Patterico's Pontifications

1/10/2013

Did I Mention That We Have a Huge Debt Problem?

Filed under: General — Patterico @ 10:47 pm

Here’s a clip of a bunch of people laughing at Peter Schiff in 2006 and 2007 when he predicted that the housing bubble was about to burst, financial stocks were going to take a tumble, and we were headed into a recession:

Why is this important now? Because he’s predicting a much bigger crash, when the government debt bubble bursts.

Great minds think alike, and sometimes, so does mine.

Then we had the real estate bubble. In the 2000s, property values kept going up and up and up. It seemed wonderful on one level. Everyone’s house value was skyrocketing. You could take out loans on the equity and do fun stuff. Everyone knew it couldn’t go on forever, but somehow it seemed like it might. So nobody seemed very worried.

And then there was a crash.

Now we have the government debt bubble. Government spending keeps going up and up and up. It seems horrific to us, because we are paying attention — but to most people, frankly, it seems wonderful. We’re getting all these government services and we don’t have to pay for them! It’s utterly unsustainable, and everyone knows it can’t go on forever, but somehow it seems like it might. So people don’t seem very worried. Certainly, they’re not worried enough to vote out of office someone who has exploded our national debt to unimaginable levels.

There is going to be a crash.

I can’t get over this. It’s like there’s a giant asteroid headed towards the planet, and it’s looming overhead, and everyone is just going about their business. Just whistling and humming and singing, la dee dah. Nice and oblivious to the GIANT ASTEROID JUST OVERHEAD. I MEAN IT’S RIGHT THERE.

I feel like I’m starting to sound like a broken record (I started to explain “record” for the kids, but then I realized vinyl’s making a comeback), but THERE IS A HUGE DEBT PROBLEM JUST OVERHEAD. RIGHT THERE.

Ah, screw it. I’m going to bed.

36 Comments

  1. Good night.

    Comment by Patterico (8b3905) — 1/10/2013 @ 10:48 pm

  2. Might be a good time to start stockpiling canned goods, bottled water and trillion dollar coins.

    Comment by daleyrocks (bf33e9) — 1/10/2013 @ 10:53 pm

  3. I’m becoming convinced that Obama knows this, and wants it. His purpose is to cut the US down to size.

    Comment by Steven Den Beste (99cfa1) — 1/11/2013 @ 1:12 am

  4. what Steve said

    Comment by redc1c4 (403dff) — 1/11/2013 @ 1:34 am

  5. I might have to buy a 100 lbs. of green coffee beans.
    Roasting those little beans is very important.

    Comment by mg (31009b) — 1/11/2013 @ 3:34 am

  6. Apophis, won’t come by till 2036;

    Comment by narciso (3fec35) — 1/11/2013 @ 4:33 am

  7. Well, as I always put in the New Zealand prespective and get ignored, I’ll do it again.

    When New Zealand got to the point where the country was bankrupt and needed drastic and sudden changes to get back in kilter, it was the left, not the right who did it. Then later when the goverment changed the right took the last few decisions that the left were too scared to make.

    So the moral of the story is that if the situation hits home hard enough, it doesn’t matter what you believe, you’ve gotta change stuff.

    But it’s Obama in charge so you’re probably screwed anyway.

    Comment by scrubone (db2fe2) — 1/11/2013 @ 5:04 am

  8. I feel like I’m starting to sound like a broken record… but THERE IS A HUGE DEBT PROBLEM JUST OVERHEAD

    Given that the sky hasn’t fallen (yet), how do you propose to convince people that this time you’re not just yelling ‘wolf’? By playing the record even more times? Turning the volume up to ’11′?

    Add in our wonderful national tradition of waiting until after we’ve had our teeth kicked in before we accept that we have a problem (Pearl Harbor, 9/11, 2007 housing crash, etc.) and the Vegas line is that there won’t be any real effort to deal with the issue.

