Very powerful.

[JayB]

Starvation diets are not the right way to lose weight.

 

No one is even talking about tapering off. It's speeding up.

 

Yes, it's really unfortunate. The republicans want to spend money on tax breaks for the rich and the democrats want to spend money on subsidies for the poor and the only guy who says any different wants to throw the economy into Mt. Doom or whatever.

 

I'm sorry, anybody that thinks Ron Paul's solution is the answer is a fucking retard of the highest caliber of retards. I'm talking King of the Retards. Like Texas-caliber retardation. George W. Bush levels, the sort of retardation that is embarrassing to watch.

 

Any opinion on Nassim Taleb? E.g. where does he fall on the retard-scale?

 

[video:youtube]

 

 

 

 

[billcoe]

Nassim? Greek AND Lebanese ancestory? Clearly a nutjob who spent too much time working on his PhD worrying over minor matters that don't involve critical things like spending trillions on crap we don't need. LOL (for the obtuse, I joke make) Thanks for that link Jayb. Check out what this former USA cheerleader says. And remember, despite the fact that he's the former budget director under Reagan, it's not about repub-dem. Not at all. No LOL. Too serious. This is the former Budget Director of the United States talking.

http://www.usatoday.com/money/economy/story/2012-03-03/david-stockman-says-economic-disaster-lurks/53339644/1

 

Wow!

David Stockman economy Q&A: Economic disaster in the works

By Bernard Condon, Associated Press

Updated 2h 40m ago

 

NEW YORK – He was an architect of one of the biggest tax cuts in U.S. history. He spent much of his career after politics using borrowed money to take over companies. He targeted the riskiest ones that most investors shunned — car-parts makers, textile mills.

 

That is one image of David Stockman, the former White House budget director under Ronald Reagan who, after resigning in protest over deficit spending, made a fortune in corporate buyouts.

 

But spend time with him and you discover this former wunderkind of the Reagan revolution is many other things now — an advocate for higher taxes, a critic of the work that made him rich and a scared investor who doesn't own a single stock for fear of another financial crisis.

 

Stockman suggests you'd be a fool to hold anything but cash now, and maybe a few bars of gold. He thinks the Federal Reserve's efforts to ease the pain from the collapse of our "national leveraged buyout" — his term for decades of reckless, debt-fueled spending by government, families and companies — is pumping stock and bond markets to dangerous heights.

 

Known for his grasp of budgetary minutiae, first as a Michigan congressman and then as Reagan's budget director, Stockman still dazzles with his command of numbers. Ask him about jobs, and he'll spit out government estimates for non-farm payrolls down to the tenth of a decimal point. Prod him again and, as from a grim pinata, more figures spill out: personal consumption expenditures, credit market debt and the clunky sounding but all-important non-residential fixed investment.

 

Stockman may seem as exciting as an insurance actuary, but he knows how to tell a good story. And the punch line to this one is gripping. He says the numbers for the U.S. don't add up to anything but a painful, slow-growing future.

 

Now 65 and gray, but still wearing his trademark owlish glasses, Stockman took time from writing his book about the financial collapse, The Triumph of Crony Capitalism, to talk to The Associated Press at his book-lined home in Greenwich, Conn.

 

Within reach was Dickens' Hard Times— two copies.

 

Below are excerpts, edited for clarity.

 

Q: Why are you so down on the U.S. economy?

 

A: It's become super-saturated with debt.

 

Typically the private and public sectors would borrow $1.50 or $1.60 each year for every $1 of GDP growth. That was the golden constant. It had been at that ratio for 100 years save for some minor squiggles during the bottom of the Depression. By the time we got to the mid-'90s, we were borrowing $3 for every $1 of GDP growth. And by the time we got to the peak in 2006 or 2007, we were actually taking on $6 of new debt to grind out $1 of new GDP.

 

People were taking $25,000, $50,000 out of their home for the fourth refinancing. That's what was keeping the economy going, creating jobs in restaurants, creating jobs in retail, creating jobs as gardeners, creating jobs as Pilates instructors that were not supportable with organic earnings and income.

