Steve Liesman: "Debt Is The Bridge From Working Hard To Playing Hard In America"

Tyler Durden's picture




 

"There is a debt problem in America..." warns Lynette Khalfani-Coz (askthemoneycoach.com) in this brief CNBC interview, expanding in the huge debt loads from mortgaging cars to student debt that Americans soak up every day in ever greater amounts. And then Steve Liesman rolls in "debt is always pointed out as a negative thing, when in fact debt is the great bridge between working hard and playing hard in this country." Then Liesman really hangs himself, "this country has been built on consumer debt," he proudly states (as if it was some badge of honor) adding carefully that "too much of it is negative thing." - well Mr Liesman... one look at the current debt load might suggest that American consumers built that 'bridge to playing-hard' just a little too far. As Khalfani-Cox admirably retorts, "excessive debt levels are simply unsustainable... It is not the job of the consumer to play the role of financial hercules... why should we have to prop up the US economy?"

Perhaps gentle reminder from Kyle Bass will help...

The Largest Peacetime Accumulation of Total Credit Market Debt in World History

It took the United States 193 years (1789?1981) to aggregate $1 trillion of government debt.

It then took 20 years (1981?2001) to add an additional $4.8 trillion and,

in the last 10 years (2001?2011), a whopping $9.8 trillion has been added to the federal debt.

Since 1981, the US increased its sovereign debt by 1,560% while its population increased by only 35%.

Remember the old economic theory of diminishing marginal utility?

Similar amounts have been accumulated all over the developed world. Total global credit market debt has grown at over a 10% annualized pace for the last 10 years while global population has grown at only 1.2% and global real GDP has grown at 3.9%.

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Wed, 06/04/2014 - 16:38 | 4824467 Squid Viscous
Squid Viscous's picture

Moar Lies- man! keep it up and maybe he can get a sweet gig with H. Ramrod in 2017

Wed, 06/04/2014 - 16:44 | 4824513 ForWhomTheTollBuilds
ForWhomTheTollBuilds's picture

The best part is if you believe him, you deserve it.

Wed, 06/04/2014 - 16:56 | 4824556 NOTaREALmerican
NOTaREALmerican's picture

Re:  The best part is if you believe him, you deserve it.

And, because most people do, that's why we've got the only system possible.   Pathological optimism and debt-narcotic; what could be a better combination?  

Wed, 06/04/2014 - 17:10 | 4824580 nope-1004
nope-1004's picture

Debt is not the bridge between working hard and playing hard.  Debt is bringing future sales into the present because of a lack of wealth.  During a time of responsible lending there is no other way to stoke stagnant sales, other than lowering prices, so lowering lending standards by lowering cost of entry brings future sales to the here and now.

Problem with this methodology is that eventually the never ending easy lending comes to an end, because at some point (NOW!) the easy lending sends asset prices rising beyond all practical affordability (housing) as it becomes a bidding war simply because of easy credit, not because of intrinsic value.  If rates in this debt saturated environment ever rise, it's instant default.

Liesman is an idiot.

 

 

Wed, 06/04/2014 - 17:15 | 4824607 max2205
max2205's picture

I bet Steve has zero debt

Wed, 06/04/2014 - 17:38 | 4824688 cossack55
cossack55's picture

Maybe, but it is pretty clear he has an intellect deficit.

Wed, 06/04/2014 - 17:52 | 4824753 ebworthen
ebworthen's picture

 Liesman is the archetype of the witless, gutless, spineless mandarins driving us to perdition.

Wed, 06/04/2014 - 19:47 | 4825078 I MISS KUDLOW
I MISS KUDLOW's picture

and the mainsteam says kyle bass has a dangerous mind .....lol

Wed, 06/04/2014 - 20:15 | 4825170 I am more equal...
I am more equal than others's picture

 

 

 

The best method to rid yourslf of Liesman is to douche with Hydrofluoric acid. 

