America's Trillion Dollar Problem

Absolutely correct, and it does not include the unfunded liabilities in either collumn.

The difference is that the USA can chuck the marxist maroon in November, but the EU cannot change direction very much at all. Change at the political level is glacial.

They have less hope, and with the massive Canadian-level immigration they are permanently changed.

"........they are permanently changed."

Ah but think of all the cultural enrichment they can now enjoy, worth every penny to be sure.

There is nothing quite like "equality" for the non-ruling classes to build their spirit. Hip Hip ol boy.

Debt is only a problem if someone tries to collect it.
Having a nuclear arsenal tends to allay such attempts.

Debt is only a problem if someone tries to collect it.
Having a nuclear arsenal tends to allay such attempts.

Posted by: Dystopian Optimist at April 12, 2012 5:54 AM

Unless, the collector has one too, and, knows that the debtor will blink first.

Debt is only a problem if someone tries to collect it.

True to a degree but the interest payments can kill you. And they are gobbling up ever greater chunks of the treasuries of debtor nations.

If the treasury can issue a 1 dollar bond as debt, it can bloody well issue a dollar with no debt attached.

Dump the Fed and write off the fait debt. The US has to act constitutionally again with debt and currency issue coming from the US Mint as debt free fiat. The Fed as a private bank has mismanaged the economy and is directly responsible for most of the economic disasters of the past 100 years.

Occam, now that is alittle shallow, as they who do all the spending (gubmint) are as much to blame, so are the electorate who keep voting these rectums in

Fiat or not, money represents value and obligation.

The U.S. is reaching a point where they simply don't have choices. They can't keep debating contraception and radio shock jocks and neighborhood watch Hispanics that kill ghetto trash.

They don't have any money.

It's getting to the point where they may not actually pull out of this.

"A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury. After that, the majority always votes for the candidate promising the most benefits with the result the democracy collapses because of the loose fiscal policy ensuing, always to be followed by a dictatorship, then a monarchy."

-Alexander Fraser Tytler

The trend is inevetable with the occassional flash of concience by an ever diminishing number of voters who still care. Those brief periods of fiscal restraint are followed by even more flagrent orgies of spending and waste, think Harris > McGuinty (with a more centrist Eves in between). Or even more discouraging, think of all the heavy lifting Klein had to do to clean up Alberta's books just to have his own party veer back to big government and high spending.

It's all gonna unravel, very depresssing really. Make sure your basement is well stocked with bullets and beans.

-RaughKee

Debt is also a problem when your run your current credit to the limit and try and then try to borrow more from the people you have told to go pound sand.

For those wishing to know where NOT to be when the whole house of cards falls:

http://www.zerohedge.com/news/map-dead-how-survive-zombie-apocalypse

Jeff,

I find your dismissal of innocent victims of violence to be disturbing. Of course, I usually feel the same way about the dinosaurs, cranks, Klanners and others that populate Kate's fine little blog on the Prairies, so I suppose we're kindred spirits that way.

We should go for a beer sometime and chew the fat.

Cheers!

RaughKee,

Given your views, why are you such a craven? If the king is coming, why not gamble and become King? Surely that's the best place to be in the coming disaster you see. Take life by the horns and win your kingdom. If you're man enough, it's clearly yours for the taking!

We could use a good king. You may well be the one. Clearly, you can see the need.

And no, I'm not joking. The Americans may well have been fools to dump good King George (or whatever his name was) back in the day. We didn't and look how much better off we are!

Ahhhh....

A good day to be a Canadian!

:-)

The Wet One

The Wet One,

Unfortunately, we don't go from a mismanaged democracy straight to a beningn monarchy (if such a beast even exists). The current apparatus must first truly fail and the shocks and aftershocks of that failure will encompase a generation or two at a minimum.

At this point it is all conjucture and looking at the failures of civilizations past. The likelyhood of being overrun by a less "sophisticated" civilization or a period of anarchy followed by feudalism which eventually leads to a monarchy would be most likely.

And I'm not worried about Canada specifically. We are but one nation that can not withstand the collapse of the greater "Western Civilization". Our defence, trade and prosperity are all linked to the greater whole.

At 40 years old, it is not really even my generation I fear for. We can probably keep the charade running for another 50 years before it all really falls apart. Black Swan events may shorten that time frame considerably. Prepare accordingly.

RaughKee

The Wet One

You confuse "innocent lives" with the faceless, thoughtless mob....plaything of politicians...

