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My Case for Jumping Off the Fiscal Cliff

96 | By Shah Gilani

“I saw my problems and I’ll see the light

“We got a lovin’ thing, we gotta feed it right

“There ain’t no danger we can go too far

“We start believin’ now that we can be who we are.

“Grease is the word…”

That’s the opening verse of the Bee Gees’ title track from the movie “Grease.”

They go on to sing “Grease is the way we are feeling.” Well, if you change the spelling of the word to “Greece,” that’s how I’m feeling about America’s debt. Both Greece and the U.S. are on a slippery slope, greased by too much debt.

And, like the song says, we are both in danger of thinking that because we see the problems, we see the light. We are both feeding it right – our debt, that is. We’re similarly deluded in believin’ there ain’t no danger we can go too far.

But that’s wrong. The danger is incredible.

You see, something just happened in Greece – something that is going to happen here and, in fact, is already happening, but doesn’t have to. We can still stop it. In fact, what’s brilliant is that Greece is an easy lesson for us. We now know how to solve the riddle about how to fix the debt mess we’re in and what exactly to do about the dreaded fiscal cliff.

Jump off of it.

That’s right. Man up, get behind it, and stop “believin’ now that we can be who we are.” We already are who we are – hopelessly in debt.

Let me haircut this for you right here: We aren’t going to fix our debt and spending problems in the next couple of weeks, or in January, or by the first quarter of 2013, or next year. We aren’t going to fix them by the next mid-term elections.

So let’s all hold hands and jump off the fiscal cliff.

Don’t be afraid. Yes, it’s a long way down, and we may never hit bottom. In fact, there is no bottom. We won’t get there. We will feel our stomachs rise in our throats on the way down, and we may even vomit a bit. But once that passes, something remarkable will happen. Something thousands of Wall Street Insights & Indictments readers tell me they want more than almost anything.

I’ll get to that.

But first: Here’s the reality about Greece. They’re “you-know-what” (rhymes with “screwed,” kind of). They can’t get past the debt they’ve accumulated. They keep adding to it, in fact. The ECB, the Eurozone euro currency group, the IMF, and Europe’s banks are all playing the “extend and pretend” game with Greece. As if the country is going to pay back its debt. Newsflash: It can’t – EVER.

Greece’s debt-to-GDP ratio is now more than 170% (the U.S. ratio is around 102%). By now it was supposed to be down to about 140%. Who are they kidding?

What happened is that politics intervened. Politics and another thing called reality – which is kind of like politics, only not as surreal.

After several rounds of bailouts, and restructurings of those bailouts, and the buying back of new debt that Greece issued by Greece itself at a discount (which means the buyers of that debt got screwed), so they had less debt outstanding (for a second), so they could issue a ton more debt (at lower interest rates, of course), so their debt burden and debt-to-GDP ratios would fall… all because they had to fall to meet IMF and ECB and lender criteria to be able to borrow more in the future (because by then, of course, they would be a better bet to pay back what they were then going to borrow), after all that jockeying of debts and bailout loans, and even after two general elections and a lot of political backstabbing…

Guess what.

Greece hasn’t done anything to meet the criteria that its lenders demanded for them to get any more loans.

So, what happened? Consequences? The end of the road?

No. Greece just got approved for another bailout tranche. It starts now and runs through March.

There’s no need to get into the specifics. It’s always the same. The banks that borrow the money from central banks (who print it or say they have promises of member governments to pony up the money if the central banks get into their own trouble with all their lending) buy the debts that Greece and the other sick Eurozone countries vomit up to keep the extend and pretend game going so they don’t all end up insolvent, which technically most of them are. How so? Because they don’t have anything near to the amount of money they’ve lent out and never will. That’s not how they work. They work on the belief system. You know, if you believe they have it, they are safe and solvent. Yep, it’s kind of like: “We start believin’ now that we can be who we are, grease is the word…”

So here’s what we have to learn from Greece.

The extend and pretend game sucks the life out of everyone. Except the bankers, of course, they get a permanent reprieve, kind of like a perma-stay of execution for their criminal lending policies.

Greece has been in a recession for seven years. That’s what’s ahead for us (or worse).

The U.S. had a more diversified economy, to be sure. But so does Japan, and look what happened there. They’re well into their second “lost decade.” The funny thing that isn’t funny is that Japan ended up where it is because of what happened there. What’s not funny is that what happened to Japan is exactly what is happening to us.

First, an uncontrollable housing and property boom made people feel rich. So they borrowed against their property to invest in the stock market, which, of course, rose with all that money chasing rising share prices. Then the bubble popped and the markets collapsed, both of them, the stock market and the property market.

The same thing happened here in the U.S. The only difference here is that the Fed pumped so much money into the banks – which has gone into the stock market – that the stock market recovered. And now the property market looks like it’s starting to recover. So far, so good.

But then there’s all this debt. We’re looking like Greece, playing a never-ending game of extend and pretend.

But it does need to end.

So I say let it end here. Let’s jump off the fiscal cliff.

