Or How I Survived the Great Debt Ceiling Crisis
by Reverse Engineer, Doomstead Diner
I’m beginning this article in the Wee Hours of Monday Morning October 14, 2013 here on The Last Great Frontier, with Da Goobermint still mired in Partial Shutdown mode, and the Debt Ceiling issue set to hit a Crisis Point on Thursday October 17th still unresolved. It looks to be a Watershed Week in Doom Observation, so I am going to make this article a Daily Diary of what goes on here. If not a Journey to the Center of the Earth, the beginning of a Journey to the Center of Financial Collapse of Industrial Civilization.
As Jules Verne Sci-Fi goes, Journey to the Center of the Earth was NOT one which held up very well over the years on a Scientific level, but it does provide a nice metaphor for retreating through History as well as reminding us of our complete dependence on the Earth for continued survival of our species. For a long time, Homo Sapiens only worked within a VERY narrow band on the Surface of the Earth, most living at or near Sea Level within perhaps about 2ooo meters to the upside of that. Resources extracted to keep said population expanding going down maybe 100 meters most in terms of pulling up fish, though really such deep fishing only possible recently in the Age of Oil.
Similarly, extracting Mineral resource from below ground level did not happen much prior to the Age of Industrialization. Each level of further development of the Industrial Economy leveraged itself on the back of another prior energy source, more or less in this order: Wood, Peat, Coal, Oil, Nuclear.
Wood was the first thing used to Smelt Metal, and whole forests in MENA where the technology developed first were cut down to do this. Said Metal Tools enabled the large scale harvesting from Peat Bogs, enabling still more tools to be made to dig into the earth a little ways and start recovering Coal deposits, fossilized plant life basically. Coal in turn made possible really BIG Steel Plants to be built, which then could create the equipment necessary for Oil Drilling. With further inventions like the Steam Engine and then the Internal Combustion Engine, you could start moving this energy supply around, and going wherever it was to be found to dig it up. In the final phase, it could be used to mine Uranium, build reactors and generate more power through Nuclear Fission.
This was supposed to leverage us into the Big One, the Holy Grail of Energy, Fusion Power on Earth. Sadly, the technological problems this has have been insurmountable over the 50 years I’ve been reading about it, starting on the pages of Popular Science when I was a kid. We are now running out of the legacy sources of energy easily mined up, and the whole Engine here is beginning to seize up because of that.
Energy is the REAL problem faced here, not the Debt Ceiling. The Debt accumulated through the course of the Industrial Era is the RESULT of financing this type of Civilization. You can read more about that in last week’s Sunday Brunch Article on the Diner, Tower of Babel Moment. The Pols and Banksters running the show do not/will not/cannot own up to this, so they make fools of themselves in a sad Kabuki theatre, of which the current Goobermint Shutdown and Debt Ceiling Crisis are just the Opening Act.
Monday October 14, 2013
The weekend passed with CONgress Jokers and Clowns getting NOWHERE with Fool-in-Chief Obama-sama. This after a 2 day RAMP in the markets based on the idea that the Leadership was coming to a Compromise of some sort and by Monday all would be Well again. Shortly after the Markets closed on Friday, it was revealed that the Bozos in Charge were not really talking to each other and no good ideas for Solving the Problem had emerged yet. So at the moment, one can only expect the Monday Markets to take another Tumble downwards, which when it gets significant enough usually gets Millionaires on BOTH sides of the Aisle to agree to dish out more Debt. Starving People do not get more Debt Issued, but Falling Stock Price in Apple does. You get the Picture I am sure.
I’m not kidding about this, another main story over the weekend was that the EBT/SNAP card program went down in 17 States, rendering those people currently receiving this Goobermint Benny unable to use the Cards to buy food at the local Walmart or Safeway. Lotta Right Wing Websites applaud this of course, but if there is any sure way of getting a Civil War going it is to make millions of Starving People with Nothing Left to Lose.
Said problem with the “glitch” in EBT/SNAP was attributed to the fault of XEROX, the Corporation apparently Entrusted to run the hardware end of this system. Possible, but given the timing, highly unlikely. Seems more like a Trial Balloon to see how the population at large would react to a financial meltdown which hits the bottom rung of the society, and as might be expected the reaction was not too good. This for a shutdown that was relatively brief, and nobody likely starved as a result of it.
Tuesday October 15, 2013
Note: Last night I wrote a bunch more that does not appear above, jacking in a whole series of graphs, which I then lost in a failed upload. AARRGGGH. I didn’t have energy to write it again last night, so here we go again on Tuesday night.
As expected, day went by here with still no resolution either on the Goobermint Shutdown OR the Debt Ceiling. We are working our way quickly to the 11th Hour on this one, which the Markets have “Priced In” as being resolved before anything major gets defaulted on. Obama-sama likely is getting advice from Lloyd and Jamie to Stonewall, and force a Capitulation by the opponents here.
