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Stanley Druckenmiller: "We Have An Entitlement Problem" And One Day The Fed's Hamster Wheel Will Stop

Tyler Durden's picture




 

Two and a half years ago, George Soros' former partner Stanley Druckenmiller closed shop when he shut down his iconic Duquesne Management, after generating 30% average annual returns since 1986. Some time later he raised many red flags by being one of the first "establishment" types to expose the Fed's take over of the market when he said in a rare May 2011 interview that "It's not a free market. It's not a clean market.... The market isn't saying anything about the future. It's saying there's a phony buyer of $19 billion of Treasurys a week." This was in the context of the constantly declining interest rates on an ever exploding US debt load. And while back then total debt was a "manageable" $14.3 trillion, as of today it is some $2.3 trillion higher moments ago printing at a fresh record high of $16.6 trillion, not surprisingly the phony buyer is still here only now he is buying not $19 billion by over $20 billion in total debt each week. But just like it was the relentless rise in the US debt that forced him out of his privacy in the public scene back then, so it was also the US debt that was also the topic of his rare CNBC appearance today (where he fiercely poked at all those other TV chatterbox pundits when he said "money managers should manage money and not go on shows like this") in the aftermath of his recent WSJ Op-Ed. There, he once again said what everyone knows but is scared to admit: "we have an entitlement problem."

Druckenmiller's definition of the problem:

The media was more concerned about the fiscal cliff and what might happen to the economy over the three months than the big picture which is the debt which is going to swallow our kids in 15 or 20 years. They totally take a pass on entitlements which is the problem. And the president comes out and says i'm not going to do this on the back of seniors. Those seniors, that we put out in the article, are all taking out more than they put in, and it's guaranteed under the system today that all the kids are going to get less than they are putting in...  the reason we're here is I think we have time to deal with this issue. If we don't deal with it in the next four or five years, we'll wake up and interest rates will explode and the next generation will have a very, very tough time and it's so unfair.... In 1994 entitlements were 50% of federal outlays, up from 28% in 1960, but to my horror under the George Bush administration they went from 50% to 63%. Now at 67% of all federal outlays are entitlements. To put that in perspective, if you look at the actuaries out there, entitlements are scheduled to grow $700 billion in the next four years just due to change in entitlements. That's as the demographics kick in.

A quick primer on the unsustainable Bernanke math:

If you normalize interest rates, i'm not talking about a spike, just normalize where they were before QE and took them to 5.7% federal funding costs of the debt, that's $500 billion a year in interest expense that goes out door. We're having a heart attack over an $85 billion sequester when we can lose $500 billion just if you normalize. The way markets work if and when that were to happen, you don't normalize, you keep going because the market figures out that you now have a credit problem which is exactly what's happened in the foreign nations.

A reminder on the irrationality of bond markets:

The bond market is a funny thing. In Greece the bond market was perfectly fine until February of 2010. Not moving, not doing anything, and then in two weeks it was over.

The topic of the free Fed money's diminishing returns is well-known:

The market is fine because you've got all the free money in the federal reserve. But that can only last so long. Eventually the hamster can't move on the wheel anymore and the free money has less and less impact.

His solution: means testing:

Means-test people like me on social security. You realize I've done all right in life, okay? I'm going to start getting social security checks in five years. It's absurd. And i'll get the same social security checks that some people who have not done so well are. And the same thing with medicare. Raise the ages, as I pointed out earlier. When all this stuff was started, life expectancy was way below where it was now, and frankly probably the guesses on life expectancy where they are are too low. It's not that hard.

Finally, on political incentives to act, or rather not:

... Congress is not getting the market signal we talked about in the article so you can scream all you want about congress and the president being clowns, I can't think of any political system anywhere where they acted without interest rates going up. When did greece act? When the bond market blew up. When did Spain act? When the bond market blew up. What was Clinton's response to Rubin, "you mean the f'ing bond market is in control." Doing what they are doing the politicians have no incentive, but the market is a very fickle and violent thing. I don't think it's today, but we've got 3-year-old kids we've promised we'll get them through college and once college is done we'll get them a job. it's going to happen before those kids.

But of course, the merest suggestion of any of the above becoming policy and whoever is in charge screams bloody "austerity" knowing full well their political career is over the moment people's entitlements are cut.

And thus: back to square one.

The full clip follows below:

And for those who missed it, here is the WSJ op-ed from a week ago penned by Stanley Druckenmiller and former Fed governor and current Fed critic, Kevin Warsh:

Generational Theft Needs to Be Arrested

A Democrat, an independent and a Republican agree: Government spending levels are unsustainable

We come from different backgrounds, parties and pursuits but are bound by a common belief in the promise and purpose of America. After all, each of us has been the beneficiary of the choices made—and opportunities created—by previous generations of Americans.

