Obama Debt Orgy: Barackanalia and Gotterdamerung
Most credible analysts see the abrupt Obama - Pelosi debt run-up as being unsustainable. The result of the massive acceleration in rate of government debt will be a debt that reaches 90% of the country's total economic output. At that level of debt -- over $20 trillion, combined with the productive segment of the population that is rapidly aging -- it will be clear to all investors that the US government can never re-pay its debt. At that point no one will buy US debt any longer, the treasury will be forced into massive inflation, and the economy and the government begin to crash together even faster.
The federal public debt, which was $6.3 trillion ($56,000 per household) when Mr. Obama entered office amid an economic crisis, totals $8.2 trillion ($72,000 per household) today, and it's headed toward $20.3 trillion (more than $170,000 per household) in 2020, according to CBO's deficit estimates.
That figure would equal 90 percent of the estimated gross domestic product in 2020, up from 40 percent at the end of fiscal 2008. By comparison, America's debt-to-GDP ratio peaked at 109 percent at the end of World War II, while the ratio for economically troubled Greece hit 115 percent last year. _Source
There will be no international community to bail out the post-Obama US government debacle, because the US has been the glue holding the international community together for almost 100 years. No hero nation waits in the wings to take over for the fallen hegemon.
As quoted previously here at Al Fin:
While the US might be capable of borrowing $20 Trillion, at that point only 60% of revenue would be available for government programs. Since the government is currently spending 180% of revenue on programs, it’s unlikely that it would be able to reduce spending on government programs by almost 70%. It’s most likely that a combination of taxes, spending cuts, and inflation will have to be used to keep debt at sustainable levels at that point. _A_Realistic_Look_At_America's_Debt
In other words, without any additional debt or devastation caused by Obama-Pelosi beyond the FY 2011 budget, the US will reach that mythical $20 trillion "point of no return" just by "staying Obama's course."
But as anyone with any intelligence and understanding of government should understand, Obama - Pelosi are just getting started driving the stake through the heart of the private sector. They see no reason to stop now, simply because a bit of simple mathematical analysis shows that they have already done enough to kill the US economy, given a few more years to absorb all that they have set in motion.
This is what happens with an incompetent one-party government that is propped up by the media, the icons of popular culture, most of academia, and the rest of the pseudo-intelligentsia. There is no one left to call the Emperor on his transparently naked debauchery.
Yes, we need to try to slow down the train wreck, and limit the damage as much as possible. But don't be under any delusions that the train wreck is preventable. Just know that there is life, prosperity and happiness on the other side -- if you make your plans now.
Labels: Doombama, economic depression
posted by al fin at 3:55 pm
11 Comments:
Too bad these sort of thoughts weren't with the previous administration who's tax policies, unpaid wars, no oversight on corrupted Wall Street and corporations helped push us quicker into the quagmire...It's easy to blame the administration that actually tries to find a solution, but let us not forget the Repugnicants who try at every turn to keep this country down the slow misery, rather than attempting to find solutions. Their brains hurt when thinking, they find it much easier to simply bread fear into the numbed minds of middle amerika.
Sorry, Douglas, your pathetic clown prince doesn't get off that easily. It may be too early in time for persons such as yourself to apprehend the abrupt change in the Obama Pelosi reich's fiscal, policy, and regulatory approach.
Voting for Obama once could simply be the case of misplaced idealism and a failure to investigate an apparent wellspring of "hope and change."
Continuing to support the ongoing train wreck qualifies a person for the label "Obama Zombie." ;-)
Heh. Funny how the Obama supporters always say things like "Well, the last guy was bad, so our guy being 10 times as fiscally irresponsible is good!"
What I thought was funny was the number of Democrats that lauded the health care bill as being as good as social security and medicare, both of which are in financial failure.
I find it even more funny how it is so easy for GOP to spend without paying for shit, then it is always up to the Demo's to clean up the fiscal irresponsibility and mess. But, the GOP is quickly there to blame for the debt that they handed down as the Demo's problem. It is also rather funny how the GOP offers NO idea what to do to fix the situation excepting to simply say NO to any idea on the table.
So, even your responses are a bit tired, just as you feel mine are.
By the by, if we heavily reduced our defense budget we could fix the other budgets.
That is both parties fault in the broken system. It is not a partisn issue, it is a broken system issue.
I have no dog in the hunt. Personally, I would happily shoot all the dogs, then re-structure the hunt according to original principles of limited government.
It is too late for that, as the one-party ramming down the throat approach of the Obama - Pelosi reich demonstrates.
The debt problem has been ratcheting itself up ever since the days of Franklin Roosevelt, but were truly set in motion in the days of Johnson, Nixon, and Carter.
Both parties are to blame.
What is undeniable, however, is that the ratcheting up of debt by Obama - Pelosi is an order of magnitude in excess of anything that came before -- even Carter, Nixon, and Johnson.
Douglas, your claim that any magnitude of reduction in the defense budget is capable of preventing the oncoming calamity needs to be re-thought.
Anyone with a brain has seen this train wreck coming many, many years ago. You may be too young to remember Ross Perot, but back in 1992 Perot could have gotten very close to the presidency if he had stuck with the message -- essentially the message of the above blog posting. 18 years ago. Smarter people than Perot were aware of the problem back in the late 70s and early 80s.
But in all the time since then, everyone in DC has been more interested in re-election and increasing their power and wealth, than in fixing the problem.
And now we have the Obama Pelosi reich, where things really start to accelerate into the avalanche.
As I say to all my students: "Wake up little stupid heads!"
It's sad that you feel you need to resort to personal insults...but, do what you must to feel good.
