Obama In The Twilight Zone: 'I won the election, I have no need to negotiate with anyone about anything...'

It is a strange thing to watch this man spend five minutes not answering a direct question, as if the question were merely a prompt to allow Himself to pontificate. There was no conversation per se, simply Himself declaring that, having run the deficit to Olympean heights, never operating off a budget since He took office, having spent all his energies finding new ways to spend money we don't have...

Members of Congress who insist on restraint are holding the economy hostage.

This is a classic Gino and Vito scenario, the local thugs who shake down the local shopowners, and then blame them for the crime wave.

This is The Twilight Zone, pure and simple.

$52,409 For Every Man, Woman And Child In The US: Rick Santelli Does The Math

But, hey! Who's counting?

Barack Obama's Birthday Present To The United States: Debt to GDP now 100%

It warms the heart, don't it?

It's the Big-Five-Oh for The Beloved Leader, and he never fails to celebrate the really big occasions, like putting the country as much in debt as it produces, with more of the same baked into the projections for years to come--and that's after The Deal, which simply slowed the speed of the runaway truck of our culture headed off the cliff. It'll be comforting to know that we're only going over the edge at 60 mph as opposed to 62 mph, dont'cha-know!

He did look in good form last night, did he not, with that winning smile and the young lady in her LittleBlackDress who breathlessly let The One just how much she admired Him. Betcha MizzMichelle loved that moment! Rather like Miss Monroe singing that memorable version of 'Happy Birthday' to JFK all those years ago...

After all, to have achieved a life goal of crashing a culture by age fifty, it's no small thing. And to hear a room full of donors cheering you for the occasion, well, that's just icing on the ole' birthday cake...

As OS hits 'publish', the Dow's down about 300, S&P down about 35, gold up about 7.

Happy birthday, Mr. President!

'Super Congress'? Where The Blankety-Blank Do We Find That In The Constitution?

Can you say 'Moral Hazard', ya'll?

Denninger has some choice words as well...

OS has not much more to add, except to say he sees our freedoms now being eroded unashamedly and publicly, with the last shred of conscience and its accompanying sense of shame now a thing of the past amongst the political class of this country.

He's going back to his hiatus now, to enjoy his family and free life while they are here to be enjoyed.

Intermission: OldSouth On Downtime, And A Visit To Southern Indiana

It's midsummer, and finally, finally some time off can be taken. One child is home from his university far far away, and it's been a year since he's been home. It is a wonderfully sweet time, just hanging out at home, cooking, jabbering about school and life. It will be tough to drive away from the airport after putting him on the plane to his future. The young man has so wildly exceeded any expectations his parents could have had for him nearly twenty years ago, and most of the credit belongs to him, with a bit to his stumbling mom and dad, who mainly tried to stay a step ahead of him during his childhood.

Sweet as well the visit to take the young man see his new infant cousin for the first time, and to visit with his aging grandparents, now well into their 80's. Lots of pictures taken by everyone, knowing this may well be the final occasion with everyone still alive, well, and in the same room. The thought, of course, was left unspoken, but hung in the air: Don't let this day's happiness go uncelebrated. We've all worked a lifetime to get to this afternoon. Let's not waste a moment of it.

Business travel took OS to southern Indiana, through Jeffersonville, Scottsburg, Hanover and Madison. The Ohio River valley at this point is breathtakingly beautiful, both in its natural state, and in what the Hoosiers who settled and developed the area have done with it. Bucolic, pretty towns, beautiful farms. A sense of order, built within the context of the natural endowments encountered here. Genuinely friendly people, who seem aware of how blessed they are to live in this somewhat remote corner of the States, largely ignored by the GreatAndGoodAndGlamorous.

On the drive back from Hanover to Jeffersonville, through the farms and villages, on Highway 62, OS listened in on the news of the failure of the elites to grasp that they cannot spend money that does not exist, and found himself musing: What's wrong with these people? Have they forgotten what it's like just to drive through this sort of country and remember how wonderful it is here? Why would they want to kill this way of life off? Why do they hate these people so much? If they didn't hate these people, how else to explain the behavior of an Obama or Pelosi, who will simply suck the life out of this culture in order to have their own way?

