US Debt Loads One-Armed-Bandit Machine
US debt is just now going over US$16 trillion... with no end in sight!
It's looking more like Romney and his money machine men will pull their one-armed bandit and win the jackpot in the US "democracy" casino in November! Blame Obama for feeding all that lolly into the machine without any payback in terms of much-promised "hope" or even any small "change"!
Can you spare a dime? A nickel will do. Obama's "change" seems backwards to 1930s!
So how will Romney's one-armed-bandit machine hit jackpot, rather than get sucked deeper down the debt drain?
Romney's money machine men have ensured they don't pay much taxes to feed the machine. They know better than to expose themselves any more than needed to US government debt liabilities. The machine is fed and loaded by Joe Soap who is about to be taken to the cleaners! Romney's capitalist running dogs will have a field day when the US government and its increasingly squeezed citizens go broke to leave the nation's and citizens' assets at knock-down, giveaway prices for the already rich money machine men to snap up. Wuf, wuf, woof.. and may the Devil take the hindmost!
Obama was a throwaway puppet used by the one-armed-bandit masters of corporate USA to load the money machine up with an "invisible hand of the market" while proffering "hope" for a rapidly dwindling, small "change" with his visible hand.
Ripe time is approaching to pull the lever and deliver the jackpot assets of USA into the hands of Romney's money machine men. Joe Soap will be left squeaky clean with US$ notes to use as toilet paper, but his ass will be owned by the one-armed-bandit capitalist running dogs.
The American Dream of Romney's money machine has a flipside similar to Adam Smith's market theory's invisible hand, but it certainly isn't the much-hyped "win-win" situation! The flip will produce a flop, the dream will turn to nightmare, the capitalist lever on the US elections will drain the pot of public debt and break the US government to leave an unruly BEAST - Capitalism Without Government!
http://www.nypost.com/p/news/business/us_debt_to_pass_YorannQiQY7NYfQcOQg9pI
http://www.usdebtclock.org/
http://www.inthesetimes.com/article/11775/the_debt_debacle/
Sovereign Man newsletter
August 29, 2012
Rome
If you haven't heard yet, the United States of America just hit $16 trillion in debt yesterday. On a gross, nominal basis, this makes the US, by far, the greatest debtor in the history of the world.
It took the United States government over 200 years to accumulate its first trillion dollars of debt. It took only 286 days to accumulate the most recent trillion dollars of debt. 200 years vs. 286 days. This portends two key points:
1. Anyone who thinks that inflation doesn't exist is a complete idiot;
2. To say that the trend is unsustainable is a massive understatement.
At an average interest rate of 2.130%, Uncle Sam will shuffle $340 billion out the door just in interest payments this year... and it's a number that's only going up. To put it in context, China owns so much US debt that the INTEREST INCOME they receive from the Treasury Department is nearly enough to fund their entire military budget.
It's rather disgusting when you think about it.
Yet when you look at the raw numbers, there is no sign of improvement anywhere on the horizon. Last year, the Treasury Department brought in about $2.3 trillion in tax revenue. They spent $2.9 trillion JUST on -mandatory- programs like Social Security and Medicare, plus the very sacrosanct defense budget.
In other words, the US government was $600 billion dollars in the hole before paying a dime of interest on the debt, or paying the light bill at the White House. In fact the government's own numbers reflect a budget deficit through the end of the decade, i.e. the debt level is only going to get higher. These are their own figures.
In the 19th century, the Ottoman Empire was facing a similar debt crisis. In just 11-years, the Ottoman central government went from spending 17% of its tax revenue on interest payments, to spending over 52% of its tax revenue on interest payments. Then came default. Eleven years. The US is at 15% right now. How long will it take for the interest burden to become unbearable?
History is full of examples of superpowers bucking under the weight of their debt. This is not the first time that it's happened, and it won't be the last.
Sovereign debt is a giant confidence game. Investors buy bonds on the belief that governments can (and will) pay. When that confidence is chipped away, the cost of capital becomes debilitating. And people tend to notice a $16 trillion debt burden.
This is banana republic stuff, plain and simple... and smart, thinking people ought to be planning on capital controls, wage and price controls, pension confiscation, and selective default. Because the next trillion will be here before you know it.