It is actually less painful than listening to this painfully stupid drivel.

Wed, 06/04/2014 - 20:17 | 4825177 Keyser
Keyser's picture

Lying scumbag MSM networks can be easily identified, they all have NBC in their name... The fact that LIESman is allowed to spew this tripe is proof that CNBC is nothing but propaganda for the banksters. 

 

Wed, 06/04/2014 - 18:48 | 4824795 dryam
dryam's picture

A bridge from working hard to playing hard is the very last thing debt is.  Debt by definition is overconsuming goods & services today at the expense of underconsuming in the future in order to pay off that debt.  Said in Liesman's dipshit terms, debt is a bridge from playing hard now to working much harder later.

And to be clear, forms of investment debt either into yourself or a business can be a good thing in the long run, but that's not what we are talking about here.

Wed, 06/04/2014 - 20:13 | 4825161 A Nanny Moose
A Nanny Moose's picture

My dog is smarter than Lies-man.

Wed, 06/04/2014 - 17:28 | 4824653 Relentless101
Relentless101's picture

Agree. Also, borrowing at x% makes perfect sense if I can make a return of y% (such that x < y). IF! IF means its possible, not written on plymouth fucking rock. Fucking idiots. It is never even conceivable to these fucks that the market could maybe possibly with a slight chance go down.

Wed, 06/04/2014 - 19:11 | 4824979 daveO
daveO's picture

The worse part is LIES-man said this after 5 years of totally rigged interest rates. Back to work debt slaves! 

Wed, 06/04/2014 - 19:29 | 4825028 DirkDiggler11
DirkDiggler11's picture

LIES-Man has Krugman's ballsack on his chin. An oxygen theif no doubt.

LIES-Man should be hung right alongside of the theiving skum he acts as the gimp for. Zipper that fuckers mouth shut and put the gimp back in the hole !

Wed, 06/04/2014 - 17:37 | 4824684 Larry Dallas
Larry Dallas's picture

Guys like him don't last very long. I'm surprised he made it this long... 

Wed, 06/04/2014 - 19:16 | 4824990 daveO
daveO's picture

Au contrare. He's been on there at least 10 years. I quit watching that lying channel after the FED started rigging rates 5 years ago. He, and most of CNBC, are paid cheerleaders(liars) for the NYC bankers. 

Wed, 06/04/2014 - 20:28 | 4825208 LooseLee
LooseLee's picture

Yep! And they will be the first to be sacrificed when SHTF....Everyone in financialland knows who they are....

Wed, 06/04/2014 - 19:40 | 4825056 AllWorkedUp
AllWorkedUp's picture

 Sorry but guys like LIESman last forever as long as they tow the bullshit party line. The minute he stops he'dead meat.

Wed, 06/04/2014 - 21:36 | 4825372 F0ster
F0ster's picture

I buy things that banks won't give you credit for, like prescious metals. Even though these are manipulated they are not inflated via easy credit. In fact the odds are that they are even manipulated downwards and are especially cheap vs the over priced assets like houses. 

Wed, 06/04/2014 - 18:18 | 4824821 Gringo Viejo
Gringo Viejo's picture

Aptly named Cocksucker Emeritas.

Wed, 06/04/2014 - 19:20 | 4825007 Berspankme
Berspankme's picture

Just wish he would go away and die some horrible death. Didn't even know CNBC was still on the air. Haven't watched in years

Wed, 06/04/2014 - 16:45 | 4824518 NotApplicable
NotApplicable's picture

Cuz everybody knows that debt-fueled consumption is sustainable.

Wed, 06/04/2014 - 16:51 | 4824536 Citxmech
Citxmech's picture

Substitute "Cocaine" for "Debt," and Liesman would still be on board.

Wed, 06/04/2014 - 18:03 | 4824782 SofaPapa
SofaPapa's picture

I have a serious question for those of you with a more complete sense of economic history than I have.  