OS also mused on what may await his son and infant nephew if we don't all eat a big serving of Humble Pie, and deal with the mathematical realities that now stare us in the face. Will they enjoy anything like the freedoms that allowed their parents to build their quiet and happy lives?

OS has been reading, keeping up with events, or non-events as it were. No need to repeat what is written more effectively elsewhere. (By the way, Monday morning will open with the news of the collapse of The Bank of Ireland and the default of Greece. No surprise there, except to those completely embedded in denial.)

And so, OS returns to his hiatus. The boy departs in a few days, and a vacation begins after that.

May Heaven bless us every one, and preserve the United States of America by divine grace.

Sean Egan Explains The Math On CNBC

OS posts this, as much for his own reference as to share with others.

Mr. Egan calmly explains the situation, so OS really has no insight to add, except to urge his readers, and the families and friends of his readers to view this interview.

It's not long, it's conducted in PlainEnglish, not FinanceSpeak.

The news is not good, but the truth is always best.

The House Republicans Finally Decide To Play Offense

From Politico:

House GOP leaders will allow a vote on a popular conservative plan to cut spending, balance the budget and put a cap on overall federal spending, the latest Republican attempt to lay down their marker in the debt ceiling debate.

The Friday morning announcement, which was made in a meeting open to only Republican lawmakers, won praise from rank and file conservatives, but it’s not the breakthrough deal that will solve the debt ceiling crisis. The proposal has little chance of passing the Democratic-controlled Senate.

President Teleprompter continues to BS-BS-BS/Blame-Blame-Blame, anything but actually lead...

Finally, the House GOP might be finding its spine...or not.

Still Waiting For That Adult Conversation: The Debt Ceiling Vote

OK, OK, OK--it was a bit of Washington theater, staged like only the House of Representatives knows how.

Still, 318-97 is a pretty lopsided vote, as the House Republicans trudge to the White House tomorrow to be treated to TheFullObamaMonty. The condescension oozes out of every pore of every Obama staffer, with that 'Tut-tut, little children' attitude they do so well.

We'll see what happens. In the meantime, Michelle Malkin points out that Obama has put his foot to the floor, pedal to the metal, in signing up just as much of the populace as he can to the Food Stamp program. We're at 14% of the population and counting...

This will not end well, ya'll. It can't. When the axe falls upon the entitlements, that means some proportion of the at 14% will consider its personal ox to have been severely gored. Think Greece, think Spain...remember Watts in 1968, Detroit in 1968...

This could get very ugly, and OS suspects that may be the White House's intended outcome.

Stanley Druckenmiller Interview With WSJ: Quote Of The Week

From WSJ, May 14, 2011

'A financial crisis is surely going to happen as big or bigger than the one we had in 2008 if we continue to behave the way we're behaving," says Stanley Druckenmiller, the legendary investor and onetime fund manager for George Soros. Is this another warning from Wall Street that Congress must immediately raise the federal debt limit to prevent the end of civilization?

No—Mr. Druckenmiller has heard enough of such "clamor and hyperbole." The grave danger he sees is that politicians might give the government authority to borrow beyond the current limit of $14.3 trillion without any conditions to control spending.

We may do well to listen to the man. He knows how the math works, and it's not working in our favor.

He's sanguine about a technical default by the US government, since it may serve a bit of reality onto everyone's plate.

And his Quote of the Week?

"People aren't going to wonder whether 20 years ago we delayed an interest payment for six days. They're going to wonder whether we got our house in order."

Amen, Brother Druckenmiller, amen.

The Greek Two-Year Bond Now Yielding +25%: But, No Worries, Just Go Back To Watching 'Housewives' And 'Oprah'

What happens when a nation is run by politicians who promise to spend more and more into perpetuity, all the while simply borrowing from the rest of the world to cover its shortfalls?

It goes broke. Like Greece. And we get moon-shot charts of short-term gubbermint interest rates that look like this.

The US carries 15 trillion in debt, and Barry and Timmy insist we just must-must-must borrow 2 trillion more, lest bad-bad-bad things happen to us.

What might happen here?

OK, ya'll. Didn't wanna get nobody upset, heah? Jes' go back to that re-run of yesterday's NASCAR event, and make sure you got the tivo set up for wrasslin' tonight.

