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Guest Post: The Smoking Ruin Solution
Submitted byDavid Galland of The Casey Report
The Smoking Ruin Solution
Just last week, it was reported that the turnout for the Democratic
primary was the lowest in 80 years. While the Republicans are clearly
energized by their concerns about the direction the Democrats are
taking the country in, the Democrats themselves seem to have decided to
forgo the voting process, perhaps in favor of a refreshing nap.
No question about it, the president is in the hot seat.
While I am sure that back in 2008 Barack Obama was one happy camper
about having taken the presidential prize, today one has to wonder if
that victory has led him to certain bitter regrets.
His problem, the problem bedeviling the government at its highest level,
is that there is actually no palatable solution to the persistent debt
crisis now gripping the U.S. economy by the throat.
In fact, the only tangible solution might be best termed the “Smoking Ruin Solution.” Allow me to elucidate.
The Keynesians would take great umbrage at the idea that the government
is left with no viable options at this point. The solution is clear to
them – more stimulus. And this time around, no skimping! A paltry $800
billion isn’t even going to begin to get the job done. Rather, if two
trillion dollars of freshly minted money is what it takes to kick the
U.S. economy out of its swoon, then so be it. Hell, make it three if
that’s what it takes – we can worry about the (inflationary)
consequences later.
Economists who look to someone other than Keynes for guidance, have
other ideas – but not many. And, as per my comments above, none that
would be even remotely palatable to the man on the street. That goes
double for the politicians (of both parties), who rely on the
proletariat to provide them with the votes that keep them in power and
in porridge.
While I don’t have the time to scratch even a square inch of the
surface of all the goofy solutions economists might trot out if asked, I
will attempt to briefly address, in the broadest terms, a solution
that might be considered acceptable to those who skew toward the
Austrian school of economic thought.
For those of you unfamiliar with the Austrian perspective, it puts a
large amount of faith in the unfettered free market, and almost none at
all in the ability of governments to do much more than run economies
headlong into solid walls.
I have to warn you, however, that the solution I am about to propose
involves no quick fix or linking hands around the fire, accompanied by
happy singing. Rather, it is more akin to treating a dread disease with a
very strong medicine – so strong, in fact, that should the patient
survive, they would (at least for some period of time) suffer a steep
degradation in the quality of life.
I say that because the only real solutions available to the country are
certain to result in financial carnage and social upheaval of a most
extraordinary sort. For starters…
- A dime-on-the-dollar forced renegotiation with U.S. Treasury/agency debt holders. Sorry, China, Japan, et al. – push has come to shove, and it’s over the side with you.
- Letting the banks that should fail, fail.
Sorry, shareholders and bond holders, which now include taxpayers, but
you made a bad bet. And sorry, anyone with more in your failed
bank than is covered by the FDIC, you’re out of luck on the
excess. Given that the FDIC is also broke, we’re not even sure
about the money you thought was covered. - Turning the lights out on the U.S. empire.
The U.S. spends more on maintaining overseas government operations than
all the rest of the world’s nations combined. While the cost of
ending our involvement in perma-wars, turning off the lights at
military installations, canceling aid and subsidies to foreign
governments will cause widespread pain and misery – both at home
for the dismissed soldiers and overseas for our allies – doing so
is likely to improve our security by dramatically reducing our
boot print on the face of the globe. - Goodbye, big government, and thanks for all the chicken.
It’s been a wonderful run, with promises of fat chickens in every
pot, affordable homes for all, safety nets under safety nets,
universal healthcare, and an almost infinite number of regulations
to make sure we’re safe in every conceivable circumstance. We hate to
see you go, but go you must, because even though U.S. business
labors under the second highest corporate tax rate in the world
and the individuals who do pay taxes pay over half of their
income, the shortfall between revenue and government expenses is
at historic levels with no end in sight. And that’s just
impossible to continue.
We’ve got more than enough in the way of nukes to deal with any
large-scale threats, and with a more streamlined national security
apparatus, we’d be certain to get a lot better at spotting the odd
terrorist threat before the malcontents make it to U.S. shores.
Under my solution, the size and scope of government will have to be
seriously reduced, a process best started by severely limiting the
ability of politicians to make new regulations and pass new taxes or
mandates. With relatively little to do – as opposed to the situation
today, when literally nothing is beyond the interest and reach of the
federal government – a wholesale purge of the bureaucracy can be
undertaken.
Yes, that would mean hundreds of thousands of freshly dismissed
bureaucrats, many of them possessing no real marketable skills, hitting
the employment market. But look at the bright side, the oversupply of
labor willing to work for subsistence pay will cause “guest” workers to
throw up their hands and head to greener pastures, leaving the former
bureaucrats to clean the sewers, collect the garbage, and pick the
tobacco.
- Farewell, Fannie and Freddie.
Nationalizing the mortgage industry was a horrible idea… an idea whose
time has now expired. The loans these zombie institutions hold
should be pumped out into the market at whatever the free market
will pay, which won’t be much, then the doors shut. - Institute a flat tax at a level that everyone will happily pay.
But that’s not fair, shout the progressives. To which I might
respond, look at the facts. One of the biggest differences between
America in its youth and the lands whence the citizenry came was that,
in America, there were none of the entrenched classes that dog so
many countries even to this day.
I can’t begin to count how many rich people I know who have lost
essentially all their money due to bad investments or business
decisions. Likewise, I know any number of wealthy people who started
with little or nothing, but through hard work and enterprise made their
mark and their money. The key to a robust economy is to make it as easy
as possible for anyone to earn, and keep, the benefits of their
efforts… and a reasonable flat tax goes a long way in that direction.
As an added advantage, a flat tax would result in a wholesale shedding
of accountants, lawyers, IRS employees, and more.
