Thursday, August 30, 2012

Ring The Bell: Treasury Debt Now Over $16 Trillion - A Modest Proposal

Behind every small business, there’s a story worth knowing.  All the corner shops in our towns and cities, the restaurants, cleaners, gyms, hair salons, hardware stores – these didn’t come out of nowhere.  A lot of heart goes into each one.  And if small businesspeople say they made it on their own, all they are saying is that nobody else worked seven days a week in their place.  Nobody showed up in their place to open the door at five in the morning.  Nobody did their thinking, and worrying, and sweating for them.  After all that work, and in a bad economy, it sure doesn’t help to hear from their president that government gets the credit.  What they deserve to hear is the truth: Yes, you did build that. - Paul Ryan, Republican VP Candidate, RNC Speech
I just want to preface that my using that passage from Ryan's speech last night in no way is an endorsement of the Romney/Ryan ticket for the Presidency.  In fact, as I've stated on this blog previously, I firmly believe the best way to get real change in this country is if no one shows up to vote on election day, which would de facto invalidate our Government.

People accuse me of being unpatriotic and ungrateful for not voting.  But, au contraire, I would argue that anyone who does vote is affirming and legitimizing an illegitimate system.  Our Governmental system bears no resemblance to the system ratified and put in place by the Constitution and our "elected" officials - nearly every one of them - is either a complete fraud (Obama) or thoroughly corrupt.

Moving along, I wanted to point out that as of Tuesday's debt issuance by the Government, our national Treasury debt officially exceeds $16 trillion.  The debt ceiling limit put in place in 2010 is $16.394 trillion.  It was lifted to this level at the end of January 2012.  At this rate of new debt issuance, roughly $114 billion per month, the Government will exceed its legal debt limit by the beginning of December.  And please keep in mind that there is off-balance-sheet Government guaranteed debt in the form of Fannie Mae, Freddie Mac, FHA and General Motors.  That extra $8-10 trillion gets conveniently left out of everyone's discussion.  But not mine.

Furthermore,  a report was released earlier this week showing that the 50 individual States collectively have over $4 trillion in outstanding bonds, unfunded pension commitments and budget gaps:  LINK If you add that to the debt that is an obligation of the U.S. Treasury (vs. all the "legacy" liabilities like under-funded Federal pensions, social security, medicare, etc), you have around $30 Trillion in Federal and State direct debt.  That's about 200% of GDP.  That ratio makes Greece and Spain look like "gold standard" countries.

When will this debt/dollar bubble finally burst?  Anyone's guess is as good as mine, but mathematically this can not go on much longer.  Either the Government has to shut everything down except the functions provided in the Constitution or the Fed has to crank up the printing press in a major way.  I will say that anyone who owns Treasury bonds, from the Chinese Central Bank to the lowliest American retiree, is a complete idiot.  I'd rather own a big bag of shit.  At least I can sell the bag of shit for use as crop fertilizer.

Circling back to my endorsement of that particular passage from Ryan's speech last night (honestly, that was actually the only part I heard as I had clicked on to CNN randomly and there it was.  It was also the first time I've heard Ryan give a speech - his voice makes him sound like a high-pitched pin-head - it's bad enough that he looks like Pee Wee Herman), it was clearly a massive missile fired at Obama's comment that American business owners owe their success to the Government.  I don't think anything I've heard Obama say has pissed me off more than that.   Obama owes his "success" to the Government and to all the socialist programs put in place like Affirmative Action which have enabled Obama throughout his life.

Obama has been a lifelong beneficiary of public spending and the public payroll.   In fact, Obama has made more than enough money off of his book deals to live comfortably and I have this modest proposal:  Obama should be the first person on Capitol Hill who gives up his Taxpayer and debt-financed salary plus benefits in order to help solve our catastrophic debt problem .  And he should step forward as a leader and call on all members of Congress who have personal wealth to give up their Congressional pay and benefits.  I think as public servants this is the least they all can do.


  1. (Quinn, Littleton)

    Dave: Did you see this - Warning, It's scary!

    "The chart in gold appears to suggest that the precious metal has upside potential, noted investor Dennis Gartman told CNBC on Wednesday."

    “If you make me do something in gold in dollar terms, I’m going to be a buyer rather than a seller,” he said on “Fast Money.”

    Put on the hedges! Look out below! Secure a life boat for the women and children now!

