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Stimulate This! Thoughts On Intergenerational Fairness
Submitted by Erico Matia Tavares via Sinclair & Co.,
Since this is the season for giving thanks in the US, we might give some consideration to the unsung heroes who have been underwriting a big chunk of our economic recovery of late. Actually, we literally owe our future to them - in more ways than one.
We recently asked a bright young economics student from a prominent European university about the right role of government in an economy. And the answer, somewhat predictable: "well, to stimulate it!" When we then asked how the government pays for that stimulus, and what impact it will have on the economy at that point, there was silence.
Just as we would have stayed silent when we were in his shoes decades ago. This has been the dogma of mainstream economic thinking for many years: in its omnipotence, the government should always step in to correct deficiencies in aggregate demand, so as to smooth out the business cycle. Stated differently, the government is much better at spending your money than you, especially when you don't want to spend it. And voilà, less unemployed people – and more happy voters.
These expenditures need to be funded via taxes, which depresses current demand (in a way, representing your own stimulus foregone because the government decided to spend it for you); more debt, which will also depress demand but only when it needs to be repaid at some point in the future; or any combination of the two.
Modern Keynesians (central planners by another name) argue that in the post-2008 financial crisis world debt should be the primary funding vehicle of enhanced government intervention, whenever possible with the assistance of central banks to avoid any adverse impacts on the private sector. They mean it. It was reported a few days ago that Paul Krugman, arguably the most vocal proponent of this line of thinking, recently advised Japanese Prime Minister Shinzo Abe not to raise consumption taxes - after the failure of that country’s unprecedented central bank intervention to stimulate the economy became obvious for all to see.
So to get out of the current economic funk we must yank up government expenditures and finance the whole thing with debt created by our central banks. If the economy fails to respond, we should stimulate more... and more… until finally things get back to normal. We can then deal with the consequences once growth is normalized, irrespective of the debt levels at that stage.
But since there are no free lunches in economics (that we all must agree on), somebody has to pay for this. And it should be obvious by now who that will be: our children and grandchildren (and at this rate, probably their children and grandchildren too).
Consider what's happening in the US. Here’s a chart of Federal debt owned by the public as percentage of GDP, past and projected:

US Federal Debt Held by the Public (% GDP): 1999 – 2039E
Source: US Congressional Budget Office.
Federal debt jumped enormously after the 2008 crisis and is not expected to look back over the next 25 years. This was the main driver behind the US’ increase in total non-financial indebtedness from 108% in 2007 to 154% of GDP by the end of 2013 (Z1 report, Federal Reserve). This of course excludes the unfunded portions of Medicare, Social Security and other contingent liabilities, which will add a great deal more of percentage points as they come due.
We are told that there’s nothing to see here. The debt capacity of an economy with a well-developed financial system is much greater than people think. This “resilience” is demonstrated by the historically low bond yields today, despite record government debt levels. Japan, with its government debt now representing over 230% of GDP, is paraded as the proof. If we all turn Japanese, so what?
The more accurate description, in our opinion, is to say that this well-developed financial system is a highly efficient mechanism to shift current debt burdens into future generations. And the further out the better, as that way the detrimental effect on demand from having to pay the bills as they come due is postponed. As Keynes noted, “in the long-run we are all dead”; that is true indeed, but much less advertised is the fact that someone will be left behind to pick up the tab.
And that’s a crucial point which is often lacking in the whole stimulus debate. Our ability to get longer duration credit materially declines once we hit 60ish years old (the banker knows that on average we’ll be lucky if we get to 80). Not so with governments. Why? Because there are whole new generations of tax payers who will become liable for those debts. Therefore, such stimulative policies can only work because they are effectively being underwritten by – or better put, forced upon – our young ones.
Seen in this light, we can certainly state that our current credit-driven economic “recovery” comes at the expense of the prosperity of future generations. Laurence Kotlikoff, an economics professor at Boston University, has been sounding the alarm on the dire state of intergenerational finances for years. In a 2009 paper he warned:
“For our children, the hour is getting very late to make the radical reforms needed to restore our fiscal and financial systems. As we economists know, the developed world’s fiscal operations have been endangering our children for decades. But governments have spent decades carefully concealing this fact. Indeed, governments have spent decades teaching their financial sectors the fine art of non-disclosure. In particular, governments have failed to systematically account for their treatment of future generations by spelling out what current policies imply for the future tax burdens of today’s and tomorrow’s children.”
