New Congressional Budget Office Report: Impending "Fiscal Crisis"

Yesterday the Congressional Budget Office released a report titled "Federal Debt and the Risk of Fiscal Crisis."

You can download the PDF here:
www.cbo.gov...

The CBO gamed two scenarios.

Scenario #1 -
Idea: All spending and tax levels continue as they currently exist.
Result: A fiscal crisis will occur at some point in the undetermined future.
Solution: Under scenario #1 a fiscal crisis can be avoided with an immediate 4% cut in federal spending.

Scenario #2 -
Idea: The Alternative Minimum Tax is indexed for inflation, Medicare payments to physicians rise over time, "some other aspects of current law are adjusted."
Result: A fiscal crisis will occur at some point in the undetermined future.
Solution: Under scenario #2 a fiscal crisis can be avoided with an immediate 20% cut in federal spending.

If a Fiscal Crisis Occurred -
Option A: the US government attempts to restructure debt, leading to substantially increased interest payments on existing federal debt; some creditors may not be willing to accept new debt terms
Option B: the US government prints more money, which leads to a decrease in standard-of-living and higher interest payments on future debt obligations
Option C: the US government adopts radical austerity measures in excess of the cuts require immediately under scenarios 1 or 2


[edit on 28-7-2010 by Ko-Dan Armada]

Solution: Under scenario #1 a fiscal crisis can be avoided with an immediate 4% cut in federal spending.

LOL

Solution: Under scenario #2 a fiscal crisis can be avoided with an immediate 20% cut in federal spending.

getting warmer.

If a Fiscal Crisis Occurred -
Option A: the US government attempts to restructure debt, leading to substantially increased interest payments on existing federal debt; some creditors may not be willing to accept new debt terms
Option B: the US government prints more money, which leads to a decrease in standard-of-living and higher interest payments on future debt obligations
Option C: the US government adopts radical austerity measures in excess of the cuts require immediately under scenarios 1 or 2

They will go with option B.

Why will they go with option B?

Because we are already beyond the point of spending cuts to deal with the problem. Oh they will try to cut spending, but in the end they will print. They will print and print and print until we are using dollar bills for butt wipe.

You can count on this as sure as the Sun will rise tomorrow.

reply to post by Ko-Dan Armada


now i'm not part of the flock, i see the bible as part of the agendas plan, this site seems to keep a track of things ok.

is this any good?- www.cogwriter.com... d%3A+ChurchOfGodNews+%28Church+of+God+News+from+www.cogwriter.com%2Fnews%2F%29

reply to post by WHOS READY


HUH?

A report done by Jonathan A. Huntley (Stochastic general-equilibrium modeling, computational economics, open-economy macroeconomics).

Narayana Kocherlakota, President of the Federal Reserve Bank of Minneapolis, acknowledges that DSGE models were not very useful for analyzing the financial crisis of 2007-2010.

My question if it was useless the past 3 years then what good is it now?

I agree that they will preview all of the options presented to them, then they will choose the least effective and most destructive one. Its like the politico of this world has taken Ahkams Razor and turned it on its head, where instead of the simplest answer being true, it is the worst agenda is most effective.

During all of this, Mr O is appealing to the downtrodden and mindless masses about incentives for small business to keep them afloat after he unloads both barrels on them in 2011.

No matter what they say, they will do nothing that the people desire or what is for the good of this nation. If history has taught anything in last century, it is that the slow and steady destruction of the US is the goal, but not until the people are so badly beaten down and destraught that they have no will to survive or resist.

If a fiscal crisis occurred, both A and C would be required to prevent a total disaster. The US debt levels are already way beyond the point of being able to be repaid. A debt restructuring and severe austerity might be able to save the system as it exists now, but I think this is unjustified in and of itself. We should not be forced to pay back debts to bankers for criminal unconstitutional bailouts.

The proper solution is option D:

We stop spending, stop taxing, and the government declares bankruptcy and liquidates the debts and its assets just like individuals do.

Of course, the solution we get will be option B:

Mass printing of money, total chaos, Mad Max Beyond Thunderdome economic implosion.

Originally posted by JBA2848
A report done by Jonathan A. Huntley (Stochastic general-equilibrium modeling, computational economics, open-economy macroeconomics).

Narayana Kocherlakota, President of the Federal Reserve Bank of Minneapolis, acknowledges that DSGE models were not very useful for analyzing the financial crisis of 2007-2010.

