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Sunday, July 21, 2013

100 more bankrupt cities

So much for the vaunted urban model of the American liberal:
Detroit Mayor Bing and Michigan Governor Snyder have been quite vocal. Bing made it clear that "a lot of negotiations will go into fixing our city," and when asked whether he will seek a Federal bailout, he responded, "not yet." The decisions following this huge bankruptcy are likely to be precedent-setting as Bing noted that more than 100 urban US cities "are having the same  problems we're having." As the WSJ reports, Bing warned, "We may be one of the first. We are the largest. But we absolutely will not be the last. And so we have got to set a benchmark in terms how to fix our cities."
Imagine how much worse the financial situation would be if the exurban proletariat and suburban bourgeoisie had listened to the progressive experts and moved en masse to the cities the way they were supposed to in the 70s and 80s.

And ask yourself this question.  If the Fed/USG can simply "print" credit money between them and "stimulate" the economy through massive urban bailouts, why are they not doing so already?  This solution would appear to kill three birds with one stone:

1. Preventing the insolvent cities from defaulting
2. Making up for insufficient private and public spending
3. Reducing unemployment via subsized local government employment.

So, why would neither Ben Bernanke nor Barack Obama be pursuing, or even proposing, such an economic program?  What is it that prevents them from "fixing" these three problems in this manner?

Labels:

107 Comments:

Anonymous stg58/Animal Mother July 21, 2013 4:01 PM  

Why didn't they just pay off everyone's mortgage?

Anonymous TWS July 21, 2013 4:10 PM  

Good question. It would have been better for everyone.

Anonymous David of One July 21, 2013 4:17 PM  

I do recall how a certain magic politician loathes Americans that don't want to live in cities.

I suspect another rendition of deificatory lecturing is about due again. It is always someone else who is responsible.

Anonymous Harsh July 21, 2013 4:29 PM  

I don't know they just don't raise the minimum wage to $25 an hour so everyone has enough money. Problem solved.

Anonymous Harsh July 21, 2013 4:30 PM  

*don't know why

Anonymous The other skeptic July 21, 2013 4:38 PM  

What is the diversity ratio of those cities? The ratio of Non-Asian Minorities to whites?

I wonder if there is a pattern?

(I am ignoring Asians because the right sort of Asians are such a small percentage of the population, but we could factor them into the denominator if you like.)

Anonymous Peter Garstig July 21, 2013 4:44 PM  

Awaiting Nate.

Anonymous Difster July 21, 2013 5:00 PM  

If they would have just paid off everyone's mortgage, then those same people would have gone right back out and mortgaged them for spending cash. It would not have ended well.

Anonymous stg58/Animal Mother July 21, 2013 5:07 PM  

Difster,

Didn't the banks do the exact same thing?

Anonymous realmatt July 21, 2013 5:13 PM  

What these idiot officials and "economists" don't understand, and what the people of Detroit don't understand, is that Joe Walsh Rules

Anonymous Godfrey July 21, 2013 5:16 PM  

"So, why would neither Ben Bernanke nor Barack Obama be pursuing, or even proposing, such an economic program? What is it that prevents them from "fixing" these three problems in this manner?"


Because they don't really believe their own rhetoric. The "printing" of credit money is about saving their pals from bankruptcy and about keeping the wealthy ruling class wealthy and ruling.

It's not about stimulating anything, it's about the redistribution of wealth from the lower classes to the wealthy ruling classes.

Anonymous Idle Spectator July 21, 2013 5:21 PM  

I wonder what is going to happen.

Will there be riots, or will the cities simply empty out and reduce in size? With the industrial revolution you had urbanization and centralization. That is reversing with the internet age. How will that affect urban planning?

Anonymous paradox July 21, 2013 5:34 PM  

Because debit is the means of bankster control. Which is why the fed will not pay everyone's mortgage off.

Blogger RobertT July 21, 2013 5:45 PM  

lynch mobs

Blogger Doom July 21, 2013 5:49 PM  

It would certainly be the beginning of the mother of all bailouts. It would never end. As to why they aren't doing it, let alone proposing? In my opinion it is because they mean to lower the U.S. economy to general world standards, not actually destroy it. No, that doesn't mean I agree with it, it's just how I see things.