I know "that any magnitude of reduction in the defense budget is capable of preventing the oncoming calamity." The calamity is much bigger than the sum of the parts.
I have no dog, as well. The dogs continue to chase their own tail toward a "New World Order".
The previous reich did much ramming, as well, so I am well aware it is the system and not the players. Perhaps a visit through your archives will exemplify your understanding of this, too.
The "free market" as it is hailed is broken. It has been for millenia. A free system built on the backs of the poor is not "free". Good for those who got, though!
Your claim that Ross Perot, or perhaps Ron Paul is that answer. Anyone with a brain knows that this is also incorrect.
As long as the system is in place with the Fed, World Bank, IMF, and all of the other corrupt manipulative players within a stacked game it will remain.
As you say, "wake up little stupid heads!"
Douglas, you are taking all of this too personally.
No one here is claiming that Ross Perot, Ron Paul, or anyone else is "the answer" to the problem. The system has been broken ever since Johnson, Nixon, and Carter, as I said too plainly in the previous comment.
I must say Douglas, that even though you respond at length to things you have not read, at least you do not use profanity. I must thank you for that.
It's just the internet. When you start repeating yourself you just need to go on to something else.
Al - I don't know how you blame Nixon and Carter for the current budget woes. My analysis ( Sojka's Call: Federal Spending Adjusted for CPI by President ) showed that Carter held spending down and Nixon was not worse than the others though he did sow the seed of printing money mindlessly by removing the US completely off the gold standard.
Regarding your comment "... if you make plans now.", any hints?
SC: I like your graph. The problem is that increases in spending are written into laws and contracts without requiring further action by an executive.
There are very few educated persons on these matters who are willing to go beyond the politically correct historical viewpoints.
If a president planted a seed that resulted in huge expenditures on another president's watch, who deserves the blame?
You need to look at the President plus the Congress to understand federal spending. Clinton plus a Gingrich Congress managed to hold spending down (nominally if not in fact) mainly by the Congress holding Clinton's feet to the fire until he signed important reforms.
Reagan plus a Democratic Congress had a harder time controlling expenditures.
Obama's rate of spending growth is destined to blow everyone else out of the water. The problem is, by the time that happens it will be too late to keep the ship from sinking. If people stand by and let it happen, they deserve to drown themselves.
Lyndon Johnson revolutionised the approach of government to social problems, and set the stage for the spending deluge. Nixon basically continued LBJ's legacy. Carter's influence was even worse, with his wage and price controls and his foreign policy incompetence.
Carter got the current housing bubble debacle started in the first place, among other monumental fubars.
Your graph is nice, but it tells less than 10% of the story. It's a start, though.
Al - I thought it would be easy to find the numbers in those two graphs, but, it was not. Though the raw numbers were there, any intelligent analysis seemed to be missing.
Your 10% of the story number (I thought it was maybe 30%) could be correct. I have given the chief exec too much credit and blame over the years for things beyond their control. However, leadership is critical and does make a huge difference, so, I might debate the hairs with you, but, it really is moot.
Back to the data.... It seemed to me that all the data and analysis of budgets, spending, inflation/deflation, wars, entitilements, Pub or Dem congress or prez, etc would have had some in-depth analysis done by some six sigma stat freak along the way. I don't think the whole enchilada is that complicated to understand and make clear to the layman.
Of course, over the years, those in power have had no reason to lay bare the facts of gov't spending. Both parties have wielded the money to control power.
However, it seems some blogger has done more analysis on this subject and I would not need to reinvent someone else's wheel.
You do a heckuv' a job scanning the internet for info. Any site(s) you have found particularly interesting or enlightening regarding gov't spending?
You deserve a lot more credit for compiling and graphing the data than you will likely get from the US government, the US media, or US academia and punditry.
You need to take what you have and add to it. I am not trying to discourage you, but rather the opposite.
Such a project represents the genius of private independent investigation and dissemination of information, made easier by the internet.
As for the 10% vs. 30%: If you had included the Congress along with the President -- perhaps breaking up the graph of individual terms where Congress changed hands in the middle -- your graph might contain 30% of the information needed to form a good picture of what was actually happening.
That would take more work and make the graph more complex and difficult to read. Starting to sound more like reality?
It is important to graph government revenues side by side with government expenditures.
To understand government revenues and expenditures, you need to understand things like interest rates, tax rates, regulatory structures, labour laws, and special circumstances such as wars, terror attacks, natural disasters, tariff rates etc.
That gets you to 50% plus or minus.
I was looking at the rate of growth of Medicare and Social Security back in the early 1990s, and it was clear that the situation was hopeless, politically speaking.
The "budget surplus" of the Clinton years was a scam, but you wouldn't necessarily know that without understanding the underlying entitlement spending growth that is hardwired into the system.
Of course spending grew in the Bush years. It was programmed to grow even without 9/11 or any wars on terror. Bush just didn't realise that there was no longer room for discretionary spending, and if anyone in Congress knew, they weren't telling.
Under Obama spending was destined to grow even more. But instead of limiting his ambition just a little -- say to the "modest" level of W, his predecessor -- Obama decided to let it all hang out and go for broke. So far he is staying the course and pushing the limits of what Americans will accept in terms of government growth and revolutionary changes in society.
Immigration is next, and if you think the anger over Obama's nascent destruction of the advanced US biomedical industry was overblown, just wait until big amnesty for illegals hits the streets.
Or whatever else Obama has up his sleeve.
The Bureau of Economic Analysis, www.bea.gov plus dozens of other government statistical sites including cbo.gov are available. They are not necessarily trustworthy, but they should have some of the data you may want.
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“During times of universal deceit, telling the truth becomes a revolutionary act” _George Orwell
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