In the Box

So, we see with S&P's downgrade that our economy is overweight with gamma risk. "The risk" is fully gamma--it is saturated with retributive (political) value (like I have been telling you for a very long time) and is at the top of the list of factors S&P identifies as putting our debt at risk of default.

Look at what supports S&P's gamma-risk hypothesis.

We have an increasing debt burden both public and private that consumers cannot pay, and if they are demanded to pay it they will be consuming even less. Thus, the outlook is extremely negative (i.e., the risk proportion is fully gamma).

Improbable as it may be, because the risk has been largely unaccounted for in the gamma dimension--hidden away (avoided) and accumulated into a crisis proportion, the probability of default (deflation) is nearly perfect. We have boxed ourselves into the devil's deal. We are "sandwiched" in detriment. If anything deserves a downgrade, this does!

Suddenly we are accounting for all the risk, which results in a significant risk premium. Having to pay more for the debt increases the negative outlook--it accumulates even more risk. The system is overloaded with Reaganomic detriment, and considering the Budget Control Act supports the trickle-down hypothesis of Reaganonomics the outlook is even more negative (like I've been telling you for quite some time).

Ironically, this is where the extended scheme of magnified detriment blows up in the face of conservatives. Eventually there is no one left to pay the debt but the very rich (the trickle-down hypothesis), and combined with a balanced budget amendment, either they pay it or we default. Since the conservative faction refuses to pay the debt no matter what because it is a "job killer," we have boxed ourselves into another downgrade and a higher debt premium which means the payer (the rich) will have to pay even more. (Like I said...we are officially stupid if not crazy!)

Maybe it's time we start thinking outside the box!

Like I have been telling you for a very long time, the binomial political structure we have only appears to be a stable form of government. While it conserves the stakes over time without much civil disorder, it does not eliminate risk, it accumulates it into an unavoidable, gamma-risk proportion. It boxes us into catastrophic detriment.

It's time to think and act outside the box of operant conditioning that consolidation of power provides and experience real freedom--doing things not because we have to, but because we want to.