Why Obama And Company Still Need To Depart Office: Taxing Cars By The Mile

OS is truly happy that President Obama gave the order to kill Bin Laden. But, let us remember always, it was the Navy that killed the monster, supported by a 'cloud of witnesses' from around the world, most of whom will go to their graves with crucial information and the methods employed to glean it. The President, for once in his extended childhood, made an adult decision, and acted in his constitutional role as Commander-in-Chief. Let's not not give Little Barry a new Audi A-4 just because he brought home one good grade on one report card, know-whud-I-mean?

Meanwhile, back in Washington, a new plan (as reported by The Hill) is being floated--a scheme to tax people per mile for driving their cars, with the mileage to be calculated by the mandatory installation of an electronic tracking device, and tax to be collected at the pump each time the serf driver fills up.

 Damn! It's brilliant! What could possibly go wrong, ya'll?

Liddle electronic devices never malfunction, right? And dah gubbermint never ever ever ever screws stuff up when it comes to collecting taxes, right? And this won't fall disproportionately upon the poor, with their older and less efficient cars, will it? And there's no possibility whatsoever of any infringement of civil liberties, ever ever ever, right?

Now, for a quick civics lesson: This is just one example of the sort of nonsense floated about daily by gubbermints--unelected people with post-grad degrees, on the public payroll, sitting in offices bought by taxpayer dollars, who seriously pursue these schemes to oppress and defraud the citizenry, in the name of SomeGreaterGood.

The brutal beasts who ran the prison camps of the Gulag and Nazi Germany didn't actually set up the system, ya'll! That was done (to paraphrase C.S. Lewis) by polite gentlemen with pedigrees and university diplomas, dressed in suits, meeting in book-lined conference rooms, quietly planning The Future after their own desires, with motions taken and seconded, voted upon, and duly noted in the minutes--followed of course by a quiet dinner to congratulate themselves for their good work, also bought with tax dollars. Or, now better yet, the final decisions are taken at a private resort, with private beaches and golf, away from The Rabble Whose Lives Must Be Run For Them.

This is why Congress must take away the credit card from the Executive, defund to zero these agencies, lest they herd our children and grandchildren onto the trains to GodKnowsWhere. It's crucial this be done now, while time allows.

The noisy debate is about 'We can't afford to spend this money, borrowing forty cents of every dollar'. That's just the chatter about the terrible math we have created for ourselves.

What's really at stake is our culture, our freedom, our dignity, our lives.

This is why Obama must go, and all his fellow travelers with him.

Don't imagine for a moment that Himself ordered the death of Bin Laden, motivated by love of country.

OldSouth Attempts To Understand The Math: This Week's Federal Budget Resolution Negotiations

The coverage has been breathless and constant--the pitched battle over whether Congress will reduce 2011 Federal budget spending by 60 billion dollars, or 30 billion dollars, or some number in between, or perhaps not at all, if DaPrez, Mr. Harry and Mizzzz Nancy had their way.

OS has been busy this week, trying to keep the plates of several unrelated projects spinning, enjoying the opening week of baseball season (Boston's zip-4-six??), and the opening day of the Masters. He has high hopes for young Mr. McIlroy, and Mrs. OS is a fan of Mr. Choi.

But, he has attempted to understand the math in the context of the emotionally charged language that is flooding the culture--e.g., 'If'n yuh don't agree wif me, yew is a scalawag of the worst kind.' As always, the Left is more practiced at spewing the poison, but there's lots of it going 'round this week. The Religious Right seems to want to score points as well. Somehow, a bankrupt United States, and the chaos, poverty and despair that would cause, is not an ethical issue in their minds. Sheeeeut.

So, with a bit of time off this evening, he began to review numbers, to see what is being talked about. After all, 60 billion dollars sounds like a boatload-o-money-hunney to a normal drudge like OS.

He decided to look up the amount of money intended to be spent by The Gubb'mint in FY 2011. The Budget that Our Beloved Leader proposed to Congress back in February of 2010, when the Dems controlled both houses, calls for spending $3.83 trillion and the federal deficit is forecast to be $1.56 trillion in 2010 and $1.27 trillion in 2011. Total debt is budgeted to increase from $11.9 trillion in FY2009, to $13.8 trillion in FY2010, and $15.1 trillion in FY2011.