 

It wasn't sustainable. It wasn't real consumption or real income. It was bubble economics.

 

So even the 1.6% (annual GDP growth in the past decade) is overstating what's really going on in our economy.

 

Q: How fast can the U.S. economy grow?

 

A: People would say the standard is 3, 3.5%. I don't even know if we could grow at 1 or 2%. When you have to stop borrowing at these tremendous rates, the rate of GDP expansion stops as well.

 

Q: But the unemployment rate is falling and companies in the Standard & Poor's 500 are making more money than ever.

 

A: That's very short-term. Look at the data that really counts. The 131.7 million (jobs in November) was first achieved in February 2000. That number has gone nowhere for 12 years.

 

Another measure is the rate of investment in new plant and equipment. There is no sustained net investment in our economy. The rate of growth since 2000 (in what the Commerce Department calls non-residential fixed investment) has been 0.8% — hardly measurable.

 

(Non-residential fixed investment is the money put into office buildings, factories, software and other equipment.)

 

We're stalled, stuck.

 

Q: What will 10-year Treasurys yield in a year or five years?

 

A: I have no guess, but I do know where it is now (a yield of about 2%) is totally artificial. It's the result of massive purchases by not only the Fed but all of the other central banks of the world.

 

Q: What's wrong with that?

 

A: It doesn't come out of savings. It's made up money. It's printing press money. When the Fed buys $5 billion worth of bonds this morning, which it's doing periodically, it simply deposits $5 billion in the bank accounts of the eight dealers they buy the bonds from.

 

Q: And what are the consequences of that?

 

A: The consequences are horrendous. If you could make the world rich by having all the central banks print unlimited money, then we have been making a mistake for the last several thousand years of human history.

 

Q: How does it end?

 

A: At some point confidence is lost, and people don't want to own the (Treasury) paper. I mean why in the world, when the inflation rate has been 2.5% for the last 15 years, would you want to own a five-year note today at 80 basis points (0.8%)?

 

If the central banks ever stop buying, or actually begin to reduce their totally bloated, abnormal, freakishly large balance sheets, all of these speculators are going to sell their bonds in a heartbeat.

 

That's what happened in Greece.

 

Here's the heart of the matter. The Fed is a patsy. It is a pathetic dependent of the big Wall Street banks, traders and hedge funds. Everything (it does) is designed to keep this rickety structure from unwinding. If you had a (former Fed Chairman) Paul Volcker running the Fed today — utterly fearless and independent and willing to scare the hell out of the market any day of the week — you wouldn't have half, you wouldn't have 95%, of the speculative positions today.

 

Q: You sound as if we're facing a financial crisis like the one that followed the collapse of Lehman Bros. in 2008.

 

A: Oh, far worse than Lehman. When the real margin call in the great beyond arrives, the carnage will be unimaginable.

 

Q: How do investors protect themselves? What about the stock market?

 

A: I wouldn't touch the stock market with a 100-foot pole. It's a dangerous place. It's not safe for men, women or children.

 

Q: Do you own any shares?

 

A: No.

 

Q: But the stock market is trading cheap by some measures. It's valued at 12.5 times expected earnings this year. The typical multiple is 15 times.

 

A: The typical multiple is based on a historic period when the economy could grow at a standard rate. The idea that you can capitalize this market at a rate that was safe to capitalize it in 1990 or 1970 or 1955 is a large mistake. It's a Wall Street sales pitch.

 

Q: Are you in short-term Treasurys?

 

A: I'm just in short-term, yeah. Call it cash. I have some gold. I'm not going to take any risk.

 

Q: Municipal bonds?

 

A: No.

 

Q: No munis, no stocks. Wow. You're not making any money.

 

A: Capital preservation is what your first, second and third priority ought to be in a system that is so jerry-built, so fragile, so exposed to major breakdown that it's not worth what you think you might be able to earn over six months or two years or three years if they can keep the bailing wire and bubble gum holding the system together, OK? It's not worth it.

 

Q: Give me your prescription to fix the economy.

