1 don't blame me; i never voted for any of this shit!

2 well, unless of course you want to, but you would be wrong.

3 P.S. I have to wonder if Doerr gave a copy to Obama at that meeting -- and, if so, whether Obama ever bothered to look at it.

Nah. He made it into a hat.  For Motown Party Night.

4 this is only problematic if anyone actually thinks any of these "obligations" are ever going to be paid.

5 i think that revenue line post 2010 in the second chart is all "estimated" post 2010 and looks highly optimistic.

6 Boned like a fish filet.

7 treasury holders most def

8 Very disappointing. I thought this was going to be a Kirstin Powers vs. Megyn Kelly catfight in jello post. Stupid twitter.

9

Y'know, I really hope the collapse comes before I get too old to fight my way through it, and I hope I live long ehough to see a rational society start to emerge on the other side.

I'm not overly optimistic, but I won't give up till I'm dead. 

10 Uncle Jed: yeah, I think you're right, which is what in part makes the report so scary: it's probably a best-case real-world analysis. Elsewhere in the report they talk about what a low interest rate the US has been paying on its loans and that if the US has to start paying higher interest rates to borrow money, that will simply make things worse.  ..fritz..

11 I'm not overly optimistic, but I won't give up till I'm dead. Posted by: gebrauchshund at February 25, 2011 01:59 AM (iYwUw) Survival tip for old folks: laser sights and head shots.

12 In this same vein, Andrew Stiles touched on the entitlements yesterday and Robert Costa linked some charts/graphs/tables being shown to members of the House. The ones for Obama's budget are here.

13 Do I have to read through all 266 pages to find out why the Net Worth improved so much in the past 2 years?

14 Eh, who cares? The units of measurement on all these graphs are dollars.

15 Meanwhile, weird cousin Ben the Bernankster keeps ordering truckloads of ink and paper from office-supplies places, and giving them printed banknotes in return.

16 Barry probably looked at the charts and said, "Oooh, look at all the pretty colors!"

17 fritz, i've retained kp in a couple of times and recognized their work product immediately.

18 Reminds me of when I heard Rove speak about Bush-era deficits. A fair amount of it was balooning entitlement spending. Realistically, even a Republican president would probably be having problems - they just wouldn't be trying to "solve" the problem by funneling $Ts to their political allies while uttering the term "fiscally responsible". And then talk about "investing" still more whan it (predictably) doesn't help.

19 (if things continue like this) It'll all blow up before 2025*. Why? Because people will stop lending the US money before that. Heck, when just a FEW lenders stop loaning then interest rates will have to rise to get the money flowing in. And THEN it really gets ugly... *2025 appears to be the crossover point on the 2nd graph.

20 if you want to find the silver lining: the mere whiff in the air that the US was going to default on their debt would probably crash the red chinese economy; so we've got that going for us. put the kaibosh on their plans for asia/the pacific.

21 The Federal budget has been in Fantasyland since they nationalized Fannie and Freddie. Both were stuffed with boxes of crap with "good" labels hastily applied on the outside -- but everyone's nose wasn't fooled. There's no entitlement that's as pressing or timely as a coverup of money already pissed away.

22 the "good" thing about any state/muni defaults is that it will destroy the muni bond market or at best make borrowing tony soprano expensive. sorta like cutting off charlie sheen's coke connection...

23 i'm all about the optimism baby! there's a pony in there somewhere...

24 As you say, "they are decidedly moderate to liberal", so you know that the reality is much, much worse.

25 It's interesting how seeing something you've heard so many times puts it in perspective. You more fully understand the urgency to fix this situation when it's displayed this way.

26 Just a zero added to the Fed balance sheet and all will be well. Hey, we've got top men on it. Top. Men.

27 They forgot to take into account the incredible value of our Strategic Second Chakra Reserve.

28 The units of measurements are not dollars, they are Federal Reserve Notes, which have a value of whatever the hell the bankers say they have. The more they print, the less they are worth. Basic supply and demand.

29 If you took all the states problems of pension shortfalls, budget deficits, bond debt, and healthcare promises and chunked it all into one great big smelly pile --
 
It would only add up to a couple of years of Federal deficits. Meanwhile, back in DC they are moaning about cutting this year's deficit by $61 billion out of about $1.5 trillion.
 
Yeah, we are boned. The ponzi has run it's course.

