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2019-07-27 07:00 by Karl Denninger
in Macro Factors , 426 references Ignore this thread
Get Your Mouth Off His Schwantz *
[Comments enabled]

This garbage is just flat-out ridiculous:

I earn my living investing other people’s money in the stock market. I am terrified contemplating how I am going to save my clients’ money, as well as my own, if a Democrat is elected president. The policies that the Democrats are advocating will destroy the American economy, not just the stock market, but the whole US economy. My first instinct will be to raise cash ahead of the stock market crash, but even that is only a temporary safe harbor.

The Green New Deal, renewed regulations, Medicare for All, free college,  as well as the 70-90% tax rates proposed by Democrats, will tank the stock market and US economic growth, leading to higher unemployment and reduced wage gains. All these programs require higher taxes and not just the soak the rich fantasy of the 70-90% rates. Most of the Democratic candidates have pledged to roll back the 2017 Republican tax cuts that fueled the renewal of economic growth in the US.

All of this is true.

But it's irrelevant.

As I've pointed out for more than a decade by 2024 CMS -- that's Medicare and Medicaid -- are incapable of the shenanigans that they use to suppress their budgetary deficit impact.  This is not rocket science, it's arithmetic, exactly as is the so-called "doom dates" on Social Security.

But Social Security's "doom dates" are in fact rather minor.  Being able to pay 80% of a promised benefit (that is, you're running a ~20% fiscal deficit which is consuming assets) is sort of ugly, but that's fixable.  Nobody's going to like a 20% tax increase on FICA (7.65% of wages up to the cap, plus another half you don't see) but raising the cap, increasing that tax by 20% or some combination that gets to the same place resolves the problem.

That's not catastrophic.  Nor, for most people, is a 20% reduction in payments, although the howling (and election losses) that result from the latter guarantees that won't be the outcome.  Those tax changes will and can be made and will not result in a collapse of the economy.

However, CMS is not running a 20% fiscal deficit; in their case roughly one dollar in five is covered, not four dollars in five!  When they run out of that stoked-back powder there are two choices, and only two choices:

1. Essentially default in its entirety on the promises made to Medicare recipients, both current and forward, forever.  This will simply cost-shift basically all of that onto Medicaid, particularly with regard to nursing home care once you bankrupt the vast majority of Medicare (retired) people, which will happen almost instantly.

OR

2. Congress changes the law so as to permit CMS to run without backing, that is, the entirety of their operating deficit shows up on the federal budget as a fiscal deficit.

Social Security and Medicare are currently prohibited by law from doing #2.  Congress will have no choice but to permit #2 for at least Medicare, and since utterly nobody in the political or news space de-aggregates these two programs when talking about "fiscal cliffs" even though they have radically different exposures and funding problems the pressure to do it for both in the same bill will be overwhelming.

Not that it really matters; #2 will roughly double the federal deficit on an essentially immediate and permanent forward basis.

The "big lie" is this:

Whatever you think of President Trump, you know by his record that he will put America first and that his policies have created a robust economy. Unless you want to see the US economy and your standard of life destroyed, there is no alternative to voting for President Trump.

No, he has not.

The GDP data is here.

It shows a 4% gross GDP advance over the last 12 months (to Q2/2019.)

Debt to the penny shows a 3.91% fiscal deficit as percentage of GDP over the same period of time.

In other words there is no "robust economy" at all; it's a lie.

Actual GDP expansion in real terms over the last 12 months is 0.09%!

Statistically-speaking that's zero.

These are not my numbers and not my assertions; they're the government's figures and they're widely-regarded as facts.  Trump's most-recent "budget deal", which he is advocating for, has passed the House and will almost-certainly pass the Senate and be signed into law will remove all fiscal rectitude until the middle of 2021 by suspending the debt ceiling entirely.

Again, I remind you, by 2024 on current trajectories that roughly trillion dollar deficit ($828 billion on a rolling 12 month basis at present, and accelerating) will permanently double.

Yes, GDP will go up, since every dollar of that deficit will be immediately spent.  That's how borrowing works; you borrow money and you spend it, and as soon as you spend it GDP increases.  That's basic math and economics.