More recently, Kotlikoff looked at the amount of tax revenues that would need to permanently increase or spending that would need to be permanently taken out of the current government budget in the US, so that future generations can enjoy the same benefits of Americans today on a tax-adjusted basis. We call this "intergenerational fairness".
His findings are presented in the graph below:

Permanent Change in Federal Budget Items Required to Achieve Intergenerational Fairness
This is telling us is that in order to preserve intergenerational fairness, the US government would need to either permanently cut its 2013 spending by a massive 35% across the board or increase taxes by a whopping 64% (“permanently” meaning that from now until such generations reach the front of the line to receive their benefits). This problem will only grow larger if left unchecked, as evidenced by the 2023 projection.
These numbers are enormous. Unsurprisingly, you will be hard pressed to find any references to this dire state of affairs in politicians' speeches. In fact, quite the opposite: everyone is clamoring for more “pork”. And the same goes for central bankers, who inadvertently have become the greatest enablers of this intergenerational transfer through successive rounds of quantitative easing (“QE”). Fed Chair Janet Yellen recently complained about income inequality, but said nothing about how unfairly future generations are being treated.
Americans are certainly not alone in counting on future generations to support their current lifestyles. Here are government debt levels in the Eurozone in recent years:

Eurozone Government Debt (% GDP): 1995 – 2013
Source: European Central Bank.
A substantial debt increase after 2008 can also be observed here; and Europeans also have to deal with ballooning contingent welfare liabilities. With all the discussion already raging across Europe about wealth transfers – within social classes, within country regions and even across countries themselves – one wonders when the young(ish) will enter the debate versus their elders in earnest. With youth unemployment remaining at stubbornly high levels in many Eurozone countries, it probably won’t be that far off.
And it's not just that debt loads are rising fast. In many Western nations there are now less kids around to pay for the whole thing. For instance, the number of newborns in Portugal just hit new decadal lows. There is little doubt that kids in these countries will struggle to continue to pay for their parents’ retirement, on top of all the debts we are already bequeathing them.
OK, but the argument is that if central banks and governments had not acted the way they did back in 2008, the world would have plunged into another great depression. That may be true, but who was responsible for getting us that close to the brink in the first place? Organizations in crisis tend to make the same mistakes as before, only faster and with greater intensity. The seeds of that crisis were sown many years before, just as now we might be sowing the seeds for an even bigger crisis in the future. Why should the kids have to pay for this?
Kotlikoff (and also Paul Samuelson before him) was warning much before 2008 that the burden of fiscal policy excesses is going to be unfairly paid by future generations. Nobody in the political and central banking circles seems to care; and frankly, neither do most of us in our societies. For one, we don’t recalling seeing any headlines like “More QE; Investors Cheer as Kids Are Screwed Once Again.”
In fact, given the way that we are treating the environment and our planet, going broke might be the least of their worries.
Therefore, let’s pat ourselves in the back because the Great Recession is behind us and US nominal GDP is up 16% since 2007 – even if the federal government debt is 140% higher over the same period (Z1 report, Federal Reserve). Let’s all hope the ECB, the Fed or whatever central bank of the day do yet another big round of QE; prosperity for all is just around the corner!
But above all let’s spare a thought for the children around us. They will need all the encouragement they can get.
So here’s to you kids, Happy Thanksgiving!
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Where you stand (on inter-generational 'fairness') depends upon where you sit (and retire).
I don't care what generation we are from. When our perspective is as broad as a barn door right up until we feel some 'pain', then we become real protective of our 'rights' rather than someone else's 'rights'......well, "We the People" have a real problem.
Fairness is relative and subjective, giving collectivists lots of room to abuse and twist it to their own ends.
Stimulation is for the erogenous zone(s). Government needs to stay far, far away from there AND financial markets.
"intergenerational fairness" is a dodge.
The bankster system is the problem.
Stay focused.
The bankster system is a creation of the governmentster system.
The governmentster system is a creation of the organized fraudster system.
The organized fraudster system is a creation of the human psychology system.
So, they will keep fucking us and our offspring until we fuck them. Bureaucrats have no place in a "free" society.
