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Founder Of Reaganomics Says That "Without A Revolution, Americans Are History"
- Budget Deficit
- Central Banks
- China
- Deficit Spending
- European Union
- Excess Reserves
- Federal Deficit
- Federal Reserve
- Foreclosures
- Foreign Central Banks
- Hyperinflation
- Israel
- John Williams
- Medicare
- Money Supply
- Neocons
- New York Times
- OPEC
- Real estate
- Recession
- recovery
- Reserve Currency
- TARP
- Trade Deficit
- Wall Street Journal
- White House
By Paul Craig Roberts, First Published at InfoWars
The Ecstasy of Empire
The United States is running out of time to get its
budget and trade deficits under control. Despite the urgency of the
situation, 2010 has been wasted in hype about a non-existent
recovery. As recently as August 2 Treasury Secretary Timothy F.
Geithner penned a New York Times column, “Welcome to the Recovery.”
As John Williams (shadowstats.com)
has made clear on many occasions, an appearance of recovery was
created by over-counting employment and undercounting inflation.
Warnings by Williams, Gerald Celente, and myself have gone unheeded,
but our warnings recently had echoes from Boston University professor
Laurence Kotlikoff and from David Stockman, who excoriated the
Republican Party for becoming big-spending Democrats.
It is encouraging to see some realization that, this time,
Washington cannot spend the economy out of recession. The deficits are
already too large for the dollar to survive as reserve currency, and
deficit spending cannot put Americans back to work in jobs that have
been moved offshore.
However, the solutions offered by those who are beginning to
recognize that there is a problem are discouraging. Kotlikoff thinks
the solution is savage Social Security and Medicare cuts or equally
savage tax increases or hyperinflation to destroy the vast debts.
Perhaps economists lack imagination, or perhaps they don’t want to
be cut off from Wall Street and corporate subsidies, but Social
Security and Medicare are insufficient at their present levels,
especially considering the erosion of private pensions by the dot com,
derivative and real estate bubbles. Cuts in Social Security and
Medicare, for which people have paid 15 per cent of their earnings all
their lives, would result in starvation and deaths from curable
diseases.
Tax increases make even less sense. It is widely acknowledged that
the majority of households cannot survive on one job. Both husband and
wife work and often one of the partners has two jobs in order to make
ends meet. Raising taxes makes it harder to make ends meet–thus more
foreclosures, more food stamps, more homelessness. What kind of
economist or humane person thinks this is a solution?
Ah, but we will tax the rich. The rich have enough money. They will simply stop earning.
Let’s get real. Here is what the government is likely to do. Once
Washington realize that the dollar is at risk and that they can no
longer finance their wars by borrowing abroad, the government will
either levy a tax on private pensions on the grounds that the pensions
have accumulated tax-deferred, or the government will require pension
fund managers to purchase Treasury debt with our pensions. This will
buy the government a bit more time while pension accounts are loaded
up with worthless paper.
The last Bush budget deficit (2008) was in the $400-500 billion
range, about the size of the Chinese, Japanese, and OPEC trade
surpluses with the US. Traditionally, these trade surpluses have been
recycled to the US and finance the federal budget deficit. In 2009 and
2010 the federal deficit jumped to $1,400 billion, a back-to-back
trillion dollar increase. There are not sufficient trade surpluses to
finance a deficit this large. From where comes the money?
The answer is from individuals fleeing the stock market into “safe”
Treasury bonds and from the bankster bailout, not so much the TARP
money as the Federal Reserve’s exchange of bank reserves for
questionable financial paper such as subprime derivatives. The banks
used their excess reserves to purchase Treasury debt.
These financing maneuvers are one-time tricks. Once people have
fled stocks, that movement into Treasuries is over. The opposition to
the bankster bailout likely precludes another. So where does the money
come from the next time?
The Treasury was able to unload a lot of debt thanks to “the Greek
crisis,” which the New York banksters and hedge funds multiplied into
“the euro crisis.” The financial press served as a financing arm for
the US Treasury by creating panic about European debt and the euro.
Central banks and individuals who had taken refuge from the dollar in
euros were panicked out of their euros, and they rushed into dollars
by purchasing US Treasury debt.
This movement from euros to dollars weakened the alternative
reserve currency to the dollar, halted the dollar’s decline, and
financed the US budget deficit a while longer.
Possibly the game can be replayed with Spanish debt, Irish debt,
and whatever unlucky country is eswept in by the thoughtless expansion
of the European Union.
But when no countries remain that can be destabilized by Wall
Street investment banksters and hedge funds, what then finances the US
budget deficit?
