RONALD CARNEY wrote:
Date: Saturday, August 28, 2010, 10:23 AM
Gleanings on the coming crisis:
Prof. Charles Hall, of SUNY Syracuse, says: “One of the great barriers to making policy in the U.S. is the large numbers of people whose minds have been ruined by the study of modern economics. They just don’t get how the world really works.”
Richard Russell writes: “Do your friends a favor. Tell them to ‘batten down the hatches’ because there’s a HARD RAIN coming [that's Richard's emphasis.] Tell them to get out of debt and sell anything they can sell… in order to get liquid. Tell them that Richard Russell says that by the end of this year they won’t recognize the country.”
According to Rubini it’s not going to be pretty for stock-holders in the U.S. or Europe. “There are some parts of the global economy that is now at the risk of a double-dip recession,… From here on I see things getting worse”.
Why the hard times? Business formation and job creation stinks. There are between five and ten applicants for every new job advertisement. The year’s college grads are having another tough time entering the workforce. Unemployment rates for minority groups in the U.S., under age 25, are in the 50% range. In areas of the U.S., that part of the U.S. economy has transformed into the “de-developing world”.
The dollars in your wallet now not only backs bankrupt U.S. Money, large banks and sub-prime home “owners”. They are also officially backing all the economies of Europe. The world’s monetary system has evolved into a new kind of global socialism. The European Central Bank (the ECB) will spend $1 trillion (750 billion euro) bailing out Europe’s sovereign borrowers (like Greece, Spain, and Portugal). It will also purchase billions of troubled assets from Europe’s largest banks – like UniCredit.
What does any of this have to do with the U.S. dollar? More than you’ll ever hear anywhere else. On paper, the money is supposed to come from Europe’s biggest governments and the IMF. But in reality, most of the money will be borrowed from the U.S. Federal Reserve, which just happened to re-open its trillion-dollar swap account with the ECB. Ironically, the Federal Reserve says these loans are risk-free because the counter party is a central bank (or at least the off-balance-sheet entity of a central bank).
The U.S. Federal Reserve has officially become the world’s lender of last resort. These policies will likely lead to a permanent loss of value for holders of U.S. dollars. The U.S. dollar has assumed all these risks.
Our currency has become a ticking time bomb.
- (Richard Russell is “the Granddaddy of Financial Newsletters).
- (Nouriel Rubini, Economist, founder of Rubini Global Economics, aka “permabear”)
- Added to the above, the Federal reserve was the buyer of last resort for the latest US Bond Auction.
- China, and The OPEC rich countries were non-bidders. Our country is like those people who pay one credit card bill with another credit card.
~Ron Carney
Please welcome Ron Carney our newest blog writer. Notice how long it took me to get this posted. I’m sorry, Ron for the huge delay. Please keep writing. I’ll be quicker to get them up (within 24 hours). Fantastic article!!
The Soviet Union went bankrupt fighting wasteful wars in places like Afghanistan and spending far too much of their wealth trying to be a global military superpower. They also tried to control and dominate (militarily, politically and economically) an empire that was too large. The Soviet Union went broke… and so they collapsed as a viable state.
The United States is doing exactly the same things, and the outcome will be the same for us. The only difference is that the Soviet government could point to a real potential military threat: The US military. We have no such military threat today — at all — to justify our own wasteful military spending.
I would much rather spend our tax dollars on healthcare, education and retirement pensions for American workers and children than throwing it away on Star Wars boondoggle defense systems that will never work and never be used; on nuclear aircraft carrier task groups that China or any other developed country can easily sink with one nuclear-tipped missle; and all kinds of other super-expensive hardware designed to re-fight World War II or the Cold War but have no use in the world we now live in; and on a bloated military heavily top-loaded with generals, admirals, colonels and navy captains who draw huge salaries and retirement pensions… most of whom are not needed at all.
Up until World War II the United States always maintained a bare bones standing military. In fact, the founding fathers had a healthy fear of large standing armies, like the British one they rebelled and fought against. Such large standing armies and navies are only good for conquering and controlling empires — ideas that were anathema to the patriots of 1776.
So when are the Tea Baggers going to show some ideological consistency and call for massive cuts in military spending? All I see is ideological hypocrisy.
BUSH TAX CUTS — Financial condition of U.S.
