Michael Pollaro says: “A $2.5 trillion deficit will create quite a waterfall on this graph, don’t you think?”
Here is the waterfall-deficit graph (with an attitude). I created it when the projected red ink was “only” $1.6 trillion, after which Obama was to cut it in half by the end of his first term.
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Education and Ethics
Wednesday, March 18, 2009
What Does A Political Lie Look Like?
Talk about political double talk!
The proposed deficit reduction at the halfway point means that the deficit will then be twice as large as it was at the beginning of his term.
That is what is held up as the great promise! Is it a lie to call it a deficit reduction? After being robbed the bandit leaves a mint, is the bandit thoughtful and kind, and generally a really great guy?
These are graphics that make me proud that I’ve never voted.
From the Promise Land to the land of promises.
i think it would be nicer to see the graph, not in absolute numbers, (though, lol. it’s pretty scary that way too), but as a % of GDP.
just a question, why does the chart switch from Bush to Obama at -454B?? the Bush Fiscal year goes until the End of Sept. the Obama budget doesn’t take effect until Oct 1 2009..
technically, and realistically, the current $1.75 T deficit for this year has to be applied to Bush.
“technically, and realistically” the deficit belongs to the unConstitutional coup!
So what would that look like if we were to use constant dollar terms? Like say using as out base approximation of dollar purchasing power the dollar from like 1912….right before the federal reserve is created.
This illustrates how political promises work. This graph was the old promise of an unimaginable deficit with the promise of rebounding to an unmanageable deficit. The new reality is an unfathomable deficit with the prospect of passing the point of no return (aka hyperinflation).
The vampires have bled the world dry and are now sucking on economic turnips. The money Parker Brothers prints for Monopoly games will be more legal tender than the Federal Reserve’s toilet paper tissue.
But all of the discussion about financial markets and government debt is being done in the context of a free market. What will happen when no one wants to buy into the Ponzi scheme? Will the government lose gracefully according to the existing rules of the game?
No, the government will change the rules. If no one will do the economic Mexican hat dance voluntarily, Uncle Sam will start shooting the floor to get our feet moving. If that doesn’t work, Sam will just start shooting people to motivate compliance. The State has ways of making you want to do things you would rather not do.
Its like we’re kids on a playground swing — big kids just a little too old to be in a playground.
It all started when everyone’s retirement got converted to 401k’s.. steady inflow of cash into the stock and bond markets! prices go up, yields go down, peaches and cream. But the economy gets hooked on the non-stop expansion and we have a series of bubbles, each bigger than the last, with the FED pumping the swing each time around.
After 15 years of this, the ride is now getting scary, even for the big kids! Is the FED sadistic enough to keep pumping? Do we have the balls to jump off the swing, or stick our feet out and try to stop all at once?
On a less serious and probably offtopic note, the graphic of obama reminded me of this:
http://www.tor.com/index.php?option=com_content&view=comic&id=11740&page=1
When I was watching the live feed from one of the ASC panels, there was an interesting debate why the Chinese keep buying the American debt, although they clearly hate to do it (you know, this Chinese oficial saying “we hate you guys, but we gotta keep buying your treasuries”). No panelist was able to answer this, but I though – aren’t they doing it, because the American government is threatening them with monetizing the debt?
You know, maybe Geithner is saying something like this: “Look guys, we are gonna run up these deficits no matter what. So either YOU will keep buying our debt, or WE are will start to monetize it. And you don’t want that, because then the value of your dollar reserves will go down.”
Am I off base here?
The Chinese probably also hate themselves for pegging to the U.S. dollar. They have to purchase dollars to maintain a weak currency and given the current state of affairs, they can’t change course without causing a panic that moves against them. As bad as things were before, they’re almost totally boxed in now, and totally at the mercy of Obama and Bernanke.
This is hilarious – Behold the Mighty DEBT STAR!
http://img214.imageshack.us/img214/2008/debtstar5rk3.jpg
I calculated this in terms of GDP, CPI, M1, M2, and TMS. Take a gander:
http://meambobbo.blogspot.com/
[blockquote]technically, and realistically, the current $1.75 T deficit for this year has to be applied to Bush.[/blockquote]
Not that I want to defend Bush, but “technically and realistically” he didn’t spend over a trillion dollars earlier this year. The 2009 deficit belongs more to Obama.
That “deficit cut” he’s promising is based on extremely unrealistic and downright fraudulent assumptions. Mark my post and hold me to it a year later: We are in for some real “sticker shock” with more spending increases and a LOT less tax revenue than current Obamanomics is promising us.
This is a total distortion. At minimum, it should be done as a % of GDP
I swear, everyone from the top on down has to be taking their cues from the Zimbabwean Government. We have a central bank and Government that bails out failed banks and businesses who then turn around (in the case of AIG) and give that money as bonuses to apparently the most incompetent people in their company. It also stands to reason that many more companies that received the bailout money have done the same thing that AIG did. Give it enough time and those companies (all of them) will be back for more and more while the U.S. debts pile higher and higher.
How long before we have some type of armed conflict with China?
Please post logarithmic or % of GDP(I know GDP is a misleading number but still better than this). It pains me to see the news media use Nominal graphs to such an extent and it is unacceptable for a site like this to do it without second thought.
I don’t see a problem with presenting the graph as is. It’s a nice way of showing both the deficit and the dollar’s loss of purchasing power. Scaling it would hide the latter effect, and possibly leave some wondering what all the fuss is about.
8:
To paraphrase Goldstein’s book, “The Power of Gold”, its like a game of hearts and the US government just passed the queen of spades. Hmmm, Goldstein used this phrase to describe Nixon’s dropping of the gold standard. Maybe the queen will be played differently this time.
IMO, the denominator should be Savings as its not spending ie GDP that funds the deficit. I think Garrison would agree
Michael:
Maybe China wants to shoot the moon.
This graphic is economically worthless. It only allows for the uninformed to get their daily proof of persecution from the government.
The fact that this was posted in Mises’ name is pretty sad. Perhaps it goes to show exactly how little of an effect he had on modern economic theory.
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