It's About Liberty: A Conservative Forum
Topics => Economy => Topic started by: rickl on October 01, 2011, 08:03:21 PM
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Another stellar Ticker by Karl Denninger. (http://market-ticker.org/akcs-www?post=195213) There is too much to excerpt. Just go read it.
Oh, OK, here's a taste. Copying and pasting loses the formatting in the original, and I don't feel like fixing it.
I wish there was a way to be "bullish" about the intermediate-term future given these facts.
There's not.
If we do not take our government contraction that is required today -- right now -- we're going to get to the point where we can't take it as it will be effectively a 100% reduction (ex-interest.) It is already more than half, assuming you intend to pay the interest bill - more than double what it was just four years ago.
In four more years at present rates it will be an effective 100% and the game will be over.
There's your timeline.
We fix this now or we go off the cliff.
It will suck severely to fix this now. Seniors will not get what they were promised and it doesn't matter who they are -- yes, this includes military veterans. Others on various forms of public assistance will have their giveaways, from "earned income" credit to food stamps to "free lunches for kids", cut in half or more. We have to withdraw from Afghanistan and Iraq -- whether we deem it operationally correct or not to do so. Our economy will contract -- mathematics guarantees a 12% contraction, and due to the knock-on effects it will be much worse -- probably 20, maybe even 25%. Unemployment will go up by 50% from where it is now at minimum (that is, to 15%) and may reach 20%. Government workers will have to have their salaries and benefits slashed - by 30% or more.
And that's if we do the right thing now. If we don't, well...
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The thing is, people won't accept the conditions produced by dramatic austerity measures. They will rapidly precipitate out and out warfare amongst themselves, letting the chips fall where they may. IMO that is the scenario everyone should be thinking about, because the way I see it, it's coming somehow or another. If the liberals hold sway and continue their profligacy, we'll go over the cliff edge. If, somehow, conservatives win the day and begin the necessary scaling back of government there is a high risk of mass social unrest when the giveaways become the goaways.
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So, I think this confirms what we already knew:
1) The continuation of the Obama Regime and Ruling Class control of Congress pretty much guarantees the end of America in pretty short order.
2) A lukewarm response to combatting the problem by replacing Obama with a Ruling Class Repub & Ruling Class control of Congress just pushes the end date out a few more years.
3) A firm response runs the risk of social unrest and can only happen if Ruling Class iinfluence is diminished to near permanent small minority status.
Hmm...I'd take my chances with #3! The first one is unthinkable and the second one is just foolish. However, getting to the third could be rather difficult. Time is running out, or has already. We might be closer to FUBAR than we all think.