It won't work. It can't work. The reason Americans have done better is because they have become accustomed to working harder for a little bit more, and that built on itself from having built up to being free. While that is obviously failing, most of the rest of the world, to include Europe, has become accustomed to only the rich getting richer and the poor getting crumbs from the graft in the way of lazy-man's work and government dole. You can't help those who don't even think they can help themselves. Either give them a fish or let them starve and figure it out in the aftermath, the latter being my preference.

I think America is done though. Too many have surrendered for something free. Probably the best thing we could hope for, and it wouldn't be all that great, is a military coup as in Egypt.

Anonymous JW July 21, 2013 5:56 PM  

Back when carter was pres. New York City was on the ropes. Dinkins was mayor. NYC got some sort of a bailout as I recall. NY was then a diversity run city.

Anonymous Anonymous July 21, 2013 6:06 PM  

"NY was then a diversity run city."

Now it is run by Jews. The End.


Ted

Anonymous Miserman July 21, 2013 6:07 PM  

So, why would neither Ben Bernanke nor Barack Obama be pursuing, or even proposing, such an economic program? What is it that prevents them from "fixing" these three problems in this manner?

1. They do not know the consequences of such a program and fear the unknown outcome.

2. They know the consequences of such a program will make matters worse and that is unwanted.

3. They know the consequences of such a program will improve the situation and that is unwanted.

4. They have not finished their game of Monopoly as a tool for economic decision making.

Blogger Nate July 21, 2013 6:41 PM  

This again? We covered can't and won't in the debate ya know.

I will explain in a comment or blog post asap.

Anonymous swolepapi420 July 21, 2013 6:44 PM  

Meanwhile, fat babyfaced hobbit Matthew Yglesias says that universities are the key to urban successs and that Detroit fails because it doesn't have any.

Great analysis from the guy who said that "debt is just savings."

Anonymous WRI July 21, 2013 6:44 PM  

My initial though incomplete thought would be political reasons. In general polls show people have some feeling that "more of teh debtz bad", and so politicians prefer look like they are not increasing it. This is usually done in 3 ways (possibly not comprehensive):

1) Hide the cost (through legally enshrined budget tricks, like the 10 year budget impact)
2) Promise that future nationwide costs are averted (to which there can be no true counter-factual to compare, like the bank bailout)
3) Declare that there are nationwide benefits, with at least a little for everyone (for which the global economy can be blamed if the results never coalesce, such as with the most recent stimulus)

A city bailout and the resulting precedent would be expensive on the books now and localized in any promised cost savings or future benefits. Even if some politicians do believe in their heart that your suggestion would solve the problem, they are politicians first and are not so willing to stand up for whatever unpopular convictions they might hold.

They might also believe that there is a limit to the effectiveness of their policy at some debt level, and the intervention would incentivize many more municipalities to quickly follow suit, eliminating the effectiveness of their favored policy lever.

Blogger Penrose July 21, 2013 6:51 PM  

The important thing is to deny there is a problem until everything escalates into a crisis and then the politicians can look like heroes after they save the plebs from inevitable doom.

Anonymous dolladollabill July 21, 2013 6:58 PM  

The reason the cities are failing is because they don't have a tax base to support their own infrastructure. If the 'exurbs' lived in the city, they would have the tax base. Simple.

The reason they are not getting a federal bailout is because they are not that bad off. Anyway, keeping credit cheap isn't the only reason we are printing money, it's to put downward pressure on the yuan.

Anonymous FUBAR Nation Ben July 21, 2013 6:59 PM  

Why you ask, Vox? Because then everyone else would clamor for money and the government may be wary of doing another 2008 style bailout. They would rather go after every single rich person to make sure they pay their "fair share."