So what happens in the future when someone owes more than they can produce, if debt keeps accumulating?
MeThinks there's a snowballs chance in hell future debt is entirely collectable.
This argument is predicated on people needing government assistance... Fuck that, go out and secure your own future and stop relying on someone else to drop a plum in your mouth...
Intergenerational Fairness !!??
Who the fuck thinks up this shit!?
Espirit - Exactly. I expect debt restructure before 2020. When the rich can no longer grow which has recently begun happening things change. A lot of paper promises get broken at the end of such cycles. Why one should learn how to hedge bets with hard assets and be prepared for a harsh correction.
It may only last three months of intensity and be rough for a year afterward but I intend to still have a drink if I want one. Happy Thanksgiving, stay safe.
Where you stand (on inter-generational 'fairness') depends upon where you sit (and retire).
Congratulations on your new child.
We need all the new debt slaves we can get.
MalteseFalcon
"intergenerational fairness is a dodge".
Perhaps so but it enables the fraudulent banker system to continue unabated.
Theft is black and white.
I agree. Each new dollar created out of thin air to prop up a corrupt and failing system robs purchasing power from everyone. Govts are able to borrow at such low costs right now due to interest rate suppression, but the interest payments will absolutely crush us in the future. Older generations that are benefitting from it now don't care, but those of us under 50 will be paying the penalty of much higher taxes just to pay the interest on this debt, and won't get jack shit out of these programs. That's assuming any of this is even left standing after another 10 years or so.
Theft is black and white.
It's also intergenerational. In fact...we'll take both.
Can't really afford to be picky at this point.
Duplicate
If real 6-7% inflation is taken into account, the economy is 20-25% smaller than it was in 2007. More lies.
I just knew you were gonna say that.
I just knew your were gonna say hat.
.......https://www.youtube.com/watch?v=GFqyX09MmyA
Cognitive Dissonance
"We the People" have a real problem.
I am afraid you put it mildly.
We have a catastrophic human failure coming, because of our idealistic selfish sense of entitlement.
All while the elites and academics with their private dialect, con commonsense.
And the masses, with their relentlessly upbeat, become self-delusional.
“Inability to face the truth about oneself is all too common a feature of the intellectual culture… Noam Chomsky
EI, far too often, I don't understand the viewpoint you are trying to express. Here, I do. +1 for the Chomsky quote. He is one of the prime examples for my contention that at the far ends of the political spectrum, left and right meet; i.e. a circle.
Chomsky is controlled opposition. Read F.A. Hayek. Start with Road to Serfdom.
The circle spectrum you speak of is called Horseshoe theory.
https://en.wikipedia.org/wiki/Horseshoe_theory
The only thing Chomsky ever did of note was to call Obama out.....but of course....no one listened to him.
https://www.youtube.com/watch?v=A6Jbnq5V_1s&feature=player_embedded
“Intellectual dishonesty is the hallmark of the leadership of Austrian Economics. Nowhere is this more palpable than with their disingenuous, dishonest and destructive defense of deflation.” -- Anthony Migchels
disengage
Economic dogmas (theories) alongside religious delusions and political corruption got us in this mess
By falak pema
Economics is a means to achieve an end, like language.
So linguists are capable of understanding the logic of communication for DECISION MAKING; whether it be in words and intellectual concepts or in numbers/statistics and algorithms.
The issue here is that perfect markets like perfect speech do not exist for themselves in society, except for the "initiated", but have a different function as a VEHICLE for body politic; which defines the AIMS and uses the means, all the means : of language as of images and of statistics and mathematical constructs.
So the thesis of the Mises/Hayek type Shamans that Economia is the "be-all" of society is just wrong. No more than the works of Shakespeare or Hugo, or of Picasso etc.
They do not define politics and power in society. They may influence it but they don't define it's objectives.
Linguists like economists can add substance to a political construct that defines the power play in civilization. And in that respect markets are just a means and their perfection as important as a perfect face on the screen.
All imagery or conceptual work in life is virtual.
It becomes real when it faces the real world of power and its continual balancing act; facts and irreversible acts that define our future as they have our past.
Chomsky is more relevant today to society than Mises.
The first analyses real political acts and consequences the other confines himself to theoretical pontification about the real economy looked at through the lens which keeps referring to the mantra of perfect markets.
