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Here was Krugman on the pending Fiscal Train Wreck, it is sure to be a crowd pleaser:

Now it projects a 10-year deficit of $1.8 trillion.

And that’s way too optimistic. The Congressional Budget Office operates under ground rules that force it to wear rose-colored lenses. If you take into account — as the C.B.O. cannot — the effects of likely changes in the alternative minimum tax, include realistic estimates of future spending and allow for the cost of war and reconstruction, it’s clear that the 10-year deficit will be at least $3 trillion.

So what? Two years ago the administration promised to run large surpluses. A year ago it said the deficit was only temporary. Now it says deficits don’t matter. But we’re looking at a fiscal crisis that will drive interest rates sky-high.

But what’s really scary — what makes a fixed-rate mortgage seem like such a good idea — is the looming threat to the federal government’s solvency.

Not sure I can add much to what else has been said regarding our esteemed Nobel Laureate. What I find funny is that a ten-year predicted cumulative deficit of $1.8 trillion back under King Bush II is just about the amount of a one-year current deficit of the Obamessiah. Krugman’s point in the 2003 article was founded on the fact that entitlement spending is out of control and that we were in no position to deal with it, even when the coffers were comparatively flush. Well, we know for sure now that the entitlement situation is worse than it was then (we even added some Part D to the mix). On the other hand it appears that the wars are winding down, we had miraculous super-groovy health care reform that is going to “bend the cost curve down” and we have a much richer world in which we can trade and invest.

Keep in mind that federal spending since 2002 was about $28 trillion. It is planned to be $46 trillion for the next decade. The current “deal” “cuts” about $1 trillion from that, with promises to reduce the rates of increase in the future. Let me ask rhetorically, if the Bush tax cuts expire, would all be well in Krugmanland? I think you guys know the answer to that.

And I’ll return to a point I have beaten the living hell out of. I don’t care if you are a terrorist tea-party member or a Kool-Aid chugging Progressive, how come no one in either camp focuses on the fact that we are planning on spending, at the federal level alone, over $4.3 trillion per year, and yet people claim we are letting the unemployed suffer, the sick die, the homeless stay without shelter. What the hell are you doing with $4.3 trillion per year? Did you hear me? What the hell are they doing with FOUR … TRILLION … THREE HUNDRED BILLION … DOLLARS … PER YEAR?

Let’s put that back into perspective. There are 310 million Americans clustered into about 117 million households. So our federal government spends about $13,871 per person in America (that would mean that we spend more, per capita as a federal government, than countries like Brazil, South Africa, China and Ukraine earn in total in income). This is roughly $36,752 per household. Suppose that every single person in poverty in America is in a single person household, this means that about 44 million households are in poverty. Let’s assume that 50% of government expenses are needed to “run the country and provide public goods” to everyone, and that only 50% is available to provide relief to the 44 million “in poverty.”

What does this mean? It means that we can spend $2.15 trillion (or over $18,000 per American household) to run the federal government (this is the amount the entire federal government spent in the draconian days of 2003) and still have the ability to spend $45,454 per household on redistribution. Can I repeat myself again? With the projected levels of government spending even under the draconian tea-party-terrorist/Obama compromise plan, we can have a government as large as it was in 2003 and provide an amount of relief per poor household in America of an amount approaching the average household income in the country. I am not even sure hard-core Communists think that level of guaranteed income is necessary.

What the hell are they doing with the money? It bears repeating. What the hell are they doing with our money?

2 Responses to “The Debt-Ceiling Debate is Like Fighting Over the Falkland Islands While London is Being Looted”

  1. Harry says:

    Yeah, Wintercow. How quickly we are talking in the trillions, and I have trouble thinking in those terms.

    Here is a radical idea: all government payments have to be made in currency, with the biggest denomination being a $20,000 federal reserve note. No checks or electronic transfers. (Non-government transfers excluded.)

    This is doable, since it would gather support from Olympia Snowe and Susan Collins, who would like the jobs being created in Maine paper mills. Think of all the teller jobs created among Senator Schumer’s base in New York City, not to mention, all the cotton-pickin’ jobs created in Red States below the Mason-Dixon line. It would throw sand in the gears of government, just as government spends its full time throwing sand in the gears of enterprise.

    I know this would take a lot of secure rail cars to move $4 or$5 trillion. We would have to impose an excess profits tax on railroads and bus companies.

  2. Harry says:

    What they are doing with our money is inflating it. This is the war between debtors and creditors, and between investors and spenders.

    Every month we shovel the nation’s wealth down a hole, the longer it will take us to recover. We cannot possibly afford any of this charity without growth, which will only happen when we throw off the chains.

    In Texas next January the EPA will close down a bunch of coal-fired power plants, perhaps bankrupting evil carbon-burning power companies, which right now are cooling Dallas. The EPA is also about to implement cap-and-trade, whereby it issues permits for burning anything that produces carbon dioxide. These permits, each of which will be worth money, is the same thing as issuing money of the paper kind. The other money, our paper currency, will flow to the government, which will create a check to pay for its bills.

    I own two wheelbarrows. The grocery store is a mile away. If my wife and I have ten bushels of dollar bills and the car is out of gas, how quickly do we have to wheel two wheelbarrows of dollars to the store to buy a loaf of bread?

    I realize I have not provided Wintercow with enough to answer the question, like what is the dollar capacity of the wheelbarrows, and are the dollar bills banded compactly.

    I wonder too: where are they spending all that money? That’s worth repeating!

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