Anonymous Nobel Prize Winning Economist Paul Krugman July 21, 2013 7:07 PM  

They aren't doing it because tea bagging Republicans are stopping them from doing it. Obama is afraid of the GOP and he fears that bailouts would be politically advantageous for Republicans in the 2014 midterm elections and possibly cost the Democrats the 2016 election because of the stupidity of teabag voters. Then Cruz or Paul or some other racist will win in 2016 and be hailed as the next Reagan thanks to an economic boom created by Obama and Bernanke.

OK, I guess Obama is to blame too. He needs to do what is good for America and run that debt up!

Blogger Penrose July 21, 2013 7:09 PM  

Why do we give a nobel prize in economics?

Anonymous Anonymous July 21, 2013 7:10 PM  

"Meanwhile, fat babyfaced hobbit Matthew Yglesias says that universities are the key to urban success and that Detroit fails because it doesn't have any."

That asshole is an extremely stupid fuck. A bunch of niggers smacked him around a few years ago, but sadly no sense was knocked into his head. A shame he wasn't killed.

Ted

Blogger Penrose July 21, 2013 7:11 PM  

Is every liberal writer chubby with glasses and a general weak, pathetic look them?

Blogger Nate July 21, 2013 7:19 PM  

http://bloggerblaster.blogspot.com/2013/07/cant-vs-wont.html

Answered.

with pictures even.

Anonymous Godfrey July 21, 2013 7:31 PM  

@Penrose July 21, 2013 7:09 PM
"Why do we give a nobel prize in economics?"


To feed the egos of and thus ensure the loyalty of the regime's whore economists.

Blogger Penrose July 21, 2013 7:38 PM  

They should give a nobel prize in women's studies.

Anonymous Harsh July 21, 2013 7:41 PM  

They should give a nobel prize in women's studies.

Please don't give them any ideas. (

Anonymous Harsh July 21, 2013 7:43 PM  

Obama is afraid of the GOP and he fears that bailouts would be politically advantageous for Republicans in the 2014 midterm elections and possibly cost the Democrats the 2016 election because of the stupidity of teabag voters.

This actually makes sense, pantomime Krugman.

Anonymous Godfrey July 21, 2013 7:49 PM  

"Obama is afraid of the GOP and he fears that bailouts would be politically advantageous for Republicans in the 2014 midterm elections and possibly cost the Democrats the 2016 election because of the stupidity of teabag voters."


Who said this? The filthy regime whore economist Crud-Man? It sounds like something he might say or write. Was he holding his Cracker Jack box Nobel "Prize" when he said it? Was he in high heels?



Blogger tz July 21, 2013 7:53 PM  

Imagine how much worse the financial situation would be if the exurban proletariat and suburban bourgeoisie had listened to the progressive experts and moved en masse to the cities the way they were supposed to in the 70s and 80s.

Then every suburb would be demographically colorful and bankrupt instead of the concentrated version.

It was not so much the progressive experts, but Judicial activism saying that the bourgeoisie had to have their children spend 2+ hours on a bus to go across town so they could sit next students of other races, so the schools could be vibrant. Even if no one learned anything.

White flight resulted in capital flight.

Anonymous Kaz July 21, 2013 8:13 PM  

@Penrose
"Why do we give a nobel prize in economics?"

We don't, because there is no Nobel Prize in Economics. What Krugman won, was the Bank Of Sweden Prize in economic sciences.

Kaz

Anonymous Anonymous July 21, 2013 8:22 PM  

joetexx here:

"fat babyfaced hobbit Matthew Yglesias"

Don't insult hobbits.

Anonymous Harsh July 21, 2013 8:52 PM  

"fat babyfaced hobbit Matthew Yglesias"

Don't insult hobbits.


Or fat babies.

Blogger Nate July 21, 2013 9:02 PM  

Question of the night:

When it comes to cutting holes in your cigars... do you use brass in .223 or .308?

Or do you pefer handgun brass?

Anonymous Blume July 21, 2013 9:09 PM  

This should be determined by the ring gauge of your cigar. With a smaller ring gauge like a lonsdale I would use smaller caliber brass. I tend to prefer the churchhill size which is significantly bigger in ring gauge so I would use a higher caliber.

