Who Is In Worse Shape – the United States or Europe?

By Simon Johnson

If economic performance is in part a beauty pageant, as John Maynard Keynes suggested, both the U.S. and Europe seem to be competing hard this summer for last place.  If anything, based on the latest flow of news coverage, Europe might seem to be experiencing something of a resurgence – last week the eurozone agreed on a big deal involving mutual support and limiting the fallout from Greece’s debt problems.  In contrast, the U.S. this week seems to be completely mired in a political stalemate that becomes more complex and confused at every turn.

But rhetoric masks the reality on both sides of the Atlantic.  The eurozone still faces an immediate crisis – the can was kicked down the road last week, but not far.  The United States, on the other hand, is in much better shape over the next decade than you might think listening to politicians of any stripe.  The American problems loom in the decades that follow 2021 – the good news is that there is still plenty of time to sort these out; the bad news is that almost no one is currently talking about the real issues.

In a policy paper released by the Peterson Institute for International Economics last Thursday, Peter Boone and I went through the details on the eurozone crisis, including how this common currency area got itself into such deep trouble – and what exactly are the likely scenarios now (you can also see the discussion and contrasting views at the launch here).

In our assessment, the issue is lack of effective governance within the eurozone.  Governments had an incentive to run reckless policy – either in terms of budget deficits (Greece), out-of-control banks (Ireland), or refusing to create an economic structure that would support growth (Portugal).  These policies were financed by loans from other countries, particularly within the eurozone, because there was a widely shared perception that if any country were to get into trouble, it would be bailed out by deep-pocketed neighbors (Germany).

At the heart of this system was a great deal of “moral hazard,” meaning that investors stopped doing meaningful credit analysis – consequently Greek or Spanish or Italian governments could borrow at just a few basis points above the rate for the German government (where one basis point is a hundredth of a percentage point, 0.01 percent).

The shock to investors’ thinking over the past three years has been the combined realizations that Greece and some other “peripheral” countries have so much debt they may not be able to make all the contracted payments by themselves, while Germany and other northern countries have become convinced that foolish investors should suffer some losses.  Imposing losses on banks that made bad decisions is a sensible principle – but getting from here to there is not easy, particularly when the “periphery” includes Italy, which has gross debt of nearly 2 trillion euros (about 120 percent of its GDP).

Either Europe really ends moral hazard, in which case there will be widespread restructuring of sovereign debts or it keeps the bailouts coming, particularly involving the European Central Bank, which will ultimately be inflationary.  The package announced last week is a classic case of “muddling through,” meaning that it doesn’t really solve anything.  (See also the Economix Q&A on Greece’s latest debt deal: http://economix.blogs.nytimes.com/2011/07/22/economist-q-a-on-europes-debt-accord/.)

If Europe and the world now experience a growth miracle, these debt problems will recede in importance – because solvency is all about debt burdens relative to GDP.  But if near term growth is not strong – as seems increasingly likely – market participants will soon resume their contemplation of European dominoes.

In contrast, the United States has a simple fiscal problem – as discussed in my testimony to the House Ways and Means Committee this week.  Government debt surged from 2008, not due to Greek-style profligacy but rather due to Irish-style banking disaster.  When credit collapses, so does revenue.  As the economy recovers, revenue comes back.

The single most interesting point about today’s “debt ceiling” debate is that over the 10-year forecast horizon that frames for the entire discussion, there is simply no fiscal problem by any conventional definition.  In 2021, the US will likely have a small primary surplus at the federal level – meaning that the budget, before interest payments, will no longer be in deficit.  (James Kwak, elaborates on this point elsewhere on BaselineScenario.)

The really bad budget numbers for the US come after 2021 – but these are not the focus of anyone’s current proposals on Capitol Hill.  Compared with other countries, it is the increase in health care spending, 2010-30, that will ruin us (see Statistical Table 9 in the IMF’s Spring 2011 Fiscal Monitor; or, if you prefer a single picture that cuts to the chase, look at where the US falls in Figure 1 on p.9 of the IMF’s recent report on how to handle “fiscal consolidation” in the G20.)  [“From Stimulus to Consolidation: Revenue and Expenditure Policies in Advanced and Emerging Economies,” Fiscal Affairs Department, April 30, 2010.]

The debate in Washington DC is fraught not because anyone is grappling with the difficult issue of how to control health care costs.  Rather the tea party wing of the Republican party is intent on insisting on near term government spending cuts, as a condition of supporting any increase in the debt ceiling.

It seems increasingly likely that some version of this libertarian tax revolt will carry the day.  The resulting fiscal contraction will slow the economy and result in fewer jobs being created.  It does nothing directly to address the looming budget issues beyond 2021 – there is no “down payment” on the table, just measures that are tangential to rising health care costs.

In the near term, the Europeans have the big problem – and this will only be compounded by slower growth in the US (we’re about one-quarter of the world economy).  Over the longer haul, it remains to be seen when and how US politicians will get to grips with our real budget issues; so far the evidence is not encouraging.

An edited version of this post appeared on the NYT.com Economix blog this morning; it is used here with permission.  If you would like to reproduce the entire post, please contact the New York Times.

138 responses to “Who Is In Worse Shape – the United States or Europe?

  1. I happened to download MIT Economics on iTunes U and listen to your presentation. I appreciate every bit of intellect you shared and delighted to know that you blog. I believe many of us will have a difficult time categorizing you as a “blogger”, although it seems that you prefer that title. I thank you for creating this blog, since it is not often that we get the opportunity to hear the insight of a former IMF Cheif Economist on a consistent bases.

    I have one question concerning Japan’s currency situation. Where as most Asian export led countries seem to be controlling their currency, why is Japan allowing it to reach unhealthy levels? Although a strong currency has its benefits, I cannot see why the Japanese government is not intervening in the process. I would love to hear your thoughts. Thank you.

  2. The single most interesting point about today’s “debt ceiling” debate is that over the 10-year forecast horizon that frames for the entire discussion, there is simply no fiscal problem by any conventional definition. In 2021, the US will likely have a small primary surplus at the federal level – meaning that the budget, before interest payments, will no longer be in deficit.

    A few problems arise here, one is the integrity of the report, and of some of its creators. Another is the US Debt.org 2015 projected budget deficit of $22 Trillion if no actions are taken such as letting the tax cuts actually expire. How is a $2 trillion/year additional deficit for the next 4 years not a problem until beyond 2021? Reagon style ceiling levels were in the Billions, as our population were in the Millions, Todays levels are in the Trillions as our population is still in the Millions. Add some unfunded figures and each person in the US currently owes a cool Million the minute they are born, and only goes up from there. Even if someone were to pay the debt for the masses, it would only make the rich richer and the poor more even. I, on the other hand, would wait for the depopulation, and then address all the issues at hand including fully paying off the debts to the survivors of this coming event.

  3. Rudyard Kipling described his 1889 visit to Shwedagon Pagoda ten years later in From Sea to Sea and Other Sketches.

    “ Then, a golden mystery upheaved itself on the horizon, a beautiful winking wonder that blazed in the sun, of a shape that was neither Muslim dome nor Hindu temple-spire. It stood upon a green knoll, and below it were lines of warehouses, sheds, and mills. Under what new god, thought I, are we irrepressible English sitting now? ”
    “ ‘There’s the old Shway Dagon’ (pronounced Dagone, not like the god in the Scriptures), said my companion. ‘Confound it!’ But it was not a thing to be sworn at. It explained in the first place why we took Rangoon, and in the second why we pushed on to see what more of rich or rare the land held. Up till that sight my uninstructed eyes could not see that the land differed much in appearance from the Sunderbuns, but the golden dome said: ‘This is Burma, and it will be quite unlike any land you know about.’ ‘It’s a famous old shrine o’ sorts,’ said my companion, ‘and now the Tounghoo-Mandalay line is open, pilgrims are flocking down by the thousand to see it. It lost its big gold top—’thing that they call a ‘htee—in an earthquake: that’s why it’s all hidden by bamboo-work for a third of its height. You should see it when it’s all uncovered. They’re regilding it now.’ ”

    War and invasion

    The Singu Min BellIn 1608 the Portuguese adventurer Philip de Brito e Nicote, known as Nga Zinka to the Burmese, plundered the Shwedagon Pagoda. His men took the 300-ton Great Bell of Dhammazedi, donated in 1485 by King Dhammazedi who succeeded Shin Sawbu. De Brito’s intention was to melt the bell down to make cannons, but when he carried it across the Bago River it fell into the river. To this date, it has not been recovered.

    Two centuries later when the British landed on May 11, 1824 during the First Anglo-Burmese War, they immediately seized and occupied the Shwedagon Pagoda. They used it as a fortress until they left two years later. There was pillaging and vandalism, and one officer’s excuse for digging a tunnel into the depths of the stupa was to find out if it could be used as a gunpowder magazine. The Maha Gandha (lit. great sweet sound) Bell, a 23-ton bronze bell cast in 1779 and donated by King Singu and popularly known as the Singu Min Bell, was carried off with the intention to ship it to Calcutta. It met the same fate as the Dhammazedi Bell and fell into the river. When the British failed in their attempts to recover it, the people offered to help provided it could be restored to the stupa. The British, thinking it would be in vain, agreed, upon which divers went in to tie hundreds of bamboo poles underneath the bell and floated it to the surface. There has been much confusion over this bell and the 42-ton Maha Tissada (three-toned) Gandha Bell donated in 1841 by King Tharrawaddy along with 20 kg of gold plating; this massive ornate bell hangs in its pavilion in the northeast corner of the stupa. A different but less plausible version of the account of the Singu Min Bell was given by Lt. J.E. Alexander in 1827 [1]. This bell can be seen hung in another pavilion in the northwest of the pagoda platform.

    It wouldn’t paste the link so I copyed it, from wiki.

  4. Mr Nakanishi seems to believe that Messrs Johnson and Kwak read
    the comments to their blog entries. I believe that Mr Kwak occasionally
    does, but I’m not sure about Mr Johnson. For Mr Johnson continues to
    talk about the “difficult issue of how to control health care costs”. So
    I’ll write once again what I’ve written many times before.

    Because the huge health care and health insurance industry takes
    a big cut off the top, the United States pays 16% of its GDP on
    health care. All other developed countries spend less than 10% of
    their GDP on health care, except for France, which spends 11%.

    Furthermore, these other developed countries — Japan, Canada,
    England, France, Germany, the Scandinavians, etc — have significantly
    better health care than does the U.S., measured by longevity, mortality
    rates of mothers, weights of infants, etc.

    So the solution is “simple”: move to a single payer system here, such as
    the other developed countries have.

    Comment on “simple”: This is a theoretical construct, for poltics, aka
    moneyed interests, raises its ugly head. How can Single Payer be
    achieved in the U.S. when the full might of the health care moneyed
    interests stands in the way? Of course, a similar comment can be
    made about Mr Johnson’s contention that the U.S. has no financial
    or deficit problem. It would of course be “simple” to abolish the
    useless concept of a debt ceiling. It would be “simple” to put our
    financial house in order: shut down our useless and illegal wars,
    shut down wasteful government spending like Missile Defense and
    the F-35 program, impose a .5%(.005) sales tax on financial
    transactions. We all know these things, and we all know that
    they are not going to happen, since we have crazy Repubs and
    a president who . . . . well, is he bought? why else his silence?

    Best wishes to all, even to Mr Johnson, should his eye happen
    to fall here.

    Alan McConnell, in Silver Spring MD

  5. Both Europeans and Americans, by large margins, lack faith in their elected officials. How can either move forward when the politicians are not acting in the interests of the people?

    “European’s attitudes towards Obama tell us more about Europe than they do about the US president. And what they say about both is not particularly impressive.”

    http://www.commondreams.org/view/2011/05/23-8

  6. CBS from the West

    @Alan McConnell

    “So the solution is “simple”: move to a single payer system here, such as
    the other developed countries have.”

