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2018-11-09 08:20 by Karl Denninger
in Editorial , 249 references Ignore this thread
The Disturbing Microcosm
[Comments enabled]

I had an interesting experience the other day.

Was having a beer in a place I haven't been before -- it's new.  I found myself in a conversation on many topics, one of which was sort of, tangentially, the economy and markets.

The comment was made that Trump was great, and look at the market.

I pointed out the actual budget deficit of $1.27 trillion last fiscal year.

In other words, 6.23% of the economy.

Of course the market will go up (fast!) when you have a ~3% 10 year Treasury rate and are increasing money supply at 6.23%.

For a while.

Just like it did in 2004-2007.

But it will also crash.

Just like it did in 2008, 2000, and every other time the government -- any government -- has done this.

There is only one place you can get $1.27 trillion out of the budget and balance it.  Health care.

You can cut the entire defense department to zero and not get there.  Of course you can't cut defense 100% and nobody would every really suggest that -- in their right mind or not.

Yet Medicare and Medicaid, or in the "as spent" Medicare and Medicaid services, totaled $1.466 trillion last fiscal year ending September 30th.

If you fixed the medical monopolies that would collapse price by 80%; you'd not spend $1.17 trillion of that.

That's within $100 billion of the budget being balanced.  It's the only way to get there as it's where the money is being spent massively in excess of tax receipts -- virtually in fact the only way to bring Medicare and Medicaid spending in line with tax receipts is to kill the monopolies so they return to the ~3-4% of the economy they were before the monopolists took over (down from the almost 20% they are now.)

Now cut the fraud in the Social Security Disability program -- money paid to people who can and do run marathons, say much less be able to work, and you'd be the rest of the way there.

But math doesn't matter to people infested with either Democrat or "MAGA" disease.

The facts don't matter to either group -- which is 90% of the population.

You may as well give up folks; this particular version of insanity is going to destroy this country, it's going to do it soon and neither side of the aisle will face basic arithmeticwhich makes neither of them worthy of associating with.

It's sad -- but true.

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