If you can keep your head when all about you
Are losing theirs and blaming it on you
Rudyard Kipling
So-called “intelligent people” are continuing to call shots and give advice to the US President and Congress that is leading us straight over the financial cliff.
Obama claims that the root causes of our financial crisis are: Â a) Bush, b) Wall Street, c) Banks, and d) Republicans.
Paul Krugman, like Obama, a Nobel-prize winner (which should say something about his credibility) is a perma-Keynesian who writes for the NY Times.  I noted recently that he has been one of the prime proponents of MASSIVE  borrowing and spending by the Federal government.
Now on Sunday the 27th, he warned we are entering a Depression. Â He whines about the lack of spending from government:
“you might have expected policy makers to realize that they haven’t yet done enough to promote recovery. But no: over the last few months there has been a stunning resurgence of hard-money and balanced-budget orthodoxy.”
Gee Paul, what part of reckless spending don’t you understand? Â He says that not spending is a deliberate mean-spirited act:
“the victory of an orthodoxy that has little to do with rational analysis, whose main tenet is that imposing suffering on other people is how you show leadership in tough times.”
It now seems that Krugman, Obama and his merry men are becoming a smaller and smaller voice, as governments all over the world wobble with crushing debts and deficits. Obama encouraged the G20 in Toronto to spend; they told him to pound sand.
Rebuffed, Obama still cannot bring himself to reduce government spending — rather we will see some wild-ass tax proposals.  As far as he is concerned, though federal expenditures are up 21% in the last 2 years, spending isn’t the problem. He wants to hike taxes, but knows he hasn’t got a chance before the November elections, so he sent a veiled warning  from Toronto:
“I hope some of these folks who are hollering about deficits and debt step up, because I’m calling their bluff, And we’ll see how much of the political arguments they’re making right now are real, and how much of it was just politics.”
Why wait? Well, he has to wait for his blue-ribbon debt commission to come back (after the election), so he can propose taxes, taxes, taxes .. to save us.  But that committee looks like there are some no-nonsense members, like Alan Simpson, who aren’t going to pussy foot around — so that may blow up on Obama.
Of course, the root causes of the financial crises are not, according to the government:
- Reckless government spending
- Unfunded programs: social security, medicare, prescription drugs
- Unfunded government union pensions
- A non-transparent and reckless Fed, who is trying experiments never tried before
- Freddie and Fannie, encouraged by Congress, backing ridiculous loans to anyone with a dog
- And did I mention? reckless government spending
The reality is that we cannot spending our way out of an over-spending problem, regardless of what Nobel-prize winning economists say.
Allan Meltzer writes in today’s WSJ: “Why Obamanomics Has Failed:
“Almost daily, Mr. Obama uses his rhetorical skill to castigate businessmen who have the audacity to hope for profitable opportunities. No president since Franklin Roosevelt has taken that route. President Roosevelt slowed recovery in 1938-40 until the war by creating uncertainty about his objectives. It was harmful then, and it’s harmful now.”
The solution? Reganomics anyone?
“The contrast with President Reagan’s antirecession and pro-growth measures in 1981 is striking. Reagan reduced marginal and corporate tax rates and slowed the growth of nondefense spending. Recovery began about a year later. After 18 months, the economy grew more than 9% and it continued to expand above trend rates.”
Are we too late to following recovery plans like Prices’s “Stop Reckless Spending” plan, or Paul Ryan’s “Roadmap for America’s Future“?
I’m afraid we will suffer a lot of pain before then.  Mish Sherlock wrote this week that “An Economic Depression is Here“. Congress and The Fed are to blame.
Hold tight … this won’t be fun.
Related Posts - Fed Fighting to Keep Spending (Rescue) Secret Pamela Geller's site has a nice report and follow-up titled "FED BEGS FOR SECRECY ON FAILED BANK BAIL OUT". The argument the Fed is making...
- How Long Do You Have To Wait for A New Knee in Canada? With the debate swirling in the USA about government "involvement" in health provisioning, let's take  a look back to the case I wrote about...
An excellent and funny explanation of world governments bailout logic (what little there is of it!)
Related Posts - Spying On Americans --- Obama Style In December 2005, the Washington Post and New York Times broke an article, stating that Bush Authorized Domestic Spying. Â Caroline Frederickson of the ACLU...
- Why Obama MUST Pass Govt Takeover of Health A New Zealand point of view ... in its entirety: I have written this post to explain why President Obama is so desperate to pass...
The Federal government (through the quasi-private Federal Reserve Bank) is the only level of our government who can coin money. So profligate spenders at state, county and local levels are going bankrupt , especially under the weight of bloated salaries and pensions for pubic workers.
Mish reports a story of the pending bankruptcy in Miami.
The city of Miami is in such financial dire straits that commissioner Marc Sarnoff is using the “B” word, bankruptcy.
“We are not the only city, municipality to be going through this. It looks like Los Angeles sometime next week or the week after will be going bankrupt. It looks like there will be 30 more cities following suit.”
Increases in public worker salaries is one of the main reasons why the budget is so tight. The average salary for a Miami city employee is $76,000. The average salary for a Miami city resident is $29,000.
Employee pensions are choking the budget too. In 2000, pension payouts cost taxpayers $16 million. In 2009 that number spiked up to $70 million.
Not un-coincidentally, state governements all over are cutting pay, payrolls and crushing pension benefits:
- Education Minnesota Drops Opposition to Curbing Benefits
- The Atlantic reports: Public Pensions Headed for Disaster
- New York City’s pension contribution for 2011 is projected at $7 billion, more than 10% of the entire budget.