“But that will only add to unemployment,” you might fret (well, not
you, but the person next to you). To which I would answer,
rhetorically, by asking the question, “Is the desire to avoid such
downsizing reason enough to keep the wasteful, counterproductive, and
impossibly complex current tax system in place?” Hardly.
What the country needs now more than anything is transparency and the
fostering of a solid foundation that allows businesses, and the
entrepreneurs that start them, to do what they do best – create wealth.
- Link the money to something that limits the ability of government to print the stuff up at will.
While some sort of a gold standard seems logical to me, anything that
anchors the currency in such a way that the Fed – or the Treasury
(in the absence of the Fed… one can only hope) – is unable to grow
the money supply at a faster clip than, say, population growth,
or the rate at which gold can be pulled out of the ground, would
do just fine.
I could give you other examples of the sort of steps and attendant
mayhem that would result from slashing government and letting the free
market run its course. But I’ll stop there, if for no other reason than
that by now, I suspect, many readers are recoiling in horror at the
inanity of the ideas just presented.
No question, these solutions would leave the economy in smoking ruins –
in worse shape, even, than at the height of the Great Depression.
While the devil is invariably in the details, the argument for pulling
the proverbial trigger on the smoking ruin solution is understandable –
at least to me – by getting back to the positive outcomes that would
result.
- The overhang of unpayable government debt would be gone.
Sure, the Chinese, Japanese, and Middle Eastern oil sheiks (along
with anyone else who got stuck with a lot of bad debt) would be
really, really unhappy with us. Again, sorry – but we’re bankrupt and
pretending we’re not is just going to make things worse in the long
run. Besides, in relatively short order, I suspect our trading
partners would get over their losses on defaulted government bonds
because… - Business would be booming.
Unshackled from high taxes and excessive regulation – and freed from
the fear that at any moment some change in the regulations, or
even the whim of a minor bureaucrat, can knock the pins out from
under a business – the U.S. would once again become the world’s
preferred place to do business. - The debt bubble would deflate.
As it now stands, we can’t even begin to tally all the outstanding bad
loans, let alone who ultimately owns that debt. Each new bank that
fails, each new equity and bond holder that goes bankrupt, and
each new financial institution that folds reduces the toxic debt
that will otherwise plague the economy and create uncertainty
until it’s ultimately resolved. Under the scenario painted above,
the deleveraging and destruction of debt would come fast and
furious, allowing the nation to understand the true value of
everything and to move forward from there. - Housing prices would fall to a market clearing level.
People who were forced to sell their houses would be forced to
sell them at a price someone is willing to pay – and that price
would likely be a lot less than the current market. Tough break, and it
could lead to a bankruptcy that takes down yet another bank – but
so be it. It’s time to let the chips fall where they might. - The U.S. dollar would once again become trustworthy, and therefore in demand. It might even be able to retain its reserve status.
Such strong medicine would make the patient sick – and likely even
cause reduced quality of life for some extended period of time. But I
have to believe returning America to a foundation built on the
principles of self-reliance and an individual’s right to the fruits of
their labor would lead to a breathtaking groundswell of optimism and
enterprise. Further, just as was the case in 1776, the U.S. would again
provide a model for the rest of the world to follow, so the benefits
would be global.
Of course, everything I just wrote would be considered almost
criminally outrageous by most of the citizenry – and written off as the
ravings of a madman by the politicians.
Which is why, in time, it will be the Keynesians’ arguments that win
the day, and the next leg down will be met by a wave of newly printed
funny money – a veritable flood of the stuff. Certainly not before the
November elections, and certainly not before the threat of a
deflationary collapse provides the cover the government needs to act –
but it’s coming.
Gold still seems a safe bet to this observer.
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Wait til he starts blaming the Democrats for the public's lack of respect for his behavior...
Presidential Pyrrhic Victory Britchez (what can I say, I'm a Newb)
Not bad Neo.
Ethier or half a dozen of another.
Want to change history...it require lots of blood. History doesn't change history books by a speech or a slight nod. Last I looked human history requires blood, American revolution didn't happen by handshakes and job's well done. Russian either...Korean...I would go on but the notations in history books that AREN'T american could give a shit about JFK. Fucker almost fired off w3 as far as the rest of the world was concerned along with the commie shits at the time. Two sides of the same shitty coin.
Although a nuke fight isn't a bad thing btw, we're over populated and more are apparently fallow in their efforts in both west and eastern developed shit holes, women are now allowed on the battle field. At least we can kill and be killed together. Can't wait to see the next draft when it comes.
Let it happen. Let's watch it burn, we'll back if most of you figure yourselves out and organise to avoid the problems. We aren't the problem, the mob is. The mob consisting of the idiots that consist of the general populace, can't read, barely write, vote on the basis of a TV show, math is a chore and household income is judged on credit cards.
Again let it happen. If the MSM wants to herd animals, then we have animals. Lots of them. Eventually the food runs out and math stops working in the favor of the MSM and it will break. It's not guess work, this is all history repeating itself. Too much money and nothing to buy. If the US wants to become a 3rd world country, carry on. I'm sure the left and right philosophies will feed people with rhetoric properly however....
Let it burn. Not everyone is going to be "saved" regardless of the teachings of Christ. It's call triage. Somehow people forgot about it. Take the valuables and let the rest burn.
I have some of what he's drinking...make mine a double.
Yer already soaking in it.
Only problem is: the dollar would buy 5 cents worth internationally. Anything imported would skyrocket in dollar terms. $500 oil?
Not if the new dollar was back by PM's
and how much PM do you suppose the good ol US of A has? O wait, maybe uncle sugar should first confiscate the gold from under the mattresses of the sheeple, then institute this new money? But wait, insist the sheeple, the banksters surely have more gold than the sheeple, so take it from them first! But the banksters would not sit idly by and watch the sheeple benefit, so we have a civil war, there you go - there is no way out! Dream on, the end is nearer than you think pal!