That's a lot-o-munney, hunney!

OS had to call up a spreadsheet, and start attempting to type in that figure. He had to format cells for lots of digits and decimal points to make this exercise work.

So, sez-he/he-sez:

383, three hundred eighty three.

383,000 three hundred eighty three thousand. Let's add three zeros, multiplying it by a thousand. Sort of like using the spreadsheet as an abacus...know-whudd-ah-mean?

383,000,000. Three hundred eighty-three million. Let's add another three zeros...

383,000,000,000 Three hundred eighty-three billion. Let's multiply by 10, one zero.

3,830,000,000,000 Three trillion, eight hundred thirty billion. That's so many zeros, OS had to dink with the spreadsheet's cell formatting. (His laptop is beginning to smoke, by the way.)

Let's go back to the proposed reductions in spending of, say, $60 billion, which our friends at the NEA call 'right-wing lawmakers insisting on draconian cuts to critical services'. Dem Waskawy Repubwikans!

That figure looks like this: 60,000,000,000.

OS's poor head hurts looking at all those zeros, so he decided to begin removing equal numbers of zeros from both numbers, which would keep the relationship between the values of those two numbers constant.

So, if we remove, say, six zeros from each number, we end up with--

3,830,000 and 60,000. Looks like a small business now. Hmmm, subtract another zero on each side.

383,000 and 6000--looks like a mom-n-pop gas station numbers.

38,300 and 600, looks like a single person's numbers.

3830 and 60 -- a month's take-home and one tank of gas in the age of Obama.

So, what percentage of 3830 is 60?

60 divided by 3830 gives us: 0.015665796

Excel tells OS to multiply this by 100 to arrive at a percentage: 1.5665796345 percent.

Round to two decimals: 1.57 percent.

Now, in reality, they're only talking about cutting about 30 billion dollars, so let's divide 1.57 by 2: 0.785 percent. It appears Mr. Harry, Miz Nancy, Our Beloved Leader and the NEA consider a reduction in spending by 0.785 percent to be unthinkably draconian.

0.785 percent. That is what is being fought over. Or perhaps, what is being fought over is the idea that spending should be restrained at all. Somehow, it will all be paid for, by the rich perhaps. Or we'll just borrow the difference, and leave it for the grandchildren to pay.

Now, let's look at another ratio: If we are running a 1.56 trillion deficit on a 3.83 trillion budget, that means we're borrowing 1.56 trillion a year. What's that percentage?

1.56/3.83=40.73%

The Treasury is borrowing (in our name) almost 41 cents on every dollar Duh Gubbermint is spending on the Federal level. We owe upwards of 15 trillion dollars, after decades of this behavior.

Lessee, OS has to reset his spreadsheet again. If we cut spending by 30 billion, what percentage of the national debt have we potentially shaved off?

Pull as many zeros as we can from both numbers and it looks like 1500 and 3.

3 divided by 1500=.002

Multiply by 100 to determine percentage: .2 percent. Two-tenths of one percent shaved from a debt of 15 trillion dollars.

Now, if we owe 15 trillion dollars, what's our interest payment obligation? Right now, interest rates are at an unhistorical low. Everything reverts to the mean, so let's say the day comes when the market decides it wants us to pay a nice round number, say 5% on our borrowed money, per annum.

15,000,000,000,000 times .05=750,000,000 Seven hundred fifty billion, which must be paid, lest we default. If we default, the dollar soon ceases to be recognized as a medium of exchange anywhere. Think Argentina...

What if we end up having to pay 750 billion dollars of interest on an annual budget of 3.8 trillion? That would mean 19.6% percent of the annual expenditure would be on interest payments alone. Not principal paydown, just interest. Wonder how long it would be until the market decides they'd like 8% on their money to compensate for the level of risk that 19.6% represents. Hmmm...that could get ugly, quickly.

Think Greece, Portugal, Spain, Argentina....

Gotta go, OS's laptop is smoking again!

Besides, it's bottom of the 7th, the Orioles are beating up on the Tigers 9-5. Two on, two outs, count is 1 and 2. Those are manageable, understandable numbers.