One of us grew up poor in the South Bronx of the 1960s and went on to lead a children's antipoverty program in Harlem. Another grew up in a small town in South Jersey, and went on to be a leading money manager. The third grew up in a small suburb in upstate New York and found his way to serve in the government amid the financial crisis.

One of us is a Democrat; one, an independent; another, a Republican. Yet, together, we recognize several hard truths: Government spending levels are unsustainable. Higher taxes, however advisable or not, fail to come close to solving the problem. Discretionary spending must be reduced but without harming the safety net for our most vulnerable, or sacrificing future growth (e.g., research and education). Defense andhomeland security spending should not be immune to reductions. Most consequentially, the growth in spending on entitlement programs—Social Security, Medicaid and Medicare—must be curbed.

These truths are not born of some zeal for austerity or unkindness, but of arithmetic. The growing debt burden threatens to crush the next generation of Americans.

Coming out of the most recent elections, no consensus emerged either to reform the welfare state or to pay for it. And too many politicians appear unwilling to level with Americans about the challenges and choices confronting the United States. The failure to be forthright on fiscal policy is doing grievous harm to the country's long-term growth prospects. And the greatest casualties will be young Americans of all stripes who want—and need—an opportunity to succeed.

Three main infirmities plague Washington and constitute a clear and present danger to the prospects for the next generation.

First, the country's existing entitlement programs are not just unaffordable, they are also profoundly unfair to those who are taking their first steps in search of opportunity. Social Security is one example. According to Social Security actuaries, the generational theft runs deep. Young people now entering the workforce will actually lose 4.2% of their total lifetime wages because of their participation in Social Security. A typical third-grader will get back (in present value terms) only 75 cents for every dollar he contributes to Social Security over his lifetime. Meanwhile, many seniors with greater means nearing retirement age will pocket a handsome profit. Health-care spending through Medicare represents an even less equitable story.

The government has an obligation, of course, to support needy seniors. But this pension system is ripe for common-sense reforms, including changing eligibility ages and benefit structures for those with greater means, ridding the Social Security disability program of pervasive fraud, and removing disincentives for those who would rather work in their later years.

Powerful, vested interests portray reformers as avowed enemies of seniors. But, the status quo is, in fact, tantamount to saddling school-age children with more debt, weaker economic growth, and fewer opportunities for jobs and advancement.

Second, while many in Washington pay lip service to the long term, few act on it. The nation's debt clock garners far less attention than the "fiscal cliff" clock. Elected officials continue to allow the immediate to trump the important. Washington appears poised to forego fundamental reform at the altar of the expedient, yet again. This could have tragic consequences.

In successive administrations, the country has spent trillions in temporary tax credits and short-term "stimulus" to goose growth by the next election. What do we have to show for this spending surge? Modest growth, declining incomes and a level of national debt that undermine our long-term prospects.

The Federal Reserve's policies reinforce this short-term orientation. To offset weak economic conditions, the Fed's principal policy objectives appear to be twofold: suppress interest rates and raise stock prices. As a result Congress may be missing market signals and failing to see the costs of its spending addiction in time to undertake real reforms. Ultimately, economic fundamentals—not the promises of central banks—will determine the prices of stocks and bonds.

But the deeper failing is one of essential fairness. The benefits of rising stock prices accrue to those who have already amassed wealth at the expense of those who are struggling to save. And failing to deal with runaway spending will burden the country's children with higher interest rates and a debt bomb that will come due in their lifetimes.

Third, too many politicians appear more eager to divide the spoils of electoral victory among their own than to increase the size of the economic pie for all. The grab-bag of special tax favors under the guise of the recent fiscal-cliff deal is only the latest example.

Crony capitalism and corporate welfare aren't just expenses we cannot afford. They are an anathema to economic growth. They deny opportunities to aspiring people and companies who seek to better their lot. They ration opportunity based on things other than merit and hard work. They further ensure that poor children—who already are disadvantaged by failing schools, inadequate health care and little access to necessary resources—will never get the chance to break the cycle of generational poverty through education.

Some individual Americans are surely better off than they were many years ago. The more probing question is whether America is better off. That can only be true if the hopes and aspirations of the next generation are achievable.

The country must find the courage, conviction and compassion to fix what ails it. The opportunity to advance real reform is still possible. But failure to reform the entitlement culture, reaffirm long-run objectives, and re-establish a common purpose will mean a dimming of opportunities for American children today and for future generations. And a great nation will have ceded more than its greatness, but its goodness.