Our politicians make Greek politicians look like Greek Gods. There’s no way our federal fools are going to get us out of this without getting themselves into a position to be elected or re-elected. It’s about them, not us.

So let’s all be the brave Americans we are and jump together.

If we do, again, we won’t ever hit bottom. We will find a cloud somewhere on the way down that will break our fall and we will start floating. Why? Because here’s the amazing silver lining… and the thing so many of you readers tell me you want.

Once we stop stupid spending, once we raise enough revenues, our debt problems will diminish. They won’t go away completely. But if we go over the cliff, do you really think we’re not all going to look at our politicians, all of them, and take them all to the woodshed?

This could be our chance to change the way we are governed.

This could lead to the revolution we need to throw all the bums out, to shut down the Federal Reserve (so it doesn’t keep printing money for the banks to get into more and more trouble that we end up having to bail them out again by, guess what, having the Fed stuff them with more money), and to revisit what kind of America we want for the future of all our children and their children, and the world.

There, I said it. Let’s all go jump off a cliff.

Who’s with me?

Shah

96 Responses to My Case for Jumping Off the Fiscal Cliff

  1. David B. says:

    So you really think the politicians, who are the ones who get to decide whether or not we jump, are going to put themselves into a position to get the entire electorate all pissed off at them? But I’m with you… I think this $700 billion dollar ‘fix it’ is just the does of castor oil this country needs. It’s too bad that mommies and daddies quit using that stuff generations ago.

    • Rick says:

      I agree, the GOP should let Obama and the Dems have their way, which would lead to the medicine we need (recession) and recognition that the liberal position does not work. Once we see the recessionary result, the GOP can the rise above at the mid-terms and implement pro-growth policies, tax reform, and budget cuts.

  2. tim anderson says:

    i agree 100%. We need to force going over the edge, it is the ONLY way the politicians will ever address the spending issue, is if they are forced to

  3. Felix Mosso says:

    Okay, BUT, as seen by the last (just past) election, voters are still acting stupid and not looking into the problems before they vote. The mindless mainstream media says nothing to help which is a big problem. Yes voting all 535 of our overpaid employees OUT would be good BUT I’m afraid that it will have to get MUCH WORSE before the light comes on !

  4. Larry Newman says:

    You just confirmed exactly what I have thought all along! This is a golden opportunity to start getting our fiscal house in order. it is like a festering sore that needs to be lanced immediately. Yes, it will bring a short-term “ouch” but in the long run we will all be better off. The problem, of course, is that our so-called leadership cannot see the forest for the trees and will reach for the nearest box of Band Aids and cover up the sore (AGAIN!) and pat themselves on the back for having “solved” the problem. Glad I own stock in Johnson & Johnson!

    • ray says:

      Nathan…..beg to differ. If you include off-balance sheet fed liabilities, private debt is just the head of the pin. Also, your last paragraph seems to be emanating from an alternate universe.

    • OldAxe says:

      Printing Dollars works well untill the price of ink is so high you can only afford to print one side as Germany did after WW1.
      Should you find a wheelbarrow load of dollars dump the trash and take the wheelbarrow.
      { This will not happen today, the new dollars only exist in the cyber space of computers}

      • anna says:

        Exactly, paper money -dollars, euros, they exist only in the cyber space. But above all in Europe, for years, the growth of GDP was and still is artificial. There is the end of this dangereous dream, the end of credit expansion without saving, cheap credit sponsored by the states. All paper money systems have failed. China invented paper, ink, and printing paper money was their experiment cca AD 1000, state money was issued to raise revenues fo state. After 1500 no paper money was used in China. So? Now, China an India are buying gold! Are we ready for change in paper money system?

    • Ed the Grocer says:

      Nathan. Look closely. That is a Federal Reserve Note. Not a US dollar. And a T Bill is no different than a Greek government bond. Private debt clearly differs from other debt in the fact that it can and does default all of the time. It is a self curing medication for stupidity.

  5. siera says:

    Shah, I do not agree. If that happens we will go into a depression, not a recession. The rich will get richer by buying the forclosed assets of the middle class and they will move into the lower class with no jobs and no assets. many are now, just living paycheck to paycheck. we must avert financial disaster and solve the debt problem by BOTH raising revenues and cutting spending. We can no longer afford to be the world”s policeman

    • ray says:

      siera….the fiscal cliff does represent cutting spending and raising revenue, which is the same as your solution, so how can you not agree with Shah.

    • amphor says:

      tend to agree with you siera- wish we WOULD all jump off together, but the ones who hold the purse strings and the politicians will just stop at the edge of the cliff and let the rest of us jump; I think we are looking at a 1789 style revolution to make ‘jumping’ work-ie rousting out those who don’t jump, and ‘assisting’ them-seizing their assets, etc. It’s almost at that point again in France, perhaps we should just let them show us how to do it?