It was the mob who hobbled ancient Rome and nearly shattered Justinian's Empire....and the Paris mob which plunged Europe into the Napoleanic wars.

But then I suspect you can be counted with the useful idiots who constitute the mob.

Then, I suggest you get to training and raising the next King. Your son or daughter (less likely but possible) may be the one.

May your child have the right stuff to the do the job of being king.

Being a craven hiding in the basement with bullets and beans may not be the proper upbringing, but then again, maybe it is. In the words of a wiser man, "Prediction is very hard, especially about the future."

I guess I should follow this blog more often, I didn't realize I was being trolled.

@The Wet One, I feel very confident saying that between the two of us, I know who is cowering in their basement, or Mother's basement in your case.

For the other reader's of this blog following these comments. I am in no way suggest building a compound or watching for the black helicopters.

I am a proffesional, tax-paying, voting adult who has a home and a family. I have life insurance just in case something unfortunate befalls me, it is the responsible thing to do.

I also have made some decisions regarding my life that I call disaster/collapse insurance. Instead of living in a suburb on a postage stamp of land, I choose to drive an extra 15 minutes to my home in the country, where I have just enough land to support a family if it ever came to that. I own a generator in case of an ice-storm like event. I could build a fuel alcohol still if I ever had to and convert my engines accordingly. I do not hunt as a recreational activity, but have a rifle; I hope I never have to remove it from it's locker. I have enough staples to pull through for a brief period and the ability to sustain myself in the long term. I teach my children to be self-reliant and think critically.

I follow the financial markets and invest accordingly. But even more importantly, I follow the decay of discourse, the inflated prominance of side issues and the expansion of the state into the most miuscule aspects of everyones lives. I listen to the pandering politicians who will promise my children's future for todays vote. I watch debts balloon and the demographics of eligable taxpayers decline. I hope for the best and plan for the worst; and I am not alone.

Wet One;
To suggest that Canadians have done a better job of running their country than America since 1776 is to much of a joke to take seriously. The monarchy is simply a subsitute 'mother/father' fixation that we have never grown up from.

The American Constitution is a document unparalleled in recent history. Putting the citizen before the state is unheard of. Our American cousins might be struggling through trying times right now but we had all better hope that they can change their current course.

Takers in society abound especially today. I suggest the majority of Canadians as well as Americans fall into that category. The difference is there was a time when that would not have been said about Americans.

"It's Probably Nothing"

I think this is the appropriate title for this cluster fcuk.

“....but we had all better hope that they can change their current course.”

Maybe if Americans create a whole bunch of new Facebook type industries, build more Wal-Mart style box stores along with new franchise restaurant chains and then import a few million more illegal immigrants "to do the jobs American won’t do" – it’ll all work itself out.

RaughKee >

“I am a professional, tax-paying, voting adult who has a home and a family.”

Of course to the rest of us that statement means you are a “normal” person. To the left you just described yourself as “The Enemy”, and you won’t talk your way out of it with normal rationality.

Think of Orwell’s 1984. You are Winston Smith strapped into the torturers chair, while the Liberal left views themselves as the torturer asking you what 2+2 equals. You don’t have the correct answer, and you never will for these people.

We're number one.

/sarcasm

We've gone, in my lifetime, from a people who expect to take care of themselves to a people who expect others to do it for them. The stigma of not providing for one's self is gone. When the mob, and it is a mob, using the ballot instead of pitchforks, has looted all, what then?

It is going to be quite ugly when the mob discovers the impossibility of taxing one's way to prosperity.

The Wet One >

"King George"?

While the US spirals into its cesspit of racial violence and collapsing economy, guess what? So are Europe and the UK.

The only common denominator between all the collapsing western nations is Liberalism and corporate/ government corruption ignores the constitutions and common laws of each nation.

Don’t be too smug Canada is making the same mistakes, but we have always been considered a few years behind the US. What conservative people everywhere need to be doing is taking names just like the left likes to do, so that when the dust settles, we know who to hold accountable.

there was a time when the GDP of the US exceeded the Eurozone including Britain. not sure if it does anymore , but that might be a better comparison, Im too lazy to add the GDPs up

The numbers are staggering. History shows most major recessions and national instability is followed by war. Automatic debt elimination and full employment as well as patriotic cries in the name of freedom. Only for the winners of course. When it all crashes and all the logical solutions have failed, then only the illogical solutions remain. We are at a point where all our great leaders see the problem but not one sees a solution or has a exit strategy to stop the spiral into chaos. Like edging towards the lip of the Grand canyon and knowing they can only move forward or the mob behind them will push them over. All buying time in the hope that something will change. The debt clock is like the nuclear clock....3 minutes to midnight. For the first time in history they may even be related. That's how I see it. Not fearmongering. Just praying I'm wrong. I envy the majority that pays no attention to the black clouds on the horizon. Ignorance is bliss, until the sh*t hits the fan.

peterj,

"I envy the majority that pays no attention to the black clouds on the horizon."