Anonymous Anonymous July 21, 2013 9:16 PM  

So, why would neither Ben Bernanke nor Barack Obama be pursuing, or even proposing, such an economic program? What is it that prevents them from "fixing" these three problems in this manner?

Uh, maybe reality? At last?

Anonymous Blume July 21, 2013 9:18 PM  

I love that comment. Amen, to fiscally responsible jews.

Anonymous Blume July 21, 2013 9:26 PM  

Junior colleges with strong vocational study programs are the key to industrial growth. A liberal arts degree is incapable of building wealth. I should know, I have one.

Blogger Penrose July 21, 2013 9:28 PM  

Welding certification > English degree

Blogger ajw308 July 21, 2013 9:45 PM  

Penrose, if you get your aircraft and missile welding certs you can make $50/ hr. Nowadays you'll need to take some classes, but it can be done in just a few years.

Anonymous zen0 July 21, 2013 9:48 PM  

Nate says:

This again? We covered can't and won't in the debate ya know.

I actually remember that part.

cool.

Anonymous zen0 July 21, 2013 10:00 PM  

I don't know what is going to happen, but I just wish it could be speeded up a bit. I don't have forever, you know.

Anonymous zen0 July 21, 2013 10:07 PM  

Nate wonders:

Or do you pefer handgun brass?

Is that that stuff that is multicolored due to a heat process?

Anonymous stg58/Animal Mother July 21, 2013 10:09 PM  

Process Technology and Control Associate's degree> Any Liberal Arts Degree.

Blogger Eric Wilson July 21, 2013 10:13 PM  

I keep oscillating. As soon as VD posts something about deflation, I find myself wanting to load up on cash. And then Nate responds and I want to take all that cash and buy gold.

Keep it up guys. I might make up my mind one day.

Anonymous Harsh July 21, 2013 10:15 PM  

I keep oscillating. As soon as VD posts something about deflation, I find myself wanting to load up on cash. And then Nate responds and I want to take all that cash and buy gold.

Per Nate's last article I'm loading up on Zimbabwe dollars. My goal is 500 trillion.

Anonymous zen0 July 21, 2013 10:16 PM  

stg58/Animal Mother July 21, 2013 10:09 PM

Process Technology and Control Associate's degree> Any Liberal Arts Degree.


You know, you might be considered kinda cute, if you weren't so obsessed with yourself.

Blogger Eric Wilson July 21, 2013 10:18 PM  

Per Nate's last article I'm loading up on Zimbabwe dollars. My goal is 500 trillion.

That was a picture of mine. So I'm a fifth of the way there.

Anonymous zen0 July 21, 2013 10:22 PM  

I keep oscillating. As soon as VD posts something about deflation, I find myself wanting to load up on cash. And then Nate responds and I want to take all that cash and buy gold.

Eric, man, take a deep breath. Just load up. Cash, gold, food, lead, home garden. Set up a cell system like the commies.

You know, one cell = 3 people, but only one of the persons has a contact with someone in another cell. It's brilliant.

Blogger Penrose July 21, 2013 10:25 PM  

I don't know what is going to happen, but I just wish it could be speeded up a bit. I don't have forever, you know.

Same. I want to know how this all plays out. Chesterton wrote that for the madman life seems boring. It is dull for me so I guess I'm mad. Mad, sitting around waiting for the end of the world, for the savages to take to the streets and consume each other.

Anonymous zen0 July 21, 2013 10:32 PM  

Nate July 21, 2013 9:02 PM

Question of the night:

When it comes to cutting holes in your cigars... do you use brass in .223 or .308?

Or do you pefer handgun brass?


You know, you really fooled me with this.

Then I remembered.....real men bite a chunk off the end...they don't have little special tools for it.

Hell, you could even saw it off with a steak knife, if you was a sensitive type.

Blogger Nate July 21, 2013 10:32 PM  

"I don't know what is going to happen, but I just wish it could be speeded up a bit. I don't have forever, you know."