    The politics of doing this go beyond what you have outlined. Even if we miraculously converted to single payer tomorrow, all that would do is put the government on the hook for the entire explosion of health care costs that lies ahead instead of partitioning it between the government and private sector. I think many advocates of single payer imagine that in a monopsony position, the government would simply force health care costs down to more reasonable levels.

    But government is already a monopsony purchaser of military materiel. And the defense sector is infamous for its bloated sweetheart contracts, cost overruns, hundred-dollar toilet seats, etc. Why should anyone think it would be different for health care? Remember Medicare Part D? It specifically prohibits the government from using its bulk purchasing power to negotiate price reductions for drugs. The ACA has some similar prohibitions. Why would that change in a single payer system?

    To achieve control of health care costs in the United States will require several things. None of them are simple.

    1. Radically restructuring the health care system itself, including elimination of fee for service, neutering the political and commercial marketing activities of the pharmaceutical and device industries (and probably nationalizing those industries to run them on a not-for-profit basis), and strictly regulating (almost to the point of banning) the marketing of health care products and services.

    2. Enactment of strict laws banning self-dealing and conflicts of interest for health care providers.

    3. Creation and support of a robust infrastructure to investigate, free of commercial influence, the actual value of existing and emerging tests and treatments (“comparative effectiveness research”). And then getting providers to actually do the best things, no more, and no less.

    4. Massive re-education of the public to extinguish the myths that drive popular frenzy for overuse of health services and use of provably worthless services. (Myths such as “more is better,” “testing can never hurt,” “the newest thing must be the best,” etc.)

    5. Identifying clearly the (I believe large) subset of health services that can be just as effectively delivered (if not more effectively) by non-physician providers and expanding their availability and use.

    6. Bearing in mind that health care cost control automatically entails lowered income for the health industry, it will probably be necessary to subsidize the education and training of health care providers in order to assure an ongoing stream of qualified people seeking careers in health care. People will not take on 6-figure debt to earn a 5-figure income.

    7. Creating and nurturing a pipeline of primary care providers to overcome the acute shortage that will result if the existing cadre is asked to handle a universally-covered population.

    And I would further suggest that none of the above is even possible, let alone simple, until we replace our political system with one that serves the public interest instead of servicing the masters of the universe.

    At the end of the day, although a single payer system would be attractive for other reasons (efficiency and economies of scale, simplicity of administration), if we radically restructured the health care system along these lines, I doubt it would make much difference if the funding were single payer or if the private sector remained involved to some extent.

  7. Ander Arratibel

    Dear Simon:

    What do you think about the results of the GAO audit of the FED? The 16 trillion number that is being underlined in Internet, is it serious? Which is the real impact of the whole US and european bail out in today´s situation and US and Europe´s future? I think to clarify all this is quite necessary to be able to take a serious look at the situation and prospects of both areas.

  8. Brenda Vinall-Mogel

    Economically speaking there is nothing to argue with in the above piece, but in terms of leadership there is much to be said if we wish to be taken seriously. We have taken the European sterio type of US citizens as loud and rather borish and placed it in a World light in our government. It isn’t even our typical friendly cowboy showing where we at least ride in at the last moment to provide hope and needed friendship. There is no Clay here.

    As for the Dems and their view of the 14th amendment I’ve read it and it refers to the debts incured (in relationship to the Civil War and who was going to pay for the South’s debts vs. the Northern Debts), but however it is interpreted, it is still inforced by Congress and not the Executive Branch. Section 5. “The Congress shall have the power to enforce, by appropriate legislation, the provisions of this article.” How preogative powers or any other executive powers fits into this is anyones guess. As a citizen, it concerns me that we must resort to this type of Executive Leadership in wake of congressional ineptitude. So saying, it again reflects on us and how we will handle other economic choices in the future. We deserve, until there is bi-partisian cooperation on a joint budget, to have our rating cut.

    Europes debt might be more serious, but our lack of leadership as a democracy example is worse.

  9. I think we’re worse off short and long term we’re worse off. The banks that largely caused the crisis were begged to stay here, leaving US tax payers responsible for the next “uh oh” banks do on the rug. Laws were not altered at all to remove the moral hazards present in our system. Now we have politicians playing chicken with the ponzi scheme we call US debt.

    I think you look at us short or long term and as bad as the EU might look, we’re worse.

  10. Bruce E. Woych

    Author Archive
    Productivity in Europe
    July 28, 2011 merijnknibbe
    from Merijn Knibbe

    http://rwer.wordpress.com/author/merijnknibbe/

    recent selection: great reasoning and interpretations: well informed author
    Productivity in Europe: two graphs
    July 28, 2011 merijnknibbe …………….Leave a comment ……Go to comments

    http://rwer.wordpress.com/2011/07/28/productivity-in-europe-two-graphs/

    from Merijn Knibbe

    http://rwer.wordpress.com/2011/07/28/productivity-in-europe-two-graphs/

  11. I offer this to those yearning for a strong President to strike down those seeking to destroy financial vitality of the USA, that is, those extreme right wing republicans, calling themselves the TEA PARTY….an incoherent, fanatic, and ignorant body of the American public:

    http://tarpley.net/2011/07/27/a-real-president-would-call-default-unconstitutional/#more-3080

    God speed to President Obama.

  12. @ Woop

    Which camp is Obama in?

  13. Woop: Has not that arguement already been made many times behind closed doors. And now, as in the future, to be made in public. And used at any moment a crisis arrives so as to delay the pain of the debt hangover just one more day/week/month/year/decade/lifetime. Just like starting to climbing Jacobs ladder, its looks so easy to do.

  14. @ Anonymous, that’s a good question; it would probably require a blue book to sort it out.

    @ Owens, it’s clear to me, that a default would generally be terrible on so many levels. But I do agree the aim is to really gut FDR and Great Society legislation, and that this astro-turf movement is funded, directed, and controlled by billionaire malefactors of great wealth, as the linked article says.

  15. I saw that, and then reflected back to the people who believe that money is their god, and felt they are in a catagory of their own. Their problem, of course, is that the solution will come a God they don’t believe in. So I say to them, live and spend as if each day was to be your last.

  16. @ CBS From The West

    Yes, there is a political issue to be over come before the US gets a real single payor health care insurance scheme. But, “assuming” you made that leap, just think of the costs that would be eliminated. You try do what the rest of the western world does but spend 60% more and achieve a lower outcome success rate in therms of life expectancy, infant mortality etc. You propose a complicated process to get to the same end. Why make it so complicated?

  17. @ Woop

    Obambi (TU Annie) had no problem with the constitution when it came to illegally taking the U.S. into Libya without consulting congress. Suddenly, he gets hypersensitive about constitutional ramifications?

    “Spokesman Jay Carney said the White House cannot invoke the 14th Amendment, which stipulates that US federal debt “shall not be questioned”.

    “It’s not available. The Constitution makes clear that Congress has the authority, not the president, to borrow money and only Congress can increase the statutory debt ceiling. That is just a reality,” he said.”

    http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100011129/flee-to-mars-if-america-commits-worst-error-since-1931/

  18. @Simon Johnson “Governments had an incentive to run reckless policy (Greece), (Ireland), (Portugal). These policies were financed by loans from other countries, particularly within the eurozone, because there was a widely shared perception that if any country were to get into trouble, it would be bailed out by deep-pocketed neighbors (Germany).

    That’s pure B.S. These policies were financed by loans from banks of other countries because they were allowed to have very little bank equity when doing so and could therefore leverage their capital from 62 until the sky is the limit, to one.

  19. The United States is an immensely powerful nation with a government that is both deeply corrupt and deeply incompetent. The Democrats are somewhat better than the Republicans only insofar as only 80% of Democrats are beholden to American Oligarchs and conservative dogma as opposed to 100% of Republicans. Both want to privatize Social Security, Medicare, and junk Medicaid. Both are effectively unwilling to cut a monstrously bloated military budget. Both are unwilling to substantively address key issues of education, infrastructure, health care, etc.

    Outside of the issues of central bank governance and financial responsibility, Europe leads the US on literally every count.

  20. @ Anonymous, flee to Mars? If the Tea Party dolts still keep screwing around, Mars isn’t the place.

    Look towards Uranus, if that default happens.

  21. Ha! Ha Simon, Simon. your blog reads similar to comedycentral.com, except you are light years away from Jon Stewart in terms of intellect:

    “..In contrast, the United States has a simple fiscal problem – as discussed in my testimony to the House Ways and Means Committee this week. Government debt surged from 2008, not due to Greek-style profligacy but rather due to Irish-style banking disaster. When credit collapses, so does revenue….”

    I know, I know, in December you blamed the Northeast snowstorms on Goldman Sachs. Next time you teach your young class of wannabe Entrepreneurs, you should spend a whole term trying to teach the kids your thesis on USA= Ireland, Apple = Orange, Monkey=Donkey, Turtle = Whale and USA = Ireland…

    You know, in Ireland they have deep and diverse companies like Boeing,Intel, Gooogle, IBM and Ford. They also have a population of 300mm people. They also have a deep and diverse banking system with over 3,000 banks and large stock exchanges like the NYSE and NASDAQ.

    No wonder theaveage American did not think twice before taking the largest loan of their lifetime, did not read any fine print and assumed that the value of their home would only go up. After all folks like you are educators at the, top tier institutes in this country….

    as they say in India…Lage Raho…..keep doing the good work of misleading the American people. That way Americans can import truly brilliant folks like myself to keep the US functional.

    Yeah baby! USA = Ireland!! He He!

  22. @spragus: with regard to single-payer health care in the US, you say to CBS from the West: “You propose a complicated process to get to the same end. Why make it so complicated?”

    CBS from the West seems a good guy, and he and I have agreed several times about matters posed on this very blog.

    Nevertheless, I must suggest to you, spragus, that the reason CBS dimisses single-payer as too simplistic, and substitutes a complicated plan of his own, may be that he has a stake, whether practical, emotional, financial, or all three, in the U.S. health care “system” as it is. It’s my experience that most people who benefit from a system, no matter how bad that system may be for everyone else, are just unable to support fundamental change to that system.

    So, it is up to the rest of us to change such systems–be they medical, economic, or financial.

  23. CBS from the West

    @ spragus

    I make it that complicated because I believe nothing less will solve the problem.

    The US health care system is bloated and growing like a cancer on both the public and private sectors of the economy. In addition to robbing us of wealth that could be used for good purposes, the massive overuse of tests and treatments preys on our flesh by causing complications that injure, maim and kill.

    My question to you is why you believe that having a single payer system would change that. Look at how the government manages “defense” spending. Has the government used its monopsony position to rein in the bloated costs associated with military spending? Of course, it hasn’t. So why will single payer tame the health care monster? I assure you it will not. The health care industry is wealthy, powerful, well-organized and amply prepared to lead the government around by the nose, just as the defense industry does.

    That is why we must slay the beast first and then raise a phoenix from its ashes. Then we can figure out whether there is a role for the private sector in its financing or not–I consider myself agnostic on that particular detail. If we fail to slay the health care monster, I don’t think it matters whether the money hemorrhages purely through the Federal treasury, or whether it comes also out of private pockets.

    I would also point out that the other industrialized nations’ health care systems, all of which are vastly more efficient than ours, are a very heterogeneous group. Some have sole government finance, some involve the private sector. All of them, though, incorporate at least some of the criteria that I have outlined–or don’t do so because there is no need to impose what already exists.

  24. Burn it all down. Both the European and American socalled leaderships are afflicted with the same unholy disease. Keptocracy! Robbing, pillaging, and raping the respective populations to feed the superrich, – the predatorclass. The richest 1%. All the worlds wealth and resources, and all the central banks’ fiat currencies are being manipulated by the same den of vipers and thieves responsible for the tumult of 2008 – and funnelled, taxfree into the offshore accounts of the predatorclass, and predatorclass oligarchs. All the criminal financial conjurings, and PONZI Schemes are base on debt products, – debt somehow majikally shapeshifted into assets.