Those who have no concept of just how dangerous these debts are to our way of life and freedom? This will be the first group out on the streets when the golden goose stops laying her borrowed eggs. The green eye of envy will be cast to any who are an easy target and all hell is gonna break loose. What will really shock these people is the speed at which gov'ts run out of manoeuvring room.

Hemingway has a quote that says something about going broke "slowly, then all at once." Seems rather prescient.

-RaughKee

Debt, by itself, doesn't mean much if you used the money to build something or buy something worthwhile. We got squat.

Raughnee,

You sound like a reasonable man taking reasonable precautions in an ever changing world.

If it is the decay of society that you're watching, I suggest watching another ball that is not often in the news (left, right or otherwise) that will almost certainly have more impact than any lefties, righties or other band of partisan idiots ever will. Watch the production of crude oil, the lifeblood of modern civilization as we know it.

I have examined the movements in the production of crude oil and the responses of governments and populations to this vital resource. I have also taken some considerable time to consider the impacts of crude oil on our way of life.

I believe this is where the real concern lies. Almost no one talks about it, though this is an improvement over the past where no one talked about it. It is the most important economic issue of our day, and the measure of any political agenda is how well or poorly it deals with this developing predicament.

To learn more, see here: www.theoildrum.com

The brief primer on the issue is here: http://www.drmillslmu.com/peakoil.htm

Best of luck in the future Raughnee.

May you never have to use your rifle in anger.

And long live the King!

The Wet One

Not a troll, just not a part of the echo chamber either. I like to strike a dischordant note in this arena.

Would someone PLEASE address the debt and deficit in this 2012 election? Please!

@ The Wet One at April 12, 2012 2:38 PM
You are correct and there is a strong link in oil and lifeblood of a country that moves on wheels. Something Obama does not understand. Look at the chart below.

http://www.scribd.com/doc/76802342/11-Trends-Over-Last-11-Years

"... Debt is only a problem if someone tries to collect it. ..."

No there is also another problem ... namely ... who will finance your debt ?

Two choices ... find someone who will keep providing the cash ... or ... print more money and watch inflation destroy your currency and economy like pre-WW2 Germany or Argentina in the 80's.

Obama seems not to read read that history as the US FED recently bought 61% of the US debt ... but with what ?

The Wet One,

I'm glad you weren't just trolling me. I felt your flip comments about the "coming king" were a misconstrusion of Tytler's insight; which is really more about pandering politicians, the masses who vote in the least responsible and the eventual outcome of loose fiscal policy.

I follow peak oil with great interest. Our entire society relies on petroleum as a cheap form of energy and it is not an infinite resource. In fact one can make a very strong link between the wealth of society in general and the cheapness/efficiency of that societies source of power.

I even like to play a little game with people when emphasizing how important oil is...

The game is to point out something in the room that isn't made out of oil or with machines powered by oil or transported from somewhere using oil.

The world still has plenty of oil, but it is more remote and more expensive to produce. When the Texas Railroad Commsion was capping wells to avert over-supply, no one would have dreamed of extracting oil from the bitumen in northern Alberta. There is also some serious doubt as to the published reserves from countries like Saudi Arabia. Combine this with a the growing industrialization of a huge percentage of the world's population and you have a sure-fire formula for trouble. Can we innovate our way past this in time? Can we do this before the economic shock tips over our already unstable apple-cart?

-RaughKee

when techtonic plate move oil is created and until there is never another earthquake again , oil is infinite, but besides that (i realize it take along time for the earth to create oil) there si so much oil right now there is no worries about it ever ending but like you say will we as a planet of earthlings ever come to a mutuale peace ful exsitence over it?