  2. Even if Obama wins, the debt ceiling will be raised just enough to pass it on to the new Congress.

  3. I read your statement about not voting in past blogs, however I don't agree. If R & D are your only choices I would agree. But I think Gary Johnson will be able to be on the ballot. If in fact he is, I think showing the effort to actually cast a ballot for an unknown sends a stronger message of discontent than not showing up. In regards to Ryan's speech, I remember Obama spewing a lot of good sounding speeches just 3 years ago. I have purposely refused to watch this.circus but did hear Romney talking just this week. Sounded just like Bush II.

    1. Yep, not voting is a cop-out.

      Dave wrote, "I firmly believe the best way to get real change in this country is if no one shows up to vote on election day, which would de facto invalidate our Government."

      Because the problem is so big, that is a rationalization to not get involved. Not only do I vote, I went through the extended caucus process of becoming a national delegate. I was on the floor of the RNC when they used a voice vote to set up stupid rules. They also stripped Ron Paul's delegates from several states, so he would not have the five state plurality to be on the ballot and have his votes count. We are exposing their deeds, and we are determined to be involved locally and take local elected positions.

      If Gary Johnson and the Libs get 5% in the general election, the party will qualify for FEC funds. This will send a message to the R-D duopoly and will be an anchor to pull the Rs back to conservative values.

      Last weekend I spoke with Gary Johnson and his VP Judge Gray. I explained how the TARP bankster bailouts got 300-1 negative calls to the Congressional switchboard, the anger still exists, and running with this issue is a winner. Gay marriage is not a winning issue. Judge Gray seemed enthusiastic about "investigate, indict, prosecute, and imprison the banksters" and he mentioned something about his experience with S&L prosecutions. Let's see if they take this issue and run with it - attract Occupy Wall Stret, Tea Party, and the 99%.

      Not voting gives R-D the all-clear signal.

  4. Support organized crime: keep voting!

    1. Love it! Should make it into a bumper sticker.

    2. If you're serious, Dave, so am I. I'll even front you the first $100 to get the ball rolling (for a tightwad like me, that's saying something!).

      On another note, here's something else you'll get a kick out of...

      Canadian Libertarian

  5. Sorry Dave but a narcissist like Obama could never allow your last two sentences into his world. He wouldn't exsist then.


  6. correction (sp) exist.


  7. The Real Reverse Robin Hood: Ben Bernanke and his Merry Band of Thieves (August 31, 2012)

    Away from the stifling media crush, staid Ben Bernanke is dashing Reverse Robin Hood, lackey pawn of the Neofeudalist Financial Lords who shamelessly steals from the poor to give to the parasitic super-rich.

    Amidst electioneering chatter about a "reverse Robin Hood" who steals from the poor to give to the rich, it's important to identify the real Reverse Robin Hood: Ben Bernanke and his Merry Band of Thieves, a.k.a. the Federal Reserve. It's especially appropriate to reveal Ben as the real Reverse Robin Hood today, as the Chairman is as omnipresent in the media as Big Brother due to the Cargo-Cult confab in Jackson Hole, Wyoming.

    Please answer the following questions before launching a rousing defense of the All-Powerful Fed and its chairman:

    1. What is the nominal yield on your savings account, thanks to the Fed's zero-interest rate policy (ZIRP)? (Answer: 0.25%)

    2. What is the inflation-adjusted yield on your savings account? (Answer: - 2.25%)

    3. What is the rate of interest the Fed charges banks for "free money"? (Answer: 0%)

    4. What is the average interest rate for bank-issued credit cards? (Answer: 14.52%)

    5. What is the interest rate for student loans? (Answer: 6.8%, and 7.9% or 8.5% for PLUS loans)

    6. Does the Fed pay interest on the funds banks have borrowed from the Fed for 0% and then deposited with the Fed? (Answer: yes)
    7. Exactly how has the average American worker benefited from the Fed's policies? (Answer: interest on credit cards has declined from 19.9% to 14.52%, if the worker has outstanding credit, which few of the bottom 90% do.) Theoretically, workers could re-finance their homes at lower interest rates, but the vast majority are either underwater or no longer qualify. Ben and the Merry Thieves love pulling Catch 22.

    8. How has the average parasitic Neofeudalist Financial Lord benefited from the Fed's "rob the poor to give to the rich" policies? (Answer: Handsomely. The top 1%'s income and net worth has soared as Ben and his Merry Band of Thieves have stripmined interest income from the poor and pension funds and diverted it to the rich.)