The United States on the Verge of Cataclysmic Debt Default

Unless you’re a go-about-your-day-and-never-pay-attention undead sheeple zombie, you’ve probably heard that the United States is on the verge of defaulting on its debt unless John Boehner and his traditional Republican and Tea Party Republican controlled House, Harry Reid and Barack Obama can get their acts together and get a debt ceiling limit raised by August 2nd.

But hey – no problem – it’s only SIX DAYS AWAY! (sarcasm font)

Yeah, the debt problem sucks. Yeah, maybe some things should have been done differently. Yeah, there are no easy answers. But C’MON – find some middle ground and get it done! We’re on the verge of fiscal cataclysm!

But don’t take my word for it, ask always trusty Reuters (*ahem* font):

An outright debt default would be much more unpredictable—and potentially cataclysmic.

What? Rewind. Read that again:

An outright debt default would be much more unpredictable—and potentially cataclysmic.

Such an historic event as failure to make payment on Treasury bonds, considered the ultimate safe-haven in banking, would cascade through financial markets and the world economy, dealing a long-term blow to the global standing of the United States.

“Default on the debt would just be a catastrophe, it would be Lehman times ten” said Joseph Gagnon, a former Federal Reserve economist now with the Peterson Institute for International Economics. “Financial markets would seize up. No one would know what is safe anymore.”

Yes! Sweet, sweet S would HTF – we’ve been waiting for a chance to dig out our junk silver and food rations for years!

I mean NO, this isn’t good, it’s TERRIBLE!

Who loses if the government defaults? Who loses it the government has to stop paying bills? We all do.

Regardless of the reasons we got to this state, our failed leaders from both parties are now too caught up in political posturing to get the job done. Everyone needs to give. Social Security, Medicare and Medicaid all need to get overhauled to reduce long-term spending; we need to get our military out of so many foreign countries; the very rich need to pay more in taxes and we need to close so many corporate tax loopholes. Everyone needs to give.

OR we could just sit back and watch our elected leaders continue pushing off difficult decisions in favor of political games.

Hell, maybe I should just start rooting for complete economic collapse (annoyed font). I have some freeze dried food, a garden and a bad attitude (serious font). I’ll watch it all go down (throwing in towel font).

– Ranger Man

75 comments… add one
  • Jarhead Survivor July 27, 2011, 8:14 am

    Great post and I couldn’t agree more. Everybody needs to put a little in the kitty. Unfortunately, the political posturing will probably result in some kind of short extension followed by more bickering and some kind of silly solution that benefits no one. I’ve seen two-year olds on the playground fighting over toy trucks work things out better than our elected “leaders.” Pathetic.

    Reply
    • Odd Questioner July 27, 2011, 9:20 am

      Agreed, almost…

      Yep, they’ll make some last-minute backroom deal, then trumpet it like they just wrote the Magna Carta. Both sides will claim victory, and next year it all happens again. Hopefully by then I’m set up somewhere close to Vernonia, Tillamook, or similar, and scouting for a home. The trick is to be far enough out of the bigger towns (like, say, the PDX metro area) that I can work remotely and only come in occasionally for meetings and the airport.

      I’ve given up on politics a long time ago, but honestly, of the two I think Boehner has a point – spending more than one takes in has got to stop. Unfortunately, I don’t think either his party or Obama’s are capable of that kind of discipline.

      Reply
      • Wally July 27, 2011, 6:20 pm

        The key words there “OUR elected leaders”… Until the sheeple out in this country get off their collective asses and start electing people who will do what is best for the country instead of themselves there won’t be any changes.

        As far as the “kitty” goes, I’ll be more than happy to donate my fair share when it quits getting wasted.

        Reply
  • Spook45 July 27, 2011, 8:52 am

    Heh……..LET IT CRASH! Im tired of sweatin it. Let it crash and let the money junkies go through thier withdrawls and get kicked out of office and we may get back to some symbolance of normal in this country. It amazes me to no end how stupid people are anymore. IT blows my mind that they still believe what politiciians say on the idiot box. Get a clue people, do you know how to tell if a politician is lying? ITs easy, his MOUTH IS MOVING!! IF there is anything spewing out of it, it will likely be an out and out LIE! Thats the only way they can stay in office and get rich off of what WE as citizens do everyday. Let it crash….

    Reply
  • irishdutchuncle July 27, 2011, 9:06 am

    if i was properly prepared, i’d say: “let the cataclysm begin”. (but i’m truely not prepared) this charade has to end sometime. maybe we should declare a national “bankruptcy” and get our national (financial and cultural) house in order, once and for all. “they” (whomever “they” are) have been working on our colapse for a long time. this time it may just happen.

    the Congress, abdicated its responsibilities, to the “Federal Reserve” (which many say is niether) a hundred years ago. it’s time for an audit. there has been criminal wrongdoing by presidents, and congresses alike.(short of a military coup, how can you clean up a mess like that?) much about what we think we know about this last hundred years is probably not “True”. (we can’t solve this crisis by waving the stars and stripes, and chanting USA! USA!)

    i wouldn’t go so far as the tea partiers, and demand a “balanced budget amendment”. there are a few amendments i’d like to see happen before that…

    we need to lead the world by our example, not by our decree.

    Reply
    • Odd Questioner July 27, 2011, 9:25 am

      The funny thing is, I’m ready ‘enough’ for the massive cataclysms that would end monetary systems, but am still pushing savings otherwise – got enough cash for 4-6 months stashed away, the preps, etc. Fortunately, my new job doesn’t rely on governmental largesse so much (the previous one was in the renewables industry, whose customers do rely on government loans and incentives in order to generate sales).