Long way to go yet.. They can extend much longer than you think..
Actually, I think it would be the exact opposite. If you default on the govie debt, the outstanding credit (and therefore money) in the world shrinks dramatically. Oil would drop to $10 a barrel.
Yup. Huge deflation.
Politics aside, it's what should have/would have happened but for the bailouts.
Blame Canada
http://www.youtube.com/watch?v=LAYMJnO9LBQ
It's full of loonies anyways.
As Jon Stweart says (w/conviction) "anyone who doesn't have a girlfriend is GAY "
Woot! My wife would not like to hear (1) I'm gay, or (2) I have a girlfriend
Hmmmm!?
(3) I have a gay girlfriend...whoooot it's a party
Pull the trigger, I'm tired of living in fantasyland
Good for you, because Fantasy Land is gone. Now, we live in the world described below. Plan accordingly, friends.
http://abcnews.go.com/US/911-call-images-depict-jennifer-hawke-petit-withdrawing/story?id=11648639&page=3
911 Call: Mom Withdrew Money to Placate Home Invaders Before Being Raped, Killed
Images Show Jennifer Hawke-Petit Withdrawing Money at Bank as Family Was Held at Home
By ANDREA CANNING and MICHAEL S. JAMES
NEW HAVEN, Conn., Sept. 15, 2010 —
As she and her family endured a home invasion ordeal of torture, rape and killing, Jennifer Hawke-Petit walked into a Connecticut bank and withdrew $15,000 in the hope of placating her abductors, according to a newly released 911 call from the bank.
"We have a lady who is in our bank right now who says that her husband and children are being held at their house," an official at the Bank of America branch in Cheshire, Conn., told a 911 operator during the July 2007 incident. "The people are in a car outside the bank. She is getting $15,000 to bring out to them. [She says] that if the police are told that they will kill the children and the husband.
"They told her they wouldn't hurt anybody if she got back there with the money," the caller said. "She believes them."
Petit-Hawke may have believed her abductors would let her go, but they are accused of taking her home where she was sexually assaulted and killed. They also tied up and assaulted her husband, Dr. William Petit, a prominent Connecticut doctor, and their daughters, Hayley, 17, and Michaela, 11, according to officials and testimony in the trial of one of the suspects, Steven Hayes.
Hayes, 47, is accused of sexually assaulting and strangling Hawke-Petit. Joshua Komisarjevsky, 30, who is awaiting trial, is charged with sexually assaulting Michaela.
The July 2007 ordeal began, authorities said, as Komisarjevsky followed Hawke-Petit and her two daughters from a grocery store. At the end of the ordeal, the two allegedly tied Michaela and Hayley to their beds, poured gasoline on and around them and set the house on fire, killing them and their mother.
Today, Dr. Petit, the sole survivor, sobbed as jurors in New Haven Superior Court saw graphic photos of his daughters' bodies. A juror also cried as the evidence was passed among jurors, The Associated Press reported.
Dr. William Petit Testifies on Ordeal
After describing a pleasant Sunday leading up to the killings, Dr. Petit testified Tuesday that he was beaten in his sleep and woke up around 3 a.m. face-to-face with Hayes and Komisarjevsky.
"I remember I awoke in a daze thinking or feeling ow, ow, ow," he testified. "Something warm was running down the front of my face. ... I saw two people standing in front of the sofa. ... [A] person who was walking said if he moves put two bullets in him."
Petit said the men bound his wrists and ankles with rope and plastic ties, and covered his face, then took him down to the basement, where they tied him to a pole. He said he went in and out of consciousness. Upstairs were Hawke-Petit and the couple's two daughters.
"I heard moaning and thumps. I may have yelled out, 'Hey!' Then he said he heard someone upstairs say, 'You are alright, don't worry it's going to be all over in a couple minutes.' It was a different tone, it was much more sinister," he testified.
Petit said he did not know the fate of his wife and daughters, but said he heard his wife in the kitchen tell one of the attackers she needed to change clothes and get a checkbook.
Bank Manager on Jennifer Hawke-Petit: 'Amazing How Calm She Was'
Later, black-and-white surveillance videos released to the media Wednesday showed Petit-Hawke entering and then withdrawing money at the bank, fidgeting at the counter and talking to the teller as she did.
"She says they are being very nice," the bank official said on the 911 tape. "They have their faces covered. She is petrified. She wasn't going to call the police, but I came to the office and I did.
"It's amazing how calm she was," she added. "But then again, she could have been petrified. I don't know."
In court Wednesday, Hayes' public defender, Thomas Ullman, asked Cheshire police Capt. Robert Vignola why it took police 33 minutes from the 911 call to determine at least one person was in distress inside the house.
Police said they followed standard hostage procedure by not going in until the suspects fled. But Vignola admitted that no attempt was made even to contact the family.
"No phone call was made from any police officer to the home?" the defense asked him in court.
"That's correct," he responded.
William Petit's Daring Escape
It could have cost Dr. Petit his entire family -- though he ultimately managed to escape by untying himself and running to his neighbors.
"I felt a major jolt of adrenaline and thought it's now or never. In my mind, at that moment, I thought they were going to shoot all of us," he testified Tuesday.
He managed to free his hands and hop up the stairs, falling at least once, then finally made his way out the door, he testified.
"My heart felt like it was beating 200 beats per minute," he said, "like it was going to explode out of my chest."
Somehow, he crawled, then rolled to a neighbor's house. Doctors said later Petit had lost as much as seven pints of blood. He said his neighbor didn't even recognize him at first, because he was so bloody.
The neighbor called 911. But it was too late for his wife and daughters.
Hayes and Komisarjevsky fled the burning home in the family's car and were caught after ramming several police cruisers, authorities said.