At what point in US history did the concept of debt change from a vehicle to enable future production to a vehicle to enable current consumption?  It seems that at the time of the founders and up until 1913, people took on debts to fund a business idea so that they could produce something; they hoped to become rich by creating a saleable product.  The loan may or may not have worked out, but that was the genesis of the loan, future PRODUCTION.  I think that concept held for even the majority of the 20th century?

Now, in our current environment, debt is considered a way to "maintain a lifestyle", i.e. to consume.  To take on a debt for the purpose of CONSUMPTION negates the entire concept of what debt was designed for.  College debt, for example, has no real sense of what will be produced at the end of it.  It's the underpants gnomes all over again: step 1, go to college - step 2, ? - step 3, profit!

When and how did this changeover occur?  Thanks!

Wed, 06/04/2014 - 18:20 | 4824825 Citxmech
Citxmech's picture

I think that debt-fueled consumerism has been around at least as long as credit cards, however, I think the moment when the upper-level policy publically shifted to pure "play now, pay later," was when Greenspan started encouraging folks to refinance their 30yr fixed mortgages with ARMs.

Wed, 06/04/2014 - 19:29 | 4825000 daveO
daveO's picture

August 1971, when Nixon took replaced the gold standard with oil. Bank reserves are now made up of treasuries instead of gold. Therefore, the more oil pumped, the more treasuries(debt is money in a fiat system) that can be sold. More oil consumption=more debt.

Wed, 06/04/2014 - 20:08 | 4825072 GooseShtepping Moron
GooseShtepping Moron's picture

It is not possible to pinpoint an exact date or cause, since the change itself is not instantaneous and the causes are multifactorial; but I've heard people discuss c. 1990 as a possible answer in response to similar questions, and that seems pretty close to me.

I would put the date a few years later, sometime around 1993 or 1994, as the time when it first became apparent to me that a new attitude had taken over and we were already past the point of no return. Obviously the changes responsible for producing that realization had to precede the effect, so 1990 seems like a good place to fix the date. But 1994 was when the changes became noticeable. I was just a kid then (actually I was just entering my early teens), but I vividly recall the new spirit of the age coinciding with the changes which were then taking place in my body and my mind.

I think it was then that the class of people which David Brooks would later characterize as the Bobos first began to really expand the horizons of their consumerism. There was among them a definite and sudden cultural reorientation towards McMansions, the purchase of stocks and other financial instruments (which hitherto most people outside the financial system had little involvment with and no understanding of); towards home refurbishing and landscaping, towards fine wines and dining, designer clothing, cigars, travel; towards "luxury" in the commonly accepted sense of the word; and especially towards the new computers and other consumer electronics which were supposed to usher in, via the internet, a new wave of innovation and opulence the likes of which the world had never seen before.

Try to recall, if you can, the sheer volume of all the techno-utopian propaganda we were subjected to during the early days of the internet, when blowhards like the prominently mustachioed Thomas L. Friedman were championing globalism and the "flatness" of the world with ridiculous prognostications of prosperity, and the skyrocketing Nasdaq seemed to validate them every step of the way.

Do you remember the days of $15/bbl oil, when the purchase of monster SUVs was a relativey new and very actively discussed phenomenon?

Do you recall some of the editorial names from that period who are no longer with us? Michael Kelly, Molly Ivins, Louis Rukeyser, Robert Novak?

Something definitely changed around that time. The radical expansion of the consumer society was fueled by cheap credit and very cheap oil on the then quite believable (to others, never really to me) premise that the growth would continue indefinitely because of globalism and the new technology. A near decade of social shifts as momentous as what occured in the late 60s and early 70s, say between Woodstock and disco, also occured between OJ Simpson's televised white Bronco chase and September 11th, 2001. It was the era of going global, going digital, and going crazy on the promise of ever-expanding wealth.

We still haven't come to terms with what it all meant.

