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Rick Santelli Is Right!
By EconMatters
Today on CNBC (view clip at econmatters.com) during the coverage of the monthly employment report, Rick Santelli pointed out that there is some absurdity in calling the Republicans “lunatics” when they are the only responsible voice in Washington right now trying to call attention to the out of control government spending in the overall context of an unsustainable federal deficit while the Democrats are running the country into the ground with even additional spending programs that the government has to borrow more money to fund.
His point is that if anybody should be labeled a lunatic, it should be the Democrats and those that are encouraging these unsound financial spending policies.
I was highly disappointed in the Republicans over the weekend. First of all, the Senate and House needed to have one voice on this issue, and the Senate Republicans threw the House Republicans under the bus by going along with the boneheaded tax increases, and ‘no spending cuts’ deal negotiated by the vice president.
Every Senator who voted for that deal needs to lose their seat next election period. But then to add additional pathetic, spineless insult to injury the House Republicans led by John Boehner had a chance to send a message and they shrunk from their responsibility on the issue of being the check and balances to the Democrats spending spree in Washington, and they chickened out when the spotlight was on them to shine!
How hard would it have been to amend the deal, and send it back to the Senate? That is how Washington is supposed to work, to get better deals through a negotiation process between the two legislative bodies, sort of defeats the entire need for two bodies if one is just going to rubber stamp the other`s decisions! Boehner is a terrible leader, he needs to be fired, and every member who voted for that deal in the house needs to be replaced for the next election cycle!
With regard to the Democrats there is no hope for them, and this is literally their last hurrah as the country is faced with Greek style tough love once interest rates go up to the normal levels again, the US will be put on a budget by China our major creditor just like Greece was by Germany.
Rick Santelli then tried to make the point that sound financial principles are in and of themselves good, i.e., the math makes rational business sense. Furthermore, that the government should operate just the way individuals and families do with budgets and within their overall means. The panel rejected this idea stating that government finances are different from household finances. Somehow these government finances are more sophisticated, have more complexity, and are not as straight forward as personal finances.
I get that they are bigger, I get that government finances affect more people when they are forced to adhere to a budget, or their “car/bridge” gets repossessed, or that they can just print more money and have a bigger credit card in essence.
I get all of that, but the numbers are so out of whack right now from a spending standpoint, escalating 16 trillion outstanding debt burden, and the future trend line with obligations due by 2025, that even with today`s once in a lifetime low interest rates, the country is headed for sovereign default on its loan obligations.
Hence Rick Santelli is right, sound financial principles are the same regardless of which level we speak to in personal or government. The government may have a bigger credit line, but that`s the only difference, and it means that the government can dig a far bigger hole and do far more damage than a consumer with a finite credit line.
The problem with having creative finance tools that enable the government to kick the can down the road for so long means that the government is actually in far worse trouble than the consumer who reaches a much more containable default level due to a resource stop loss in effect.
The consumer runs up 100k in debt, the banks stop lending; they declare bankruptcy at much more sustainable default levels. The government on the other hand, through creative finance techniques can dig such a large hole, i.e., Greece, that the damage can not only take down an entire Country`s standard of living, even after default, but hamper growth in the Euro region even though it is a small component of overall GDP.
Just compare the standard of living, and Greek lifestyle of today versus just five years ago. Greece has essentially lost entire parts of their economy due to the effective sovereign default at the hands of creditors. Streets which once thrived with shoppers and business activity are replaced with plywood and graffiti. A modern day ghost town!
Now picture the United States and the size of the hole that the US is digging with these creative money shuffling techniques, and the alarm bells should be sounding off right now all over the world. Because by the time you get to Greece`s level where the bond vigilantes make the government face up to the problem, the problem is too far gone. It is too late; there is nothing that can be done about it.
Right now we have limited options, but it is still possible, but just barely and with a radical change where everything we have done for the last 30 years of spending, annual budget deficits, and taxation needs to be completely reconfigured and overhauled.
And I am not talking about some tweaks that Washington is addressing now in the dialogue. I am talking a major paradigm shift in budgetary thinking, about 2013 and not having a budget deficit, whatever it takes. And it will take spending cuts; we collect enough tax revenue in this country. It is ridiculous how much tax revenue this country takes in each year.
