All I can say is that “we” were smoke and mirror rich and now we are going to be painfully poor in dire reality. I, of course, use we in the Statist coercing people sense not in the voluntarily accociated sense where exiting is possible when the association becomes harmful and thereby insulate yourself from harm. Those of us who tried as hard as possible to gird ourselves against such inevitable days are still going to be tested. I just can’t think that social stability is going to be maintained through the “resets” that lay ahead. On top of all of this “present” outlay and loss of equity we still have a $54 Trillion accrual basis debt to pay if we are going to endeavor to make good on all our unfunded entitlements. We have had socialism work its “magic” for the last eight decades and we are on the cusp of being rock bottom poor. I can only imagine the amount of State force that is going to be necessary as they begin the generation transfer on top of the collapse we have suffered.Near nothing will be left to the worker or saver. I cannot see much more beyond central rationing of every last scrap of output.

But anyway, is this chart supposed to be a surprise? All it shows me is the inevitable growth of the State. It’s programs got bigger and bigger as time went on. The last few decades the “service” provided was the service of delusional wealth. Every effort was made through the machine of State to put a hundred chickens in every pot, and three cars in every garage. We even defecit spent on top of decent growth to make sure the Program went on apace. So once the government didn’t have the space race or nation building (a la the Marshall Plan) to occupy itself, it simply made the economy in general its Program, taking control and making people think there were two Gross Domestic Production pies out there when there was only one. And so people consumed ever more and more because the assumption was that there was something in the bank, or some Defined Benefit Plan that was going to allocate to them. The reality is that we vastly overconsumed lagging behind actually producing anything and now there are infinitely more demands coming out of the finite production of the near and mid future. And those who demand aren’t likely going to be all that civil about making sure they get their part of the pie and our Central Planners will be as all have been, bribable access sellers. Welcome to the Apparatus.

Another problem with comparing the cost of the current disaster with past fiascoes is that there is no real money involved with the issues at hand. The government is simply creating gigantic amounts of fiat currency and writing IOUs that they have no hope or intention of paying off–ever. Of course accountants still keep the books, but no sober person can look at this situation and seriously believe in a happy ever after.

Now you may say that this has been the case in the past, too, but in the past there was an expectation of at least paying interest on the “debt.” As the economy grew, resources were siphoned off to keep the Ponzi scheme propped up. Today is the proverbial day of reckoning when all means have been depleted and the cupboard is bare. Like Mr. Madoff of recent fame, the United States is being called to account and come up empty.

And like Zimbabwe and all other governments caught with their pants down and hands in the cookie jar, money is being printed as fast as the presses can spew it out to stave off collapse. The staggering amounts don’t matter–it is the arrival of the process of hyperinflation that heralds the demise of the system. Trillions, quadrillions, quintillions…there is no need for balancing the books because none of it will matter after the monetary apocalypse.

But life will go on. Those who are productive will prosper. The post-industrial economy, information economy, and service economy will all be exposed for the frauds that they always were. People will get real jobs making real consumer goods at appropriate wages in competition with their counterparts in China, India, and Africa. The inexorable power of competitive markets will level everyone out. Well, everyone but the thieves and their government cronies.

Brad,

Good post. The main stream media’s total ignorance of the cause, magnitude and significance of recent economic maladies and the government’s ill advised moves to “remedy” the “problem” reminds me of the 2003 US invasion of Iraq; One of Saddam’s henchmen, nicked named “Baghdad Bob” told reporters that US forces were in retreat – when behind him, American M1-A1 tanks were rolling down the street (not in retreat).

Ignorance is bliss.

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Mr Tucker, I think Lew posted up on this on LRC not too long ago. My only suggestion is that Medicare and Social Security and other entitlement programs be included on future exhibits (I suspect they’re not fully captured in the “New Deal” component).

Its the ‘me’ generation running the country. They will never experience a diminution in their royal lifestyles, only those who follow.

I think there is sort of a lost cultural component now whereby one generation feels duty-bound to provide for the next generation. The cultural revolution that mainstreamed in the 1960s broke the old culture and substituted a new one that is not sustainable.

Tick, tack, tick, tack. That’s what this time bomb of hovering “liquidity” does.

Dennis & Curt -

When I posted my article, I was more interested in how to present the information in a sensible graph. I did not track down any of the actual figures in the source I got the data from (Barry Ritholtz in Big Bailouts, Bigger Bucks).

According to MeasuringWorth, based on the Consumer Price Index the Louisiana purchase price of $15M would now be worth $278M, a fraction of one percent of the value Ritholtz calculated.

One can only wonder what other inaccuracies there are in the data. Certainly nobody knows the “value” of the bailout.

From http://www.politico.com/news/stories/1208/16663_Page2.html

The Alternate-Dollar Nightmare

“The Number One vulnerability is the dollar itself,” Rickards concluded. “We’re printing them and shoving them out the door, and the Fed is basically out of bullets. So why hasn’t the dollar collapsed? The short answer is, global investors don’t have any other choice.” That is, there simply aren’t enough Euro- or Yen-backed securities for investors to shift their money out of dollars and into some other currency.

But what if some kind of global coalition – say a trillion-dollar sovereign wealth fund allied with several countries around the world – banded together to create a gold-backed alternative to the dollar?

Rickards says investors – many of whom already resent that they have no alternative to the dollar – would sell American currency in huge numbers to take advantage of the new opportunity. “If that happens, that’s the end of the dollar,” Rickards said. “You’d have high unemployment, deflation, and interest rates would go up. It would take what already looks like a strong recession and make it a Great Depression or worse.”

I’m tired of complaining and noone listening.

The graph explains it all. Many beneficial projects were expensive, but contained real value. We also got more than we put into them.

However, The $4+ Trillion Credit bailout was a waste of money. It was apparently more expensive than all of the other projects (in the graph) combined. The financial services held no real value and/or wealth. The were mostly speculation, and contracts (which does not entail wealth production). Yet taxpayer money was spent to keep money in the hands of those who already had it. This prevented a weeding out process, and provided a pit for American money.

What I fear most, though, is the devaluing of the American currency! Hyperinflation may be a thing of the American future!