TEA Party budget cutting strategy will likely pay off
Laissez faire analysts predict that a process of monetary equalization will take place as the result of the end of monetization of U.S. Treasury debt combined with a Congressional refusal to generate new debt over and above a statutory ceiling imposed last fall of $14.3 trillion.
“Without a debt ceiling increase by August 2, the government will wake up August 3 unable to pay approximately 44% of its bills for August. The overwhelming majority of those bills are simply disbursements of funds for government programs, without which this would be a richer, freer country. Interest on the national debt due in August is not a big item...
“In the meantime, in the weeks and months that follow August 2, something unexpected would happen... something nobody in government wants you to know. You'd find out how much you don't need the government.
“For example, you'd find out that the Departments of Commerce, Energy, Interior, Agriculture, and a few others are completely unnecessary and a total waste of money. They'd spend only a couple hundred billion dollars out of a $3 trillion budget, but it would be a huge start on the way to showing you how unnecessary government is. Once that ball got rolling, it'd get harder and harder to stop.”
Dan Ferris, author of the financial newsletter, “Extreme Value.”
Extreme value theory is a branch of statistics dealing with the extreme deviations from the median of probability distributions. The general theory sets out to assess the type of probability distributions generated by processes.
Extreme value theory is important for assessing risk for highly unusual events, such as 100-year floods. The statistical models were pioneered by a gentleman who was working to define the probability of the weakest fiber in any given cotton thread and use the data to manufacture a stronger product.
It is often used to assess risk in day-to-day market fluctuations.
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