Debt Rattle September 28 2017
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Juan Gris Man in the café 1912 • The Illusion of Prosperity (Lebowitz) • Trump Tax Plan Economic Outcomes Likely Disappointing (Roberts) • The
[See the full post at: Debt Rattle September 28 2017]It is tautological that it’s beneficial to avoid the misallocation or wasteful and pointless application of wealth which the government is famous for; or their required enforcement of wasteful oligopolies like medicine – approaching record-breaking zero care for infinite cost! Up 50% in Florida this year!
But the government is not going to cut anything. Not outsized and hilariously backward military graft, not the $23T+ in corporate welfare which lets MNCs and billionaires avoid taxes, and not the 60% of social welfare spending that’s wasted in administration. They can’t. Why? Because without infinite growth, infinitely accelerating, a debt-based system mathematically collapses. The end.
So let’s cut to the chase. Since you’re not going to stop, and since 1979 you were never going to repay the debt anyway — something Adam Smith remarked on in 1775 — then the idea of tax cuts takes on a new flavor, doesn’t it? Lawmakers and Presidents can’t say it, but once you’re going to default, it’s now just a choice between crippling your population with austerity on behalf of the creditors (ie banks) or not crippling your citizens and telling the creditors to back off. …In preparation for the day you default anyway.
I know there have been discussions on austerity here, but they often pretend there are no limits and no consequences to giving everything to everybody. That’s impossible, both physically and strategically. However, you can still choose between a bad outcome of slavery and austerity, or freedom, autonomy, and hardship. So again, since Congress knows this – or at least many on the finance committee do – AND they know this was decided and set in stone long before they arrived, they have to play the hand before them. Recognizing this, and that they’re all lying – shocking I know – will make all the kabuki theatre make a lot more sense to us outsiders. So, print money to pay for the tax cuts until you can’t, then go back to a gold-oil standard when you have to. You know this is close because they’re finally serious about industrializing to offset the imminent halt of foreign imports. This will restore income equality as the insider money-hose stops, bonds collapse, paper wealth disappears, and access to government has little benefit.
Again, they’re not going to pay. They were never going to pay. It’s impossible to pay. They will default, like governments always do, like Adam Smith said. Everyone knows it, that’s why they don’t care. That makes all the decisions different.
Dr. Diablo
Correct me if I’m wrong, but; I thought states (country’s, with a sovereign currency) couldn’t/wouldn’t default, because they own the printing presses.
I do agree the debt will never be paid, period.
What’s not clear to me is what happens to us?
I suspect the last 10 years are a good indicator…There must be a financial reset, since all the debt is owned by a small percentage at the top, who are not allocating resources for economic health, but for personal protection when the rest of us sink.
The young employables (not all employed) are less capable than in prior eras, less experienced and less adaptable. The ageing boomers will need a whole lot of care, or some hemlock, or some “balanced strategy” of the two.
All of this is in a trend of plummeting free-energy from fossil fuels, and awareness of the ecological doom which looms from all the greenhouse gasses which are in the atmosphere and have decades to play their roles, even if production stopped suddenly.
I don’t see a large plan. Command economy is what tends to happen in dire emergencies. Growing vegetables and building a core network of other humans you can trust and work with (hard to find), and shrinking your distances to those you can bike and walk, is critical for surviving short-term and long term in situations like Puerto Rico is having.
The sun is still shining somewhat. Fix the roof!Before you cheer, look up the definition ofWaives and find out what will be the duration.
Haven’t read the article, zerosum, but from what I’ve seen, Trump already waived the Jones Act right after Maria struck, and after much protest from shippers now decided to waive it yet again. DOesn’t sound like something you can put on his plate. Shouldn’t be his anyway, Congress could have done this from the get-go.
The wave is not going to be for more than 10 days. It takes four day of sailing from Miami. It’s a pretend help.
Here is an other pretend help.
A group of bondholders, who own a portion of Puerto Rico’s massive $72 billion debt, has proposed what they are calling relief — but in the form of a loan. So they’re offering a territory mired in debt the chance to take on more debt.
The announcement came after The Intercept spent two days reaching out to 51 of Puerto Rico’s known creditors, asking them if they would support a moratorium or cancellation of debt payments for the island, given the humanitarian crisis. Prior to this announcement, only three of the 51 creditors had so much as donated relief funds to charity or offered sympathy for island residents, all of them banks who actually have to face consumers, and so are a bit more adept at handling public relations. No creditor had supported debt relief.
Of the 51 creditors contacted by The Intercept, only Citibank, Goldman Sachs, and Scotiabank have pledged no-strings-attached money for Puerto Rico and other Caribbean islands, in the form of donations to relief organizations totaling $1.25 million. Citi has also waived certain fees for citizens within disaster zones.
Puerto Rico’s other creditors contacted by The Intercept would not say whether donations were made by their firms or their top executives, which include some of the richest people on earth. Holders of Puerto Rican debt have included John Paulson, who got rich betting against the housing market during the financial crash; Jeffrey Gundlach of DoubleLine Capital, who in 2015 called Puerto Rican debt his “best idea” for investors; and Marc Lasry of Avenue Capital Group and co-owner of the Milwaukee Bucks NBA team.
The creditor lists were assembled by Puerto Rico’s Center for Investigative Journalism in 2015 and supplemented by additional media reports. In addition, the federal bankruptcy-like process in Puerto Rico forced holders of one type of debt, so-called “COFINA” bonds backed by sales tax revenue, to reveal themselves. A full list of known Puerto Rican bondholders and their responses to The Intercept’s inquiries appear at the end of this article.
Experts see even the offer that was made by the bondholders less as a gift and more as a backdoor for creditors associated with the Puerto Rico Electric Power Authority, or Prepa, to take advantage of the disaster by enriching themselves. Offering a desperate population the ability to drown themselves in even more debt is hardly generous.
See….
There are lots of ways to make money when the bubble burst. 🙂
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