      Reply
      • irishdutchuncle July 27, 2011, 10:03 am

        you can never have “too much” cash… unless of course the “authorities” catch you with it. they will confiscate it and you’ll have to prove it isn’t “drug money”. in the mean time they will confiscate everything else you have. our lives can be changed for us in an instant. (i’d be thrilled if i could save up a few hundred bucks to keep under the mattress) i need more… my own place, more canned goods, more ammo, more cash. ’till then i’m only an “armchair survivalist”. i know that the excrement, is proximal to the air impelling device. ( i’m just not ready for the splatter)

        Reply
  • Rev. Lawrence July 27, 2011, 9:11 am

    I agree that cuts need to be made, but before we go chopping away at retirement/disability pensions that many of us rely on for survival (at least while we try to prepare to live without them), I think we need to focus on cutting waste. We can start by cutting Michelle Obama’s staff down to less than five advisors. We can stop giving tax dollars to multi-million dollar corporations, charities and universities that don’t need taxpayer help. Check out the Citizens Against Government Waste website for some great examples. http://www.cagw.org

    Reply
    • Odd Questioner July 27, 2011, 9:26 am

      Small but o’ comforting news… Social Security is self-funded, and doesn’t rely on taxes. It actually makes more (currently) than it puts out.

      Problem is, like any large wad of money, Congress can’t keep its fingers out of it.

      Reply
      • JeSter July 27, 2011, 10:09 pm

        Errr…did I miss the “sarcasm font”? Ever heard of $66 Trillion in UNFUNDED liabilities (46ish of which are Medicare, Medicaid and Social Security)?

        Anything is self-funding if you use accountants from Enron…I mean the CBO.

        Reply
        • Odd Questioner July 27, 2011, 10:48 pm

          Actually, Social Security *is* funded separately… 7.5% from your paycheck, and a matching amount from your employer. It’s a flat percentage, not subject to fluctuation or tax credits, etc. Last year, the SSA took in $800 some-odd billion and spent $650 some-odd billion.

          Now as demographics change and the baby-boomers get older (the first of them are just starting to draw off of it now), then the numbers will change. But, the fact remains.

          Honestly, the US government has more than its share of problems, but this is one bit that actually isn’t in any immediate danger of getting cut.

          Reply
          • JeSter July 28, 2011, 6:55 pm

            I understand what you are trying to say, but calling it self-funded is incorrect. I am currently paying the SS benefits of retirees. Their money is already looooooong gone.

            The program was originally set up as a contributory system…i.e. “self-funded”…I am funding myself. Now it is a tax, or in other words, a redistribution of my wealth to others. This is called confiscatory. Thus, $66 Trillion in unfunded liabilities.

            If you don’t believe me maybe you’ll believe the Revenuers! From IRS.gov…

            “At first, payments into Social Security were considered “contributions,” not taxes. The program appeared to be self-funded–as workers contributed, they received credits toward retirement benefits. However, too many people needed help, so the program was expanded to include the families and survivors of retired and disabled workers, the unemployed, and federal workers.

            Today, Social Security provides a regular income to retired and disabled workers and the unemployed. Social Security is funded by a compulsory payroll tax called the Federal Insurance Contributions Act (FICA) tax. The payroll tax is withheld from each paycheck. Withholding means that an employer deducts, or holds back, a set amount of money and sends it to the government. Workers pay the tax as they earn their incomes. This system is known as “pay-as-you-go” or “pay-as-you-earn.” Workers’ payroll taxes support those who are currently receiving Social Security benefits.”

    • Jarhead Survivor July 27, 2011, 9:40 am

      Hey Rev. – I’m all for cutting back on government bloat, but how many people in government want to cut their own jobs or give up pieces of their little “kingdoms?” Not many. Once people get used to the power and freedom that money brings it’s hard to let it go. Between the banks loaning money and Americans going to into debt to get it, and the government putting their fingers into pies they shouldn’t like OQ says, I’d say it’s going to be a long road leading to austerity measures when they figure out we can’t spend ourselves rich. That’ll go over big here in the US!

      Reply
  • Timmy July 27, 2011, 9:35 am

    Everyone needs to give?!?! You cannot be serious! They have spent us into oblivion. There is NOTHING to give until the spending STOPS! (reality font)

    Reply
    • Ranger Man July 27, 2011, 10:09 am

      Kudos on the “(reality font)” – lol

      Reply
    • fedup July 27, 2011, 3:35 pm

      Timmy,
      I agree. Instead of raising ANYBODY’S taxes, they should eliminate the income tax and institute a consumption tax (the Fair Tax). That way you only pay when you consume, and EVERYONE would pay taxes….not just the 50% of us who currently fund everything the government pays for…
      http://www.thefedupamerican.com

      Reply
    • Odd Questioner July 28, 2011, 10:35 am

      Hell, I’d be happy if they just instituted a flat tax on every individual and corporation – say, 20%, with only one loophole: you have to make at least $30k/year before you have to pay it.

      That way…

      * “the rich” are pay their fair share (right now they don’t, thanks to a zillion loopholes).

      * The IRS would shrink by at least 80% (how’s that for cutting back government waste?)

      * Folks would actually waste less time and headaches.

      * The government would actually make *more* money overall (and could even start paying down the stupid debt).

      Reply
  • PrimalCane July 27, 2011, 10:16 am

    Consumer debt free this week! Still have about a year left on a car loan, but we rent so there is no other debt to my name. What a feeling, and what better time to be rid of the shackles of consumerism. Took the money I saved (on credit cards not car insurance) and bought my first wave of gear – a few handy knives, a decent pack, hydration equipment, Ferro rod (thanks for the gear review on Gobspark, two thumbs up), and a few other odds and ends. I still don’t have a firearm (Gamo count?), but our family/landlord does, and the garden is coming along nicely so if the zombie (congressional) apocalypse is upon us so-be-it. Squirrel Stew coming right up…

    In other news- How to get out of debt: a Primal Guide. Cut expenses to essentials ONLY, allowing for children to enroll in enriching activities with the understanding that honor roll performance is to be maintained. Boost revenue by working a S#!^ ton of overtime. That is all. [relieved of burden font]

    ~Primal

    Reply
    • gat31 July 27, 2011, 10:58 am

      WTG PRIMAL!!

      Reply
    • Jarhead Survivor July 27, 2011, 10:59 am

      PrimalCane – congrats on getting debt free! It’s hard work, but so worth it when you get there. I imposed some of my own austerity measures six or seven years ago and got debt free. It sucked, but it’s oh so worth it!! Way to go!

      Reply
    • Odd Questioner July 28, 2011, 10:36 am

      It’s an awesome feeling…

      (I had to do the Chapter 13 route thanks to my spouse’s medical bills, but damn I can sympathize).