Jim Sinclair says the end of 2013 will make 2008 look plumb stable.

Personally I think it will take until 2015 or 2016.

Vox... ever the pollyanna... thinks it won't crash till 2030.

Anonymous Anonymous July 21, 2013 10:34 PM  

"Cash, gold, food, lead, home garden."

Silver. Pretty hard to make change with a Krugerrand. And booze. Gotta have booze.

Ted

Blogger Eric Wilson July 21, 2013 10:41 PM  

I think when VD asked if anyone had been persuaded I said that I was still on Team WZ. Still think I am, but I'm more bullish than Nate (mainly because I think the Fed will be able to keep interest rates low enough such that debt service won't be crippling in only 2 or 3 years time) and less than VD (although his 70 years rule does seem intriguing).

Set up a cell system like the commies.

That's a good idea. Never heard of it. What was the point? Nuclear bomb-related?

Blogger Eric Wilson July 21, 2013 10:46 PM  

Gotta have booze.

Indeed. Too bad my peasant drink of choice isn't very storable long term. I guess another point in VD's column about its status.

Blogger Eric Wilson July 21, 2013 10:49 PM  

Silver. Pretty hard to make change with a Krugerrand.

I agree. I think it's important to have a stash of silver before one buys gold. Kind of like Dave Ramsey's system of building $1000 as an emergency fund before paying off any other debt.

Anonymous zen0 July 21, 2013 10:49 PM  

That's a good idea. Never heard of it. What was the point? Nuclear bomb-related?

Limit the possibility of infiltration. Sort of like a type of immune system.

Blogger Eric Wilson July 21, 2013 10:54 PM  

Limit the possibility of infiltration. Sort of like a type of immune system.

So more proactive than reactive. Interesting.

Any recommended reading on the subject?

Anonymous zen0 July 21, 2013 10:55 PM  

Kind of like Dave Ramsey's system of building $1000 as an emergency fund before paying off any other debt.

Good idea, Eric. That should keep you for a couple of days at least, until it all blows over.........

Anonymous zen0 July 21, 2013 11:00 PM  

Any recommended reading on the subject?

Are you a government agent, Eric?

Its just something everyone knows. Check out the FLQ crisis in Canada. 2 cells operating independantly paralyze a nation!

Well, at least some of it, but no one noticed the difference.

Blogger Eric Wilson July 21, 2013 11:00 PM  

Good idea, Eric. That should keep you for a couple of days at least, until it all blows over.........

Not my point. (Unless VD is right, then who knows, it might.) Rather have monies readily available that can pay for small ticket items immediately (which Krugerands, Buffaloes, Philharmonics, et al. can't do).

Anonymous Harsh July 21, 2013 11:01 PM  

Too bad my peasant drink of choice isn't very storable long term.

You could stock up on the raw ingredients and make your own. Home brewing is pretty easy.

Anonymous E. PERLINE July 21, 2013 11:01 PM  

When the Industrial Revolution began, there was a flight from the farms to the cities. Instead of cutting hay with hand scythes, workers could now use powered machinery to manufacture stuff in quantity.

Cities are still a magnet for those seeking jobs and excitement but things are changing. Political crooks have peddled influence to the point where city governments are going broke. Our country will change its form, and it will be intersting to see what form that becomes.

Blogger Eric Wilson July 21, 2013 11:05 PM  

You could stock up on the raw ingredients and make your own. Home brewing is pretty easy.

Or I could befriend a cell of brewers, whose efforts would likely be better than mine. And so the new economy would begin.

But point well taken.

Anonymous zen0 July 21, 2013 11:10 PM  

EP :Cities are still a magnet for those seeking jobs...

This is not true, that is the problem. People are leaving the cities as manufacturing declines. Then they go broke.

The cities, that is. Then maybe some of the people.

Blogger Eric Wilson July 21, 2013 11:14 PM  

Are you a government agent, Eric?

Hahaha. Everytime I come here, I learn more and more how poor my formal education has been.

