The wife and kids are whining that I need to give them more money because
things cost more. Usually I just ignore them or politely tell them something
like, "Go to hell, ungrateful parasites!" lock myself in the Secure Mogambo
Bunker (SMB) and peer at them through the periscope until they go away and/or
shut up.
This time, however, I just showed them an essay I printed out from The
Huffington Post which brings us the bad news that "Tax receipts are on pace to
drop 18% this year, the biggest single-year decline since the Great Depression,
while the federal deficit balloons to a record $1.8 trillion."
In case you were wondering, the author of the Huffington Post piece is wrong;
the deficit will NOT "balloon" to "a record $1.8 trillion", but instead, the
budgeted deficit for this year alone brings us ANOTHER $1.8 trillion deficit to
add to the $11.6 trillion in
accumulated federal deficits, taking us to almost 100% of GDP! Hahaha! We're
freaking doomed!
The message to my kids, of course, is that their lack of income means, "Welcome
to the club, jerks!" in that the essay clearly shows that neither I, nor
anybody else, has more money these days, and in fact we all have less money, so
obviously I don't have any money to give them.
Of course, I am thinking to myself that if I did have any money, I would spend
it on getting away from all of them and their whining and complaining by having
a night out with my hoodlum friends, hopefully to drink myself into such a
stupor that I can hopefully forget, for even one lousy minute, that I even have
kids! Hahaha!
They immediately objected, of course, and so I just held up the printout in
their faces and rudely said, "Tell it to the essay!"
In fact, speaking of taxes, it makes your hat fly up comically off your head in
astonishment when you realize that total income and corporate taxes are less
than this year’s federal budget deficit alone! And then you really start
screaming your guts out in anger when you then realize that the total federal
budget is 400% of total federal revenues! They are spending four times as much
as they take in! Four times as much!
And then you start vomiting up blood and thinking dark, homicidal thoughts in
Ultimate Mogambo Outrage (UMO) when you find out that the national debt already
went up by over $2 trillion in the last year alone, thanks to Congress's sneaky
Supplemental Appropriations tricks, which was before the big budget deficits
even started kicking in!
The statistics are, gathered from an Associated Press analysis, "Individual
income tax receipts are down 22% from a year ago. Corporate income taxes are
down 57%. Social Security tax receipts could drop for only the second time
since 1940, and Medicare taxes are on pace to drop for only the third time
ever."
In fact, "The last time the government’s revenues were this bleak, the year was
1932 in the midst of the Depression."
Bloomberg called it "The worst US economic slump since the Great Depression",
as the Commerce Department reported that "Gross domestic product shrank at a
better-than-forecast 1% annual pace after a 6.4% drop the prior three months."
Later on in the article, we find that "The Commerce Department's figures today,
which included benchmark revisions to past years, showed that GDP has tumbled
3.9% since the second quarter of last year - the biggest drop since quarterly
records began in 1947. GDP has fallen four straight quarters, the longest
ever."
This all makes sense when looking at other data, like how Karl Denninger of
Market-Ticker.Denninger.net has been looking at "freight loadings both road and
rail, along with port traffic data".
He contends that this is the kind of "leading indicator" that is really
important if you want to know what is going on, and the Bad, Bad News (BBN) is
that "both import and export demand has effectively collapsed! We are now
anywhere from 40% to 60% below comparable levels on imports and exports."
Add it all together and you will be forgiven for getting the disquieting
feeling that I am going to launch into a Loud Mogambo Tirade (LMT) about how
history shows that you should be buying gold and silver with your depreciating
dollars that will buy less and less, because they will almost certainly never
again have the buying power that they have Right Freaking Now (RFN), which is
something you will probably be able to say most every sorry day of the next,
umm, decade or so. We're freaking doomed!
So you were right: I did launch into a LMT about buying gold and silver! And
you are also right if you thought, "Whee! This investing stuff is easy!"
Richard Daughty is general partner and COO for Smith Consultant Group,
serving the financial and medical communities, and the editor of The Mogambo
Guru economic newsletter - an avocational exercise to heap disrespect on those
who desperately deserve it.
(Republished with permission from
The Daily Reckoning. Copyright 2009, The Daily Reckoning.)
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Office: Unit B, 16/F, Li Dong Building, No. 9 Li Yuen Street East,
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