war ended, are functionally retarded. And such a discussion is not even on the political radar screen.
One can only conclude that humans retain more pack animal characteristics than we thought. Individually, humans can split the atom; sequence the genome; design microprocessors. But as a political pack, they turn ape-stupid. Congress cannot be fixed; it can only be closed. Here’s to anarchy!
@machinehead - Agree. We’ve got to get the lobbyists and money out of the elections. The politicians are bought to enact laws to benefit the wealthy. Bring back government of the people, by the people, for the people. Our entire voting process needs to be changed.
Perhaps select our Representatives and Senators by jury-lottery. Everyone’s social security number is in the lottery (similar to PowerBall). Balls are selected from each of 9 containers. The 1st ball is the 1st digit of the SS#…9th ball is the 9th digit of SS#. This will give a random pool of SS numbers to select the candidate. Specific criteria could be used to discard potential candidates, such as too young, too old, moved, died, etc. Eventually, the candidate is chosen and serves for the position he/she was selected for.
This will not happen in my lifetime, maybe in my kids, most likely during my little grandbabies lifetime.
I don’t think are election process needs to change. If you want to get the lobbyists and money out of elections, shrink the government. If there is no money for the politicians to give away, then there is no reason for lobbyists or the corruption we see now.
Chris Wrote:
the true federal deficit is far larger than is being reported
From Treasure “Debt to the penny” Webpage: http://www.treasurydirect.gov/NP/BPDLogin?application=np
Date Public Debt Inter-gov’t Debt Total Debt
09/29/2008 5,774,962,168,083.97 4,170,616,063,897.62 9,945,578,231,981.59
09/29/2009 7,460,136,852,988.81 4,315,975,995,667.36 11,776,112,848,656.17
Difference: 1,685,174,684,905.00 1,830,534,616,675.00
Why does the gov’t insist that during FY2008 that the gov’t only lost 1.4 Trillion? We can clearly see that the outstanding public debt rose by nearly $1.7 Trillion or $285 Billion more than publically stated.
Another gov’t statistic snafu, is the GDP figures for 2008. I believe the annual GDP decline for 2008 was about 8.8%, while federal tax receipts declined by 27% for 2008. The difference between these two figures raises red flags. How could the GDP only fallen about 8.8% when the gov’t collected 27% less in taxes for the year? I believe the median tax revenue declines for states also declined by 27%. I suppose the increased gov’t expenditure of about $1 Trillion would have closed some of that gap. It would be nice to see what private sector GDP figures are (excludiing gov’t deficit spending) to get a real understanding of the GDP, but I know thats a pipe dream!
"Two-thirds of Americans say they have an unfavorable view of financial executives. More than half say big financial companies, which are expected to pay record yearend bonuses, are out only to enrich themselves and also should not have received government aid."A prudent action would be to bailout 85 to 90 cents on the dollar on bonds held by failed finanical business so that investors take a loss so that they realize there are real risks to investing in risky investments. If they permitted the value to fall to market prices it would have collapsed the economy.
As of today, the gov’t has a blanket guarentee on any investments by the big banks. You can’t lose because the gov’t will pay 100 cents on the dollar for any bad loans, plus interest! The second thing would be to break up the big banks into much smaller banks. The big banks are simply too big and use thier influence to push the riskiest investments since investors know that they are “too big to fail”.
The third thing would be for the Fed to supply cheap credit to the banks with the best loan balances on their books, since these banks well managed their loan risks. The gov’t needs to reward the good banks and banish the bad ones, but they did just the opposite.
[quote=machinehead]
Supposedly the average American has about 14 years of formal education. It isn’t working. People who can’t figure out that we’re going backrupt, after forgetting to demobilize for 64 years after the world war ended, are functionally retarded. And such a discussion is not even on the political radar screen.
One can only conclude that humans retain more pack animal characteristics than we thought. Individually, humans can split the atom; sequence the genome; design microprocessors. But as a political pack, they turn ape-stupid.
[/quote]HYSTERICAL and sadly true.