Not saying markets are not important just saying they are not ALL important.
For the Mises theory to become reality we would have to live in a perfect "anarchy" state without government. The last time they wanted the state to "shrivel away" it was called the "ultimate step of communism" and it parented Stalinism. So...you have to know what you wish for in the REAL world.
History says you are wrong. You keep harping about a system that has gone off the cliff twice because of market forces being spiraled into Vesuvian eruption under irrational exuberance and greed and thanks to lack of Government regulation : in 1929 and 2008.
You are into DEEP denial of historical FACTS.
The historical thread shows us neo-feudal oligarchs are just as destructive of wealth creation as are statist hegemonists.
The only realistic solution is to balance state power and private oligarchy power and make sure NEITHER is in dominant position by having transparent control of public and private spending and by ensuring due diligence and SANCTIONS.
Today we have a Mussolinian economy of crony collusion between statists and oligarchs. We have the worst of both worlds.
We need good state governance and non monopolistic private sector innovative investment, compatible with "general good", that does not run us off the cliff in mad speculation nor poison the planet.
The GDP should be run on an equitable basis between both power structures.
Whether this divide is 30/70 or 50/50 between private and public and how its used and how its controlled and monitored is the role of the Republic. And it should be debated and then voted and then executed in a legal framework which is NOT CORRUPT.
http://www.zerohedge.com/news/2014-08-24/you-cant-run-economy-spreadsheets#comment-5138074
As to your first quote, please explain the misallocation of resources and a solution within the fiat debt economy. The quote is pure bollocks. If you are willing to condemn crony capitalism, how can you ignore the misallocation of capital which is its' hallmark?
'Economics is a means to achieve an end, like language.'
Please explain this comment. It does not stand alone nor is it intellgible.
Austrians, for their many faults, do not deal in perfect markets. Any theoretical construct must use a base foundation for calculation. Just as the Keynsians use "equilibrium". In the application of theory, economists then deal with reality and how policy effects us. As Falek demonstrates his ignorance of Austrian economics, this does not mean we must go along for the ride.
Equating "perfect anarchy" (he falls into his own trap here, as no such thing exists) with communism is laughable. Last time I looked, communism is a form of State governance with laws and coercion. It therefore more resembles democracy than anarchy.
His historical reference to 1929 and 2008 show a remarkable ignorance of hstory and the movers of policy. Ignoring the removal of capital by central bankers prior to 1929 and blaming markets is irresponsible. Claiming regulation is the protector of markets ignores two hundred years of American history demonstrating regulation does nothing but protect the Elites and aid in the transfer of wealth.
Finally, you cannot "balance" state power, because state power is determined by the operators of the system- which is a club, and we aren't part of it. This is the promise of the "perfect" market of democracy. Ironic isn't it? Thinking a perfect market exists when it suits him?
All existing governing systems appear well suited to the continued slavery of mankind. So, why should we attempt to fix any of them? Should we not seek out a different solution? Or no solution? Does the selling of products in marketplace require an economic system? Do you need to elect someone to tell you what to do- even if it means incarcerating you or killing you or stealing all the fruits of your labor?
You only need to fix a malfunctioning entity if it exists.
zhandax
Glad that you understood that the issues we’re facing are much larger than education, economics, and politics can solve. Actually, their solutions (more complexities), from the stage we find ourselves in, it will only make matters worse.
And English is my second language that I learned by living in America, that I call home and where I am going to die.
Glad that you understood that the issues we’re facing are much larger than education, economics, and politics can solve
Cut to chase bitch......what are the initial cult fees gonna cost me?
if you can find no work that is life enriching, has a purpose and produces goods and services for a healthy economy..you get ferguson and hundreds- no thousands of communities accross the globe like it. despair and poverty, no moral codes ,no functioning society..automation, large populations with nothing to do poverty for most and immense wealth of very few..for thugs this works (police, tsa, cia,nas...) as safty of the elite is the only growth industry and oh service of high value to the elite need those mega yachts and haute cuisine.
“… as species, as culture, we’re significance junkies” -- Carl Sagan
Our time bombs are demographics and mysticism (ignorance, misinformation, and indoctrination).
The trigger will be not enough energy.
The delivery systems are language by the (religion, political, and economic) demagogues.
