Monday, November 21, 2011

Surprise, Surprise, Surprise!

The 'Super Committee' is reporting that they won't be able to agree on which Chinese buffet to hit for lunch, much less how to cut $1.2 billion out of the budget over the next decade, and now Congress is scrambling to find a way to not enact the across the board cuts that were the stick meant to get the Committee to actually do something other than posture.

Please excuse me if I don't rend my clothes and rage at the gods in disbelief on this one.

When the Republicans blinked this summer and kept the government running so that this collection of thieves could get together for a few months to fiddle while Rome burns, I knew we were boned.  The truth is this:  Our spending, including the military and entitlement programs, is going to be cut.  We can either cut it voluntarily and in a way that softens the blow, or we can let the bond market dry up and then fight over the scraps.  Either way is going to suck, but the path of inaction chosen by Congress pretty much amounts to people on the side of a volcano going out to watch the fireworks as the lava flows inexorably closer. 

So what do I expect to happen?

For one, the stock and bond markets are going to start swinging wildly, but with a general downward curve for the near term.  The prices of real things, like gold, are going to restart their steady climb upwards.  Look for our national credit rating to take another hit.  In order to get suckers, I mean buyers, to purchase government bonds to continue to pay for the bread and circuses, the government is going to have to offer higher and higher interest rates, which will drive up the cost of credit for everyone.

In the long run, I see a general slump in the economy as raising prices drive most of us out of the non-essential markets, meaning nothing other than food, clothing, energy, and housing.  Hardest hit will be what's left of our manufacturing industries.  It's cheaper to repair an old car than it is to buy a new one when you're worried about whether or not you'll be able to afford groceries this week.  I see unemployment going nowhere fast, and a lot of people will drop off of the unemployment tracking as they just give up. 

Doom and gloom?  Yep.  Accurate?  I hope not, but then again, hope isn't a plan.

It's past time we accepted that we can't cash all the checks we've written in this country since 1934.  We have to cut back, way back.  $1.2 billion over a decade wasn't going to adequate, but at least would have been a good start.  Now we get to make popcorn and watch the thriving economy our grandparents created grind itself into the dust.


Duke said...

This economy has no chance of surviving. We need put our currency back on the gold standard, If we did watch gas be 25 cents again. I don't see it happening, too many powers want a world wide currency.

TinCan Assassin said...

Gold was a world wide currency. It didn't matter which king's image was on the coin, gold and silver were accepted everywhere, as gold and silver.

Matt said...

Unfortunately, that was based on base line budgeting.

What that means is even if that had agreed to the 1.3 trillion, spending would have continued to rise.

An example is of this would be, if I currently weigh 300 lbs and my current weight gain is expected to be another 100 lbs over the next 10 years, I go to the doctor and he tells me that I need to lose 50 lbs.

So what do I do? I cut my expected weight gain down to 50lbs. over the next 10 years.

I go back to the doctor and he's really expecting me to weigh in at 250. I show up at 350.

That's convoluted, I know. But the point is there was no real spending cuts ever planned. The 1.2 trillion would have only SLOWED the rate of spending, not cut the national debt, which is what everyone seems to think was going to happen.

Either way, it was a bone job form the get-go.

WS4E said...

> cut $1.2 billion

They are not cuts...the sequester automatic "cuts" are NOT CUTS.

They are 'reductions in the rate of growth'. If you make 100,000 this year and make 110,000 next year instead of 115,000, that is not a PAY CUT, it is still a raise.

These jokers are not serious at all, not a single person in either party cares about the country. Even you vaunted so-called conservatives, they are all liars.

If you see someone from either party talking about 'these cuts', point your finger at them, look them in the eye, and say "LIAR!".

All this does is fire up the sheeple for the big red-vs-blue 2012 game and get the money flowing into the battle coffers for raiding and pillaging.

Until I can look my kids in the eye, and not have to tell them that the government is selling their soul and future and expecting them to work in forced labor for their entire lives under threat of laws and prison to pay off the money they are spending today....then they are all lying.

What have conservatives ever conserved anyway? Did they keep socialism from taking over? Nope. Did they shrink the federal government? Nope. Did they ever end a single federal agency? Nope.

That is why I have stopped calling myself a conservative...the entire conservative label is now a silly joke worthy of disgust and shame.

DaddyBear said...

Can't say I don't disagree with y'all. I'm not well versed enough in economics to know how or if we could get back on the gold standard, but I do know that if we don't start making deep, real cuts soon, we are boned.

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