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Tag Archives: government bankruptcy

The Only Question


$20 TRILLION National Debt! [courtesy Google Images]

$20 TRILLION National Debt!
[courtesy Google Images]

On September 30th, A.D. 2016, the U.S. government closed out the 2016 fiscal year with an “official” National Debt of $19,573,444,713,936.79.

Makes me laugh.

Government can calculate the U.S. National Debt to the penny. How responsible!

And yet, government has no idea what happened to $6.5 trillion that was given to the Pentagon and subsequently disappeared.

In any case, the National Debt grew by $1,422,827,047,452.46 ($1.4 trillion) in fiscal 2016. That averaged out to over $100 billion in deficit spending per month.

That annual deficit spending increase has been a de facto $12,000 subsidy for every American household.

The fiscal 2016 deficit spending (debt) amounts to roughly 7.5% of the entire US economy. Without that 7.5% in debt-based “stimulation,” where do you suppose the economy would be right now?

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A Hard Choice: Inflation Kills the Dollar; Deflation Kills the Government


Inflation or Deflation? [courtesy Google Images]

Inflation or Deflation?
[courtesy Google Images]

“timmy” is one of this blog’s regular readers.  He recently posted the following comment on one of my previous blog entries:

 

“I’ve been hearing about the demise of the dollar for twenty years, as it continues to hit cyclical highs, with no end in immediate sight…. long term, sure, it must die. But not in the next year or three. There is no viable alternative– yet. Is gold saying inflation, as it continues multi-year declines…?? Wake up folks.”

 

I agree that the fiat dollar and the US economy have been amazingly resilient.  They’ve both defied fundamentals and reality for at least forty years.   In the 1990s, I was convinced that the whole system would collapse before A.D. 2000.  I was wrong.  Goes to show what I know.

Today, I look at the economic and monetary systems’ resilience with a sense of awe and resignation and ask, “Who is like unto the beast?”

But, beast or no beast, I remain convinced that the dollar’s goin’ down.  My prediction’s timing may be unreliable, but my notion of fundamentals still strike me as valid

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Growing Government Insolvency


Government Pigs Squeezed by Reality [courtesy Google Images]

Government Pigs Squeezed by Reality
[courtesy Google Images]

The Washington Times reports (“Dennis Ross pushes zero-based budgeting for federal government”) that Congress may impose much stricter financial controls on government agencies and bureaucracies.

According to said Congressman Dennis A. Ross, Florida Republican and a member of the House Committee on Financial Services,

 

“The streamlining tactic, known as zero-based budgeting, requires each agency or business unit to justify their budget requests from scratch for all existing and newly requested programs. It’s something the federal government hasn’t attempted since Democratic President Jimmy Carter advocated for it in the 1970s; it relies instead on past budgets as a baseline of money that’s guaranteed, and then requests additional sums year-over-year.

 “‘We should be painfully honest with the American people, because it’s their money.  When we do the budget process, we want to have some justification for every appropriation that is sought—a legal basis for it, an amount that is less than last year’s and a summary to express the outcome of it.”

 

Oh, pulleese—as if government could ever be “painfully honest” with the American people about anything.  (If government started being “painfully honest,” half of Congress would wind up “painfully” in prison.)

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Daily Hip Shots: Greek Anger; Rushing for Exits; & Inevitable Government Bankruptcies


The Ol' Hipshooter [courtesy Google Images]

The Ol’ Hipshooter
[courtesy Google Images]

Daily Hip Shots are occasional articles that I haven’t considered for long or proofread as much as I’d like, but still contain the germ of an observation, idea or insight that you might find interesting.

 

Greek Anger

CNBC posted an article entitled “It’s treason!  Greek anger at government u-turn”:

 

“European equity markets might be cheering a deal to extend Greece’s aid by four months, but many ordinary Greeks feel their government has backtracked from its grand promises to strike out the bailout.

“Greece is now scrambling to present a list of reform proposals in order to secure the financial lifeline. “

 

The significance of these “reform proposals” is this:  Last Friday’s celebrated agreement to extend the Greek’s loans for another 4 months is not yet final.

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What Can’t Be Paid, Won’t Be Paid—Not Even to Government Pension Funds


Is Nothing Sacred?  Not Even Gov-co Pensions?! [courtesy Google Images]

Is Nothing Sacred? Not Even Gov-co Pensions?!
[courtesy Google Images]

According to The New York Times article “In Ruling on California Town’s Bankruptcy, Judge Challenges Security of Pensions”:

 

 “A federal bankruptcy judge on Wednesday upended the widely held belief that public workers’ pensions have a special status in California that makes them impossible to cut, further chipping away at the idea that pensions are sacrosanct in a municipal bankruptcy.”

 

The judge ruled against the sanctity of CalPERS pensions and declared the CalPERS liens on the city of Stockton, California to be null and void.

What’s that mean?

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Posted by on October 16, 2014 in Bankruptcy, Pensions, What Can't be Paid

 

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