Who Created This Mess?

By James Kwak

Not us, say the Republicans. “We didn’t create this mess,” a Republican said to Tim Geithner in a meeting recently, referring to the national debt and the need to raise the debt ceiling this summer. Yet, as the Times continues,

“Independent analyses have shown that more than half of the $14.3 trillion debt is from policies enacted during the past decade when Republicans controlled both the White House and Congress, and much of the rest from lost revenues and stimulus spending and tax cuts since Mr. Obama took office at the height of the financial crisis and recession.”

I did one of those “independent analyses” (although not one that has made it into the media) myself a few months ago.

To summarize, I looked at five Congressional votes in the past decade that contributed a total of $3.1 trillion to the current national debt. And the fact is that, on a dollar-weighted basis, current Republican senators voted for that debt 67 percent of the time (typically the 2001 tax cut, the 2003 tax cut, Medicare Part D, and the 2010 tax cut), while current Democratic senators voted for it 50 percent of the time (typically the 2009 stimulus and the 2010 tax cut). Note that for these purposes I am not getting into the debate about which of these deficit-increasing measures were worth the cost and which were not.

(I’m sure Democrats are also walking around Washington saying they didn’t create this mess, either, and while they aren’t quite as much to blame as the Republicans, they did their share as well. But remember, the Democrats are the party that wants to raise the debt ceiling, which is at least the logically consistent thing to do when you’ve passed a lot of bills that increase the debt.)

Now, back to unnamed Republican lawmaker who thinks his party isn’t to blame. The frightening thing is, he probably believes it. When people hold certain ideological beliefs strongly enough, no amount of facts will get in their way. If you believe that the current deficit is the result of excessive government spending (passed by Democrats, even though they only controlled Congress and the White House for four out of the past thirty years*), no pile of charts will be big enough to convince you otherwise — just like if you believe that tax cuts increase tax revenues, that the deficit has produced high interest rates, or that Barack Obama was born on Mars, no amount of evidence will convince you otherwise.

This is just fine if you are my daughter, who is four years old — although, actually, she admits it when she makes a mess (and helps clean it up). But if you are a legislator in the most powerful country in the world –and the one whose debt is the definitionally risk-free asset against which the yield of every other financial asset in the entire world is measured — it’s not good enough.

61 responses to “Who Created This Mess?

  1. trouserman

    Ronald Reagan inherited a national debt of $1 trillion. Using a combination of tax cuts and increases in military spending (with nary a “hot” war in sight), he Laffer-curved the nation to a $2.7 trillion debt (a 170% increase in just eight years!)

    I’m not blaming Reagan—or the Repubs—for the current mess. But it does seem to me the Reagan years mark a time when Washington began to lose its fiscal sanity.

  2. actually, it goes back further than reagan…it started under johnson, running the “Great Society” programs & the vietnam war without paying for them…

  3. What’s important is the size of the debt relative to the size of the economy. Under Johnson, the debt to GDP ratio decreased. Under Reagan, it had the first sustained increase since WWII. No question, this is when all the magical thinking started.

  4. Owen Owens

    There is no shortage of blame to go around, I think under Carter when the usury laws were wiped out was the beginning and the ball really got to rollin under Reagan.

  5. When does a revolution start? Or a crisis of some sort?

    Why do we think that trends have to be replaced by single acts in writing history? So we can make (up) sense out if it? Or editorial policy?

    DEBT R US!

    James is a bit more careful by saying, “current Republican senators voted for that debt 67 percent of the time.” This is quite different from attributing the debt clearly to anyone.

    The trend ought to be sought in the capitalist life-cycle. Have we done anything to slow it down? Hell, no! That would have been anti-capitalist/patriotic. Anti-capitalist in affecting the well being of the elites, anti-patriotic in affecting the purchasing power of Joe and Jane.

    Question is: Can we slide peacefully to a lower station, or must we take the most down with us through the bust?