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NO new taxes!! — focus should be on problem of the Federal Government
Regarding the financial condition of the United States and the Bush Tax Cuts—The Bush Tax Cuts should be made permanent for all Americans. NO NEW TAXES!! There should be no new taxes or ramifications that puts more burden on free market business or Americans. The answer here is for the Federal Government to not direct its imposition toward the Liberty of the American People to thrive in business or the States but rather to turn the pointed finger back at itself and direct the Nation’s budget problem and deficit to where the problem is — the too big Federal Government.
Republicans and Conservatives should not implement what President Obama proposes because Obama will offer nothing that limits or cuts back government. Obama will only offer more setbacks, taxes, burdens, or stifling against the American People — that has been proposed by his (socialist, communist) Czars. There are to be NO bribes or back room deals to allow any further harm or damage to be wrought against the United States or the American People. It is legitimate that the Federal Government and its employees share in the sacrifice for the Nation. The time has come for the Federal Government to realize it needs to fix itself, that trying to arrange so called ‘fixes’ on the American People is not the solution to itself, that the Federal Government is the problem harming the Nation.
Firstly the American People were just taxed by having the Federal Reserve do “quantitative easing” and printing $600 billion which devalues the U.S. dollar causing inflation to Americans!! TAX — higher prices.
It is at the negligence, malfeasance and abuse of the Federal Government and all its many agencies that it seeks to grow itself, its employees bloated salaries, its expensive Union pensions that at the expense of the American People tax base feeds itself with living high on the hog, living protected and insidiously unaffected from the suffering and sacrifice of the people and industry it feeds off. The federal government is now making a living with little better to do in their life but to literally sit and contrive ways to find something it can regulate, control and hence tax. Literally telling humans when they can put food in their mouth in the name of “preventative healthcare“. For example the healthcare bill taxing medical instruments so that the Federal apparatus can feed itself. So why don’t we all become Federal Government workers and then we can just pay ourselves — we can all work for the federal state hierarchy that took over all business and affairs — oh that’s right — that’s called Communism—well some of the anti-U.S. defilers (Progressives in both Parties) in our midst wouldn’t mind socialism/Communism. What a bright future of gray misery, drudgery for the indoctrinated children when they turn 15 years old and find they have no freedom to create because they are government slaves.
The American People have made sacrifices (jobs, foreclosures, inflation (another tax by printing more money)) and paid more, more, more taxes and so in likewise sacrifice for the good of the U.S. Nation it should be with legitimate focus and understanding by those in the Federal Government that they have a common purpose in sharing in the sacrifice and put the fixing and the focus NOT more on the American People but where the fixing and focus should be where the problem is originating from — the Federal Government. The American People did not propose $3 Trillion in spending or have the Federal Reserve print more money to send to Pakistan and elsewhere to create a $14 Trillion debt — the federal government did.
The Debt Commission created by both Parties as an escape goat hole comes forward with recommendations all directed at the American People and how the American People need to be slammed to take the cost, but no recommendations for corrections by the Federal Government other than ‘defense spending cuts‘. Back in May, June was the initial quips of the debt commission throwing out trial balloons of more taxes, the VAT tax, the financial reform bill as supposedly punishing Wall Street to fix the financial problem (by the way – Bank of America raising checking fees and ending free checking is the cost to the American People consumer for the bad financial reform bill – which harms consumers) and namely suggested after the election, trying to get Americans to “GET USED TO” new tax pain and more government control — WELL WE WILL NOT — NO new Taxes!! NO to bigger stifling government!
At the prior G-20 summit Tim Geithner and Barack Obama were rightly rejected and scolded for putting forth that other Nations go along with their plan (global stimulus) for more stimulus spending that Obama and Geithner were proposing for the United States. Tim Geithner has had secret meetings in Canada and been running around to other Nations urging them to do more reckless stimulus spending. It is about time the UK and other Nations told Geithner NO and stopped the spending and the U.S. needs to do likewise.
DON’T TELL US A 15 cent GAS TAX (stealing more money right at the pump) IS GOING TO BE USED TO BUILD HIGHWAYS!!! Baloney — this money goes right in with all the other money–social security taxes, income taxes and gets shelled all elsewhere all over, burned right thru it including waste project earmarks, worse anti-America programs like the NHA, NCLR, SEIU or ACORN and funding a corrupt anti-U.S. organization called the UN. More taxes equals more spending for bigger government. NOPE — NO GAS tax, NO VAT tax, NO any tax! ANY new tax will have a likewise dampening of consumption of products, services having worse effects for the economy. More taxation or federal burden against Americans will send a likewise retraction from consumer activity in the economy. Americans may retract to a full boycott on consumption (having the minimums) to then debilitate China and other foreign National economies by rejecting products as much as possible. ANY new taxes and global fallout will then be the fault of the Obama Administration/Congress for raising taxes.