30

The sad thing is that cutting spending is far easier than entitlement reform. I imagine that some pols who have suddenly jumped on that bandwagon (namely some in the leadership and the moderate Rs) are going to run for cover at the first sign of losing the public debate.

31 The .us bubble has burst

32 30

The sad thing is that cutting spending is far easier than entitlement reform. I imagine that some pols who have suddenly jumped on that bandwagon (namely some in the leadership and the moderate Rs) are going to run for cover at the first sign of losing the public debate.

Posted by: Miss'80sBaby at February 25, 2011 03:11 AM (yfJ6g)

The really sad thing is that entitlement reform isn't that difficult if you start out with "it's your life, and not the Fed's".

Take Social Security, and cut it loose from the Federal government, and it's very simple. Current workers pay in to provide for former workers. The ratio between current and former has to equal the ratio between pay-ins and pay-outs. So if you have three workers per retiree and you want the retiree to get $12,000, then the current workers need to chip in $4,000 apiece. You can play all sorts of games -- you can't become a retiree until there are 3 free workers, for instance. The only reason that people get all torqued about it is that there was supposed to be a surplus accumulated over the last few decades. Once you accept that this was looted by the Feds, the logic of running it as a separate organization is self-evident.

33 I have the sick feeling that "entitlement reform" will be pushed out to the point where it becomes "warehousing people as cheaply as possible," a guaranteed disaster.

Maybe less of a disaster than raw collapse, but still a disaster.

34 "The sad thing is that cutting spending is far easier than entitlement reform." Apparently even that is nearly unthinkable. We hear all variety of excuses to justify paring down a lousy $100B cut to almost half that. I'm no longer interested in excuses. People who are serious don't make excuses; they perform. It doesn't matter what the reasons may be for putting off Real Reform Eleventy. We never seem to be short of reasons to spend more taxpayer cash. So start finding reasons no to do so. Put your excuse-dowsing abilities in that direction, dear politician. Don't expect a warm reception until you do so.

35 Fuck. I am tired. "reasons not to do so." Fucking typo.

36 "warehousing people as cheaply as possible," I think you meant "social justice."

37 If anyone is still here, saw on Drudge the WI Assembly passed bill limiting collective bargaining rights two hours ago, per AP

38 Early morning treat "Wis. Assembly passes bill taking away union rights By TODD RICHMOND The Associated Press MADISON, Wis. — Republicans in the Wisconsin Assembly took the first significant action on their plan to strip collective bargaining rights from most public workers, abruptly passing the measure early Friday morning before sleep-deprived Democrats realized what was happening."

39
. . . abruptly passing the measure early Friday morning before sleep-deprived Democrats realized what was happening."

Ooooh! Those wascally wepublicans!

40 I find myself agreeing with that Piven woman. We should collapse this thing ASAP. Avenge me, Boys!!!11!!1!

41 Like if I had three twenty-something sons, I might suggest they go down to the GR Building and tell the nice lady at the counter  that they lost their drivers license and they were couch-surfing around Cali and where the fuck is their EBT card?  That 200 a month would go nicely with the odd-job cash . 
The new Asscheek family motto on our new Coat-of-Arms---
'Cash- It's Not Just For Mexicans Anymore'
Avenge me, Boys!1!!1!1!1

42 P.S. I have to wonder if Doerr gave a copy to Obama at that meeting -- and, if so, whether Obama ever bothered to look at it.

You really need a college education to understand the report so he probably passed it off to a staffer.

43 MADISON, Wis. — Republicans in the Wisconsin Assembly took the first significant action on their plan to strip collective bargaining rights from most public workers, abruptly passing the measure early Friday morning before sleep-deprived Democrats realized what was happening."

44 Lawyers don't read charts. They don't understand finance or economics. They only understand check stubs and banking deposit slips.

45 The joke is projecting a better economy immediately. Since that's not happening, entitlement spending meets revenue this decade if not next year. 2025 my eye.

46

" The Federal budget has been in Fantasyland since they nationalized Fannie and Freddie"

Well, technically they've always been "Fed"...(heh)

There's a grain of truth there - ever since the 70's, when "lending" became a focus of "social justice" with Government stepping in to ameliorate the nasty Banking habits with CRA, Sallie, F&F, etc., the trends have gone only one way, due to the sin of exposing Government to ever more risk.