    _____________________________
    P.S. The latest major idiocy was Bush’s when he had wasted resources with his/elites’ wars, as fast as the Chinese could feed us and some more.
    P.P.S. Reagan’s latest gift to America is Obama’s bipartisanship.

  6. Housing Programs created this mess . . .

    It is clear as day – the housing bubble collapse has collapsed the inflationary economic growth we saw for 50 years.
    The bubble collapse forced the Feds hand. The Bubble Collapse crashed the Balance Sheets of every investor in the market. The Housing cycle IS the economic cycle. From dishwashers to carpeting to new roads, school buildings and waterlines – housing drives growth and jobs.
    Fake housing policies, from Carter’s Community Redevelopment Act, (greatly expanded under Clinton,) to the False Promise of Freddie and Fanny (thank you Barney Fwank and “that’s not my mortage” Chris Dood) _generated_ all the trash mortgages that Wall Street packaged and repromoted as bonds. That is where this all started, “signing mortgages” – They weren’t high 30 year quality nor backed by the government – even if Moody’s said they were. They were super risky’ – one little hic-up in the economy and thousands of low quality homeowners would start missing payments, and they did. Another hic-up and the tidal wave of forecloses feeds on itself.
    - So here we are. Nearly 30% of US mortgages are underwater, no one can sell without a loss. No Bank will back you as the economy and your Balance sheet stink like your neighbors.
    The only way out Nationally is for Bankers/investors to take the losses and put them on their books – which closes banks down – and they are closing but that is painful. As such no real growth until foreclosures get back to where the real world says they should be measured by and paid by real risk levels.

  7. ““We didn’t create this mess,” a Republican said to Tim Geithner…” Really? If not the banker and the politician, was it the citizen who thought giving banks money and borrowing it back at 20% would be good for the economy?

  8. “How to fix this mess, never minding the past?”

    *Unemployment numbers went up today with just 55k jobs created – where McDonald’s has stop hiring? So now, ironically some of us can’t even afford to buy their french-fries and hamburgers? (kinda pathetic – so sad – but actually laughable for a masochist)
    They [I] say, “The Great Recession” was indeed as far from a recession as democrats are apart from republicans! Let me rephrase that…we “LOST” (nasty ward, eh?) the battle, but instead of changing course as we should be, were digging ourselves deeper into debt.

    We technically have been in a mild depression with the constant tweaking of CBO’s/ Government guesstimate (borderline malfeasance [?]) numbers (JMHO) since late 2008! Greenspan and Bernanke are certainly the blame! Two [2] non-elected officials whom/who have overseen the countries bloodline for decades (isn’t that nice) through an organization that is chuck full of “fill-n-the-blanks-yourself?

    Our constant perennial wars with any country that looks at us cross-eyed isn’t going to work any more, period! Or for that matter buying off our enemies for our multinationals {(note: when Joe Klein [5/2/11]of “Time Magazine” asked the pentagon how many private contractors [mercenaries ?] they had…the reply was somewhere between one [1] and nine [9] million – probably now at ten [10]ml)} to create jobs for who?

    The Great, Great Depression was finally abated by the United States getting itself into WW II (which by the way everybody wanted?) for the programs initiated by FDR just didn’t solve America’s problems – but as fate would have it…prepared a work force with discipline and loyalty, ripe for what was to follow. Then came the “Atomic Bomb” rushing civilization into the Nuclear Age overnight!
    Today’s problems cannot be fixed by WW III, (there’s no argument – oh God, I hope not?) for it is the end of us all, and dozens of small wars can’t solve the problems either, as we in America are feeling the cost of War {(“A Pyrrhic-Victory to the Nth degree)/(shouldered all, on the backs of the American working families). But what we can do…is stop giving unemployment checks for “Two-Years” and get people back to work retraining them to build out our failing infrastructure (let not the unions interfere) which in turn will create (jobs build self-esteem, and give an individual a feeling of worth, something a hand-out can’t provide) jobs for a new energy
    infrastructure program, modernized 21st Century Transportation programs, and innovated ways to enhance our healthcare program to a “Single Payer National Program” (Mitt Romney?) while slowly raising the retirement age for Social Security (JMHO)!

