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The Republic is Finished

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MC Escher View Drop Down
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    Posted: November/09/2012 at 14:48
It's difficult to say when it will actually begin to fall apart in such an obvious way that even the Nation of Libtardia notices it because we're talking about two different timelines:

1) Time until debt crisis is mathematically irreversible, and;
2) Time until economy begins to fall apart.

AND...

It dependent on human behavior and attitudes. The main thing that keeps an economy afloat is faith in it's underlying supports, like currency. If I accept $500 from you in payment for something today, will I be able to exchange that dirty paper for something I need tomorrow and do so at a value level that I consider to be substantially the same.

The first will occur in either 2013 or 2014. The second will occur in 2014 either way, although I will hedge my bets and say it might hold off until 2015 if the media tries hard enough to hide it and people have strong enough denial systems.


Here's the basic problem...
If you look at September's Monthly Treasury report, buried way down at the bottom of page 32 you'll see a line for Department of the Treasury:Interest on Treasury Debt Securities (Gross).......................$454,015

That doesn't seem so bad, except for two things. First, that's millions of dollars, so we're talking about over $450 Billion. Also, that was last year's number, when we owed LESS money. This year's projection as of the end of September is right about $360B, but we're adding about $30B every month, so it's right on track.

That's at an interest rate of around 1%. We're also doing mostly short term borrowing because it's cheaper, AND nobody wants our long term debt. Not on the scale we need anyway.

We're borrowing a little over $1.5T every year and of course half of that is going to paying the interest on the debt with a trillion left over for Uncle Sugar.

If interest rates simply return to NORMAL,, Which means the Fed rate goes up to around 4-5%, you'll see the debt payment balloon to 2 or 3 times the size it is now. This is WHILE we still have to run the rest of the government and baby boomers are retiring at the rate of 3,650,000/year and will continue to do so for about 20 years.

I don't have to tell you what that does to

State and Local governments have $2,812,000,000,000 in debt, much of it underfunded pensions and the big ones are NY, Chicago & California.

Expect that debt to be off-loaded onto the Federal govt in 2013, because those locations are essentially bankrupt NOW. That brings our debt to about $19T right away. Add in what you have to figure at AT LEAST another trillion next year and you enter 2014 at $20T in debt, at a minnimum. By that time the "official" fed interest rate might still be around 1%, but sooner or later the REAL interest rate will have to go up or lenders will lose money on every loan. Remember, loan interest has to outpace inflation over the life of the loan just to break even.


Here's the problem...

RIGHT NOW, if we cut $1.5 Trillion out of the 2013 budget by closing down every single federal agency that isn't mandated by the constitution and necessary to our functioning, we could close the budget deficit, stop borrowing money and once the economy begins expanding again, begin paying down the debt.

A year from now, we won't be able to do that without making real cuts to Defense & Social spending. (Which have to be reformed anyway, especially the social spending, because they'll consume the budget all by themselves if we don't.) And keep in mind... There's only so far you can cut the military and still have one. More to the point, our deficit is more than twice the ENTIRE defense budget, and that includes retirement pensions & medical, and the VA.


At some point, probably in late 2013 or early 2014, the growth of our "budget" will be proceeding at a rate that will be too fast to catch up with, and the recipient class will see their goodies start going away. And I'm not talking just welfare queens and such. I mean your PARENTS, if they collect SS or use medicare. I mean retired veterans. I mean ANYONE getting more money back from Uncle Sugar than they send in and who have structured their budgets around it.

This will happen as things get more expensive, and visible inflation will begin kicking in NO LATER than January of 2013 regardless of anything else.

Why January 2013?

Because our manufacturing, wholesaling and retail sectors have been eating inflation for 4 years in an attempt to avoid alienating their customers, and in some case using "Package Shrinkage" to hide it. (The price stays the same but the package gets smaller.)



They'll try to keep that inflation invisible through the holiday season, but after that they are DONE, because they have no more room to hide things.

