Friday, June 24, 2011

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!


Unknown said...

Of course in the budget talks yesterday, the Dems want tax increases and don't want cuts (except for our military) and don't want to fix medicare, just continue on like there is no real problem. Greece needs to change its political make up, (along with all European nations) from Social to Capital.

Always On Watch said...

Even Democrats are ringing the alarm bells

Scares me -- and I'm fearless.

Anonymous said...

We may have to organize Labor Camps to get the homeless off the streets, and the poor and needy organized into an army of workers given food, clothing and shelter in exchange for doing the menial tasks that need to be done every day to keep the country safe and looking good.

The idea should be if you're going to live at the public's expense, you should have to live by the public's rules, and work to serve the public's interests.

This "unfair competition" should break the death grip of organized labor, drive wages down to a buck an hour, and the COST of goods and services down with it.

All union officials should be dragged from their homes, lined up against a wall and machine gunned.

Our new national maxim should be:




Incentives -- such as higher wages, a good working vehicle, better housing, college scholarships, the opportunity to advance, to own property, should be offered for evidence of initiative, intelligence, ambition, loyalty and commitment to duty.

The income tax, the capital gains tax and the inheritance tax should be abolished.

The government staff should be reduced by 75% al across the board. All pension plans should be replaced by setting aside a percentage of everyone's wages to be invested in US Bonds, CD's, and private annuities.

Get the government OUT of everything but DEFENSE and INFRASTRUCTURE.

The country would be better served if the bloated blundering bureaucrats scrubbed floors, shined shoes, mowed lawns, planted and harvested crops, washed windows, swept sidewalks, cooked and served food, drove trucks, buses and taxis, repaired engines, cleaned swimming pools, tended the elderly and infirm, pumped out septic tanks, etc. etc. etc.

The schools should teach only the FOUR R's -- Reading, 'Riting, 'Rithmetic and REASONING.

That might be a good start in getting us in the road to recovering the wealth, security and sanity we have lost since FDR opened the Pandora's Box that led to the modern Welfare State.

If ever there was a time to implement Draconian policies that time is NOW.

Do you have any better ideas? If so, LET'S HEAR 'EM.

~ FreeThinke

Anonymous said...

The CBOs numbers are usually low and spending always exceeds budget. So our boys and girls in D. C. are going to have to work a lot harder. Spendings would be so much more palatable to the average American if our economy was growing at a good clip and jobs were being created at a pase to bring down unemployment. For this reason, I would like to see our Republicans put forth right now a bill to imlpiment Pawlenty's tax proposals, i.e., reduce corporate taxes to 15%, eliminate capital gains taxes and why not eliminate all the tax loopholes at the same time. We might be surprised at how many Democrats would be willing to sign on to such a plan. said...

Of course, we keep contributing to Greece with our 18 percent requirement in the IMF. Billions sent their way. Pray tell, who is left to bail us out?

Trekkie4Ever said...

Have a great weekend? After reading that?? lol!

Now that's news, the Dems are actually getting concerned? Wow! No wonder it's going to rain today.

You have a great weekend, too!

Anonymous said...


Your proposals make sense, of course, but I think they are much too tepid. I think we need to get every bit as radical as the Bolsheviks were when they destroyed Czarist Russia, only we need to REVERSE the harm they did to the greatest extent possible.

We need nothing less than a REVOLUTION. If our elected representatives had the necessary guts, brains and heart, they could bring about radical change without anyone's having to get out the machine guns. Right now all those silly bastards are doing is the moral equivalent of rearranging deck chairs on the Titanic.

Why do people have to wait until they are reduced to nothing before they realize they have to make drastic changes in their priorities, if they hope to better themselves?

Of one thing I'm sure: We won't be able to change our circumstances and unseat the villains who keep making every bad situation worse by sitting in front of our computers and grousing to each other.

Until the poor can be made to realize that they cannot make themselves richer and more secure by destroying those already wealthy, society will never make ay real progress. The idea should be to find ways to share our strengths and build on our positive achievements not to dream up ways to kill each other off.

