Use access key #2 to skip to page content.

alstry (< 20)

What Happens When Government Needs ALL Of The Citizens Money



December 20, 2009 – Comments (11)

Our colleague Rob Arnott, who always does terrific research, wrote in his recent report that "at all levels, federal, state, local and GSEs, the total public debt is now at 141% of GDP. That puts the United States in some elite company--only Japan, Lebanon and Zimbabwe are higher. That's only the start. Add household debt (highest in the world at 99% of GDP) and corporate debt (highest in the world at 317% of GDP, not even counting off-balance-sheet swaps and derivatives) and our total debt is 557%

Total Debt now 557% of GDP while government running a $2 trillion dollar deficit.........AND THE ECONOMY ISTILL CONTRACTING IN MANY INDUSTRIES suffocating under unsustainable debt burdens!!!!!!!!

New Home Sales down 80%

Auto Sales down 50%

Commercial Real Estate Construction down 80%..(Shopping Ctrs, Condos, Office Towers)

We are now at the point of no return as debt service and taxes is sucking most of the revenues of our economy and very little is left for goods and services.  Even if we taxed the top 10% of income earners, those making over $100K per year, 100% of income, it would not be enough to cover the deficit.

Currently, debt service is sucking the savings from America.  The wealthy are liquidating their toys and luxury homes as fewer can afford the maintenance, even if they own it free and clear.  Many public corporations are running out of money and are tapping our pension funds with additonal borrowing drawing down the assets of underfunded balances even further..

All of this happening while Benny B and his banker buddies are laughing at Americans as they can't even see what is going on despite 20% unemployment and collapsing tax receipts. 

Although only reported at 27% by the Fed.......Detroit's Unemployment Rate Is Nearly 50%, According to the Detroit News

Soon our pension funds will run out of money funding our insolvent companies and govenrment will not be able to that point America will be Zombulated and the only choice for government will be to face the anger of its people or attack other nations to hyperinflate its currency to worthless paper.

It appears we are well on our way to both as the savings of our nation is sucked dry and revenues evaporate......

It may take months before the United States deploys 30,000 new troops to Afghanistan under Barack Obama's latest surge, but the U.S. military is already rushing to expand its "Drone War" in neighbouring Pakistan's troubled tribal areas.

Last year Concentric Contraction hit our shores will full force bankrupting our banks and auto companies.....instead of restructing the debt, our government bailied out the banks and left the citizens out to dry sticking them to suffer with the debt burden. 

As we approach 1.01.10, Concentric Contraction will stimulate a revolution in America....we the people will need to be taxed 100% of our net worth or our government will be insolvent as our deficit is growing exponentially....if the latter occurs, we are still broke...... as citizens are jointly and severally liable for the debts of their nation, especially if government goes to war.

1.01.10       When Concentric Contraction results in Zombulation Nation.....and much of the world for that matter.................Global Warming could be a lot hotter than most currently perceive.

11 Comments – Post Your Own

#1) On December 20, 2009 at 9:37 PM, lquadland10 (< 20) wrote:

Joy to the World.

Report this comment
#2) On December 20, 2009 at 9:58 PM, alstry (< 20) wrote:

Government's demand for $$$ is exceeding the ability of its people and the world to fund the amount........taxes are rising everywhere despite the fact that incomes and revenues are evaporating.....anger is growing with rising unemployment and declining incomes and the world is now incapable of meeting the needs.

In a discussion on the global role of the dollar, Zhu told an academic audience that it was inevitable that the dollar would continue to fall in value because Washington continued to issue more Treasuries to finance its deficit spending.

He then addressed where demand for that debt would come from.

"The United States cannot force foreign governments to increase their holdings of Treasuries," Zhu said, according to an audio recording of his remarks. "Double the holdings? It is definitely impossible."

"The US current account deficit is falling as residents' savings increase, so its trade turnover is falling, which means the US is supplying fewer dollars to the rest of the world," he added. "The world does not have so much money to buy more US Treasuries."