So whatever that number is, we need to spend less than that amount in 2013. That is the first step of the United States 12 step program. Until we balance, and I mean a real balance, not some funny budget gimmicks, the budget everybody in Washington is a bunch of “lunatics”!
Moreover, the mainstream media should be chided for not doing their job, and holding Washington`s feet to the fire with regard to implementing sound financial principles into the government budgetary framework, and not busy promoting additional, irresponsible, creative finance workarounds that just dig the country into a further hole by not facing up to the real issue.
Balance the freaking budget, develop a surplus, and start paying down the country`s debt! Sound financial principles at work whether in the context of a government or household.
Ergo, the media needs to spend less time inventing and promoting “Governmental Coin” budgetary gimmicks and start asking some tough questions of our governmental representatives like, Does the 2013 budget balance with projected revenues? If not, why? What do we need to do to make this the last year where this country runs a budget deficit? Remember, you cannot even start to address the national debt, until you finally have a budgetary surplus!
Yes, Rick Santelli given the context of the consecutive years of running budgetary deficits, the size of the federal debt, and the projected obligations going forward, anyone not for major spending cuts in Washington or the mainstream media is an actual “Lunatic”.
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" sound financial principles are the same regardless of which level we speak to in personal or government."
Keynesian economics makes mush of great minds. Instead of making sure each component of the economy is sound, Keynesian-trained government officials are told to attempt to manipulate the "aggregates", like "aggregate demand" and "aggreget spending", as if it doesn't matter what people buy nor what they spend as long as it is a big enough number. The Keynesian formula of C + I + G leads to the absurdity of Secretary of Labor, Hilda Solis, claiming that unemployment checks have "saved millions and millions of jobs". Under the Keynesian formula, there is no such thing as government waste, because it benefits the economy just as much to hire someone to sleep all day as to work digging holes and filling them back up.
Spending hundreds of thousands of dollars to arrest, convict and incarcerate someone for shipping imported seafood in plastic boxes rather than the cardboard boxes required by regulations creates or saves just as many jobs as if the importer remained employed, that is after he finishes serving several years in federal detention.
Moreover, Keynes thinks that savings are bad and spending is good. Because people are poor because they cannot borrow enough, the only way to allow them to borrow as much as they need is to suppress the time value of money to such an extent that interest rates are zero, and happily this destroys the reason to save and it destroys the rentier class, those evil people who make a living at the expense of borrowers. We can borrow ourselves rich too in the process of flooding the market with enough money to effecct our will on interest rates.
Of course, none of this utter nonsense applies to personal or business finance. I can see how those who are smart enough to be our overlords could know why government finance is totally different than any other kind.
" Hence Rick Santelli is right, sound financial principles are the same regardless of which level we speak to in personal or government." so, you're saying Santelli would vote for fair taxation and massive cuts to the ridiculous military budgets? I don't believe you.
And letting rick have air time is intended to give cnbs at least a small bit of street cred. notice he is also marginalized (not to be taken seriously) by the other talking heads.
1) You are right in saying we only have one legislative body. The hoiuse and senate are one and the same. elected by popular vote. This ensures we enjoy the tyranny of popular vote and the trampling of any sort of common sense. They should be combined into a single body or the Senate should go back to being elected by the state legislature (and revive the 10th ammendmant in the process) this is the best choice.
2) Most newly issued government debt is bought by the federal reserve bank from the primary dealers or direct from the government. Very few real investors buy our crappy bonds any more. We exchange debt with other broken nations in a fiscal circle jerk. Other than that, those that do own US government debt are selling it off.
3) Congress, bamy, federal agencies, and the MSM all continue to act like there is serious business and negotiations on all this when in fact, it's a charade.
4) This is wwhy the idiotic trillion dollar coin has traction. The inmates are, and have been, running the prison in the us for quite a while.
They are put into office by lobbyist and PAC money, regardless of who pulls the lever, they don't represent the voters.
All of them except Rick are a bunch ass kissing losers. At the least he's forcing them to look like the meat puppets they are.
: "Balance the freaking budget, develop a surplus, and start paying down the country`s debt! Sound financial principles at work whether in the context of a government or household."