Anonymous RC July 21, 2013 11:24 PM  

I tend to prefer the churchhill size which is significantly bigger in ring gauge so I would use a higher caliber"

Is this Sunday ATF? Churchill requires WSM, wide enough to grip easily. Lighting an Onyx as I write.

Blogger Nate July 21, 2013 11:51 PM  

i actually don't vary my cut based on ring gauge. The pull is the pull regardless to me.

Anonymous Jake July 22, 2013 12:00 AM  

"Any recommended reading on the subject?"

Heinlien's The Moon is a Harsh Mistress covers this type of organization in detail. And is an enjoyable read at the same time.

Anonymous zen0 July 22, 2013 12:12 AM  

Jim Sinclair says the end of 2013 will make 2008 look plumb stable.

Personally I think it will take until 2015 or 2016.

Vox... ever the pollyanna... thinks it won't crash till 2030.


I don't know. The crash is always defined post facto. But still, I certainly hope Vox's head is up his ass on this one, cuz I don't think I am gonna make to 2030 and I would like to see it for myself. If it takes me out I don't care but I would at least like to be assured it is possible before I die.

Is that too much to ask?

Anonymous The other skeptic July 22, 2013 12:51 AM  

Krudman think sprawl did Detroit in

Anonymous Anonymous July 22, 2013 12:55 AM  

The other skeptic July 22, 2013 12:51 AM

Krugman is an asswipe. The tool lives in Princeton. Why he can't go 15 minutes down the road to live in beautiful, diverse and wealthy Trenton is beyond me.

- DWL

Anonymous Harsh July 22, 2013 1:00 AM  

Krudman think sprawl did Detroit in

Pittsburgh = 26% black
Detroit = 82% black

You do the math.

Anonymous Will Best July 22, 2013 1:05 AM  

Well we know for a fact Obama didn't know Detroit was bankrupt until he read about it in the NYTimes, so I don't know why you are even worried about what he thinks of the matter.

Anonymous nick digger July 22, 2013 2:00 AM  

The zombies have devoured all the living flesh in Detroit; they will simply move on to other, unwalled cities. This will serve (and amuse) the ruling class better than handing over a Gotham-sized EBT card.

Anonymous Daniel July 22, 2013 2:16 AM  

Interesting. I am, right now, watching a movie called Zombie Lake. It is a French movie about zombie nazis who, every time random chimes start, come out of a lake. Then they go back in. That is the entire movie. Sometimes they go a little farther out of the lake before going back in. Sometimes they only make it to the shore.

It makes absolutely no sense and is dull as hell, except as as an art house metaphor for Detroit.

Of course, I have to watch it until the end to see if the nazis go back into the lake or if they decide to stay outside of the lake.

Anonymous Daniel July 22, 2013 2:40 AM  

Wow. Total twist ending in the last five minutes. The zombies came out of the lake again, and one shoved the other one. Then one of the zombies went to a little girl who was watching them shove each other. She smelled his hand and ran back to her room and fell asleep.

Then the zombies went back to the lake.

As the closing credits approached, it was revealed that the zombies could only be destroyed by nuclear weapons at the end of time.

Or else a blowtorch.

The zombie nazis came out of the lake. This time they made it all the way to the old mill. The girl had the zombie whose hand she smelled smell her hand. Then I think she gave him porridge. Then the other zombies got the porridge.

Turns out the first zombie nazi was the girl's dad.

Then the zombies caught fire from a blowtorch.

One of them fell back into the lake.

So yes, it was totally about Detroit.

Zombie Lake should have won an award for Most Accurately Titled Movie of 1980.

Blogger James Higham July 22, 2013 7:53 AM  

Exactly, Vox. We've been writing on these things hell for leather ourselves. The bitter harvest of "progressivism".

Anonymous Porky July 22, 2013 8:19 AM  

Damn those sequester cuts!

Blogger James Dixon July 22, 2013 8:26 AM  

As I noted in an earlier thread, the proper template is simple: Un-incorporate the city, sell off it's assets to pay the debts, and bar it from re-incorporating for a minimum of 20 years.

Some of the debt holders won't get paid, but those are the breaks.

