Shhh! Don't Tell Anyone!

[Fredkc]

The Story Nobody is Reporting On

By Karl Denninger

Why aren't we talking about this?

.	Date	Public Debt	Intergovernmental	Total Debt
.	09/30/2016	14,173,423,516,895.82	5,400,021,197,040.97	19,573,444,713,936.79
.	09/30/2015	13,123,847,198,347.81	5,026,770,468,136.52	18,150,617,666,484.33
Purchasing	Destruction	1,049,576,318,548.01	373,250,728,904.45	1,422,827,047,452.46

Remember, the actual "public" deficit is the difference in borrowing between the end of the fiscal year and the beginning in debt held by the public. The total increase in debt, including intergovernmental (mostly Social Security and Medicare) is the actual deficit and is exactly equal, on an arithmetic basis, to the destruction in your personal purchasing power that the government causes (or gain if the government should EVER run a surplus.)

The actual deficit -- that is, the destruction in purchasing power the federal government caused last year, is the percentage of $1.423 trillion .vs. the total GDP of 18.450 trillion or approximately 7.7%.

That's right -- the government intentionally destroyed almost 8% of your paycheck and your savings last year, running a $1.423 trillion dollar budget deficit, which is roughly equal to the worst of the "great recession" when tax revenues went through the floor.

Today, there is no such "tax shortfall" excuse.

The breakdown of exactly where the ugly is coming from will be published next week. I already know what is in there because I've been following the monthly treasury statements all fiscal year, but wish to report final "as tallied" facts -- and thus will have another post at that time.

Let me be clear on the arithmetic: If we do not stop this now within the next 4-5 years -- that is, within the next Presidential term -- our government will collapse, our economy will collapse, our health care system will collapse and both the stock and housing markets will collapse.

This is not politics! It's arithmetic!

And the worst part of it is that I am utterly certain that the "references" count, along with the "views" count on this article will both be a fraction of the politically-oriented articles I've recently posted.

That the real end of our way of life in America, a threat that is obvious, mathematically certain, not very far in the future and yet avoidable if we act now fails to garner any sort of serious attention is the real outrage, folks.

[Ross]

Iv'e been waiting to see inflation go through the roof, yet with the printing of more $$$ and the growing cost of baby-boomers leaving the work force, it remains relatively benign...how can this be? less tax dollars, growing deficits and continual printing of $$$...what am I missing here?

[Adam Bomm]

Blame it on the Fed...

[Fredkc]

Hi folk;
Spent the last day and a half helpin my daughter.
Back.

less tax dollars, growing deficits and continual printing of $$$...what am I missing here?

Well, mostly, the government lies a lot... mostly.

Let's start with this:
The Gooberment just released employment data yesterday. It's the usual crap.

They said unemployment remained steady at about 5%.
Actually, at the point of the last crash - 2008 - it was at about 13%. Today it's between 18, and 23%.
They've been diddling with the way they decide someone is unemployed for about 20 years, now. And after a period of time, they just take you off the list - classify you as "not wanting a job".

A couple of telling observations by David Stockman:

"Namely, that outside of health and education there has not been one net new job created in the American economy since July 2000! Yes, not a single new job—as in none, nein, nichts, nada, zip!

And, the US economy has been losing breadwinner jobs at a rate of 18,000 per month for 14 years running."

Most of the jobs have been created in the Health, Education, and Service sector (HES).

The Service end, you can almost throw away. Avg wages are in the $20k/year bracket. No benefits. These people will not buy new cars, new homes, send kids to college, etc. Neither do most of them wind up paying taxes.

This leaves the "HE's". Most of them get their money from government. This makes them "tax eaters", who pay some back in taxes.

Last month the Gov't said employment increased by 156,000. 1st off, between 50,000 & 60,000 of those area "guesstimate". They go look at how many new business started up, then throw a dart to see how many ppl they hired.

Basically, it's all a crock of ****, made to look good. So much for employment.

Blame it on the Fed...

Bingo! Adam wins a cookie.

90% of our current woes, are provided as bonus, by the myth of Keynesian Economics.

Back in a bit with that.

[Adam Bomm]

They've been diddling with the way they decide someone is unemployed for about 20 years, now. And after a period of time, they just take you off the list - classify you as "not wanting a job".

I heard the 'rise' of unemployment reflected people coming back into the market now that there is some hope for actually finding a job...

[Adam Bomm]

A couple of telling observations by David Stockman:
"Namely, that outside of health and education there has not been one net new job created in the American economy since July 2000! Yes, not a single new job—as in none, nein, nichts, nada, zip!

The Father of Reaganomics is living in an alternate Universe. So what else is new. I wonder how much time he's spent on Fox News. Keynesian Economics is not a myth, however contrary economic policies are outmoded economic philosophies and completely lost credibility when the banksters and corporations took over the world. Those approaches require guiding ethical principles to provide a positive function which obviously is something the aforementioned entities left behind in the 18th century.

Friedrich Hayek the father of modern conservatism would agree I'm sure.

Incidentally, I have become aware of an arena of endeavor that could provide the limitless growth required to sustain capitalism. Space development. It's been staring us in the face for 50 years plus.

[Adam Bomm]

"Keynes intended government to play a much larger role in the economy. His vision was one of reformed capitalism, managed capitalism -- capitalism saved both from socialism and from itself. He talked about a "somewhat comprehensive socialization of investment" and the state's taking "an ever greater responsibility for directly organizing investment." Fiscal policy would enable wise managers to stabilize the economy without resorting to actual controls. The bulk of decision making would remain with the decentralized market rather than with the central planner."

- Commanding Heights - Keynesian Economic Theory (He looks like Nikola Tesla)

The one point that I think history has demonstrated a different reality...

Keynes' factor of lower taxes!

Demonstrative and perhaps counter-intuitive, higher taxes stimulates growth. I know, it defies reason but it is true. If one looks at the historical pattern of growth in eras of low and high tax rates one can see that economic growth is higher in times of high taxes.

The only thing that I can surmise why this is true is because tax burden pain is relative to the individual. It would seem that even the uber rich suffer the pangs of existential scarcity. For example, if a CEO or a bankster doesn't feel that one can without concern buy that 2nd yacht, then a sense of dis-ease begins to fester. Those in a position to move an economy will do so if the psychological motivation to do so exists.

This is not a myth. This is a historical fact despite what Fox news might have to say about it.