1. The final part of a play, movie, or narrative in which the strands of the plot are drawn together and matters are resolved.
2. The climax of a chain of events, usually when something is decided or made clear.
Today's headlines report that the US House of Representatives is considering a new spending plan that would cut 6.2 trillion dollars from the budget over the next decade. Of course, the cuts are not immediate, but rather slated to begin "tomorrow". It's always tomorrow. Tomorrow is the Keynesian's national anthem. The article states "The GOP plan proposes a federal budget totaling $3.5 trillion next year, while promising more than $6 trillion in accumulated spending cuts over the next decade compared with the budget that President Barack Obama offered in February." So, basically 2012 would see no cuts at all and then after everyone gets elected again (or not) then we can start making those pesky cuts. Of course, when 2012 comes around some new political hacks will get voted in and the first thing they will do is repeal the cuts in some form or fashion. And even if the cuts aren't repealed it's impossible to know how much of the $6.2 trillion is just a headline number vs. being actual fact. For example and as reported earlier, $38 billion in cuts slated for this year turned out to really only be $352 million after the bull$hit was wiped away from the picture by the CBO.
Just for a lark, let's assume for a second that they really do plan to cut those $6.2 trillion and that they have the political spines to make the changes stick without making up for it some other way. That's $620 billion per year. The current deficit is $1.3 trillion. That still means we go $700 billion more into the hole each year under this new plan. Think of that as a new bank bailout each and every year for a decade. Of course, this doesn't count the risk of rising interest payments on the debt. If our best effort means that we go into debt by an amount equal to the GDP of The Netherlands or of Turkey or of Indonesia each year then who can continue to have long term confidence in the dollar? One thing is pretty certain: as soon as Bernanke stops printing money to buy treasuries with, the unsustainably low interest rates that he has been creating with this process are going to go up and that means higher interest payments on the debt going forward. Given that they have been held down a very long time there is significant risk that when they do rise it could be dramatic in nature.
OK, so enough about Keynesian dreams of future budget cuts that may or may not ever actually materialize. In the here and now, President Obama is warning congress that if they don't raise the debt ceiling it will cause a global recession. Of course he has to have a higher debt ceiling because without it the debt Ponzi will indeed collapse and the result will be worse than a "recession". Add it all up and it looks a lot like another Keynesian Wimpy Promise. If you just give us our hamburger today (again) we will begin asking for less hamburgers sometime in the future (if we don't change our minds between now and then of course). Heck, one day we might even pay you back a hamburger but be careful because it might not be the same kind you lent us.
The little details can be made as complicated as you want them to be but overarching truth is fairly simple. If these guys make any real cuts in federal spending then it will whack the economy which will whack housing prices which will whack the balance sheets of their banking buddies and threaten the stability of the entire funny money system. Without having a funny money system in place, lazy good for nothing con men will actually have to work. Instead of making millions by conning people out of their wealth they will only make average salaries given that they have no real economically useful skills to speak of. Could you image Ben Bernanke without the funny money game? The guy wouldn't even be allowed to teach high school math. He'd be competing with retirees for the position of Wal-Mart greeter. So the bottom line is that they will do what it takes to save their funny money system and that means supporting the banks in any way needed even if it causes the debt enslavement of the nation or its eventual bankruptcy.
