by ReverseEngineer » Tue 26 Aug 2008, 03:36:32
$this->bbcode_second_pass_quote('Ludi', '
')Oh yeah, right. The government will collapse by tax time next year?
Is that really what you're saying?
Unemployment is probably nowhere near Great Depression levels (it was approx 25% then, you know) - did the government collapse during the Great Depression?
I guess, I'm just wondering how you figure TSHTF so soon....
I guess I need to be a little more clear. I think Tax Time will accelerate the downward slide so its apparent to many more people than we have right now on the PO board.
As you watch the revenues slide in all the major industries from Financial Services to Cars, you have to figure next year's Tax Revenues will be nowhere NEAR what last year's were. Deficit spending is getting progressively more difficult to engineer as other central banks balk at buying more treasury notes. So if you actually were going to meet Government Payroll, the only way would be to REALLY just Print Money, not just inflate the M3. With as many Government workers as we have, including the Soldiers, this would hit Main Street as Inflation almost Immediately, and compounded on the systemic inflation going on now due to scarcity in the oil supply, it would then start to run out of control. This would be OBVIOUS, and then Panic starts to set in.
Other solution of course would be to start laying off Government Workers and Soldiers in droves, but do that and the ability of the Government to administer and control becomes nil, so they won't do that.
No, the Government did not collapse with 25% Unemployment in the Great Depression, but of course there was the difference then that Oil was still plentiful right here on Home Soil; its not the case this time around. Also as mentioned in another thread, at the time the American population was still significantly Rural based, and subsistence farming for the population extant at that time was more possible than it is now. Today's population will have a harder time adjusting to massive unemployment than that population did.
In any event, I don't see this "Tax Time" scenario being the Instant Death of the US Government, any more than the currency collapse in Argentina in 2001 ended that Nation or Government. However, it certainly quite rapidly turned Buenos Aires into a Hell Hole from the Middle Class Sining Star of South America it once was. I'm sure many of you read the Blog from FerFal detailing his life since that crash.
At SOME point here we will Tip Over the Edge. I thought it would happen after Bear Stearns, I was wrong. I could be wrong on this one also, but it seems like the next real big shock to the economy. A massive shortfall in Tax Revenues will put a lot of stress on an already over stressed house of cards.
Reverse Engineer