It will never happen.
Fucking talking-head clowns!
"The government on the other hand, through creative finance techniques can dig such a large hole, i.e., Greece, that the damage can not only take down an entire Country`s standard of living, even after default, but hamper growth in the Euro region even though it is a small component of overall GDP."
SO, here's the ONLY mention of "growth." But, it's always about GDP and growth!
I dare one of these fuckers to answer the question of how we can have perpetual growth (they LOVE growth) on a finite planet.
Toss out anyone who even has a single cell that thinks like a "Democrat" and we'll STILL be fucked, because, you idiot fucks, perpetual growth on a finite planet ISN'T possible.
The Democrats are a symptom of a problem, they are not THE problem. Look in the fucking mirror!
I love me some spending cuts as long as we start with the military budget!!
Whoever is not willing to just obliterate the military spending cannot be considered serious about the debt/deficits.
Almost half of revenues collected are going towards military and related stuff
Exactly...when do you ever hear the Repubs or Santelli talk about cutting Republican waste and the trillions in off-shore tax evasion WELFARE for the rich. Santelli admirers are mental deficients.
Pete - at a minimum get your facts straight.. Half of the budget does not go to defense! Jesus, pick up a budget and read it. About 16% is allocated to the defense dept. Approx 65% is allocated to social welfare payouts of some kind. So when I hear folks say, "I want to start with the military" I have a hard time taking them seriously.
Worse - military spending is slated to fall while social spending never slows. We are headed toward a European situation where they have effectively cut defense to nothing to throw everything in the social welfare bowl. It's why there is no outcry of "Cut defense" in Europe because there isn't one to speak of.
You are the one who has NOT got your fact correct!
He said HALF of the REVENUE! NOT Budget!
I did not look it up, but by what he said, the Fed. revenue is about $1.2 Trillion, and about half of it, which is $640 Billion goes to Defense spending!
What you said is the budget. Obama's budget is around $2.2 Trillion a year, but the fed only gets $1.2 trillion revenue coming in. So that is where the $1 trillion deficit came from!
Entitlements such as Medicare, Medicaid, Social Security represent a much larger part of the budget. Defense spending should be cut but you're missing the enormous elephant in the room.
Who couldn't live with a freeze in spending? Obama. That's the problem. One man who wants to drive this country into the ground. It's time to face the facts. If Obama wanted to change the course this country is on he could very easily because he has the bully pulpit. But sadly he will not.
Ask yourself and your friends why this is the case?
As Ronald Reagan said so well.
http://www.youtube.com/watch?v=ihUoRD4pYzI
This sums it up nicely.
You my friend seem to know little of how the budget is really structured!
Republicans will not cut one dime on military spending. In fact, that is why Boehner caved in: he and his neocon buddies were worried that the fiscal cliff would kick in and cut the profits of the military industrial complex. Republicans are just as bad as Democrats on spending.
I make a very nice living working on military projects. I've worked in and around the military for over 30 years but I think it's time to stop. I'm tired of the endless wars, the surveillance under false pretenses and the general fucking paranoia that is the MIC. If I lost my job tomorrow and had to go back to the US I wouldn't be upset. I worked outside the MIC for 10 years and it wouldn't be too hard to go back to non-contractor corporate life.
Ike must be spinning in his fucking grave.
Yes, it's no different on the "other side of the isle."
It's the fucking Military-Congrfessional-Prison-Complex. These folks HAVE to have this funding in order to protect THEM (and TPTB). Oh, it doesn't hurt that they're able to skim money from tax collections along the way...
The Dems are every bit as protective of military spending as the GOP. This is all the game. They can say whatever, the real test is to look at what they DO. The drones continue to fly...
ah the good old days when money was steadily inflating, Theyre gone! wake the fuck up there is not going back the debt WILL NOT BE PAID DOWN. Nor should it be. a day late and a dollar short with this article. It looks like Graham Summers has someone below him now with the dumbest contributor to this site. Congradulations Econmatters!
Good for you!
It really is pointless hashing over all this shit, isn't it? We're in a corner and in front of us is nothing but wet paint and we're trying to figure out where to paint next?