Do not be fooled by what they call "Entitlements", which includes many dollars spent on the entitlement structure, as remarkably few dollars of Medicade actually go to the individual recipients of said aid, whilst billions go to support all sorts of quasi medical items - how do you think the Johns Hopkins "guns in the home are bad & a medical issue" studies were funded - but all are lumped together as a bulwark against reducing these "transfer payments" (see, Republicans want old people to DIE).

As to the rationale behind these charts, it is depressingly simple - they are designed to support tax increases, nothing more. FWIW, get used to seeing more & more of this.

Oh, and enjoy the pretty colors...

47 Everybody needs to bring in a list of what we cannot, under any circumstances, cut.

And then we cut that.

48

Welcome to the United States of Receivership.

If everyone keeps sitting on their money, then this 266 pages is fantasy land because the bovine waste will hit the wall earlier.  And they will sit on their money.

As for Obama reading this?  He probably passed it onto Turbo Tx Timmy who should reduce it to a doodle in crayons in about three months showing how wonderful everything is.

49

This information is useful, and I hope it can help our side get the point across that the government is sqandering our resources.  The spending has to be made rational, because the government is taking away resources from the private sector it is created to serve and it is not providing comparable value in return.  Not to mention the fact that it is becoming tyrannical in doing so.

That said, the government is not a business, nor is it similar to a state or local government.  It does not borrow money to pay bills.  It does not collect taxes to pay bills.  The government creates money as it is spent (by Congress), and destroys it as is collected back as tax.  This has been the case since the gold window closed.  As long as inflation is managed and kept low, to the extent it can be managed by policy (real supply and demand for different goods will always affect this), the deficit problem is not so serious as it seems.  Some deficit spending is required to supply more money as the economy grows.  The "borrowing" is done to manage interest rates, not to fund spending.

Regarding the SS problem, there is one thing that helps us a bit.  The productivity per worker is very high today compared to what it once was.  That's a big part of why we have growing production but shrinking employment.  Producing the goods and services needed to support the oldsters in their retirement doesn't take as many current workers as it used to.  Also, given that most older Americans can't survive on SS and their savings anyway, they'll be working well into what we think of as their retirement years, assuming they can find employment. 

 

50 And all the leftsts will say is that Obama restored the net worth of the country (the red line) that George W destroyed through 2008...

51 If a shooting war were to arise between the United States and China, would that be grounds for canceling all existing debts?

Just wondering.

52

"to the extent that the Kleiner Perkins partners have political leanings, they are decidedly moderate to liberal"

They are solidly liberal and some even fascist/socialist. This is an example of how the labels for the political spectrum have been screwed up over the past generation. When Bush was elected, he and Rove pulled the Republican party sharply left trying to fill the "middle". Never mind that that's where the party already was. But Bush became the definition of "conservative" in the media merely because he was the guy that was in opposition to Democrats. And when the socialist Pelosi rose to speakership and later the socialist/communist Obama became president, no one would apply a label more extreme than "liberal" to them. So we have artificially squished the politcal spectrum from nationalization of the economy on the left (liberal) to No Child Left Behind and amnesty on the right (conservative).

On another note, George Gilder has a decent piece in the American Spectator on the decline of the US venture capital industry. KPCB gets prominent mention in the discussion of an industry that once incubated companies that would become economic powerhouses (Intel, Microsoft, etc.) to one that now is financing a host of companies that are of dubious economic value (various social media) to those that are outright drains on the economy (many rent-seeking "clean energy" companies).

53

This is perhaps a simplistic examination of the chart, but I notice that "cash flow" dropped precipitously the first three years of Bush, as noted due to an economic downturn and the added effects of 9/11. Note also that cash flow began improving through FY 2007 then took a massive hit in FY 2008.

Is it just a coincidence that FY 2007 to FY 2008 also marked the transition from Republican control of the budget to Democrat control?

54 Is it just me, or are the women pictured in these e-cigs sidebar ads becoming scarier and scarier with each passing day?

55

GoLA:

Perhaps you need glasses. "Cash Flow" (read it's definition) hit it's 2000's "high" point in 4Q 2003.

FWIW, "Cash Flow" was at it's 15 year high when tax collections (in real $, not %) were driven by the .com boom...

56 Out, damn sock!

57 If a shooting war were to arise between the United States and China, would that be grounds for canceling all existing debts?

Posted by: Little Miss Spellcheck at February 25, 2011 08:00 AM (xqhoO)

I'm sure it would be, but I assume China would simply sell off those debt instruments they carry to 3rd parties, assuming they could get a buyer.  That might be hard to counter.  However, we could probably freeze their assets in much of the world's banking system, and we could certainly nationalize all they own here in the US.  That's what they'll do - nationalize all US owned capital.