In opening statements Monday, Ullmann said Hayes told police that things "got out of control," and that Hayes' co-defendant Komisarjevsky said no one was supposed to get hurt, the AP reported.
"It has been a very painful process to get to this day," Johanna Petit Chapman, Dr. Petit's sister, said outside court on Monday. "And although the pain will never end, we think of Jennifer, Hayley and Michaela every second of every day."
William Petit: 'Tried to Do the Best I Could Do for My Family'
Petit and Hawke-Petit lived what seemed like a charmed life in an upscale neighborhood. Hayley, who was planning to attend Dartmouth College, was hoping to become a doctor and follow in her father's footsteps. Hawke-Petit had multiple sclerosis and the family was active in efforts to raise money to fight the disease.
Dr. Petit cited his lost family after his testimony.
"I mostly focused on the questions I was being asked," Dr. Petit told reporters. "Just tried to do the best I could do for my family."
Both defendants have offered to plead guilty in exchange for life sentences. But prosecutors, seeking the death penalty for both, pushed for trials, defense attorneys said, forcing the state to revisit the unsettling crime and its lone survivor to relive it in the courtroom.
Hayes' trial was delayed significantly after he was put into a medically induced coma following a suicide attempt earlier this year.
If Hayes is convicted, the same panel will weigh his fate in the penalty phase.
Click here to visit the Web site for the Petit Family Foundation.
ABC News' David Muir, Sarah Netter and Lee Kamlet, and The Associated Press contributed to this report.
That's a pretty old story by now.
Still, I wish they had the option of burning those two guys at the stake. Even that would be too kind.
In response to this horrific story, may I recommend to everyone that in addition to being armed, people have at least one large, loud dog.
If the utterly evil fuckers like the ones in this story aren't completely deterred by the dogs, they are at least going to buy you enough time to arm yourself.
concur, nothing quite like a brace of rotties bearing down on scum to see just how brave they are.
Your balls crawl up inside your stomach when you see one of these coming at you.
http://englishmastiffpuppiesblog.com/files/neopolitan-mastiff.jpg
I've always told my family, if you're in a hostage situation, call me first, I WILL come to get you.
The cops will cordone the perimeter.
Agree with the above.
Criminals prefer unarmed pacifist cat lovers and incompetent law enforcement. Another thing, there is no question of guilt here.
Two 50 cent bullets. Done. Next case.
I'm all for facing the pain. All these solutions sound great to me.
Not sure business would be booming afterward though. We have sorely overrun our primary economy, peak everything useful, good and desirable. This is the only answer, but it's still going to be a very tough road from here on.
Article starts out saying the Democrats are going to lose.
YEAH!!!!!
Now the Republicans will take over and everything will be fucking Age of Aquarius.
Goddamn. I need to take up a drug addiction. Need some way to kill the pain.
That's what you got out of this?
So. Are you a mouthbreather or a douchebag?
Quiet Cooper. I don't see you adding ANYTHING to the conversation.
Hard to see a way out of this that doesn't go along these lines. Alas.
I can assume that since every point of this post resonates strongly with my "let's do it" button, that I'm hopelessly misguided and abhorrent to the population at large?
So Be It.
Only suggestion is that *all* international trade has to be carried out with a commodity basis; no fiat allowed. Foreign countries can continue to run fiat if they choose, but in order to buy goods from a U. S. of A. vendor, they have to first exchange their paper for something tangible, *then* they can exchange that for the goods. Keeps a lid on the problem of some fiat printer endlessly creating money and using it to buy real goods from a country that *doesn't* have an exploding money supply.
I assume you propose to enact this rule after our massive devaluation and debt repudiation? Because right now we're the #1 pig at the trough of fiat printing.
Do it...like muscle, it must be torn down to grow back stronger...
Sounds like movie script. Economic life is not like that and the last 60 years in the US were an aberration brought on by the spoils of WWII. Reality is, growth is usually pretty slow and tough to pound out with only the managerial, aristocratic, religious and political elite accumulating societal value. Nothing has changed. We've fused politics, money into the religion of nihilism and turned managers (think CEO) into aristocrats.
Goodbye, big government, and thanks for all the chicken.
No Fah-ricking Way. Sorry.
It's Government for The Public Sector by The Public Sector at this point and they'll partner with whom/whatever they have to, high and low to keep the milk and honey flowing 'til the very, very end.
Your kids will be pulling Barney Frank's rickshaw before so much as one federal assistant diversity counselor is let go.
Including shooting us, "the people", if necessary.
God bless 'Merica.
The clearing price of housing will screw a lot of homeowners/sellers, but imagine the whole new group of people that will be able to afford a home! We should go for it. The sellers are going to get screwed anyway, and in slow motion, and there won't be any buyers left if the system finally hits the wall well down the road.
Volcker's raising of rates in 1980 was "unthinkable", but would anyone go back and do differently in hindsight? Time to grow some cojones and get on with it.
Some form of this is all going to happen eventually regardless of whether people want it. Doing it now, voluntarily, would minimize the pain and disruption. But it isn't going to happen.
Oh, and the proposed debt repudiation, while probably needed, would almost certainly spark WWIII with China and various other nations. Not sure we'd be on the winning side three times in a row.
Depends what the definition of "winning" is...
Our last gallon of fresh water is growing yellow-green to a lesser extent than their last gallon of fresh water?
Berkely Bitchez?????
"Not sure we'd be on the winning side three times in a row."
-Whaddaumeeen??? Third times a charm! ; )
too bad we didn't start 3 years ago...
I agree, but the problems weren't understood as well 3 years ago. With Bush being a lame duck and Democrats in Congress wanting the White House solutions just weren't forthcoming.
Under my solution, the size and scope of government will have to be seriously reduced,
This is inevitable in my opinion, and the sooner the better. Too much corruption, too many unfit serving in office and draining resources. At least a 50% cut in employees is my guesstimate.
