The Crack ***** Is Combing The Carpet
Courtesy of Karl Denninger, The Market Ticker
That which cannot go on forever will eventually stop. The young woman who looks 50 but is 20 as a consequence of sucking on a crack pipe for 2 years and laying down for anyone with a rock or two to offer eventually runs out of Johns as her looks and abilities fade; she is then consigned to trying to scrape up enough to stay stoned.
That young-but-old-looking lady is Spain, Greece and Italy, among others. It is also the "free **** army" in the United States; those who believe the pablum served up by people like Jeff Miller (R-FL-1) who continually proclaim that nobody will have their Medicare changed if they're 55 or older, when in point of fact at a 9.x% expansion in cost annually we double spending every seven years and change; ergo, that's fourdoublings between 55 – 85, or a 55-year old's approximate life expectancy (30 years).
Starting from today ($820 billion) this results in:
$1,640 billion in seven years
$3,280 billion in fourteen
$6,560 billion in twenty-one
$13,120 billion in twenty-eight
That's $13 trillion dollars.
The entire Federal Budget today is $3.8 trillion and what's worse, we're only taxing about $2.6 trillion — so that, in fact, is all we have to spend.
Paul Ryan (and President Obama, in the main) are both proposing to spend more than four times the entire Federal Budget and approximately the entire current GDP on Federal Medical Care 30 years from now.
That's not going to happen.
But it is what you're being sold.
Oh yes, both Obama and Romney are claiming they will "bend the cost curve" but they're lying. They can't both maintain the programs at the current benefit levels given the demographics that are and will be driving this problem for the next 30 years — that is, it's impossible for them to both keep their promise and not have the above escalation of costs occur.
Germany’s Bundesbank stepped up its criticism of the European Central Bank’s plan to embark on potentially “unlimited” government bond purchases, widening a rift over how to tackle the sovereign debt crisis.
“The Bundesbank holds to the opinion that government bond purchases by the Eurosystem are to be seen critically and entail significant stability risks,” the Frankfurt-based central bank said in its monthly report today. The new program “could be unlimited” and decisions about potentially far greater sharing of solvency risks should be taken by governments or parliaments, not by central banks, it said.
But Germany doesn't have the money. Neither do we. And neither of us can acquire it; that sort of money simply doesn't exist.
That this path is unsustainable has been known for decades. When the path first became apparent in the 1980s and federal medical spending was $53 billion we heard a few people tell us we were headed for the cliff. Yet for decades our politicians have continued to lie and dole out money to people that they don't have and can't manage to acquire via taxation.
Last year the federal government spent $820 billion on health care alone.
This manipulation is all a game and Central Banks along with politicians are all whoring around with each other trying to evade the mathematical truth of what they've been pulling over your eyes for the last three decades.
This is pointless; the so-called "solution" isn't and can't be an actual answer, as there is no answer that maintains that which is impossible to maintain.
Until we have the political debate that must be held we will remain subject to sudden dislocations in the markets and the level of outright thievery will continue to escalate as ever-more desperate politicians and so-called "banksters" will claw at the carpet like our proverbial crack *****, seeking that one tiny elusive piece of crack to provide them just one more, even if abortive and tiny, hit of their drug of choice.