 

A: We have to eat our broccoli for a good period of time. And that means our taxes are going to go up on everybody, not just the rich. It means that we have to stop subsidizing debt by getting a sane set of people back in charge of the Fed, getting interest rates back to some kind of level that reflects the risk of holding debt over time. I think the federal funds rate ought to be 3% or 4%. (It is zero to 0.25%.) I mean, that's normal in an economy with inflation at 2% or 3%.

 

Q: Social Security?

 

A: It has to be means-tested. And Medicare needs to be means-tested. If you're a more affluent retiree, you should have your benefits cut back, pay a higher premium for Medicare.

 

Q: Taxes?

 

A: Let the Bush tax cuts expire. Let the capital gains go back to the same rate as ordinary income. (Capital gains are taxed at 15%, while ordinary income is taxed at marginal rates up to 35%.)

 

Q: Why?

 

A: Why not? I mean, is return on capital any more virtuous than some guy who's driving a bus all day and working hard and trying to support his family? You know, with capital gains, they give you this mythology. You're going to encourage a bunch of more jobs to appear. No, most of capital gains goes to speculators in real estate and other assets who basically lever up companies, lever up buildings, use the current income to pay the interest and after a holding period then sell the residual, the equity, and get it taxed at 15%. What's so brilliant about that?

 

Q: You worked for Blackstone, a financial services firm that focuses on leveraged buyouts and whose gains are taxed at 15 percent, then started your own buyout fund. Now you're saying there's too much debt. You were part of that debt explosion, weren't you?

 

A: Well, yeah, and maybe you can learn something from what happens over time. I was against the debt explosion in the Reagan era. I tried to fight the deficit, but I couldn't. When I was in the private sector, I was in the leveraged buyout business. I finally learned a heck of a lot about the dangers of debt.

 

I'm a libertarian. If someone wants to do leveraged buyouts, more power to them. If they want to have a brothel, let them run a brothel. But it doesn't mean that public policy ought to be biased dramatically to encourage one kind of business arrangement over another. And right now public policy and taxes and free money from the Fed are encouraging way too much debt, way too much speculation and not enough productive real investment and growth.

 

Q: Why are you writing a book?

 

A: I got so outraged by the bailouts of Wall Street in September 2008. I believed that Bush and (former Treasury Secretary Hank) Paulson were totally trashing the Reagan legacy, whatever was left, which did at least begin to resuscitate the idea of free markets and a free economy. And these characters came in and panicked and basically gave capitalism a smelly name and they made it impossible to have fiscal discipline going forward. If you're going to bail out Wall Street, what aren't you going to bail out? So that started my re-engagement, let's say, in the policy debate.

 

Q: Are you hopeful?

 

A: No.

 

Whope-de do, right Rob? Just keep spending, no one will ever need to pay it back? We need to actually hear the money flushing to nothingness or it doesn't really matter? We neeed th egovernment to spend a few trillion more here or there on stupid ased shit to get us out of this hole? Stockman is just another nutjob on the full retard train?

 

 

 

 

Gary Johnson is another candidate who also doesn't stand a chance in hell who is looking at the major structural issues we as a country MUST address. Now or later. He also rates very high on personal liberties by the ACLU.

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2012/01/01/MNND1MJ7UO.DTL

[G-spotter]

Just keep spending, no one will ever need to pay it back?

 

BUY $100,000,000,000,000,000,000,000 CANADIAN DOLLARS AT PAR

DEVALUE US DOLLAR so 1 USD = 1/1000 CANADIAN DOLLARS

CANADIAN DOLLARS ARE NOW WORTH $100,000,000,000,000,000,000,000,000 US DOLLARS

PAY OFF US DOLLAR DEBT WITH CANADIAN DOLLARS

[JayB]

Sure Bill, things may look bad at the *national* level, but there's plenty of good fiscal news at the state and local level.

 

http://www.pensiontsunami.com/

 

 

[billcoe]

Sure Bill, things may look bad at the *national* level, but there's plenty of good fiscal news at the state and local level.