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Fri, 02/22/2013 - 23:46 | 3269178 bilejones
bilejones's picture

"How unbelievably f'ing ignorant are we, when measured collectively?"

 

You seem to be American. How deep does ignorant go?

Thu, 02/21/2013 - 20:19 | 3265368 Slightly Insane
Slightly Insane's picture

There will be blood in the streets.  This hamster of a hedge fund manager who made a shit ton of dough NOW comes out and says .... I'm worried.  This asshole missed that critical time when he should have stood up to the regulating assjacks and said NO.  Instead he waits until his sacred investments are potentially in jeapordy.  I say .... that fucking train left the station 10 minutes ago Jack!

 

Yeah, we're going to get entitlement reform ..... right after they disolve the Constitution.  It will ocurr as Vlad Putin says .... you're credit card is no good here .... cash only Komrade.  Same story with Xiozinhou (or whatever fuck his name is) .... your credit no god here joe .... got gold?  At this time, the libs and the dems will be the "deer in headlights party"  .... what we on the other side refer to as Harvestors .... or Meat, or just plain "slow moving targets".

 

When one comes to realize that the machine he voted for ... is willing to kill him, for shits and giggles ... then he will come to understand that he is not only a subject, a slave, and a stupid one at that .... but a Democrat.  Republicans are only one street away from this malaise  .... maybe 10 - 20 seconds behind, the shit they face is no better.

Thu, 02/21/2013 - 20:30 | 3265396 Stuffs And Stuff
Stuffs And Stuff's picture

According to Dr. Joe Kerr, we don't have an entitlement problem - We have a brain problem.

Thu, 02/21/2013 - 20:38 | 3265411 are we there yet
are we there yet's picture

Famous quote: when John Dillinger asked why he robbed banks, he said 'because that is where the money is'. .... Well, why do politicians want to rob social security, well first they already have robbed its supposed separate 'lockbox trust fund' by merging medicaid and forcing it to buy worthless gov bonds, now they want to cut its payout as it comes due in John Dillinger style.

Thu, 02/21/2013 - 20:46 | 3265435 Joebloinvestor
Joebloinvestor's picture

The biggest violator is the GOVERNMENT who thinks it is entitled to borrow money from SS and never pay it back.

I agree SS needs to be looked at, but I want the government to return all borrowed funds and interest to the trust before enacting limitations on benefits.

Thu, 02/21/2013 - 21:05 | 3265470 notquantumdum
notquantumdum's picture

Ah, but before too much longer, the're not going to have any assets left with which to pay the "benefits" if they don't reduce them for people who aren't going to retire for decades.  Or print our way into hyperinflation.

They never actually "borrowed" the money.  How does one entity borrow from itself?  They just spent a large portion of the ss taxes on general revenues as they have always done.  If they didn't, what else would they do with the money?  Invest 100% of the SS taxes in treasuries instead of only a fraction of it?  Screw that.

I don't want my retirement investments in treasuries at this time.  Even if they just left it in cash it would evaporate due to inflation.

You need something which can keep up with inflation.

Maybe a volutary private account with some gold and other stuff in it!

I'd vote for that.

Thu, 02/21/2013 - 21:26 | 3265515 notquantumdum
notquantumdum's picture

That is, they spent SS on general revenues, back when SS used to have a surplus -- imagine that!  Years if not decades sooner than we were promised it would happen, it turned into the current deficit.

It pretty sad how badly the CBO and others always underestimate the bad things and overestimate the good ones, projecting into the future.

How can they do that so consistently for decades and decades in a row?

Thu, 02/21/2013 - 21:40 | 3265545 YouAreBliss
YouAreBliss's picture

What would the appreciation have been if they really did invest in 30 yr Treasuries when they were 6% a few years ago!!!!!!  The Soc Sec Trust fund would be brimming over!!!!!!!!!!

While every other pension fund bought loser equities for the last ten years  - The Soc Sec Trust fund would have had 100% in LT treasuries.   Every politician for the last 30 yrs should be tried for fraud and treason.

Like old Pete Dominici - Sure I'll baby sit your daughter!  Evil and Corrupt without any morals.  Wasn't this guy one of those "family values" Republicans?  Oh yeah he values your family - especially your young daughters.   Fucking incredible.  Worst then old "honest" and "honorable" Newt.  These folks are the ones in charge...excuse me while I go barf....

 

http://www.slate.com/blogs/the_slatest/2013/02/20/pete_domenici_michelle...

 

Thu, 02/21/2013 - 21:44 | 3265558 notquantumdum
notquantumdum's picture

I'm sure I would have done exactly that (invest in treasuries years ago) with at least some of my voluntary private acount back then, if they had let me have one.