However, diluting the currency as a means of "goosing" GDP doesn't actually advance anything in terms of actual economic output.  Worse, productivity, if you believe the BLS, is "advancing" at 3.4% annually as of the last read.  This is, paradoxically, very negative in light of the fiscal deficit because "doing more with less", which is the definition of productivity, means that GDP should be running at least at that level on a fiscally-adjusted basis!

In other words if you include productivity, and for honest numbers you have to, the US is currently in a deep recession as it is in fact contracting real output on a roughly 3.3% annual rate.

How is this possible given "full employment" and the stock market soaring?

It's not hard to figure out; it's happening the same way you're "just fine" if you make $100,000 a year but continually add another $4,000 a year to your credit card balances.  That $4,000 is quite a lift in your standard of living.  It allows your family of four "another" week-long cruise per year, for example, or a very nice trip to Disney, or, for that matter, more than half of the monthly payments on a brand new $50,000 "loaded" pickup truck or Lexus.  Note that if every family did this GDP would increase at that same 4% since you're all spending 4% more than you make and the gross output will thus lift by that same 4%.  The (obvious, to anyone with more than two firing neurons in their brain) problem is that you're not really gaining any prosperity at all; in fact you're going backwards as you're accumulating an obligation that at least has an interest expense and at least in theory eventually must be paid off!

This illusion of "prosperity" can continue for a very long time -- so long as your credit card company doesn't call the loan, or even just shut off the spigot and deny any more charges. But even if just the latter happens not only does that $4,000 a year of "spending" disappear the interest payments do not disappear, and since you can't afford to pay down any of the principle those interest costs go on forevermore into the future.

Again -- as things stand right now we're consuming our capital base at a roughly 3% annual rate.  That depletion rate is set to double within the next five years.

I do not know when the markets will wrap their arms around this just like I don't know when you as a family would if you were running up your credit card on those Disney vacations.  But I do know that the day when it happens will come.  Not might, not could, will.

The willful and intentional denial of this fact by you, Greenwald, along with the others drum-beating for the flying-hair monster currently in office will simply make it worse when it does happen.  After all a market crash from DOW 27,000 to DOW 5,000 is very, very bad.  But one from DOW 35,000 to 5,000 is demonstrably worse because more and more people will believe that the so-called "value" in those assets is not only real but theirs to consume over the coming years when in fact it is not.  How many of those people have a half-million dollar "retirement fund" that is, in fact, really a $50,000 one?

What really galls me, however, is so-called "money managers" like the cited one in this quoted article, who believe that (1) this "prosperity" is real despite the data saying its not being literally in their face, (2) Trump is responsible for it and (3) voting for Democrats will be a disaster while not doing so will continue the "prosperity."

The root problem is that there is no prosperity in the first place; it's a chimera and fraud writ large and has been the case and policy of both parties since approximately 2000, when the accumulation of federal debt crossed the zero boundary and began resulting in negative contribution to GDP.

This is an exponential series.  Like all exponential series the negative impact starts slowly and thus the "belly" in the curve from the two lines on the chart for a while expands.  Yes, the top-line (debt) is accelerating but the imposed cost starts at a lower level and thus there's more "gap" between the two curves for a while.

But arithmetic tells us that exponents always behave exactly the same way.  That the appearing-safe "belly" will disappear, the gap will close and when it does you have a catastrophe because you can't cover the expense.  There is nothing you can do about it other than to halt the excessive spending and pay down the outstanding balance, but this requires not just halting the excessive spending (that is, cutting it to income levels) but going even further in order to pay off some of the outstanding balance.

At present the Federal Government is spending approximately 25% more than it takes in from all taxes combined.  To halt the detonation the spending cuts must therefore be more than 25% in total, now and forevermore into the future.  Everyone in DC has a wipe-out, toddler-style screamfest if you propose not spending more every single year yet the corrective action required is for one quarter of all money spent today be whacked off the budget.  That's how far down the rabbit hole we've gone, all without a single whimper of revolt or refusal to consent by the public at-large.

The mantra for the last 30+ years is that we're "leaving this mess to our kids and grand-kids", implying that we're saddling those who either cannot yet vote or worse, aren't yet born.  That was true 30 years ago,  It was probably true 20 years ago, as the generation just being born then would become adults about...... now.

