"Kissing the Girlfriend:" the Fiscal Cliff

 

 The FOX Economic Fear Campaign

The "fiscal cliff" has grown more than a little thread bare.  The commercial media has constantly hyped it as a "fear point" for so long that now, as we actually approach the "jumping off place" most of the terror steam has long since dissipated.

However, consistent with Republican "hostage taking," the next "fear point" -- the debt ceiling -- is being dragged from the garage where they keep it during its off season, cleaned up a bit and gleefully waxed for a "startling fresh" re-introduction in a few months.  In this post, MeanMesa will brazenly provide links to a number of previous Short Current Essay posts about next round of debt ceiling terror, the fiscal cliff terror, the sequestration terror along with just a couple of new ideas.

Before we even begin, we should make a special note.  The Republicans now find themselves sandwiched between two coarsely demanding phenomena, the forces above them -- the controlling avaricial oligarchs who own the party and fully expect it to "dance on command" thanks to the millions they are funnelling into it -- and the forces below them -- the drooling hill billies, bigots and tea bags whose relentless blind loyalty is required for their role as "foot soldiers" in the larger scheme of things.

Think of the Titanic.

Unfortunately, it's not just a bad movie. (image source)

Now, the tea bags and their handlers have simply "left town."  We're on our own "fiscal cliff-wise."

Predictably, those denizens of the Republican Party's steerage decks are growing more and more restive -- suspicious of the oligarchs lavishing themselves up in the ball room.  But, predictably, those tripping the light fantastic in minuet six decks above are also feeling the same strange, unsettling, "aristocratic tickle" that plagued King Louis a few days before he met the guillotine.  They look down at the unwashed, illiterate hordes of tea baggers who are beginning to grumble about new things which aren't on the official "play list" of approved grumbling topics.

All this is mentioned here because all of these are the "players" in all the litany of "terrors" listed above.  House Republicans and the surviving PAC monsters such as Norquist, Adelson, Rove and the others must now somehow keep all these ducks lined up in a row and moderately happy even as things grow continuously worse for them.  The oligarch controlled media has dutifully remained embarrassingly obsessed with the breathless, histrionic message of the gravity for these economic gizmos, but now, even that "bottomless bucket" of fear is running short on new material.

For the likes of Boehner, Cantor, Ryan, McConnell and their Congressional ilk, the formidable political skill of a newly unfettered, second term, "tanned, rested and ready" Barack Obama only makes all this even more threatening for the Grand Old Party.  

The oligarchs won't bolt.  There is no place for them to go.  They are beginning to suspect that their "oceans of cash" no longer protect them.

But, in terms of ground troops, the hill billies' and tea bags' wheel chair skirmish line is mortally fractured. These tin soldiers were eager to belch and burp on measure for death squads and Kenya, but they simply can't understand this stuff.  In better times this would have been no problem, but now, many of them have coldly "quit believing," and if they won't believe, they can't be frightened.

Let's explore the litany of economic monsters. To keep these posts short we'll just address one at a time.

The Fiscal Cliff

Since this post was begun earlier today the entire House Republican caucus has surrendered itself to the tea bags once more.  This afternoon it looked like things were "moving."  At this writing, Boehner has recessed the House -- probably until after Christmas.

Can you spot the "cliff" in this graph? (data and graphic source)

The fiscal cliff has not even happened yet, but there are already literally books written about it, prognosticating its effect on the national economy -- GDP.  Most Americans have not yet come to grips with the severity of fiscal cliff economic ramifications.

During the last quarter, GDP growth was estimated at 3.1% [higher than first estimated].  3.1%, after the incredible violence of the Bush W. economic collapse, is pretty respectable.  In 2008, in the midst of the collapse, the GDP was contracting at roughly 9.6% annually.  We can all the 9.6% negative growth number -- so actually, it is -9.6% growth -- the "base" for recent economic wreckage in the country.

All kinds of bad things caused the 2008 economic collapse, and the dismal GDP contraction was a good way to accurately "size up" the effects of all those bad things.  If we roll off the cliff this time, we will see a "junior version" of another similar Republican violent economic contraction.  The CBO estimates that by the end of the second quarter after the "cliff," national GDP growth rates will have plummeted to roughly -3.5%.  [This is also pretty much what's on the graph above, too.]

This would mean that the economy had contracted about 6.5% between "cliff day" and the end of the 2nd quarter of 2013:  currently +3.1% dropping to predicted 2nd quarter-3.5% =  -6.5%.