    • dejayajay says:

      According to numerous reports and statistics, the rich are already getting richer, and significantly so. No … banks and their owners, that lent to insolvent people and ventures, should be allowed to go bankrupt. LIfe for the majority of people will continue, much as before, but without the burden of un-repayable nationwide debt.

  6. john kavanaugh says:

    Jumping together, falling together, rising together, makes sense in light of our system collapse. Too many know too much to remain silent and acquiesce one more time. Thanks for your candor.

  7. M A Dougherty says:

    I once heard a great explanation of possible conflicting statements: Which is good advice a) Look before you leap; or b) He who hesitates is lost? If you are General Custer just you and several of your last survivor buddies and you have an army of Indians (Native Americans) on your tail and you have encountered a cliff – which is true a or b (above)? Depends on how close they are right? Well I agree with you – they are right on our hinds-end….and he who hesitates is LOST. I am yelling FREEDOM all the way down – just like William Wallace!

  8. Jim K says:

    Well, I’ve been hoping for some kind of “deal” to be made to avoid the “cliff”, mostly from a selfish point of view: I don’t want to be taxed even higher. However, the “cliff” is there because congress PUT it there because they couldn’t come to any kind of reasonable agreement about how to cut spending and increase revenue. Maybe this is the best of all the worlds. It would, in fact, slash spending, which I really want to see and although I wouldn’t like a tax increase, I’ll survive. Let’s jump!

  9. Rellif says:

    Ok, but you go first. Me thinks that after we jump the last ones will be the “politicians”. Me thinks they will chicken out.

  10. Thomas says:

    Ha….good one!!

    Shah, seriously, have you spoken to your congressperson about your concerns and proposed solutions? I would imagine it would not be too difficult for you to get an audience with him or her and perhaps glean some insight into how the issues will be addressed. You could then share that insight with your readers and help us plan out a corresponding trading strategy.

    I have no doubt you know all the right questions to ask your congressperson in order to determine what is most likely to happen over the next six months.

    Thanks.

  11. Marc Prinz says:

    We should have shunned the so-called Stimulus–how’s that working for
    us?–but, now, more than ever, taking the jump at least offers new clouds to land on…STARTING WITH TERM LIMITS… The CORE of our problem? Go figure?

    • tom says:

      Your right, but it will never happen.The best Senator we have is term limiting himself. (Senator Dr. Coburn) I hope he doesn’t because we need his leadership in a Congress that is on;y interested in reelecting themselves.The republicans in the 90s all said they would push for term limits. Term limits is a theory that has no place in reality. There isn’t enough wisdom in the body politic or voters to make this happen.

  12. robert moore says:

    When the power of the sovereign is assigned (the FED) and economic control passes to one group v/s another group then the rule of law has been subverted and a state of totalitarism is in
    force.

  13. Jay Curtis, author of THE CODE says:

    Sorry, Shaw, its not going to happen. Get real. We don’t have a queen of hearts to shout “Off With Their Heads.” Instead we have overwhelming lip service to fixing our debt problem but no real solution. Going off the fiscal cliff with tax increases (particularly for middle and low income citizens) will only cut demand and further depress our economy which, in turn, will lower government revenues. Its a vicious cycle. Higher taxes on people who spend every penny they earn or get cuts consumption which cuts buying which cuts manufacturing and consumption of services which cuts income of providers which cuts their consumption and so on and son on down a vicious downward economic cycle. Obama’s tax plan is good for the economy, i.e. raise taxes on incomes over $250,000. We really need half of the fiscal cliff, the cutting of military spending in particular. We have a cold war military establishment in a terrorist century. But, alas, as long as the electorate is barraged by lies and absurd political ads paid for by billionaires and vote accordingly against their own best interest do you really think we will solve our problems until people are starving in mass and there is blood in the streets?

    • Wallace says:

      I want Obama to stick to his promise of covering all negotiations on C-Span like he campaigned on in 2008. I want him to lead the country and stop blaming this and that. A true leader accepts his responsibility and works endlessly to solve the issues at hand. We must create jobs and that should have been Obama’s plan day one. The job growth has not been enough to sustain our population growth. GDP is a joke after we should have had a huge increase in GDP after the “Great Recession”. However, this president has created class warfare and has divided our country when we all have to come together. That goes for all our politicians as well. Our fore fathers created this form of government to protect the people from government when the majority of today’s politicians just protect their own interests. For example, how does the average net worth of our congress and senate become $7.3 mm when their salary is $174,000. Take a look at Nancy Pelosi’s wealth from 2008 to 2012. It’s a 5 bagger. Must be nice to vote on policies/laws that benefit the companies you invest in. Washington DC is the ultimate Insider Trading center, not the finance industry.

      Any educated person should research the facts, not advertisements. I love how Bill Clinton supported Obama when Clinton deregulated Glass-Steegle which was one of the main causes of the housing collapse. Good Ole Slick Willy at it again. While during Clinton’s terms we did enjoy growth, it was due to the cyclical nature of our economy and we had the tech boom that drove the economy then.