    This fiction is doomed to fail!!!

    Amerikan politics a pornographic kabuki theater.

    The total derivatives exposure is around $600tr dollars.

    Amerika is bankrupt.

    Amerikan children will pay a terrible price for thier parents rank ignorance, apathy, cowardice, and supremist behavior.

    Get stocked, locked, cocked, and ready to rock Amerika, because the predatorclass is bent on enslaving or eliminating every single one of us!!!

    It’s us, or them!!!!

  25. Brenda Vinall-Mogel

    @Anonymous at 10:45. I am getting rather tired of people like you who will make rather harsh comments and do not put your own name to your work. I and I know others here do not always agree with Simon, and yes he can stand up for himself, but we at least sign our name to our work. Yes, we have free speech in this country, but I ask you, Is it free speech when you hide behind “Anonymous”? Might I remind you that Anonymous also means lacking personality — a nothing — and thus one who does not qualify for our first amendment rights as you do not exist.

    Please I know many of us are frustrated. I probably more than many as I deal with cultural change and I see much of this recession throughout the World not as a banking or pure Economics issue as they are symptoms, but one of an aging population in terms of consumption along with the issue of balancing actual need vs growth, and savings and inflation pressures (bubbles). In 2008, I called this a Brown Out. Will the Hill talk to me? I am an independent researcher not associated with any university so no. Do I watch Congress and wonder what they are thinking in terms of taxation, government programs, and our spending cap? Yes, I do, but we can be polite and show decorum.

    Please people, lets keep this site as one of the last vestiges of civilness in a rather rude world.

  26. Sorry. Make that “kleptocracy”.

  27. @Carla,

    you could very well be right. My point is that until the US goes to a single payor system, it’s going to continue to pay 4-6% more in terms of GDP to have a more inefficient health care system than the rest of the western world.
    I suppose though that the point of Simon’s article is that the real crunch in health care doesn’t come till after 2020 when the real increase from the baby boomers hits. As he alludes to, an immigration policy that encouraged immigration might alleviate the problem.

    @CBS,

    I like the single payor model because it works. 16% vs 10% of GDP plus outcomes seems to show the advantage. All western countries are facing the problems of growing older and the attendant health care problems at the same time, but to varying degrees. The US is burdened by a system that is 6% points of GDP more expensive than any other western country. Perhaps that is an advantage, because the crunch can be alleviated by a reduction in this ratio (thru cost reductions) while everyone else has to pay the increased costs from a lower base. But that will only happen from a single payor system.

    Much is made of the benefits of competition and the inefficiencies of government run systems. All I can say is look at the evidence and the outcomes. This is the 16% vs the 10% and the outcomes.The US government doesn’t run defense or healthcare. Both are run on a public payor and a private provider basis. It’s called cost plus. The private sector sets the cost basis and the payor (the govt) pays. And this is an expensive system. In single payor health care systems governments set the cost and the private sector delivers the services. This leads to cheaper costs than in the US.

    And if you say (and you didn’t go there) but a single payor health care system means rationing and this is bad. But what do the outcome show? And doesn’t having 12% 0f the US population without health care imply rationing? As you point out the wealthy US health care industry is capable of leading the nation around by the nose. Why? So it can gouge out 6% of US GDP? I’m not sure why that’s a good idea as a matter of public policy. There has to be a change in the way the system is run; the monster must be slain.

    And no, I don’t know how to go about getting the US into a more rational policy mode. But it may well happen from a state pioneering the way. And it may well come about from a mixed payor source, but the state will be the main provider. Changes in the way health care is provided (and you note some of them (and more too )) will be required. Hopefully, nations will be able to cope with the boomers’ twilight years, or else there will be a long period of depressionary times.

  28. Moses Herzog

    Bernanke/Geithner loans billions to the ECB, which helped temporarily pull French banks’ dirty rump out of the fire, and our “thank you” from Christine Lagarde is to make appearances on American television saying “your currency is crap, and you American boys have had it good for too long”. Wow, with friends like that, who the heck needs enemies??? Hey Geithner, give the French banks a couple more billion so Lagarde’s French banking cronies can throw it into the bidet and see if she’ll do a guest appearance on Letterman calling you a “tax cheating twerp”. You might get lucky, eh??

    Of course this is after Lagarde basically trashed European markets around July 5 by saying “As regards a possible new program, in my view we’re not at the stage of discussing the conditions and terms and length and volume, and nothing should be taken for granted,”. Thus Lagarde fails Bureaucrat 101: If you don’t know how your comments will be taken by markets, keep your damned mouth shut.

    Oh well, American policymakers supported her for a job paying a base salary of $550,000 a year so she can “talk tough” to all those silly Greeks and Spanish running around in the streets ‘cuz they don’t understand they should be slaves so some corrupt basturd in France can get his bond coupons paid in full.

    Oh well, it’s not like Christine Lagarde is corrupt or anything. See here: http://www.guardian.co.uk/world/2011/may/11/christine-lagarde-invetigation-bernard-tapie
    and here:

    http://www.sltrib.com/sltrib/money/52156599-79/court-lagarde-french-imf.html.csp

  29. Ander Arratibel

    Dear Simon:

    Just to be more accurate on my question before. We have found in the GAO report, pages 131 to 133, two different tables:

    In Table 8 we find the mentioned data of 16 trillions of “total loans”, but, as the report says, it is not “time adjusted”. It may be more related to the legal or political consequences of the different decisions taken to approve new loan operations.

    In Table 9 we have the same data but “term-adjusted” and here the “total loans” are not 16 trillions, but 1.1 trillion. I understand that, from an economic point of view, this should be the really relevant data, as a measure of the real economic risk and effort made by the US government and FED. Is it correct? I understand that Table 9 measures the medium effort made by US public institutions. So, shouldn´t it be the data to be used in the media? Please, correct me if I am wrong.

  30. Housing in the US – sovereign debts in Europe. I think there was (and mostly still is) a deeper underlying problem: what’s euphemistically called “global imbalances.” The enabling factor was great quantities of liquidity sloshing around the world. In sufficient complicated ways that no one really saw where it was coming from and simply thought it was time to make hay while the sun shone.

    As regards those global imbalances, Napoleon did say: Quand la Chine s’éveillera, le monde tremblera. Although China (and Korea et. al.) are simply following in the path of the Japanese who pioneered the model – and who still push to tip the world as much in their direction as possible. The yen was, until very recently, deeply undervalued just like the yuan.

    I lived for a time in East Asia and I could imagine the leadership there saying – and long ago – the West really won’t tolerate this. Yet we have and the reasons for that make a further fine story.

    At a further historical remove, the Europeans also collaborated in allowing the US to rise past them economically. Autres pays, mêmes moeurs. There’s an easier to read (than the General Theory) and still fascinating Keynes book by the somewhat deceptive name of Essays in Persuasion.

  31. Conjure all the econobabble you want. The system is bankrupt, woefully indebted, mismanaged, toxically incompetent and criminal, and totally in control of the the worlds major governments, the US most ironically. The system will collapse and fail, because it is based on lies and deciet and paper, – not to mention extorsion, graff, payolla, monopulies, fraud, tax evasion, insidertrading, collusion, and various other forms of predatorclass skullduggery.

    There are two ways out of this nightmare.

    Hold criminals accountable for criminal activity, and that means massive cutting haircuts, and long jail sentences for the den and vipers and thieves in the financial sector, and the pathological liars and shills in the socalled political system, – there other options is revolution. Real 1776 style, wherein the people say no more! No more robbery, thievery, pillaging and rape! No more bribery and extorsion! No more cheating and stealing! No more immunity and unaccountabilty! No more favortism and largess from the socalled government. No more spaniels working for the predatorclass and predatorclass oligarchs undermining the peoples best interests to enrich the unholy few, the predatorclass, 1% of the population. No more dimantling the Constitution, and eroding or erasing the peoples rights, freedoms, and protections!

    NO MORE!!!!

    “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness. That to secure these rights, governments are instituted among men, deriving their just powers from the consent of the governed.

    {That whenever any form of government becomes destructive to these ends, it is the right of the people to alter or to abolish it, and to institute new government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their safety and happiness.}”

    Burn it all down!!!

  32. Patrice Ayme

    European bashing is a strange thing. It seems to me that the Europeans are trying harder than the Americans to get their house in better order. The USA was economically fortunate to have plenty of energy, for 150 years, at least. But how well will fracking work? If it backfires (literally) the USA will roast. no more gas, no more oil, no more water. And so on.

    http://patriceayme.wordpress.com/

  33. Good points Patrice Ayme, “…the USA will roast. no more gas, no more oil, no more water. And so on.” The people will be ruthlessly deprived, – the systems shut down, no gas no matter what the cost, brown and blackouts, cripplinsg water and food shortages. And so on!

    The predatorclass will be fine in their oppulent mansions and (if they have any brains WELL SECURED, palaces),- but the people will suffer terrible losses, deprivation, and hardship.

    We’ll fight these battles anyway. Our future is certain now. It is time to standup and say, – no demand! NO MORE!

    The entire system must be taken down and erased by any means possible, and a new more equitable, more legal and ethical must be erected in it’s place.

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

  34. Dear CBS-West,

    Thank you for adumbrating, elegantly and persuasively, the
    difference between “simple” and simple. I wrote:” “simple”
    . . . is a theoretical construct.” You fleshed out this
    difference admirably.

    I have a very few nits to pick.

    1. You write of the “explosion of health care costs”,
    without making it clear whether you are referring, as
    some do, to the proliferation of CAT-scan machinery,
    or to the on-coming wave of baby-boomers. In the
    first case I ask: how many CAT-scanners can one buy
    for the price of one F-35? In the second case, I,
    a pre-Baby Boomer well into his eighth decade,
    remark that there will be good money for untrained
    but hopefully kind people who will be changing my
    sheets and emptying my bedpan. I provide employment.

    2. You write: “defense sector is infamous for its bloated
    sweetheart contracts, cost overruns, hundred-dollar toilet
    seats, etc. Why should anyone think it would be different
    for health care?” I answer: very good question, and I have
    no adequate answer. It may indeed be the case that our
    government is already totally in the pockets of the wealthy,
    as I, with many others, suggest.

    3. You write ominously of nationalization. I remark that
    there are lots of private doctors and health care
    establishments in Japan, England, France, etc. Single payer
    doesn’t mean driving out private enterprise, or competition.

    Finally, I thank you for enlarging my vocabulary! I had to
    look up ‘monopsony’, and I afterward found entries for this
    gorgeous word in both my Samuelson and my Wonnacott. I
    think now we need a word for “so stuck in corruption that we
    can’t back out”. The uses for such a word in daily life are
    clearly numerous.

    Best wishes,

    Alan McConnell, in Silver Spring MD

  35. @ Anonymous, flee to Mars? If the Tea Party dolts still keep screwing around, Mars isn’t the place.

    Look towards Uranus, if that default happens.

    Riddle: Why are there 3 rings around Saturn?

  36. Answer: Because there are 2 rings around your anus.

  37. Who Is In Worse Shape – the United States or Europe?

    It seems sort of a silly question. Suppose the US debt is downgraded, would not all Europe´s debt, as a consequence, then have to be downgraded even more, the morning after?

  38. @ owen

    Please don’t tell us you’re just getting started. LOL

  39. @ Doc McConnell – “I think now we need a word for “so stuck in corruption that we
    can’t back out”. The uses for such a word in daily life are
    clearly numerous.

