Fuzzy Accounting
By Mitch Berg
Joe Doakes from Como Park emails:
Do these numbers matter? If not, why bother keeping track of them?
Treasury Department says that for the month of September (one month only) Social Security and other payroll taxes took in $96 billion, but Social Security and Medicare cost $158 billion, about three times as much as we spent on the entire Defense budget. Are we buying so many beans that we can’t afford bullets?
For fiscal year 2017, we ended up being short $666 billion. That’s not the total amount of debt owed, nor the total amount of future spending promised, it’s the amount we overdrew the checkbook at the end of the fiscal year. We borrowed money to make the books balance. Our loan balance is now $20,000,000,000,000.00. It goes up a million dollars a minute.
Let’s be serious: it’s simply not mathematically possible to pay America’s debts in any reasonable amount of time while maintaining any reasonable level of taxation and therefore we can safely conclude they will never be paid. One of two things will happen: we’ll default and cause a world economic crisis; or we’ll convert to electronic money not backed by any tangible asset so the computers can continue to transfer electrons as if they were money and nobody will care that the entire thing is a polite fiction.
Maybe in the future we’ll run things as they did on Star Trek – money simply appears, just like your lunch shows up in the replicator machine or the red-shirted guy beams up from the planet. Magic.
Joe Doakes
Our federal government makes me feel like a redshirt all. The. Time.
November 2nd, 2017 at 5:41 am
The move to a cashless economy has already begun.
If and once that happens, all bets are off with personal freedom.
November 2nd, 2017 at 6:01 am
A reduction in 401K pre-tax deductions is a tax increase on the middle class. And the more Trump says it is off the table, the more you know he will support it and sign it.
Quite frankly; tax reform was supposed to be about lowering rates and removing loopholes.
What happened to that tax reform?
November 2nd, 2017 at 9:37 am
What happened to peace on earth if 0bumbler got elected? He had 8 years and full support of partisan congress. Still waiting…
November 2nd, 2017 at 9:51 am
My, my, my… Tax Reform was unveiled today. Oh, and 401K savings were not touched. My, my, my… What’s eTASS-BFL-SPM to do? Everything he hopes, predicts, and pines for, EVERYTHING, is being proven wrong, time and time again. Every time. And I, for one, is extremely grateful. Unlike a blind squirrel and a stopped clock, you are never right. It has been proven time and time again, it is so. But keep it up, cupcake.. Keep on digging.
November 2nd, 2017 at 10:04 am
The vast majority of dollars in circulation are already electronic money. When my company takes an advance on it’s operating loan, the bank doesn’t move greenbacks in the vault, they merely make an entry in their computerized accounting system, saying the company owes them an additional 50,000 and adds 50,000 to the company’s checking account. When the company pays me, they tell my bank to sow I have x dollars more, and to take it from their bank. My bank makes an entry that says they owe me more and that the company’s bank owes them, or that the company’s bank has paid the Fed and the Fed owes my bank.
No greenbacks have exchanged hands.
November 2nd, 2017 at 11:10 am
^^^ Sow = sHow ^^^
November 2nd, 2017 at 11:18 am
jpa: @ 0600 the 401K issue had not yet been resolved nor made public.
This bill in reality seems better than the rumored version. For Middle class, 401K seems protected, State & local at 500k is good. Standard deduction increase, and top rate for the 1% unchanged. The Democrats should review this carefully, the 20% corporate tax is needed to thwart Canada, Ireland, and other tax shelters..It will spur the economy. I would say A for effort from the GOP.
November 2nd, 2017 at 12:02 pm
This bill in reality seems better than the rumored version.
While you are eating crow, don’t choke on this:
Yet NRC memos reviewed by The Hill show that it did approve the shipment of yellowcake uranium — the raw material used to make nuclear fuel and weapons — from the Russian-owned mines in the United States to Canada in 2012 through a third party. Later, the Obama administration approved some of that uranium going all the way to Europe, government documents show.
Still think 0bumbler and sHrillary did not sell out interests of the US to the highest bidder. Russia in this case? Nothing to investigate? To convict? To sentence to hard labour in the same mines without personal protection? I am sure Russians would welcome 0bumbler and sHrillary with open arms. Maybe for once they would have to work for a living.
November 2nd, 2017 at 12:25 pm
And the more Trump says it is off the table, the more you know he will support it and sign it.