And the hiding place of all of these nonsense that we cannot overcome? The immeasurable coils of our DNA.
“Deception, machination and mendacity lie at the core of human intelligence, like worms coiled at the core of a apple” -- Mark Rowlands
Let me suggest you consider this: you are a significance junkie. Mark Rowlands probably needs to stop eating spoiled fruit. I'm sure he identified with deception, machination and mendacity because he saw them in himself. Then proceeded to project them upon everyone else. Most apples have no worms whatsoever.
Your definition of mysticism demonstrates more ignorance than imagination.
Instead of living in the "language" (read propaganda) of others, might I suggest reading?
Beliening the lies is at the heart of Cog. Diss, in the Land of the conned.
:-)
Dear heart "I don;t care what generation we are from"
I kindly put forth that it matters not your generation.
We are life. We are reborn in some form of universal energy that extends back and forth from the Big Bang and into the infinite future. it is said that every atom in every living being (human, plant, animal, flora/fauna, UNIVERSE) is connected.
So barn door?
Pain is a largely human defintion in many ways of frustration of not finding the easy way out. And lack of any spiritual education to our true natures.
So yes it is the self-focused avoidance of any "pain" that motivates greed and distorts any core guidance of the soul to act in an honourable fashion towards other life forms.
So what does that have to do with the price of peanuts? Lots.
It boils down to massive delusion that runs the planet's future. Parents are willing to sell their souls to lie and cheat their offspring into better schools. The rich act like homeless "folks" and worse (far worse) by thinking that the next dime they possess may be the last. People are willing to lie/cheat/steal from neighbours and family for anything and then boast online...about cheating and raping ..
Pyschopaths fed by pyschopaths. NO wonder the Dalai Lama announced he was choosing not to reincarnate this go round.
Tibet is the only society on this planet that I have awareness of where the "warlords and such" willingly ceded power to spiritual rule. And before everyone jumps on this....tell me another place on the planet that even came close.
Tibet (not Wall Street and the FED or Obama or Hilary or Comcast or Putin) are the crime of the century.
And it kinda says it all.
He can't reincarnate because China stole the next lama in succession. The chain was broken.
Tibetan 'buddhism' is a cult, it is not buddhist. It is a cult that enslaved a nation under theocratic feudalism. The theocratic caste ruled over the serfs and demanded children as tribute for their paedophilic desires.
The Dalai Lama does not have a Buddhist bone in his body.
You just bought yourself several millenia in purgatory for that bullshit spiel. I'd stop there if I were you.
Human beings lack the capacity for major forms of originality. "Celebate" pedophile priests who wear funny hats and long robes can be found everywhere. The dalai lama is a fraud, just like the pope.
Never underestimate the divine cosmological significance of an elaborate hat.
Don't worry about it. They are never going to pay back the debt, they are never going to pay the interest, they are never going to pay any of it.
Every year they borrow or print enough to pay the interest, enough to pay back the loans that come due, and enough more to make them feel all right.
Where it ends nobody knows but then, nobody thought it could go on this long. Maybe it will never end or at least not in our lifetimes.
Well said. If you can keep everyone's attention on fixing something, they remain too invested to junk it.
Also, the author failed to point out an important point: the government has NO role in economics. Which should lead you to: does it have a role at all?
Human cooperation is the only governing source we need. There is a reason the Elites do everything they can to frustrate it.
Oil down $1.50 this am. That's gonna screw up someone's Thanksgiving.
Got Gold?
https://www.youtube.com/watch?v=IGYaFMFU63U
I would much prefer if we could start freeing up capital by crushing the real estate bubble.
This to me is literally "the whole load of bullshit." Nothing as stupid as a trillion dollars is complicated...though certainly I have enjoyed pondering "the great alien wars we might be losing here."
In all seriousness tho...this simple sentence is all "this" is. And of course...race riots aside...everyone knows this is absolutely and empirically true AND "we're doing it again."
In short "to get the consumption boom you have to lever the lawnmower to at least a trillion.". CRAZY.
And of course the " system" cannot succeed because a house is a liability not an asset. But of course this was known at the end of World War II.
"They was all Grubered."