    Best wishes,

    Alan McConnell, in Silver Spring MD”

    Hollowood movie script provided:

    “In the end, the story of Jeff Kindler’s time at Pfizer provides a window into the challenges facing a mammoth company in an essential industry — and the people who aspire to govern it. Pfizer is an enterprise with the noble calling of easing pain and curing disease. Yet its leaders spent much of their time in the tawdry business of turf wars and political scheming…..Perhaps the only thing as destructive to Kindler as his inability to trust his colleagues was the one Pfizer executive in whom he did place his trust: Mary McLeod. The head of human resources under Kindler, McLeod would leverage her relationship to the CEO to become both his emissary and a power in her own right. Kindler’s loyalty to her would undercut him at a crucial moment. McLeod, 51 when she joined Pfizer, had an unusual career trajectory. She had started as a dental hygienist before going back to school and pursuing a career in human resources. She had worked with GE Capital, Cisco (CSCO), and Charles Schwab (SCHW). She was a no-nonsense type who seemed to relish difficult environments.”

    the noble calling of easing pain and curing disease….babushka busybodies (male and female) need not apply….scary that those who wake up every morning ready to present the case for “stalin” as to who dies today (HR department) have an *industry* called for-profit health insurance…

  40. to clarify – HR department is what Stalin would have called his hooligan henchmen soaked in hate, jealousy and greed today – since we’re all getting clever with words…

    I wrote a short book back in the day, never got published, go figure :-) It was a satire called, “If Women are from Venus, and Men are from Mars, Why are Most of the People I know from Uranus?”

    :-)

  41. Knocked it out of the park again, Mr. Johnson!

    All we have to do to fix the US fiscal problem is get serious about the hottest of all the hot-button policy issues: healthcare costs. No biggee!

    We are totally doomed! ha, ha, ha, ha!

  42. I must be missing something.

    If they raised taxes on the super rich would this not solve the so-called debt crisis?

  43. @ Anonymous: Well, I’m a either gettin started, or I am Moses’s one perfect person, what ever he thought he was a gonna do with that.

  44. @Owen: There you go again….
    @ Moses: “Thus Lagarde fails Bureaucrat 101: If you don’t know how your comments will be taken by markets, keep your damned mouth shut.”

    Very good advice; and here’s some good advice for all her cronies in Euroland from Jack Beauregard:

    “Folks that throw dirt on you aren’t always trying to hurt you, and folks that pull you out of a jam aren’t always trying to help you. But the main point is when you’re up to your nose in sh*t, keep your mouth shut.”

    http://www.imdb.com/title/tt0070215/quotes

  45. I think he took that out of a Twain book or possibly an an Emerson one. it just has that feel about it. Now if you want a book that will spook ya, move to New Hampshire.

  46. Maybe you should just compare quality of life, gdp per capita, and the average chances of any newborn to have a good quality of life. Europe wins hands down.

  47. @tippygolden: “If they raised taxes on the super rich would this not solve the so-called debt crisis?”

    Bingo! And that will happen when pigs fly.

  48. @ Alan McConnell

    I enjoy reading your pragmatic, and professional comments. Your intrinsic knowledge of an industry (healthcare) that all, or most here have very little hands-on, or better yet, no tangible empirical data of — should be grasped and embrace with a wide open mind. Thankyou :-))

  49. @tippy – In the documentary called “The Singing Revolution”, a woman shares how crazy it was that one day she goes to school like any other and ends up getting paraded out of class and into a prison pen – she was 5 at the time. Make no mistake that this is exactly the level of madness afoot right now – HOSPITALS, nursing homes, schools, police, etc – all taken over and being killed – millions homeless and unemployed…now they’re in D.C. For all we know, the place has been rigged with explosives – almost the only thing that makes sense, no? We’ve had a decade of NO REAL NEWS, so anything can be going on…

    The “tea party” in D.C. is a coup funded by globalist war lords and drug lords. They are trying to pull off just paying the interest on the *loaned* FIAT $$$, and that’s it. This is Part B of the 3 page stick up note Paulsen gave USA citizens as Bush Cabal left in a cloud of dust and smoke with the bandanas pulled over their faces…

    All other *bill due* notices – payments due from the Federal Government – will have to go to the Federal Reserve Board and their babushka busybodies will decide whom to pay, manana or in 2021…I’m sure Halliburton will get theirs…

    Crazier things have happened in the name of god, no?

  50. bows out of the theater and orbits the sun once.

  51. Hiya Annie….how true: “This is Part B of the 3 page stick up note Paulsen gave USA citizens as Bush Cabal left in a cloud of dust and smoke with the bandanas pulled over their faces…”

    Those guys launched USA on this road to perdition, and where the terminus is, is anyone’s best guess. It can’t be good, everyone with a brain on this board sees it going down, down, down.

    Those doing God’s work, those ponying up close to $5 billion USD to short Treasuries, the winning of this bet signifies the financial incapacity and ruination of so many productive, honest people……I wonder how these people sleep at night. But when there is no conscience guiding conduct, I guess sleeping isn’t particularly difficult.

    Anyway, this in…..Boner squeaks by in the House, and Senate votes this evening, July 29, 2011:

    http://www.rawstory.com/rs/2011/07/29/boehner-version-of-debt-ceiling-bill-passes-in-the-house/

    But no matter what, AUSTERITY won’t work, and will lead to further disintegration and chaos, and death.

  52. “funny yet so laughable how things of matter seemingly and grudgingly
    always leveling the unnecessary wrinkles out
    all with but an iron fist wisdom that such we carry
    invisible to sight
    but this middle ground class and shovel ready stiffs
    this backbone of america this freedom of sorts
    seem to have gotten a welcoming reprieve
    as if the sovereigns’ european wind has mystically mimicked our fickle political trends
    an equitable sculpting of flavor
    shaping our courtship from unbearable to a compromising win
    that is to say as i beg not to repeat
    twas obama’s giving the entitlements away with a twisting and gaudy laser modification pen
    cutting and dicing til there is nothing within
    but fate has its queries not known
    yet ever gifted absent to mortal men
    ironically the debt ceiling this oxymoron exposed
    deflated and shelved by the mighty and adversarial gop
    supposedly the enemy dispensed
    this demagoguery heaven sent
    how strange politics be
    when enemies turn and be thy your friends
    in times of confusion the greatness of man does always ascend
    yes i say yes again
    whoa to the deceptive dem’s and hapless leader that blows with the wind,….”

  53. It’s twilight in the grey milky sky
    Laced with string clouds sprayed from engines of deceit and folly
    The umbrella of my neighbor needs to be corrected
    But the basketball hoop made in China is straight and stiff

    The leaves are tired and there is no wind
    Except for an occasional gentle breeze
    That provides a relief from the madness
    Of time and space and destiny

    My son is 13 today
    The handsome face I see coming from his mother
    It seems like yesterday
    Only in my dreams

    The path of universal deceit
    Will evaporate
    As Water spilled in the midday heat
    A single chance at redemption.

  54. Whatever! The bank regulators, without anyone authorizing them rearranged the whole financial global landscape and allowed the banks to lend to good and friendly sovereigns without any of those capital requirements they impose on banks when lending to the real job creators the small businesses and entrepreneurs… that led, of course, to an explosion in sovereign debt, and I haven´t seen for instance a Simon Johnson protesting that… in fact he might even love it.

    They have no idea how much suffering they will cause.

  55. How low can you go? Checkout the latest APB from the Internet Police HQ:

    “The White House has named Jesse Lee to a new position within its communications department titled Director of Progressive Media & Online Response. According to The Huffington Post, Lee will essentially be responsible for building up Obama’s online presence as he prepares for his reelection bid, and squashing any negative stories.”

    http://www.debatepolitics.com/general-political-discussion/99833-white-house-adds-new-position-deal-unfavorable-online-media.html

  56. @woop

    so heading with pitchforks to the capital is probably the best move now…

    if they are being held hostage by bomb wearing tea baggers (and that better be the explanation for this kabuki)

    we’ll end up saving them

    and if they are doing all this because they’ve gone insane (psychedelics in the water? that’s been done before)

    we’ll save ourselves and *government*…

    “….Civilization is a racial acquirement; it is not biologically inherent; hence must all children be reared in an environment of culture, while each succeeding generation of youth must receive anew its education. The superior qualities of civilization – scientific, philosophic, and religious – are not transmitted from one generation to another by direct inheritance. These cultural achievements are preserved only by the enlightened conservation of social inheritance….”

    The saving miscalculation of the kleptocrats – that we the sheeple are too stupid to SEE that their (kleptos) free-will iniquity is loose in the world with nothing standing in their way

    does NOT mean we have an INFERIOR culture that made us appear *stupid* to them…

    But now that we know it’s true how evil they are – well…we’ll see…all bets are off…

    Lost on them, but important to the preservation of CULTURE, are the ways of JUST WAR.

    ….when the damage is so great….

  57. “It seems increasingly likely that some version of this libertarian tax revolt will carry the day.”

    I do not think the tax revolt can be ascribed only to libertarians.
    As 3-D said, the current financial mess was spun out of whole cloth by the Big Banks. Google “municipal bond bidding fraud” or any description of subprime CDOs packaged and agencies paid-off to rate them AAA.

    The meme that the fault lies in “people making $10k/yr were asking for loans to buy $750k houses!” is still spun in the inter-web, to which the briefest rebuttal is usually “If a family making $10k a year asked YOU for a loan to buy a $750k house – would YOU give it to them?” That frequently shuts down the argument.

    Taxpayers do not see why THEY should pay for the financial institutions’ malfeasance. Instead, the feeling is that it should be taken out of the hide of the bankers who paid themselves so well to cause the economic collapse. That is neither libertarian or liberal or conservative. It is merely Justice. (Speaking of which – does the US even HAVE a Justice Dept anymore? What ever happened to Levin’s report sent to Holder?)

  58. Who Is In Worse Shape – the United States or Europe? Is, I believe, a silly question.

    Every nation should concentrate on it bringing its own house in order first. Thankfully that isn’t happening in the U.S. (or Europe); otherwise the The Base Line Scenario would be flatline.

  59. Hey JD, that was so funny my belly hurts from LOL @U. And Rob, if a banker has a choice to either save his soul or save his hide, which would they choose? An indepth study was done, and it found that a banker will always save his hide before his soul. So enless you know of someone personally, who can beat the hide of a banker, they sleep fairly well at nite. Unlike their underwater counterparts who were convinced into ARM’s, non-income verification loans, and then either because of a bad economy, or a lost job, or even a loss of some steady income for whatever reason, find themselves backed by a justice dept with no teeth and an appitite for money.

  60. @ owen

    Our system is indeed so corrupt that the entire government is a sad joke, along with the so-called ‘justice dept.’

    http://www.thetruthseeker.co.uk/?p=31064

    http://www.thetruthseeker.co.uk/?p=31064

  61. @Rob “Taxpayers do not see why THEY should pay for the financial institutions’ malfeasance.”

    Actually they will have to pay for regulatory malfeasance, because had not the regulators authorized that whenever a triple-A rating was present the banks needed no or very little capital, this crisis would NOT have happened. The problem though is that taxpayers have not seen that yet… because there are so many interested in covering up for the regulators.

  62. Sorry for having linked to such an offensive site. It was unintentional and I am embarrassed by this goofup.

  63. It is abit winded, but the story has broke out before when we declared that the Fed was operating under negative rates, using a .25 rate as a benchmark for the markets. They basicly could not go to zero because after that they would have to explain themselves and no one really was up for doing that. You see, there is a law for us, and there is a law for them, and they aint the same law.

  64. Does the EU have more cash than Apple? Anyone know?

    This lamentable condition of USA finances is directly correlated with the orgy of insanity led by firms piped into the USA military-industrial-terrorist-security complex.

    It’s been the largest rip-off in world history as near as I can determine, and now your old parents, and then the remainder of us, are expected to under-write the fiasco, by going into the almshouse.

    The patient is dead, but still breathes.

  65. “Logic is valid in the material world, and mathematics is reliable when limited in its application to physical things; but neither is to be regarded as wholly dependable or infallible when applied to life problems. Life embraces phenomena which are not wholly material. Arithmetic says that, if one man could shear a sheep in ten minutes, ten men could shear it in one minute. That is sound mathematics, but it is not true, for the ten men could not so do it; they would get in one another’s way so badly that the work would be greatly delayed.”