The only remaining financier is the Federal Reserve. When Treasury
bonds brought to auction do not sell, the Federal Reserve must
purchase them. The Federal Reserve purchases the bonds by creating new
demand deposits, or checking accounts, for the Treasury. As the
Treasury spends the proceeds of the new debt sales, the US money
supply expands by the amount of the Federal Reserve’s purchase of
Treasury debt.
Do goods and services expand by the same amount? Imports will
increase as US jobs have been offshored and given to foreigners, thus
worsening the trade deficit. When the Federal Reserve purchases the
Treasury’s new debt issues, the money supply will increase by more
than the supply of domestically produced goods and services. Prices
are likely to rise.
How high will they rise? The longer money is created in order that
government can pay its bills, the more likely hyperinflation will be
the result.
The economy has not recovered. By the end of this year it will be
obvious that the collapsing economy means a larger than $1.4 trillion
budget deficit to finance. Will it be $2 trillion? Higher?
Whatever the size, the rest of the world will see that the dollar
is being printed in such quantities that it cannot serve as reserve
currency. At that point wholesale dumping of dollars will result as
foreign central banks try to unload a worthless currency.
The collapse of the dollar will drive up the prices of imports and
offshored goods on which Americans are dependent. Wal-Mart shoppers
will think they have mistakenly gone into Neiman Marcus.
Domestic prices will also explode as a growing money supply chases
the supply of goods and services still made in America by Americans.
The dollar as reserve currency cannot survive the conflagration.
When the dollar goes the US cannot finance its trade deficit.
Therefore, imports will fall sharply, thus adding to domestic
inflation and, as the US is energy import-dependent, there will be
transportation disruptions that will disrupt work and grocery store
deliveries.
Panic will be the order of the day.
Will farms will be raided? Will those trapped in cities resort to riots and looting?
Is this the likely future that “our” government and “our patriotic” corporations have created for us?
To borrow from Lenin, “What can be done?”
Here is what can be done. The wars, which benefit no one but the
military-security complex and Israel’s territorial expansion, can be
immediately ended. This would reduce the US budget deficit by hundreds
of billions of dollars per year. More hundreds of billions of
dollars could be saved by cutting the rest of the military budget
which, in its present size, exceeds the budgets of all the serious
military powers on earth combined.
US military spending reflects the unaffordable and unattainable
crazed neoconservative goal of US Empire and world hegemony. What
fool in Washington thinks that China is going to finance US hegemony
over China?
The only way that the US will again have an economy is by bringing
back the offshored jobs. The loss of these jobs impoverished Americans
while producing oversized gains for Wall Street, shareholders, and
corporate executives. These jobs can be brought home where they belong
by taxing corporations according to where value is added to their
product. If value is added to their goods and services in China,
corporations would have a high tax rate. If value is added to their
goods and services in the US, corporations would have a low tax rate.
This change in corporate taxation would offset the cheap foreign
labor that has sucked jobs out of America, and it would rebuild the
ladders of upward mobility that made America an opportunity society.
If the wars are not immediately stopped and the jobs brought back to America, the US is relegated to the trash bin of history.
Obviously, the corporations and Wall Street would use their
financial power and campaign contributions to block any legislation
that would reduce short-term earnings and bonuses by bringing jobs
back to America. Americans have no greater enemies than Wall Street
and the corporations and their prostitutes in Congress and the White
House.
The neocons allied with Israel, who control both parties and much of the media, are strung out on the ecstasy of Empire.
The United States and the welfare of its 300 million people cannot
be restored unless the neocons, Wall Street, the corporations, and
their servile slaves in Congress and the White House can be defeated.
Without a revolution, Americans are history.
Dr. Paul Craig Roberts is the father of Reaganomics and the
former head of policy at the Department of Treasury. He is a columnist
and was previously the editor of the Wall Street Journal. His latest
book, “How the Economy Was Lost: The War of the Worlds,” details why America is disintegrating.
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Not to worry. After 30 years of Reaganomics, we have Obamanomics.
This guy has an amazing point of view. How the heck was he ever allowed to be involved with a high level of government finance?
I am also wondering how high the actual deficit will be if they are predicting a $1.4T deficit using their unicorns pooping rainbow projections.
Does he not realize the UST is already, most likely, buying up its own debt?
$1.4T was total bullshit. That was just the headline number. TreasuryDirect told a different story and you can only hope to estimate the losses embedded in the Fed's balance sheet, all of which pass through to the Treasury. I originally estimated $2.5T and I think that's a decent number to shoot for this time, too.
Thanks, I'll look into that.