Know. As in not speculate, surmise, guess, or pull an assertion out of your… Why do we know this?
November 2nd, 2017 at 1:30 pm
On one hand: I thought the Republicans cared about the debt and deficits.
On the other hand, from this point forward let it be said: “Deficits Don’t Matter”.
November 2nd, 2017 at 1:50 pm
Jeez!
You know it’s bad when Emery tries to steer the conversation back on topic.
November 2nd, 2017 at 2:09 pm
The best part of the new tax plan is the reduction of allowable deductions for state and local taxes.
For once, reprobate leftists will start footing the bill for their recklessness. Can’t wait to shower in their bitter tears.
Also, happened to see the CEO of Broadcom, a $100 billion Fortune 100 company, in the Oval office, giving Trump the credit for his decision to move the corporate HQ back to the US.
That does not include all of the companies that support their manufacturing. This is yuge.
http://www.apnewsarchive.com/2017/The-White-House-says-a-100-billion-semiconductor-company-based-in-Singapore-will-move-its-home-address-to-the-U-S-Broadcom-Limited-manufactures-communications-chips/id-41606442bed74e6aa0491a500574a8c7
He also indirectly ripped reprobate leftists a new orifice.
Finally, we are awaiting a decision from SCOTUS that will put a wooden stake through the heart of public unions…that is to say, all unions.
So much winning.
November 2nd, 2017 at 2:16 pm
One thing that absolutely terrifies me is that Americans have about $25 – 30T in total retirement assets ripe for the taking. Really low hanging fruit for the money grabbers! Fear is they’ll come after those assets and issue IOU’s for the seizing of funds. I’ve read that there are IOU’s of about $2.5 – 3T from SS overages the government has taken. Wouldn’t be a surprise for the thieves to go after some or all retirement assets to cover the SS IOU’s or to pay for other government “necessities”. The IOU’s could serve to circumvent 5A taking issues.
November 2nd, 2017 at 2:34 pm
Going back to the original premiss, one possible gain of taking the monthly data is that you could see what the trends are, what the variability in the data are, and what is causing the excursions–it would be the government equivalent of the “biological passport” that would tell us a lot more about what’s really going on. Given that every excursion in the data is “unexpected”, what that tells me is that their control limits are not calculated correctly–or cannot.
And that’s really, really valuable information.
Side note; Democratic activist (excuse me, former Democratic activist) Donna Brazile has just confessed that yes, the DNC rigged the primary for Hilliary. Pray for her grieving family after the Clintons get to her….
November 3rd, 2017 at 4:17 am
EMERY WHY DOES STATISM GOVERMENT CENTRAL PLANNING GOVERNMENT ACTUARIAL SYSTEMS LEFTISM CENTRAL BANK INTERVENTIONISM ETC MAKE OUR LIVES BETTER tia
In other words, why do you defend this crap?
Everything is proceeding according to Mises.org which is right about everything.
Get as much graft and government largesse as you can before silver rounds, ammo and dehydrated food become day to day necessities. Then the fun starts.
November 3rd, 2017 at 4:49 am
Here is the big picture. https://twitter.com/josh_hammer/status/925933449520865280
NAFTA, China opening up, robots, and computers have killed Wilsonian inflationist statism. It will get brutal.
November 3rd, 2017 at 6:12 am
TFS: This is an exercise of the Republican elite inside Washington and Republican partisans across the country — anchored by the donor class — believing in the economic power of tax cuts delivered to the wealthy. Once they become engaged with their own self-righteousness, they will push ahead with their tax plan. Republican belief in the efficacy of tax cuts for the wealthy comes from psychology, not from any meaningful grasp of economic statistics. Watch during the coming process and you will see that Republican arguments for the tax legislation will be aimed at psychology, not economic argument. Lobbyists don’t hire economists to fashion economic arguments but rather political consultants and message mavens to come up with effective bullet points that move enough voters to have a telling effect on representatives in Washington.
November 3rd, 2017 at 7:28 am
Admit it Emery. Mises.org is right about everything.
Angelo Codivilla is right about everything.
Victor Davis Hansen is right about everything.
David Horowitz is right about everything.
Admit. It.
November 3rd, 2017 at 8:35 am
Fed, the only economic talking points eTASS believes in are the one uttered by Krugman. Which means he is wrong 100% of the time.