The really wonderful news which Speaker John Boehner shared with us today is that the next Republican Recession will only be about 2/3 as bad as the last one. The tea bags in the House believe that the 1/3 improvement in the nightmare is sure to get them re-elected in 2014.

With a -6.5% economic contraction jobless rates will immediately begin to escalate.  However, just here we must be a bit cautious about simply multiplying the 750,000 jobs lost per month in the last 2008 Republican recession by 2/3 and assuming the answer will be job loss rates in the next nightmare.  

Why?  We haven't really healed up after the last one.  Current unemployment rates have only dropped down to 7.7% after four years of steady work to add jobs.  More or less normal unemployment rates should run around 4% - 5%.

All of the Republican "penny pinching" plans in every House tea bag version cut off unemployment benefits.

Sequestration

The precise reason why the economy will falter this time is somewhat different from the reason last time.  The 2008 Republican Recession could be described -- in an over simplified way, of course -- as the result of simply emptying all the money out of the economy.  There are all sorts of sophisticated details which could be added, but at the end of the 2008 disaster the wealth of 99% of Americans had dropped 40%.  That's what MeanMesa calls "missing money."

Of course we all know that not everyone's money was missing.  Some folks' money had grown hugely.  We all know whose money grew hugely.

The next Republican Recession being planned for us next year is not likely to create nearly as many millionaires and billionaires as the last one did.  This next recession will be the result of a violent contraction in government spending, one which according to just about everybody who knows is way, way too fast for the economic recovery to be able to survive it.

The plan for this violent contraction in government spending originated last year [2011] when the House tea bag Republicans held the debt ceiling hostage.  As soon as they did that, the interest rates the country pays went sky high, increasing the budget deficit and, in turn, the national debt.  

To "pay the ransom" to get the debt ceiling increased, a massive "sequestration" agreement was hammered out between the President and the House tea bags.  The House tea bags had no idea how to lower the deficit or pay off the national debt so they threatened to simply quit writing checks -- but writing checks was their job and according to our Constitution, they were the only ones who could write the checks.

The "sequestration" deal amounted to an automatic, blind, hack saw budget cut with half the blood coming from the Defense Department and the other half coming from social programs which Jesus had told the tea bags to hate.  The President is anxious to avoid "sequestration" -- which is actually only another word to call the fiscal cliff -- by cutting spending but also by raising taxes to increase government revenue.

Further, the President wanted to "balance" the spending cuts so -- in his words -- "the tax cuts for the top 2% were not being paid for by cuts to old people, students needing loans and veterans trying to put their lives back together."  The automatic "sequestration" approach would not have been "balanced."  It would have been chaotic and brutal.

As of right now, there's no telling what's going to happen.  MeanMesa's bet is on going over the cliff.

The GOP's Great Fiscal Cliff, National Debt, 

Budget Deficit Deception

MeanMesa's opinion of all this should not surprise any visitor here by now.  In any event, we'll keep it as brief as possible.

The horrible debt we have right now began to grow into its current nightmarish size during the Reagan Administration.  Ronnie was the first President to host a $1 Tn dollar national debt.  His economic expert created the "trickle down" theory and famously said that "deficits didn't matter."

Every Republican President since Reagan has  exploded the national debt even more.  The following graphic shows the increase in the debt which each Republican President sign off on as the years flew along.  The graphic also shows something else which is rather important.

Pay attention to the green line. (data and graph source)

The exact note above the green arrow says : "If Reagan & [the] Bushes had balanced their budgets and Dems did what they did"

The green curve along the base of the graph shows how the US economy would have performed during the years from Reagan to now.  Instead of the national debt being roughly 95% of our annual GDP, it would have been at a very healthy 15% or so.

If there is anything which totally deflates the "spending cutting" "cost controlling" "economic development" meme of the Republican Party, it is exactly this data.

They are economy wrecking spendthrifts and scam artists who have not only wreaked havoc on our economy but also amassed great personal and corporate wealth while doing it.  It turns out that, economically, Republicans are essentially the exact opposite of what they are currently presenting themselves to be.

The tea bags never had any sort of legitimate claim to anything close to their two favorite "pretend themes."  From the very beginning they painted themselves as fiscal conservatives entirely directed at 1. lowering taxes, and 2. making government smaller so it wouldn't cost as much.  

But since they managed to win enough elections in 2010 to place the House of Representatives in their suffocating death grip and castrate the Senate with their endless filibusters, they have consistently increased deficits and national debt with increased interest rates and the instantaneous massacre of any program which would either save money, create jobs or spur real growth.