I believe this was called the Smoot-Hawley Tarriff act the first time it fucked us all over.
It surely wasn't the Greeks' fault running up that debt and all. No, no, no... it was all a decades long Wall Street scheme with the US Treasury backing it all up just so we could sell more treasuries. Stupid.
This kind of one-dimensional thinking is the hallmark of bullshit. TIC data says that everyday people are picking up treasuries. No buyers? It is at least possible that yields will go up until there are buyers.
Just another the "good American people aren't to blame, it's the damn politicans" sob story. Grow the fuck up. Please. Middle class voted these motherfuckers in, middle class takes it up the dukey.
'This kind of one-dimensional thinking is the hallmark of bullshit. TIC data says that everyday people are picking up treasuries. No buyers?'
RFLMAO
Keep laughing idiot. They sure caught a bid today.
Are these "everyday people" taking out equity lines on their houses or using their unemployment checks? I hope they have really deep pockets because there will be plenty more to buy in the very near future.. They can go with state and local bonds as well, if they choose.
What the hell, a round of treasuries for everyone!.. It's on me.. :)
PCR,
don*t hold your breath waiting for the revolution. Your coward stupd brainwashed coutrymen are still dreaming their American dream. So definetely the world will get rid of this kind of America! Cheers!-
I just watched CBS evening news. It was a crap fountain. I have pink eye and I can't hear because the bullcrap got into every orfice.
Here's a thought...
Stop watching that crap.
Sometimes you have to know how far people will go and how rediculous they will get. One of the shows was about flooding in pakistan. Then yahoo news says world bank is going to give them some money. World bank doesn't have any money.
I just hate astrology. I haven't looked at it done anything with it in ages and I get this strange feeling somethings going on. Jupiter opposes Saturn on aug 17th. I could smell the jupiter feel good bullshit 30 million miles away.
Let's go out in a blaze of glory, something the mutant roaches will tell their children's children about.
America needs 10,000 Tim McVeighs.
If you are referring to mind-controlled patsies,
we've got more than we need, thank you.
If that means blowing up day care centers in govt buildings, count me out. If it means targeted assassinations, tell me more.
I live 90 miles from that explosion. I heard it. I felt it. That event is another doesn't add up. Middle support beams folding when the explosive material was only able to present 25psi to them. Nobody goes into a situation against an criminal organization that has huge resources and expects to live. If you can get to a place to where you can blow up a building with women and children in it. You're not going to lay down put your hands on your heads for the FBI. Put the fucker on TV and let him spill clues. No more of this 3rd party "characterization" of him. I think he's as inside as inside gets.
This is the Obama posture.
http://www.youtube.com/watch?v=q54LJ5RsqRw
God Bless America.
Come on...they have until January at least...football season is starting (roman games) to divert the sheeple. Huge weekend government shenanigans will occur to keep things going....I'll be impressed if we see one riot..other than those that didn't get their free mortgage rent voucher.
Pascivism and protectionism. Why didn't I think of that?
I think Roberts has been influenced by the same vested interests that he decries. He dismisses taxation way too easily.
Consider 1) a wealth tax or 2) higher corporate taxes (particuarly on entities that cannot move).
A wealth tax could easily be implemented and not avoided if structured properly. It would help clawback ill-gotten gains from the past several decades. Anyone sitting on massive real estate gains has added nothing to society to deserve those gains - they simply were on the right side of a broken system & incentives.
As for corporations, they are at record profit levels yet there is virtually no talk of raising taxes. Some fear they will move to other jurisdictions. So then at the very least tax resources, REITs, transporation, etc. They cannot move.
Funny how you skipped right over the suggestion that we should reduce military spending (or spending in general) and immediately set out to disprove his theory about the -not so promising- view of increased taxation.
Money earned by true innovation can not be considered to be ill-gotten. Money earned by crony capitalists in bed with government is thoroughly ill-gotten. However, how can one trust government to tax away the ill-gotten gains when the government facilitated those gains in the first place and those same corporate cronies remain in the catbird seat?
Profoundly stupid.
Tax companies that can't move? LOL The only thing that will come from that is the movement of the investments in those businesses...to something that will be able to show a profit.
And a wealth tax, so the poor slobs that worked their asses off all their lives and took care of their own retirement can now pitch in and fund THIS government?
You really do want to start a revolution.
http://www.youtube.com/watch?v=tsH8xvjTAlo&feature=player_embedded
I guess it must have been Reaganomics' mother who had the brains.
"The financial press served as a financing arm for the US Treasury by creating panic about European debt and the euro. Central banks and individuals who had taken refuge from the dollar in euros were panicked out of their euros, and they rushed into dollars by purchasing US Treasury debt."