@ : RaughKee at April 12, 2012 3:58 PM

The peak oil theory has been around for more than 40 years. They were wrong then and are wrong now. There will be no shortage of oil in our or our childrens lifetime and by then new technology should bring oil consumption to a managable level. Canada has already replaced Saudi Arabia as the largest reservoir in the world and we have barely scatched the surface for future development.

http://www.eia.gov/pub/oil_gas/petroleum/data_publications/company_level_imports/current/import.html

China, India and Europe need the middle east a lot more than America does. The destruction of a way of life is being driven more by incompetence than logic. As long as Obama is at the helm and Energy ministers like Steven Chu gloat at the prospect of destroying a economy dependent on fossil fuels , we will continue on our path to disaster. These people are proof positive that a good education has absolutely no bearing on intelligence or common sense.

Hmmm...

Interesting.

I wonder what you have to say to the above poster RaughKee? Is oil depletion / energy prices merely an Obama scam to destroy the Western world or something else?

I am curious.

The Wet One

RaughKee >

“The world still has plenty of oil, but it is more remote and more expensive to produce....... There is also some serious doubt as to the published reserves from countries like Saudi Arabia”

Agreed.

I have abandoned oil and gas well/fields all over western Canada and on all continents of the world, save for the Antarctic. Alternately I’ve worked on wells further and further out in many of the planets oceans, deserts and mountains for over 30 years and as a third generation oilfield expat.

If it renews itself, it damned slow about it and it is definitely more expensive to find and collect each year.
Peterj, has one thing right for certain, it will outlast us and our children’s lifetime, but the acceleration of the Third World economies are accelerating the fossil fuel decline whenever that critical point stands. For certain it will accelerate the already ongoing energy resource war we see happening around the world. If it’s so abundant why are we dropping bombs all over the ME & NA for it?

If it renews itself so readily what happened to all those gushers in Texas, and why are there so many pump-jacks desperately sucking up drops where it once flowed?

Whatever anyone’s expert view of “Peak Oil” is, at the end of the day, we are not leaving the world for our grandchildren in the west as prosperous and safe as it was left for us.

No. The debt needs to be divided my GDP to put it in relative terms. Come on! Using absolute measures is so Michael Moore.

For the EZ and UK, the GDPs must be summed, and the debt taken as a ratio of the sum. To create a stacked column for each nation, you'd have to calculate a weighted share of the total ratio; this number may not be meaningful.

But you could chart each nation's debt to GDP side by side since they have the same basis.

There are PPP issues to consider, but it complicates matters greatly.

Someone brought up unfunded liabilities which is a great point, but the EZ has those too. Calculating the present value of all projected deficits is sufficient.

Someone else is correct when he said that our ability to issue debt may be impaired in the future if our credit rating suffers. That will also increase our debt service payments.

We are constantly repaying debt since securities are maturing every month. We maintain consumption by rolling over maturing debt. If we ever default, our ability to refinance past debt will collapse. Our borrowing costs will soar, like Greece.

"The difference is that the USA can chuck the marxist maroon in November,"

I this said because it is plain that Obama's debt is, except for the "stimulus," a continuation of George Bush's tax policies?

Here in America the most Bushies who most believe in magical tax cuts and think they are business experts, would be immediately fired from any business they suggested follow the same drunken binge of spending.

Hey Grace, if the Bush tax cuts are responsible for our present fiscal morass, why was the deficit for 2007 only $161 billion?

It's the spending. Our government spent almost $900 billion more in 2011 than it did in 2007. Oh, we have plenty of shiny new bike paths and government buildings now, but at what price?

@The Wet One, @paul in calgary, @peterj, @Knight99

To answer The Wet Ones question, I think peterj and paul in calgary must have their tinfoil hats on a little tight and be cutting off some circulation.

Obama may be a bad President, he may be incompetent and driven by politics to pander to certain portions of the population who, in my mind, have some of their priorities seriously confused. He is not evil and is not driving some sort of communist plot to destroy our way of life. What he and people like him are doing is making poor decisions based on misguided principles and incomplete information. Still dangerous mind you, but not evil.

The Peak Oil theory was developed in the 50s, when oil was literally gushing out of the ground in Texas. The theory was domestic in nature and was incredibly accurate in describing the situation of US continental domestic oil production. Which peaked, as predicted, in the late 70s. The theory has since been expanded to look at global oil production. One would be foolish to assume that the theory is somehow different when expanded to the globe. If we aren't steadily running through our oil supplies, why then are we doing things like the Alberta oil sands, which in a climate of plentiful and cheap oil would be economicly ludicrous.