      Reply
  • Defiant III July 27, 2011, 10:23 am

    “Regardless of the reasons we got to this state, our failed leaders from both parties are now too caught up in political posturing to get the job done. Everyone needs to give. Social Security, Medicare and Medicaid all need to get overhauled to reduce long-term spending; we need to get our military out of so many foreign countries; the very rich need to pay more in taxes and we need to close so many corporate tax loopholes. Everyone needs to give.”

    REALLY?????

    The federal government take in about 2.2 BILLION dollars a month! The bottom 47% eligable tax payers pay NO Federal TAXES

    Sooooooooo???? Just how much “more” does “Everyone need to give”????

    I realize this must be a real news flash for ya but how about governments at EVERY level spend LESS and the bottom 47% of “tax payers” who whine the most and loudest that have NO SKIN IN THE GAME start paying taxes???

    The ONLY legal, moral, constitutional, and legitimate means of taxation is APPORTIONED taxation.

    I am VERY disappointed to see such neo-progressive Marxist/Liberal jibberish on website such as this.

    Why does this NOT surprise me in view of the fact that Maine is that state that has REPEATEDLY elected neo-progressive Marxist/Liberals like Olympia Snowe, Michael Michaudm, Chellie Pingree, and William Cohen among other to office?

    Perhaps I am reading the wrong blog.

    Reply
    • Timmy July 27, 2011, 10:28 am

      woot!

      Reply
    • Defiant III July 27, 2011, 11:54 am

      Typo on my part. Should read 220 Billion dollars. (which brings in an annual revenue of 2.2 TRILLION dollars)

      Reply
    • Calamity Jane July 27, 2011, 12:57 pm

      Here’s a more nuanced view of that 47% figure, for those interested.
      http://www.nytimes.com/2010/04/14/business/economy/14leonhardt.html

      Saying they pay “NO Federal TAXES” is not exactly true. Most of those 47% pay Income tax and other federal taxes.

      What is true is that a “much greater share of income is now concentrated at the top of distribution, while each dollar there is taxed less than it once was.”
      I also think it’s true that raising taxes on the rich alone can’t come close to solving the long-term budget problem. The deficit is simply too big. And your thoughts on the gov’t spending less at every level is probably widely agreed on by prepper types. I know I wouldn’t be opposed to that, but again, solving the problem will take more than cuts to entitlements and bureaucratic layers. There are some major cuts needed in the overblown defense budget, the massive prison population and overzealous laws that enlarged those populations and clog our courts. Corporate entitlements and subsidies and tax breaks, I think there’s a lot of waste there that should also be addressed, with a bigger impact on the budget than going after Jon Q Public for his 3% federal tax payment on the 35K he made this year.

      “neo-progressive Marxist/Liberal jibberish ” Wow.. I realize polite discussion is horribly old fashioned, but maybe others would be more inclined to talk with you about your views if you restrained from calling people names.

      Reply
      • Jarhead Survivor July 27, 2011, 1:49 pm

        Yeah, I ain’t no stinkin’ neo-progressive Marixst… what? Hell, I don’t even know what that means.

        Reply
      • Selkirk July 27, 2011, 3:12 pm

        Our total national debt is about 14.5 trillion dollars. The federal government gained about 2.2 trillion dollars this year in tax revenues, and spent about 3.6 trillion dollars, increasing the national debt by 1.4 trillion dollars (our deficit).

        We spend something in the neighborhood of 700 billion dollars on the military, about the same amount on social security, and almost 800 billion dollars on Medicare and Medicaid combined, each year. If we completely eliminate Medicare, Medicaid, and Social Security, we will eliminate the deficit. We will still owe the 14.5 trillion, but we will not add to it through spending.

        The total income from labor in the U.S. in 2000 was 6 trillion dollars. About 3.6 trillion dollars of that money was earned by the top 20% of our population. Only 1.2 trillion went to the bottom 60% of wage earners. If we raise the income tax rate of the top 20% from the current 35% to a very high 70%, we will eliminate the national deficit. If, alternatively, we raise the taxes on the bottom 60% of earners to 100% of their income, we will not eliminate the deficit.

        I do know about Marxism, and I know about neoliberal economics (the economics of the mainstream right and center). Taking 70% of the earnings of the very rich might properly be called a socialist solution. It would force the top 20% of wage earners to live on a measly $300k per year. Most of the Marxists I know are not so moderate; they would like to take 100% of the money from the top 20%. The Tea Party position, that we should not raise taxes on anyone, requires that we eliminate Medicare, Medicaid, and Social security if we realistically intend to eliminate the national deficit. Most of the “progressives” that I know want to raise taxes negligibly on the top 20% so that they look like they did something, and ultimately not make a dent in the deficit.

        These are rough numbers, but their proportions are basically correct. Whatever your philosophy, the numbers are always the same. There are no easy solutions.

        Reply
        • Selkirk August 18, 2011, 11:13 pm

          As I write this (on August 18, 2011), John Stewart is explaining exactly this math on the Daily Show. At least somebody understands it.

          Reply
      • Timmy July 27, 2011, 8:12 pm

        @CJ – Your link does not compute with your msg. True, most everyone pays some type of Federal tax (the structure is so complex it is impossible to avoid) but the article states: “The 47 percent number is not wrong. The stimulus programs of the last two years — the first one signed by President George W. Bush, the second and larger one by President Obama — have increased the number of households that receive enough of a tax credit to WIPE OUT THEIR FEDERAL INCOME TAX LIABILITY.” So when you say that “Most of those 47% pay Income tax and other federal taxes.” I believe is incorrect according to your own provided argument.

        REGARDLESS

        Our problem is not one of revenue. It is and always has been one of spending!
        Google “base line budgeting” to understand the depth of the spending mentality that has infected Washington.
        We are screwed. Raising taxes on anybody or everybody will never ever solve the problem. I will argue to the death, that it in fact will only make it worse. (another time perhaps) :)
        And no offense, but the NYT?!?! Not exactly a paragon of independent or objective thought.
        Keep up the good work.

        Reply
        • JeSter July 27, 2011, 9:58 pm

          @ Timmy Right on, right on, right on…

          Reply
        • Gobbedyjook July 27, 2011, 11:22 pm

          @Timmy

          Are you actually Grover Norquist?

