A Greek Comedy...

Photo: (C) Giovanni Dall'Orto

And the Jokes on Europe!

61% of Greeks vote no on austerity.  

"Today we celebrate the victory of democracy," Tsipras said in a televised address to the nation, describing Sunday as "a bright day in the history of Europe."

As if you could vote yourself out of debt.  What was it Franklin said? "Democracy is two wolves and a lamb voting on what to have for lunch".

This ones for Angela:

Europe Gets Greeky

Germany wrote the 130 billion Euro check, but Greece has already blown it on ouzo, cigarettes and KY Jelly...




Governments Gone Wild

Governments have been borrowing, spending with profligacy, buying votes with welfare payments, and debasing national currencies in attempts to hide what they are doing. Some governments in the EU borrowed from private banks with abandon on the assumption that the European Central Bank would be forced to bail them out, which it has by reluctantly printing euros.

Does this sound like a crisis of capitalism/free markets/economic freedom? No. It is a crisis of profligate government.  (Eustace Davie - Did Capitalism Fail?)

Keynesians Give Keynes a Bad Name

The Keynesian fallacy is in essence one of getting something for nothing. By Keynesian fiscal stimulus, normally involving spending more money though occasionally through tax cuts, providing they avoid the annoyingly savings-prone rich, we are supposed to produce additional economic output whenever there is an "output gap" from full employment, that is, in all conditions save those of a raging boom, when resources are scarce.

Keynes himself recommended such stimulus only at the bottom of deep recessions, and suggested that it should be balanced by running budget surpluses in times of boom. Needless to say, his disciples have neglected the disciplines he recommended.

In the 1930s, US president Herbert Hoover's reckless expansion of government spending, including loans to cronies through the Reconstruction Finance Corporation, caused further slowdown in the economy, which was exacerbated by his dreadful early 1932 increase in the top marginal rate of tax from 25% to 63%.

In the US case, the Barack Obama stimulus converted a vigorous recovery into an anemic one; only in the third quarter of 2011, after the effects of stimulus had begun to wear off, did output begin to accelerate and unemployment trend down... (The True Cost of Keynes)

Bend over, we're next...

Obama in Fantasy Land

President Richard Milhous Obama went to Disney World this past Thursday, and the make-believe setting was apropos.  But even the magical castle and fantasy surroundings couldn't erase the colossal failures and the intellectual, moral and financial bankruptcy of this corrupt mental midget  from Crook County.  Only the little munchkins in magical munchkin land could believe Obama has been a good president.

"You'd better vote for for him, my little pretties, or his flying monkeys will swoop down and snatch your government-provided goodies, Heheheheheheee!"

While at Disney World, the President also paused to model for his wax figure which will be placed in the Hall of Failed Presidents, stealing the place of honor for worst president in the history of the United States from Jimmy Carter, who's sagging, peanut-shaped figure will be moved to one side to make way for the new number one.

Greece to Rent out Ruins

The bankrupt Greek government has announced that is will rent out its ruins to raise money.  Given the destruction President Obama has wrought, that would be a more appropriate setting to launch his 2012 campaign...

See also:  Obama's Magic Kingdom of Joblessness

Where did all the Money Go?

Everybody is broke, including whole countries. I heard somewhere that total global debt is over 100 trillion! Simply put, progressive government programs were built with borrowed money, and they are not self-sustaining, they are draining. China holds the mortgage note, and the progressive version of the American Dream has turned into a nightmare.

So, Where did all the Money Go?

In the throes of the 2008 crisis, the money didn’t disappear. President Bush explained that it was "stuck," and "clogging the system." Not the disaster he made it out to be, but not good either.

Finance and the banking system facilitates business transactions that power our economy. Think of the truck that regularly delivers goods to your grocery store. The store manager doesn’t stand on the loading dock and write a check in order to get the driver to unload. No, the driver unloads and presses on. Revolving credit accounts facilitate this and millions of other daily transactions. If the financial system locks up, so do these accounts, freezing economic activity.

Making a Bad Situation Worse

Tarp favored large institutions over smaller ones, and our banking system is in even worse shape because of it. Wall Street is gambling bigger than ever, and Uncle Sam is behind them with promises of credit if they shoot craps again, which they will indeed.

community banks have given way to big banks and excessive industry concentration; profits are increasingly driven by risky trading; leverage is taking precedence over prudent lending; compensation is out of control. This toxic combination leads to continued taxpayer risk and threatens long- term U.S. prosperity. (Bloomberg)

Still Too Big to Fail

Fortune Magazine explains that the Dodd-Frank Banking Scam made provisions for too big to fail institutions to have "living wills," which are agreements on how to break them up if another crisis happens.  This is folly:

These "wills," which banks are currently discussing informally with regulators, are a weak, pathetic substitute for what Washington should have really done: that is, break up "systemically important financial institutions" into much smaller pieces. Or segregate their federally-insured-deposit parts from risky things like creating and trading derivatives. (Fortune)

The Fortune writer has nailed it, but alas, it will never happen because it curtails the profits of the banking giants and politicians can't extract bribes from them with such a simple plan.