Blogger James Dixon July 22, 2013 8:49 AM  

> Jim Sinclair says the end of 2013 will make 2008 look plumb stable ... Personally I think it will take until 2015 or 2016 ... Vox... ever the pollyanna... thinks it won't crash till 2030.

I keep doing the math, and I keep coming out that we hit the point of 50% of our tax revenues going to pay the interest on our debt sometime around 2020-2022. At that point things get out of hand very quickly, but it will still take a few years until total collapse.

I know Nate says I'm not counting all the debt, but I have no idea what he's counting that I'm not.

Anyway, the point of all this rambling is that I come out slightly closer to Vox's figure than Nate's.

Anonymous Anonymous July 22, 2013 9:04 AM  

Small towns like mine just keep moving the city limits out every so often, annexing the exurbs so those taxpayers don't get away for long. I guess big cities can't do that because the exurbs were large enough to incorporate themselves?

Blogger James Dixon July 22, 2013 9:07 AM  

> I guess big cities can't do that because the exurbs were large enough to incorporate themselves?

They still can, but that makes it harder, yes. The burbs get to vote on the matter too once they're incorporated. So the cities have to convince them it's in their interest. That's a hard sell.

Blogger Nate July 22, 2013 9:46 AM  

"I know Nate says I'm not counting all the debt, but I have no idea what he's counting that I'm not."

You're not accounting for a couple things...

1) rising interest rates

2) new spending.

Blogger James Dixon July 22, 2013 11:15 AM  

> You're not accounting for a couple things...

Both taken into account, Nate. But I'll admit that both are estimates, not hard figures, and there's a lot of room for them to be wrong.

Blogger Nate July 22, 2013 11:36 AM  

what's the cost to service the debt if the interest rate goes up 3%?

Last I read it would be around 1 trillion bucks.

That's just the minimum credit card payment hoss. They doesn't even start to account for spending.

The rate doesn't have to go up nearly that much to get to just 42% (which is generally the magic number) of total tax revenue. We only bring in about 1.4 trillion.

Anonymous Ferd July 22, 2013 11:43 AM  

" Welding certification > English degree "

You are so correct. A marginally intelligent relative just received one after graduating HS. He is now in the Dakota oil fields making twice or perhaps three times the salary a English, Womyn or Black Studies degree holder is pulling down.

It smells like justice!!

Blogger James Dixon July 22, 2013 12:00 PM  

> ...what's the cost to service the debt if the interest rate goes up 3%?

17T * .03 = 510B. Assuming the figure of 17B is accurate of course. I don't know that it is, but I don't have a better one.

> We only bring in about 1.4 trillion.

A quick Google search gives figures of about 2.4 trillion in federal revenues (http://www.usgovernmentrevenue.com/yearrev2012_0.html and http://www.cbo.gov/publication/43153).

If you're working with 1.4T, that makes a lot of difference. We'll pass 50% of that on our current debt once the interest rates tick up to only 5%.

Blogger Nate July 22, 2013 1:02 PM  

there is a lot going on here... but the summary is.. I don't buy the 2.4... but even if you took the 2.4... the tax base will severely shrink at the same time interest rates are going up.... and likely spending will increase as well.

So the pinch is 3 fold.

Blogger James Dixon July 22, 2013 1:55 PM  

> I don't buy the 2.4... but even if you took the 2.4... the tax base will severely shrink at the same time interest rates are going up.... and likely spending will increase as well.

I agree that is a distinct possibility. And I agree that the figures are suspect. It's just that 2.4T and 17T are the best ones I have. :(

Blogger Serge_Tomiko July 22, 2013 3:41 PM  

Jim Sinclair has never been right about anything.

Detroit is allowed to fall for the same reason the entire economy has been allowed to fall and millions of immigrants are being brought in.

A war is being waged against the American people. The purpose is to destroy the middle class.

Blogger Phoenician July 22, 2013 6:13 PM  

And ask yourself this question. If the Fed/USG can simply "print" credit money between them and "stimulate" the economy through massive urban bailouts, why are they not doing so already?