But today it's no longer true.  We're not leaving anything to anyone.  The problem is here, it's ours, and we either stop it now or it will blow up in our faces.  Five years is a very short period of time to make fiscal adjustments and allow the economy to adjust and come back into balance.  Trying to eke out another 10, 20, or even 50% in stock prices over the next five years is not only unwise it's literally suicidal on a national basis and those advocating for same deserve to be held to account when, not if, their continued drum-beating for a fiscally, economically, politically, morally and ethically bankrupt position results in mortality.  One can only hope it's their progeny, spouses and then theirs personally, in that order first.  Sadly while I can hope and pray for them to be first it will not be only them no matter who goes first; the count of ordinary people who will be utterly destroyed and likely die is going to reach all the way from top to bottom with those at the bottom bearing the greatest percentage of losses.

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Orangemanbadeh 1k posts, incept 2019-04-22
2019-07-27 10:24:59

It is worse...

If you accept the numbers that the ****suckers over at Conservative Treehouse put out Everytime they run a puff piece on the economy, if we take your numbers of 'real growth' and add in the inflation number they are so proud of which last I looked was 1.7% (and obviously a ****ing lie) we are already contracting.
Ktrosper 5k posts, incept 2010-04-06
2019-07-27 10:25:01

Great ticker. Thank you.

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The unexamined life is not worth living.-Socrates
The only stable state is the one in which all men are equal before the law.-Aristotle
Liberty exists now in the spaces government has not yet ch
Jayhawk 54 posts, incept 2010-08-20
2019-07-27 10:25:09

It seems to me the situation is actually worse than you state, because you deduct increase in federal debt but not increase in business and personal debt. I would think that increasing all form of debt is negative economic growth, and should therefor be seen as negative when calculating growth.
Tickerguy 190k posts, incept 2007-06-26
2019-07-27 10:29:59

@Jayhawk -
Quote:
It seems to me the situation is actually worse than you state, because you deduct increase in federal debt but not increase in business and personal debt. I would think that increasing all form of debt is negative economic growth, and should therefor be seen as negative when calculating growth.

Maybe.

All debt is not equal. That which is offset by an asset that is sequestered as collateral until the debt is repaid, and which IS in fact repaid, is not longer-term inflationary (e.g. does not destroy currency value.) It does create a problem in that it creates a "squeeze" for dollars needed to repay, but that's really nothing more than overpaying. For example you borrow $200,000 to buy a house but over the 30 years you pay that back more than twice, so you REALLY paid ~$450,000 for the house, not $200. This of course makes people jump shit so nobody talks about it, but it's true, and what's worse is that the first few years your P&I is all interest, so if you move somewhat-frequently the kick in the nuts in terms of your effective loss (compared against, for example, renting) can be very large.

Unbacked debt (credit cards, for example) is another matter; that is directly additive. The problem is that figuring out what is truly unbacked especially in the corporate sector is not easy - with governments it is, since federal borrowing is always unbacked.

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The difference between "kill" and "murder" is that murder, as a subset of kill, is undeserved by the deceased.
Whitehat 11k posts, incept 2017-06-27
2019-07-27 10:33:25

in some conservative circles there is an underlying acceptance that these issues have been protested for decades and only manage to get worse, much worse. some pundits propose that the solution is to have this party and drive the debt to the ceiling and beyond crashing the whole thing down hopefully with a societal upset. in other words the thing that concerns us most here is their stated goal born out of the same frustrations with getting enough people on board to change things. since Trump has gone out of his way to appeal to these themes and these groups, perhaps this very popularly echoed sentiment informs his decisions.

there is a large percentage of a group formerly known as the productive class, mainly males of working age and their allies, who accept that the decline and ultimate destruction of America is inevitable along with valued institutions such as law, culture, marriage and family. they are quite vocal in their acceptance of the inevitable and how it is worthwhile to live now accordingly while waiting for some great cultural and economic reset. there are varying degrees of this. it seems that Trump plays to the subset who would like to accelerate the process.

regarding the younger generations, perhaps Millennial and younger, they apply a different logic to debt that they learned very well being the most online generation thus far. as far as they are concerned, bankruptcy is a tool of the powerful and connected and why should they not somehow benefit without consequence. to them this extends to the country. money is not as real to them. this is why their desire to face bankruptcy for their college loans sounded less noble during the occupy movement to those of us in close contact with them. to them it is seven years of living at home, working for cash or not at all, and a fresh start. seven years to good credit as they saw their neighbors and often families who lived on the credit card do a reset consequence-free every so often. even in my practice i saw investors do this often and it seemed to benefit them. young people now learn these lesson early.

is Trump playing to the conservative working age men or are they justifying his actions in their own minds?

