The real state of the union, pt3

“The problem with socialism is that eventually you run out of other people’s money.”  Attributed to Margaret Thatcher in various forms.

“A billion here, a billion there – sooner or later it adds up to real money.”  ~ Senator Everett Dirksen

“All that said, given the fundamental factors in place that should support the demand for housing, we believe the effect of the troubles in the subprime sector on the broader housing market will likely be limited, and we do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system.  The vast majority of mortgages, including even subprime mortgages, continue to perform well.  Past gains in house prices have left most homeowners with significant amounts of home equity, and growth in jobs and incomes should help keep the financial obligations of most households manageable.” ~ Ben Bernanke, May 17, 2007

Stick a fork in us, we’re done.

Mathematics are fundamental.  Math cannot be talked round to your way of thinking or persuaded to join your cause.  It does not care if you have a worthy argument.  Math just is.  If you tell us that 2+2 has to equal 127 or sweet grandmas lose the family home and puppies die of cancer, the math won’t change because you think it ought to.  Math just is.

I see a lot of folks’ eyes glaze over when numbers and economic lingo get batted about, because they don’t understand deflation and price inflation and they’ve never heard of debt auctions, so I’m going to just give you a few facts.  Simple.  Straightforward.  Unassailable.  (Though this is the internet and I’m sure some will want to debate the matter.)

The federal budget is 3.7 trillion.  Federal tax receipts total 2 trillion.  So, take your tax bill and double it.  How does that work for you?  Because that’s how much money your federal government is spending.  I’m actually being quite kind, because in reality merely doubling your tax bill won’t solve the problem as it only pays this year’s expenses, not the things Congress has promised to pay but has not added to the budget yet.  And it doesn’t touch the deficit.

We’re told that cuts to spending which will bring receipts in line with output would take us back to an age of barbaric severity, with the poor rioting in the streets, children starving, the elderly eating cat food and each other, etc ad nauseam.  You know, as was so common in fiscal year 2000.  Surprise!  That’s right.  Cutting the federal budget down to about half, or what we’re actually taking in tax receipts, could be accomplished merely by taking us back to the 2000 budget.

A depression is defined as 10% or greater contraction of GDP.  We hit that mark in 2009 (and every year since, only harder).  Government spending is included when calculating GDP, so the government merely increased spending by that much.  Et voila, there is no depression!

A recent poll showed that 84% of Americans believed we can balance the budget without touching Social Security or Medicare.  Spending on Social Security, Medicare/Medicaid and DoD takes every penny of current tax receipts, with nothing left afterward.  Nothing.  Let me repeat that: After collecting all tax dollars and spending them on those three things alone, there is not one thin dime left to pay for education, bailouts, TSA, transportation, IRS, farm subsidies, federal pensions…  Nothing.  The American taxpayer can only afford to fund Social Security, Medicare and the military, and only at current levels.

You could confiscate all the assets of wealthy Americans, right down to taking their shoes off their feet and selling them on eBay, and it would give us about 3% of the money we need.  (And we’d have no more rich people, so I’m not sure who we’d be shouting to tax then.)

Here’s the quick-and-dirty.  We can’t afford this budget.  It is quickly becoming mathematically impossible to ever repay the deficit.  The American consumer is broke, and since taxpayers are the income of the government then the American government is just as broke only they’ve been putting everything on credit cards ever since the taxpayers went broke.  And, exactly like taxpayers, they cannot do this forever before creditors start to suggest maybe it’s time they take back the plastic.

On prepping

This is certainly the logical follow-up to my State of the Union posts, but I’m usually resistant to bringing the topic up.  Most who are not thoroughly familiar with prepping associate it with extremism and mental illness and, frankly, I don’t give a damn about other people’s opinions enough to bother with educating them.

But it is the logical follow-up, and I am amused that I have found something I can teach to Maggie.

The entire point behind my SOTU posts were that hard truths are our national ‘elephant in the room’.  Someone has to be adult enough to point it out before it makes big elephant apples on the carpet.  Some of you may have known that something was wrong but couldn’t quite put your finger on what it was, and some of you will stick your fingers firmly in your ears and go, “La la la laaaaaa” because it’s easier and less scary than learning to use your gray matter for something besides stuffing.  I could help the former; the latter there is no help for, and I wish you luck and godspeed.

I’ve witnessed the progression many times from blithe unconcern to awareness.  On prepper boards, where I’ve been active since 2004, it’s called many things: waking up, sheeple-no-more, going from DGI (Doesn’t Get It) to GI (Gets It).  Either you knew what was wrong, or you knew something was wrong and found out what that was.  The next question intelligent people ask is, “So what the hairy hells do I do about it?”

Prepping is short for ‘becoming prepared’ and a prepper is no more than ‘someone who prepares’.  Prepares for what?  Self-reliance.  The rest is fine detail which people can and do fill in anyway they please.

The general “how-to” of prepping is simple.

1. Identify your vulnerabilities.
2. Assess prevention measures.
3. Plan to minimize personal damage.

We’ll start with the obvious South Texas vulnerability, a hurricane.  Hurricanes can’t be prevented, but you can prevent your exposure to hurricanes by moving to, say, Kansas.  Other than those options, there’s very little in the prevention category to be done about a hurricane so we’ll step right along to the plan to minimize personal damage.  Carry proper insurance for wind and flood damage to your home and property, and it might not be a bad idea to look into how much coverage you have for looting.  Make purchases of tarps, plywood and duct tape in advance, so that when you need them to protect your home you already have them on hand.  Are you planning to evacuate or ride it out?  If you ride it out you’ll need to be prepared for loss of services and dealing with minor property damage, or in the case of major property damage to evacuate anyway after the storm passes.  Can you cook without electricity?  How will you handle sanitation?  Where will you get fresh water?  If you evacuate you’ll need a well-maintained vehicle, a planned route and destination and what’s known as a BOB, or Bug-Out Bag, i.e.; the bag of essentials you have prepared in advance in order to evacuate without needing to rummage around for family photos and clean underwear.

You also need to pay attention to the mistakes of others.  It saves a lot of grief.  After watching Rita from the relative comfort of Florida, my evacuation plans have included extra filled fuel canisters, bottled water and non-perishable snacks.  It also stressed the importance of a good BOB, because anyone who doesn’t have to pack will have a better chance of getting to the highway before traffic gets too heavy.

And that’s prepping in a nutshell.  Having the common sense to put forth a little effort now to save a lot of trouble down the road.  I’ve never understood the people who know they live in hurricane country and still get taken by surprise when this means (*gasp*) they get hurricanes. It’s a child-like mindset which is not at all endearing.

Once you’ve gotten the hang of prepping, go back to the three steps and address something else.  Job loss.  The stock market tanking.  The second coming of Jesus Christ.  Hey, I’m not one to judge.  I would encourage any proper thinking adult to address a police state, civil war and an economic collapse, but proper thinking adults are probably already doing so without any encouragement and the rest of you will just think I’m a nut.

Not saying you aren’t right about me being a nut, only that my preferred flavor of crazy does not preclude my habit of being correct on economic and political matters.