What a deceitful little dipshit you are. Firstly, you misrepresent actual Keynesian positions on the creation of credit, and secondly, you ask stupid questions without running the numbers.

http://www.guardian.co.uk/business/2010/dec/20/debt-crisis-threatens-us-cities

"American cities and states have debts in total of as much as $2tn."

Strangely enough, this is about the same as the amount of stimulus predicted in advance as being needed - http://krugman.blogs.nytimes.com/2010/07/28/how-did-we-know-the-stimulus-was-too-small/ . So if the federal government had funded local government debt without pushing through any tax cuts and otherwise running a balanced budget, this might have worked.

But, of course, it is politically impossible to get any stimulus bill through without this involving tax cuts, and a balanced budget is also impossible even when the economy is running well.

But you know this already, you mendacious little twerp. You're just interested in looking smart to the mouth-breathing ass-lickers here, and the only way you can see to do that is to misrepresent the actual arguments of your superiors and ignore reality.

Which is why you'll always be nothing more than a dipshit.

Anonymous willneverpostagain July 22, 2013 8:11 PM  

Phoenician: The answer then, is more debt?


HAHAHAHAHAHAHAHA.

Anonymous Vic July 22, 2013 8:29 PM  

Phoenician must be one of the economic professors from Detroit. Lets continue the same idiocy that bankrupted us to start with.

More cowbell...

http://www.youtube.com/watch?v=BjsUf_oIgp0

Blogger James Dixon July 22, 2013 8:52 PM  

> ...and a balanced budget is also impossible even when the economy is running well.

Because cutting spending is not an idea to even be considered.

You know, I think I may actually enjoy watching the next few decades, assuming I live long enough to do so.

Anonymous Harsh July 22, 2013 10:12 PM  

But you know this already, you mendacious little twerp. You're just interested in looking smart to the mouth-breathing ass-lickers here, and the only way you can see to do that is to misrepresent the actual arguments of your superiors and ignore reality.

You wouldn't know reality if it bit you on the ass, you pathetic little anklebiter. Stop bothering real men and go back to your online porn and video games.

Anonymous Luke July 23, 2013 1:49 AM  

Relevant quote here:

"The market rules. You can defer the market if you have enough money or enough bullets. But eventually you run out of money, or bullets, or the will to spend them. Then, the market rules."

http://joannenova.com.au/2013/07/india-threatens-wind-farms-with-fines-accurately-predict-the-wind-a-day-in-advance-or-else/

Blogger Bosefus July 23, 2013 2:37 AM  

What is it that prevents them from "fixing" these three problems in this manner?

And the answer is... There are no Wall Street banks in Detroit or that are leveraged in Detroit housing if you can still call them that.

Detroit has to mark to market and there just aint no market in Detroit. Look at Alabama to see how cities get hosed by Wall Steet and left to suffer. If the Fed cannot figure out a way to make Detroit suffer even more then the Fed won't get involved. The Fed runs Congress and it's spending. No taper from Fed is no taper from Congress.

What a country. But on the bright side there is a moral to to this story which prevents alot of "fixing" to alot of problems in this manner. What is that prevents Detroit from fixing the moral of this story??? Same as it ever was.

http://www.youtube.com/watch?feature=player_detailpage&v=I1wg1DNHbNU

They have to whip it...
http://www.youtube.com/watch?feature=player_detailpage&v=IIEVqFB4WUo

Blogger Bosefus July 23, 2013 3:00 AM  

I think I have solved this question:

http://www.youtube.com/watch?feature=player_detailpage&v=dlPjxz4LGak

Blogger Bosefus July 23, 2013 3:11 AM  

Bankers gone wild...
http://www.youtube.com/watch?feature=player_detailpage&v=8Pa9x9fZBtY

Blogger Bosefus July 23, 2013 3:30 AM  

Well, the bankers will be soon...
http://www.youtube.com/watch?feature=player_detailpage&v=XjiOtouyBOg

Blogger Bankruptcy Classes July 23, 2013 8:40 AM  

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