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smiley Je souhaite

Quod tu es, ego fui, quod ego sum, tu eris
Frieza 360 posts, incept 2019-03-09
2019-07-27 10:55:39

Tickerguy wrote..
2. Congress changes the law so as to permit CMS to run without backing, that is, the entirety of their operating deficit shows up on the federal budget as a fiscal deficit. ... #2 will roughly double the federal deficit on an essentially immediate and permanent forward basis.

What part of CMS isn't shown on the budget? I can see that the 2018 MTS reported $1466.2b for Centers for Medicare and Medicaid Services while the budget only reported $971b for Medicare+Medicaid (582+389), but the total outlays and revenues are the same on both documents, so the missing amount must be in there somewhere, right? I understand the deficit will double within a few years, but what's the immediate effect you're talking about? Surely they wouldn't stop collecting the tax just because CMS was officially running unbacked - they'd continue collecting at least the same amount one way or another.
---
https://www.cbo.gov/system/files/2019-06....
https://web.archive.org/web/201810181252....
Tickerguy 190k posts, incept 2007-06-26
2019-07-27 11:01:57

@Frieza - Medicare is currently running off the accumulated Treasuries in the so-called "lock box" (which isn't, of course.) This is why its full impact doesn't show up in the budget deficit; they're spending accumulated capital in large part, basically.

When they run OUT of said accumulated Treasuries they can't do that anymore. Present law prohibits them from running beyond tax receipts + that accumulated set of funds for Medicare (Medicaid, on the other hand, is a pure entitlement and has neither tax or asset base it can draw on.) Medicaid is ALSO misleading in that some of it is paid for by the states. The problem with cutting off Medicare wholesale is that in expansion states Medicaid is available to ANYONE who is low-income with no other option, so if you toss Medicare those older people will wind up instantly in Medicaid, and you've saved nothing. In ALL states if you're broke and wind up in a nursing home Medicaid pays for it, so after the "gone" Medicare system causes a retiree to blow up their checking account in two months guess where that winds up? Medicaid.

They'll keep collecting the same Medicare tax but it's tiny. To bring CMS into balance on a cash basis they'd have to roughly multiply the Medicare tax by SIX! That's never going to happen, so instead they'll just toss the constraint on CMS not being able to spend on the Medicare side beyond tax receipts + accumulated Treasuries.

As soon as they do that the entire impact of CMS' net spend shows up in the formal deficit figures. That plus the expected acceleration in spend over the next five years (~7-8% compounded) is going to blow the roof off the deficit immediately when this occurs.

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The difference between "kill" and "murder" is that murder, as a subset of kill, is undeserved by the deceased.

Whitehat 11k posts, incept 2017-06-27
2019-07-27 11:53:40

oh shit, never thought of it regarding the states. the state Medicaid contributions are going to hammer the states and the federal govt has every incentive after Medicare blows up to dump everyone into that program. it is zero sum for them and an increasing liability for the states if they increase state Medicaid contributions. not sure the machinations of this, but then again they make it up as they go along.

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smiley Je souhaite

Quod tu es, ego fui, quod ego sum, tu eris
Tickerguy 190k posts, incept 2007-06-26
2019-07-27 11:58:22

The States have only one "out" from the program formally and that's to rescind it ENTIRELY. The USSC has already affirmed they can do that when the "expansion" was challenged and ruled unconstitutional. But what the states can't do is pick and choose other than at a legislative boundary.

That is, a non-expansion state can walk off but if it does ALL medicaid funding in that state disappears. An expansion state can revoke its expansion status but that throws ALL of their currently expansion-insured people off instantly. What the state CAN'T do is take the federal funds and then not match on the program rules.

Exactly how bad that gets on a state level depends on the state. But it's the reason that most states which did not do the expansion refused; they knew damn well this was coming. The Feds picked up the first few years of expansion funding but the obligation would be permanent and they knew this, and that trying to rescind it later would likely result in their state capitol being burned to the ground by the angry zero-income people who just got it up the ass. So they said "no."