    It’s time to move on!
    Thankyou James and Simon, and “Thankyou for your great digging for America’s Sake”! :-))

  9. Here’s another angle from Karen Garcia (New Paltz, NY) on the debt issue:

    Part of the problem lies with the corporate media’s complicity in the controlled narrative that the debt and the deficit are the be-all and end-all of what plagues America. With few exceptions, the press is not doing a good job covering the unemployment crisis, the foreclosure crisis, and the deep and widespread corruption in our government.

    And according to a report in The Huffington Post, when Rep. Henry Waxman of California prodded President Obama to take to the bully pulpit and fight back against the Republicans’ extortionistic shenanigans, the president demurred and even got a bit testy. At a meeting Thursday with House Democrats, he said he already had a plan and didn’t want to upset the global markets and cause even more problems…

    To read it all, follow the link to NYTimes comments section: http://community.nytimes.com/comments/www.nytimes.com/2011/06/03/opinion/03krugman.html?permid=10#comment10

    Karen gets the story!

  10. The careful construction of Corporate Personhood over a 150-year period of legal decisions was accelerated by the creation of the K Street lobbying industry in the late 1970s* by the DEMOCRATS. This prepared the fertile American soil for Reagan’s DE-forms, Clinton’s introduction of NAFTA and destruction of Glass-Steagall, Dubya’s Iraq adventure, and the most brilliant stroke of all: the development of the Obama Brand.

    This is all theatre. When will we start throwing rotten tomatoes?

    And when will Mr. Kwak stop pretending that the Democrats are better than the Republicans? Surely he is too smart to actually believe this.

    http://www.MoveToAmend.org

    *There is a book about the creation of K Street called, I believe, “So Damned Much Money.”

  11. If the major media routinely offered this kind of factual challenge to politicians’ fantasies, as good journalists used to do, we might see a little more evidence of sanity in government. The Times still comes through sometimes, but most news outlets report the politicians’ words without any factual context at all.

  12. Actually it started with President Reagan, trickle down economics and its effect on tax policy. The “mess” is like a chicken coupe that’s been thirty years in the making and now the chickens are coming home to roost.

  13. Yet another, sophomoric, partisan posting by Kwak. There isn’t a single politician (either Republican, Democrat or for that matter from the Communist Party of China) who doesn’t use government spending to stay in power. After all, Kwak, seems to forget, people like bubbles because it gives everyone an endorphin-like wealth effect. And politicians like them even more because it helps them get re-elected or stay in power.

    @Kwak, do you think inspiring more partisan bickering is helpful?

    PS, did you actually flunk your antitrust class as you seem to have no idea about the McCarran-Ferguson Act and its protection of insurance oligopolies?

  14. Wow, big surprise! The ‘Don’t-Tax-and-Spend’ Repub’s outdo the ‘Tax-and-Spend’ Dems. Wonder what the numbers come to when you add in the Enron inspired, off the books accounting gimmicks that we spend to support Big Oil for three wars.
    I got a great idea: Let’s support a political class that’s hell bent on destroying what’s left of this country. They promise whatever they need to get the votes, and then they do the bidding of whoever spends the most.
    It’s a sham, a disgraceful clusterf*!k for a few rich sociopathic pigs that don’t amount to a single private slain by a IUD.
    Opt-out, revolt, do whatever you can! DRY UP THE SWAMP!
    And for God’s sake, quit thinking that either of the parties will fix things!!

  15. All you have to do is graph yearly federal deficits by year since 1952, putting red bars when Rs are in the white house, blue for Ds. This way everyone but Sarah Palin could figure out which political philosophy leads to increasing debt. (I have made the graph, but this comment stream doesn’t seem to accept attachments.)

  16. “Who Created This Mess?”

    You need to define this mess properly. That would be a too much total debt mess (meaning BOTH private and public).

    “But if you are a legislator in the most powerful country in the world –and the one whose debt is the definitionally risk-free asset against which the yield of every other financial asset in the entire world is measured — it’s not good enough.”