~ FreeThinke

Lisa said...

You got my vote!

Of course Silver you always did.

Anonymous said...

This just in via email. It seems pertinent to this discussion:


I hope you will follow the president's example and do your part

The President ordered the cabinet to cut $100 million from the $3.5 trillion Federal budget.

I'm so impressed by this sacrifice that I have decided to do the same thing with my personal budget.

Normally, I spend about $2000 a month on groceries, mortgage, insurance, property taxes, medicine, utilities, lawn care, etc, but it's time to get out the axe, go through my expenses, and cut back.

I'm going to cut my spending at exactly the same ratio as Obama proposes -- i.e. 1/35,000 of my total budget.

After doing the math, it looks like instead of spending $2000 a month, I'm going to have to cut that number by six whole cents.

Yes, I'm going to have to get by with only $1999.94, instead of the usual $2000.00. It will be hard, but that's what sacrifice is all about. I'll just have to do without so many luxuries.

Did the president actually think no one would do the arithmetic? If so, he must be even stupider than we've thought.

~ Submitted by FreeThinke

PS: Thank you, Lisa. I'm a great fan of radicalism, as long as it operates on the side of conservatism and libertarianism. - FT

Z said...

gad, I hate that cartoon, it's too true.
Only Lib TIME Magazine could print that article about Greece and completely leave out the implications about US, huh?

We're definitely out of easy answers...this is a very scary time. And, of course, any answers Republicans offer are first maligned with the "REpublicans are evil and hate the poor and old people" mantra of the left. What a mess.

Anonymous said...

Hey, Z,

Isn't about time we stopped wringing our hands and biting our nails, and started scratching out a few liberal eyes, instead?

We need more people like your friend Andrew Breitbart who actually DO something to drop these bastards dead in their tracks. I just loved the way he got the goods on Weiner, and threw the grenades over the barricades. BLAM! SOCK! BIFF! POWEE! SHAZAM! DEAD!!!

Three cheers for Breitbart -- a man of ACTION. He don't moan about nothin', he just quietly gathers the goods, then knocks 'em DEAD.

Ann Coulter never fails to draw blood either, bless her crazed, overzealous, borderline fanatical heart.

I wish we could clone them both into an army.

The Founding Fathers penned immortal sentiments in our founding documents, but they went much farther than that. They literally pledged their lives the future of their wives and children, and every bit of comfort, social position and financial security they possessed in order to implement a set of ideals.

Do you know anyone willing to go that far in order to save us from tyranny today?

~ FreeThinke

Anonymous said...

If you just feel like lettin' off a little steam and enjoying a good laugh or two, copy and paste this charmer into your browser and go to town:

It just made a big Jimmy Buffet fan out of me -- something I never would have thought possible till a couple of hours ago. Be sure to watch the pictures as the tune grinds on.

~ FreeThinke

Ducky's here said...

The problem with Greece is not so much the debt but the problems any default will cause already virtually insolvent European banks.

They bought a lot of bad Irish paper, bad Greek paper and the bad American paper is really going to kill them.

The American debt problem isn't quite so severe at the moment since the cost of debt service is relatively low, much lower than when Saint Ronald Raygun was spending like a drunken sailor.
Can't keep interest rates this low forever without eventually heating up inflation but the problem isn't immediate.

1. Finish up the Iraq and Afghanistan fiascoes and get them off the books.

2. Return to the Clinton tax levels.

3. Reinstate home buying tax credits and institute mortgage cram downs to stimulate the housing market.

4. Cross your fingers and hope that a housing improvement generates optimism and increases spending and growth.

5. Stop the idiotic nonsense of claiming this was created by Obama and make at least a half assed non partisan effort to understand the problem

Ducky's here said...

Freethinker, I'm intrigued.

Just how does letting Breitbart gin up another sex scandal make even the slightest dent in the problem of international insolvency.

Why not tell Andrew to throw in a salad once in a while, hit the gym and get out of the way?

Jersey McJones said...