    Yeah, but now we have ten men extracting what the one man did – leaving labor with NOTHING but FIAT DEBT.

    Communism and fascism were always opposite ends of the same stick. The two WW were about who got to be the 1% – the head kleptocrat who got it all. Soros cashed it in – “retired”.

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

    that’s the new revelation being writ in blood.

  66. @ Annie, indeed, you have been correct about the “ism’s” the entire time.

  67. tea baggers screech and whine about over spending – how anyone can not see that they are the MICs PAID hooligans, I don’t know…

    common sense – what kind of political animal would deploy their private army into local politics to destroy all the CULTURE in home towns – private property stolen, schools held hostage to LYING ideologues wanting to *teach* superstition and delusion, hospitals one big paper pushing enterprise sucking up savings, private property, and government aide (hospitals are akin now to rice being dropped off in famine stricken areas and the local criminals stealing it all and not distributing it but selling it to War Lords)….

    we are UNDER ATTACK by the worst element in USA gene pool….

    the MERCENARIES of the globalist War Lords and Drug Lords…

    Yes, a drunken FOOL put us on the road to perdition (how many of us can share the TRUE story about the brutal censorship of OUR right to speech in the past decade and how we were put into the Patriot Act grinder to be stripped of all we have EARNED and kept out of *jobs* for which we were MORE than qualified to be replaced with CORRUPT raving ideologues?). I know for a FACT that some mercenary is rich because he robbed ME – and my name was GIVEN to him through the *secret* Urantia Book DEVILS….

    the last time USA was so *divided*, there WAS a Civil War…

    Sleep well, Owen Owens….

  68. Until the past couple of weeks, the issue of a “double-dip” recession seemed to have almost fully vanished. Now, it seems virtually assured. Any major cut in government spending over the next couple of years is a problem, considering that the latest GDP figures (.4% 1st Qtr and 1.3% 2nd Qtr) are severely anemic, and indicate that our economy is perilously close to sliding backward. The Tea Party Republicans in Congress seem to be in broad control of the debate, and when their hard line against government spending combines with the Luddite Norquist followers, there is little hope that any real improvement in revenues will be able to work to the benefit of actual reduction in deficit and debt. Just reducing spending is absurd. The result of the present debate will not address entitlement reform, or tax reform, and, of all things to be accomplished to truly impact our debt future, those far outweigh control of discretionary spending, excepting military expenditures. I am afraid that the present debate will result in a perminent crippling of our economy, and that recovery within the foreseeable future will not be possible.

    Then there is the issue of the possibility of yet another debt commission, which will likely be ignored just like the Simpson-Bowles Commission and the infamous (?) Gang of Six (whose suggestions were wonderful AND bipartisan). My greatest worrry is simply the future of effective governance, which cannot be done on the basis of dogma, but must be done logically and practically. Until our election process is reformed to remove the effects of massive wealth, things will not change.

  69. J_Dave_mejia@hotmail.com

    @Owen. Glad I could make you laugh, even if it was a my expense.

    It is true [U.S. and European] bankers play a large role in where we are today; but they could not have done it without [willing] counter-parties. Money for nothing, especially for those that don’t know how to use it, can cost them everything.

    Being rational is important. As a collective society (E.U. and U.S.) we appear somewhat lacking in such behavior.

  70. A double dip recession?

    How could it not be… when the bank nannies induced a risk-taking deficiency in the economy which affects the creation of jobs.

  71. Quantitative easing papered over the fact this never was a recession, but a world depression with all signs pointing to a breakdown crisis.

    Thinking the current slowdown in USA economic performance signals the commencement of a double dip, if it isn’t wishful thinking, certainly doesn’t go to the heart of the matter. Absent a radical departure, we’re all toast, and as Claude Rains stated, “Major Strasser has outlawed miracles.”

    The various quackademics on the net (I’ll spare mentioning by name, but many of these people are well-known), are NOT going to be truthful, because their livelihoods are reputations are at stake in the academy.

    Take note and beware: The snipers are oiling their barrels and aligning their scopes, should the public start taking to the streets.

    The mercenaries are HERE, not just elsewhere. And their carrying facial recognition software packages, courtesy of the boys and girls doing God’s work.

  72. Orbital update: There is no question that in order to survive the future you will have to be inside the asteroid belt, a short term existance on Mars is possible, and a ten year bond is not short term, but you will need to be inside the belt by the time mars goes extint ( the first time, oh tea there will be a second), or risk fatal consequences. I have sent a tethered craft to Venus in hopes of reeling it closer to the earths orbit [—]rather than the mercury cure (I hear that it is hot in the kitchen), and that will take 5 years. So store your food like a next door neighbors squirrel, and bide your time like youth. It shall be here sooner than you think.

  73. @woop – who gave the Orks permission to be snipers?

    C’mon – hackers will be coordinated to take down their software – scheesh…

    About 24 hours before Katrina made historic landfall in New Orleans, one of the pundits on PBS’s McLaughlin Report, Eleanor Clift, breezily quipped that the solution (to the war getting expensive and supplies running short) was to pay the *contractors* more in Iraq.

    People have NOTHING to loose and everything to gain by going out into the streets.

    Look on YouTube at the wunderkinder that were organized for the staged *happening* to celebrate the OsamiSalamiBaloney head-on-a-stick parade – from where is that culture? They don’t look human…

    Why does Basel have permission to do whatever they want? Even in their uber-civilized culture, were they too stupid or super shrewd for themselves when they lowered the requirements to leverage up…?

    Even RATigan is clear that the road to perdition is an unavoidable WWIII – without an “ism” that anyone can *buy* so it will definitely hit the re-start button on civilization.

    Gone. Start from scratch.

    Grandma will probably be tasty…oh wait…you didn’t listen when she was teaching you how to cook….?

  74. I’ll tell ya whose in worse shape,… the american taxpayer!
    In just a decade we’ve “Doubled” our debt and yet no one talks? I guess it’s a non starter – a left right upper cut to the groin,…this, it-takes-two-too-tango brought to you by America-Can-Dance” to the dumbing down limbo-stroll of “America Rocks”! But, as far as bi-partisan politics goes, our compromising politicians have a huge credibility gap. A double-down gamble to pick what’s left from every tax paying stiff that tries to earn a wage in a “Left-Over” job market! Pathetic,…

    Ref: “Democrats resist GOP bid to nationalize election” by Chris Stirewalt (7-6-11)

    http://www.washingtonexaminer.com/politics/democrats-resist-gop-bid-nationalize-election

    Ref: “For Reid, Durbin and Obama, a (very) partisan record on debt ceiling” @ Beltway Confidential — Politics from the Nations Capital by Byron York (7-30-11)

    http://www.washingtonexaminer.com/blogs/beltway-confidential/2011/07/reid-durbin-and-obama-very-partisan-record-debt-ceiling

    Please note,…if link fails title ref. @ Google :-()’

    Thankyou Simon and James

  75. @ Annie, hard to reset and to begin to restart from scratch, with radioactive isotopes everywhere! :)

    A “black rain” fell in Japan, and the northern part of the big island is toast, but the people are being told not to worry, be happy. And have a beef taco, while you’re at it. If you start glowing after digestion, pretend you are a firefly.

    Arnie Gundersen lays it out for everyone, at Fairewinds dot com.

  76. Per Kurowski said:

    Actually they will have to pay for regulatory malfeasance, because had not the regulators authorized that whenever a triple-A rating was present the banks needed no or very little capital, this crisis would NOT have happened. The problem though is that taxpayers have not seen that yet… because there are so many interested in covering up for the regulators.
    ———————————————————-
    I think that conclusion is a common mistake that violates the adage of “Follow The Money”.

    Regulators do not pay themselves for lax regulation. they are either bought or underfunded to do a proper job. Ratings agencies do not pay themselves to provide false ratings. Again – where does the financing come from to do corrupt the process?

    All this has to occur in a government administration that at least tacitly condones such behavior.

  77. @ Rob, and your insight is exactly the reason the FBI should at the moment have an open-case investigation(s) as to whether MONEY or other forms of corruption influenced the determinations of personnel at the rating agencies.

    Why does it seem that exposing such gangrenous lesions in the financial system are so anathema, given the fact staffing is available, trained, and capable of pursuing criminal leads?

  78. BRUCE E. WOYCH

    why and precisely whay was the mechanism that pronounce Obama a Nobel Peace Prize recipient? No one seems to dare ask how this atrocity came about: No one questions the Chicago Schools uncanny luck with the corrupted streak of the hy-bred version either. And no one questions Obama’s background any more as child in the land of the CIA massacres of Indochina (…just boy hood traing…), nor do people see Daly and Chicago power politics settling into and entrenching the city with its stench…as part of the Obama team stream. Just keep your eyes on the money now, but maybe instead of temper tandtrums over Wall Street Greed we might all start a new realistic chant:
    NOW!!! ELIZABETH WARREN

    http://en.wikipedia.org/wiki/Elizabeth_Warren

    …………………………………………….for President

    NOW!!! ELIZABETH WARREN

    http://en.wikipedia.org/wiki/Elizabeth_Warren

    …………………………………………….for President

    NOW!!! ELIZABETH WARREN

    http://en.wikipedia.org/wiki/Elizabeth_Warren

    …………………………………………….for President

    NOW!!! ELIZABETH WARREN

    http://en.wikipedia.org/wiki/Elizabeth_Warren

    …………………………………………….for President

    NOW!!! ELIZABETH WARREN

    http://en.wikipedia.org/wiki/Elizabeth_Warren

    …………………………………………….for President

    NOW!!! ELIZABETH WARREN

    http://en.wikipedia.org/wiki/Elizabeth_Warren

    …………………………………………….for President

    NOW!!! ELIZABETH WARREN

    http://en.wikipedia.org/wiki/Elizabeth_Warren

    …………………………………………….for President

    ELIZABETH WARREN FOR PRESIDENT NOW!!!!!!!!!!

    lET’S HEAR IT ACROSS THE COUNTRY!

    LOUDER!!!!!!!!!!!

  79. The nannies of our banks told these that if they lent to triple-A rated and good sovereigns then they were allowed to leverage their risk-adjusted premium over 60 to 1 on their capital but if they lent to those “risky” small businesses and entrepreneurs then they could only leverage their risk-adjusted premiums 12 to 1…

    The candies represented by the over 60 to 1 leverage handed out by the nannies, so corrupted a market which, on its own, without nannies, would probably never have allowed a leverage much higher than 10 to one.

    And we still have the same nannies looking after our banks, in much the same way. What does that say about us?

  80. It says alot about Unforgivable Sin. And what certain individuals have to endure to overcome it. It eventually does wear down many victims. But they seem to be able to hang on to thier beliefs to the bitter end, closers they call themseves, and they are comfortable with gutter politics and taking most anything they can to keep the species reproducing. They love to trap their prey in lies, and hide their lies under the realm of your were not there so you have no proof. The hypocrisy runs so deep they can’t even talk about it, and need pick me ups all day long or threaten depressional suicide. Many fall into this catagory simply trusting money as if it had no end, or could do them no harm. But by the end of the day it will, for all to see, even those who are Nothing Now, will certainly be nothing then.

  81. A change in 2004 by the SEC allowed 5 firms (can you guess which 5?) to change their debt-to-net capital ratio from 12-to-1 to as high as 40-to-1. These 5 firms had been lobbying the SEC to allow the change. (Hint – one executive later became Treas Sec).

    To lay this solely on the regulators is a misinterpretation, though they are part of the problem also. These 5 powerful firms did not sit idly by and allow the SEC to decide on its own to change the rule. They were actively engaged in lobbying for the change to garner more profits/bonuses for themselves.

    Money talks, and when it talks, it screams.