    Note I’m not disagreeing with you on the substance of the issue, I’m just wondering how you would go about convincing the jury, especially given that the jury is happy going through life fat, drunk and stupid?

    Comment by steve (e7e6c7) — 1/11/2013 @ 5:20 am

  9. Ah steve, weren’t you the one who said let Obama have the stimulus and Obamacre, because we need to do something, I do recall that,

    Comment by narciso (3fec35) — 1/11/2013 @ 5:23 am

  10. Seems the vaunted trillion dollar coin will not solve our problems. And that was the left’s big idea.

    Comment by Bugg (b32862) — 1/11/2013 @ 6:08 am

  11. No, the next one are IOU’s iel; warrants, from a former Senate staffer, now at USC

    Comment by narciso (3fec35) — 1/11/2013 @ 6:18 am

  12. More brilliance. from our betters;

    http://tcf.org/about/fellows/edward-d.-kleinbard

    Comment by narciso (3fec35) — 1/11/2013 @ 6:22 am

  13. They don’t see the asteroid because it’s sprinkling fairy dust.

    Comment by SB (8a4846) — 1/11/2013 @ 7:02 am

  14. But it might be hard to do, Patterico. And people might not be happy. And maybe at some point we might consider entitlements and social engineering.

    Comment by JD (b63a52) — 1/11/2013 @ 7:08 am

  15. i’ll start believing it’s a crisis when the boehnerturd tiger beat fan club starts acting like it’s a crisis

    Comment by happyfeet (ce327d) — 1/11/2013 @ 7:35 am

  16. Note I’m not disagreeing with you on the substance of the issue, I’m just wondering how you would go about convincing the jury, especially given that the jury is happy going through life fat, drunk and stupid?

    We get to pick our juries.

    First step: selecting people who CAN be convinced.

    Comment by Patterico (8b3905) — 1/11/2013 @ 7:42 am

  17. narciso: nice try. $100 if you can find anything I’ve written in support of either Obamacare or Obama’s stimulus.

    Patrick: let me rephrase. How are you going to convince the jury when you have to accept the jury as it is comprised? No challenges allowed.

    Comment by steve (e7e6c7) — 1/11/2013 @ 8:04 am

  18. 3. Let’s start a club, open to all races, creeds, nationalities and sexual preferences.

    Note on Schiff detractor Mike Shedlock to whom I frequently link. He’s waging a running drive-by assault on Mr. Schiff, claiming the latter agreed to debate somethingorother and is avoiding sitting down for cameras.

    I expect Piers Morgan will be included any day now. Quit ignoring us!

    Comment by gary gulrud (dd7d4e) — 1/11/2013 @ 8:17 am

  19. 8. “How do you propose to convince people..?”

    Indeed, how does one go about convincing the frog dropped into a tepid bath he’s dinner?

    Thank you for participating.

    Comment by gary gulrud (dd7d4e) — 1/11/2013 @ 8:24 am

  20. I think steve, bless his heart, is suggesting that everybody just surrender to the inevitable, or something.

    Comment by daleyrocks (bf33e9) — 1/11/2013 @ 8:28 am

  21. I’m suggesting that rather than say the same thing over and over and over again to people who aren’t listening* to what you’re saying, those who worry about the country’s financial future might think about changing their approach. If the public has been ignoring the issue for 30 years, what makes you think that they’re going to start listening now? Because you’re telling them that this time you’re not kidding?

    And because I have no confidence in either those doing the yelling will rework their message in a way that connects with the public or in the public to accept that action needs to be taken, then yes, I suggest you start to figure out what you will do to survive when the whole thing comes crashing down.

    * There’s no better evidence than Obama’s reelection that most of the people aren’t listening to what you have to say.