          Reply
  • gat31 July 27, 2011, 10:38 am

    Well I have to admit that I too am torn between let them fix it and let it go. Either way it goes someone gets the shaft. (no kiss, no vasoline)
    My feeling is this, if we the people have to balance our own checkbooks, have a yard sale,downgrade our stuff, or tell the kids sorry can’t buy the $400 prom dress, then why can’t congress cut some corners? The big corporations have to have lay offs, why can’t congress cut staff?
    If they let it collapse it will kill us here in Florida because we are the retirement capital. Almost half of the state is on SS or SSI and the rest of us depend on them to spend that money to live. OTOH If they raise the limit and all is well, they will only delay the the collapse that will have to happen eventually. You can’t continue spending beyond your income indefinitely.
    On a side note, does everyone have their Rosetta stone program to learn Chinese?

    Reply
  • Timmy July 27, 2011, 10:40 am

    BTW – this “cataclysmic” speak…Do you mean like the cataclysm that would have befallen us if they did not pas TARP, or the cataclysm that would have come to pass if Big O did not get his stimulus package? Both of which have taken us from big problem to apocalyptic problem. Where will this next “cataclysmic” fix take us?!?
    They rule by fear and panic. Why do you so easily fall for such an obvious ploy? Know your enemy!

    Reply
    • Ranger Man July 27, 2011, 10:50 am

      The “cataclysmic speak” was largely tongue-in-cheek. I now remember why I stopped writing anything politically oriented, no matter what side I’d write on, left, middle, or right, someone always gets ticked off – lol. *shrug*

      Reply
      • Timmy July 27, 2011, 11:03 am

        Not ticked off – just passionate. Politics is in everything and some hills are worth dying on for survival of the future.

        Love the blog!

        Reply
  • Presager Buddy July 27, 2011, 11:14 am

    I think few people are prepared for what may come. Consider that if the govenment taxed 100% of our income for one year, it would only take care of half our country’s debt. Just that fact alone is scary!

    Things cannot go on as they are. Everyone will have to give something whether it’s voluntary or not. If we go into default, EVERYONE will feel it. Only a very few who have insulated themselves from the system, such as MD Creekmore, will get by without too much trouble. The rest of us, especially those who depend on the government, such as Social Security, Medicare, Veterans Benefits, Unemployment Benefits, etc., will find various degrees of difficulty in getting by soon. More people will be laid off, more businesses will start to close or stop expanding, the federal and state governments will get less revenue as a result and that will put even more hardship on those who do work. State and local taxes will skyrocket when the federal government cuts what they give the states.

    Our economy is based on unlimited growth. Growth is dependent on energy and the cost of energy is going up. The expanding growth of China and India, for example, means increased demand on the world energy supply. Cheap, abundant oil is a thing of the past. How are we going to have unlimited growth without affordable energy? What will our energy situation look like in 20 years? Think about it.

    Things don’t look good and it almost seems like our leaders are having an argument while the Titanic sinks.

    Our system relies on unlimited growth to sustain our style of living over the long haul. Does it look like we are going to have unlimited growth? Take energy as an example. Given the enormous growth of just China and India consuming a larger portion of the energy pie.

    Reply
  • Jason July 27, 2011, 11:53 am

    Ho-hum (**sarcastic, tired of panic & imminent doom, news font **).

    Just like Y2K, I’ll wait & see how not so magically a “miracle” gets created. I saw a “must see” video of Michael Ruppert in April carrying on about how the economy was going to absolutely implode, fold, get disintegrate in June or July of this year. He implies to buy gold, silver, bullets, fill up the SUV & drive to the nearest Amish community & hide out until it all blows over. But like nuclear radiation fallout, the fallout of our economy implosion has a shelf life of 10,000 years … need I say more?

    Another Reuter’s to consider while you rush WalMart for H2O, .22 hollow points & canned food –

    http://news.yahoo.com/u-likely-lose-top-rating-economists-000214380.html

    People focus so much on the debt side of the equation, what about the revenue side, capital reserves & assets – do you all think we have zero? Things are misappropriated as is the story of every government & something will change & change for the better – feet are being dragged but change will be forced.

    OK, now on to more fun –

    You go into the grocery store to buy the weekly essentials just after depositing $500 in cash with the teller at the bank. You go the checkout line, whip out the ATM to pay and digital read out says INSUFFICIENT FUNDS for your $138 purchase.

    What do you do? (**sarcastic, tired of panic & imminent doom, not so reality font **)

    Reply
    • gat31 July 27, 2011, 12:01 pm

      l never put anything in a bank. (unless you count the water bottle l put change in) When l cash my check l keep the cash. No cards!
      Pay a bill? Use a money order. Go to store? Use cash so far no one has refused it. :)

      Reply
    • Jason Post Script July 27, 2011, 12:08 pm

      BTW, let’s say we default – we don’t make our “mortgage payment”, what then, do those we owe come and repossess America? No, I think it’s “let’s make a restructured deal” time. Something is far better than nothing.

      We are the land of the free & home of the brave and if we decide not to pay any of the debt & tell them all to piss up a rope, we can become truly free & isolationists – now that would stimulate the economy!

      We have PLENTY of data that shows that there is life after foreclosure.

      Reply
  • Selkirk July 27, 2011, 1:45 pm

    Some cataclysms are more fun than others. There’s a lot of life just sucking before I get to use my bugout bag, hang out in my secret bunker, and shoot stuff.

    They’ll raise the debt ceiling.

    Please remember to vote for somebody with at least a rudimentary grasp of economics next time. Education ain’t all bad.

    Reply
  • PAWineMaker July 27, 2011, 2:23 pm

    Some things to keep in mind with regard to the current budget debate and crisis. I’ve tried to maintain an apolitical tone to this, but it’s quite easy to claim to take an apolitical stance, and then just quote the specific facts that justify your view, which is exactly what I’m going to do.

    The proposed “cuts” are based on a baseline increase. The reality is that the amount spent next year will be greater than this year, even under the current proposed “cuts”. For the normal person, this is not a cut, it’s just less of a proposed increase. When I have to cut my budget, it generally means the money I spend in the next period is lower than the previous.