What I find more troubling is that they STILL don't get it, they still don't get the underlying FLAW that is basing everything on the premise of perpetual growth on a finite planet! Perhaps it's because NONE of them actually produce anything, in which case they rely on feeding off of growth (any excess of producers)?
Brooke On A Boat
http://chartistfriendfrompittsburgh.blogspot.com/2013/01/brooke-on-boat....
Thnx for the ten second respite from reality...
Now... back to fight club
wait a minute???? didn't the republicans spend like drunken sailors for 8 years and we were all told that "deficits don't matter" but now they do?
our system is seriously fucked up....AND Balz is 100% correct!
If you look at the chart of the debt over the last three decades, it's clear that the debt has been increasing regardless of who the president is. The only time the deficits approached zero (~2000), we had a party stalemate in the Presidency and Congress, and we were shifting our bonds from long term to short term to lower our interest payments.
The Washington DC establishment is its own animal, and has been growing out of control for multiple decades regardless of who is president. The best we've been able to do is slow the growth down at times.
Obama makes Bush look like a penny pincher.
And so too would have McCain, statist-extraordinaire, had he won. The 'crisis' makes that a certainty.
WTF does McCain have to do with this discussion?
The point is it doesn't make a rat's ass difference who was in the WH the past 4 years, they would have made Bush look like a penny pusher. Douches on both sides say it Bushs or Obummers fault because the like simple answers and shifted blame.
It's ok as long as the gov't finances job creating companies.
http://www.huffingtonpost.com/2013/01/04/lincolnton-furniture-company-cl...
If you still believe there is a difference between those two kleptocratic party, then you are the lunatic.
Rick Santelli has a heart of " XAU" GOLD. I sure hope that man dOESN'T BECOME A SHILL for CNBS ahh...<>
http://fofoa.blogspot.com/
Gold. Guns. Lead.
Rick Santelli Rant of the Fucking Year!
Thanks for the link potacello. Those innocuous fire alarms that nobody would pay attention to going off from time to time, are of the highest priority to the central bankers. That's why they are doing what they are doing today.
I enjoy watching my monkey barnyard animal banksters preforming for me as they are instructed by me to do so, to entertain me.
Ben Bernanke is my favorite monkey barnyard animal.
Back in recent history, those 299 other world fiat currencies that failed in the past had virtually no online wittinesses to the monetary events taking place in real time, live on their computers.
They couldn't look at the characters in the play like Helicopter Ben, and his moves on a day to day basis with millions of people watching on the web worldwide.
Who's the barnyard animal now Ben?
The Federal Reserve Monetary System Management Corporation of the USA is doing a lousy job managing my money.
NEWS FLASH: It's NOT YOUR money! (read the print!)
The Fed is no more than a policy arm of the govt, which is fully tuned to the perpetual-growth-on-a-finite-planet paradigm. Expecting a bad premise to work out well is pure lunacy. Fed or no Fed the premise is still accepted...
Am confident, no, pretty fucking sure that ( after vomiting over another " unbiased " daily prop report on the BBC ) if i threatened to withdraw the licence fee and get rid of the TV sets my lawyer missus would have the locks changed and my suitcases stacked on the driveway, more quickly than you could say HFT Algo ( diehard fan of American Idol, X Factor, Big Brother, Next Top Model, Some Cunts Got No Talent and the like ).
To the point
Tricky Ricky Sanitary Towel ( although, albeit one of the more reasonable CUNTS on C FLEM BC ) should live on air give 2 fingers to the rest of those barefaced lying arselicking whores and QUIT. If he does i will personally reccommed him to Maxie Keiser.
Kelly's cute, but what a bimbo!
she's a fucking stupid Irish pig.
Yeah, it's not like she's an Eastern European pig after all.
Being kind of harsh on Irish pigs, aren't ya?
"You would"-priceless. I have watched that clip at least 5 or 6 times today and every time I laugh. the look on that firecrotch's face is priceless-it's that "how dare you talk to me-one of the media elite- like that?" look. that smug jew liesman should get beaten with a tire iron. and that Obama enabler Bernstein is a POS. Hey Kernan-IL and CA are WORSE than the PIGS.
just did my daily search on youtube for Peter Schiff, this week, and found his video today on CNBC with the doubters and a fitting headline of 'gold in the gutter', and he obliterated them with truth.