With heavy emphasis on "at least." My estimate is an 85-90% reduction to get to something sustainable.
Works for me.
My prime concern is restoring the land of liberty for my children. The less government, the more freedom.
http://www.youtube.com/watch?v=I5zhz3hy62w
"The less government, the more freedom. "
yup. just ask yer average Somali
He said elucidate.
Kum ba 7.62 ya, [insert word du jour here]
The smoking ruins lamp is lit.
+ 1911
Convergent thread alert. Art Carney, Canada's equivalent to Bernanke in the US in a speech this weekend spoke against the threat of moving away from the US$ as the currency of exchange. I raise this because such open discussion on another global reserve currency was unthinkable, let alone speakable 4 years ago. Now we have the elite speaking publicly against the idea. Wow what a change. Let us extrapolate out a few years and.....
Just bunch of nonsense. We had a chance to do that, we blew it. Now ev All bankers now are happy, and their bonuses keep coming. They can buy all the votes they need to keep the same thing going. It won't change much for a long time. You live in a fantasy land.
Either way we get smoking ruins in my book, the only question is whether we do it ourselves or it is forced upon us by bond vigilantes (followed immediately by 100% QE and hyperinflation). It will be the latter and the pain will be much worse. But until the music stops, let's keep dancing!
Few places on this globe exhibit the wastefullness and excesses of the U.S. Even the defense department has recognized the fact that we can no longer expend unlimited funding to carry on overt actions outside of the Conus without being partnered to a country with equally deep (or shallow) pockets with which to defray costs. Sad but true, Galland has hit upon the medicine we must take to salvage what's left, but unfortunately our politicans and banksters want more for themselves at any cost to the population. So havoc and ruin it must be - Go gold Bitchezzz!
"excesses of the U.S. Even the defense department has recognized"
Now, if the other thousand departments can recognize the same, not that it matters. The people have recognized it.
A short list;
The Education Dept. has produced nothing but widespread stupidity.
The Energy Dept. born to make us energy independent has failed completely.
Homeland Security Dept. scrutinizes veterans more than terrorists. Airport security explores the undergarments of 80yr. women more than a foriegn national's flammable underwear with the fuse dragging the floor.
The Agriculture Dept. has more employees than there are farmers.
The SEC is the trained monkey of Wall Street organ grinders.
The Dept. of Justice can be given a video tape of voter intimidation, the same tape viewed by billions of people worldwide, and find no voter intimidation.
Congress can pass three thousand page laws, without reading them first or having any idea what's in them, and expect the people to abide by the the letter of the law?
Rounding out this small sampling, the EPA thinks CO2 is a danger to the enviroment. Of course the EPA is composed of nothing but people, so by the same logic it is an indictment of itself, apparently. It's so stupid I can't even wrap my head around it.
It goes on and on and on. Perpetual analysis of what should happen and what will result and NOWHERE IN ANY OF THE ANALYSIS is any consideration that oil is not infinite and growth dies without it, just before humans do.
For God's sake, stop with the economic analysis that treats oil like it's air. It's not. It's finite. If its limit is soon, so is civilization's.
Barathrum bitches
Please stop treating oil as the only source of energy. At some price point, other forms of energy become competitive. When that happens we may see real development of that tech whatever it may be. Also please consider that a depression would reduce the need for energy. I am not saying that everything will continue the way it did but I highly doubt civilization would collapse. Humanity is very adaptive.
There are lots of energy sources that can heat your house or generate electicity, but there's almost nothing other than oil products that can usefully power an airplane or a truck, and no really good options for trains or smaller ships. And we are so enormously dependent on transportation for everything that any issues with oil are amplified throughout the economy.
Mnay modes of transport can switch to natural gas, electrical overhead ines etc..
Yes, oil is important however we can get along with less of it. Will there be suffering yes, will we survive, yes. Back to finance..
Many modes of transport can switch to natural gas, electrical overhead ines etc..
Yes, oil is important, however we can get along with less of it. Will there be suffering yes, will we survive, yes. Back to finance..
No, it's not back to finance. Oil TRUMPS finance. And you know it.
As for "we will survive" . . . 1 billion will on this planet. They'll live pretty well, too. There are 7 billion alive now.
File this post under "fantasyland".
Who ever wrote this piece of nonsense must be a hermit living on a mountain top.
The author is in a bigger fantasy land than the fat cats in gubbament who show up for work late, leave early, and leave plenty of memos to the minions to burden the private sector.
The U.S. dollar would once again become trustworthy, and therefore in demand.
To whom would the US dollar be in demand with?
I say the author has valid points, flat tax is good, less lawyerism, good, but an authoritarian govt like the Nazis in Germany or in China or in Russia, is what it would take to do all the author wants done.
One Adolf Hitler in the world is one too many. VOTE THE BASTARD OUT AND VOTE THE NEW BASTARD IN.
The problem with the Casey report and America is that it must preface or prepare readers for what's to follow. Otherwise this should be common sense. We have Progressive liberals that have moved us toward a welfare/redistribution state. An idea that has and never will work. These same lib progressives will tell you that capitalism has failed when they're dead wrong. Our free market has become over regulated, over taxed and corrupt.
Over-regulated by whom? There were no regulations from Jan. 2001 to Jan. 2009 and look where that got us. Greenspan is a Randian disciple. Hell, he was a gold bug before being hired by JP Morgan back in the 1960's. Why did he stop? Because it hindered profits. You can't print profits like they do now with a gold-based money supply.
Dave Gelland sounds just like Ron Paul. This is not a bad thing, and the ideas have merit. Here is the problem:
We, the people, have lost control of the government. You may have heard that we are a country that has a government and not the other way around, but that is no longer true. Government has only one mission: to perpetuate its own existence, to ensure its continued growth.