      I have paid hundreds of thousands in taxes through out my career when I know of people that completely live off food stamps, energy assistance, welfare, disability (when they are more than capable of working), and any other govie freebies they can get their hands on and have been doing it for years. I do believe that we do need social programs such as unemployment, and other assistance for people that lost their jobs and are trying to get back to work, but we must eliminate persons from making it a profession of living off the government. Additionally, I know of persons that only pay $600 to $1,000 in taxes and end up getting $4,000 to $5,000 back. I believe we should give them back what they paid into, but to give them 6 to 8 times more than what they put in must end.

      I make a third of what I used to. Work 16 hours a day and have three jobs while taking care of two sons, but we won’t take a hand out (I am lucky to get 5 hours a sleep a day, typically 3-4 and maybe 6-7 hours on the weekends). We will survive and I pay my taxes and I don’t spend more than I make. Imagine that, not spending more than you earn. If the government can’t figure it out, they should get out. What happened to work ethic and what you can do for your country, not put your hand out. It must stop and I also understand your vicious cycle as I studied economics, but things are going to have to get worse before they get better, especially for those that have not contributed anything to our society.

      We have a leadership crisis in this country. Also, people need a purpose and work provides purpose (that way they are not rioting in the streets). The number one priority is jobs which will solve the revenue problem and reduce the dependence on govie hand outs.

      Today I watched John Boehner say no spending cuts have been proposed and twenty minutes later Harry Reid said that he doesn’t know what happened to Boehner’s brain. This is ridiculous. Put it on C-Span so we can see who is really lying. These are the adults that are leading our country. They act like kids on the playground. In the private sector, if you don’t play nice and work as a team, you get fired. It’s time to fire these knuckleheads. We should have the power to get rid of them before the next election. Let’s make that a new amendment to the constitution as DC changes it on us all the time. Why don’t we have web-site that we can all access to see who voted for what at our finger tips. In today’s environment, it’s difficult to ascertain that information.

      Raising taxes on $250,000 is ridiculous. I don’t know where you live, but in the Northeast, that is middle class, if that, not the rich. I do agree we should raise taxes on maybe $500k and more, but not $250k. Where is your incentive to work harder?

      Further, defense spending is imperative to technology enhancements and are private sector jobs that pay taxes. I don’t know if you noticed, but China is developing their military at an alarming rate. While we do have to focus on a new style of war, we still have big threats and we can’t let our guard down.

      Moreover, businesses are not hiring due to the uncertainty of tax hikes, health care expenses, and thousands of new regulations. Small companies do not have the capital to hire the attorneys to handle all of these expenses. Let’s also not forget that without capital, there are no businesses so we need to stop bashing the bankers when most of them did the right thing while deregulation from Clinton’s terms were the main cause of the housing collapse and opened up Pandora’s box for the ones that failed. Read “Too Big To Fail”. The government forced the banks to take those loans and most of them have paid it back and it was the best investment the government has ever made. While you’re at it, check out the Congressional Budget Office, the CBO. This president has racked up the most debt since FDR, and we had to do that in order to finance WW!!.

      Most importantly, the class warfare and ignorance of the American people must cease. By the way, I am an Independent voter.

      Not all of what I said pertains to your post; however, Obama’s tax plan is heinous, just like his first term, and I particularly loved the African American movement to vote for Obama. Imagine if Romney created the Caucasian movement to vote for him. Big bird was outrageous as a small percentage of the revenues from Elmo would easily pay for PBS, and this whole Romney against women – totally ridiculous. I forgot, how many times can we kill Osama Bin Laden when Obama should be impeached for covering up our ambassador’s and three other American deaths when our ambassador was asking for additional protection since last spring. That was worse than Watergate. People are absolutely dumb and stupid if you think we are winning the war on terror. Take a look at the middle east, Pakistan, and Afghanistan. Also, Russia, I wouldn’t trust Putin as far as I could throw that ex cold war KGB head. Russia is one of the most corrupt countries in the world and there are things that are going on there and we just turn the other way. So keep up the military spending.

      • Mario says:

        Blah, blah, blah! Are you try to let us know you read some history?…
        And, well – congratulations! – you even learn something from it?…

    • Frank B. says:

      First, you need to learn how to spell Shah! Next, I’ve heard it said that we would actually solve 77% of our problems by going over the “cliff”.
      It’ll hurt like hell, but will get better!

      FB

    • Mario says:

      Sorry Jay, you’re just another idiot trying to protect “status qvo”. Actually the fact you pretend to wrote THE CODE (probably was written by your f*#k^&g masters, “the illuminati”- and the fact that a such poor novel was made into a movie just proves it!),doesn’t make you an authority by yourself at all.
      As “Amphor” said a little earlyer, US is about in the same spot where France was in 1798. And I agree.
      What you advocate is “let ‘em eat cake – we’ll give it to them, after we’ll take it from somebody else”…
      What Shah says is “Let the gillotine falls!”
      Advocating for small changes, in order to preserve the actual state of things, Jay, puts you in the same cell with them one day, week, or month before Place de la Greve!…

  14. Richard Roschke says:

    Jump! even Warren Buffet said the cliff was not as bad as everyone makes it out to be. Maybe we could create a productivity chart for politicians. The bottom 50% are terminated. That would clean things up quickly.