    The markets are not as concerned about the debt ceiling as they are about the credit rating of the US Government. This credit rating is based on the debt and the economy of the US. To put it in perspective, the current debt is 98% of the gross domestic product (source: usdebtclock.org). While the debt ceiling is the item that helps media outlets sell advertising space when they report the so-called “news”, it’s the amount of the debt that is the trigger for the credit rating. Some claim it’s also unlikely that in the event no debt ceiling agreement is reached that there would be a default on treasury payments. But this is unknown territory, so we are already in the “unlikely” scenario.

    While you are at usdebtclock.org, look at the projections for the unfunded liabilities. I’m sure people can object to the assumptions that are made in those calculations, but I doubt they are sufficient enough to discount the order of magnitude of what we are on track to undertake as a nation.

    With the bailouts and the “quantitative easing”, the money supply has essentially doubled in the past year. This is uncharted economic territory for a country the size of the US. Check out this chart: http://research.stlouisfed.org/fred2/series/BASE. It’s not clear what the long term impacts of this are. Some economists suggest that it’s just sitting in banks and won’t impact inflation. Others are predicting gloom and doom. Don’t forget though that the purpose of economics is to make weather forecasting look accurate.

    It’s also important to avoid using the crisis as an instigator for class warfare. The question of “fairness” in taxation is often based on the real and perceived loopholes that the very wealthy use to avoid paying taxes. That’s more properly a debate on tax reform, which while obviously related to debt reduction, has enough political pitfalls to be it’s own topic. However, if the question of fairness is based on the very wealthy paying “their fair share”, then consider this. The top 1% of taxpayers according to adjusted gross income ($328,049 or more), paid 36.89% of the money collected by Federal income tax. The data is relatively old, it’s from 2004, but the trend has increased over the years. I suspect that the last tax year numbers are about the same or higher in terms of percentage. The top 10%, which is adjusted gross income of $99,112 or higher is 68.19% of Federal income tax collected. Here’s the source: http://taxprof.typepad.com/taxprof_blog/2006/09/jec_releases_to.html. Regardless of these figures, and independent of the current debt crisis, tax reform is urgently needed for both individuals and corporations.

    Reply
    • Michael July 29, 2011, 4:00 am

      Hell, the top 10% have been waging class warfare on the rest of us in the bottom 90% since Nixon was in the White House. It’s time to start fighting back.

      Reply
  • Chris July 27, 2011, 3:04 pm

    I’m not worried. I have duct tape, bungee cord, clotting ointment, space blankets, a magnesium bar and iodine tablets in my car. Just what I need to get through a national debt default, right? I figured I’d start buying silver at $25 after everyone in Washington came to their senses. Obviously, my optimism trumped my sense of history.

    But, I can always just go live in a debris shelter. My wife would complain at first, but she’ll get used to it. whitecollarbunker.wordpress.com

    Reply
    • Smoky July 30, 2011, 11:59 pm

      I think I may have to become a drug dealer so that I might be able to afford to pay my bills. Pehaps our government should do the same. Think of the money they could collect if they just legalized Marijuana and collected a tax on it like they do with alcohol and cigarettes. Then again that might put a few of our boys in blue out of a job. Seems like they came up witht the war on drugs just to employ more police. Just saying. I’m all for the debris hut but I really had my heart on the solar Passive concrete bunker house with solar panels and a windmill.

      Reply
      • Chris August 2, 2011, 2:59 pm

        I also have my heart set on an off-the-grid home, but a few things stand in my way: My current lack of land, homeowners association and county rules, and not enough money. Fortunately, the home and money situation don’t have to be permanent. It’s funny–I grew up in a semi-rural area and couldn’t wait to move to a city someday. I spent five years in Boston during college and loved it. Now that I have a family, all I want to do is move to the country for a slower lifestyle. The DC area is good for employment, toxic for many other aspects of life.

        Reply
  • chris July 27, 2011, 3:06 pm

    Joking aside, excellent post. Everyone has to sacrifice to get through this. What we give up now will likely be a much smaller price to pay.

    Reply
    • JeSter July 27, 2011, 9:55 pm

      The sacrifice should begin with our Govmunt cutting actual spending, which they NEVER do! Neither side. In “Washington Speak” a cut is actually a reduced increase in spending. See Timmy and “baseline budgeting” above.

      The politicians in this country have proven, over the last several decades, that they are incapable of handling the taxes collected from the Citizens. As a result they should not get one more dime, be it from the richest among us or the poorest of the poor, until they get their heads out of their 4th point of contact (ass for you non-airborne personnel).

      Asking any Citizen to “sacrifice a little” would be like telling an alcoholic, “We are going to cut your beer consumption, freeze your whiskey consumption to current levels, but you will get a little more wine”. The problem is not revenue!

      It is spending and corruption.

      Reply
  • john July 27, 2011, 5:03 pm

    There is no middle ground and you can’t compromise with evil.

    TQO#193 Christians: Will you allow Boehner to sell your children to Satan?

    http://www.obamasucks.tv/docs/tqo193.html

    Reply
  • COF July 27, 2011, 5:09 pm

    SOO FULL OF SHIT

    Reply
  • john July 27, 2011, 5:15 pm

    We spent between $30-$35 billion per month paying interest on the debt (it varies depending on what long or short term bond auction is up). Our biggest long term (China dumped about 200 billion short term) debt holders are China and Japan with about 800 billion each. Followed by Russia and Germany. Last time I checked about 300 billion each?

    The latest nuclear air craft carriers cost $30 billion each. We are giving China and other nations enough interest money for us to build 10-12 nuclear aircraft carriers every year. China can build them a lot cheaper, which is why we have seen them greatly expand their military along with space weapons.

    They have so much of our money, China is building empty ghost cities. No one states the real reason why, they get boat loads of their cement from our east coast and if our economy collapses, that supply would dry up.

    Reply
  • Briar Rabbit July 27, 2011, 5:20 pm

    Hey Ranger Man! I really like your new fonts! (Really likes new font, font.)

    So, I read some name calling and some math… But no one really mentioned the problem.

    It’s the money.

    The money IS DEBT… We have been robbed of buying power and no amount of taxing the rich, and dropping spending on everything, will not pay the debt for more than one year. And that’s if all the super-rich “pitched in” EVERYTHING. (Money, houses, land, planes, etc…)

    What needs to be done is a raid on the banks!

    A government TAKEOVER of the “fed.”