It is not about Democrat, Republican or independent. It is about what needs to be done and how we could get it done.
So, if you have ideas on how we can regain some semblence of control, please issue it forth -- I am at a loss as to what we (individually or collectively) could do. The words of Joseph Stalin ring true: "It is not who votes that counts but who counts the votes."
Maybe we could throw all the bums out but they would be replaced by the next generation of thieves. The system is corrupt which corrupts all who run it.
All natural systems have inherent limits on their growth. What limits the growth of government?
"The system is corrupt which corrupts all who run it.All natural systems have inherent limits on their growth. What limits the growth of government?"
System Failure brought about by those increasingly corrupt, increasingly incompetent "leaders"
The U.S. dollar would once again become trustworthy, and therefore in demand. It might even be able to retain its reserve status.
If the U.S. defaults on its debts, no one (including U.S. citizens) is going to want hold dollars for any length of time. When the dollar originally was made the reserve currency, the U.S. government agreed to exchange dollars for gold upon request (by foreign governments). So effectively, the reserve currency was paper gold until 1971 when President Nixon abrogated the gold exchange agreement (and then proceeded to devalue the dollar through inflation). It still puzzles me as to how the dollar was able to remain the reserve currency after all of that. The sensible thing would have been to make physical gold the reserve currency, since history has shown that paper gold always changes into just paper eventually. But since all the central banks seem to have an aversion to gold, somehow the dollar was able to hang on as the reserve currency.
I think that in order for the dollar to continue to be the reserve currency, the U.S. would need to pay its debts and not let inflation get too high. And even that might not be enough. The original reason why nations agreed to use the dollar as a reserve currency (convertability to gold) is no longer valid. And countries that are hostile to the U.S. would prefer some other reserve currency anyway.
"It still puzzles me as to how the dollar was able to remain the reserve currency after all of that."
Prior to 1971, all the other countries were slacking (pegging) on our backs. The U.S. would do the heavy lifting of maintaining "the gold standard" by our (near) lonesomes while the euros could point to their dollar peg which was as "good as gold"...
After we went off in '71, well, It really comes down to the basic human tendency to Entropy doesn't it...we've just stumbled along with the same $ regime based on the idea that America is the strongest country in the world etc etc...Now, that pre-eminence is in doubt.
also, If "all the central banks seem to have an aversion to gold" that's because being on a gold standard is like being on a PERPETUAL monetary diet....Who has that discipline? The whole "gold standard" era was incredibly short-lived.
It would be far better to accept the truth and be seen to make the hard choices rather than reacting to the problems as they begin to pile on one by one, which they will.
"One of the biggest differences between America in its youth and the lands whence the citizenry came was that, in America, there were none of the entrenched classes that dog so many countries even to this day."
There were at least two classes, the free and the enslaved. Furthermore, America was an agrarian nation and to get back to our roots would require reverting back to that. There weren't as many "jobs" required because peopled worked for themselves on their farm if they could. Those free spirited individuals might not be interested in giving up their farms and the relative stability it provided in exchange for working in your underfunded, safety-net-free cities.
Your lack of appreciation for the social and historical aspects makes me question your grasp on the economics. A perfect economic system without humanity is worthless to humans.
I love the ideas and would dance a jig were they enabled, but seriously, it is fantasyland. You can script the greatest policies in the world, but if they are politically unviable, it is a completely moot point. You might as well suggest we are going to solve our energy problems by piping in methane from Titan.
Theoretically, the electorate could elect a set of leaders with the desire to push through such a program, but the way the numbers currently stack up, there are more voters somehow feeding off the trough than there are voters filling the trough. The Tea Party might be able to create viable candidates on the basis of vague promises like cutting spending and returning to the Constitution, but lay out the brass tacks of such a plan as you have, and many of these voters will find they don't have the stomach for revolution.
The only way I can see to upend the status quo is a forced bankruptcy of the federal government. And the only way I can see that happening is through some kind of Atlas-Shrugged-esque national strike by taxpayers.
The idea would be that participating taxpayers take the max number of deductions, and then when it comes time to pay up the difference in April, refuse to do so as an act of civil disobedience. This is, of course, a crime, and the feds are humorless when it comes to tax evasion, but it would become a tricker situation for the federal government if the evasion was widespread (minimum hundred thousand participants in the strike) and was clearly linked to a conscious act of civil disobedience. They couldn't prosecute them all, so I'm not sure what they could do without crossing some lines that might gain the strikers the sympathy of the larger citizenry.
Additionally, the public act of a widespread and concerted taxpayer strike would have very quick consequences, as a) tax revenue would plummet and b) international bond holders would panic. With a debt Ponzi requiring continous rolling of debt, such a situation might be bring the federal machine to its knees much faster than one might expect.
How you would organize such a strike is beyond me, but it certainly has a more realistic potential than the fantasyland proposals in this article.
+1 I'm in..
Galland's plan once enacted would change the world once again as that shot that was heard around the world did so long ago in this country. No more central planning, no more central banks, a gold standard, no IRS, no more having 700 military bases in 130 countries, no more minimum wage, and what would be the result on the population? Investment from all over the world would pour into this country and a renaissance of entrepreneurial activity would occur, creating jobs and wealth like never before in all of history. And if his plan is not enacted, we will see ever greater lawlessness, corruption, and poverty. You get a Mises world or you get Animal Farm. There are no other outcomes.
Get comfortable...
http://www.youtube.com/watch?v=FM0Pl80Zf00
You'll never sell the idea of a flat tax to the roughly 45-50% of the workforce that doesn't have any income tax liability right now, nor to a sizable fraction of those who do. No way, no how. Not happening.
Not without shooting them and shoving them into holes in the ground, anyways.