Also, we're coming to the end of the big beef kill-off as farmers send more animals to the slaughterhouse to reduce feed costs after last year's drought. Expect food prices to start climbing in time for Thanksgiving.


As the Euro-Zone falls apart, which it will do because the Northern portion will have to shake off the Mediterranean portion to survive, the dollar will be seen as a safe haven.

China is having a lot of problems too.

This means a stronger dollar as people in Europe & Asia try to seek a safe haven, making imports cheaper. You can expect the media to try to play up the idea of a recovery, although employment will remain a problem as our exports actually shrink.

This will play out through 2013. As we go into 2014, the structural problems in our own economy start showing up more and more and Obamacare comes fully on line.



IF the "Red" States had an Article V convention next year and essentially fired the central government and left the "Blue" States to their own devices, we would have a great deal of temporary economic disruption, but the growth the would occur in a presumable zone of economic and regulatory freedom would tamp that down and bring it to an end fairly quickly. But that wont happen.

We might have a "National Election" in 2016, but by that time I suspect that several States will have de facto seceded already. By this I mean, they will have told Uncle Sugar that they had decided there were limits to Federal power that they are willing to stand behind with their police power. This may include declining to collect revenues on behalf of the IRS or making sure that corporations within their borders do so. The 2nd is less likely, but very possible. It's hard to say which ones, but the big candidates are, North to South:

1) Alaska, which has the natural resources to go her own way any time she wants.
2) The North Central States, the ones with the oil boom and 3% unemployment.
3) Ohio/PA/W.Va due to the Coal & Gas issue. This one is dicey because it;s actually a chunk of Southeastern Ohio, Western PA and most of West Virginia that would be most likely to want to go their separate way due to the pain caused by the environmentalist attacks, via the EPA, on coal & gas.
4) Texas, which is where I'd place my money as  being first. Rightly or wrongly, most Texans believe they have the legal right to leave the Union any time they want ANYWAY, and if they decide to, Washington DC wont be able to stop them.

Also keep in mind that if a coalition of States decide to move forward with the Keystone pipeline without the cooperation of Washington, there will be little AS A PRACTICAL MATTER that Washington will be able to do beyond greenmail; which will have less sting as Federal money transfers to the States will be drying up REGARDLESS.

Even beyond that, the general population will have become less willing to co-operate. Tax evasion will skyrocket. The first big revolt might be the ADA requirement over swimming pools; by which Wash
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Post Options Post Options   Thanks (0) Thanks(0)   Quote lucytuma Quote  Post ReplyReply Direct Link To This Post Posted: November/09/2012 at 17:24
An interesting perspective.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote tman1965 Quote  Post ReplyReply Direct Link To This Post Posted: November/09/2012 at 19:47
Interesting Indeed.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Alan Robertson Quote  Post ReplyReply Direct Link To This Post Posted: November/13/2012 at 12:24
I have tremendous faith in our nation and her people, according to what we have accomplished so far.
However, with recent electoral results broken out demographically as to race, economic status, etc., my faith is diminished.
Even more troubling than our economic mess, is the growing tendency of various federal agencies to usurp freedoms guaranteed by the constitution. They just keep chipping away and there are plenty of people who willingly comply, although more and more people appear to be making an effort to resist.
It wouldn't be hard to envision a scenario whereby the feds are intentionally ramping up their assaults against personal freedoms, hoping that eventually, people will get sick of it and will rise up agaisnst the transgressions, thereby allowing those totalitarians sprinkled throughout the gov't to finally reach there goal and clamp down on us completely. In the long run, such a scenario would ultimately fail, but at terrible cost.

What it gets down to is, younger generations haven't learned to look at this state of mind we call a nation in the same terms that some of us older folks do.
It's Uncle Sugardaddy now, instead of Uncle Sam.
"Garg'n uair dhuisgear"
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Son of Ed Quote  Post ReplyReply Direct Link To This Post Posted: November/13/2012 at 17:01


The Republic isn't finished until we are all dead.