Thu, 02/21/2013 - 21:47 | 3265568 notquantumdum
notquantumdum's picture

I think I have also read that the "treasuries" that the SS fund does have are non-marketable special issues, or something like that.  Gee, I wonder what that means!?

Thu, 02/21/2013 - 21:04 | 3265467 eatthebanksters
eatthebanksters's picture

All the Feds need to do is watch Kalifornia!  

Thu, 02/21/2013 - 22:24 | 3265670 player333
player333's picture

Exactly this past election was the Kalifornication of the USA

Thu, 02/21/2013 - 21:11 | 3265482 just_askin
just_askin's picture

Riiiight. 30 years of crony capitalist looting, and now we have an "entitlement problem." You can bet your sweet ass Druckenmiller and the other hedgies who've been paying at a lower tax rate than their housemaids won't be eating catfood when TSHTF.

Thu, 02/21/2013 - 21:12 | 3265483 tony bonn
tony bonn's picture

there is no doubt that entitlements are a problem, but it isn't the poor who are the biggest abusers of entitlements -  it is the middle and wealthy classes - the ones who need a  700+ billion usd per year military to conquor the africans, arabs, and anyone else who dares threaten the bush crime syndicate oil supply.....it is entitlement for bankster bailouts to the tune of 23 trillion usd which is an egregious crime against humanity in order to keep incompetent banks afloat......there aren't enough welfare mamas and hos having 7 chilluns each who could begin to approach the welfare and entitlements accorded the plutocrats....and i haven't even touched the neon pink education entitlement elephant in the room.....we all have our grubby snouts in the trough...

druckenmiller can go fuck himself....he concentrates on the petty venal in place of the gargantua and pantagruel.....

Thu, 02/21/2013 - 21:19 | 3265501 Peter Lemonjello
Peter Lemonjello's picture

It is Not an entitlement problem.  Any politician that tries to cut that should be imprisoned.  We PAY for these benefits.  

WE HAVE A MILITARY INDUSTRIAL COMPLEX PROBLEM!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!    QUIT Stealing our money!!!!!!!!!!!!!

Thu, 02/21/2013 - 22:11 | 3265630 notquantumdum
notquantumdum's picture

If that is what you think, here is the chart we should all be looking at:

http://www.usgovernmentspending.com/spending_chart_1900_2012USp_13s1li01...

Personally, I don't care where they slow down the rate of growth of government as long as they do it net, for the total of all of the governments in the US.

Thu, 02/21/2013 - 22:16 | 3265646 notquantumdum
notquantumdum's picture

Here's another good one:

http://www.usgovernmentrevenue.com/revenue_chart_1900_2012USp_13s1li011l...

Houston, we have a problem.

Is that Atlas I see?

Shrugging that is?

Thu, 02/21/2013 - 21:27 | 3265516 Atomizer
Atomizer's picture

Beckoned more of a televised confession to me.

 

http://www.muckety.com/Stanley-F-Druckenmiller/141038.muckety

Thu, 02/21/2013 - 21:29 | 3265522 YouAreBliss
YouAreBliss's picture

These PE and HF guys are incredible - what a load of crap!  They raped and looted this country, screwed over it's middle-class for a few billion in outsourcing profits, bribed a corput govt for a huge miliatary to "protect" their overseas investments... and NOW want to pull the last rug out.  Too bad Obama is as bad as the corupt GOP!

Check this out for how these guys operate:

 

Carlyle Group's profit drops, has investment loss      http://www.marketwatch.com/story/carlyle-groups-profit-drops-has-investment-loss-2013-02-21?siteid=bigcharts&dist=bigcharts    
  Revenue fell 9.2% to $755.3 million        Carlyle recorded an investment loss of $2.3 million versus income of $21.8 million a year earlier.      Performance fees dropped 31% to $264.4 million; however, fund-management fees were up 13% to $263.5 million.               BUT!!!!!!!!!!!!!!!!!!!!!!!!!!          

   Compensation and benefits expenses rose to $376.6 million from $146.2 million. Total expenses rose 56% to $660.2 million.     

  Well paid for a job well done...shareholder/investor suckers!!!
Thu, 02/21/2013 - 21:30 | 3265528 ramacers
ramacers's picture

all the better for rivers of blood. gotta happen.

Thu, 02/21/2013 - 21:32 | 3265532 Mr. Hudson
Mr. Hudson's picture

Druckmiller says we have 4 to 5 years till the SHTF. He blames entitlements as the cause, but he never metioned the trillions we waste in military spending and foreign aid. We need those three-year olds (that his side kick talked about) to grow up healthy, so that they can die fighting in America's stupid wars.