Our future branches are quite constrained at this point. Smoking ruin is inevitable, but there are no branches which involve willfully invoking smoking ruin, because the elites know it leads to revolution. But since smoking ruin is inevitable, therefore revolution is also inevitable. Remember that.
We have already crossed the event horizon. The only question is what lies beyond the singularity of revolution: Fascism? Freedom? A divided America? WWIII? Slavery to a world government?
I think our best chance at emerging as a free, united, and sovereign nation is if we have such a massive, traumatic purge that no American will trust the elites for another 100 years. We need horror stories to tell the grandkids. America needs the kind of self-reflection that only happens when the drugs run out, cold turkey. The sheeple must look in the mirror and recoil, realizing it's all their fault.
For this, EVERYTHING must go. Derivatives, the tax code, the Federal Register, DHS, MBS, court precedents, 401(k)s, welfare, beaurocracies, entitlements, Goldman Sachs, the dollar... they must all evaporate like goddamn pieces of paper in a firestorm, while only the Constitution remains. I say bring it on. The worse it gets, the fewer the corrupt institutions that survive. Buy guns and PMs so we can meet on the other side and rebuild. America can rise from its ashes and be reborn as the free country it once was.
Guillotines, bitches!
+ 100
------------------------------------------------------
You are advocating DEFAULT, man. If the States doesn't have enough money, those creditors may ask for land...
Once, Loki bet his head in a wager with some dwarves. Of course he lost. When the dwarves came to collect their winnings he found he preferred to keep his head in its usual location and went to Odin, hoping to welsh. This was Odin's judgment. The head, of course was forfeit to the dwarves, but they had no claim to any part of his neck. As it was impossible to determine exactly where the head ended and the neck began, Loki got to keep his head. The dwarves took his lips, since they were obviously part of the head, but Loki kept his life. If our creditors want land, of course they may have it, they just can't keep it here, nor can they stay here themselves.
But they can do whatever they like with the Capitol and the Mariner Eccles building.
"You are advocating DEFAULT, man. If the States doesn't have enough money, those creditors may ask for land"
Come and get it...LOL.
This is the kind of practical medicine that comes from a crash not politicians. Politicians have no choice but to continue to inflate the bubble. That is what Rogoff's must read book (This Time It's Different) confirms.
Ya' know - it's gonna happen anyway. Just a matter whether it's voluntary or market determined.
economic orgasm has been achieved
david galland for treasury secretary / george washington for president.....
i have never been so excited by two commentators as i have been with these guys....david totally understands economics and the solution to our problems....
i probably part ways with him on the flat tax - an idea which i have long supported but about which i have doubts given michael hudson's critique of the rentier class....there must be shackles placed on the banksters to prevent them from doing what they have done to us since 1980.....a gold standard would surely solve most of the problem but i am not clear that a flat tax would give them enough rope to hang us again....
all in all galland's article was superb. i can do business with him....
It could probably be done.
In the middle of the country, there is a "zone of sanity" running from Texas to North Dakota that by and large didn't participate in the Great Bubble, has some manufacturing, can grow food, has some energy resources, and is for the most part populated by sensible and self-reliant people.
This Second Confederacy also embraces much of the military - and it would split the profligate and bankrupt "New Greece" into two coastal parts that could not realistically support each other politically, geographically or militarily.
As "New Greece" sinks below the waves in a crescendo of unrest, default and starvation, other states will gradually free themselves from bondage and join the new Nation.
Ulitmately, California Oregon and Washington are sold to a joint venture of China, Mexico and Canada in exchange for debt forgiveness. "East New Greece" petitions to join the EU - where it belongs.
Stars and Bars Bitches !
Your "zone of sanity" is "B country" in an old RAND Corp. study of nuclear war, and they reached conclusions similar to yours, though I'm sure such conclusions were horrifying to the intended readers of the study.
I would pay to see the northeast try and survive without being an enormous leech off of the productive midwest and west. Good fucking luck. Kalifornia has far better odds economically if they can ever sort out their beyond-insane politics.
That's where I actually got the idea. I read a summary many years ago.
Even though I am "near coastal" myself, I am originally from the Zone and what we don't see in the lamestream media is the anger and rage "Im Der Neue Vaterland" about supporting all the bicoastal leeches.
Remember - the "New Secession Movement" has already started in Texas and is moving its way North to the Canuck border. And what is key about this is that gradually, one individual at a time, it's sinking in that the boat cannot be saved and what do we do from here?
Being by nature practical and independent Volk, the "Zoneites" are saying "Don't waste my time talking about what's doesn't work. I want to know what's still good on this ship."
And there's quite a bit. Most of the ag production. We can dispense with California Arugula and Avocados. Much of the land military forces. Most of the air force. A significant portion of energy production, with more to follow once the Old South joins.
Warm Water ports and a coastline in the Gulf. Much of the Navy will sail for its new homeports in Biloxi, Charleston, New Orleans, Savannah and Galveston. The rest will intern itself in Britain and Japan.
Add in most of the remaining manufacturing base and you have the possibility that maybe half the current population can save itself.
Hawaii, Oregon and most of Cali become New China, dependent colonies. San Diego and points south declare Anschluss with Mexico, bowing to the will of the indigenous population. Washington and Alaska petition to join Canada.
All of this is peacefully settled by quadripartite negotiations held in Berlin and moderated by Europe's new leaders Premier Jean-Marie Le Pen, Prime Minister Nick Griffin and ReichsKanzler Thilo Sarrazin. The collapse a year prior of the EU and the German-led reconquista against the Muslims with military and material help from General Secretary Putin's New Union of Fraternal Russian Socialist Republics (which now include all of Poland and Central Europe, who "voluntarily" rejoin Russia to avoid starvation) gives these nations experience in the mechanics of breakup and reformulation.