  82. Rob… And that change explicitly stated that it had to be done in accordance with the Basel Committee’s recommendations…. and then the Dodd-Frank Act does not even mention the Basel Committee… pure surrealism in action!

    http://subprimeregulations.blogspot.com/2009/12/day-sec-delegated-to-basel-committee.html

  83. @woop – “Why does it seem that exposing such gangrenous lesions in the financial system are so anathema, given the fact staffing is available, trained, and capable of pursuing criminal leads?”

    When a monkey brain imagines the perfect “culture” fro him/her self, then proceeds to train all the other monkeys how to BE in that culture – there you go…

    Any culture that is not built on the college of hard knocks, so to speak, leads to massive social retrogression.

    How can anyone – even a monkey brain – make the right decision about what not to do to destroy the material world and our capacity to use it for life-maintenance when we either don’t collect the data, or cherry pick it? Heck, I could make a case for how a cow is genetically capable of evolving into a jet plane with cherry picked data…and I know lawyers who would make the case for me :-)

  84. Money/power is the driving force behind malfeasance and corruption. It is no different for corporate executives and owners than it is for Mexican druglords. That the regulators/police enforcement can be corrupted along the way is no different either.

    I read a post somewhere I can’t recall, so I can’t cite attribution, but it went something like this:

    There seemed to be no lack of understanding of “Trickle-down economics” by a certain group previously – meaning some group at the top rakes-in huge profits and it trickles-down to stimulate/incentivize the underlying economy.
    Now this same group of theorists somehow do not realize the same applies – that for the corrupt practices of no-doc loans to be profitable for those writing them, some group at the top again has to rake-in huge profits for that money to trickle-down to make that corrupt practice profitable.”

  85. And, so, if you permit me, these motives of personal aggrandizement and insatiable money-lust, have ruined a once functional (more or less) government, and rendered it on a macroscopic level, impotent to curtail and end the abuses, made so glaring by the malefactors of great wealth.

    That Elizabeth Warren was cast out is evidence that real oversight is still a long way away.

  86. @ Annie, of course, it goes to data manipulation and falsification, at the basic level. Anyone working with numbers and other types of data, unless vigilant, morally sound, and intellectually honest, can distort the picture to suit any application being sought. The underlies the immense trafficking in silliness and stupidity being delivered to us in unending and toxic doses.

    Thus, this is one reason any data I see, hear, or touch, is taken with a proverbial grain of NaCl…:)
    I see you are the same way…

    Have a wonderful Sunday, everyone.

  87. BRUCE E. WOYCH

    @WOOP
    The fact that Elizabeth Warren was cast out (and never was intended to actually be the central leadership in that task of critical scrutiny)…only goes to prove that she is she is the people’s choice and totally ready to defend America and Democracy…starting with its financing…

    We need to wake up and remember that WE CAN DO THE PICKING AND SELECTING and we don’t have to accept the “non-choice: false faces that the puppet regime holds on their fish line.

    Stop moaning and start pushing for Elizabeth Warren for President. Given these times she is perfect for America and Foreign Policy could not be done worse than it is being done now with its color war ideology and its mercenary mentality for corporate megalomanic global domination and capture.

    It would not be hard to select a good VP to work the election needs and Foreign Policy, there are good people out there well distributed. I Love Alan Grayson and Bernie Sanders, and Hinchey would make a great team coming out from New York, but these might be a tough sell to the full spectrum of brain washed consumer “sitizen-drones.”
    .
    Oddly enough, Jon Huntsman (???) may well serve this country better and anchor it towards a more adaptable and honest center with integrity if he would agree to work directly with Elizabeth Warren and accept a VP position this time around instead of his Presidential expectations. For the Good of Country!

    What do you think Woop? Can we get Carla, Bayward, and Earle, Owen and Tony on this track too?

    Maybe James and Simon could run a streamer topic to test the water on such a prospect? After all: it did seem that they were strong supporters themselves in the many discussions created by their previous blogs.

  88. I agree Woop, that 2014 crowd hasn’t worked together since cub scouts or maybe the first year of boy scouts. They need a book of anger and not one of information.

  89. @Bruce

    how are you going to keep the Ork snipers away? And if the snipers aren’t already lined up, as Woop suggested, to take out *real* leaders as they rise, then a deal with the devil has already been signed by the rising leader…

    Plus you under-estimate the toll a decade of in your face militarism has taken on culture and civilization because of the depraved degradation of women. Sure, Madame Warren was not shot in the street like Madame Bhutto, but it was a *get her* job…

    Finally MEN are saying enough to vicious bs “politics” like Koch pouring money into beating up women at their HEALTH CARE CLINIC….Koch has any business in beating up women he neither knows nor loves when they are trying to get health care…?!

    Like I said before, now that the psychobabble of *religion* placing people on some MORAL high ground that is 100% delusional is off the table, we’ll have a fair fight.

    Plus look at which women got tons of $$$ from the FRB to start the business of loansharking *student loans*…

  90. BRUCE E. WOYCH

    @ANNIE
    HAPPY TO HEAR YOUR WISDOM IN THESE STREAMS!

    Google my name…it’s all there. I don’t hide anything and shooters are not yet on every corner…not yet. I am steadfast American, New Yorker and obstinate Pollack to boot. I don’t wobble at threats from these neon-traitors types. I see them self serving pigs that have been here all along and just happen to have found some technical ground to exploit. They are trash…even if they swear they do some evil gods work.

    We need Elizabeth to lead a truth and discovery movement. The “narrative” is managed with control fraud precision. Since they insulted her by manipulating her good intentions and then discarding her right on schedule (easily read from last summer), it is up to us to support her and get a massive movement of interest going for truth and political economic justice. The difference today is the computerized speed of corruption. It swarms and sprawls its working connections and has a “systemic advantage”. Economics doesn’t even try to keep up with a lexicon to cover the maneuvers that overwhelm the media market droans who do the footwork. It is rigged and gamed at a level that arrogantly dismisses the obvious and smirks at you when it is done right before your own eyes.

    check out this post about letting the whole thing bust. I would love to see it. their entire systemic would be the first to fall…and guess which way those snipers will be facing then?

  91. @ Carla

    The outlines of the deal hacked in secret are starting to emerge, and one thing seems clear. Medicare patients had better start looking asap for another way to pay for their healthcare. Deep cuts are being made to already paltry physician reimbursement rates that don’t even meet costs. There will be a massive exodus of doctors willing to accept medicare patients. And this is a backhanded way of gutting medicare. Leave it to Obama.

  92. Count me in BRUCE E. WOYCH. The US political system is dead. I believe it was killed under the fascist bushgov regime, – but today borders on lunacy. Amerika’s politicians and the political system are sociopathic and bent on enriching, protecting, and advancing the predatorclass, the richest 1% the population alone and exclusively. Politicians “misremember” who they work for. The people have absolutely zero voice or representation in the conduct the government. This is a grotesque abuse of the core principles that formally defined our “once more perfect union.”

    Burn it all down! The system and the spaniels and pathological liars in politics ignore, disadvantage, erode, and abuse the people’s best interests, and former Constitutional rights, privileges, freedoms, and protections.

    Don’t vote. Don’t give any money to any political group, party, or individual. They are all tentacles of the same predatorclass beast seeking and succeeding in devouring America’s poor and middleclass, (especially our minority sisters and brothers), and owning and controlling the vast majority of the nations wealth and resources.

    Our enemies are many, ruthless, and hypersuperior. They will not be defeated politically or judicially, – or bloodlessly. Only masses united and determined to end rampant abuse, thievery, profligracy, institutional deciet, and wanton criminal conduct can garner the power to tumble and dismember the structures of tyrannical and sociopathic oligarchs, empires, and the ruthless predatorclass shades controlling, perverting, and undermining those structures and empires.

    Ashes ashes all fall down!!!

  93. @ Bruce, my first thought is maybe someone should ask Ms. Warren if she has any interest in seeking high office. It is unknown to me whether this is the case.

    I’ve been receiving emails from progressive groups that seem to be pushing for her to run for the US Senate in Massachusetts. I prefer your suggestion, however, in that a presidential aspiration would a better tonic…..for our set-upon nation.

    I’m sure the other intelligent beings writing on this board would be only elated to see someone of Elizabeth’s stature seeking public office. I worry about Annie’s observation, however, because this is based not on a free-flight of fantasy, but on a consideration of US political history.

    We all witnessed what happens when someone offends the PTB in a major way, and it isn’t pretty. But the message is clear: get into line, or else. I recall the fate of Matt Simmons, not a pol, but a man who went on MSNBC and charged BP with lying through its’ teeth, as well as the government. Shortly afterwards, at his home in Maine, he was found dead in his hot tub…..rubbed out, in my considered judgment.

    So, the people who get through….as Annie pointed out, are these not the same people already compromised, and therefore, not who they say they are?

  94. @TonyForesta

    Always nice to read your posts, especially the signature ‘predator-class biaatches’ line. But we are still very far from class consciousness in the U.S. Until the financial system completely collapses, there will not be any real change, unfortunately. These days, the system seems hell-bent on collapse, no matter all the smoke and mirrors.

    @Woop

    I think if EW ran for president, the corporate media would be particularly vicious towards her. They have an established track record of not wanting to ‘cover’ non-‘mainstream’ candidates.

  95. @ Anonymous, absolutely, the coverage would be stilted, if at all.

    Ralph Nader wrote a book on what third-party candidates are up against in USA politics, called CRASHING THE PARTY.

    It’s probably worse now, than when old Ralph put pen to paper.

  96. @ Rob: “Ratings agencies do not pay themselves to provide false ratings. Again – where does the financing come from to do corrupt the process? All this has to occur in a government administration that at least tacitly condones such behavior.”

    As you well know, the ratings agencies are paid by those they rate. There is no “tacit condoning” going on. Government = Big Banks & Big Business. There IS no difference. It’s a closed system of corruption. We are living in a Banana Republic. Just happens to be a Big One.

  97. A thousand thanks whoeveryouare. The political system is dysfunction. It is irreparably broken. It is a cancer that will eat away the vital organs of what is left of America. The political system, and all it’s fiendish inhabitants must be surgically removed for the better health of the nation. This process will not be pretty or peaceful. The malignant entities metastasizing the people and the nation are pathologically aggressive. Mere topographical applications will not prevent the malignancies from devouring the host if left unchecked. The remedies must also be aggressive.

    Perhaps we are “very far from class consciousness in the U.S.”

    If we are then, woe to our children for they will inherit an Amerika of the status quo; stagnate wages, no labor bargaining power, ruthless oppression of dissent, radical increases in core costofliving outlays, absolutely zero voice or representation in the conduct of the socalled government, continued rapid of expansion of the radical economic divides between thehaves and thehavenots, massive flows of fiat currencies deposited in the offshore accounts of the predatorclass and predatorclass oligarchs, ruthless robbing and pillaging of the poor and middleclass to feed the predatorclass (the richest 1%), brutal suppression of the peoples rights and freedoms, propaganda, disinformation, informationwarfare, and perception management operations relentlessly glorified by the complicit parrots in the socalled MSM, deprivation, unemployment, loss, dispair, and hopelessness.

    The predatorclass perches allpowerful in oppulent mansions and fortified palaces supremist, obdurate, and detached from the hardship and suffering of the poor and middleclass.

    When the critical thresheld is reached wherein dispair and hopelessness pervade societies – all bets are off.

    History proves this wrenching and bloody lesson time and time again.

  98. USA is in WORSE shape for years to come, given the atrocious agreement tonight that is AUSTERITY from top to bottom.

    Paul Krugman, a good guy, and someone who has been right the entire time:

    “We used to talk about the Japanese and their lost decade. We’re going to look to them as a role model. They did better than we’re doing,” he added. “There is no light at the end of this tunnel. We’re having a debate in Washington which is all about, ‘Gee, we’re going to make this economy worse, but are we going to make it worse on 90 percent the Republicans’ terms or 100 percent the Republicans’ terms?’ The answer is 100 percent.”

    http://www.rawstory.com/rawreplay/2011/07/krugman-proposed-debt-deal-will-cost-jobs-and-revenue/

    The realization of the storm may be here sooner than we now know.