    There is NO reason for any debt to be risk free.

  17. Mr. Kwak quoted the Times article stating “…more than half of the $14.3 trillion debt is from policies enacted during the past decade when Republicans controlled both the White House and Congress…” This statement is false! Republicans had control of both the White House and Congress for only 4 years, from 2003-06 (inclusive). Mr. Kwak then goes on to state “…even though [Democrats] only controlled Congress and the White House for four out of the past thirty years…). But that is also true for the Republicans. They had control of both the White House and Congress only 4 of the last 30 years.

    “the Democrats are the party that wants to raise the debt ceiling” To be honest, the republican are also willing to raise the debt ceiling. The difference is that the republicans insist on coupling that increase with spending cuts.

    As to the congressman who said “We didn’t create this mess,” he may well be correct. It was a meeting with FRESHMEN congressmen. Since they only took office 5 months ago, it is a stretch to blame them for debt that has been building for decades.

  18. @Kwak,

    When are you going talk about how Barney Frank and Chris Dodd stoked the financial crisis by encouraging moral hazards at Fannie Mae? Even to the outrageous extent of Frank getting his boyfriend a job at Fannie by beseeching Fannie’s CEO — who was all too happy to comply.

  19. D and R are two sides of the same coin.
    The destination is the same (complete corporate governance and a toll-booth society, aka fascism), the difference is the rate at which we get there if the status quo doesn’t change. R’s want to get there at mach 2, and D’s only 100 mph.

    How do we get out of this? Crash the system and reset. It will be terribly painful, but it’ll buy us a few generations of time before the corporate/financial monster regenerates its collective political power.

    What will it take to do this? Set off the derivative bomb. Greece may be the detonator. They default, and they should, and the double domino chain of defaults and CDS will cook off and all of the banks essentially implode at once. There literally isn’t enough money to save ALL of the TBTF’s globally, simultaneously. Central banks can try and print, but can they do it fast enough to keep up with the cascade? Can they avoid the riots that would ensue?

    The mega-banks/corporations have used economics to corrupt the political system, and their misunderstanding of economics (+ hubris) will be their demise.

  20. Michael Spence, a Nobel laureate for economics in 2001, writes in Foreign Affairs:

    Globalization and Unemployment
    Summary:
    Jobs growth was slow in May, renewing pessimism about the U.S. economy. Spence, a Nobel Prize-winning economist writes that economic growth and employment in the United States have started to diverge, increasing income inequality and reducing jobs for less-educated workers.

    For more, http://www.foreignaffairs.com/articles/67874/michael-spence/globalization-and-unemployment

    The idea is that the state of the US economy is due to a trend that was only aggravated by the last bubble. Diogenes in a comment above also gets to this.

    Fact is that the deficit level may very well be preventing us from doing more of the same. Is it also preventing us from doing the right things?

  21. Blunt Instrument

    A waste of pixels. It is akin to arguing over who is the more heinous: the murderer who beats his victims to death with axlehandles; or the one who uses baseball bats. We, the victims, get bludgeoned to death either way.

    Vote no to incumbents. Perhaps the next gang of thugs will be kind enough to just drown us in the bathtub.

  22. It is time to “hang” all of the banksters and their political accomplices. Hopefully, there will be a massive revolt in Greece to send flames up the a*ses of the FIRE sector sociopaths and the crooks in politics…starting with Papandreou:

    “In a nutshell, they allege that Papandreou and members of his team presided over the sale of 1.3 billion dollars worth of credit default swap contracts (CDS on Greek sovereign debt) on or around December of 2009, shortly after coming to power. The $1.3 billion worth of insurance protecting against a Greek default was bought during the spring and summer of the same year, by the Hellenic Postbank, a public banking arm of the Greek government. (In other words, public funds to be used for public insurance against default).

    “Were it to be cashed in today, the policy would pay out in the region of $27 billion – a substantial amount to put against spiralling debt management.