  15. Dimi Chakalov says:

    If you jump off, Ron Paul may choose to run as an Independent or Libertarian, and people would be inclined to listen. In other words, perhaps we can be optimistic: the winter is coming, so the spring cannot be far behind…

  16. Gary L. says:

    Ah Shah!! While I agree with the plan to make the jump, I could only wish that you were right about our political future. The electorate will not take the politicians to the woodshed. It’s unfortunate, but our culture has changed from our historic roots. The electorate just confirmed that earlier this month. Between those on the government dole, who don’t want to lose what they are getting, and the infertile minds we have generated the past thirty years in our education system (kindergarten through University) we no longer have the majority with will to make the necessary changes. We now suffer from the “cut flower syndrome”. We have been removed from our cultural roots, and we can look pretty for a short time but will then wither and decay just like Greece. The beginning of the decline began when the progressive liberal government types changed the meaning of the equal rights amendment to the cultural entitlement amendment. That was the first cut to to the roots of our one nation–one people heritage. Then they took control of our educational system and we ended up teaching our young fertile minds that inclusiveness, diversity and fairness were the heritage of our country, instead of liberty, opportunity, and freedom from government interference. Flower power and the “summer of peace and love” has come to rule the day by inserting itself into the wheels of government. Unfortunately, what they brought with them was the same root cutting that they personally practiced when joining the flower power movement. So, let’s jump off the cliff, but I don’t believe that when the fall ends I am going to end up in the Land of Liberty. Liberty will make it’s triumphant return after the debasement of the currency is completed, living standards are deplorable compared to today and the rioting in the streets ala Europe and Greece is over. After that, the human desire for freedom and opportunity will rekindle itself and we can begin to rebuild.

    • Leroy says:

      Gary, you sound like one smart cookie!

      Let me add: Cut every Federal Dept.’s budget by 10 % and let them figure out how to implement this change.

      • Mario says:

        Don’t cut Federal Department’s budgets by 10%, CUT THE FEDERAL DEPARTMENTS. PERIOD!
        Excepting Department of Justice – who should enforce some rules, like how a Maine man is trialed in Luoisiana, or how an Oregon investor can foreclose in Florida on his delicvent mortgagees – otherwise let them to the states, or even better, to the communities to handle the “crimes” or crimes done on their land!…
        Except the Department of State – but strip them of CIA! They are representing us all over the World. They are the Embassyes and Consulates, but they deffinitely don’t need to supervise CIA. Espionage was, and allways would be about war, which takes me to the last exception…
        Except Department of Defense. Obviosly,every sovereign country, and especially those who manage to gather some wealth, need to protect themselfs from who wants their wealth. It seems, the Colonies could do exactely that whithout a standing army in 1776. Definitelly that’s not possible in this days…But deffinitely doesn’t explain THE SIZE AND EXPANSION of US military!…
        Two days ago, on this Planet were 201 recognized nations. Right now, they are 202, after UN recognized existence of Palestine…Still, somebody please tell me why we should keep active bases in 157 of them?…How that protect us, and US wealth?…Why we need 7 fleets, when Coast Guard makes everything is needed to protest our shores?…
        So, I suggest to keep this departhent, but cut it’s budget to payroll for deployed personal and only for the next 5 years. I bet that will cut about 90% of the wasting in this area.
        Ah ,and well, everithing else – all other Departments – will have to go!…
        Problem solved!…
        Well, I plan to campaign on this platform to became your next POTUS…Do you really thing I’ll get a vote?..
        Garry Johnson was only 25 % as tall as me and he get the boot….
        So , what’s the solution?…

  17. Marilyn says:

    When traveling this summer we ran into a place called “Head Smashed in Buffalo Jump.” Apparently it was a place the Native Americans ran herds of buffalo over a cliff which gave them a quick way to get food, clothing, blankets and tools. Perhaps jumping off a cliff isn’t that bad if it’s someone else and the results are good. My theory is once everything hits the fan, we get to say “I told you so to those who voted for Obama.”

    • Jeff Pluim says:

      Head Smashed in Buffalo Jump is in Canada so they were Native Canadians, not Native Americans. No offense, but Canadians hate being referred to as Americans.

    • Lang. says:

      “Head Smashed in Buffalo Jump” is located in Alberta, Canada which would make them Native Canadians.

      The truth is that President Obama nor any single politician has any power to “persuade” the Fed to NOT do anything it is determined to do. I believe Allan Greenspan made that perfectly clear.

      Lang.

    • Lang. says:

      Incidentally, the natives never actually jumped off the cliff themselves, they just ran the buffalo over the edge. Not a bad idea, the only question is how do we scare the bankers into stampeding.