November 3rd, 2017 at 8:44 am
With the move towards reviving US manufacturing sector and economy, we are entering a very dangerous and potentially explosive geopolitical quagmire. We have to make sure we are prepared for the consequence.
China, in the effort to catch up with the rest of the world is imposing government sanctions on their manufacturing sector which are very disruptive, expensive and untenable. Already, they are not competitive in the world market. Situation will only get worse. With US getting even more competitive, China will be in a very precarious position having to feed and pacify a growing number of discontent population. Xi’s latest address at the last Congress, is nothing but ominous. One of the ways for a country to pacify domestic upheaval is to start war(s) – real, with bullets, not economic. We better be looking over our shoulder.
November 3rd, 2017 at 9:51 am
Greenspan started this crap in 1997, if not sooner. Horrific debt to GDP. Jobs. Bubbles. Never ending low GDP. Populism. The whole planet. It will end the hard way.
November 3rd, 2017 at 9:52 am
JPA, does this have something to do with the fact that they’re cracking down more on unapproved churches lately? I really wish I could say that you are dead wrong, and I’m sure you do, too, but you raise a good point.
November 3rd, 2017 at 9:59 am
There are about 4 billion people in the Emerging and Advancing economies growing at a now projected FASTER rate of 5 to 6 percent while there are about 1.3 billion in the Advanced economies growing at around a constant 2 percent with possibly a growth uptick in the .1 to .2 percent range. One suspects that the overall growth in the world economy is lifting stock indices worldwide. American multinationals are adept at profiting from growth everywhere and anywhere (as are many Japanese and European multinationals).
So I would say it is the worldwide environment, not the policy mix in the US, that is the driver. One should be skeptical of a tax-cut driven $1.5 trillion dollar increase in US indebtedness that is not going to build any public assets inside the US. The balance sheet will become even more over-leveraged. Most of the increase in federal spending is committed to more defense spending to fund uneconomic wars in the Middle East and Africa. The generational neoconservative-inspired misallocation of US public resources continues.
The US economy and its multinationals enjoy their preeminence due to 80 years of US international leadership. Trump is tearing this up and undermining it faster than any president since the era of Warren Harding and Calvin Coolidge. (One fantasizes about the presidential reticence of Coolidge; noted wit Dorothy Parker upon hearing of his death said, “How could they tell?”)
If investor confidence in US preeminence cracks in the coming months, a major correction would ensue. More importantly, the Emerging and Advancing economies are going to have a much, much larger influence in international economic life in the future—starting now. These countries are going to stress the economies of the Advanced economies greatly and in particular the lower half of their skills distribution will be under increased competitive pressure. So the backlash by workers and middle classes caught in stagnation is going to intensify in the advanced economies. Meanwhile, the overall world led by the Emerging and Advancing countries will enjoy a golden age of growth. The people at the top in the Advanced economies will of course hugely prosper — but there will be very little trickle down. The money in New York City is not going to find its way to western Pennsylvania and Ohio.
So one suspects that the political problems of a more pronounced two-track economic society will make itself felt. Look for more rage and less reason (jpa) in the public debate.
November 3rd, 2017 at 10:25 am
Emery: You are right about the demographics, but we central planned our way into this mess with fiat money and we are too stupid and corrupt to fix it with more. That is what you are demanding. Obama, in effect, didn’t even try. He just piled on the debt for the Cloward and Piven steamroller.
I pay big money for this stuff and I can tell you it’s not clear at all that China will pull off fixing their problems.
November 3rd, 2017 at 10:29 am
Robots in Bangladesh. That’s when the fun really starts.
November 3rd, 2017 at 10:32 am
#MAGA —-> https://twitter.com/NARNfan/status/926445517579616256
November 3rd, 2017 at 10:56 am
eTASS: tl;dr. If you gonna troll with your uninformed and verbose prose, you gotta learn to be more concise.
November 3rd, 2017 at 11:15 am
You should be more concise with your sarcasm. It doesn’t improve with length.
November 3rd, 2017 at 12:28 pm
Robots in Bangladesh. That’s when the fun really starts.
TFS, they tried, but the robots wouldn’t go into the buildings until a U.S. building inspector took a good look…… :^)
November 3rd, 2017 at 2:51 pm
You should be more concise with your sarcasm. It doesn’t improve with length.
Is this the best you can do? Now you are not even trying. Whatever it is you thought you had, you are losing it. But then losing is in your nature.
November 4th, 2017 at 4:46 pm
And yet there you are……