I love it when this sort of thing happens....
The U.S. economy will probably tip back into recession next year if Congress fails to address an impending “fiscal cliff,”the Congressional Budget Office said.
The nonpartisan agency said in a report late yesterday that the economy would contract at an annual rate of 1.3 percent in the first half of 2013 if lawmakers allow the George W. Bush-era tax cuts to expire and $1.2 trillion in government spending cuts to take effect in January.
"Fails to address"?
Is this an admission that the so-called "growth" of those years (and up until now) was a fraud? You bet it is.
Remember this graph?
So let's look at 2000 - 2008 for how of a "spread" this has been, and how much fake money was showing up in alleged "GDP" that was not real, but instead was simply expansion of debt in the system.
The answer? $13.1 trillion dollars, or awfully close to a full year's worth of economic output.
That's what our bankrupt policies did to us over just eight years.
And no, the previous administrations going back to 1980 were not "clean" in this regard, nor is President Obama now. All have done the same thing; they're just changing exactly how they try to hide the rot. Some paint over it, some hang a flag over it, some dupe you with various schemes like housing bubbles and worthless (or nearly so) IPOs.
How much damage must be absorbed to return the economy to balance? An amazing amount. And the worse news is that we cannot take a decade or more to do it, since the longer you wait to do it the more damage you're inflicting.
Europe is playing the same game we are. Their banks are "unprepared" for a Greek exit from the Euro because they were not forced to take their leverage down nor to stop creating credit against nothing after 2008, just as our banks were not. Their governments, like our government, loves that "cheap credit fix" and continues to abuse it to this day.
The CBO's plaintive bleating is amusing to listen to, as is Eric Cantor and others arguing over "which way" to address this problem. Nobody on either side of the aisle is actually talking about addressing anything, because the only way to address the problem is to stop spending more than we make.
And that, for many people, means what amounts to a "sudden stop" faces them in their daily lives.
Rather than tell people to deal with it in 2008 among the "elites" who led the world off the cliff, we instead coddled them and allowed them to lie, and lie they did. Rather than force the leverage out of the system by refusing to support it with government games and debasement of the people's purchasing power, we instead continued the same bankrupt policies that got us in trouble. And rather than deal with the truth now, we instead wave our arms and play partisan politics with intentionally-fraudulent "budget proposals" from Ryan and equally-fraudulent bleating about the rich "paying their fair share" from Obama, Pelosi and Reid.
Neither side will simply put its foot down and say "there will be no more deficit spending -- period" -- and back it up by refusing to move and pass a single spending bill until the budget is balanced. Neither side can claim to be "right" as both are spending money they do not have and therefore are committing an active and intentional fraud upon the people of this nation. The same fraud is being committed in Europe.
The problem is that the old game is running out of rope, as the people have figured out that it doesn't work any more. Their purchasing power is in the toilet, stocks are starting to sink under the pressure of the fraud, spreads are blowing out in the credit market (again) as traders are (correctly) surmising that there's no way they'll get paid and recognition is starting to dawn on people that the first guy who runs for the door might make it through before the crush of bodies turns into a mash of blood and guts.
There's no excuse for this folks. There never has been and never will be. Fraud is never excusable and it is not a mistake. None of the participants in this game are innocent nor are they ignorant.
They're liars and they are undeserving of not only your vote, but also your respect and deference until and unless a confession of sins is made and the truth is brought front and center for public debate.
There's no indication that any of that will happen and as such I fully expect that before the election the entirety of this fraudfest is going to come crashing down around our heads, much as it did in 2008 -- but this time, with central banks having already played their "QE" cards and interest rate games there will be no stopping it.
Make sure you remember who's responsible for this when you are once again trashed as the economic and financial system come apart -- if you see a lawmaker on TeeVee or pontificating in print, they're responsible and should be held personally to account -- irrespective of which major party they hail from.