      Did I say that out loud? Laughing…

  18. ray says:

    This whole ordeal (increase debt/deficits and bailouts) was designed to enrich the wealthy via the stock market. Once we have the eventual currency collapse, the wealthy will buy huge amounts of assets, shredding the so-called middle class.

    Note: the wealthy are able to protect their wealth via land, other currencies, and owning gold/silver.

  19. Jim Hunt says:

    Why never a mention of cutting the HUGE ‘secret’ Black Ops budget (tunnel/city networks, black helicopters, etc etc)???
    Why is such a ‘given’??? Do the American people know about it enough to ‘just say no’ if they DID have a say in the matter? Do all the congresspeople have a guaranteed spot in the underground
    safe haven when the sh_t hits the fan, so what do they care, or???
    This is real, and it merits some serious investigation, imho.

  20. JohnD says:

    No problem here; I’m ready to jump. And here’s another big bonus for jumping–an automatic 9% cut in “defense” spending. There’s probably no other way to force such a big, happy cut in the outrageous defense budget.

    • Lang. says:

      For anyone who still has doubts just Google “The Creature From Jekyll Island”.

      Should be required reading for all Americans,

  21. H. Craig Bradley says:

    DEBT HELL

    I like to think of the taxpayer’s and citizen’s situation in respect to current Govt. debt levels and the predictament they find themselves in as analogous to the B-Movie (1983) “Motel Hell”.

    Unwary lodgers at this rural retreat would be greeted by a superficially friendly motel owner and operator, Farmer Vincent. The sign at the highway (designed to lure the unwary) read:

    “There are all kinds of critters in Farmer Vincent’s Fritters”. ( The critters were former customers who were butchered and smoked for the fullfillment of new visitors). However, passing vacationers who purchased Farmer Vincents fresh (smoked) meats were pleased with their unique flavor.

  22. john says:

    Living here in europe and seeing the Obama return, I think you guys must have lost contact with reality. BUT you are in good company as we also will not admit our problems and just ” kick
    the can further down the road ” Although Shah understands your problems and is on the button, we are also unable to get our politicians to face realiaty.that pretend magic is real and Grease will pay it’s debts. Pigs flying in the sky comes to mind !
    Our problem is the EURO is a manifactured curency that is not fit for purpose as it can never fit 20 odd DIFFERENTLY taxed countrys.

    • jack says:

      greek better can have an bail out.better for the country.
      perhaps there is another reasen.The country is to near to Egypt(Africa)
      It is an gues but possible.Europa has 5 old men from Goldman sachs.
      to lead some countrys..Think about it.

    • Steve Church says:

      I agree with you, John. Have you read “Circus Politicus”? The major theme of the book is that there is not enough transparency in the European institutions. It is filled with facts and interviews, and makes a good case for American influence in the creation of EU and its labyrinth of commissions, councils, etc that have so removed the decision-making process from any semblance of democratic governance. I could certainly be wrong, but a break-up of the EU does not seem an impossibility and, in my opinion, would be good news for all.

  23. sun tzu says:

    First, let´s PUSH Bernanke and all the BANKSTERS over the cliff so If we fall longer that reasonable we have something to brake the fall!!!!!

  24. sun tzu says:

    First, let´s PUSH Bernanke and all the BANKSTERS over the cliff so that if we fall farther than reasonable, we have something to land on!!!

  25. RA says:

    When the financial cliff was created the politicians got it right in their typical gutless way. Going over the cliff is the first step, more cliffs may be needed. We shall all live through this if we don’t panic. The news media is fueling the frenzy while the politicians play games to aggrandize themselves. So what’s new? Love all the comments even Nathan’s……..

  26. uncle peter says:

    Jump off the cliff but remember to take your cellphone. How many food stamp receipents, welfare and unemployed people have Iphones?Give up the toys, park your cars, take public transit and go after the 25Trillion$ big corporations have hiiden in overseas accounts.There are approx. 40 million undocumented humans in country, make them pay higher taxes, open the doors to immigrants who will start a business and institute and federal tax that every other developed country has done.

  27. Elaine says:

    Gary L. said it so beautifully. Until we get back to a well-educated, disciplined electorate who can be critical thinkers and not “buy” into all the false promises made by politicians who then ignore what was promised, it will be business as usual. Obama’s disgust for successful business people is so obvious and he is going to “make them pay” that I don’t think he is capable of representing all of America’s citizenry. As to the fiscal cliff, unfortunately this looks more and more inevitable. With $68 trillion in unfunded liabilities, it’s pretty clear where we are headed. Obama’s class warfare obscession will destroy this country.

  28. RBT says:

    Forget the fiscal cliff, we have a spending problem not a revenue problem. Under Clinton we had tax receipt’s of $12 trillion, under Bush we had tax receipt’s of $17 trillion. Clinton had six years of a republican congress and his receipt’s jumped after he accepted welfare reform(after he veto’d it twice) and cut the tax on capital gains. Bush was doing just fine till the democrats took over congress in the 2006 election. The last republican controlled budget provided a $160.7 billion deficite in 2007. The first democratic controlled budget gave us a $458.5 billion deficite in 2008 and from then on it’s been trillion dollar deficites. If you are interested in facts go to http://www.whitehouse.gov/omb/budget/historicals
    click Historical tables Historical tables 1.1

  29. terry l. thomas says:

    The comment written so far have been more of emotions rather than fact.