Pay for what? The grossly inflated nominal dollar value of debt and future unfunded liabilities that are going to be rationed and defaulted on? Grandma is going to be eating dog food from a can after blindly paying into a system for decades that she believed was going to be there for her. She fell for the bullshit.
Grandma and Grandpa are already working at McDonalds. Yeah, they never had it so good!
Gwar5 - +1,000
We could all give thanks that the holiday is taking our attention off the fact that America's National Debt stands poised to hit 18 trillion dollars in the next two weeks. While we continue to hear from the media how robust economic growth has helped push the U.S. budget deficit down to the lowest level since 2008 we can also be thankful things are not worse.
Claims of the sharpest turnaround in the government’s fiscal position in at least 46 years are targeted at reassuring American that Washington has got our back. The ugly truth many people choose to ignore is that starting in 2017 entitlements will become the driving force and carry the deficit in to nosebleed territory. Any claim that the Obama administration has the budget deficit back under control is a total lie. We are mired in the mist of the greatest government debt bubble in the history of the world. The article below looks into the risk that with the artificially low interest rates many people seem to have little desire to do anything about this.
http://brucewilds.blogspot.com/2014/11/deficit-poised-to-top-18-trillion.html
Fuck you, Spam-master.
BTW: Your blog sucks dog ass.
"But since there are no free lunches in economics (that we all must agree on), somebody has to pay for this. And it should be obvious by now who that will be: our children and grandchildren (and at this rate, probably their children and grandchildren too)."
Wrong answer!
I did not sign any loan documents, as borrower, or cosigner, on behalf of Uncle Scam. My children and grandchildren certainly did not.
Sorry, must have been someone else. My lawyers of the firm, AK, AR, and Glock, concur.
An American, not US subject.
The most powerful weapon the American people have is Rejection.
The system of fraud and theft that has been built up upon the backs of the American people is dependent upon our backs. Withdraw our backs, and the whole scheme collapses. This is our greatest weapon.
Stop Paying--Put it into food, and precious metals, etc. They stole whatever "debt money" they loaned you in the first place (fractional reserve banking) and soon you won't be able to pay them anyways, so Stop Paying.
Stop Obeying--If they are in violation of the Constitution then they are not legitimate anyways, so Stop Obeying their unlawful dictates.
Stop Playing--Stop being a tool for them to use, mock, and call "stupid." Stop Playing.
The Four Rs
Rejection: Stop Paying, Stop Obeying, Stop Playing.
Revolution: It is inevitable, so prepare, as they are.
Retribution: The guilty must answer for their crimes against the American people and the Constitution.
Restoration: Restore the American people, country and Constitutional republic.
"The most powerful weapon the American people have is Rejection."
Exactly, aka, repudiation, as what can't be repaid won't be repaid.
And when all of this finally starts to sink in, the utter futility of the USG will sink in as well.
It's just a matter of time:
http://www.cnbc.com/id/102021344
Who holds the government debt?
Here's the cool part about that.....it's not the government.
All we have to do is say FU....and it's over in a flash.
Correct. Were the Germans still paying WW1 reparations in 1989? Were Spaniards still paying King Philip's debts last century? How about Iceland and their bankster debt? No, because repudiation!
No, the Germans weren't paying WW I reparations in 1989. But in 1989 they certainly were paying WW II reparations to Israel and survivors of the concentration camps.
If I'm not mistaken the Jewish State is still shaking Germany down for more. And it's the grandchildren and great grandchildren of the nazis who are paying taxes to pay them. The six German subs, of which Israel has recieved 3 or 4, were sold to them at below cost. I think the Jewish State paid the rest on an interest free, no money down loan.