    “But the Greek government is no longer in possession of this $27 billion of CDS. It was sold for a minimal profit soon after being bought. A Swiss-based wealth-mamagement firm set up the same year, IJ Partners, bought the insurance – says Kammenos.”

    — excerpt from http://hat4uk.wordpress.com/2011/06/01/papandreou-accused-of-greek-debt-lifebelt-fraud/

  23. Why Liberal Sellouts Attack Prophets Like Cornel West – Chris Hedges

    — excerpt —-

    To accept that Obama is, as West said, a mascot for Wall Street means having to challenge some frightening monoliths of power and give up the comfortable illusion that the Democratic Party or liberal institutions can be instruments for genuine reform. It means having to step outside the mainstream. It means a new radicalism. It means recognizing that there is no hope for a correction or a reversal within the formal systems of power. It means defying traditional systems of power. And liberals, who have become courtiers to the corporate state, must attempt to silence all those who condemn the ruthlessness and mendacity of these systems of destruction. Their denunciation of all who rebel is a matter of self-preservation. For once the callous heart of the corporate state is exposed, so is the callous heart of the liberal class.

  24. Temptation

    That’s pretty awful, Stuxnet about Barney Frank but unfortunately true and chronicled by Gretchen Morgenson of the NYTimes. Sort of my fanny for your fanny for a job at Fannie.

  25. What was the national debt when Bush Jr was sworn-in in January of 2001? Correct me if I am mistaken, but I want to say it was just shy of $4 trillion.

    Eight years later, this had ballooned to > $10 Trillion, after the regime pushed endless war, mindless security spending to look out for law-abiding citizens, huge tax cuts mainly benefitting the top percentage of the wealthy. Sure, democrats aided and abetted this Bush fiasco, but the impetus was all republican, specifically, the neocon “think tanks” in Washington, practically all of which are funded by corporate money.

    Someone mentioned Medicare Pt D, in all its’ mendacity during Congressional hearings relating to its’ cost, Bush et al simply LIED about the numbers. Throw in legislation the prohibits the government from negotiating Rx drug prices, and you’ve got another big republican initiative running on fumes.

  26. Temptation

    Of course being a partisan blog, neither Simon nor Kwak would ever mention that Larry Summers (D) and Robert Rubin (D) were instrumental in deregulating derivatives and squelching any attempt at regulation, along with Greenspan.

    Check out Frontline:

    http://www.pbs.org/wgbh/pages/frontline/warning/

  27. @Woop – When Pres. Bush took office, the gross federal debt was $5.6T. By end of 2008 it was $10.0T, a rise of $4.4T. The debt at end of 2010 was $13.5T. According to Pres. Obama’s proposed fiscal year 2012 budget, the debt is expected to rise to $16.6T by end of 2012 and $20.8T by end of 2016. Do the math, Pres. Obama is expecting to add $6.6T to the debt during his first term (50% more than Pres. Bush did during both terms). If Pres. Obama serves a second term, then he is expecting to add $10.8T, more tan 2X the amount Pres. Bush accrued.

    Note that I used gross federal debt, which includes money “borrowed” from the various trust funds. If we only consider public debt, then the debt went from $3.4T to $5.8T during the Bush administration and is expected to rise to $15.1T by end of 2016.

  28. trouserman

    This doesn’t directly address the “mess” or who caused it, but I do think it speaks to the Carter-ian “malaise” that seems to be afflicting this country It’s also pretty good prophecy. Here’s David Foster Wallace speaking in 1996(!):

    “The thing that really scares me about this country….is I think we’re REALLY setting ourselves up for repression and fascism. I think our hunger, our hunger to have somebody else tell us what to do—or for some sort of CERTAINTY, or something to steer by—is getting so bad….in Pat Buchanan, in Rush Limbaugh, there are RUMBLES on the Western horizon, you know….the next few decades are going to be really scary. Particularly if things get economically shaky….