Oh, c'mon guys! We are not "in worse shape than Greece." That's just silly.

We have a massive economy. We could easily pay our bills right now. We just have to man-up, act like patriotic Americans, and DO IT.


Silverfiddle said...

Jersey: Our debt situation is worse, size-wise. The difference is that we have much better fundamentals than they do, which I think you are alluding to.

So just do what, exactly? We could tax every rich person at 100% and it still would not cover our annual spending. Gotta cut spending.

I think Reagan must have stole Ducky's girl back in the 50's or something. He's got a real fixation on the 20th Century's greatest president.

Ducky: Stop the idiotic nonsense of claiming I said "this was created by Obama".

You're welcomed to puke out your wild claims and hare-brained liberal nonsense all day long here, but don't put words in my mouth.

Finally, you idea #3 is a beauty: Reinflating the housing bubble is brilliant! You should be a democrat politician.

tha malcontent said...

No comment needed.

Anonymous said...


Very briefly:

Anything that discourages, inhibits, balks, intimidates, cripples, derails, eliminates or otherwise deters a politician who advocates Marxian or Fabian ideas is bound to have a salubrious effect not only on the American economy but that of the entire world.

Please notice I did not say "Democratic" politician, because I believe both parties have tilted so far to the left that there is hardly an appreciable difference between them. Republicans just move a little more slowly in the relentless march towards mutually shared poverty administered by a despotic oligarchy comprised of international bankers and financiers, owners and distributors of vital raw materials, and captains of global industries -- and the army of liberal judges, college professors, journalists, entertainment moguls, social workers and government bureaucrats who have dedicated their lives to serving them.

The trend away from capitalism towards collectivism is set to hamper and ultimately destroy the opportunity designed by the Framers of our Constitution for the individual to use whatever intelligence and creativity he may have to advance according to the dictates of his own ambition.

The would-be oligarchs have been busily engineering a return to the feudal system casting us common folk as serfs and vassals subject to the suzerainty of One World Government.

"Anything it takes" to stop this -- however unsavory, unkind, illegal or unethical -- is worthy of support in my never humble opinion.

Anthony Weiner's internationally celebrated phallus is just one tiny fragment in a huge mosaic depicting Orwell's dystopian vision made manifest.

~ FreeThinke

Anonymous said...

PS: Ducky, Breitbart's physique, however out of shape and unappealing it may be in your estimation, is not at issue here. Neither Breitbart nor Weiner are slated to win any beauty contests, and Breitbart, whatever you may think of him, is not the one who exposed himself in lurid, pornographic detail giving the entire world an opportunity to gape, gawk and giggle at the source of his insufferably cocky attitude.

~ FreeThinke

Ducky's here said...

Silverfiddle, I was not referring to you specifically but rather the contemporary right wing when suggesting the the current climate of blaming Obama, which is quite widespread, is non productive.

Stabilizing housing prices should not generate a bubble. The suggestion would do more to stop foreclosures and stop adding to the large current housing inventory.
Do you have suggestions or do you believe we can just let it correct itself, which it shows no signs of doing.

I assume you don't hold with the Keynesian idea that some markets need outside intervention to resolve their inertia.

Ducky's here said...

Frethinker, Breitbart is a cheap hustler and a liar who pollutes the national dialog.

Silverfiddle said...

Ducky: I am a big believer in unintended consequences, which drives my conservatism, I guess, and also makes me a free marketeer.

Every time government (or any entity for that matter) creates winners, it also creates losers.

We had a housing bubble. It popped. This is the new normal. People are enraged, yet government continually robs us by devaluing the currency and eroding our savings and not a peep.

Where we may partially agree is the area of banking. Worldwide, everybody is in trouble, but the banks always are made whole, at the expense of the governments and the people.

I don't like it, but I don't yet completely understand it enough to go off on it.

Anonymous said...

"Breitbart is a cheap hustler and a liar who pollutes the national dialogue."

I find Breitbart an unappealing figure -- as I find all muckrakers and troublemakers. The urge to pursue muckraking as a profession is one of the classic symptoms of a peculiarly odious personality type -- but that does not make Breitbart a liar.