I love it that at least someone somewhere 'gets it' - the entire affair was nothing but one big kabuki dance. Very deliberate and planned to perfection.
"...or the government will require pension fund managers to purchase Treasury debt with our pensions."
Heck, the government just changed the actuarial world two years ago by having pension funds switch from using the US 30y as a base line to using IG corporates... and that was the world with a 5%+ 30. Imagine what would happen to all those rosy projections if pension funds, especially state & local government pension funds had to use 3.75% for their base lines..
ROFLMAO
Anyone who's that focused specifically on Israel is showing his true colors. The last really major Israeli expansion was Lebanon when Reagan was Prez. Since then they have withdrawn from Lebanon and had the geopolitically irrelevant in/out biz w Gaza.
American problems have little to do w Israel.
PNAC yourself you dam appologist.
Anyone who's that focused specifically on Israel is showing his true colors.
Those Americans who defend Israel no matter how often they endanger American lives show just how falsely they play their own people.
Yeah, giving back the Sinai really worked out swell.
Now the Egyptians close the border with Gaza until a Turkish freak show of a ship get's boarded by Israelis for running a blokade meant to stop arming militants in Gaza.
And yet somehow...it's the Israelis fault for the EGYPTIAN/GAZA border being closed.
Cowards don't dispute my words...just junk them...LOL.
Punks.
f@ck Zionnnnnnnnn!!!!!!!!!!!!!!!!!!!!
This article is VERY suspect. Hmmm.... dismantle the military. BIG savings! Let's kick the Jews while were at it... they just want to grab land.... Anti-military and Anti-Israel... nish git! And they run the media too.... WHAT CRAP!
Welcome to the end times. Yeah, let's bring the country down with violence and throw in a good old fashion pogrom for sport! Leninist BITCHEZ! Arm yourselves, this country looks more like Germany in the late '20's than a Norman Rockwell wet dream.
"American problems have little to do w Israel. "
I agree, it has been one of positioning. The dice are loaded against Israel, when the cards fall Israel will be on its own. Yeats talked about the (lack of) compuction of humanity and I think we are at that point:
Too early to start the shootin', but to late to do anything about it......that about sums up where we are as a country!
Reaganomics? Isn't that exactly when budget deficits started to soar? Isn't it true that Republicans have not delivered one balanced budget since Richard Nixon?
Yes, that's right folks. We now need Republicans and more Reaganomics to get us back on the road to fiscal sanity.
How convenient that you forgot the Republican Congress surpluses when Billy Bob Blowjob was president.
Ah yes, ZH reverts back to geopolitical nuttiness. I thought things were looking up here after some excellent articles yesterday. My bad.
Clinton used accrual accounting which amounted to wishful thinking on huge
tax receipts to *show* a balanced budget ON THE BOOKS, but in the future, not
in real life. We did not have *cash* on hand or even equity on hand that would
have been tangible assets to "balance" our budget. However, starting with Reagan
(mid 80's)and continuing with Clinton (even with the then largest tax increase
in history) we were on a better path towards balanced budgets. The disclaimer
there though.... we borrowed money to pay for pet projects, just as Bush II
became addicted to doing, because we knew SS and both Mediscare programs were insolvent, so the budget was balanced "on the books" while the National Debt
(what we owe everyone else) went through the roof!
Reaganomics?...yadda...yadda...yadda
I assume that the handle "sagelike" indicates that you resemble a low, scrubby plant and not some kind of smart guy?
Partisanship is so passe. Team blue will not save you.
This was actually a pretty good read until the "Israel's territorial expansion" bullshit. What a crock.
Yet another so-called Reaganaut gone psycho. Worse than Stockman.
f@ck Zion!!!!!!!!!!!!!!!!
Yeah, well, he's right ..but he's not saying anything new. Perhaps the new thing here is that a founder of the same philosophy that built the mess now condemns it. All the more reasons to doubt that anyone knows what they're doing.
On another note, I disagree with those who said that the US cannot simply withdraw from ongoing conflicts. It's not a matter of what history says or whether you like it or not. It's closer to a question of whether you have any choice left. You can go on with spending on waging wars that you never win. It's a well-known fact that America never won any war by itself. I don't see how this could happen when money becomes scarce.
"It's a well-known fact that America never won any war by itself."
America won the Civil War but the reUnion has gone down hill ever since.
"Americans have no greater enemies than Wall Street and the corporations and their prostitutes in Congress and the White House."
True words. When do we stop this nonsense?
When do we stop this nonsense?