The problem with this blow-up is that even if a state didn't take the expansion they're still exposed. Not as badly as one that did, but it's still going to be bad in large part because of the nursing home exposure which can be utterly ridiculous and, of course, that's all last-few-years-of-life Seniors. There's already a problem there in that the states try to squeeze providers and pricing to keep from blowing up their budgets to start with; this will get intractable instantly post 2024.

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The difference between "kill" and "murder" is that murder, as a subset of kill, is undeserved by the deceased.
Peterm99 9k posts, incept 2009-03-21
2019-07-27 13:04:37

Seems almost to be a "good news/bad news" situation.smiley

The good news is that we can be entertained by watching the states that are at the forefront of the "give illegals free healthcare" open borders movement (e.g., Calif) get screwed really hard. The bad news is that the rest of the states will only have a slight delay before we ALL get shafted as well when things fall apart.

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". . . the Constitution has died, the economy welters in irreversible decline, we have perpetual war, all power lies in the hands of the executive, the police are supreme, and a surveillance b
Mangymutt 1k posts, incept 2015-05-03
2019-07-27 13:04:52

Every day, the MSM puts the money indicators on display "See how well dressed the S&P is" - "The NASDAQ,is so full of wonderful darlings" But "Have you seen anything more noble than the DOW?"

They parade them around like they did actually make it all the way to the moon and the public cheers like it matters and people believe somehow their lives just got a little better, because the numbers for the money MSM has just gotten back from the moon.

Use logik and maff and tell people the truer money indicator is actually 0.09 - Fingers go into ears and NANANANANANANA!!!! is expelled from their lips.

But we will fix this by importing cheap and illegal labor, we will allow ourselves to be easily distracted by our hopes that at least one of those bastards at the top FINALLY gets theirs. And best of all we have the most wildly entertaining presidents that Russian Votes could buy.

So we sit there having our and our children future stolen from us, believing debt doesn't matter, so we can spend, spend spend.

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"It's just a shot" - Gates
Stee_man 309 posts, incept 2011-12-08
2019-07-27 13:44:42

Thanks Karl. Very well presented.

Trump obviously knows all this. We all saw how the sweeping health care reforms were hidden after the election. He's playing a delicate game of introducing them slowly and taking on the legal challenges. We have smiling deceivers like Rand Paul pretending to be his father, while trying to exempt health care from antitrust laws.

It's easy to imagine what would happen to a public figure who proposes a 25% budget cut. 20% of the economy is health care workers. A few of them would agree with you, but almost 20% of voters would hate you. Most minorities are on welfare, so the media instantly brands you as a racist. Trying to get your message out on social media gets you shadow banned at minimum.

Nobody is going to take this on before an election. Even after the election it's almost impossible because of the screaming you'd get from congressmen and senators up for re-election in 2 years.
Tickerguy 190k posts, incept 2007-06-26
2019-07-27 14:05:07

@Peterm99 -
Quote:
The good news is that we can be entertained by watching the states that are at the forefront of the "give illegals free healthcare" open borders movement (e.g., Calif) get screwed really hard. The bad news is that the rest of the states will only have a slight delay before we ALL get shafted as well when things fall apart.

Exactly.

But this is also why the only fix is political, whether peacefully so or otherwise.

You can't "grow" yourself out of this hole because the "growth" is not real. Further debt accumulation returns less than a dollar for each dollar of debt; once you cross that rubicon "stimulus" makes it worse in real terms. It LOOKS better in the statistics, but only if you refuse to look at the OTHER HALF of the balance sheet. That's profoundly dishonest and anyone who has ever run a business, works for a financial concern (including one what reports on financial matters) or has any bookkeeping or accounting training whatsoever knows it.

There are real solution to this problem that don't involve a complete meltdown. One of them would be to invoke my "low hanging fruit" Ticker as a law. That would take about $400 billion a year out of federal spending all on its own between Medicare and Medicaid. That by itself would lift GDP in real terms back into positive territory for a few years. It wouldn't, unfortunately, stop the detonation in CMS, but it WOULD extend it a decade or so and it MIGHT keep GDP positive enough in real terms to give you the margin to restore rates to a sane level without causing an instant detonation in the federal fiscal outcome. I

At the same time it would take a large whack out of the pension and state funding problems too. I don't have a good way to put numbers on that aspect of it, since the data is too sparse for me to be able to wrap my arms around it in a form I can trust.