    (Instead they raid the Amish! And kids lemonade stands… Legal lemonade is now a silver quarter a cup!)

    All debts forgiven! New money to be printed by the gov. Old money still good. Basically, a gov certificate of value.

    Run the money LENDERS out of the temple of gov, and into prison!

    That’s just what happens to criminals… Can you say fraud? Pyramid-Ponzi?

    “If I control the money of a nation, I care not who makes it’s laws.” We shall see about that!

    Reply
    • Jason July 27, 2011, 7:14 pm

      We’ve been in serious debt since the founding of this country, I think we are pretty used to it. In fact our debt to citizen ratio has only tripled since 1780. Yea, just triple … still a hefty chunk.

      Reply
    • gat31 July 27, 2011, 11:08 pm

      Amen brother! Amen!

      Reply
      • irishdutchuncle July 28, 2011, 9:41 am

        yeh, what the Rabbit said!

        Reply
        • Jason July 28, 2011, 4:15 pm

          What Briar Rabbit really said –

          Briar Rabbit: Ow! And more trouble. This is where my trouble is and this is the place I belongs away from.

          Uncle Remus: Don’t you know you can’t run away from trouble?

          Briar Rabbit: Where I’m goin’, there ain’t gonna be no trouble.

          Uncle Remus: There ain’t no place that far.

          The politicians time will come …

          Reply
          • Briar Rabbit July 28, 2011, 5:47 pm

            That was a long time ago…

            My point was/is, that it’s LEGAL for the gov to take such an action, not me, or you, or any group of ci-villians!

            Don’t just audit the fed, shut them down. And return to constitutional money.

          • Jason July 30, 2011, 9:39 am

            My point was/is ….. humor

  • Wally July 27, 2011, 6:33 pm

    Great blog, great use of fonts….

    Personally think the entire process needs to go belly-up. It’s time for a financial mulligan.

    As a 5’6″ no-talent basketball novice, I have a better chance of being the starting center for the Celtics next season than our government actually paying off the 14+ tillion dollar debt we have.

    Reply
    • Jason July 27, 2011, 7:10 pm

      Remember Spud Web? Better get your Nike’s laced up! Ha, ha (insert humor font)

      Reply
  • Gobbedyjook July 28, 2011, 9:03 am

    “It’s like when you try to get a cat to look at itself in the mirror and it’s like..it’s like…it just won’t look at itself and it looks up and down and everything and you say ‘Look at yourself! Look at yourself! Now! Now!’…heh heh…and it’s like.. it just won’t do it…heh heh…heh heh.”

    —Beavis

    Beavis and Butt-Head
    Season 4, Episode 16 (1994)

    Reply
  • noisynick July 28, 2011, 10:18 am

    Jarhead said everyone needs too put some in the kitty. Lets start with congress and the president Poor Job Performance pay reduction 25% sounds fair!!!!!!!!!!!!! Benefit reduction No Private congressional retirement plan its all for one and one for all so they forfeit all rights to there Cogressional Pension and join the ranks of SS and medicare recipeints. …….
    Bring the military home and all the money we spend with them. Lets them gaurd our borders and reduce the numbers of border patrol and special contract services. if your illegal here your sent home along with the children you have here > You weren’t invited and neither were your children…Replace taxes with Tariffs on products manufactured outside the US and double for corporations who began in this country that were built by American Labor and then ababandoned ther country and countrymen all in the name of the Almighty Dollar.
    American have cowered in the Shadows too Long its Time for them to Rise up and Remember Who and What They Are.
    And more importantly Whose led the Rest of the World In every area except Tyranny and oppression……….

    Reply
    • Jason July 28, 2011, 12:30 pm

      Noisynick, you make too sense & you’ll never make it in politics.

      Reply
  • Suburban Survivalist July 28, 2011, 8:38 pm

    “Everyone needs to give.”

    My wife and I have been “giving” a pretty good chunk for a few years – our reward for living lean while going to school for a long time and getting good jobs – and don’t think I need to increase the percentage we pay, just the opposite.

    Most likely a moot point. Demographics are going to crash us if something else doesn’t first. Last year we had four workers for each retiree and its supposed to be 2 to 1 by 2050 (Japan hit that mark a few years ago and their debt has climbed to over 200% GNP).

    Sure, a Black Swan could save us in the nick of time. Probably won’t and that’s why I prepare.

    Reply
  • hemp July 29, 2011, 8:45 am

    The Government Accountability Office GAO has taken note of this question and has begun a series of reports on debt management. The title of the report pretty much summarizes its conclusions Treasury Inflation Protected Securities Should Play a Heightened Role in Addressing Debt Management Challenges. taxpayers thus benefit from the low interest rates our government has to pay on its debt.

    Reply
  • hemp July 29, 2011, 4:41 pm

    Faced with the stark choice between a short-term increase in the national debt and default and the ensuing credit-market chaos that could plunge the country into another recession the president would certainly choose the former.. For the first time the president said he would be willing to consider proposals to cut spending on entitlement programs along with major cuts in discretionary programs in exchange for an overhaul of the tax code that revised rates and removed many deductions and loopholes..However Boehner retreated after hard-line Republicans vowed to oppose any deal that includes revenue increases.

    Reply
  • T.R July 30, 2011, 9:53 pm

    Well if it forces us out of globalization and into self reliance and isolationism ……….. let it happen !!!!!

    Reply
  • Pure Mahem July 30, 2011, 11:46 pm

    I just love how the Republicans can’t get their head around that they should pay taxes. OH MY FREAKING GOD!!! People that make more than a quarter a million should have to pay taxes on it, NO WAY!!! (Sarcasm)

    I like how the Speaker of the House can’t seem to do his job and unite the parties to get this resolved. Instead they are so concerned that this should be a short term solution so that they might argue the point next year durring an election year so that they might get the Presidency back. If my vote has anything to do with it they don’t have a chance in hell! Seriously Bush created this problem after Clinton had completely balanced the budget and now they want to blame the whole deal on Obama are you Fing kidding me. Granted I don’t like gun control and I don’t think they will ever to get that to the point of what all of us fear as we already possess the guns in question so they are not going to get that. But National Health care what the F is so wrong with that. Every other super power in this world has National Healthcare why cant the U.S.? And granted some old programs need to be reformed but don’t just toss the baby out with the bath water. Work to fix the damn thing. Quit being so damned worry that you might have to pay a few taxes. The wealthy should have to pay their fair share, Final Bottom Line! Step the F Up!!

