http://market-ticker.denninger.net/archives/1751-Greedspan-Stick-A-Sock-In-It.html
Check out the bold. How much a month does go out to social security?
And how many months will 50 billion take it?
In answer to a question about why rising debt is a concern, Greenspan said: “The critical issue that economists worry about” is the spiral that occurs with ever-rising debt and debt service, often followed by higher interest rate. As a consequence of that, “the debt service becomes explosive and that moves directly into the budget deficit,” he added.
Yeah yeah. If you read his testimony what you will find missing is any acknowledgment of exactly how it is that government gets the idea that it can run more than a trillion dollars in deficits in the first place!
I'll tell you how, since "Sir" Alan won't: You find a central banker that will kneel before Congress whenever the members drop their drawers by pumping so much liquidity into the system that real rates are in fact NEGATIVE, thereby LITERALLY paying people to borrow.
Of course the government has never met a free money handout it didn't like, and political will for restraint is ZERO when faced with such a circumstance.
The solution to this is really quite simple: Don't do that sort of stupid crap!
We continue to challenge Einstein's General Theory of Insanity - you know, one of my favorite definitions?
Doing the same thing over and over but expecting a different result.
The 900-lb Gorilla that stomped his first piece of china was found in the $290 billion debt limit increase - something that AP reported (perhaps accidentally):
Republicans - who helped supply votes to increase the debt ceiling just last year - unanimously opposed the legislation, which is required to issue new debt to pay for federal operations and deposit up to $50 billion into the Social Security trust funds.
Uh, Social Security wasn't supposed to go negative - that is, require actual general fund expenditures - for another 20 years!
But now it was - and that's a major problem. How much is Social Security and Medicare actually in the hole here? I don't know - but the fact that we're 20 years in front of where we should be in this regard is very ominous.