When each of us realizes that the individual alone is sovereign. A system run for the benefit of special interest groups can only trample individual rights. And that is all that government is -- a tool to redistribute wealth from individuals who produce it to members of favored special interest groups.
I seem to remember something after the fall of the Soviets called the 'peace dividend'. Remember, when we cut the military and intelligence to finance who knows what. How'd that end up? Oh thats right. 9/11
Nobody thinks we need all our bases, especially those in Germany, Japan, and Korea. But seriously Roberts, knockoff the nutty empire talk. We have no colonies. We have no king or subjects. We aren't scooping gold off the ground in South America. We aren't teaching people english by force. There are no state funded religious missions.
There is no comparison to the empires of old.
Nobody thinks we need all our bases, especially those in Germany, Japan, and Korea.
Saw on the news last night that the last "combat troops" left Iraq. But 50,000 "support troops" remain. You need to add Iraq to your list.
Here's an idea.
Let's attack the only governmental organization that actually works as it was intended to do. And, almost as an after thought, repeal NAFTA and offshoring.
"More hundreds of billions of dollars could be saved by cutting the rest of the military budget which, in its present size, exceeds the budgets of all the serious military powers on earth combined."
There is only one military power that is any concern...idiot.
"Chinese defense spending has increased by an average of 12.9% annually since 1989 when Beijing launched an ambitious army modernization program, and this wasonly the second year over that period in which annual growth was less than 10%. The actual level of effort is seriously understated, and may represent as much as $100-150 billion. China's legislature began its annual session Friday, 05 March 2010."
http://www.globalsecurity.org/military/world/china/budget.htm
If you can even believe what a damn communist country reveals to the world outside. Why is communist North Korea spending upwards of 40% of "known GDP" on military and not China, also a communist country? Kinda like Islam, where it's perfectly acceptable to lie to "infidels" to achieve the goal.
However, two can play in the race to the abyss game.
Not a word about welfare queens? Not a word about socialist programs of "entitlements" sucking the blood of future generations yet to be born and destroying their potential through confiscation of their labor? Not a word of getting the government to hell out of our lives and back to it's intended purpose?
They created the mess and now this hack from the government by the government pontificates about how to fix it...by prostrating ourselves...placing our heads on the block before our potential enemies?!?!?
No sir!
1) Remove our bases from Europe...that is all. They don't need us there propping up their socialist lifestyle relying on our largesse through the defense of their property.
2) Means test Social Security. Yes, your money was stolen from you throughout your life, but now, for those of you who have done well...you don't get it back. Sorry. It was a social experiment gone horribly wrong. Talk to the inventor and enablers of the ponzi not us.
3) If you are a woman and have a baby or do illegal drugs and you are a ward of the state, that is, you are on welfare or any type of government assistance you will be given the option of going off subsidy or sterilization after the babies birth. If your are a male and impregnate a woman (any woman) or do illegal drugs and are a ward of the state you will not be eligable for public funds either. Keep clean, zippers closed, you stay as you are. To be truly free requires sacrifice, responsibity and determination.
4a) Children born to illegal immigrants are not citizens. The fact that they are here by fraud, deciet or other illegal acts of their parents exempts them. Documented workers, green card holders who bear children here followed the law's of this country therefore their children born here are citizens.
4) The Dept. of Homeland Security is duplicity of departments. Abolished.
5) The Department of Agriculture is abolished. There are more employees of the department than farmers. What does that tell you about government efficiancy?
6) The Department of Energy is abolished. This was created by President Carter to make America energy independent. It has failed, miserably.
This is just the short list bitchez.
7) Department of Education.
It's on the extended list of atrocities comitted against the republic.
How someone can advance through grade school and on into college (like JB) thinking that all that need's to be done, fiscally, is to turn on a printing press is beyond my ability to quantify outrage.
- exactly, listen carefully.
http://www.youtube.com/watch?v=9M4tdMsg3ts
Claire Wolfe "101 Things to Do 'Til the Revolution"
And other Claire Wolfe books...
Also check out her blogroll on her (permanently hiatus) blog:
http://billstclair.com/clairewolfe.com/blog.html
Many people have been preparing for this for periods of time longer than the average age of ZH contributors.
As one of them observed this week, the local gun shows are mostly empty now, and the prices of weapons, accoutrements and munitions have fallen back to the trendline. THis has more to do with the fact that millions of American households are now armed and prepped for substantial hardship over the coming years. And contrary to the uneducated views of most on ZH, preparations for this involve cooperative neighborly and neighborhood level planning to sustain extended close knit communities.