Thu, 02/21/2013 - 21:37 | 3265541 Atomizer
Atomizer's picture

On above link, click on Soros Group. Notice MF Global. Proceed to click on MF Global. As I’ve stated before, they can try to hide. Good luck!

Thu, 02/21/2013 - 21:42 | 3265551 jomama
jomama's picture

i've got less of a problem with millions of low income serfs sucking on a multi-million dollar teet than i do with a select few banksters siphoning off billions from taxpayers unchecked.

Thu, 02/21/2013 - 21:42 | 3265552 billwilson
billwilson's picture

NOT ONE WORD ON THE MILITARY INDUSTRIAL COMPLEX. Wonder why? Cause that is where most of the money was and is wasted.

Thu, 02/21/2013 - 22:51 | 3265740 notquantumdum
notquantumdum's picture

a little more than a fifth of the total spending is where they waste "most" of it?

I kind of doubt that.  I suspect they are much better at "wasting" money than that.

Thu, 02/21/2013 - 21:47 | 3265567 Black Markets
Black Markets's picture

SS is a pyramid scheme, just like your 401K.

The day of reckoning is here when generation Z (under 13's) looks at all these schemes and says...

FUCK YOU

Thu, 02/21/2013 - 21:53 | 3265576 Cabreado
Cabreado's picture

It's a shame Mr. Druckenmiller neglected the real Entitlement problem, in fact the one that brought us here, and the one that feeds our demise more certainly than anything else -- the Entitlement of the Narcissist in places of influence and control.

 

Thu, 02/21/2013 - 22:42 | 3265716 j8h9
j8h9's picture

Agreed. "Crony capitalism and corporate welfare aren't just expenses we cannot afford. They are an anathema to economic growth."...

Thu, 02/21/2013 - 22:02 | 3265604 firstdivision
firstdivision's picture

I would say the largest drain on the system is the entitlement system of the banks. Betting and losing, then coming to taxpayers begging for money.

Thu, 02/21/2013 - 22:35 | 3265700 notquantumdum
notquantumdum's picture

Maybe I’m too naive, but didn’t the bankers pay back their bailouts with interest, and GM, AIG, fannie, freddy, solendra, et. Al. were the ones who consumed taxpayer’s resources, with little apparent benefit?

Thu, 02/21/2013 - 23:12 | 3265795 riphowardkatz
riphowardkatz's picture

yes you are too naive.

when you are in the business of managing risk and you have no risk of failing you can never ever put a price on that. They will never be able to pay the cost of that protection back. They all would be defunct and with no power if it wasnt for a loan of something much more important than money.

Thu, 02/21/2013 - 23:20 | 3265822 notquantumdum
notquantumdum's picture

Well, I certainly don't support the govt picking winners and losers either if that is what you mean.

Let's stop that.

But, I know we are humans, and we can maybe only approach these kinds of goals while possibly never reaching them.

Thu, 02/21/2013 - 23:38 | 3265879 Abrick
Abrick's picture

$7 trillion added to the national debt since TARP, no marked increase in the social safety net. You do the math, or just look at the Bloomberg report.

Fri, 02/22/2013 - 00:15 | 3265991 notquantumdum
notquantumdum's picture

Regarding the "social safety net" it's the future that matters not the past.

I hope (if not pray) that your apparently unconcerned tone is warranted!

Fri, 02/22/2013 - 00:48 | 3266056 IridiumRebel
IridiumRebel's picture

Yes, but the past dictates the future like precedent in legal proceedings...."track record" as mom would say when shooting me down. "IridiumRebel, honey, you have a poor track record of coming home on time so you cannot go play lazer tag with your friends tonight."

Fri, 02/22/2013 - 08:18 | 3266406 firstdivision
firstdivision's picture

You are too naive as it hasn't been paid back in full  Perhaps you should read up on a TBTF called Citigroup. 

Fri, 02/22/2013 - 23:30 | 3269144 bilejones
bilejones's picture

You seem to be ignorant of the trillions of dolars lent to the banks at a few basis points and immediately used by them to buy treasuries yielding 2-3%.

 

 

Thu, 02/21/2013 - 22:18 | 3265649 brettd
brettd's picture

Govt only works if people comply with it....

Thu, 02/21/2013 - 22:25 | 3265675 notquantumdum
notquantumdum's picture

And, if they inforce it.

Thu, 02/21/2013 - 22:27 | 3265679 notquantumdum
notquantumdum's picture

enforce

Thu, 02/21/2013 - 22:20 | 3265655 JR
JR's picture

"We have an entitlement problem." -- Druckemiller

And that's the way the elite put people into boxes and categories so that they can be handled collectively. 