  99. @ Woop, agreed.

    “This is not a situation that is going to get better. It is going to get worse, unless and until people wake up and retake the government. Corporate America is going to keep squeezing American workers until the government starts creating enough public sector jobs to remove some of the understandable fear people have now about being sacked, until labor unions can organize successfully without being undermined by unpunished illegal anti-union actions by managements, until attacks on critical programs of support like Social Security, Medicare, Medicaid and Unemployment Compensation are ended, until the rich and the corporations stop getting a free ride on taxes, and until the country stops engaging in endless wars and in blowing over half the national budget on the military.”

    http://www.thiscantbehappening.net/node/715

  100. oops,… just click on “Home Page” to continue below — great broken-down reads

  101. @Woych – “Since they insulted her by manipulating her good intentions and then discarding her right on schedule (easily read from last summer),….”

    Scheesh, that’s the story of my life in a nutshell – just sayin’ :-) Reason the monkey brains deploy that schtick all the time is because they create the advantage of stalking the good soul on a daily basis in order to implement a counter-move to every move the soul was PLANNING on making! *Weird software* was designed in the same way! It’s wealth extraction – no one is even saying anything else at this point – are they?

    That was my “political” argument all along – Madame Warren sat there under the evil eye of the Federal Reserve Board who could ACT with legislation while all they let her do was PLAN legislation. To me that is proof, not of their shrewdness, but of their utter nihilistic depravity.

    Constitutional Convention to forge an energy policy. BURN THE PATRIOT ACT. Issue new currency based on proper accounting practices – you think there won’t be *investors* in something sane – there’s no *MONEY* to be made in life-maintenance activities?

    It’s not just the actual blood shedding acts of killing in these modern asymetrical wars, it’s the hijacking of so much of natural resources to make the modern weapons. Since it is so clear that certain peoples are incapable of advancing beyond theft and war, the least we can do is make them go back to using rocks and sticks – why give them the fruits of *technology* – that’s beyond insane! Armies always destroyed their weapons rather than have them fall into the hands of enemies!

    And I’m going back to consider the points made about *weird software* in another thread’s conversation because it is a SINFUL waste of time to micro-analyze the details of how fraud is micro-managed! It’s like saving the process by which cancer reproduces!

  102. Right on cue – blasting headline on Huffin’ and Puffin’ – sensationalism designed with only one goal in mind – to PRETEND that women in America have not forged lives of great dignity deserving of respect! That website needs some hacker’s attention – it’s an insulting murdoch-wannabe e-RAG

    Everything that is in the *deal* has already been proven to be a FAILURE – it’s the road to perdition.

    C’mon guys, apply some mental discipline. There has to be PROOF that something works – you can’t just implement something that turns everything inside out and upside down! Would a bridge or car or plane or any other real MATERIAL accomplishment product engineers and builders allow such a travesty?

    Oh sure, we’ll build this plane without proof it can fly…

    There is a REAL *economy* and this s8it deal ain’t gonna fly…

  103. Ref: tax.com: Breaking News: Tax Revenue Plummeted ___Note: if link fails Google :-()`

    http://www.tax.com/taxcom/taxblog.nsf/Permalink/UBEN-8EL2Y8?OPENDOCUMENT

    3-3-11 [pdf] by David J Johnston

    A few notes worth repeating that we’ve all disgust – Entitlement Cuts, Military Cuts exempt if War[?] , SSA parameters set permanently,…and a possible “Debt Ceilng Budget Amendment” (that will crush the average joe six-pack) lastly President has “Iron Fist” over implementation!

    No Corporate tax cuts, no Tax cuts,… just entitlements,… Go Obama, Pelosi, and Reid

  104. @ the “Super Congress”: reject it, unequivocally, it’s neither Constitutional, nor any conceivable function of a bicameral national legislature: 12 people get to slash and burn the social safety net, and what they say, goes.

    This is a further abomination, in a long succession of usurpations, and outrageous Un-Constitutional shenanigans.

    The corporate powers now get to count the votes, so elections can be flipped in creative, sustainable, and not-too-obvious ways, so I can’t even say, vote the bums out. These bums got in because other bums got creative with machine language, which isn’t an arithmetic function, it’s a sign of fraud.

  105. Best observation about the shenanigans was “they WERE going to cut the baby in half”….

    They were all set to just pay the interest and that’s it – all other checks were to be funneled into the babushka busybody claws (the MRS, health care, bank, etc. temp hire apparatchiks) to decide whether to pay or not…so we dodged the sniper bullet…

    and they are super p*ssed…

    Here’s one place you can read the *deal*:

    http://msnbcmedia.msn.com/i/CNBC/Sections/News_And_Analysis/__Story_Inserts/graphics/__PDF/DEBT_016_xml.pdf

    It’s nonsense, basically. More people can read ancient Egyptian hieroglyphics than can “interpret” this monkey brain made up crap *deal* that says poor people can afford to pay more….

    @woop – look, we girls get it. It’s just the male brain wiring. So here’s a suggestion that implies more than one can politely say in mixed company – when it gets to the point where the guys start coming up with an idea like the “Super Congress” (zip. boom. here’s mine),

    can we agree that that’s the trigger to let the accomplished women like Born, Warren, EnGarde, etc. grab the baton to continue to run the Western Civilization race…?

  106. Sorry about anonymous comment above,…Ref: tax.com
    Never before have posted anonymous and never will!

    Question: Would a novelty roll of toilet paper printed with the portraits of the entire112th Congress — 435 US Representatives — 100 U.S. Senators — 9 Supreme Court Justices — 1 V.P. United States — 1 United States President for a grand total 546 sheets on a double roll be a best seller?

    Any takers? Oh,… we could make it in China and price it in Yuan,… and gift a jumbo pack to “Air Force One”

  107. @ Annie, fine me with, put the women up there, they can’t possibly bleep it up more than it is! :)

  108. @ @ Earle in Florida, I’m down for a 12 pack, maybe I’ll gift some during Christmas. :)

  109. Bow to the goddess. This kabuki theater debtceiling debate kicks the can down the road. We do not address or solve our fiscal problems which are massive and unsettling on a global scale, we do not reign in the abuserive criminals and den of thieves on Wall Street, we do not fairly tax the predatorclass, the richest 1% who are bestowed trillions in government largesss, we do not reduce our expenditures for stupid, senseless warsofchoice and wanton profiteering, and we do not reduce either spending or the deficit, but compound the problems by refusing to imagine increasing tax, or socalled taxreform on the predatorclass, the richest 15 of the Amerikan population — And we, the poor and middleclass, will pay a terrible price in core costofliving outlays, radical reduction in services, (mass transit, public education, basic healthcare, housing, afterschool programs, foodcosts, access to drinkable water, etc, etc,.) for the benefit and obscene profits of the predatorclass, the richest 1%.

    How long will we suffer this abuse?

    When will we recognize the crinimal activity, and force accountability?

    What future are we bequeathing our children?

    No way!!! In a world where there are no laws, there are no laws for anyone predatorclass biiiiiaaaatches!!!

  110. Considering that it was only a 3 page stick up note from Hankie Pankie Paulsen that was handed to the taxpayer as the Bush Cabal rode out of D.C., we the stupid should hand back that note to D.C. predatorclass poodles saying, “nope – you pay”.

    This wasn’t a deal, this was extortion.

  111. Stay on track Annie, we have a long way to go.

  112. Bruce E. Woych

    http://msnbcmedia.msn.com/i/CNBC/Sections/News_And_Analysis/__Story_Inserts/graphics/__PDF/DEBT_016_xml.pdf

    @ANNIE: If I read this correctly all graduate student loans after July 1.2012 will no longer ge eligible for subsidized loans supports; they will all go privatized. Effectively nullifying the 1965 Pell Grant Student Loan system.

    (Page 71 See #502 Termination of authority to make loans to graduates and professionals.

    This is one giant wash out. They gave away the store and asked them to come back for more!!!

    It seems a good time to watch for some street strikes en masse! We need tostart thinking of an historic National Slowdown! or SHOWDOWN!

  113. Annie said:

    Considering that it was only a 3 page stick up note from Hankie Pankie Paulsen that was handed to the taxpayer as the Bush Cabal rode out of D.C., we the stupid should hand back that note to D.C. predatorclass poodles saying, “nope – you pay”.

    This wasn’t a deal, this was extortion.

    ——————————————————–

    Actually, one of the things out of the Assange Leaks was that Mervyn King sent a secret communication in early 2008 that the banks were insolvent. Paulson (who we would have to assume read that cable) then went to Congress in Oct asking for money for – insolvent banks (which he defined as “illiquid” at the time…)

    Oddly enough, that tidbit never turned up in Andrew Ross Dorkin’s “Too Big To Jail” book or HBO whitewash….

  114. @Bruce – I saw that about the student loans – that one *detail* in this massive extortion revealed the whole truth about who *wrote* this thing – didn’t it…?

    @owen owens – the only statement you made that I ever understood as lucid and not wrapped in metaphysical religious delusion was the personal threat you made against me – a women who NEVER did anything to you, doesn’t even know you….are you threatening me again? This planet is TRASHED, environmentally. That’s hardly a record of scientific genius and religious leadership….

    I fully realize the numbers of Orks that need to be sent into permanent oblivion…rumor has it there is one Ork from whom all the others were *derived* – if you get that original one, the rest disappear in a foul smelling green cloud….along with their fiat *MONEY* god, of course….

  115. I already made peace with me, its too bad about your planet though, ours is fine and young and fresh. Just waiting for the puppet master to call in the chips, cut the lines, so we can enjoy the times ahead. you and your orks destiny, is in your own hands — should you be able to see that far. And this is my last correspondence with your lame country, see ya later…….MUCH.

  116. @owen owens – young and fresh country – in the middle east…? south america? africa?

    I can see far enough to know you are DELUSIONAL.

    Sure, YOUR puppet master is cutting the lines….

  117. @Woych – I was yelled at yesterday for not gathering up the troops like was done by Polacks before to save Europe from a Moslem invasion – I kid you not :-)

    2011 – 7 billion people on a TRASHED planet – and still blaming the Polacks for not doing enough to defend them….

    should we put on the play – “Merchant of Venice” – with “modern” protagonists and antagonists?

    kabuki it definitely wasn’t…

  118. In J. R. R. Tolkien’s fantasy writings, Orcs or Orks are a race of creatures who are used as soldiers and henchmen by both the greater and lesser villains of The Silmarillion and The Lord of the Rings — Morgoth, Sauron and Saruman…..Although not entirely dim-witted and occasionally crafty, they are portrayed as miserable beings, hating everyone including themselves and their masters, whom they serve out of fear. They make no beautiful things, but rather design cunning devices made to hurt and destroy.

    Or in modern phraseology, corporate apparatchiks :-)

    Funny how PRIVATE corporate employers can keep big secrets – they now employ fewer USA citizens in USA based offices, not to mention that the majority of those permanently unemployed by same said corporations (THE transparent plan to suck up all savings and property) are ALSO citizens of USA….prove me wrong….oh right, it’s “private” information…

    class action suit, anyone?

    also, can we stop calling them “whistleblowers”? People who actually are competent to do the job and try to DO the job are not freaks of nature…

  119. Why is it tha US bloggers are so much more pessimistic (in the sense that the European project will fail, which of course makes them optimistic about the relative international policy space of the US in the medium term) about Europe. Is it so hard to see that the Europeans have no real alternatives?

  120. Its more pain for the free world on the way. Should the USA repatrate overseas funds, [the soon to be new Bernanke plan of 8-26-011 and (as Japan has been doing since the quake)] they mostly come from Spanish and Itialian banks, which will need to be recapitalized via euro quantitative easing. In addition, the lost revenue to the US taxpayer will be felt by a downward sliding dollar for months to come.