Over 1.1 million US servicemen have rotated through Iraq and Afghanistan in the last decade. Several hundred thousand more have rotated through active duty foreign tours outside those two theatres.
As Claire says: "It's too late to work within the system, but too early to shoot the bastards."
Semper Paratus
P.S. the Captcha questions have really gotten easy today... check this one out "Math question: *
_______ times (minus one) equals minus one"
For what its worth, gun sales are actually holding steady, NCIS stats are on the same track as last year. The media tries to spin it as "ZOMG RIGHTY WING NUTZ PHEAR MORE LAWZ" but this is nonsense, the gun crowd knows full well that after Heller there isn't much to worry about there. People are still preparing, and upgrading where possible. Here in the south the gun shows are still doing very well. Ammo has gotten cheaper, but a fair part of that is the big Russian manufacturers finishing up some very large contracts last year and more being available.
Paul Craig Roberts, Rubin, Greenpan, these fuckers (and their buddies) caused the mess and yet they continue to write and broadcast with breathtaking audacity. They are liars but are never called out in the MSM. Fucking treasonous and seditious bastards - lining their own pockets and massaging their egos at the expense of the nation. Sinister and evil.
What a crock of $#!t from the great "creator" of Reaganomics ie those we can thank for the degenerate economic policies that led directly to today's mess. Sorry. 3 decades of "Greed is Good" WAS the fleecing of America. "Shop till you drop"?...well we're dropping now. We have these guys to thank for Trickle Down Economics that, well, don't trickle! It was another way of simply instituting economic policies that favored capital accumulation (gains) over income generation (jobs and profit margins from small business). That was the guiding principle. That if you "Make the Rich Get Richer", they'll "Reinvest" accumulated capital into the economy and create jobs. Ahem. Instead we learned once more that the rich hoard, buy jewelry and art collections, place their money in foreign tax shelters, buy property in the South of France, and pay off politicians who favor giving them tax cuts. Nice.
The centerpiece of Reaganomics was cutting costs to the "Supply Side" so that in turn prices of finished products could be reduced. What resulted was income deflation in real terms for 30 years. Outsourcing was a mainstay of anti-inflationary policy because it permitted cheap labor abroad to produce the goods that America would consume. And to finance this trade deficit we would simply allow foreigners to purchase Treasury IOUs with the dollars they earned so as not to let a flood of dollars back into the country. Hence our massive debt addiction. Hence a debt pyramiding scheme never before seen where old debt gets paid by "check kiting" new debt, all on America's tab.
The delusions of Reaganomics are now coming home to roost like sick pigeons with communicable diseases. Destroying the industrial and manufacturing sector while expanding the FIRE sector is not a sustainable model. We can't live by inventing new derivatives, securities and debt packaging any more. That game is up. Trusting Wall Street with the fate of our country was an unwise choice.
"delusions of Reaganomics are now coming home to roost like sick pigeons with communicable diseases"
Poetic. Kind of Bill Hicks mixed with a bit of Bukowski. Impressive.
:-) or maybe Douglas Coupland with a newly minted degree in economics from U of Phoenix
Generation U6
The delusions of Reaganomics are now coming home to roost like sick pigeons with communicable diseases. Destroying the industrial and manufacturing sector while expanding the FIRE sector is not a sustainable model. We can't live by inventing new derivatives, securities and debt packaging any more. That game is up. Trusting Wall Street with the fate of our country was an unwise choice.
So you don't want to trust "Wall Street" and neither do I, but I expect that in your call for change you expect us to trust some new raft of government programs -- programs enacted by the very same government which you quite rightly criticized throughout your post.
Government is the problem. Deregulate everything. Humans can not prosper without freedom.
Regarding De-Regulation:
-Orthodox belief in De-Regulation presupposes that "Greed Works" (to coin a phrase :0). Of course the danger lies in the inevitable dystopic outcome of complete de-regulation: crony capitalism aka the Mafia economy where you play by their rules since they don't need to play by yours. Also, pure Market Fundamentalism which advocates total financial de-regulation has been throughly discredited by the collapse of Lehman and the follies of 2008. Paulson and Bush truly believed that markets would right themselves and therefore provided no support for Lehman. Well they sure backtracked on that one, a la TARP, TALF, ZIRP, QE, bailing out every bank on Wall Street and Main Street in the process.
-Can America compete through de-regulation against nations that are moving increasingly toward full regulation? This question will move center stage one again as we watch China's command economy soar. Euro countries and Japan won't need much coaxing, nor will the bankrupt PIIGS and Eastern periphery nations.
I don't see how 'total financial de-regulation' has been discredited. I think selective deregulation has been discredited, time and again.