Wed, 06/04/2014 - 21:59 | 4825447 SofaPapa
SofaPapa's picture

Thanks all for your answers.  For context, I graduated college in 1990, and I agree I noticed a major culture shift between 1990 and 2000.  But because I don't have much financial memory before that, I wasn't sure if that was just because of my shift in phase of life (from student to working member of society).

That said, the comment above about leaving the gold standard makes a great deal of sense.  There can be little doubt that the single most important commodity of the past forty years for international relations has been oil.  The petrodollar agreement has been the framework we have worked under since then.  With the dollar pegged to a consumable commodity rather than one which is conserved above the ground, that would logically change the dynamics of how the system and its participants value wealth.  It's also right around that time that the credit card culture really took off.

Thanks again for the thoughtful responses.

Wed, 06/04/2014 - 22:23 | 4825532 t0mmyBerg
t0mmyBerg's picture

The Debt Curve really inflected up hard with Reagan.  In the 80s there was much wailing and gnashing of teeth by both R and D that the debt would cripple the country.  Only that did not happen.  Things got better and better and the economy soared.  Well of course it did, we leveraged the shit out of the economy!  The good thing was we caused the USSR to buckle under.  But the bad thing is that guys like Dick Cheney learned that debt does not matter.  And then he paired up with W after Clinton and convinced him that debt does not matter.  So the debt curve inflected up again starting in 2000.  Then along comes Obozo and he and everyone else in Washington has come to believe that debt does not matter and now it has gone parabolic.

And they are right.  Debt does not matter.  Until it does.  And wont they all be surprised then.

Thu, 06/05/2014 - 18:14 | 4828239 puckles
puckles's picture

I have to admit that I knew a couple of guys who gamed credit in the '70s and early '80s.  It did not end well for them.

I would put the turning point at roughly 1988, right after we survived the crash of '87.  There was definitely a feel of a cyclical change afoot around that time.  In the metro NY/NJ/CT area, the McMansions began.  Punk fashion finally began to bite the dust, ushering in a preppy revival. People began to feel quite expansive--and competitive. I think many, including yours truly, had not trusted the initial booming rebirth of the S&P in the early '80s, after getting their teeth kicked in during the '70s. The '87 crash initially seemed to confirm that pessimism, but once it proved false, all restraint was lost, at least by a good (or bad) many.  After all, we kept making more money, right?  In some cases, a whole lot more money, every year, like clockwork.

I have to confess that I did not entirely join the swelling tide. I paid off my mortgage in '92. Then I bought a McMansion--for cash.  Put the kids through college via savings.  Have had no real debt except monthlies (which are paid in full) since '92, which mildly wrecks my credit rating, but I don't really give a hoot. I drive a used car, and the McMansion was sold quite a while ago, although the house I have now is worth far more, and in a different locale. I sleep reasonably well at night. I retired once, but don't plan to again.  It's boring.

Wed, 06/04/2014 - 16:52 | 4824521 john39
john39's picture

Usury was a mortal sin for Catholics (until they forgot about that), still is for Muslims...  and not hard to see why either.  But thankfully americans know better, right?  see, just look how well this whole debt slavery thing has worked out.

Wed, 06/04/2014 - 19:39 | 4825052 August
August's picture

American Consumerism - destroying the world, one soul at a time.

Wed, 06/04/2014 - 17:37 | 4824686 Da Yooper
Da Yooper's picture
Steve Liesman: "Debt Is The Bridge From Working Hard To Playing Hard In America"

 

ONLY IF YOU ARE A BANKER

Wed, 06/04/2014 - 17:58 | 4824769 FeralSerf
FeralSerf's picture

. "this country has been built on consumer debt,"

If LiesMan is referring to the house of cards that's been built the last 30 years, this may be one of the few non-lies he's ever told.

Wed, 06/04/2014 - 18:28 | 4824847 villainvomit
villainvomit's picture

Liesman is the bridge from dumbass to full retard.........  Damn, I am feeling real nice today.