“She’s come undone
She didn’t know what she was headed for
And when I [the middle class) found what she was headed for
It was too late…”
I guess I’m glad there are people out there like you all who think voting could somehow turn things around; I wish I believed that–and that it were possible. But IMO, of course, the American middle class was an artificial creation, the by-product of the spoils taken from The World by a monarchy unrecognized; it’s over. Chinese slave meet American slave, also known as your ex-master…
Even if all the wealth (which, in most cases, is simply a line of 1s and 0s on a chip somewhere) that the thieving kings have excised from the corpse of the planet were to be retaken; were we to “vote out” every senator and congressman, replace them with honest Citizens, institute a retroactive effort to imprison everyone at 85 Broad and other such locations around the world, and claw back every cent, it would be of no avail, as the 3 decades that Reagan’s legacy have had to undermine the spirit, intelligence, drive, and INDUSTRIAL FOUNDATION of America and Her Americans have rendered the effort an exercise for the contemplation of those who would be beheaded during the process; that is to say, only the dead kings would have time to ponder the hypothetical outcome.
Man what a ride! Those of us who have lived through the last 30 years as Americans have had it better than 99.999999999% of the people that have ever inhabited the planet. Bye bye. Get ready for reality.
On the plus side, I, for one, rid myself of almost all material goods some 19 years ago and have had a more interesting and rewarding life than I ever could have imagined back when I initially made the decision to do so (you, too, can live without all that shit). And I would have been just fine living like a pauper, but no, The Devil’s Spawn on Wall Street took over what I thought were seriously flawed, but not homicidal egomaniacal gangs, otherwise known as the House and Senate, a pair that surely would have rivaled a Hitler-Stalin ticket; a pair which had all the right components and fragments to passively auto-coagulate in the heart of the nation. And now? America, alone in a dark alley, on her back and bleeding, her skirt torn and tossed aside, her panties soiled and pushed down to her knees; she’s whispering through the spittle and blood, waving an unseen hand in the putrid Wall Street alley…
I could have happily lived out my life as a pauper, but they took my country…
Now I can’t, in good conscience, be passive; we now know what passivity leads to. The cretan-kings have created a situation in which all our children will no longer, within a short time, be safe to walk the streets–in the daytime (watch a few videos of what’s happening in some of the murder hot spots around the country).
We (the middle class) are all going to become much less well off (as far as velvet paintings of Elvis, Hummers, and other essentials that our egos require), but…uh…hell! There is no but. Given the ugly nature of the average American’s perception of him/herself as entitled to…name it; given that he/she can do little of practical use as regards making, fixing, growing, or raising anything; given that only three or four days of hunger is capable of estranging the cerebellum from the cerebrum, given that There Will Be Hunger,–en masse, the inevitable contraction is going to be ugly.
Those of us who have grandparents or parents that suffered through what will soon come to be known as the Good Ole’ Great Depression know how it affected them (my grandmother kept every can, bottle, rubber band–you name it). Imagine what our children are going to be like (should they survive) when they come out the other side of whatever is coming at us in the next few years–and I hope it’s years, not months or weeks…
There is no fix for the adjustment the American middle class is about to endure. There wil be blood.
Have a nice day.
Some one said that if we hyper inflate that it will wipe out the savings of the current generation but that the rising generation would be able to build again on the newly inflated currency. In other words that life would be good again. You should check out the history of nations that have chosen that path. You will find few that didn’t end in massive wars of distruction or generations third world (excuse me, to be PC “developing nation”) status with poverty abounding. You can not distroy the wealth of a nation to good effect.
www.campaignforliberty.com
This Campaign For Liberty’s membership grew exponentially in its first year. I joined in August 2008 when membership was 6,000 and now it is 224,764 so it doubled and redoubled over five times.
Growth has slowed but keeps going up each hour of the day around the clock and worldwide!
I recruit at every opportunity face to face with friends and strangers. I tell them we believe the politicians in Washington, D.C. take an oath to preserve, uphold and defend the Constitution but have no idea what it would mean to do so.
We intend to replace them with those who will keep the oath.
I think it is our only hope.
Join us! and pass the torch!
I thought Barack Obama was the guy who was going to solve all of these issues.