Deregulation is only half of the solution. We have to remove both the stick and the carrot. The Fed being one big-ass field of carrots.
The reason greed doesn't "work" in a TBTF environment is the elimination of risk and the fear of failure. The implicit (and explicit) government guarantees and backstops must be ended. All greed must be balanced by fear.
China's 'command economy' is soaring because it's full of hot air. But also because at the lower level, they're apparently very business-friendly with low regulations, taxes, and barriers to startup. Not "full regulation". I think a free market US could probably compete, but regardless, things will get worse before they get better.
-Orthodox belief in De-Regulation presupposes that "Greed Works"
Freedom works.
No man has a right to force another to do something against his will. It is neither moral or practical. By demanding that some supposedly superior people hold power over the remaining populace you guarantee a repeat of every evil perpetrated in the history of mankind.
If you do not trust individuals to be free because you fear "greed" how can you believe that a select group will govern without exploiting the masses for their own greedy self interest?
Government is the problem not the solution. Only the individual is sovereign.
You all keep talking about the government this or the government that... well, you need a bridge to get to the other side of governmentville. The problems you're describing are neat in a vacuum, but have no remote connection with our present reality.
How do you propose we deal with the wealth gap? What happens with america as the government is peeled away without addressing the wealth gap? What is your present socioeconomic status? How do you perceive your socioeconomic status? Was your wealth derived from the fruit of the poisonous tree? How much of it? How do you propose we account for that?
I'll propose that peeling away the government, at this juncture, is the worst possible move... I hate them at least as much as you do... but, keeping many of their mechanisms in place is going to be necessary to rein in our captors. On the backside of the government's demise, we will have NO viable mechanism, other than taking arms against the robber barons, in which to dethrone them. (I'll also propose that taking arms against the robber barons will not likely end well).
All of the shit you're talking about is in a vacuum, with all things equal, not the uneven playing field we presently face.
You don't seem to realize or grasp that it is precisely the reining-in of government that WILL level the playing field! It is through their ability to manipulate the inordinate power of government that the elites have obtained their disproportionate wealth in the first place!
Have you never noticed that it was not until AFTER corporations as we know them today were enshrined in law in post-Civil War America that the great concentration of wealth in the hands of the elites in the USA commenced? Do you believe that that is just a coincidence? Just as one example, corporations are a creature of government and NOT the market, and their vast hold over us in their perverted economy of neo-slavery would be impossible without the power of government supporting and abetting their quasi-feudalistic hold over us.
I agree. The problem is that the government is both a sword and a shield. By turning our own government against our interest, the powers that be have made it impossible for redress. It was the government that has made it impossible for small business owners to operate profitably within the law as well as made activity that should obviously be illegal not illegal and/or not prosecuted to ensure the powers that be get to continue the rape and plunder.
However, it was also the government that utilized anti-trust laws to break up the robber barons of yesteryear. In this sense, we need to use the government as our shield, against the sword of the powers that be and, through careful use of power, as a sword to combat them.
I think a more accurate statement of what needs to be done immediately would be redirecting government, not reining it in... after all, the defense we need against the powers that be would also be the sickle that gruesomely rewards any success (should we achieve any after kicking them to the curb).
After we get this whole wealth gap sorted out, then we can go back to limiting the size of government...
Totally agree with you.
Anyway, I think he's running too much about the dollar's demise. The path he described is more or less the same I imagine, but I don't think it will be completed in 6 months.
The need for systematic financial chaos he points out to is absolutely crucial, and maybe not stressed enough on ZH. At least this is my impression, but I might be wrong.
i loved paul craig roberts when he was a reagan staffer and i love him even more now with his call to end wars of imperial aggression and to bring jobs home...
go paul go!!!!!!!!!
+10
Government- the black art of raping & pillaging and then persuading your victim to thank you for it.
Government is the enemy of humanity. Not the saviour.
regards
100% on target.
"Government is a disease masquerading as its own cure."
-Robert LeFevre
Sometimes one has to reverse engineer what one thinks should happen....
Anyone would agree that the main objective is to produce a much larger economy than the current system is and is going to produce....
View it this way....
Which platform would provide a much larger economy than the other in the next ten years ?
1)) Eliminate the individual and corporate income taxes....and replace with a sole 15% consumption tax....
2) The current system
The least understood point is that the tax take from 1) dwarfs that of 2)....and the 1) economy would be many times the size of 2) in less than 10 years....
This is the best shot that the US has....
I read all these negative comments on how bad everything is and how bad everything is going to be. Everything is fine, nothing to see here, please move along.
Thank you.