    Mr. Boehner quit being a dick and doing something this country will respect you for. Don’t just drive it into the ground like that idiot Bush.

    I really don’t see how Obama has done such a bad job. Bush left him with the biggest shit pile any of us could of immagined. I think if this all goes to the dead line our president will have a plan to inact to save the country. He is currently just giving the democratic leaders a chance to rectify it on there own. No don’t get me wrong I’m not a Democrat ass kisser but the GOP and this Tea Party Bullshit in my opinion is all about trying to keep the people that can afford it from paying taxes and trying to get their ass back in the white house. We all witnessed what the last Idiot Republican did to us, Not a Fing chance if I have anything to do with it. Personally I’m buying some more ammo and some more arms as this might all just lead to a second civil war. This shit is crazy. It’s been predicted a War of the Classes this certainly does appear to be jump in the first steps of it. Imagine Rich capitalists not wanting to pay their fair share! Screw the poor let them pay.

    Do you think it’s possible to ask the next person that says this is about raising taxes, that someone could interject and ask who’s taxes? Because I certainly don’t make 250,000 dollars a year, How bout You? I bet these politicians do!

    Political Assholes Do Your F ing Job!!! If you make it to the next election I think it fair to assume you will not be reelected as none of you have been able to get your head out of your own asses!

    I can’t believe that they would do this to our elderly and disabled, our soldiers and civil employees, our citizens. Perhaps they do not realize that these people are voters. I think we should find a way to yank everyone of these politicians out of office tomorrow if they can’t do their job. It’s not like they haven’t known that this all has been coming. they should be in a room working it out until they come to a resolution and if they can’t then they should forfit their office as they leave!

    Reply
  • Pure August 1, 2011, 8:11 pm

    Didn’t realize our ranter was CENSORED! Good Bye!

    Reply
    • Ranger Man August 1, 2011, 9:14 pm

      Your response was kicked into the spam moderation folder, probably because of its length. I just approved it. Very rarely do we ever censor ANYONE! Hello!

      Reply
  • john August 2, 2011, 4:01 am

    FWIW: Charlie Rangel who wrote the tax laws on the House and Ways committee didn’t pay his taxes. I do believe he is a democrat.

    > after Clinton had completely balanced the budget

    That is the lie they keep spreading. The national debt went up $3.2+ trillion dollars under Clinton’s watch and they got rid of bills due by taking out multi-generational loans, forcing future generations to pay them back. The classic example is foregone revenue where they owed the USPS $1.2 billion in 1997/1998 and took out a 42 year loan on it. Paying it back $29 million a year.

    http://www.obamasucks.tv/docs/forgone.html

    They took cash from Social inSecurity to pay bills to make it look balanced and then gave Social inSecurity multi-generation loans (70+ years?). No need to keep spreading their lies for them.

    > Every other super power in this world

    There were only two super powers, the USSR and the USA. Socialism killed Edom, the ten tribes of Israel is left and if we keep up borrowing from other nations, we are done too. If the bill passes in the Senate today, we are done, and there is nothing we can do about it, except if God steps in.

    > I really don’t see how Obama has done such a bad job.

    a- Unemployment is up almost two % points over when he took office, after spending $880+ billion of StimUwaste. Total under employment and unemployment is up even more then that. The total is now close to 20% because many people have fallen off the edge and rolls. Plus, the model they used to arrive at these figures is guess work anyways.

    b- Obama has gone from about 1.5 million Federal employees to almost 2.0 million Federal employees.

    c- Obama has shut down the drilling of oil in Alaska and the Mexico Gulf.

    d – The biggest environmental disaster in a long time happened on Obama’s watch. Obama put a Harvard hack like himself with no real job experience, with no oil rig experience in charge of the MMS, that worked at BP. BP gave more money to Obama than any other candidate. The MMS under Obama approved a faulty drilling safety plan and ignored BP’s safety violations, and that got 11 people killed and polluted the Gulf because they had no viable safety plans.

    e- Gas is up over 100% .

    f- Obama has spent more in three years then Bush in 8.

    g- Obama and McCain both supported the TARP plan and Bush “only” spent $350 billion of that and left the rest for Obama to spend.

    h – NATO injuries are at an all time high.

    i – Afghanistan dead and injuries per month are at highs for US troops.

    j – He shorted his own hand picked general 20,000+ troops the general needed for a stalemate.

    k – The USA is losing in Afghanistan.

    l – Our exit tragedy is 2014 for Afghanistan, with no win.

    m – Enslaved the nation with Obama Care.

    I guess that is a good job done if you are George Soros.

    On the bright side he is making Nixon look less evil, Carter look competent, Bush #41 and #43 look stingy, and Clinton truthful.

    :-D

    Reply
    • T.R. August 5, 2011, 3:07 am

      The only thing I can make a comment on is that we CANT WIN . We are basically up against what the Roman Empire was up against with Christianity . We learned nothing from Vietnam . Strictly from a military point of view , if you haven’t won after 10+ years ………. your not going to . The best way to defeat the US is to wait them out . They will have to leave at some point , everybody but uncle sam knows this . Your talking about an enemy with no tanks , no air force , no high tech , and strong convictions kicking our ass and draining our coffers ! Anything but total victory is a defeat . We haven’t really known total victory sense WW2 .

      The rest of what you stated I’m in total agreement with . Obummer is a sell out and gives a great speech , but putting his money where his mouth is , hes an arrogant tyrant , that is anti american in action . If the rest of the world is smart , they will quit enabling him and stop lending us money they know we cant pay back . Socialism and the white man doesn’t mix , we cant make it work ( anywhere ) . The red man on the other hand has been making it work for over 1000 years ( the tribe ). I just hope there is another Lee Harvey Oswald out there soon !

      Reply
  • Pure August 3, 2011, 2:37 am

    First I appologize for jumping to the censorship response. However it is a common recurrence usually that when someone states something others do not want to hear that their post magically disapears. I apologize for making that accusation.

    Next we’ll be saying that the rich are actually paying their fair share of taxes I suppose and the oil monopolies deserve the tax breaks they are getting after having record profits of all time.