Every embarrassing, inconvenient, unpleasant, unpalatable, undesired and undesirable episode he brings to light is indisputably factual. His tactics have caught every one of his targets hoist on its own petard and stewing in its own juice -- condemned not by mere accusation and sly innuendo -- but by the target's very own words and actions caught on videotape.

Breitbart is only doing to leftists what leftists in the media have been doing to conservatives for decades. As the saying goes, "what's sauce for the goose is sauce for the gander."

Who was it who invented GOTCHA! journalism in the first place?

"Everything that goes around comes around."

"If you can't take it, don't dish it out." That's all I can say -- and all I'm going to say before I run out of cliches.


~ FreeThinke

Anonymous said...


Doesn't it stand to reason that those who control the money supply and the sources of raw materials are destined to be our de facto ruling class, whether we like it or not?

Once banking and industry went global wasn't only a matter of time before individual nations would come to be regarded as a thing of the past and the citizenry of each country as mere pawns in the eternal game of aggression, domination and subjugation that's been escalating in every more powerful waves since time immemorial?

You not the law of unintended consequences. I see that at work all the time too, but isn't it also possible that the consequences with which are now suffering are the result of a brilliantly-conceived and executed long range plan designed by overly ambitious who may honestly have believed they had the best interests of all mankind at heart, burt who erred tragically in imagining their intelligence could and should supplant God?

~ FT

Silverfiddle said...

FT: Yes, I agree with your last comment. It's rarely a nefarious plot, but rather the do-gooders who end up doing the most tragic damage.

Matt said...

SF, your last comment puts me to mind of two sayings...

1. The path to Hell is paved with good intentions.

2. Quinn's Law: Liberalism always generated the exact opposite of it's stated intent.

As for the financial situation, we need a slash and burn to the government. We have so many functions for fedzilla that exceeds it Constitutional authority. That, and they don't work. Then again, big government tends to never work.

Ducky's here said...

That makes a certain sense, silverfiddle. Government intervention will be imperfect.

However, what we have to realize is, as Alan Greenspan himself has admitted, that markets screw up very badly. We've had sufficient experience with unregulated markets and their aftermath to realize that we can have the government work for us or as it is now, against us.

As capital continues to destroy the middle class its time to say enough and reverse the flow. Favor the individual vs. banks, progressive taxation. This can be done.

Silverfiddle said...

Ducky: Unregulated markets? Examples please.

@Matt: Fedzilla. Never heard that one before. I love it!

Jersey McJones said...

Silver, as far as you're concerned, is there ever a time to raise taxes?


Silverfiddle said...

Probably so, but we haven't seen it yet.

Anonymous said...

Instead of raising taxes, print up uncallable G-Bonds that pay rates of interest competitive with long-term CD's. Naturally the income from these bonds should be tax-free -- as it already is to FOREIGN investors, but NOT Americans. In that way, the government should be able to attract more money from investors than it could ever hope to get through taxation.

TAXATION is a synonym for EXTORTION.

~ FreeThinke

Anonymous said...

Re Alan Greenspan:

He's ancient now and probably getting more-than-a-bit dotty. Some years ago old Alan, who was supposed to be a Republican, made the tragic error of marrying that mouthy, Feminazi bitch, Andrea Mitchell, of Nothing-But-Communism News. Since then, Alan's gone daft. He's been talking more and more like a leftist ever since.

That said, I agree with those who would claim that Capitalism untempered by a Christian Conscience is potentially as fearsome as any of the other isms.

But the very last thing Alan and Andrea would be likely to possess is a Christian conscience.

~ FreeThinke

MathewK said...

As i always say, one way or another, everyone will learn fiscal responsibility. A little Australia or a super power like America, we will all learn it.

And if we refuse to learn, it will be taught to us. The only real choice we have in the matter is the amount of pain and discomfort involved in learning it.

Lastly, it's my opinion that many in the west deserve to learn this lesson very painfully.