The use of statistics, as in “entitlements “ here by Mr. Druckenmiller, is a phenomenon of socialism. Man reduced to a number is grist for the mills of the central planners.

As well, statistics used by pollsters that include responses from uninformed people are strategic devises in furthering the welfare state. And when people respond that they favor a 20% increase in the minimum wage, not realizing that it would actually damage, for many, their own financial position or buying power, it is highly unethical to use that statistic against those people.

It is one of the hallmarks of socialism, writes Dr. Clarence B. Carson, to use numbers to control people, to force deform rather than to transform man.

 “The thrust of socialism is toward that complete control over men by depriving them of choices by which they might thwart the planners,” says Carson. “The effort to use statistics as a means to control the future pushed us toward reducing individual man to a statistic. Specifically, it manifests itself as the tendency to reduce man to a number.”

Writes Carson:

“The most obvious use of numbers in gradualist countries is in the effort to control the economy of a nation. The numbers that are believed to be relevant to this undertaking are statistics. Ours is the only era and time in all of history in which national statistics have been extensively collected and used. There is a reason for this. Statistics are just about the most inherently uninteresting thing imaginable. They are formed by reducing persons, places, or things to numbers…”

Statistics are faceless. Statistics are collectivism. Statistics are atheism.

The point is, the use of statistics is inhuman. Statistics relegate man to an inanimate object.  Statistics can be used to control people by blocks, to identify people, say, by income and then put them into a category, into an inanimate block, into a box. Then you can harness them by age and put them into several boxes. And once you have them in boxes you can move the boxes around. You’re not interfering with anything human, after all; it’s just boxes. So now, say with health care, you have boxes of certain people that require different kinds of handling and payment,  and people with certain ages are in certain boxes like in Dr. Emanuel’s Reaper Curve boxes, and those with preexisting conditions are in other boxes.  Or, why not faceless red states and blue states that react; it’s not individuals within those states reacting ; it’s the red box.

That’s Marxism, that’s socialism, that’s atheism, that’s Dewey and his system, that’s Upton Sinclair,  that’s I. F.Stone, that’s all those socialists identifying people as figures, as statistics, as widgets to be used.

Writes Carson: “Socialism vitalizes, animates, gives meaning and purpose to statistics. It does this by attributing a magical quality to them. They are to be the means by which economies are to be planned, controlled, and all efforts are to be concerted.

“It would probably be possible to calculate with some precision the extent of the spread of socialism in a country, especially of gradualist socialism, by the degree to which statistics are kept and used.

“In short, the whole is greater than the sum of its human parts …”

Thus, Bernanke, by using and falsifying statistics and making his objective some contrived unemployment statistic, meshes the pain of the individual that he is stripping mining into a faceless number; paints out the man who has given up looking for a job with a statistic; politicizes the student saddled with a $27,000 college loan and no job into a statistical ploy for government stimulus; clandestinely steals an old gentleman’s life savings using a falsified inflation statistic to crush him into a faceless statistic to "benefit" a faceless economy; relegates the homeowner in the throes of losing his home to a chart line; lumps middle-class achievers and individual attainers into an all encompassing 97% of the population statistic, and explains it all with a statistical consumer confidence report…

Thus the individual and his land of individual opportunity and his individual freedom and life time of purpose is nullified,…by a statistic.

No thanks, Mr. Druckenmiller.

Thu, 02/21/2013 - 23:36 | 3265874 notquantumdum
notquantumdum's picture

So, is anyone who uses math or statistics a socialist?

That kind of stuff seams to be somewhat useful to me from time to time, but I will never think of myself as a socialist.

Fri, 02/22/2013 - 00:11 | 3265986 JR
JR's picture

Of course not. A number system is a wondrous thing; the use of numbers in calculation has enabled man to comprehend the universe – the speed of light, the speed of sound, the distance from the earth to the sun, the law of gravity… In short, man’s mastery of things is greatly enhanced by numbers. “Numbers are the touchstone of contemporary man’s control over things for his purposes.”

Carson, instead, is describing how socialism diverts the use of numbers to control people in order to use them for the power ends of government.

Assigning a number to an individual under socialism is a “subtle and symbolic assault on the person.” You know, like in assigning numbers to prisoners.

Alexander Dolgun explained after his duration of torture under Stalin, that for “the prisoners of Dzhezhazgan the number was the prime symbol of our slavery, of our demotion from human being to object.”

In the words of Carson: “Individuality is an obstacle to collectivism.”

On the other hand, a name “is a means of assigning distinctness and individuality… Individuality and ownership are deeply entangled in naming and numbering, spiritually, culturally, and legally.”