US debt is just now going over US$16 trillion... with no end in sight!
It's looking more like Romney and his money machine men will pull their one-armed bandit and win the jackpot in the US "democracy" casino in November! Blame Obama for feeding all that lolly into the machine without any payback in terms of much-promised "hope" or even any small "change"!
Can you spare a dime? A nickel will do. Obama's "change" seems backwards to 1930s!
So how will Romney's one-armed-bandit machine hit jackpot, rather than get sucked deeper down the debt drain?
Romney's money machine men have ensured they don't pay much taxes to feed the machine. They know better than to expose themselves any more than needed to US government debt liabilities. The machine is fed and loaded by Joe Soap who is about to be taken to the cleaners! Romney's capitalist running dogs will have a field day when the US government and its increasingly squeezed citizens go broke to leave the nation's and citizens' assets at knock-down, giveaway prices for the already rich money machine men to snap up. Wuf, wuf, woof.. and may the Devil take the hindmost!
Obama was a throwaway puppet used by the one-armed-bandit masters of corporate USA to load the money machine up with an "invisible hand of the market" while proffering "hope" for a rapidly dwindling, small "change" with his visible hand.
Ripe time is approaching to pull the lever and deliver the jackpot assets of USA into the hands of Romney's money machine men. Joe Soap will be left squeaky clean with US$ notes to use as toilet paper, but his ass will be owned by the one-armed-bandit capitalist running dogs.
The American Dream of Romney's money machine has a flipside similar to Adam Smith's market theory's invisible hand, but it certainly isn't the much-hyped "win-win" situation! The flip will produce a flop, the dream will turn to nightmare, the capitalist lever on the US elections will drain the pot of public debt and break the US government to leave an unruly BEAST - Capitalism Without Government!
http://www.nypost.com/p/news/business/us_debt_to_pass_YorannQiQY7NYfQcOQg9pI
http://www.usdebtclock.org/
http://www.inthesetimes.com/article/11775/the_debt_debacle/
Sovereign Man newsletter
August 29, 2012
Rome
If you haven't heard yet, the United States of America just hit $16 trillion in debt yesterday. On a gross, nominal basis, this makes the US, by far, the greatest debtor in the history of the world.
It took the United States government over 200 years to accumulate its first trillion dollars of debt. It took only 286 days to accumulate the most recent trillion dollars of debt. 200 years vs. 286 days. This portends two key points:
1. Anyone who thinks that inflation doesn't exist is a complete idiot;
2. To say that the trend is unsustainable is a massive understatement.
At an average interest rate of 2.130%, Uncle Sam will shuffle $340 billion out the door just in interest payments this year... and it's a number that's only going up. To put it in context, China owns so much US debt that the INTEREST INCOME they receive from the Treasury Department is nearly enough to fund their entire military budget.
It's rather disgusting when you think about it.
Yet when you look at the raw numbers, there is no sign of improvement anywhere on the horizon. Last year, the Treasury Department brought in about $2.3 trillion in tax revenue. They spent $2.9 trillion JUST on -mandatory- programs like Social Security and Medicare, plus the very sacrosanct defense budget.
In other words, the US government was $600 billion dollars in the hole before paying a dime of interest on the debt, or paying the light bill at the White House. In fact the government's own numbers reflect a budget deficit through the end of the decade, i.e. the debt level is only going to get higher. These are their own figures.
In the 19th century, the Ottoman Empire was facing a similar debt crisis. In just 11-years, the Ottoman central government went from spending 17% of its tax revenue on interest payments, to spending over 52% of its tax revenue on interest payments. Then came default. Eleven years. The US is at 15% right now. How long will it take for the interest burden to become unbearable?
History is full of examples of superpowers bucking under the weight of their debt. This is not the first time that it's happened, and it won't be the last.
Sovereign debt is a giant confidence game. Investors buy bonds on the belief that governments can (and will) pay. When that confidence is chipped away, the cost of capital becomes debilitating. And people tend to notice a $16 trillion debt burden.
This is banana republic stuff, plain and simple... and smart, thinking people ought to be planning on capital controls, wage and price controls, pension confiscation, and selective default. Because the next trillion will be here before you know it.
Simon Black
Senior Editor
SovereignMan.com
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