It would be flamboyantly over-generous to describe them as exclusively misdirected -- but otherwise innocent -- ideologues.  The clumsy incompetence of the tea bags as legislators is no more than a flimsy cosmetic hiding the almost indescribable corruption which seems so organic as to naturally flow in their veins.

The Only Question Left:

 Do House GOP Tea Bags Know This?

If they do, and MeanMesa has to assume that they, in fact, do, what in the hell are they doing?

Maybe the alternative is worthy of comment.  GOPCon Romney was so inebriated with synthetic FOX world "propaganda constructs" that he remained oblivious to available polling about the likely election results.  He had surrounded himself with advisors who believed the FOX just as much as he did.

These problem tea bags must probably live in a similar world of gaseous FOX reality.  That would be noxious by itself, but with the help of Murdoch's FOX, the hill billies who repeatedly elect these miscreants are also duped into "towing the line."

The happy news is that the hill billies seem to be becoming less and less anxious to be manipulated.

With that said, we have made full circle to what began this post.  MeanMesa routinely monitors email traffic from Freedom Works.  The revelation offered up by reviewing Freedom Works emails is that a wide population of Americans -- notably, not just those in the oligarch class -- seem to support the destructive habits of the House Tea Bags.

MeanMesa Homework Section

MeanMesa has been watching the grotesque "Passion Play" conducted by the 2010 House Tea Bags -- and, along the way, posting frequently about it.  Here are a few links to the most popular MeanMesa Short Current Essays from the last 20 months.

These are 3 Freedom Works emails:

http://www.meanmesa.com/2012/12/how-boehners-plan-b-met-ugly-death.html
http://www.meanmesa.com/2012/12/the-latest-freedom-werks-email.html
http://www.meanmesa.com/2012/12/latest-freedom-works-email-cannibalism.html

These are a few other MeanMesa posts related to this subject which you might enjoy.

http://www.meanmesa.com/2011/12/gopcons-governing-by-hostage-taking.html
http://www.meanmesa.com/2011/11/meanmesa-fiction-candidate.html
http://www.meanmesa.com/2011/10/cleaning-up-blood-after-republican.html
http://www.meanmesa.com/2011/10/republican-candidates-selling-dream.html
http://www.meanmesa.com/2011/07/how-to-quit-worrying-about-default-and.html
http://www.meanmesa.com/2011/07/house-tea-bags-after-fall-of-fox.html
http://www.meanmesa.com/2011/07/peering-through-fog-boehner-reveals.html
http://www.meanmesa.com/2011/05/tea-bags-to-gopcons-please-pretty.html

The Wisdom of Just Walking Away

Debt forgiveness. King Hammarapi receives divine law from God Samas. (image source)

The Gigantic Republican Bankster Debt Scam

There has been much talk about the gigantic debt and debt guarantee which lurks behind the financial calamity of the Great Republican Recession.  Some estimates range as high as  sixty times the planetary Gross Domestic Product.  The current planetary GDP is around $70 Tn US dollars.  Sixty times the planetary GDP is around $4,200 Tn.

For the mathematically challenged, $4,200 Tn is:

$4,200,000,000,000,000.

We can zip around some of the colossal economic wreckage as we attempt to convert this ridiculously high number into something more comprehensible.  The Bush autocracy's blind, unilateral, vicious banking de-regulation "released the Kraken" when it came to making us unwilling "national enablers" for the addict behavior of banking and brokerage thugs.

The present economic problems in the European Union can be traced directly back to the same feeding frenzy.  European governments in Greece, Ireland, Spain and Portugal jumped into the "high yield" promises of the mortgage securities market like drunken junkies diving into an Olympic pool full of cocaine.

We can pause for a moment to repeat one of MeanMesa's favorite quotes, the words of Vermont Independent, Senator Bernie Sanders:

"Not everyone had a hard time during the eight years of the Bush Administration.  The top 400 income earners in the country saw their net incomes INCREASE by $630 billion."

More assistance for the mathematically challenged:

The United States National Debt is around $14 Tn.

$630 Billion is around 5/8 of $1 Trillion.

As individuals, the average take of those among this crowd

 of 400 is roughly $1.5 Billion per each.

Money Lenders, Temple, Credit Default Swaps.  (image source)

The massive US debt is a well documented fact.  The even more massive monster lurking out of sight in the shadows just behind it may be a tiny bit more difficult to actually "touch with a finger," but it's there too.  However, we know where the debt came from; we just don't have much of an idea of exactly where it went.