In this problem it is understandable given the size of the entitlement programs of Social Security and Medicare should at least be on the table to be addressed. Social security and Medicare serve as an understandable legitimate safety net and should not be proposed to be done away with. There may be some way to reign in these programs in detail but raising the retirement age is a bad alternative and will be another sacrifice made by the People. One thing is to stop giving money to dead people and fake SS#’s.
I am making the point that in the best interest of the United States to get fiscal order — the majority of the burden is on the problem within the federal government — and just as congressmen are proposing and has been clearly talked about–as per the notion of federalism of the founding Fathers by a Constitutional government – it is the responsibility of the federal government to look at its malfeasance and do the CUTS — move to a more limited government. And those newly elected are on probation of acting accordingly.
In a recent report (per Fox News) it was shown that Federal Worker salaries have DOUBLED for those making $150,000 or more since 2009 (isn’t that interesting). Also: let’s see, Unions got special deals on their healthcare costs, pensions and Federal workers get exempted from being taxed by not having to use the new healthcare law…. (here is the abuse against the American People!)
Here are some CUT proposals:
1) Moratorium on earmarks — that means no lobbyists getting special favors in return for re-election money or insidiously dropping in earmarks on legislative bills at last second
2)Federal hiring freeze — NO new positions created. (with exception of Border Patrol and ICE Dept.)
3) 10-15% salary cut across the board for all Federal employees with exception of Congressmen
4) CZARS FIRED! — ALL unconstitutional unnecessary Czars that should not be listened to because the American people should be listened to should be removed so that they can do more productive things with their lives (because they are smart enough to do other beneficial activity) rather than spend time trying to control other humans.
5) Fannie Mae and Freddie Mac investigated and trimmed down and NO more bailouts
6) Foreign Aid heavily reduced (reduce by $billions)
7) Reduce money to the UN ($billions)
8) End the Pakistan-Afghanistan War – bring troops home—-then put them on the U.S.
Mexico Border (saving $Billions)
9) Have the SSA actually verify SS#s so that dead people and fake SS#’s don’t steal money.
10) Require legal U.S. ID documents to get program benefits such as food stamps, social security, etc. so that illegal Aliens do not steal money. Outlaw Mexican ID Card nationwide.
11) CUT back unnecessary agencies such as Dept. of Energy, Dept. of Education, the FDA who carry out unnecessary or duplicative inspections, etc. —- hence cut these jobs —yes Federal workers can work in private sector now to improve the economy.
12) Cut unneeded NASA jobs that are doing “outreach to Muslim world” rather than doing anything with Space exploration
13) Stop funding organizations that turn around and do harm against Americans and the U.S. with our own tax money such as : ACORN, NCLR, SEIU (which visit’s the White House about weekly) LULAC, ACLU
14) I’m sure there are many more…..
NOW this fiscal problem is getting tight and severe and that is why there is need for Congressmen to stand up, stand on principle and say enough is enough! There is no room or place for compromise that ends up again back at failure because it seeps into doing the exact same spending bloated government. Either do it or you don’t — and the Nation is at risk — it is cut and dry. There is no place for cheesy, ‘well maybe’ or ‘just a little bit of corruption is ok’ or ‘spending on this earmark or unnecessary government is ok’. The last and example of charade was calling Congress back into session to vote on spending $26 billion to buddy U.S. States Teachers Unions while spending just $600 million on Border Patrol.
Stopping illegal immigration would stop the taxation to pay illegal Alien services and stop the money loss expense of (crime, gangs, school cost, hospital cost, anchor baby cost) as well as stop $30 billion being stolen out of American communities that goes out of the country–illegally. As well more Americans could get jobs just as what occurred following a raid on meat packing plants. Study after study has shown the cost of ILLEGAL Aliens is worse for society than the so called, ’contribution’. And NO, in-state tuition for illegal Aliens is an insult and assault on Americans and legal immigrants that is a tax.
The tax cuts should be kept for ALL Americans– the class warfare needs to be ended for now because the Nation is in bad fiscal condition. As well all officials can stop the lip service and show of political posture to the Middle Class because for decades it has been the Middle Class that has bared the burden of government fiscal irresponsibility, job outsourcing/in-sourcing, and government excess.
NO new taxes or anymore burdens on American People.