China continues to see its foreign exchange reserves grow, albeit at a slower pace than in past years, due to a large trade surplus and inflows of foreign investment. They stood at US$2.3 trillion at the end of September.


Report this comment
#3) On December 21, 2009 at 12:31 AM, davejh23 (< 20) wrote:

"Add household debt (highest in the world at 99% of GDP) and corporate debt (highest in the world at 317% of GDP, not even counting off-balance-sheet swaps and derivatives) and our total debt is 557%"

Add in unfunded obligations and it's well over 1,000%!

Report this comment
#4) On December 21, 2009 at 9:32 AM, jddubya (< 20) wrote:

Well, what is it Alstry?  In this blog you say:

"Last year Concentric Contraction hit our shores will full force..."

But Several times this month you say:

Concentric Contraction Begins.......1.01.10

You need to pick a story and stick to it.

Report this comment
#5) On December 21, 2009 at 9:39 AM, russiangambit (28.86) wrote:

The government does what it always does - borrows where it can and prints where it can't. Either way the population is poorer and non the wiser. This scenario has palyed over so many times, yet here we go again.

Though it not surprising given that in the US there is no respect for history since it is such a young country.

Report this comment
#6) On December 21, 2009 at 10:17 AM, GNUBEE (< 20) wrote:

Wait, what?????!!!!!!!!!!!

Were going to end up like Japan!!!!?????......AGGHHHHHH NOOOOOOO!....runs away pulling out hair.

Our society will fall apart like like Japans!!! Just think of all the Japanese and thier crime and unrest! They have no government services. All those poor Japanese starving and dying,

Cat's and Dogs Living together....... 


Report this comment
#7) On December 21, 2009 at 11:01 AM, russiangambit (28.86) wrote:

GNUBEE, US will be lucky to have Japanese outcome, US culture is completely different. And their unemployment rate is only 5%. They have public transportation and they don't have the ghettos.

Think more along the lines Latin America, like Mexico.

Report this comment
#8) On December 21, 2009 at 11:04 AM, alstry (< 20) wrote:

The Japanese people had no debt and live in an export economy.

Americans have massive debt and live in a domestic consumption economy.

If we are not consuming from each other, we have basically No ECONOMY.

Right now the only thing holding this economy together is government spending $2 trillion dollars that doesn't exist.

Could you imagine what would happen to grocery sales if we halted 40,000,000 food stamp credits each month?  Or what would happen to health care and drug revenues if we halted medicare and medicaid payments?  And these two don't even come close to reaching the current deficit.

The problems facing the world are massive and unprecedented.  I am confident we will pull through......but the process is likely to be very convulsive.

Report this comment
#9) On December 21, 2009 at 12:35 PM, GNUBEE (< 20) wrote:

Russian, you are correct "US culture is completely different", but to think that forced conditions cannot meld new levels of acceptance is narrow sighted.

Alstry, I thought this was a post about the US Govt taking the money of its citizenry? If Japan was able to continue to operate without robbing it's "Debt free people", why should the US citizens care, debt laden or not?


Report this comment
#10) On December 21, 2009 at 5:17 PM, alstry (< 20) wrote:

Absolutely not.....

America's private economy will shut down due to the suffocating debt service draining revenues from the economy and government.....

We are already practically there with construction and halfway there with autos.......there is no chance exports can come anywhere close to picking up the slack.  Just real estate and autos is about 25% of GDP.......

Conversely, Japan's private economy still functioned, albeit at a slower level permitting the government to borrow practically unlimited money for essentially free while its debt free citizens plodded along.

Without a private economy, nobody will lend America money on any kind of reasonable terms.....which will not only destroy the government, but the citizens as well.

Report this comment
#11) On December 21, 2009 at 10:59 PM, GNUBEE (< 20) wrote:

My fault,

Guess this threw me off track....


Report this comment

Featured Broker Partners