But even if we chose not to stiff them (which would be the height of folly) all we would need to do is basically put any "payments" into an escrow account that sat doing nothing until the war was over.  Thus the effect would be zero.  Then when we smashed them and they gave up we could zero out that account in payment for war reparations or some such.

 

58 The download link now returns AccessDenied, can you post a good link?

59 I don't believe these projections take debt service into account.  They show flat revenue, but debt service is about to explode in the next two or three years if congress continues to spend at current levels. 

Ben Bernanke does not control international lending rates for our bond issues.  The US prime lending rate can stay at zero for 10 years, but the bond rates will double and triple in the next few years.

60

Cloward/ Piven.  Collapse the system - fill it in with socialism/communism/unions. Destroy the free market in the name of social justice. Scratch head when prosperity and liberty die.

Obama not caring - is this.

61 Those charts show that the government isn't borrowing, taxing, and spending nearly enough!

62 I can't beat up too hard on Doerr, after all he funded a firm whose success meant good things for my family.

On the other hand, if I recall correctly he's one of the warmist rent-seekers who funded the anti-Prop 23 effort so lavishly last election out here.

63

#59 theBuckWheat

Just go to the first link, and then download it from Scribd. You'll have to set up a free account with them if you haven't yet.

64 Boned.

65 And the Fisting of America continues...

66 WAF

67 Does anyone have a valid URL for the PDF version? Using the one in the post results in an "Access Denied" response. Thanks!

68 Doh! Never mind...there's another PDF download link on KPCB page's sidebar and that one works. Sorry!

69 Excellent find Fritz. The leftists who are forced to deal with economic reality have calculated that progressivism is destroying us.

70 AP does a two minutes hate on Montana Tea Party.  They even mention the specter of Civil War right in the headline.

Their state would be a place where officials can ignore U.S. laws, force FBI agents to get a sheriff's OK before arresting anyone, ban abortions, limit sex education in schools and create armed citizen militias.

71 Their state would be a place where officials can ignore U.S. laws, force FBI agents to get a sheriff's OK before arresting anyone, ban abortions, limit sex education in schools and create armed citizen militias.

I fail to see the downside here.

72 Government spending, borrowing, debt, and promises like Medicare and Social Security are all huge numbers. They can't be comprehended as is.

What if a family budget operated like the government, in proportion? That gives a feeling for our situation.

<b>Sam</b>:&nbsp; Like the government, I have promised to help out my parents when they retire.
<b>Mike</b>:&nbsp; Why the grim face? How much did you promise?
<b>Sam</b>:&nbsp; About $1,523,000 from my salary of $65,000, while I repay $330,000 that I owe on my credit card.
<b>Mike</b>:&nbsp; Just break it to them gently.

In $billions: National Debt $14,500, Social Security $10,400, Medicare $40,000, Prescription Drug $16,600. This adds up to $81,500 billion ($81.5 trillion) of promises. That is 37 times the $2,200 billion in taxes estimated to be collected in FY 2010 (the year ending Nov 30, 2011). There is nothing saved or set aside to satisfy those promises; that is the meaning of "unfunded".

<a href="http://easyopinions.blogspot.com/2011/02/family-budget.html" rel="nofollow"><b>Family Budget</b></a>

73 Government spending, borrowing, debt, and promises like Medicare and Social Security are all huge numbers. They can't be comprehended as is.

What if a family budget operated like the government, in proportion? That gives a feeling for our situation.

Bob: Like the government, I have promised to help out my parents when they retire.
Mike: Why the grim face? How much did you promise?
Bob: About $1,523,000 from my salary of $65,000, while I repay $330,000 that I owe on my credit card.
Mike: Just break it to them gently.

In $billions: National Debt $14,500, Social Security $10,400, Medicare $40,000, Prescription Drug $16,600. This adds up to $81,500 billion ($81.5 trillion) of promises. That is 37 times the $2,200 billion in taxes estimated to be collected in FY 2010 (the year ending Nov 30, 2011). There is nothing saved or set aside to satisfy those promises; that is the meaning of "unfunded".

Family Budget

74 If that first graph is accurate it means that (GASP) the tumble started with Clinton and (DOUBLE GASP) the lauded Clinton surplus was a myth.