Look at Knight99's comments regarding oil exploration and recovery, these match perfectly with the information I get from friends working in the oil industry. They also match the general trend for exploration and development that can be gleaned from any annual report put out by any multinational oil company. If it were so damn plentiful and regenerated via some magical tectonic mechanism then these companies wouldn't be running to the most remote and/or dangerous parts of the globe to get the stuff.

I would also like to point out that the tectonic plate theory for oil creation was something I had never even come across. After doing some quick research to see what it was all about my take is that it seems really fringe and I would not put my eggs in that basket. You however can plan and act as you wish, that's the great thing about a free (or semi-free) society.

We are discovering better technologies to recover petroleum every day, we get better recovery rates and can drill in places that would have been impossible to drill in even a decade or so ago. We have methods to recover more from previously unrecoverable reserves. This doesn't mean that we aren't running out of the stuff.

RaughKee

Is it actually a question of running out? Or is it a question of having enough, when you want it at a price that you can pay?

You don't need to run out of a thing to not have enough, when you want it at a price one can pay.

In other words, is the rate of production great enough to meet current needs for our present standard of living?

I note that it appears that crude oil production worldwide has not increased since 2005 or 2006 (depends on which numbers you use). This may be important, or it may not...

The Wet One

@The Wet One,

Yes, I agree, it is not running out as per say but demand outstripping supply and the massive price shocks associated with it. What is more, it doesn't a large percentage of over-demand to cause massive price spikes in oil. Oil is so fundamental to our daily lives, a doubling or tripling in price would be catastrophic to our economies. Especially since every model we have for social programs, retirement savings, health care etc... is based on growth. If the world economy is hit by oil price shocks everytime it hits its stride, trouble...

RaughKee >

As others have stated, today the concern is about availability and expense, sooner or later we will reach a crisis point. A result of our never ending necessity to grow our economies, including the exponentially rising third world economies based on continued growth.

It’s a little like the fresh water argument, many stating we will always have plentiful fresh water because it renews itself. The point is that easily sourced fresh water aquifers take time to regenerate, which of course is adequate for “x” amount of withdrawal from the source until you run out. Better technologies need to be developed to create fresh water from poisoned rivers and oceans to keep up with ever growing demands of increasing populations, mostly for agriculture but also industry and a modern standard of living.

We haven’t figured out how to artificially grow or produce enough oil yet.

Resource wars are nothing new, and they will only get bigger and uglier as populations grow and the Third World climbs on board with the big boys looking for their piece of the pie.

PS: Disagree with your mild characterization of Obamba as a “bad president”. He is a narcissistic rent’a puppet to the banking corpocracy, with a personal dream of power not fully understood by anyone. The outright lies, the domestic power grabbing Executive Orders, UN directed foreign policy actions, flagrant mockery of congress (the people) etcetera, put the US on a dangerous path with this man.

Hmmm....

I could point out a lot of things about the above post but I won't just yet. I'll just point out this, notwithstanding the last throw away paragraph, I actually think that I could have a reasonable discussion with Knight99.

Interesting...

The Wet One

May all our futures be bright, notwithstanding the stormclouds on the horizon.

LOOK , we HAVE to go to the places where it is at as we use up the readily availible stuff ...kinda like hing money in a park and then throwing it al over the place you go for the easy stuff first once that is gone you go to the other areas it is at. doesn't mean there is less or we are running out we are just running out of the easy access stuff , and this is true about about techtonic plates it is how scientist's figure oil is made , and so while texas does not have earthquakes that doesn ot mean that when pangea split apart it didn't and that may have created pokets of oil , same as alberta they find palm trees in rocks in alberta all the time ....so while we may be land locked and no where near a techtonic plate that deosn't mean that oil can't move under ground , i mean it does what it does , think of hydraulics right enough pressure from one area can move thing's in another and oil may have been forced up wards due to the coastal techtonic plates moving , shaking ,and quaking .

I aint no scientist and i don't have the answers but i just have no fear of running out of oil like literally there one one bottle of quakerstate oil in 2356A.D. you know it just does not bother me even if it was true .

I could be wrong but so what what are we going to do ? more wind farms and solar panels ? we will always find "gushers " they just may be further under ground ...until california breaks off and sinks (boo hoo) there are rumblings under ground all the time heat and pressure i think oil is a by product of techtonic plate movement in fact it may be the cause with it being so slippery when plates are set against one another the oil may casue them to slip ...lol. i don't know . i do know that when people like obama purposfully hinder human progress it is farm ore worrysome than the though of running out of oil !!

just my opinion and i am probably wrong but it is what i think.