So I guess to the MSM, the last thing anyone should want is gold, despite 100s of trillions in explicit deficits/unfunded liabilities (latter of which might as well be counted outright as debt as those don't just get to be an 'asterisk' while talking about the 16.4 trillion # it dwarfs) and Benny and the InkJets in full force not to mention undercover PPT injections into futures and selling as Tyler said 'copious amounts of VIX.'
That the Fed cannot print purchasing power/supply will eventually assert itself. There simply will be too many moles that signify black swans that need to, but can't, be whacked and then it will be rather instantaneous the ensuing collapse it triggers.
http://www.youtube.com/watch?v=jL15Qywx17g
Peter Schiff schooling bimbos.
Schiff at least comes prepared to be questioned about owning Gold. He like Santelli will always debate with facts and CNBC will always shill for the Fed. It's disgusting how dishonest the CNBC machine has become all the way up to the top. We are fast becoming Greece and CNBC and other media are making the outcome inevitable.
Actually, you're off. Most of the CNBC hosts express open disdain with our fiscal policy and are quite pointed in their questioning of the pollyanas. The problem is that FED policies - which many hosts acknowledge or imply is wrong - is what's keeping the market afloat. So, attacking the FED is risky.
Central bankers CAN play a positive role. The Polish (and Estonian) central banks bucked intense political pressure, refused to allow massive expansion of the State and debt and it paid off handsomely. Most Western central bankers are so caught up in continually tweaking the economy and policy they couldn't no more do the right thing than Obama could support a balanced budget.
Most of the CNBC hosts express open disdain with our fiscal policy and......... thats fucking bullshit and you know it. they pay lip service to the "guest" and then as soon as the guest is punted, the FED can do no wrong and the government has to keep spending otherwise the economy will tank. Its the same fucking mantra day in and day out. all of them...Bartiromo, Liesman the ass clown, Lee, the whole fast money crowd, and Kudlow - who still believes that "free market capitalism is still the best path to prosperity" promotes anything BUT this. they all talk out of both sides of their mouth, except for santelli, who challenges the current Keynsian monetary arrangement at every turn. he is the only reason i listen to the show at all anymore. and you're argument stands on pegged legs.....if the FED is the only thing holding up the market, then its not a fucking market is it!!!! JFC! when are you people going to get educated!?
The FED's policy of buying out the long end day in and day out is destroying capital. Its distorting incentives in the market place - dislocating capital chasing asset after asset hunting for yield and a real return greater than zero. Its fucking asinine. There is no free lunch. You can't buy or print your way to prosperity. the only positive role a central banker can do, is DO NOTHING. Quit facilitating government largesse and currency debasement ands negative real returns. let asset prices fall - AS THEY MUST - and let capital determine price. If I can't print money and distort markets to my benefit, why the fuck should anybody else be able to do it? When are people like you going to figure out that central planning - especially of the cost of money - is absolutely destructive to the common man? Show us where this shit has ever worked!! YTR you can't. The FED will never unwind its position because it can't unwind - oh the irony.
so keep living the "attacking the FED is risky". you know how this will play out.
Peter Schiff sells gold, so are you so easily swayed when the CEO of McDonalds declares the health benefits of a Big Mac?
I own gold, but I take what Schiff says with a grain of salt. He runs a business that benefits from buyers.
Virtual vs. Physical. Hm... is this even a contest? :-) (and in the background I hear mother nature warming up for the last at-bat)
Let's set the record straight - right now ALL of them are lunatics! The writing is on the wall that we are a one party country and if I remember correctly Marx identified this change during the transition from capitalism to Marxism. Sucks.
I'm heartened to see that you're getting more red arrows than green. Not because I think anyone is defending Marx/Marxism, but because you're NOT getting it!
It's not about ideologies other than POWER.
BIG = FAIL
I don't care whether it's BIG Marxism or BIG Capitalism, it's FAIL!
Further, for all those whose bus stops just a bit short of its stop, THE problem is perpetual growth on a finite planet. When resources get scarce tensions and pressures always increase.
Taibbi sums up the bitter truth of the bailout/Wall Street Take-over:
http://jessescrossroadscafe.blogspot.com/