    Comment by steve (e7e6c7) — 1/11/2013 @ 8:40 am

  22. Gary: good metaphor. It may be impossible.

    Comment by steve (e7e6c7) — 1/11/2013 @ 8:40 am

  23. “If the public has been ignoring the issue for 30 years, what makes you think that they’re going to start listening now? Because you’re telling them that this time you’re not kidding?”

    steve – It’s just selective history on your part. When Republicans are in power, Democrats tell the public that deficits and spending matter. See Obama’s statements about the debt ceiling and his votes against it. In fact, remember his first budget being titled “A New Era of Fiscal Responsibility.”

    Remember the polling from the Fall that a majority of Americans think the government is too large and deficits are too big. The reelection of Obama is a problem but not necessarily a validation of his fiscal policies because some people actually believe Obamacare will work, his lies that he will tackle entitlement reform and return us to a path of fiscal sustainability. The media covers for his lies. As the economy continues to struggle and trillion dollar deficits continue to hit the books and Obama continues to take no action, how much longer do you believe people will continue believing his lies?

    Comment by daleyrocks (bf33e9) — 1/11/2013 @ 8:54 am

  24. how much longer do you believe people will continue believing his lies?

    I won’t underestimate the willingness of people to be lied to… or to think that it is someone else’s (i.e., the GOP) fault.

    Yes, people accept that government is ‘too large’ but only in the abstract. There’s no agreement as to specifically where government is too large (ask 10 people and you’ll get 10 different answers). And given that, it isn’t a surprise that there’s no agreement on what, where or when to cut (10 people, 50 answers). Perhaps sad, but there is no broad desire to take even a little bit of pain now in return for some vague benefit some number of years or decades in the future.

    You’re the doctor who for twenty years has been telling me I need to drop twenty pounds. I ain’t dead yet, so why should I give up smoking and drinking and eating like a pig? If you want me to listen, you need to come up with a better and different approach than continuing to say the same things you’ve said since Reagan was President.

    Comment by JD (steve) (369bc6) — 1/11/2013 @ 1:45 pm

  25. So, what is your solution, Steve, ‘we don’t have a debt problem’ that seems to work, but that’s like denying gravity.

    Comment by narciso (3fec35) — 1/11/2013 @ 2:03 pm

  26. I have this idea the Alien will provide a solution to our problems, Civil War II, rather as he provided the Greater Depression.

    Comment by gary gulrud (dd7d4e) — 1/11/2013 @ 2:07 pm

  27. “Yes, people accept that government is ‘too large’ but only in the abstract.”

    steve – I’m glad you agree, because admitting there is a problem is the first step to finding a solution. Now if only the media and Democrat leadership will admit there is a problem we could be on our way.

    Comment by daleyrocks (bf33e9) — 1/11/2013 @ 2:14 pm

  28. Comment by daleyrocks (bf33e9) — 1/11/2013 @ 8:28 am

    Isn’t that what the Left condemns when it is advised to rape victims to not resist, just to embrace the inevitable?

    Why is it wrong for a rape victim to not resist, yet it is the acceptable response when an ever-encroaching government is slowly nibbling away at your Liberty & Freedom.

    Its better to die on your feet than to live on your knees.” ― Emiliano Zapata

    Comment by askeptic (b8ab92) — 1/11/2013 @ 5:11 pm

  29. Can someone please explain to me why people like Cramer have their own show and this guy Schiff doesn’t? He should have an hour every night on primetime.

    Comment by gahrie (3fff08) — 1/12/2013 @ 1:07 am

  30. Steve,

    What are you going to do to cure cancer?

    Continuing to comment on blogs isn’t helping much.

