Assessing the Cap

[fredtoast]

(03-21-2022, 03:46 PM)Au165 Wrote: No, because the cap hit in most cases is absorbed in a single year, so you keep rotating the hit from year to year. So dead cap hits I take this year from past void years won't effect the dead cap I take on next year because this will clear. That's why I am saying it's a ponzi scheme you just keep plugging in new dead cap then restructure other contracts to offset it rinse and repeat. 

Once you push cap space down the road you are locked into the original cap.  It is impossible to keep going over the cap every year.  Eventually you would end up with zero cap space.

If the cap is 200 million and you sign 250 million worth of contracts then next year you only have 150 cap space.  If you then go back to the 200 million cap you can keep pushing 50 down the road.

But if you go over the 200 cap and sign another 250 then the next year you only have 100 in cap space.

So you either have to work under the cap at some point or else you will eventually have zero cap space.

The cap will go up some every year, but the theory still applies.  You can spend over the cap one year and continually push it down the road, but you can't continually spend over the cap and push more and more down the road.