The perfect example of economy and what is in store for the world and U.S.
By Karl Denninger
Whah Whah: Go Ahead Merkel, Pull The Pin
 This is getting amusing...
Greece is missing its debt-cutting targets, German Finance Minister Wolfgang Schaeuble told lawmakers today, intensifying pressure on Greek politicians to deliver on austerity promises.
Schaeuble said in Berlin that Greece’s plans would leave its debt as high as 136 percent of gross domestic product by 2020, according to two people who took part in the meeting and who spoke on condition of anonymity because it was private. That compares with the 120 percent foreseen in a 130 billion-euro ($172 billion) bailout being negotiated.
Oh well, gee, you mean that when you stop deficit spending GDP goes down and thus debt-to-GDP goes up?
Yep.
Now here's the ugly -- you have to do it anyway.
In fact, you have to cut spending and the deficit by more than the private economy falls, so the imbalance is still corrected. You must run a primary surplus. You must do so even though it is difficult and even though the nation goes through an economic depression.
You cannot borrow your way out of debt. You must balance the budget with either major tax increases, spending cuts or both. You must do so even though it sucks, even though it brings major pain, even though the nation and her people will scream bloody murder. You must do so even if there is risk that you get civil disorder and overthrow of the government.
Mathematics are not subject to political whim or what people want. Mathematics just is. That's all. And mathematics are that you cannot borrow more than you take in on a continual basis; you must eventually stop, you must eventually balance the budget, you must in fact have government growing at a slower pace than the economy, which means if the economy is shrinking government must shrink faster!
These are all uncomfortable truths, but they are also all truths.
They are truths in Greece, they are truths in Italy, they are truths in Portugal, in Spain, in Great Britain and in the United States.
Greece is a relatively small nation. But the fact is that those who lent the nation money did so foolishly and without mathematical foundation behind it that they would get paid. Now trouble has come, because those banks and others lent money they didn't have -- unsecured lending with effectively-counterfeited Euros, as the European banking system, like ours, does not enforce "One Dollar of Capital."
This must end. It must end there, it must end in the rest of Europe, and it must end here.
We'd be wise to end it now.
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