Russia offers economic advice and political and diplomatic assistance to "New Greece",which wasn't so much revolted against by the Zoneites as it was bodily thrown out of the existing Union by them.
China, now owning Japan, Taiwan, a foothold in North America and all of the Pacific, becomes the undisputed #1 nation. The merged German and Russian economies (German Management, Russian labor and resources) are a close second.
And the American Confederation begins to prosper, with a balanced budget and a gold-backed Confederate dollar ...
Heh heh - "zone of sanity". That's pretty funny. To be sure the coasts don't see us that way. When I told my family and employees I was going to open an office in flyover and move there, the universal response was WTF - are you crazy?
The answer is yes, but not because I relocated. Staying in Phoenix would have been really crazy. And only the flyover office exists now.
Time for an economic/political broken arrow?
Let's do it! I'm in favor of all of this plan!
How would a flat tax not lead to some sort extreme slant in favor of the rich in short order?
Seems to me like a goal of restoring and maintaining a new middle or dark age is a goal worth reconsidering. I live in a remote area by choice... can look out 30 miles in most directions right now and not see one electric light on the nights horizon. I have stores of food, ammo, some money, and the ability to produce and store food... I even have trade skills which will keep me afloat via a barter system... far more likely than most anyway. But I like civilized society too. I do think we should A) try to keep much of it... and B) Try to plan on bringing back much of it after a major interruption. The post plan seems like it wants none of that.
Leaving the system wide open as the post suggest would simply mean the King of Saudi Arabia (or some other nutcase) could waltz in and buy the place - take over. I don't want 1.2 billion muslims (or chinese, whomever) buying us out in a fire sale in order to give laissaz fairies another chance at the all for one one for all trough.
Though i do think the military must go (at least 80/90 percent).. and that restoring and enforcing rule of law beginning at the top... while greatly simplifying the tax code and conducting public campiagn finance elections are the kinds of things which must take place under any circumstance.
Try again Galland... renting or buying the entire twenty some odd years worth of Gunsmoke episodes would be much better for your health.
Fiat justitia ruat caelum.
The devil i heavily in the details.
Step 1: Devalue and repudiate debt.
Step 2: Economic Boom?? Nope.
Sorry. That might be step 22. After civil war breaks out and America is broken up into 3 autonomous regions fighting one another. Why should the rich areas support the poor, to extend the Austrian argument? Let 'em burn, they would say. A milder version might be a return of urban blight and organized crime. Drugs and illegals. But with no money to support law enforcement. Don't think it could happen? It did and that was America in the 1980s, a milder version of what could happen.
Caviar, I have always read your opinions with interest as I believe you have some sound common sense; except this time.
There is a hidden history in America about the 1980s. The drugs were brought here by the company (FACT). "Law enforcement" actively participated in this drug pushing and also reaped (and continue to do so) billions in "drug forfeiture". The "DEA" became self-financing very quickly.
Let me put it in economic terms. The same people who legislated the black market into existence are the greatest drug traffickers and reap the greatest economic, social and political benefits. This is a fact.
As for prescritions to remedy the actual situation, I'll side with Steve keen over Galland any day of the week.
This proposal is pure madness.
I agree with every solution but the flat tax.
This will never happen voluntarily, but it will probably end up happening.
Part of your plan should allow a similar debt reduction for individuals - too.
will cause widespread pain and misery – both at home for the dismissed soldiers and overseas for our allies
Hilarous and very wrong. Our allies are the torturers, the company's drug traffickers, the thieving "central banksters"; humanity would be free of the parasitic influence.
Haven't read the rest after this unseemly display of naivete but I think this solution is much better and based in logic and history:
http://www.monetary.org/houseoflordstalk.pdf
Jesus H Christ.
I completely disagree with this guy.
Here, please read it:
http://www.monetary.org/houseoflordstalk.pdf
This guy is a crank.
Stop believing his stupidities. Thats the best advice I can give you.
Amen to that brother.
It doesn't matter if you win by $1,000,000,000 or $1,000,000,000,000: winning is winning.
Ben's got NOS hooked up to those printing presses.
But it's going into all the rich guys' coffers :(
The author is on the right track....
But here is the real story.....
Even with the new legislation that is currently being proposed in congress that will commence a form of VAT tax that will start small and increase...thus tacking on tax obligations to a cumulative 70% + for all humans that work....the tax take from the coming VAT plus the current and increasing progressive system ....will not produce high tax revenues that the following WILL produce....
1) Eliminate the income/corp. income taxes and replace with the broadest based smallest tax possible....ie a small monthly basis point charge on all cash balances....
2) Simply mandate that the govt. cannot exceed 10% of the economy....mandate has to be met in 10 years....
3) Revamp the stock exchange for RETAIL while allowing the banks to only service RETAIL...limit account sizes....Who needs another PIMCO carrying out self fullfilling prophesies...and threatening the mortgage system ? And do not allow taxes on any securities ....
4) Index the dollar to a blend of precious metals and commodities....end the FED....
RESULT ????
The economy would take off NOW....not later....and the dollar would take off to the moon...
............................................
Otherwise....this is the story....
The US becomes a form of Japan/Argentina....
And all working US citizens will be turning over their retirement plans to the government in return for some form of annuity....which of course will be spent today with an iou later....and every working citizen WILL be paying over 70% in cumulative taxes....with a much smaller US economy....
Which one would you pick off the sidewalk first ? A $1000 bill or a penny ? Or does one want "World Order"....ie GE would like for YOU to have....
There is a terrible debt problem out there. The big question is if the monetary authorities hold the pieces together will the world economies grow enough to service and reduce the debt? If they make the wrong decision we'll see inflation - perhaps real high inflation. If not, then a couple years down the road the debt's been payed down/reduced and we're off to the races.
I personally think we need to go through a period of painful debt writedown.. but that just my opinion.
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