International Banking:  A Multi-Tentacled Monster

One ugly scene that some analysts are imagining involves a default by Greece leading to losses inflicted on banks in other European countries that own large amounts of Greek debt. [...]

Those losses could then cascade to the United States because the American and European banking systems are so interlocked, lending billions of dollars to each other every day.

American banks and insurance companies may also be liable for the biggest share of default insurance payments to European institutions if Greece or other countries fail. And the trillion-dollar money market fund industry could also suffer.

About 44.3 percent of money-market fund assets are European bank debt... (NY Times - Worries Grow)

The Gig is Up

The beast is strangling us, and we've done it to ourselves.  If our progressive governments had not gone into hock to the tune of tens of trillions, these international Snidely Whiplashes would not now be tweedling the ends of their pointy mustaches and threatening us with foreclosure.  Our politicians, paralyzed with fear and cowering like the trapped rats they are, don't know what to do other than borrow even more.

It has sent the message that we have hit the moment of demosclerosis. Washington is home to a vertiginous tangle of industry associations, activist groups, think tanks and communications shops. These forces have overwhelmed the government that was originally conceived by the founders. (David Brooks - Who is James Johnson)

The solution is clear but impossible:  Get out of debt and disentangle the federal government from its sweaty pornographic embrace with high finance and big business.  The federal government should not be Wall Street's drinking buddy.  It needs to be the cop with the nightstick who cracks the big banksters over the head when they reel out of the saloon drunk and begin marauding and threatening innocent citizens.

The answer to the question, of "Where did the money go?" 

The answer is that it never existed in the first place.  The money was conjured out of thin air.  That's what credit is, and it must be paid back.

Protesting Reality

 

The Welfare State is in a Death Spiral, and Liberals Can't Handle the Truth

"The spectacle of government workers, cranky retirees, militant unionists, and mad dog socialists locked arm in arm protesting reality is a sight we'd better get used to."  (Bill Frezza - Our Greek Future)

As Robert Samuelson notes dryly, we are witnessing "the death spiral of the welfare state."  Greece now, with the rest of Europe and the US soon to follow.

Virtually every advanced nation, including the United States, faces the same prospect. Aging populations have been promised huge health and retirement benefits, which countries haven't fully covered with taxes. The reckoning has arrived in Greece, but it awaits most wealthy societies.

Budget deficits and debt are the real problems; and these stem from all the welfare benefits (unemployment insurance, old-age assistance, health insurance) provided by modern governments.

 
Taxing the Rich at 100% Still Won't Pay for the Democratic Socialist Agenda

 The Wall Street Journal notes that Obama has set a post-WWII record for government spending.  His feral beast now consumes 25% of GDP, besting Reagan's highest spending level by three percentage points.  Here are a few salient points from the article:  


$$$ Taxing all millionaires and billionaires at 100%  "yields merely about $938 billion..."

$$$ Taxing the "top 10%, or everyone with income over $114,000 [...] throws up only $3.4 trillion."

And that's assuming these job creators will just lay down and take it as federal bandits rape them and steal their property.  Contrary to wild-eyed liberal fantasies, they won't.

Progressivism is morally, intellectually and financially bankrupt.  From Europe to the United States, there's not enough money in the world to pay for the Utopian agenda.

Further Reading:
The Library of Economics & Liberty article Reaganomics does an excellent job combating the liberal lies about President Reagan's record.

Digging Our Way Out of a Hole

Here are some fun thoughts going into the weekend...

Greece could still tip over...

First, the bailouts are not actually making it any more likely that Greece will be able to pay its debts back. Perhaps just the opposite. The bailouts are trying to solve Greece's debt problem with debt. 

And then what? However you slice it and dice it, Greece's debt is unsustainable, and the bailout process being employed to fix the problem is equally unsustainable. (Time)

The US is in worse shape than Greece...

All that separates us from Greece is the fact that we can still print our own money.

The national debt will exceed the size of the entire U.S. economy by 2021 — and balloon to nearly 200 percent of GDP within 25 years — without dramatic cuts to federal health and retirement programs or steep tax increases, congressional budget analysts said Wednesday.

“The health care programs are the main drivers of that growth,” the CBO said, responsible for 80 percent of the projected rise in spending on those programs over the next 25 years. (WaPo)

We would have to cut $700 billion per year just to keep our debt from getting worse!

According to the CBO report, policymakers would have to come up with immediate and permanent savings of more than $700 billion a year — more than $7 trillion over the next decade — just to keep the debt at its current level of roughly 69 percent of GDP through 2035. Reducing the debt as a share of the economy would require even more dramatic changes. (WaPo)

Even Democrats are ringing the alarm bells, so you know this is serious, unlike VP Biden's paltry $2 trillion in phony cuts over 12 years or whatever the latest unserious White House proposal is.  We are out of easy answers

Have a great weekend!