One of MeanMesa's favorite graphics shows us the origin of around $6 to $8 Tn of it, although this is only the visible part of the thing.  Since the owners of the Republican Party obviously expect us to eagerly cut spending on most of the things we like the most -- while we keep paying taxes, of course -- it's clear that they believe that we owe someone this money.

Follow the red bars.  Add them up for a grisly total.  Ronald Reagan hit the "first trillion" not long into his disastrous fiscal policy.  Remember that "debt" means money borrowed.  These shills not only emptied our pockets, they emptied treasuries all around the word. Also remember that all that red ink began to not only accrue interest, but also inflate as we bumped our way down hill to where we are now.

Our country is now best characterized as the unlikely amalgam of good credit and bad debts.

So, What's This About "Walking Away?"

Audio Greatness - open in new tab: 

https://www.youtube.com/watch?v=YB4WwPVEv8c

The main part of this incredible scam is founded on the idea that, as normal citizens of Earth, WE are the ones who owe this money.  Solving this disaster is really only complicated when the main part of that solution is about US paying back all this money. 

We didn't borrow this money.  We didn't spend this money.  Further, this money wasn't spent to purchase something for us.  Our part amounted to simply signing the note -- a commitment executed by the GOPCon looters who, at that time, controlled the government, and a commitment which we found ourselves powerless to avoid.

The $4,000 Trillion figure comes from totalling up the financial and banking doo-dads, many of them guarantees that our alleged creditors be "made whole" in the event of any defaults or other interruptions in the cash flowing into their bunkers.

Now that the steam organ is silent, the clowns are whimpering and the unregulated three ring banking circus is buried under its own flaming Big Top tent, those "interruptions" and "defaults" are swarming all around us -- thicker than gnats on a sweaty preacher who just saw his mistress arrive at the ice cream social.

Does this mean that the whole planet has to commit economic suicide so 10,000 human billionaires won't be "inconvenienced?"  This might have been the "very best, sweetest wet dream deal imaginable" to the lurch jaws in the Bush Crime Family, but it tastes rather sour to the rest of us.

In fact, extremely sour.

What can be done?  The "bondholders" will instantly trot out some nonsense or other from their King James Bibles if there is so much as a murmur of default, and Mr. FOX Murdoch, the Australian fascist and servant of the oligarchs -- each one of these same oligarchs horrified at the prospect that he might be the next ox to be gored -- would rush into action, declaring that none other than Jesus himself commanded that we hand all this loot over and hand it over right away, too.  

Not a problem.

It turns out that the ancient Pentateuch of the the old King James actually contains the instructions for handling a moment such as this one.  Suspecting that many of MeanMesa's visitors are not serious bible-readers, this following little passage -- apparently the words of Moses -- is included here for your convenience.

Deuteronomy 15:1-11

The Year for Cancelling Debts

15 At the end of every seven years you must cancel debts. 

² This is how it is to be done: Every creditor shall cancel any loan they have made to a fellow Israelite. They shall not require payment from anyone among their own people, because the Lord’s time for canceling debts has been proclaimed. 

³ You may require payment from a foreigner, but you must cancel any debt your fellow Israelite owes you. 

⁴ However, there need be no poor people among you, for in the land the Lord your God is giving you to possess as your inheritance, he will richly bless you, 

⁵ if only you fully obey the Lord your God and are careful to follow all these commands I am giving you today. 

⁶ For the Lord your God will bless you as he has promised, and you will lend to many nations but will borrow from none. You will rule over many nations but none will rule over you.

⁷ If anyone is poor among your fellow Israelites in any of the towns of the land the Lord your God is giving you, do not be hardhearted or tightfisted toward them. 

⁸ Rather, be openhanded and freely lend them whatever they need.  

⁹ Be careful not to harbor this wicked thought: “The seventh year, the year for canceling debts, is near,” so that you do not show ill will toward the needy among your fellow Israelites and give them nothing. They may then appeal to the Lord against you, and you will be found guilty of sin.

¹⁰ Give generously to them and do so without a grudging heart; then because of this the Lord your God will bless you in all your work and in everything you put your hand to.  

¹¹ There will always be poor people in the land. Therefore I command you to be openhanded toward your fellow Israelites who are poor and needy in your land.

Go ahead and make a "Deuteronomy and Sausage sandwich" for your favorite oligarchs.  They can have a snack while the rest of us "walk away" from their monumental mischief.  Tell them sternly that we don't intend to ever let them do this again.