American Taxpayers Up to Their Ears in Debt

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When I woke up, it was morning, which meant that the economic world did not blow apart during the night, abruptly waking me up by setting off loud alarms in the Mogambo Big Battle Bunker (MBBB), rudely alerting me to another outbreak of serious financial trouble from the economic cataclysm (“bust”) that I figure is right around the corner, now that the decades of irresponsible over-creation of excess money and credit by Alan Greenspan and his misbegotten Federal Reserve (“the boom”), and the rest of the central banks of the world, are wreaking their inevitable damage.

Which is not to mention the inevitable wars that usually break out about this time in the economic cycle, either, which is another damned thing to be paranoid and worried about – as if worrying that my wife, children and creditors are trying to drive me to suicide with their incessant demands for more money, more money, always more money is not enough to worry about.

But perhaps I am just in shock, or becoming jaded, because while Total Fed Credit went down by a massive $19.3 billion dollars last week, I am strangely not shaken or afraid, as it seems so insignificant nowadays, especially compared to the $142 billion increase of the previous week, which, despite my deadened sensibilities, still merits an exclamation point!

Then, just as I was congratulating myself on how “cool” I am and how maybe I am finally growing up, I was again instantly childishly hysterical when I read at Bloomberg.com that “The U.S. government is prepared to lend more than $7.4 trillion on behalf of American taxpayers, or half the value of everything produced in the nation last year, to rescue the financial system since the credit markets seized up 15 months ago.”

My brain went into convulsions, as the average increase in Federal Reserve credit was a measly $10 billion per month during the Greenspan years that created the bubble, and even Bloomberg notes that Fed lending is now “1,900 times the weekly average for the three years before the crisis.” Yikes! We’re freaking doomed!

Laying there on the floor clutching at my heart and waiting for the emergency squad to get here, I was laughing and choking up blood at the irony of American taxpayers “loaning” $7.4 trillion dollars – half of GDP – when the problem is that American taxpayers are already up to their ears in debt and can’t make the payments as it is; and American corporations are up to their ears in debt, and all the federal, state and local governments are up to their ears in debt, which is actually good news because with their ears still above the congealed mess, they can hear me laughing at them, mocking them, and saying, “Welcome to the hell you rightfully deserve, you halfwit lowlife morons! Hahahaha!”

So, I have some bad news for the U.S. government; the taxpayers are not prepared to loan anything to anybody! Hell, total debt-to-GDP is over 350% already, maybe 450%, which is, either way, the highest, by far, of anything I’ve seen in U.S. history, including the height of the Roaring Twenties boom that preceded the Great Depression!

Well, Bloomberg is not interested in the Mogambo Rude Mocking Laugh (MRML) and they do not ask things like, “Tell us why you are so dismal, disdainful and derisive, oh, Fabulous Mogambo Person (FMP) upon whose full, sensitive lips is bloody froth and scornful laughter that chills our spines!”

Perhaps it is because nobody cares about me, or perhaps because $7.4 trillion is already just another big freaking number that defies comprehension, but Bloomberg continues, “The unprecedented pledge of funds includes $2.8 trillion already tapped by financial institutions in the biggest response to an economic emergency since the New Deal of the 1930s, according to data compiled by Bloomberg.” Yikes!

But this, as horrifying as it is, is typical government crap, and if you want a good example of the kind of governments we have, Bloomberg.com reports that “New York Mayor Michael Bloomberg said his administration wouldn’t send $400 property-tax rebate checks due this month to owners of apartments and houses because the slowing economy threatens to worsen a widening budget gap.” Hahaha!

I wipe the tears of laughter from my eyes and ask, “Seeing the way the government steals the buying power of the currency, the confiscation of taxes, and now seeing what appears to be outright theft, you STILL say I’m wrong about gold? Hahaha!”

Whee! This investing stuff is easy!

Until next time,

The Mogambo Guru
for The Daily Reckoning Australia

Mogambo Guru
Richard Daughty is general partner and COO for Smith Consultant Group, serving the financial and medical communities, and the editor of The Mogambo Guru economic newsletter - an avocational exercise to heap disrespect on those who desperately deserve it.
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Comments

  1. “They shall cast their silver in the streets, and their gold shall be removed: their silver and their gold shall not be able to deliver them in the day of the wrath of the LORD: they shall not satisfy their souls, neither fill their bowels: because it is the stumblingblock of their iniquity.”

    Ezekiel 7:19

    Reply
  2. Yes but he didn’t say WHEN did he. Actually he was probably referring to FDR’s confiscation of US citizens’ bullion holdings during the Depression, which was a hot topic in Judea a few thousand years ago.

    john weymouth
    December 3, 2008
    Reply
  3. Don’t hold back now,say what you really think.

    Reply
  4. There’s another trillion or so USD in uncrystallised losses waiting to erupt upon the US mortgage market : Alt-A and ARMs. These loans are already showing massive default rates on tiny teaser rates of 1%-3% *before* they re-set to much higher rates. It’s likely that 50%-70% of these mortgages will default. More bailouts, and where will the $ come from? The US Fed will simply print more money or run titanic deficits, to be paid off by US taxpayers for decades to come.
    The worst is yet to come.

    Glenn Peters
    January 10, 2009
    Reply
  5. Always the comedian.
    I always get a good gut shaker from the way things fall out of your brain and on to the page unfiltered, a little frayed, sardonic and funny as hell.
    I fear you also see the truth of the current insane way the economists in our universities are doing. I know it is possible to go through university without learning much, but these guys need locking away.

    Reply
  6. 15,000,000 American households with average bad debt of $20000.00.Send $25000.00( average ) to each of these households to pay off debt, avoid bankruptcy, renew credit, purchase new car, or whatever they need with the extra $5000.00. This will stimulate the economy better than giving it to rich asshole CEO’s who have helped create this economic crisis that we are in. Total cost is $375 Billion.

    Reply

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