Personally, I do figure they will capitulate for a Temporary Debt Ceiling Extension at the last minute, it is really playing with fire to let this thing flip over this way. However, you do have a lot of ideologues voted into office here who don’t understand how this system works, so it might just go over the edge, which will undoubtedly be major entertainment if it does.
For tonight, let us take a good look at the current economic setup we have in the Balance here, which in most respects is entirely dependent on further debt issuance.
There are currently living in the FSoA about 300M People. Of those 300M, approximately 120M are employed to one degree or another:
Of said Employed People, here is the Distribution of how they are getting paid:
A good 25% of these currently employed people are living at or below Poverty Level when you take into account their dependent children, also a significant portion of the population. They can barely afford to put a roof over their own heads and feed their kids, much less help anyone else out through Taxation of their meager incomes.
This represents the “Productive Side” of our current economy. Now let us look at the Dependency Side of people who for one reason or another do NOT have jobs. Start with the most currently FAMOUS chart, people getting SNAP Card/EBT/Food Stamp Bennies administered by Jamie Dimon and Minions at JP Morgan Chase:
Next let us look at everyone receiving SS Retirement Bennies and SS Disability Insurance:
Next let us look at the currently REPORTED number of people receiving UE Insurance:
Finally, let’s add in the population of Prisoners here in the FSoA, the largest such population in the world right now:
Remember also, unlike the UE, SSDI and Retired folks, prisoners have a large Liability the others cover from the transfer payments. You gotta maintain the Prisons, pay the Prison Guards, etc here, so a few million Prisoners is a much bigger liability than many more Retired or SSDI people. Forgetting that issue for a moment, in RAW NUMBERS I get:
47M SNAP Card Recipients
55M SS Recipients
UE 3.5 M
For a GRAND TOTAL of 109M people on the receiving end of transfer payments, to be paid IN THEORY by around 90M people (substracting off 25% the Working Poor who can’t cover their own bills) who still have Jobs and Pay Taxes. Sense a PROBLEM here?
This does not even take into account the ENORMOUS cost of running the FSoA Military, Medicair (even prior to Obamacare) or of course the all important Parks Department either. JUST in terms of one person picking up the Bills for somebody else, in current Modern Amerika the Taxation System if it was to Balance Out would require each working person to cover the basic needs of AT LEAST one other non-working person. Obviously this does not work, even IF you Taxed the Living SHIT out of the Uber Rich. Most Wealth is not being sequestered or recorded as Individual Income here, it mainly goes on Corporate Balance Sheets, which largely can be shielded from Taxation in numerous ways. At this point though, even if it WAS possible to effectively Tax Corporations like Exxon-Mobil, Royal Dutch Shell or any of the TBTF Banks like Goldman Sacks-the-Taxpayer or JP Morgan-Chase-you-into-poverty, you likely could not cover all the bills and still provide Lights On and Happy Motoring to All, due of course to the reality of Global Energy Deficit relative to Total Population, mentioned in my previous article Tower of Babel Moment.
The ONLY way to keep this game running is through further Debt Issuance, and EVERYBODY KNOWS this. Obama-sama knows it, and so does Boner. Even Freshman CON-gress Critters KNOW this, because they get hit on every day by Lobbyists who let them know if they DON’T increase the Debt Ceiling, all FUCKING HELL will break loose! Secure in this Knowledge, Obama-sama could Stonewall Boner, knowing that in the end he would Capitulate. Up goes the Ceiling again until this Kabuki Theatre gets replayed once again in January 2014, assuming no major Black Swan comes in for a Landing in the interim.
Wednesday, October 16, 2013
As was TOTALLY EXPECTED by everybody here, Boner and the Republocrats and Tea Baggers alike CAPITULATED, and the Can Has Been KICKED AGAIN, this time to January of 2014! GREAT NEWZ for my friends and me on the Diner currently setting up the SUSTAINING UNIVERSAL NEEDS Non-Profit 501C3 Corporation, now that the Shutdown is over I can file my papers with the IRS with slightly less concern that they will get lost in the shuffle from too much Paper with too few Goobermint Drones to push it around!
And so, in the proverbial 11th hour, or technically 10th hour and 10th minute before the midnight of the X-Date, the House gets the necessary 216 votes to pass the Senate bill to raise the debt ceiling, and in a final 285-144 tally, in which 87 Republicans voted yea to 144 GOP noes as all 198 Democrats vote yea, has agreed to restore funding.
Next up: the BLS random number generator starts cranking again and informing everyone in just how sorry a state the economy finds itself, which of course is bullish for stocks because it means that the taper is indefinitely delayed, potentially until June 2014. Also next up, as the emergency Treasury measures are netted out against the new debt limit, it means that once the new Daily Treasury Statement hits, the total US Federal debt will be just at, or over $17 trillion. Rejoice.