Wed, 06/04/2014 - 16:35 | 4824470 Silver Bug
Silver Bug's picture

This contry was built on consumer debt???! What is this wack job smoking? I pretty positive the founding fathers are rolling in their graves at the moment.

 

http://mikemaloneyblog.blogspot.ca/

Wed, 06/04/2014 - 16:57 | 4824562 Handful of Dust
Handful of Dust's picture

American Airlines' Retirees Are Furious Over Changes to Their Flight Benefits

 

http://www.businessweek.com/articles/2014-06-04/american-airlines-retire...

 

Bullish, right?

Wed, 06/04/2014 - 19:59 | 4825111 CheapBastard
CheapBastard's picture

People who have a 'job' or a steady 'pension' in the private sector think nothigng will change except for maybe the better with salary increases, bonuses, etc as has happened fairly regularly historically.

However, things are different now and you cannot count on anything for one reason [sort of mentioned above] the massive debt people, companies, gubmints have taken on to consume/spend now with no guarantee the party will continue. I guarantee the party will not continue and these entities [such as the folks at AA] need to see that as stark as it is for them.

As my co-worker says, 'I don't count on nothing these days."

Wed, 06/04/2014 - 17:05 | 4824588 Colonel Klink
Colonel Klink's picture

Our founding fathers have been spinning in their grave faster than the shit scattering, rotating, ocillation device.

Wed, 06/04/2014 - 17:31 | 4824656 Squid Viscous
Squid Viscous's picture

it's not really usury if you can borrow for 3-6 months at less than 25-50 bps...the bernank shalom and mr. yellen sayeth!

Wed, 06/04/2014 - 17:41 | 4824672 realWhiteNight123129
realWhiteNight123129's picture

THIS DEBT LEVEL IS A BRIDGE TO NOWHERE!

The US was built on super hard money between 1866 and 1901 US was getting rid of fiat (civil war greenbacks) was demonetizing silver leading to contraction of M0 and lower and lower prices. Dollar was getting harder and harder against foreign currencies. Price were falling, entrepreneurs and bank had to deal with a tough environement where there was no Fed, no bailouts, no Gov debt and loans harder to repay because of harder and harder money. So to succeed you really had to have a real good business plan and money making business not a fluff stuff,  and yet the US emerged from backwater to industrial superpower with the likes of Thomas Edison. Mr. Liesman you are full of s*** and lies and you are lucky that most Americans do not know their own history (and I am not even American).

Wed, 06/04/2014 - 16:38 | 4824471 Rainman
Rainman's picture

Lloyd's gonna kick dude's ass for this fuckup !!! No mention of God work.

Wed, 06/04/2014 - 16:35 | 4824474 Yen Cross
Yen Cross's picture

   Liesman's turd polished dome is a heliport for all the shitball D.C. Krugmanites!

Wed, 06/04/2014 - 16:36 | 4824475 Lendo
Lendo's picture

Steve Liesman, the dumb cunt with a degree in Journalism. 

Wed, 06/04/2014 - 16:36 | 4824478 AustrianJim
AustrianJim's picture

I remember once he argued for government doing something-or-other, and Santelli asked what government does well, and "Lies, man" responded "Military and roads". Funny on so many levels.

Wed, 06/04/2014 - 16:41 | 4824489 asteroids
asteroids's picture

Fucking moron.  Lenders think the average joe is a terrible risk, that's why they charge 20% (give or take) on consumer debt.

Wed, 06/04/2014 - 16:39 | 4824491 kurt
kurt's picture

Steve, 

You're a dick.

Wed, 06/04/2014 - 17:20 | 4824632 NotApplicable
NotApplicable's picture

Now why ya gotta go and insult dick like that?

Wed, 06/04/2014 - 16:40 | 4824494 Freewheelin Franklin
Freewheelin Franklin's picture

All I know is, I was just issued a Chase CC with a $4,000 limit at 14.24% and I don't even have a job right now.  

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