Americans as individuals rapidly are being degraded and dehumanized under their current government, branded by Bernanke and his BLS with a number, using that brand like in branding animals as an emblem of ownership and manipulation by the state.

In short, Americans are are being “democratically processed.”

Fri, 02/22/2013 - 00:21 | 3266013 notquantumdum
notquantumdum's picture

So am I screwed from having a social security number?

I like individuality too.

Frankly, as an engineer, I have spent an absurd amount of my life studying math, so I hope it's not a total waste.

Fri, 02/22/2013 - 00:42 | 3266049 IridiumRebel
IridiumRebel's picture

"So am I screwed from having a social security number?"
"So am I screwed from social security?" Yes. Fixed it for you.

Fri, 02/22/2013 - 00:53 | 3266074 notquantumdum
notquantumdum's picture

That's good!

Fri, 02/22/2013 - 00:54 | 3266075 JR
JR's picture

You’re screwed.

Reducing Americans to a generality began for the first time, you guessed it, in the 1930’s when to have a SS number became a requirement for employment, according to Carson's studies. And, now, all that is left of all the money that you paid into SS is your number. And the purpose of that number is to extend it. Already it has become your Taxpayer Identification number. And, now, the IRS “considers only so much of an individual’s income as his as he can show does not belong to the government.

“It is the assigning of a number that is essential, not Social Security. Social Security is incidental; it is only one of the possible means by which government takes from the individual the control over his affairs.”

Your name belongs to you; your number is the government’s claim on you as it reduces each individual to the lowest common denominator.

For engineers, it’s called the process of “enmassment.”  For ordinary folk, it’s called plain ol’ enslavement.

Fri, 02/22/2013 - 02:57 | 3266132 Radical Marijuana
Radical Marijuana's picture

JR, while I agreed with a lot of the basic feel behind your quotes, I have substantial semantic disagreements.

I see the trends as primarily being War to Fraud, (power to information) which were why we went from patriarchal militarism to fascist plutocracy.

The problems behind the "statistics" and the "socialism" are the actual purposes those serve are control through deceits backed by destruction.

We are talking about what is basically a money/murder system, which superficially became more scientifically managed, and technologically amplified, but was still BASICALLY organized lies, operating organized robberies.

The real problems are NOT the superficial ones that you label, JR! "Socialism" without real human ecology is obviously ridiculous! That must be fake "science" without any science about itself! Measurements which deliberately ignore the inherent limits to measurement must be fronts for deceits.

My point is that the central core of human ecology MUST be the death controls, and therefore, the debt controls within the political economy are built around and on top of that. To boil it down results in recognizing the money is backed by murder. Social systems have at their core death controls. "Socialism" has ended up being more sublime expressions of the deceitful ways that those death controls were done! Obviously, the "statistics" in "socialism" end up being totally tangled up expressions of those purposes, which specialize so much in lying about themselves that they reduce their numbers to ciphers of absurdities.

All of civilization was selected by the imperatives of militarism, and the monetary system simply symbolizes that deeper reality. Therefore, "entitlements" are actually about who has the power to rob whom, and how. Those are backed up by who has the power to kill whom, and how.

The astonishing achievements of the most "successful" people operating within those systems are the ways that they develop a language which obscures what they are doing. In my opinion, JR, the language that you quoted is doing the same thing, although in a different way.

The sublime paradox that human beings are truly faced with is built right into the fundamental dilemma of militarism, which was based on triumphs through successful deceits, backed by destruction. The monetary system within any technologically advancing civilization is STILL doing that, only in more convoluted and sophisticated ways!

The only theoretical way through that tangled knot of complex bullshit is to cut through to the ways that the murder systems and death controls operate. However, in order to do that, we would have to go through the sublime paradox that those who were the most successful in the past got that way by being the best at lying about the systems that they were operating within.

Statistics about socialism, and entitlements, etc., are hypercomplicated expressions of fraud and robbery, which turn science into a Bizarro Mirror World, since it all is based on deliberately NOT being any more scientific about itself!

Basically, we ARE doing what must be done, but through the means which express the maximum deceits possible. We are murdering the future, because we have gotten too good at doing what we were selected to be able to do.

Theoretically, we need a different deal with future generations, regarding how there will be death controls imposed upon them. However, in practice, we have the runaway triumph of debt slavery generating numbers which manifest debt insanities, and therefore, we are ACTUALLY headed towards our real death control systems developing themselves towards death insanities.

Militarism has always been the central ideology, and so, at the core of the monetary system. All of these elaborate legalized lies, backed by legalized violence, that we called "entitlements," which are argued about using "socialist statistics" are basically murder systems which operate through the maximum possible dissembling about themselves. The money system is a goofy golf ball of tangled up threads wrapped around and around the military systems, for generation after generation!