    Annie you are nothing but a CANCER to this planet, that needs to be removed like the trash you speak of, don’t kid yourself into thinking you are anything more than that.

  121. @owen owens – funny how all cancer patients from the Middle East tribal kingdoms end up spending their gold in Texas to get *cured* of the effects of the environmental disaster that they live in…

    your oil will run out

    LIFE will go on….

  122. Bruce E. Woych

    Dear Annie: The right wing is notorious at distortions and guilt in the service of their greed and stealth: Poetry glorifies it and ideology legitimates it’s stupidity:

    http://www.sparknotes.com/poetry/tennyson/section9.rhtml

    But did you know:

    “The Charge of the Light Brigade” recalls a disastrous historical military engagement that took place during the initial phase of the Crimean War fought between Turkey and Russia (1854-56). Under the command of Lord Raglan, British forces entered the war in September 1854 to prevent the Russians from obtaining control of the important sea routes through the Dardanelles. From the beginning, the war was plagued by a series of misunderstandings and tactical blunders, one of which serves as the subject of this poem: on October 25, 1854, as the Russians were seizing guns from British soldiers, Lord Raglan sent desperate orders to his Light Cavalry Brigade to fend off the Russians. Finally, one of his orders was acted upon, and the brigade began charging—but in the wrong direction! Over 650 men rushed forward, and well over 100 died within the next few minutes. As a result of the battle, Britain lost possession of the majority of its forward defenses and the only metaled road in the area.

    In the 21st century, the British involvement in the Crimean War is dismissed as an instance of military incompetence; we remember it only for the heroism displayed in it by Florence Nightingale, the famous nurse. However, for Tennyson and most of his contemporaries, the war seemed necessary and just. He wrote this poem as a celebration of the heroic soldiers in the Light Brigade who fell in service to their commander and their cause. The poem glorifies war and courage, even in cases of complete inefficiency and waste.”

    So we glorify the distortions and so too does this moron Norwegian mass murderedr who somehow attempts to link historic dates of ancient national border defenses to his actions. But Right Wing fanatical ideology lives like a disease waiting to plague whatever opportunity it can infest and infect.

    Today we are here in American under a very subtle and insidious transformation from a civil society ti a military-industrial society,
    Check out:
    THE NEW AMERICAN MILITARISM: HOW AMERICANS ARE SEDUCED BY WAR : 2005 :BY ANDREW J. BACEVICH. OXFORD PRESS

    IT IS VERY DIFFICULT AND RISKY TO DISCUSS American homeland (it issaturated and highlighted the media) in Social-MILITARIZATION BUT i AM FINDING THAT THE SOLDIERS ARE THE MOST EAGER TO SPEAK ABOUT IT WHILE THE CIVILIANS ARE MORE GUARADED WITH RHETORIC AND CONFUSION ON WHERE THE BOUNDARIES EXIST BETWEEN TRUE DEFENSE AND FALSE POLITICAL AGGRESSIONS /PRIDE AND PURE EVIL.
    REGARDS: BRUCE

  123. @Woych – I did the math with my abacus :-)

    Cost of modern war far exceeds the value of the stolen booty, shortens the time the victor remains in power since this asymetrical perpetual war does nothing in the way of either saving the best of the defeated culture or put in place a new superior and SUSTAINABLE culture, and modern war increases the genetic “orc” strain – which your observation about the *poetry* and *romance* bestowed upon modern militarism proves.

    Who else but an “orc” bows a knee to leaders coated in craven avarice?

  124. Singing Around the Campfire

    @ Annie, I liked your earlier idea of getting the head Ork, and all the others vanishing in some kind of green haze…wouldn’t that be swell. :)

  125. Bruce E. Woych

    Annie:

    When you find some time it all starts here…and leads right up to Obama!

    http://topdocumentaryfilms.com/evidence-of-revision/

  126. @Woych – the truth is WAY stranger than fiction and the madness was inflicted on humans a really long time ago…

    Keep asking this – WHO gave them permission to do what they do in the name of their god – FIAT *money*….?

    You? Me? Anyone?

    That’s the simple way to end the head game part of the madness….

    “….WHO are you?….”

    @singing – a SMELLY and toxic green haze :-) Head Orc is a coward – won’t come out to the mic….

    *market gods* were all geared up to pay themselves *interest* and no other USA bills….told you they were really mad…

  127. Bruce E. Woych

    @Annie:

    (full article here):

    http://www.alternet.org/story/151904/our_commando_war_in_120_countries%3A_uncovering_the_military%27s_secret_operations_in_the_obama_era?page=entire

    AlterNet and TomDispatch / By Nick Turse
    comments_image 291 COMMENTS

    Our Commando War in 120 Countries: Uncovering the Military’s Secret Operations In the Obama Era
    American secret commandos are carrying out raids in 70 countries–just today. By the end of the year, the number will probably be close to 120.

  128. Robert Jacobson

    One more crisis of capitalism. You wonder how many times the system can endure crises before it crumbles. All ideologies have their day … and then they die.

  129. Bruce E. Woych

    http://topdocumentaryfilms.com/the-men-who-killed-kennedy/

    The more things change…/
    …the more they stay the same…

    The more things stay the same…/
    …the worse it gets!

    http://topdocumentaryfilms.com/the-men-who-killed-kennedy/

  130. There are some significant, and common errors in your analysis with respect to the prospects of the US over the next 10 years.

    “In contrast, the United States has a simple fiscal problem – as discussed in my testimony to the House Ways and Means Committee this week. Government debt surged from 2008, not due to Greek-style profligacy but rather due to Irish-style banking disaster. When credit collapses, so does revenue. As the economy recovers, revenue comes back”

    But the economy is not recovering. Why? The answer is debt. Not public debt, which for the US is not a problem at this time. The issue in the US is the mountain of private debt, which has not been reduced nearly enough. In fact, the focus of policy efforts in the US has been to PREVENT at all costs, the liquidation of private sector debt, and to maintain asset prices. Total debt to GDP is the US is 375%….over $50 Trillion. By maintaining asset prices…we insure that credit injected into the system just gets parked in treasuries. There is nothing else worth buying…as the prices are still way way to high!

    Also, despite your statement, credit has NOT collapsed. Relative to long term trends, private debt to GDP, especially in the financial sector, is far far too high. This assumed recovery in the US is not going to happen until we realize that finance is not a value added economic activity. We have been fooled by 30 years of falling interest rates into thinking that it is. Well the era of re-financing, due to falling interest rates is over, or very close to it.

    I would guess that your models that assume an economic recovery over the next 10 years is likely based on 20-30 years worth of data. In other words, you, like most economists, make your conclusions not only on a data sample that is inadequate, but a data sample that is badly skewed. The last 30 years have been a fantasy, and orgy of endless credit growth. We are at debt saturation in the private sector. THAT is what was happening in 2007-2009. We have put a band aid on a gaping wound, but failed to address the root causes.

    When the assumed economic recovery does not occur, I think that your assumption that the US’s fiscal issues are simple from now to 2021 may need some re-thinking.

  131. Eric Janzen, another ‘non-economist’ who saw what 99% of professional and academic economists could NOT see in 1999, and again in 2004-2007..has it right again:

    http://www.itulip.com/forums/showthread.php/19949-The-Big-Bet-revisited-Part-I-Turkeys-grounded-Eric-Janszen

  132. @Woych – interesting website (alternet) reporting on Orc operations – liked the article “Six creepy new weapons…” Huffin’ and Puffin’ article about paid speakers for the MEK cult is not a surprise to anyone, is it?

    Remember to ask – Who gave them permission….?

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

    thus beginith the revelation in the new age holy book – absolute totalitarianism for dummies….

  133. To Alan McConnell and others engaged in discussion of health care costs:
    Pretty good. But nowhere did I see mention of the savings that would accrue by letting the insurance companies occupy themselves with other projects—like insuring boats and buildings and whatever else they can think of. Just so they stop “insuring” our lives. Their power of life and death (50,000 US deaths per year due to no insurance coverage) is unconscionable. Their “administrative” expenses, ranging from CEO mega-salaries to advertising to costs related to claims-denial, currently amount to some 30% of total US health care expenditures. Also, REAL health care reform would allow a single payer agency to negotiate Rx and other products and services with vendors. If we really fixed the system, health care would be deliverd by private providers (MDs, hospitals, etc.), and publicly paid for by a reasonable and predictable tax—the same way that Medicare is funded—obviating the need for premiums, co-pays, co-insurance, deductibles, and whatever else the insurance industry and a compliant Congress have been beating us up with over the years. If you doubt these numbers and suggestions (it’s very late now and I’m so tired I can hardly think) please see information available to all at the website of PNHP, Physicians For A National Health Plan: http://www.pnhp.org/

    Also take a look at this very interesting account of how the current Medicare system came into being, and how much bigger and better Lyndon Johnson wanted it to be. Here’s a little introductory information:

    “…the role of Wilbur Cohen in carrying through the Medicare idea
    from FDR all the way to completion.
    The article also substantially mines the LBJ tapes, attesting to
    LBJ’s attitudes toward the legislation. Read in its entirety here:

    http://www.larrydewitt.net/Essays/MedicareDaddy.htm

    [Following is an LBJ quote from a conversation with Bill Moyers, who at the time was his
    press secretary. NOTE the use of “entitled” and how it is NOW used to vilify Social Security, Medicare, etc:]

    “My reason though is not because of the economy. . . . my reason would
    be the same as I agreed to go $400 million on health. I’ve never seen
    an anti-trust suit against an old-age pensioner for monopoly or
    concentration of power or closely-held wealth. I’ve never seen it
    apply it to the average worker. And I’ve never seen one have too much
    health benefits. So when they come in to me and say we’ve got to have
    $400 million more so we can take care of some doctors bills, I’m for
    it on health. I’m pretty much for it on education. I’m for it anywhere
    it’s practicable. . . . My inclination would be . . . that it ought to
    retroactive as far back as you can get . . . because none of them ever
    get enough. That they are entitled to it. That’s an obligation of
    ours. It’s just like your mother writing you and saying she wants $20,
    and I’d always sent mine a $100 when she did. I never did it because I
    thought it was going to be good for the economy of Austin. I always
    did it because I thought she was entitled to it. And I think that’s a
    much better reason and a much better cause and I think it can be
    defended on a hell of a better basis. . . . We do know that it affects
    the economy. . . . it helps us in that respect. But that’s not the
    basis to go to the Hill, or the justification. We’ve just got to say
    that by God you can’t treat grandma this way. She’s entitled to it and
    we promised it to her.”

  134. @ Cyclamen

    I myself am glad you stayed up late and provided this important and necessary link. The subject matter of fairness and pragmatic reform is extremely timely particularly “Single-Payer”, and the 18,000 strong supporting its implementation.
    The article (8/10/11)____ “If US is serious about debt, there is a single-payer solution.” Thankyou

  135. @cyclamen

    thanks for the history…

    truth is that grandma EARNED her “entitlement”….

  136. Bruce E. Woych

    Analysis of Financial Terrorism in America
    By David DeGraw, AmpedStatus Report

    http://ampedstatus.org/exclusive-analysis-of-financial-terrorism-in-america-over-1-million-deaths-annually-62-million-people-with-zero-net-worth-as-the-economic-elite-make-off-with-46-trillion/

    (2)
    Is the SEC Covering Up Wall Street Crimes?
    By Matt Taibbi
    August 17, 2011 8:00 AM ET

    http://www.rollingstone.com/politics/news/is-the-sec-covering-up-wall-street-crimes-20110817

    (3)
    Daylight Robbery, Meet Nighttime Robbery
    Naomi Klein
    August 16, 2011

    http://www.thenation.com/article/162809/daylight-robbery-meet-nighttime-robbery

    (for the “late night” crowd …paying attention)