Karl Denninger http://market-ticker.org/ with a chart of doom and some harsh words for David Walker and every President since Ronald Reagan. An unsustainable trend will not be sustained. Obama presented his budget today. His forecast is for the deficit to be $1.33 trillion this year. He plans on spending $3.8 trillion next year, while touting $4 trillion of cuts over 10 years. That’s funny. $4 trillion comes to $400 billion per year. He is spending $3.8 trillion this year and $3.8 trillion next year. Where is the $400 billion of “cuts”? See, you need to think like a government drone. The cuts will all come between year 6 and 10. Plus, they won’t actually cut spending. In government speak, spending $4 trillion less than your predicted spending increase counts as a cut in spending. Get it?
David Walker was on CNBC this morning again claiming that we “lost our way” over the last ten years. He’s lying. What we have here is a geometric series in two dimensions (both slope and time) and I’m going to prove it.
Over 20 years, from 1980 to 2000, the slope of the line of debt accumulation was approximately 12 degrees. From 2000 to 2008, or approximately 9 years, it was 26 degrees (more than double the slope over less than half the time) and from 2008 to today it was 64 degrees or again more than double the slope over less than half the time. Note that this is just the public debt — the problems in entitlement programs (internal debt) are even worse!
This is a chart of a runaway geometric series.
There is no solution that comes from “slowing it down” — you must stop this right now.
I recognize that nobody wants to talk about it, say much less do it. But mathematical relationships do not care whether you want to talk about them or not. They just are, and Walker is trying to put this into some sort of perspective that aims at Bush and Obama.
He’s full of crap. The problem goes back to 1980 when we crossed beyond fiscal sustainability. Every President since that time and every Congress has been part of a gigantic Ponzi Scheme that will inevitably blow up unless we act to stop it now.
TeresaE says:
How beautifully laid out in verbiage even a Wall Street trader should be able to understand.
Paying attention is the problem.
Ooh, another piece of candy.
And, HOLY SHIT!
I just spent a bunch of time looking at the zerohedge Fed Reserve charts. Overlay with this, then overlay with US Treasury spending/debt.
There is not enough money & assets & resources in the world to cover this shit.
Zimbabwe & Argentina, with a dose of Roman empire building. Now I know why so many people firmly HAVE to believe this time is different.
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13th February 2012 at 12:44 pm
ron says:
You look at the dept,its kind of hard to fathom the amount. But apparenty president Obama and everyone running except Ron Paul live on anouther planet.And say little about the dept.
The only one who would tackle it,and they call him wacky?
I almost wish we could get the whole SHTF over with instead of the slow death thing.
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13th February 2012 at 1:48 pm
Petey says:
“What we have here is a geometric series…”
Or in other words, an exponential function. Compound interest is a bitch.
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13th February 2012 at 2:06 pm
AWD says:
Obama increased government spending by 30% since he first took office, and shows no signs of stopping. We’re obviously past the point of no return now. Everyone knows it must be stopped, but Democrats and Republicans also need votes, so there will never be cuts. Our current form of government won’t be around in 6-10 years (to make cuts then).
It’s game over, everyone knows it. The boomers were the last nails in the coffin. I wonder what the most obese generation in the history of mankind is going to do once the government goes belly-up or creates hyperinflation (the only two possible outcomes). They won’t even be able to eat Alpo. Maybe they can eat each other.
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13th February 2012 at 2:20 pm
bluestem says:
Up,up and away!!!!!!!!!!!!!!!!!!!!John
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13th February 2012 at 3:32 pm
stan says:
Adminstator,
did you hear about the new Obama Chant that the Houston Texas Kindergarten kids have to learn?
http://www.sodahead.com/living/hes-our-man-yes-we-can-pro-obama-song-taught-to-kindergarteners-at-tx-school/question-2450363/
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13th February 2012 at 3:36 pm
stan says:
Tell me we ain’t Nazi Germany!!
Who is gonna be the White Rose?
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13th February 2012 at 3:36 pm
stan says:
Oh, and btw, does anybody here rembember a sob named Thomas P. Tip O’neil?
I damn sure do.
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13th February 2012 at 3:39 pm
AWD says:
Stan:
“Obama must be trying to commit political suicide! I three times to transfer this video, and it would not be accepted by soda head. First, he puts his filthy stamp of Socialism on our country, then he starts telling us he’s fixing our freedom of religion. Now he has Really done it! He’s messing with , of all places, Texas! Kindergarteners at a Texas elementary school were sent home with lyrics to a pro-President Barack Obama song that included such lines as “Barack Obama is the man” and “He’s our man, yes we can!”
The song, part of a Black History Month program, was forwarded from a parent at Tipps Elementary School in Houston to Joe “Pags” Pagliarulo, a nationally syndicated radio host and frequent fill-in for Glenn Beck. Included with the lyrics was an apparent memo to kindergarten teachers that said kindergarteners would be “required” to learn the chant for the program”
They should be teaching the kids about lying and fascism, what Obama is most known for.
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13th February 2012 at 3:58 pm
Kill Bill says:
Obama increased government spending by 30% since he first took office, and shows no signs of stopping -AWD
The three stooges, Benny, Timmeh and Barry, know three things.
Create, spend and borrow. The debt is out of control, the spending is out of control and the borrowing is out of control.
The worlds most expensive clown car, aka the Borg, has set sail for dimensions unknown.
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13th February 2012 at 4:07 pm
llpoh says:
Whatever happened to the trend is your friend? What a bunch of killjoys around here.
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13th February 2012 at 5:38 pm
KaD says:
In this case the trend is THE END.
Link to petition supporting Ron Paul’s Audit the Fed bill:
http://www.chooseliberty.org/auditfedt2.aspx?pid=feb12op
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13th February 2012 at 6:06 pm
KaD says:
Talk about UNsustainable; here’s peak everything for you: http://finance.yahoo.com/news/in-demand.html
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13th February 2012 at 11:47 am