The real issue for future generations is what kind of murder system will be operated. That is the real content of the socialized statistical questions regarding possible entitlements, or lack of entitlements.

Future generations are growing up in a world which ALREADY has global electronic fiat money frauds, backed by the threats of atomic weapons. Unless civilization does not survive at all, then the future is going to be even MORE OF THAT!  However, all of that technologically advanced money/murder system is still necessarily doing the same basic things as human beings did back when they were primitive primates. Thus, we have been able to hide from ourselves, while becoming astronomically amplified at being who were always were.

Obviously, looking at those real issues are like looking through an infinite tunnel of deceits. Like looking through a telescope backwards, or like looking through a microscope backwards, without understanding that!  Or like looking in the mirror, without understanding that everything in the mirror is backwards, and distorted.

"Socialism" is a misleading term, since it ought to be have human ecology at its core, but deliberately does not. The statistics regarding entitlements were designed to suit the purposes of professional liars, and immaculate hypocrites.

The grand paradox that postmodernizing humanity faces is that we have awesomely advanced technology, all based on triumphant deceits, which deceits existed for very good reasons, due to the deeper historical realities of military imperatives.

I wish I could propose something better, however, the deeper problems are that all the people who are the most successful within the present systems are necessarily those who are the best at bullshitting about what they are doing, and therefore, never propose any "solutions" which are not just more bullshit, piled even deeper.

It is impossible for the exponential growth during most of human history to continue forever. By definition, the limits to that growth will be death controls. The only sane debate ought to be about how those death controls are done. However, everyone who has achieved the maximum possible previous successes at operating within the current systems did that by being good at lying to everyone, especially including themselves!

We gradually had the force backed frauds of making "money" out of nothing take more and more total control over our civilization, in ways which deliberately ignore the basic laws of nature, EXCEPT for how deceits are able to become triumphant, as legalized lies, backed by legalized violence.

Our current civilization was shaped according to the runaway "success" of the application of the principles of organized crime.  That did NOT break the laws of nature. However, it was based on many people believing things which deliberately ignored the basic laws of nature, as much as possible.

... So, JR, regarding your quote of Carson: “Socialism vitalizes, animates, gives meaning and purpose to statistics. It does this by attributing a magical quality to them. ... "

Privatized fiat money is a religion which magically creates "money" out of nothing, as a triumphant fraud, backed by force. It was simply the triumph of the money/murder system, running away with its own "success."

Everything that is ever calculated inside of that fiat money system is based on bullshit statistics, and, of course, that includes "entitlements." However, IF we return to basic science FACTS, then we must return to WHY mililtarism was the central core ideology throughout history.

The only saner ways to have a social debate about these issues would require addressing the death controls, and the murder systems, which are at the heart of the monetary systems, and all of its currently crazy magical numbers, where statistics serves deceitful "socialism."

To have a genuine socialism would require human ecology be at the core of that concept, which then would understand the REAL HISTORY regarding why patriarchal militarism became fascist plutocracy, and thereby, inhumane abstract numbers gradually took over controlling people's lives.

This sublime paradox runs throughout all of the attempts we make to discuss these issues: ONLY BETTER ORGANIZED CRIMES COULD RESOLVE THE CURRENT PROBLEMS CREATED BY THE PREVIOUS ORGANIZED CRIMES.

... Bizarro Mirror Worlds' Tunnels Of Infinite Deceits ...

Thu, 02/21/2013 - 22:24 | 3265659 thismarketisrigged
thismarketisrigged's picture

does anyone have the same feeling as me that the fraudsters who run this market will try to pump it up as hard as possible tomorrow to either minimize this weeks losses, or completely wipe them out?

 

the dow is only down 95 or so pts for the week, and the s&p is down i believe 18 or 19 pts for the week. is it unrealistic to think these fuckers will make sure we end far in the green, or either minimize the weeks losses?

 

i hope i am dead wrong and the dow falls 300 plus tomm with the s&p falling 20 plus, but i have a feeling these assholes will make sure to do whatver possible to pump it green tomm

 

hope i am dead wrong

Fri, 02/22/2013 - 05:28 | 3266342 Oldwood
Oldwood's picture

They are pumping everything else, so why not. We bemoan the printing of money and the variable value of fiat. Stocks are just pieces of paper too that have an infinetly variable value dependent totally on what any irrational person places on them. Those who own the casinos know the chips are worthless but they will do what the must to lure you into buying them just the same as in any other ponzi scheme. And everyone knows its a ponzi, they just all want to "time the market" so they can get out before it collapses. Good luck with that!

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