Finally – see you all again here in three months. In the meantime the interim status quo is as follows:
- The government will be reopened through January 16
- The debt ceiling has been lifted through February 7, while the Treasury is allowed to use its assortment of emergency measures to delay running out of funds, which means the next true X-Date will hit sometime in April
- The House and Senate budget conference must real a deal by December 13, but it may very well not achieve anything.
- Government workers get back pay for 16 days, and tomorrow return from a 2 + week vacation.
- The only thing that was actually “achieved” as a result of the government shutdown is to have income verification for Obamacare beneficiaries: something which should have been embedded in the ACA from the beginning.
Not too much to say about this bullshit tonight, the Markets expected this result so nothing real major made any kind of Big Move here overall. It should be obvious by now that the Pols themselves will not put a Hard Ceiling on Debt Issuance, EVERYBODY KNOWS that is a recipe for a virtually instantaneous LOCK-UP in the Financial Markets. The REAL CEILING is in moving Debt further out from the Balance Sheet of Da Fed and the TBTF Banks to the Population at Large, to keep some kind of Real Economy moving about here. This is not controlled by Da Goobermint, it is controlled in reality by the BIS, the Bank for International Settlements Headquartered in Basil, Switzerland (on their OWN Property not controlled by the Swiss People).
Secret Meetings will be held here, mainly determining who gets CUT OFF first and most from the Credit Bandwagon. The Chinese are making all sorts of NOISES of discontent with Amerikan Goobermint FOOLISHNESS, stop rocking the boat and just pitch out more debt! We’ll buy it! We don’t have any money other than the Trash you already sold us, or resources of our own that haven’t been polluted and poisoned, but we’ll issue out our own Trash to buy your Trash! LOL.
More on this one tomorrow, I am DONE for tonight Ranting on this Global Stupidity. Even I have a Nightly Limit for dealing with this shit.
Thursday, October 17, 2013
Goobermint Drones in the Parks Department are BACK to Work! YEA! Now you can head up to Denali National Park and employ one of the Guides there to take you Fishing on the Copper River headwaters! Drive on up in your Bugout Machine, spend a FORTUNE in Gas to experience the Great Oudoors life with your Fiberglass Fishing Pole and Tackle from Walmart, another FORTUNE employing your Goobermint Licensed Fishing Guide, and still another FORTUNE on the Plane Ticket to get you up here to enjoy the Great Outdoors one more time, before it is GONE, and so are YOU.
By the time you add up all the costs involved in getting your ass out there to what is left of Nature and then packaging and freezing whatever it is you catch or hunt down and shipping it OUT from such locations, it is FAR CHEAPER just to buy a Fish Fillet or Rib Eye Steak at Safeway. Even if you LIVE in Anchorage, it is still more expensive by the time you factor in your driving costs to get anywhere good for Fishing and Hunting. If Gas is unavailable or Rationed, FUHGETTABOUDIT! You need to be living right on the damn rivers out in the Bush to do this type of living, and REALLY few people do that. However, at least it is in theory possible to do it when TSHTF finally, which it will eventually no matter how long the Bozos keep Kicking the Can.
Which of course is all that occurred here, no “solutions” have been figured out for reducing dependence on Debt to finance Da Goobermint. As my Tuesday Chronicle PROVES, it is mathematically IMPOSSIBLE to keep this show going without perpetual issuance of more Debt.
Friday, October 18, 2013
Here as the working week comes to a close, you can be certain of one thing, which is that Da Goobermint Clowns & Jokers will keep on Kicking this Can down the Road, until they run OUT of Road. The Road in this case being Cheap Energy to keep on building out the Great Amerikan Parking Lot and Suburban Sprawl, along with Cheap Energy to fuel the Drones cruising MENA Airspace to insure the delivery of said fuel to our shores.
We are nicely set up for Act 17 of this Kabuki Theatre Presentation to repeat itself in 3 months, great entertainment for Ringing in the New Year.
Meanwhile, everybody in the Blogosphere is taking this opportunity to criticize the various Clowns & Jokers running this show, which is making the Clown-in-Chief very upset. Why can’t these folks just join the Pahhhty and play along like the Jokers we have shilling the story line for us in the MSM? Happy Daze are Here Again!
On the UP side, you can view this as another Reprieve and opportunity to continue to Prep Up and plan for the future of a low per capita energy world where lots of people will be buying a Ticket to the Great Beyond. If you do not feel the time is yet right for you to go Exploring Eternity, a good idea would be to GTFO of Dodge, aka any Big Shity in the Industrialized world. If it is impractical for you to leave said BS now, at least have a well planned Bugout and some good Survival Tools to get you started.
At least until the Internet Goes Dark or the Boys in the Black Cadillac Escalades come to ship me off to GITMO, I will continue to chronicle this insanity with the View from the Bugout Machine, here on the Last Great Frontier.