    FACT – MONEY TALKS – B***S*** WALKS

    Lets look at some facts –
    1.American business is sitting on 1.7 TRILLION DOLLARS IN CASH!.
    2. American companies have approximately another 2 TRILLION DOLLARS IN PROFITS FROM THEIR OVERSEAS OPERATIONS which they have not and probably will not repatriate to the U.S. so it can be taxed.

    Why is that – Simply put MONEY TALKS, B***S*** walks. If you had a business operation in one country that was being regulated and unsure of the political parties intentions, are you going to invest and put that money to work or invest it elsewhere where the business climate is more favorable?

    You don’t need to have an M.B.A.or P.hd (otherwise known as piled high and deep) to figure that one out.

    But after all, 52% of Americans voted for what we now have and a gentlemen from Illinois said it best – “People get the government they deserve” (source A. Lincoln – 16th pres. of the U.S.).

    Welcome to the world of “stupidity, selfish behavior, etc. of ALL elected officials, DEMOCRAT & REPUBLICAN ALIKE, at all levels of government – federal, state, county and local.

    In two years at a maximum, we will have the following scenarios or possibly all of them.

    1. Inflation – How high will it go???
    2. Debasement of the current currency – Already occurring at the supermarket, gas stations, etc. Let’s not forget – QE1, QE2, Operation Twist, etc.,etc.
    3. “Bubbles” like the housing market, tullip frenzy of the 17th century, most certainly gold, silver and other “precious” metals.
    4, Some “civil unrest” of what magnitude???
    5. More outsourcing of jobs to other more favorable climates.
    6. Government breakdown and government labor problems – i.e.
    unfunded pensions coming due, raising the debt limit, due to appear AGAIN next year, are just an example.

    When will our elected officials get this fact thru their collective heads – MONEY TALKS, B***S*** WALKS!!!

  30. michael ellson says:

    l
    Let’s create a Federal Fools Day with life size inflatables of Bernanke, Geitner etc. We could have them ceremoniously inflated until they burst.

  31. Hayrick says:

    Hi you guys and gals. Much as I love Americans I do not love your establishment. Shah’s solution sounds much like a continuation of American imperialism. You exported your now worthless dollars that can be printed at will and bought many of our best income producing business, mostly when we were in trouble. Now you are in trouble you want to change the rules. Sorry – any reset should not be just for your benefit. We need to stop the financial feudalism for good and institute a fair system that rewards prudence and overturns all the current systemic rorts.

  32. Grandpa Ed says:

    When will we learn? When will we ever learn?

    Here is my wish. I am so sad that it may ever be a wish, not a reality.

    PLEASE PEOPLE, HELP ME !

    TERM LIMITS: Long enough to learn how to legislate, then do some, then go Home.

    TAX ONLY CONSUMPTION: No income tax and elaborate rules. No IRS even. It shrinks to only a monitor on the Consumption Tax collections.

    LOBBYING: You, citizen, can talk to your representatives, and only your own representatives. You cannot accept any reward for talking to your representatives. No professional lobbyists can exist. If some should try it, let them be Persons Without a Country.

    ELECTORAL COLLEGE: None! One Citizen, One Vote.

    POLITICAL PARTIES: Let them exist. We humans do like to have organizations to espouse our preferences. But NO election financing by a party or PAC of a candidate for office. The corrupting influence destroys the candidate’s freedom to think for himself and respond to his constituents.

    ELECTION FINANCING: Donations, WITH A LIMIT, only by individual citizens who are the candidate’s constituents.

    THE FEDERAL RESERVE: Just NONE !

  33. Grandpa Ed says:

    Excuse me. I hit the wrong key and was not really finished, so here is the rest.

    THE BUDGET: Balance it or all representatives immediately are impeached.

    CURRENCY: It must be backed by gold or silver. Unsupported paper must be impossible.

    THE CONSTITUTION: Follow it absolutely! Amend it only through constitutional procedure. No “overrides” by any office.

    RULE OF LAW: Laws and rules apply to ALL. No exceptions for anyone, especially office holders.

    Think I am wrong? Stupid? Whatever. Say your piece.

    • Lang. says:

      “RULE OF LAW: Laws and rules apply to ALL.”

      That wouldn’t be George Bush’s version of the rule of law would it?

      “A world where the “Rule of Law, not the law of the jungle, governs
      the conduct of nations”
      (Source: YouTube)

      If you watch really carefully you can actually see his lips moving…

      Lang.

  34. Grandpa Ed says:

    Just one more, I promise.

    SOCIAL SECURITY: If you tax me for it, pay it to me, because if you tax me you owe me. ABSOLUTELY !

