Last Chance?


by Karl Denninger, Market Ticker:

There’s a clear divide this time between parties in the upcoming election.

Its rather simple from where I sit; you may find this a bit jarring, or even disturbing.

You should.

It’s this: Is this nation one where we actually have a justice system with deterrents for personal and property crime against ordinary people, or must those of us who are not members of the criminal class conclude that there is no purpose for police of any stripe and settle their own problems in a perfunctory and final manner?


There is usually very little room between the parties when it comes to real matters of consequence; both print up credit like a crack-addled nutjob who just got a new credit card in the mail with a $20,000 line on it as but one example.  Everyone in the political world loves to throw that at the other guy or gal, but in point of fact nobody answers those questions.

Witness the last couple of nights of “debate” by various parties talking about Medicare and Social Security.  Neither party has said one factual word about either program, which is quite clear if you look at the MTS: Social Security is and has been running a small operating deficit and thus is fixable on a permanent basis with a small but real increase in taxation.  Neither party will admit this and both continually say they will “strengthen” the program — without saying how.  Nor has either party put forward and enacted those changes and, I remind you, the Democrats can do so at present since they hold 50+1 votes in the Senate and this is fiscal thus it can go through reconciliation.  It hasn’t.

Medicare and Medicaid, on the other hand, are another matter.  In the fiscal year ending in September those programs (known as “CMS” in the Treasury statement) spent two trillion dollars and yet collected less than $400 billion in taxes to pay for it.  That is an operating deficit of more than 80% and thus there is no possible way to increase the Medicare tax, which already has no cap on earnings, as you’d have to multiply it five times to bring the program into balance.

That will simply never happen and nobody is “having a conversation” on fixing it despite the obvious; the entire federal deficit and thus the federal debt and our inflation rest there.  It will not stop until this is addressed irrespective of what anyone else tries to tell you; while you can play tricks and make it appear inflation is subsiding it is not and will not until this is stopped.

This will, with certainty, destroy the nation’s fiscal health and our economy.  It is not subject to doubt; either we fix this or the nation descends into Economic Hell.  Indeed an enormous part of what is going on right now with inflation is due to exactly this reason.  But here voting does nothing because it hasn’t for more than 20 years; both parties continue to lie, cheat and BS the public, and you, for your part, are perfectly ok with all of it.  I’ve yet to see one politician dragged out of office or from behind the lectern by his or her hair for running that crap, and they all should have been long ago.

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