 

http://www.pensiontsunami.com/

Oh joy:-) Hey, it's only money, right:-) Some of these guys must be able to somehow conjure it out of thin air it seems as they don't seem worried at all.

 

 

Drew, I made a mistake and denominated into Yuan a large hunk of my cash in a Federally insured bank account. Sure, it's gone up, but I've sat and watch some other currencies roar even further ahead. I would have been wiser to grab a misc market basket of currencies. The Yuan looked like a sure thing at the time. You joke,but I'm sure that they have looked at devaluing the dollar to pay off the debt. But the time to do that is only AFTER you have stopped borrowing:-)

 

Warm regards to all, remember that capitol preservation is the game that's afoot!

[Coldfinger]

 

Instead of telling me why my candidate is wrong....why dont you tell me who to vote for that will do something different than the status quo.

 

 

Er....

 

Ron Paul IS the status quo.

 

Useless posturing.

[j_b]

 

Instead of telling me why my candidate is wrong....why dont you tell me who to vote for that will do something different than the status quo.

 

 

Er....

 

Ron Paul IS the status quo.

 

Useless posturing.

 

Ron paul is indeed for the deregulation status quo that is responsible for taking the world economy over the cliff. One percenters arguing for austerity for the other 99%, while they cash in on the spoils, aren't very credible.

 

There are fundamental problems with the economy but it has to do with the wild growth model, which isn't sustainable without the energy intensity afforded by cheap oil and despite all the illusion performed in the great casino. Doubling down on letting corporations run our lives is moronic.

[j_b]

Sure Bill, things may look bad at the *national* level, but there's plenty of good fiscal news at the state and local level.

 

What kind of people think that drowning government in a bathtub, so that it cannot perform its basic function, is good news?

 

All the while they argue that the 1% shouldn't pay their fair share ...

 

[JosephH]

Because there ain't no man

Who got the money in his hand

Who got any of that bread

Bein' slow in the head

The easier it looks

The hotter it hooks

There ain't no such thing as easy money

We say, "yes! oh yes!"

 

Saturday night

There was a terrible, terrible fight

Between two dames who was losin' the same game

It wasn't clear, But I hear

somebody was lookin' for some easy money

 

Maybe we are swimming in debt because we have allowed the development and operation of a shadow economy with little oversight or regulation. Debt is the basis of that off-the-books economy and every percentage of our economy that can be converted over to that shadow economy is essentially moved off the books and into the shadows where the people who make money off of it are definitely not the average American. Hence the reason we have assiduously converted all four basic forms of consumer debt to those markets and have been vigorously following through doing the same with the principal forms of debt use by all forms of governments at all levels around the world.

 

 

 

 

If all of our nation's and the world's monies were vested in regulated economies those funds would be out of reach of the folks who have structured this 'new [financial] world order' that revolves around various forms of unregulated debt. To see the resilience of this shadow economy you only need to look at the efforts that went into killing financial reforms after the 2008 crash - nothing has been structurally or significantly changed since then other than some tighter reserve requirements - otherwise the game is still the same.

 

 

 

 

Debt and debt markets are today's financial 'lingua franca nova' and that, from my perspective, is why we are swimming in debt - debt is now what makes the world go round under-the-hood. And those markets get repeatedly pumped up by speculation and the human instinct to chase 'easy money' - the corporate reshuffling of the 80's, borrowing by world governments in the 90s, the internet bubble, suckering pension funds, the housing bubble all feed the beast (along with what I would argue is the very best of speculative, off-book, bubble businesses, war). Of course, the ultimate booty, would be the opening up of Social Security to 'private markets' so you know who anyone rooting for that is cheer leading for.

 

 

 

 

Don't like debt? Then apply the same level of oversight, regulation, and transparency to the derivatives market as we do our above board markets and economy. The way we have it structured now is essentially an off-books debt-based economy run by a gentler-and-kinder form of organized crime that's sanctioned and abetted by our government. It's a forest-for-the-trees deal with 'guberment' mainly to blame - not for 'spending' - but rather for us allowing it to be co-opted into failing to regulate this new shadow economy. Dude, don't watch the walnut shells; watch the guy doing the shuffling, and question why you are sitting at the table in the first place. But then, oh yeah! That's the lure of 'easy money' and the real bottom line - we all be wantin' some.

