The great awakening continues

The herd continues to get showered with scary news as the New York Times reminds us today that nothing has been fixed by all the presidential talk of recovery, bank bailouts and calls by the con men to consume more, borrow more.  The article quotes a spokesman for the Peterson Institute, “That government debt will grow to dangerous and unsustainable levels in most advanced and many emerging economies over the next 25 years — if there are no changes in current tax rates or government benefit programs in retirement and health care — is virtually beyond dispute.”

Learned as this spokesman might be, let me make a few corrections to his quote.  Instead of government debt "will grow", it should read "has grown".  Japan is > 200% of GDP.  The US debt is nearing 100% GDP and the ratio is probably a good deal higher then government con men are letting on.  These are not historically numbers that warn of future problems but rather trigger levels that indicate the point of no return has already been crossed.  And 25 years?  Does someone really think we have 25 years to sort all of this out?  Mathematically speaking, the collapse must occur before the majority of the boomers get all their benefits.  Think well under 10 years.  Also, the concept that there is some course correction that can be done today to avert disaster is ridiculous.  How are government con men going to raise taxes on the people as we enter another downturn?  Doing so invites a street level necktie party. What cannot happen will not happen.  People need to stop factoring impossible things into their future plans.  Who do they think they are bull$hitting, anyway?

Cutting back on benefits is also not a panacea.  All of that debt based government spending must continue lest the economy roll over.  It's a catch 22.  With government spending now 45% of the economy and 42 cents of each dollar they spend being borrowed there is no way they can just stop borrowing (or printing) and hope for a soft landing.  A crash landing is assured.  The only question is when and 25 years down the road (i.e. after the con men die) is not going to happen.  Sooner or later the partial truths from the major media outlets will turn into full truths and the herd will finally realize that the big con is ending.