    (Quoted from “although of course you end up becoming yourself” by David Lipsky)

  29. @ Temptation

    You should read the blog before making a fool of yourself?
    I’d bet you still think the egg came first, before the chicken – a literary quest of imprudence to impinge your sophomoric non-script decoupage!
    Cheers!

  30. @ Big: Bush set the house on fire with gross mismanagement and fiscal imprudence that was extremely reckless. Today, we still have a GOP-dominated Congress that insisted on nearly one trillion more in debt to continue Bush tax cuts, that clearly were wrong from the start. You can quote numbers all day from Wikileaks, but at the end of it, most reasonable people are able to see where this mess originates, and it ain’t with Obama.

  31. Analysis of an initial cause to a problem is useful, especially if it can stop the problem immediately.

    The SNAFU the U.S. is currently in is not such a case.

    Where are the credible plans to fix, or at least seriously address, this mess?

  32. trouserman

    If Time magazine had a “Mess-Makers of the Decade” issue, I’d like to see Allan Greenspan on the cover.

    He never could see a stock market or housing bubble, but during his tenure he must have seen twenty recessions just around the corner. So slash, slash interest rates!—until the largest economy in the world becomes one huge credit bubble and…. collapses. The “Maestro” took the credit when things were going well; now I give the “Mess-tro” a large part of the blame.

    And how about his famous warning to Congress in 2001 about the RISK of surpluses and the DANGER of paying off the debt too soon or too quickly? The warning which led in part to the infamous Bush tax cuts? It would be funny now if it wasn’t so sad. Did he actually believe his own nonsense? Was he a fool—or a tool?

    Either way, he helped make this mess. So I salute him, as one of the best(?) “Mess-makers of the Decade”.

  33. Years back, I nearly barfed one day watching a Senate hearing, when the late Senator Byrd referred to Greenspan as “one of the wise men.”

    Hello? What ya smokin’ ?

  34. This article on alternet is a brutal look at how the American people have been robbed to enrich the elite few: http://tinyurl.com/y5g8rtp

    Here’s an excerpt. It’s depressing:

    What could be done with all the money that has been hoarded by the Economic Elite is extraordinary!

    Let’s consider what we could do with the money that has been stolen from us? On top of what should be our average six-figure yearly income, we could have:

    * Free health care for every American,
    * A free 4 bedroom home for every American family,
    * 5% tax rate for 99% of Americans,
    * Drastically improved public education and free college for all,
    * Significantly improved public transportation and infrastructure,

    The list goes on…

  35. Corrupt Hypercapitalism has given us this:
    1. US is the richest nation in history yet with 50 million of our fellow citizens living in poverty.
    2.50% of US children will use food stamps to eat at some point in their childhoods
    3.1 out of 5 US households don’t have enough money to buy food
    4. 1.4 million Americans filed for bankruptcy in 2009. A 32% increase from 2008
    5.60% of those bankruputcies were medical bankruptcies.
    6.75% of medical bankruptcies filed were from people who had health insurance.
    7.Americans have lost 5 trillion dollars from their pensions. 13 trillion dollars from the value of their homes.
    8.personal debt in 1980 = 65% of income. In 2009, 125% of income.
    9.13 million US families are expected to lose their homes by 2014.
    10.48% of homes or 25 million homes are underwater.
    11. Every day 10,000 homes enter forclosure.

    Anyway…The U.S. flavor of capitalism is a miserable failure. This is an expression of our current state of plutocratic oligarchy and is a bi-partisan issue. To pin this on one party or another is to betray the mind of simpleton. There is no room for apologists anymore. Only room for direct action and truth.

  36. Commenters here might want to Google “Lifting the Veil” for a feature-length documentary about the (broken) promise of the Obama presidency.

  37. Owen Owens

    @ JDM: Where are the credible plans to fix, or at least seriously address, this mess?

    There may not actually be a so called credible plan or plans. Being that money is a finite supply, you can never please all the people even some of the time. Life itself is a risk, the lower and middle class have taken a hit and it will only be fair if some of the upper class does so in the future. The question is in what form would this take place?