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The difference between "kill" and "murder" is that murder, as a subset of kill, is undeserved by the deceased.

Kochevnik 1k posts, incept 2007-07-30
2019-07-27 15:24:34

From the 2019 Medicare Trustees report (HI is the hospital part of medicare (part A))

https://www.cms.gov/Research-Statistics-....


Quote:


In 2018, Medicare covered 59.9 million people: 51.2 million aged 65
and older, and 8.8 million disabled. About 36 percent of these
beneficiaries have chosen to enroll in Part C private health plans that
contract with Medicare to provide Part A and Part B health services.
Total expenditures in 2018 were $740.6 billion, and total income was
$755.7 billion, which consisted of $745.9 billion in non-interest income
and $9.8 billion in interest earnings. Assets held in special issue U.S.
Treasury securities increased by $15.1 billion to $304.7 billion.


Short-Range Results

The estimated depletion date for the HI trust fund is 2026, the same
as in last years report. As in past years, the Trustees have determined
that the fund is not adequately financed over the next 10 years. HI
income is projected to be lower than last years estimates due to lower
payroll taxes and lower income from the taxation of Social Security
benefits. HI expenditures are projected to be slightly higher than last
years estimates because of higher-than-projected 2018 spending and
higher projected provider payment updates, factors that are mostly
offset by the effect of lower assumed utilization of skilled nursing
facility services.


The Trustees are issuing a determination of projected excess general
revenue Medicare funding in this report because the difference between
Medicares total outlays and its dedicated financing sources6 is
projected to exceed 45 percent of outlays within 7 years. Since this
determination was made last year as well, this years determination
triggers a Medicare funding warning, which (i) requires the President
to submit to Congress proposed legislation to respond to the warning
within 15 days after the submission of the Fiscal Year 2021 Budget and
(ii) requires Congress to consider the legislation on an expedited basis.
This is the third consecutive year that a determination of excess
general revenue Medicare funding has been issued, and the second
consecutive year that a Medicare funding warning has been issued



I dont remember anything about Trump or Congress addressing this at all ?

And I admit I dont understand much of this - they have $300 Billion in special Treasuries which increased last year but they're going to run out in 2026 ? But they also say they have 200 Billion in bonds ?

Confusing as hell other than the 2026 part. I also like how they project 4.7 percent GDP growth annually till the 2026 date.
Tickerguy 190k posts, incept 2007-06-26
2019-07-27 15:27:18

CMS is an interesting bunch. They're not true actuaries since they're required, like the CBO, to follow existing legal structures for both taxes and such, NOT what's nearly-certain to happen. In other words if a tax break is to expire in two years they're required to assume it will, even though we know it won't and there's no evidence that it will. If you pull shit like that in the private sector you'll go to jail. IN government it's actually mandated by law.

The problem with their estimates is that it makes assumptions on growth and tax revenue that are entirely unrealistic. These things result in SERIOUS changes over long periods of time, but at this point, with the zero hour just a few years away, it's only good for a projected two more years -- an effective nothing.

That's what exponents DO; they narrow the gap as you get closer to the end between "ridiculously optimistic" and "realistic."

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The difference between "kill" and "murder" is that murder, as a subset of kill, is undeserved by the deceased.

Cfisher 19 posts, incept 2019-07-27
2019-07-27 15:45:24

I have been following the ticker since the 2008 near death experience, and I agree with the financial analyses here. I am of the opinion, though, that the king, his horses and his men also know that Humpty Dumpty is about to fall off the wall and they are doing what they can to stave off Humpty's fall until after Nov 2020. I'd rather endure the collapse with an administration who is USA first and securing the borders than the disgusting alternatives. Trump has, in the past, acknowledged the crisis. Since being elected, he has doesn't anything about it except for take steps to extend the current situation, but he has acknowledged it.
Tickerguy 190k posts, incept 2007-06-26
2019-07-27 15:46:27

@CFisher - There's a precedent for this, you know.

Bush, 2007/08. He too knew Greedscam and Paulson were blowing a huge bubble. He knew it wouldn't last, but he too was pretty sure the election would come first before it went boom.