 

Also, and contrary to popular belief, the sky is not falling and we should consider easing up a bit on the undue angst, drama and hyperbole, but then it is an election year and lord knows we gots to drive that black devil outta da Whiteyhouse:

 

 

 

 

But if you desperately want politicians to blame for our current hangover you need look no farther than:

 

 

 

 

But hey, war is always free in America ("and for a good cause!"). Never more so than when you're portfolio is redhot and you are too preoccupied rounding up that second vacation home or property to flip. And especially if you're rich, because you sure as hell aren't going to be paying for it when the bill comes due - hell, that's what all the [flag-waving] suckers and chumps are for (oh, and remember - war and healthcare - you can't have both and one is clearly the spawn of Satan himself).

[kevbone]

 

Instead of telling me why my candidate is wrong....why dont you tell me who to vote for that will do something different than the status quo.

 

 

Er....

 

Ron Paul IS the status quo.

 

Useless posturing.

 

All the other candidates (Obama, Newt, Mitt and Rick) want and will continue the current occupations. Ron Paul will not. How is that the status Quo?

[Coldfinger]

Not true Kev, the GOP (Paul's party) have been obstructing each and every effort by Obama to get things done.

 

Rather than do the work needed in Congress to move the country forward, the GOP's sole goal is to take power: so they have done nothing over four years except obstruction and posturing.

 

There's the 1% but don't forget Congress has a 12% approval rating and that number is solely aimed at the Tea Party types Ron Paul aims for.

 

 

[Coldfinger]

And I'd add the Tea Party is really for the imposition of a Christian State on all of us masquerading as fiscal conservatism.

 

There are BIG correspondences between the Christian Right and Tea Party now that we have some elected and can see what sort of things they focus on, e.g. declaring the Girl Scouts a threat to Christian values.

[rob]

 

Instead of telling me why my candidate is wrong....why dont you tell me who to vote for that will do something different than the status quo.

 

 

Er....

 

Ron Paul IS the status quo.

 

Useless posturing.

 

All the other candidates (Obama, Newt, Mitt and Rick) want and will continue the current occupations. Ron Paul will not. How is that the status Quo?

 

there are other candidates, haven't you been listening?

[KaskadskyjKozak]

there are other candidates, haven't you been listening?

 

None of which even register as a blip on the national scene

[rob]

there are other candidates, haven't you been listening?

 

None of which even register as a blip on the national scene

 

Hey, if you're talking about electability then Ron Paul isn't an option, either. He won't even be on the ballot but these other guys will -- in some states

[KaskadskyjKozak]

Hey, if you're talking about electability then Ron Paul isn't an option, either. He won't even be on the ballot but these other guys will -- in some states

 

Oh, no, he's not electable, but he's giving people like boner hope that he could be.

[rob]

I thought kevbone was into candidates the mainstream media refused to acknowledge, but it turns out he's the one who refuses to acknowledge the non-mainstream candidates.

 

ahhh, irony

[kevbone]

Irony is aid.

[j_b]

Of course, the ultimate booty, would be the opening up of Social Security to 'private markets' so you know who anyone rooting for that is cheer leading for.

 

Privatizers get kicked to the curb

[billcoe]

Homie the Clown says that we should check in with the debt clock lil childrens!

Hmm,says that it's $136,980, up $2000 from quote below, which means your share, assuming you are a taxpayer, is only ... wait, nevermind - that is exactly what YOU owe. $136,980 IS YOUR SHARE.

 

About a month later, $138,155 is the number each of us taxpayers owes. This clock runs faster than Steve Prefontaine ever did.

[Phil K]

We've gotta get some spraymasters on this ASAP! 'Bone.... JayB.... j_b..... KKK....Tvashie.....let's get on the ball guys! How we going to fix the deficit if you'all don't figure this out?