    Now if that was a known, the knowers would seek alternative investments. If it were based on greed, bad investsments or bad luck, that would take a surprise event. One which the players cards would have to be shown in order to shake out the losers and pay the winners. There would be far more losers than winners which in turn would create and even larger mess, only this time the upper class is shaken down to some extent adding to a new middle and lower class.

    So you can see that by actually addressing a problem with a cure, you can create more problems, the benifit comes by creating problems for the same people who created the problem for you. Whomever that may be.

  38. Moses Herzog

    Who created this mess???? I can show you with a graph. Click on the link.
    http://2.bp.blogspot.com/-8LVw3-YXt_A/TdWj8nQyUkI/AAAAAAAAQ1w/wGI39TSyujc/s1600/DeficitChart.png

  39. From BBC,

    20 June 2010 Last updated at 03:04 GMT
    “BP CEO Tony Hayward criticised for yacht trip
    Mr Hayward and his son attended the Isle of Wight boat race BP CEO Tony Hayward has faced fresh criticism for taking time off to go sailing with his son instead of dealing with the Gulf of Mexico oil spill.

    The White House said the move was one of a “long line of PR gaffes and mistakes” by Mr Hayward.”
    Exposing the superman?

  40. Moses, I love the chart. Are you the source, or has this been published elsewhere?

  41. Lady in Red

    Blame is irrelevant.

    “Who is going to fix the mess?” asked the Little Red Hen.

    Nobody? Kick the can some more? ….Lady in Red

  42. “Blame”?
    Suppose there is another party for whom this “mess” is not a problem but a profitibal exercise. where the banker and politician have performed, the lamb is fleeced and all’s well?

  43. Perhaps from an elite perspective everything is going to plan. If we have say a 13 trillion dollar debt and we are currently paying in the neighborhood of $500 billion in interest every year to the Economic Elite, wouldn’t it make sense that US debt would be good for them? $500 billion dollars a year is a good sum. Our tragedy is their prosperity.

  44. @ Dan, “Our tragedy is their prosperity.”

    Exactly. And the Golden Giving Bountiful Teat reduces to this: “terrorism”.

    What a bonanza for them, and Americans are by and large so stupid from drinking aspartame all day long, and eating at junk food, most can differentiate their a** from a hole in the ground.

    Just the perfect paradigm for the largest theft in history, and I’m not narrowing this to merely pecuniary wealth.

  45. oops: typo, S/B: “most CAN NOT”…etc

  46. I’ve been thinking about MMT Modern Monetary Theory again.

    The current banking system creates fiat money. The legacy of deregulation (and non-enforcement of existing laws) are the TBTF / Zombie Banks. Essentially, MMT would have the government create money, for economic stimulus rather than impose austerity, and use taxation to regulate the economy.

    Did get this right?

  47. Moses Herzog

    This comment directed mainly to both Carla and tippygolden,

    That’s a very good question Carla and I should have put that information together with the graph. I wish I was clever enough to make it. The graph comes from “The Center on Budget and Policy Priorities” (CBPP). You can get more details here Carla if you like.
    http://www.cbpp.org/cms/index.cfm?fa=view&id=3490

    tippygolden,
    When I saw this linked over at Brad Delong’s site I thought of you. Thought you might get a kick out of it. You can bookmark this on your computer and yank it out next time you hear some b.s. from a right-winger on the “evils” of socialized medicine.
    http://www.washingtonpost.com/blogs/ezra-klein/post/meme-busting-doctors-are-all-leaving-canada-to-practice-in-the-us/2011/06/03/AGVdAuHH_blog.html?wprss=ezra-klein
    Which also led me to this article, which you might also like tippygolden,
    http://www.washingtonpost.com/blogs/ezra-klein/post/meme-busting-tort-reform–cost-control/2011/06/02/AGpb0DHH_blog.html

  48. So a Banker and a Senator are walking out of a bar, the Senator says “I didn’t have anything to do with this mess” and the Banker says “what mess?”