  35. Avnash Banwait says:

    We here in Canada did it in Nineties. It is your turn. Strangely it was done by liberals. Who knows Obama may take the bitter pill and do it. But here in Canada now the so called conservatives are raking up the debt again.

  36. Jerry Collins says:

    Hi Shaw, I will go lemming with you. Either way we are screwed. Will we jump or not? Buy stocks, or gold, or stuff $ in my mattress? What are the rich doing?

  37. Laurie Kennedy says:

    I was just reading Pausanias ‘Guide to Greece’ written in the 2nd century AD and he echoed Herodotus’ ‘Histories’.

    ‘Things by now had gone as far as this; but the troubles of Achaia were to start from the most ungodly of all crimes, and one by which in the whole course of history Greece has never ceased to be afflicted: treachery to a man’s country and people for the sake of his personal profit.’

  38. J says:

    Obviously a depression now is better than ongoing inflation and the future demise of the dollar.The latter will cause the collapse of the economy and the government which could cause the rise of a dictator because a strong leader will always look favorable after weak leaders that lie and commit faud. But if people don’t learn from the lessons of history then let’s wait and see where hyperinflation leads the USA and repeat history.

  39. Sveti says:

    Yeah, Fantastic comparison “Grease is…” (After dire …or… “You-know-what” future we are facing :-( ….) ………
    ……..aaand as the song goes:
    “This is life of illusion, a life of control…. mixed with confusion…”
    Nevermind I became in great mood since I listened to the song, mentioned, and you could too:
    … Here could have been a link to youtube: Grease Beegees Lyrics

    Have a great weekend!!!

  40. Ed the Grocer says:

    Here is how it works in real life. My Grandfather ( the grocer ) survived the Depression ( thirtys ) with his store intact. He did give credit as was the norm in those days, but it tightened as the depression dragged. He did deals all the time to settle debts, not as a crook, but to make sure his customers (friends ) had food to eat. I learned from that episode. I don’t do credit. If you are hungry, I’ll make sure that you have food, but it comes with a lecture. I still have all of my customers, they all still eat. But almost all of the treats are gone and everyone is down to business.

  41. Ed the Grocer says:

    We could jump. Most of the money is Fed or City or Government debt. Sorry, but its all gone. And most of it didn’t exist to start with. So, flip the switch. On one condition. As we flip the switch, you set the spending rules and you stick to them. Rule # 1 If you don’t have it, you don’t spend it.

    • Grandpa Ed says:

      Earlier I said “THE BUDGET: Balance it or all representatives immediately are impeached.”

      I especially like the way Ed the Grocer said it. “Rule # 1 If you don’t have it, you don’t spend it.”

      I did live through one time of government action that would break our “rules” that I could excuse. Anyone remember “War Bonds”? We officially loaned our country money to enable defending ourselves in World War II. Of course then our brilliant (?) representatives converted the title over to “Defense Bonds” and the senseless waste took over.

      Is nothing ever learned by our representatives? Is nothing ever learned by “We the People” ?? Perhaps Over the Cliff will teach enough of us. LET’S GO !

  42. Big Burly says:

    It seems to me that the fiscal cliff PR blitz and sham is the right time to force the issue … were Keynes and Marx right about human nature OR Aristotle and the Austrian School? Time I think that this is answered once and forever. Give BHO and his adherents all they have asked for.
    Spend time instead on finding a fix for the illegal immigrant challenge we face — one solution might be to declare that all illegal immigrants who can demonstrate that they were in this country, save those convicted in this country or with a criminal record in country of origin, on say September 30, 2012 have a legal road to citizenship. All others will be deported and we will get serious about border controls. IF the Repubs took this initiative, it would go a long way to getting back in my good graces and donations!
    Remember that big business, big labor, and big gov’t (read BHO, Boehner, Pelosi, McConnell & Reid + their acolytes) will be the biggest losers going over the cliff. They created this mess.

  43. Bruce Claflin says:

    Billions of dollars were spent during the recent election period to elect people who would then cut the so-called entitlements. Let the congress people start cuts with themselves. Give beck the automatic pay raises, replace their pension plans with 401ks (like the rest of us), restrict their health coverage with the same social security as the rest of us, set up benchmark goals or face salary reductions, and establish a dual rating system where each congress person is (1) rated by their state electrorate and (2) by the country as a whole. The “Are you one of the 90%?” is for real so why should we pay their bills? Also why have the major banks weathered this fiscal mess unscathed and are even bigger than before.? They should be given the choice of paying back the the fiscal consequences of their policies or face criminal prosecution with real jail sentences. Then we might see some real progress in fixing our debt problems..

  44. Randy A says:

    We need to go over the cliff and we need a lot of people to be pissed off. Because Revolutions are never born from contentment. The real hope for this country lies in a revolution. To replace our brokren , corrupt, and oppresive government with a new one that is actually a government by & for the people instead of a government by and for the government. We, who are the economic engine of this country can bring the gravy train to a halt. REVOLUTION NOW

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