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Post Options Post Options   Thanks (0) Thanks(0)   Quote MC Escher Quote  Post ReplyReply Direct Link To This Post Posted: November/13/2012 at 20:18
He's dead.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Urimaginaryfrnd Quote  Post ReplyReply Direct Link To This Post Posted: November/13/2012 at 21:06
Get Your Popcorn Ready Google UN Agenda 21

Edited by Urimaginaryfrnd - November/14/2012 at 19:43

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Post Options Post Options   Thanks (0) Thanks(0)   Quote 8shots Quote  Post ReplyReply Direct Link To This Post Posted: November/14/2012 at 01:42
In the late 1800's a statitician calculated that due to the ever increasing number of horse drawn carriages being used in the urban cities, that the London streets would be covered 20 feet high in horsemanure by 1925.
 
Of course that never happened, because along came the internal combustion engine....
 
So who knows what the world will look like in 2014?
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Post Options Post Options   Thanks (0) Thanks(0)   Quote MC Escher Quote  Post ReplyReply Direct Link To This Post Posted: November/14/2012 at 04:57
Originally posted by 8shots 8shots wrote:

In the late 1800's a statitician calculated that due to the ever increasing number of horse drawn carriages being used in the urban cities, that the London streets would be covered 20 feet high in horsemanure by 1925.
 
Of course that never happened, because along came the internal combustion engine....
 
So who knows what the world will look like in 2014?


People who can do math.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote opticsmike Quote  Post ReplyReply Direct Link To This Post Posted: November/14/2012 at 16:50
I did the math on my own, and as my math goes nothing can fix this under current conditions.

At one extreme, if we do nothing, the debt will crush the economy. At the other extreme, if we tax 100% of everyone's income, it would take 3 years to pay off the debt, but the economy would be crushed at zero hour of the process, and there would be no revenue to pay toward the debt, let alone survive. The key is finding the margin in between at which the function can allow itself to be reversed, but unfortunately that margin had receded to a fine line and already disappeared in this last term.

There are two things which can change this...

1. We can change the dynamic of world trade from hindering our economy by reversing unbalanced conditions including but not limited to EPA, wage & benefit requirements, and monetary valuation. If we mandate for ourselves minimum requirements in these areas, our competitors in the world must as well. But instead of addressing this, we just keep increasing these minimum requirements for ourselves alone, continuing to further unbalance our own footing in the world economy. So leveling the playing field to fix this will -NEVER- happen.

2. ...or we can just sit around and "hope" for some new unexpected miracle to come about as 8shots touched on. I finally realize what Obama meant years ago by "hope". That is his entire plan. Our nation voted for this, and reaffirmed it with his reelection, so "hope" is the course we are taking. For this to work, we all need to stop being negative about this and start hoping better. We need to become a nation of much better hopers if we want to do our part to make this work. Our children and grandchildren deserve it.


Edited by opticsmike - November/14/2012 at 16:55
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Post Options Post Options   Thanks (0) Thanks(0)   Quote tman1965 Quote  Post ReplyReply Direct Link To This Post Posted: November/14/2012 at 17:42
Originally posted by Urimaginaryfrnd Urimaginaryfrnd wrote:

Google  UN Agenda 21


Very interesting, Wes. thanks for sharing that
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Alan Robertson Quote  Post ReplyReply Direct Link To This Post Posted: November/14/2012 at 18:19
I watched the President's press conference today.
Several things stuck out:
He kept making references about how the "American people knew what they were getting when they re- elected me" and how that gave him a mandate. (we are so well- informed by the media, after all)

1) Concerning the economy, POTUS said that by increasing taxes on "the rich", that we'll get an extra $trillion into the gov't coffers.   (I got distracted at that point, thinking about "fuzzy math")
Lots of rhetoric from him about "the wealthy aren't paying as much as they should", the burden on "families with disabled kids or parents in a nursing home", and other tug- your- heart- strings talk, justifying soaking the rich... which they never do anyway, just soak those trying to get rich.