  49. Moses Herzog

    According to Yves Smith, lefties are not allowed to talk about the national deficit in a public arena anymore, as it means they are “on the take”. Can anyone verify if Yves has eaten any German Brussel sprouts in the last week or so???

  50. Moses, with Democrats talking deficits, who needs Republicans? Oh, it turns out that what we need is NEITHER.

    Yves Smith for President.

    Odin, thanks for my first out-loud laugh of the day.

  51. P.S. Moses–thanks for the source info about the graph. I appreciate it.

  52. P.S. @Moses: Thanks for the source info about the graph. I appreciate it.

  53. TonyForesta

    Republicans speak with forked tonges and have no ear, and no eyes. All the gop cares about is the predatorclass and predatorclass oligarchs. The gop is, and has been funnelling all the nations wealth and resources into the offshore acccounts of the predatorclass, the richest 1% of the population for 30 years, and ruining and eroding the peoples wealth and resources, and rights and freedoms in the process. The gop a keptocracy, the NAZI party of the 21st century, well schooled and expert in progaganda disinformation, and perception management, and singly responsible all the nations many ills. Degradation of healthcare, all entitlement programs, woefull lack of financial accountability, debtbased PONZI finance machination, neverendingwarsofchoice, police state raping and dismantling of the constitution and the former rights, protections, and freedoms of the people – and the ruthless insipid advancement and advantaging of the predatorclass and predatorclass oligarchs, – the richest 1% of population for the last 30 years.

    The gop in it’s current incarnation is the 21 century NAZI party, an oligarch, a kleptocracy, and a devout and ruthless enemy of the people.

    There will be blood!

    In a world where there are no laws, – there are no laws for anyone predatorclass biiiiaaatches!!!

  54. Dan Green has surely positioned the “exceptional” USA in its real state of affairs–socially, culturally, economically/financially. However, given mass media infatuation with cheerleading and the ownership of the commanding heights of the economy and government and courts by the oligarchs and its lieutenants, it will take citizens to put away the channel changer and a slap on the side of the head to forestall serfdom ascendence.

  55. Plutarch, ah, I remember him well….anyway, wrote of Solon, who saw the only way to get out from under crushing debt was to say….sooooooo sorry, no ticky no shirty.

    In an article up at CNBC today here: http://www.cnbc.com/id/43272710

    “The freeing of the debt slaves and the cancellation of debt set the stage for the flourishing of the Athenian economy and culture. Freed slaves and unencumbered landowners formed the basis of an agrarian and democratic political culture that gave Greece its military might and helped shape the formation of western civilization.”

  56. @ Tony, except this predatorclass has the goons and the guns, and what do we have…a mouse pad, and a glass of pink lemonade, if we’re lucky?

  57. @woop – they have more than goons – they have The Patriot Act. Predators want unlimited access to your financial records and LIBRARY records….why those…? Monitoring “Free market” forces…?

  58. @woop – they have more than goons – they have The Patriot Act. Predators want unlimited access to your financial records and LIBRARY records….why those…? Monitoring “Free market” forces…?

  59. I know, Annie, my library selections are very critical to national security….LOL.

    Librarians everywhere in USA stood up and their real courage in the face of these total-state measures will not soon be forgotten.

    The statute wasn’t so much enacted to keep the USA safe from “terrorists”, as it was to protect the “terrorists” from the rest of us, the non-terrorists. And to pave the way for an unprecedented transfer of wealth to criminal elites…no hyperbole.

    Burn It, and Stomp the Ashes under the heel.

  60. @woop – that is the God’s honest awful truth – The Patriot Act protects the “terrorists” from the rest of us….

    Their Nihilism is so inhuman, you have to – logically (evidence from the science and math of all this) – believe their *god*,

    their channeled prophet-sizing Big Giant Head (drunks and opium brains *hear* him the clearest, go figure…)

    he has pure hatred for everything that is true, beautiful and good – stark raving lunatically “cosmically insane”…

    Genetically bred – this trillion $$$ mercenary goon army – but that’s another story for another day…

    “In the beginning there was ***MONEY*** and then came life…”