There will never be a revolution, you americans are too busy watching Nascar and NFL and eating donuts for breakfast, and if someone does stand up and express any dissent, then your beefed up intelligience agencys will lock then up and they will be branded terrorists. The PATRIOT act will never be repealed, is it in place to stop the "Revolution"
Revolution? With American Idol coming on soon? Like I'm so sure!
I think maybe he's talking about Dance Dance Revolution.
Who better to warn us about the imminent crumbling of Oz than the man behind the curtain?
I have an idea how we can generate a lot more money and grow our way out of this minor problem - First we use government planes to fly tonnes of cocaine into the US, second we cut the coke to a few percent purity then sell it in all the major cities, third we take the hundreds of millions of dollars in cash and launder the money through the big Wall Street banks resulting in huge profits, then lend the clean money to Fortune 500 companies at lower than market rates. This will give US businesses the edge over foreign corporations and allow us to grow our economy, then we use our hegemoy to force other countries to open their markets to our products further increasing the profits for American business.
Pretty good eh?
That is sooooooooooo 1980's.
Duh ... isn't that what we've been doing for years?
Time to cut the Peruvian marching powder some more, I guess.
How about legalizing and taxing marijuana instead of shipping profits to south america? Think man, think!
</snark>
And newsflash to Alex Jones. PCR isn't the father of Reaganomics. Jude Wanniski, Art Laffer or Jack Kemp would be closer to target.
+100 I found his claim of title quite off-putting. Just because he fired off some knuckle-children inside the room where conversations took place doesn't make him the daddy.
Actually, maybe Keynes is the father of Reaganomics.
"Nor should the argument seem strange that taxation may be so high as to defeat its object, and that, given sufficient time to gather the fruits, a reduction of taxation will run a better chance than an increase of balancing the budget. For to take the opposite view today is to resemble a manufacturer who, running at a loss, decides to raise his price, and when his declining sales increase the loss, wrapping himself in the rectitude of plain arithmetic, decides that prudence requires him to raise the price still more--and who, when at last his account is balanced with nought on both sides, is still found righteously declaring that it would have been the act of a gambler to reduce the price when you were already making a loss.'" (John Maynard Keynes, The Collected Writings of John Maynard Keynes; London: Macmillan, Cambridge University Press, 1972)
"The United States is running out of time to get its budget and trade deficits under control."
Nope, the US is out of time. There is no escape. It's default or print. The US can't borrow or tax what it owes and committed. The unfounding fathers have screwed the US.
On the point of "What can be done?" the only workable solution for TPTB is war. It would achieve quite a few goals:
1. The angst of US citizens will be directed to the new foe, which is not US Goverment/WallSt/Zion cabal, but rather some third-world country whose only sin is to be sitting on vast reserves of somithing valuable.
2. The wealth of the captured country can finance the fucked up menu list of the current Administration. Hell, unemplyment benefits for the next 99 years and free cable for everyone.
3. Any challenge to the supremacy of the naked king that is the US will be suppressed.
4. As a result the can will remain kickable down the road for quite some time.
Yeah, but WHICH COUNTRY? That's who you wanna short...
My money's on Venezuela (lotta oil down theya). I'm against this whole disaster that's coming, but if it has to go down this way, I'll enjoy the tv event of the decade: Chavez climbing the scaffolding, whimpering that he's happy to die for Socialism.
Your reply is typical of the current mores of the brainwashed and money-driven developed world.
You basically state that you will cheer looking at a foreign Master being executed by your Master and his crony Masters. Why would you do that? Because your Masters told you that the other master is evil (in this particular case, he is a socialist). And there you go cheering at the game of wealth redistribution at the top level, to which you are not privy, and to the origins and true meaning of which you are clueless. The only good thing that will come to you is if you can make some money on sidebets of the killing to be done in that country.
Bravo! You're an accomplished 21st century businessman.
"I'm against what's going to go down"...<--what part of that didn't you read?
And Chavez is a dick.
How can you junk me without refuting both key points above?
Yup, I've read that one. My reply was aimed at "I'll enjoy the tv event of the decade: Chavez climbing the scaffolding, whimpering that he's happy to die for Socialism.". That kinda goes against your first quote, doesn't it? Unless you adhere to the 'rape solution' - i.e. if you can't fight it, then at least try to get some pleasure from it.
How can you cheer a person being put to death if he didn't do you or your loved ones any direct harm? For political reasons? Then you're no better than those planning and carrying out the execution, and the first quote is just hypocritical.
Hitler, Stalin and Pol Pot didn't do anything to me or my loved ones either.
Would've enjoyed watching them swing too.
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