- Even the New York Times cries: Padded Pensions Add to New York Fiscal Woes
more than 100 retired police officers and firefighters are collecting pensions greater than their pay when they were working. One of the youngest, Hugo Tassone, retired at 44 with a base pay of about $74,000 a year. His pension is now $101,333 a year.
This widespread and obscene theft of public money is unsustainable and is crashing down all over … as it must.
EXCEPT …. to the rescue is the nanny of all nannies – the bottomless pit of money from the Federal government:  Sen Bob Casey (D-NJ) has proposed bill S.3157 to “save” public pensions .. those pensions that pay public workers 2-4 times the average private individual … with the money from .. you got it .. the poorer private individuals.
I think few in the private sector voted for this “fundamental change” in America — where private individuals are plundered for the benefit of overpaid public workers.  This has to end NOW, or it will crash in an ugly fashion.
Related Posts - Economic Storm Clouds Gather as USA Goes Socialist For the last year, all political attention has been focussed on the health care debate. In the end, the bills that were ramrodded through Congress...
- How Deep Is the Bottomless Pit of Government Spending? Is it a requirement of people who run for public office that they must abandon all sense of fiscal sanity? It would seem so. A...
Rasmussen’s monthly summary shows that the Great One (NO!, not Wayne Gretzky!) Obama got a pop in popularity.
They also note that the “pop” in the index (which is created by subtracting strongly disapprove from strongly approve among likely voters) is almost 100% due to more energy from Democrats.
In other words, a partisan bill gets partisan support.
However, that increased enthusiasm has come at a cost among unaffiliated voters. Among those not affiliated with either major party, just 23% Strongly Approve of the President’s performance while 48% Strongly Disapprove (see other recent demographic highlights).
So there is hope this socialist nightmare will come to an end in November, as Obama, Pelosi and Reid spend America into the poor house.  Some of the headlines from the week:
Obama: U.S. Would Go Bankrupt Without Health Reform
Obama said in a nationally broadcast interview Friday he isn’t worried that his bold reach for a $1.3 trillion, 10-year makeover might cause his public approval ratings to plummet.
Let’s keep them plumetting!
States have $5.17 Trillion in Pension Obligations, Gap is $3.23 Trillion; State Debt as Share of GDP
Really? Â Can we spend our way to prosperity? Â Try:
Legends of the Fall: The Real and Imagined Sources of Our Bubble Economy
Ronald Reagan said:
We could say [Democrats] spend money like drunken sailors, but that would be unfair to drunken sailors. It would be unfair, because the sailors are spending their own money.
Related Posts - THIS is What a Socialist Take-Over Feels Like The world, and especially the USA, is lurching, sliding and falling into the social morass called socialism. This slide is pushed and lauded by The...
- Obama Disdains Govt By, Of and For the People Obama, like all "progressives" (formerly known as avowed socialists), believes in rule by an elite class. An IBD column yesterday has some stunning quotes, dug...
For the last year, all political attention has been focussed on the health care debate. In the end, the bills that were ramrodded through Congress and signed by the president will not reduce government spending by a dime.
In fact, Congressman Paul Ryan’s analysis, CATO analysis, heck… anybody with a brain’s analysis will show you that the true cost of the bills could be as high as $2.5 trillion.
Moreover, the on-budget costs of the legislation probably account for only 40 percent of the total costs. The other 60 percent come from the private-sector mandates. But Democrats have systematically suppressed any estimates of those hidden taxes, probably because such an estimate would reveal the full cost of the legislation to be closer to $2.5 trillion over the next 10 years.
And, did I mention? We don’t have the money!
Gosh, this weekend, Pravda published “American capitalism gone with a whimper“.  The writer laments America’s fall.
It must be said, that like the breaking of a great dam, the American decent into Marxism is happening with breath taking speed, against the back drop of a passive, hapless sheeple, excuse me dear reader, I meant people.
Sort of insulting to be called a sheeple, but the true hurts!  And then Pravda targets the complicity of the financial institutions.
The final collapse has come with the election of Barack Obama. His speed in the past three months has been truly impressive. His spending and money printing has been a record setting, not just in America’s short history but in the world. If this keeps up for more then another year, and there is no sign that it will not, America at best will resemble the Wiemar Republic and at worst Zimbabwe.
These past two weeks have been the most breath taking of all. First came the announcement of a planned redesign of the American Byzantine tax system, by the very thieves who used it to bankroll their thefts, loses and swindles of hundreds of billions of dollars. These make our Russian oligarchs look little more then ordinary street thugs, in comparison.
Yikes!  Our banks are ripping us off? Then this article in Bloomberg this weekend:  “JPMorgan, Lehman, UBS named in Bid Rigging“.
JPMorgan Chase & Co., Lehman Brothers Holdings Inc. and UBS AG were among more than a dozen Wall Street firms involved in a conspiracy to pay below-market interest rates to U.S. state and local governments on investments, according to documents filed in a U.S. Justice Department criminal antitrust case.
The bump in the economy is a false trap.  The government spending is a head fake, and smart money is getting out of bonds, equities and hard assets.  Governments who have to balance their budgets (state and local) are going broke and moving to severe austerity programs.  Unions are on the other side: they are organized and militant.
This is not looking good.  Expect, as Moody’s pointed out, that the eventual cure, will cause social unrest.
(Also at RedState)
Related Posts - D-Day for American Freedom The Pelosi power-grab ... I can't reasonably call it health care reform .. is being pushed by the Democratic house leaders and the White House...
- How Deep Is the Bottomless Pit of Government Spending? Is it a requirement of people who run for public office that they must abandon all sense of fiscal sanity? It would seem so. A...