How'd that work out?

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The difference between "kill" and "murder" is that murder, as a subset of kill, is undeserved by the deceased.
Cfisher 19 posts, incept 2019-07-27
2019-07-27 16:02:56

If it doesn't blow before the 2020 election, I can guaranty that it will blow during Trump's second term. This is it. Like you said - within 5 years. Trump's job, being the everything-in-chief, will be not only to transition out of it but to do that while explaining to the American people that it was not his fault. He will have to explain it over the calls for his head by the partisan media. WE HERE know it's not his fault, but for every one of US, there are ten heads in the sand. I don't know how this will play out. Hell, I don't even know how to keep the attention of my friends and family when trying to explain this.
Captainkidd 2k posts, incept 2010-05-25
2019-07-27 16:35:10

Quote:
WE HERE know it's not his fault,


Some of us here know:
It getting started wasn't his fault.
It existing when he was elected wasn't his fault.

But we all know that he is, AT THE VERY LEAST complicit that:
It continues to grow.

And it DAMNED WELL IS HIS FAULT that it has not been addressed or even acknowledged!!!

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A lawyer with a briefcase can steal more than a thousand men with guns. --Mario Puzo

It is well enough that people of the nation do not understand our banking and monetary system, for if they did,
Tickerguy 190k posts, incept 2007-06-26
2019-07-27 16:36:06

@CFisher -- I disagree that it is not his fault. The genesis of this was not his fault, true.

But it most-certainly IS his fault that he's not only perpetuating the mess he is actively making it worse by goading The Fed into blowing more and bigger bubbles.

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The difference between "kill" and "murder" is that murder, as a subset of kill, is undeserved by the deceased.
Whitehat 11k posts, incept 2017-06-27
2019-07-27 16:37:22

thanks for explaining it so well and for answering my comment.

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smiley Je souhaite

Quod tu es, ego fui, quod ego sum, tu eris
Frieza 360 posts, incept 2019-03-09
2019-07-27 16:39:37

Quote:
Medicare is currently running off the accumulated Treasuries in the so-called "lock box" (which isn't, of course.) This is why its full impact doesn't show up in the budget deficit; they're spending accumulated capital in large part, basically.

Ok, this is the part I'm missing. The MTR says the HI fund spent $306.6b and took in $308.2b last year, and has $200.4b left in the fund. But it also says it's expected to run out in 2026. A $1.6 deficit over 7 years does not consume $200, even if cost rises exponentially, so obviously I'm missing a number in that equation. The SMI fund had $104.3 sitting in it but it also took 74% ($319.98) of its revenue from the general fund, which sounds like it comes straight from the federal budget, and nobody seems worried about that one so I assume it's not the problem.
Tickerguy 190k posts, incept 2007-06-26
2019-07-27 16:42:23

@Feieza -- Well, dollars are dollars; they're fungible, so all this arm-waving is a load of crap.

Look at "debt to the penny" for the real budget deficit, in real time. As with the way the so-called "Trustees" do their math, along with the way the CBO does theirs they are constrained by the rules imposed by Congress as to how they account for things, whether those methods are reasonable or not, and whether they truly reflect both expectations and previous events or not.

In both cases the answer is "not", which is why neither organization has any sort of accuracy worth putting any sort of faith in. They're not intentionally dishonest and yet they are; the reason for it is that they're mandated by law to be dishonest!

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The difference between "kill" and "murder" is that murder, as a subset of kill, is undeserved by the deceased.

Kochevnik 1k posts, incept 2007-07-30
2019-07-27 21:29:44

Here are the yearly numbers :

https://treasurydirect.gov/govt/reports/....

The current debt is (07/24/2019)$22,022,943,775,070.37 and that should rise another couple hundred billion by September.

Not sure why but it seems even numbered years the debt goes a lot higher ? Which might mean a real humdinger next year since this year is going over a trillion as an odd year.

And look at the 2009 and 2010 numbers - that's what 'recession' numbers looked like 10 years ago - 1.6 to 1.8 trillion yearly numbers. I think we would see 2 or 3 Trillion yearly numbers if something similar happened now.

Then add the Medpocalypse numbers onto those. To me, assuming a big recession sometime in the next couple years, 2024 looks like 30 to 35 Trillion total debt.
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