These are the 18 Israeli billionaires
1 Eyal Ofer $7 billionZodiac Maritime Agencies, real estate, shipping
2 Idan Ofer $6 billionIsrael Corporation, Ofer Brothers Group, drilling, shipping
3 Stef Wertheimer $5.3 billionInternational Metalworking Companies, tools
4 Shari Arison $4.9 billionBank Hapoalim, Carnival Cruises
5 Arnon Milchan $4.6 billionMovie making
6 Yitzhak Tshuva $3.5 billionEl-Ad Group, Delek, real estate
7 Beny Steinmetz $3.5 billionMining, diamonds, real estate
8 Dan Gertler $2.5 billionDan Gertler International, mining
9 Teddy Sagi $2.4 billionPlaytech, gambling software
10 Alexander Mashkevitch $1.9 billionEurasian Natural Resources Corporation, mining, metals
11 Gil Shwed $1.8 billionCheck Point Software Technologies, software
12 Shlomo Eliahu $1.4 billionInsurance
13 Marius Nacht $1.4 billionCheck Point Software Technologies, software
14 Shaul Shani $1.3 billionSwarth Group, technology
15 Lev Leviev $1.3 billionAfrica Israel Investments, diamonds
16 Mori Arkin $1.2 billionArkin Holdings, pharmaceuticals
17 Zadik Bino $1.1 billionPaz, banking, oil
18 Morris Kahn $1 billion Aurec Group, softwareDISCUSS
f**k the poor
http://www.youtube.com/watch?v=rYqF_BtIwAU (0:21)
Literally or figuratively? Are "the poor" hot? Are they mind numbed bots who drone incessantly about their income inequality and how unfair life is thereby ruining any possibility of sex? "Waaaa..... waaaaaa.... waaaaa... waaaaa..." (repeat until death)
Things never change.
Honestly/ Without reading the article.
That's 99.999999~ percent of America
Every generation has their qualms. The people that decide, no matter how young or old they are?
These people make concious decisions to help others through our flawed social conduits.
Am I wrong?
Yes Sir you are skewed.
Your definition of conscious and mine are different. Generational qulams? WTF? another code word for lack of self knowledge. No matter how young or old you are it is astounding that any real self-awareness is actively denied...and the resulting "mental illness" is called "being adjusted and successful"
It is the matrix lie being sold.
But I am an artist not a Wall Street banker so wTF do I know?
We don't have enough gas in the car to drive the next 100 miles to the gas station. No problem, floor it and we'll get there before we run out......
Highly unlikely... Based on your comments you're " Tall hat~ no cattle".
Is that like "making it up on volume?"
Bezos is good at that
The government can quite easily stimulate the economy. Simply SHRINK the size and scope of government. Economy then takes off.
Quit strangling businesses and people with burdensome, overzealous, regulation, paperwork, and taxes to be sent back out to your contributors. Allow people to prosper.
We indebted some folks.
Twenty or Thirty years from now, the grandchildren will be earning a salary that will rise as the dollar collapses. The savers (seniors) will watch their savings confiscated or cut by half as the dollar collapses. Tax rates will rise - much faster than senior incomes. Social Security and all government entitlement programs will suffer from years of under-reported compounded inflation. Real costs of health care will have to be paid - and by the sickest and oldest. Pitty not the children and grandchildren - they shall have revenge!
The point being, stop going into debt, stop QE, phase out SS and any other programs that are defunct.
Stupid article.
Calling Keynesians Central Planners is just plain stupid.
Call them Keynesians. Do not disipate what they are. They are getting future generations to pay for profits now for the .1%'ers.
When TSHTF, and it will, we need to stick a knife into that corporate prostitution program and kill it for good.
"Therefore, let’s pat ourselves in the back because the Great Recession is behind us and US nominal GDP is up 16% since 2007"
Too stupid to respond to.
obviously, you have not learned history.
A reset only starts it over again to repeat. It never gets killed for good because there is always government that facilitates it.
You, and I and probably others, only want it to get better while we walk the earth. That way we can say things are good, we solved the problem. The truth is the problem has existed for thousands of years (way before these corporate gangsters) and is yet to be solved.
Cutting to the chase in this article -- it's the deficit, stupid. And if you look at various countries, they all have a natural effective tax rate as a percentage of GDP. In the US, that rate is about 20%, and maxes out at 25%. We had Nazi's about to take over the world, gotta win WW2 level crisis happening in the the 1940s, and we just cracked 25%.
The natural rates are a little higher in Europe, but the fact remains everywhere, that there's no possible way to sustain the spending.When tax rates are increased to push the effective rate over this limit, people work less or actively avoid taxes.
I figured all this out in the mid-90s and started stacking. If you go back and read the news, people figured this out during LBJ's war on poverty, though obviously the Fed and FDR laid the groundwork and Nixon sealed the deal.
Rest assured, a bleak future filled with starving, homeless old people is cast in stone, the deck chairs being rearranged just changes the start time by a few months.