    Comment by Patterico (8b3905) — 1/12/2013 @ 1:15 am

  31. Oh, sweet Jesus, the first two minutes of this clip had me laughing so hard I couldn’t stop! Good Heavens, you can’t make this stuff up! Oh dear, it’s sad when this is the funniest thing that I’ve seen in weeks…

    Thanks for the warning, Petey. (Not that it’s gonna help much…)

    Comment by J.P. (bd0246) — 1/12/2013 @ 8:26 am

  32. Short answer, Cramer, furthers the scam, and Schiff does not,

    Comment by narciso (3fec35) — 1/12/2013 @ 8:32 am

  33. I see that the numbers for Q4 are bubbling to the surface, and they don’t look good.
    From 2.5/Q3 to sub-1/Q4….Did the Gov’t lie to us leading into the election (again)?
    http://www.zerohedge.com/news/2013-01-11/us-q4-gdp-25-sub-1-under-six-months

    Comment by askeptic (2bb434) — 1/12/2013 @ 8:56 am

  34. 33. “Did the Gov’t lie to us leading into the election”

    Did their lips move? Secretary Solis moving on.

    Comment by gary gulrud (dd7d4e) — 1/12/2013 @ 9:11 am

  35. Steve has a point, but he’s asking the wrong question. Between now and the advent of the financial catastrophe the media and the administration are not going to warn the people Steve calls “the public” about the problem. “The public” is going to be as blindsided as they were when their houses dropped in price, their bank stocks became worthless and they were foreclosed on.

    So we can’t save “the public” and we can’t forestall the crash but we can survive it. Lots of people always do. What gives me hope is that we have seen mini-mass movements in the recent past. Not enough to change the last election, but enough to see a lot more Chic-fil-A sandwiches sold. And thanks to the best gun salesman in the history of the country, Barack Obama, we see men, women and couples buying guns and ammo at a record pace even as the media is demonizing them as crazed baby killers. WE have ways of talking to each other unfiltered by the bird cage liner like the LA Times.

    For example, despite the best efforts of the media and this administration, the reaction of school boards and local governments around the country is actually to follow the NRAs advice and increase armed police protection in schools. My local paper, the Virginian Pilot, told Wayne LaPierre to shut up and sit down after his speech to the press. Meanwhile the local gun shops are crowded and getting on a range is a two hour wait. This morning the Virginian Pilot’s headline is about the increased police protection in local schools.

    What does this have to do with the financial crash coming up? First we have to stop thinking that we have to change everybody’s (read “the public’s”) mind. All we have to do is to talk amongst ourselves and then find a series of actions that we can take that will cushion the blow even if we can’t avoid it completely.
    Is there a magic bullet? Buy guns and build a [object TextRange]? Well, some people are doing that but it’s not practical for a lot of people. Buy gold? I have a problem seeing the local merchants accepting my gold coins. But the collapse of the housing market tells us that there are things that we can do that will help us avoid much of the trouble. People who were buying houses in 2003 – 2007 should have known they were buying into a speculative bubble. It didn’t take a rocket scientist to figure that out, all they had to do was go shopping for a house, stop and think about it, watch TV and see a whole channel devoted to flipping houses. You could feel it in the air. So you either rented or, as my son did, got a very good deal from a friend.

    There are one or two things that people can do to make the next crash a lot easier. First have no debt, or as small a debt as possible. No car loans and no credit card debt, and pay off that mortgage fast (get one of Dave Ramsay’s books). That leaves the “outgo” part of the “in go/out go” much smaller. Second, don’t own any long term bonds or bond funds. When the crisis hits, it will be a debt crisis and bonds are debt instruments. The most likely move in bond prices is down and it’s going to come from two directions: downgrades and rising interest rates. The 30 year Treasury bond yields roughly 3%. If rates double, the price of this bond will drop by nearly 50%, and if it’s downgraded it will be even worse.

    Anyway, that’s a start. Think Camp of the Saints.

    Comment by Moneyrunner (40a5bc) — 1/13/2013 @ 12:02 pm

  36. Well, if America had a debt problem in 2006, the Obama administration has certainly not done much lately to help! I ( https://debtsblog.wordpress.com/ ) lost my job and nearly lost my house and my familiy becaue this country no longer can keep ownership of its own industries as my company was bought and ripped apart by a Chinese investment co.

    Comment by Helena (c9c565) — 2/4/2013 @ 5:31 am

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