    I think it’s easy for everyone to say it’s all Obamas fault when the Republicans that own the oil companies are setting their own prices.

    I supose Boehner and his followers weren’t trying to hold the nation hostage to get the whole issue moved to make it an election issue. In the end everyone was still black mailed to vote on the whole deal just to put something threw and for what they didn’t even cut that much compared to what they could of. It’s down right shameful. As Speaker he should of used his influence to unite the moderates of both parties instead of putting fourth his parties politcial agenda.

    I think they should all be fired anyway. To put our elderly, disabled, veterans, and Active Duty soldiers in danger of not recieveing their checks. Tell me that would not of been a shit storm if all the people who recieve those checks did not recieve them. Guess that would of been pleasant to of experienced that type of economical turmoil in this country. I hate to tell you all this but the poor of this country make the whole damn thing spin. If they don’t pay their bills and can’t spend their money at Walmart and such the whole damn thing doesnot happen. Really who does credit help Not those who can afford it. The person who can’t the person who needs to make monthly payments so they have something to drive to go to their job if they are lucky enough to have one or live in the shack they can afford the payment on. Looks like obtaining the American dream is getting further and further away for more and more people. But hey I’m glad the rich bastards can afford it!

    GB, Canada, France, Spain and most other European contries all have some sort of national health care Their is no reason the greatest country in this world should not be able to provide health care to every citizen. Perhaps if we didn’t send so much money overseas to people who were injurred in the latest earth vibration, political uprising, or rain storm we could afford it. Or perhaps if the drug companies and medical industries weren’t so damn scared of loosing a buck it would be possible. Do you realize the las time I went to the doctors for an office Visit they billed my insurance ove 400 dollars, for an office visit. I saw the man for 10 minutes ARE YOU FREAKING KIDDING ME! No wonder we can’t have health care not at those prices, that’s $2400 and hour and it took me 2 hours to see the guy. That’s crazy. And you all scream Socialism I say bull shit. The Government should Serve The People Not the people serve the Government. So the guy who makes a quarter of a million plus a year can afford to pay for all his healthcare well goody for him then maybe he can afford to pay his fair share of taxes too in stead of dodging them through some tax break or some loop hold. It’s all about the rich trying to stay rich and F everyone else. Well let them keep that up it will come to bight them in the ass. Their are more people pissed in this county right now than you could possibly immagine. You know the Original Boston Tea party and the revolutionalry war in general was about taxing people on their breakfast drink and not being heard by the government How do you think it will affect people when you fuck with the money they use to live on. It is not going to be pretty. Heads will roll over this Bull shit hopefully it will not be literally.

    You may not agree with Obama and not like him on purpose but he walked into a shitstorm that was happening no matter who took the job. And if you didn’t realize it W. was a fucking idiot that drove this nation into the current situation. You see the economic situation we have today. How bad would that have been if we didn’t have soliders at war. I believe he got the war going because he knew what was coming. Or maybe you still believe they found WMDs in Iraq!

    I’m not an Oba supporting but the reason he got in was he was the lesser of the Evils available. Change in DC was the reason he got in apparently obvious here it still ahsn’t happened but has become more than apparent it is still Definately Needed! I wonder how many of the idiots will still have their jobs when it comes for their reelection.

    I would still like to know how much the bastards make that are suporting the damn Tea party they are aparently brainwashed from the demonstrations we see on TV apparently they are all doing ok since they have time to protest and don’t need to work or look for a job. Must be NICE to not have anything else to do!

    Solve the problems simple 1.Tax the rich so everyone pays the same % 2. cut spending not just additional but real spending like normal budgets utilize 3. Bring our troops home to guard our own borders. 4. impose penalties on any company who sends jobs abroad. 5. Impose tarrifs on all products not made in the USA. 6. Reform outdated programs to make them more cost effective.7. Impose caps/regulation on Medical Costs.8. You want a war get some damn Oil Problems solved!

    Want some additioanl ideas to cut spending how about stop makin those damn coins that no one collects they actually had to make a secure warehouse to store the damn thing because nobody is collecting them. costing close to 40 million dollars.

    To much to ask for some common people with some common sense. Maybe if they were all more like Bernie from VT they’ld get some reall work done! When the Senate holds the House Hostage over their political agenda for 2o12 it’s a little hard to blame the President. Pehaps you would enjoy some Martial Law so that we might actually get something productive accomplished. Oh I forgot Obama is responsible for everything because he’s the president, that’s a conveinient excuse for people to not doing the job they were elected to do I supose!

    Perhaps another post that may need to be resurected from the SPAM Folder.

    Reply
    • T.R August 5, 2011, 3:26 am

      Saw a bumper sicker ” the change sucks ”
      here are a few inspirational truths thought of by a man over 200 years ago .

      “A strong body makes the mind strong. As to the species of exercises, I advise the gun. While this gives moderate exercise to the body, it gives boldness, enterprise and independence to the mind. Games played with the ball, and others of that nature, are too violent for the body and stamp no character on the mind. Let your gun therefore be your constant companion of your walks.”
      Thomas Jefferson

      “When the people fear the government, there is tyranny. When the government fears the people, there is liberty.”
      Thomas Jefferson

      ” To compel a man to furnish funds for the propagation of ideas he disbelieves and abhors is sinful and tyrannical.”
      Thomas Jefferson

      “The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants.”
      Thomas Jefferson

      “A wise and frugal government, which shall leave men free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned – this is the sum of good government.”
      Thomas Jefferson

      “How much pain they have cost us, the evils which have never happened.”
      Thomas Jefferson

      “I believe that banking institutions are more dangerous to our liberties than standing armies.”
      Thomas Jefferson

      ” I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them.”
      Thomas Jefferson

      Stars & Bars !

      Reply
    • Timmy August 6, 2011, 9:44 am

      My goodness! If you spent your time doing something productive instead of whining about how others are supposedly controlling your life, your problems would solve themselves. If you are unhappy with your circumstances, get off your ass and take charge of yourself! Stop trying to dictate how everyone else should be living!

      As for me: I will not check the box to be notified of follow up posts again (sheesh!)

      Reply
      • Timmy August 6, 2011, 9:50 am

        Previous comment directed @Pure

        Reply

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