To The Incoming Senators and Congresspeople: YOU ARE ON NOTICE.
- No mewling about the National Debt and deficit. The below charts cannot be argued with. They are what they are.
- No promises to “do something about it tomorrow.” We’ve heard about that now for three years. The time for political stunts and showmanship is over. This is a real issue, it is a real national crisis, and if you don’t do something about it you’ll be lucky to get through 2011 before it blows up.
- YOU WILL NOT GET THROUGH 2012. I know what you’re thinking already. Remember that George W. Bush thought the same thing in 2007 and early 2008. So did Bernanke. So did Paulson. They were wrong.
If you do not act on this, it will detonate before the elections next year.
This is the truth through 12/31/2010. We closed the year at $1.714 trillion dollars in deficits for the year. That’s a record, more than $100 billion higher than the $1.612 trillion last year.
The deficit for the last calendar year was 11.64% of GDP. This is right up there with the nations that have blown up – Iceland, Greece and Ireland – and this is the third year running you’ve put up numbers over 10% (10.23, 11.41 and now 11.64, respectively.)
You will not get away with this into the indefinite future. You may think you can get away with it for two more years, but I assure you – that is not going to happen.
Further, the true GDP rate for the last 12 months is in fact -7.31%. We now have a cumulative decline in GDP built into the economy of approximately 30% that must be absorbed. If you attempt to continue this path much further, it won’t be a decline that we will be dealing with, it will be an all-on collapse.
I know 30% sounds outrageously large – and beyond the nation’s ability to absorb. It cannot be absorbed without severe pain. But if we do not take that pain, force the bad debt into the open that is causing this and clear it – irrespective of whether we want to or not, the result will be political and economic collapse.
This is as certain as night follows day, and day follows night. It is as certain as January 1st follows December 31st.
Mr. Goolsby opined that to not extend the debt ceiling would be to “play chicken” with the “full faith and credit” of The United States.
Let me be clear: If you extend the debt ceiling and by doing so allow deficits of this sort to continue for another year, say much less two, you will have placed a loaded shotgun in the mouth of this nation and pulled the trigger.
It will go off, and you will splatter this nations’ economic and political system all over the wall.
Promises at this point are three years old and have been proved lies.
Simply put, you must act now and shut off spending you cannot fund.
I fully understand that in order to address this problem both The House and Senate will have to do very unpopular things. Nonetheless, you are duty-bound by your oath of office to do so.
I will, of course, continue to chronicle your failures, for that is exactly what I expect from you. I also expect and anticipate all manner of excuse, rather than forthright and honest examination of the issues. I repeat, however, that whether I, or anyone else, like the outcomes we face is immaterial. These issues are not political – they are mathematical. I can no more change these outcomes than you can.
These deficits and embedded damage cannot be grown out of. The mathematics on this are clear, convincing, and easy to prove. They require nothing more than a calculator or a copy of Excel and 30 seconds of your time. The data in the above graphs is taken from official government and Federal Reserve publications. It is exactly what is presented to, and is available to, everyone worldwide. I have not “interpreted”, “interpolated” or “projected” anything in the above data.
It is simply a presentation of the facts – whether you wish to see them or not.
Do your job Congress. You’re running out of time.