2) re: Benghazi- POTUS got/acted angry and chastised Sen. Graham and Sen. McCain for saying they would block Ambassador Rice as Sect'y of State for her comments to the UN concerning Benghazi and POTUS heaped praise on her said that if he wants to nominate her, he will; that her comments were based on intelligence which we had at the time. (right uh- huh)

Questioning got more pointed about Benghazi, with one reporter saying: "(those killed) basically called 911 for help and they didn't get it."
POTUS blustered about how anyone making such accusations doesn't know how the military or the state dept. work and that we did everything we could to save them and that they would provide all info available to the families involved.
(The FBI spent more time rifling through Paula Broadwell's house than they did searching the consulate in Benghazi.)

A pointed question was asked: "On 9/11, as commander in chief, did you issue any orders to try to protect their lives?"
POTUS did not answer the question.

3) When asked if he will be doing more to prevent Climate Change, POTUS answered:
"... we do know is the temperature around the globe is increasing faster than was predicted even 10 years ago... there have been an extraordinarily large number of severe weather events here in North America, but also around the globe." [Both of those statements are untrue and not supported by data.] He then rambled on about "educating" the people (propaganda) about the need to do more to stop climate change and generally made me disgusted listening to him talk about steps to curtail carbon (shut down our economy) without seeming to shut down our economy (Bush's fault).

He also talked about how he's sending people to get involved with the "opposition coalition" in Syria and how he thinks Iran will come around.


Was that a pig that just flew past my window?


"Garg'n uair dhuisgear"
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Urimaginaryfrnd Quote  Post ReplyReply Direct Link To This Post Posted: November/14/2012 at 19:48
Why yes that was a flying pig.

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Post Options Post Options   Thanks (0) Thanks(0)   Quote Urimaginaryfrnd Quote  Post ReplyReply Direct Link To This Post Posted: November/14/2012 at 20:15
I did get a bit of a chuckly when I thought - HMMM   last time it was: HOPE. This time we have given up : HOPE ,  and the new slogan is: FORWARD Shocked. Now following the election all I hear is there is a FISICAL CLIFF ahead -- OK, and we elected the guy who's slogan is ......FORWARD. Whistling  Isnt this the time when we really needed that slogan HOPE?   Yes this will get interesting before its over. 
 
As for the 60% of you who did not vote I am quite convinced that if you will return to your country of origin that will solve the problem for the rest of us.  
 
   

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Post Options Post Options   Thanks (0) Thanks(0)   Quote Alan Robertson Quote  Post ReplyReply Direct Link To This Post Posted: November/14/2012 at 21:39
Originally posted by Urimaginaryfrnd Urimaginaryfrnd wrote:

I did get a bit of a chuckly when I thought - HMMM   last time it was: HOPE. This time we have given up : HOPE ,  and the new slogan is: FORWARD Shocked. Now following the election all I hear is there is a FISICAL CLIFF ahead -- OK, and we elected the guy who's slogan is ......FORWARD. Whistling  Isnt this the time when we really needed that slogan HOPE?   Yes this will get interesting before its over. 
 
As for the 60% of you who did not vote I am quite convinced that if you will return to your country of origin that will solve the problem for the rest of us.  
 
   
The problem with the slogan: FORWARD! is that it's always been used by various Communist and Socialist groups. I mean, not that anyone in the mainstream press noticed that fact, or the fact that at one of Obama's campaign rallies in Seattle, the band played "The Internationale".

http://www.washingtontimes.com/blog/inside-politics/2012/apr/30/new-obama-slogan-has-long-ties-marxism-socialism/
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Alan Robertson Quote  Post ReplyReply Direct Link To This Post Posted: November/15/2012 at 01:00
"Garg'n uair dhuisgear"
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Post Options Post Options   Thanks (0) Thanks(0)   Quote opticsmike Quote  Post ReplyReply Direct Link To This Post Posted: November/15/2012 at 12:09
lol, someone must have pointed and yelled hey everyone I see hope down there!
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