My question if it was useless the past 3 years then what good is it now?

Dr. Kocherlakota has gone on to state he believes DSGE modeling has improved since then.

reply to post by Ko-Dan Armada


No it hasn't.

The underlying assumptions of the models assume that all economic inputs can be calculated or approximated.

Just like the climate models, they assume looking at raw number crunching can arrive at predictive success.

This is utterly ridiculous.

Their logic of business cycles is based on Keynesian junk science, thus even if it was realistically possible to derive a working mathematical model, the ultimate results would still be wrong because they are inputing invalid assumptions.



[edit on 28-7-2010 by mnemeth1]

Originally posted by wheresthetruth
I agree that they will preview all of the options presented to them, then they will choose the least effective and most destructive one. Its like the politico of this world has taken Ahkams Razor and turned it on its head, where instead of the simplest answer being true, it is the worst agenda is most effective.

During all of this, Mr O is appealing to the downtrodden and mindless masses about incentives for small business to keep them afloat after he unloads both barrels on them in 2011.

No matter what they say, they will do nothing that the people desire or what is for the good of this nation. If history has taught anything in last century, it is that the slow and steady destruction of the US is the goal, but not until the people are so badly beaten down and destraught that they have no will to survive or resist.

Wow! Very well put. I enjoyed your comments so much I will do something I rarely do. Star for you.

Not much new information in that report. At least, not new to anyone who's had his eyes open for the last couple of years.

My main concern is this:


WILL THEY BE ABLE TO KEEP AMERICAN IDOL ON THE AIRWAVES WHEN THE COLLAPSE OCCURS?


[edit on 28-7-2010 by incoserv]

[edit on 28-7-2010 by incoserv]

Originally posted by mnemeth1
reply to post by Ko-Dan Armada

 

No it hasn't.

The underlying assumptions of the models assume that all economic inputs can be calculated or approximated.

Just like the climate models, they assume looking at raw number crunching can arrive at predictive success.

This is utterly ridiculous.

Their logic of business cycles is based on Keynesian junk science, thus even if one were to be able to arrive and a working mathematical model, the ultimate results would still be wrong because they are inputing invalid assumptions.



[edit on 28-7-2010 by mnemeth1]

#1 - Yes, Dr. Kocherlakota has, in fact, stated just that.

#2 - While I thank you for your speech, if you look at my posts in this thread you'll notice I'm not advocating for or against the efficacy of DGSE, or any type of macroeconomic modeling. All I did was post a link to a PDF.

My interest begins and ends at the fact that the CBO released a report yesterday which states what it states. I neither endorse nor reject the thesis, conclusions or research methodology of that report.

It sounds like you're anxious to have a debate on modeling efficiencies and I'm certain there is someone here who might be interested in joining you. That person is not, however, me.

[edit on 28-7-2010 by Ko-Dan Armada]

reply to post by Ko-Dan Armada


Good for Dr. Krakatoa.

I think its much easier to just assume that anything put out by a governmental office is junk.

This saves us the trouble of having to debate the merits of the information.

Does everyone have their wheelbarrows?

I have mine. You ask, what do we need wheelbarrows for?

[atsimg]http://files.abovetopsecret.com/images/member/8a414c339d1b.jpg[/atsimg]

Off to buy a loaf of bread there folks.

Oh, either that or they might print up the replacement for the 100 dollar bill.

[atsimg]http://files.abovetopsecret.com/images/member/653b0e3a9ad0.jpg[/atsimg]

Stagnation or Hyperinflation.

My guess the printing presses will be running full steam.

Got gold or silver?

Originally posted by mnemeth1
reply to post by Ko-Dan Armada

 

Good for Dr. Krakatoa.

I think its much easier to just assume that anything put out by a governmental office is junk.

This saves us the trouble of having to debate the merits of the information.

I'm still not exactly clear who you're debating.

reply to post by Ko-Dan Armada


communist insurgents

reply to post by mnemeth1


Hey, I just hacked the federal reserve computers. I put in a lot of zeros and now our debt is paid off. Woo hoo!

This is humor and sarcasm for the government spies out there.

Originally posted by endisnighe
reply to post by mnemeth1

 

Hey, I just hacked the federal reserve computers. I put in a lot of zeros and now our debt is paid off. Woo hoo!

This is humor and sarcasm for the government spies out there.

not much