For sure:
"In fact, given the way that we are treating the environment and our planet, going broke might be the least of their worries."
The irreparable destruction of the natural world will trump the irreconcilable social polarization over the longer term. The full price of the industrial revolution being controlled by systems of legalized lies backed by legalized violence, which enabled attitudes of evil deliberate ignorance, could quite possibly become the extinction of the human species. I.e., the full inter-generational price could turn out to be INFINITE.
It is ridiculous to talk about "fairness" when the real systems have become globalized electronic frauds backed by atomic bombs. Controlling civilization with systems of lies backed by violence, after the industrial revolution has amplified those by trillions of times, means that perhaps the only cosmic "fairness" left will be that the human species thereby commits collective suicide.
IF, IF, IF future generations are going to survive, then they are going to have to go through profound intellectual and political revolutions, which would make everything else that ever happened before like that in human history look relatively trivial and easy by comparison!
If QE 4 and the Ukrainian coup are the current state of the evolution of the human species, and the mass misery it must endure, is extinction really such a bad idea?
And if some of us are caught up on whether sooner is better than later, I think we can talk them over to the other side.
A very great man said "The rest is silence," and that sounds pretty good to me.
ALL YOU zh MUTHA FUCKAS.
wHEN I WAS JUST A CHILD AT THE DRIVEI IN.
dIG THIS THE MOST FOR THANKsgiving.
https://www.youtube.com/watch?v=kttCi2jOcOo
"The vigilante is an enemy and a criminal to the privileged of society, but he is chiefly, the servant of the people".
Best place to be a kid, by this standard, would be Russia:
http://www.tradingeconomics.com/russia/government-debt-to-gdp
Whatever your classroom teacher or you whoever taught you.
You are lying to your self, if you do not see the banksters were forerer against feisty, honorable ladies.
Or maybe Southern ladies of iron.
Believie all of that, even soberly.
Lawd help y'all.https://www.youtube.com/watch?v=GFqyX09MmyA
https://www.youtube.com/watch?v=_ojRQ15My7s
It is not happenstance, it is a plan.
Wiemar Germany and the follow on.
excellent video here by Grant Willaims on the economic madness that now exists and its ultimate consequence. A must watch.
https://www.youtube.com/watch?v=MdOaLsEVPeA
We need fewer "bright young economics students" and more bright young farmers, homeopaths, fisherpeople, miners, engineers, and assasins of bankers, congresspeople, and other worthless rodents.......
Neither I or my children are obligated to pay the debts contracted between corrupt politicians and criminal financial institutions.
Of course you are, and of course your children are.
Anyone who doesn't pay their taxes gets stripped of their assets and a lien placed on future earnings until the bill is paid. They may even get thrown in prison for a few years, as a deterrent to others.
You may not like it (I don't), but that's how it is and has been since human civilization began.
In earlier times, if you didn't pay your taxes the King would send his goons over to confiscate your belongings and lop off your head. Today we have the IRS and a complex legal system backed by law enforcement. The methods of collection have evolved, but the taxes remain.
"In this world nothing can be said to be certain, except death and taxes." Old Ben Franklin knew the score.
exactly
You or your children will not be directly repaying that debt. All of us will be "repaying" that defaulted debt indirectly through salaries that lack purchasing power and lowered standards of living, including poor health and shorter lives. The collapse may be gradual or happen suddenly.
If the previous generation sells out the next, then the next will need to sell out the next two, and the next two will need to sell out the next 4 or 8 generations.
Until the system crashes.
^^..
It won't take generations...according to the slope of a lot of these debt charts and (lack of) growth charts, we will likely see "The Crash" pretty damn soon.
It's crackling in the air now...in the headlines, in the gold repatriation CB panic, in the behavior of people. The seizing of any thread of an excuse to explain why economic "growth" is so tepid and the trumpeting of the smallest "green shoot" into growth ad infinitum are not accidents. They're the hallmark of desperation.
Extrapolate our problems out worldwide - the debt levels are like this everywhere - and the ingredients are all in place for an historic wave of defaults.
We are not immune to the consequences of human foibles or artifice.
somebody has to pay for this. And it should be obvious by now who that will be: our children and grandchildren
People like Krugman dont give a shit if our children have to pay for this debt because Krugman does not have any children. He has no idea what it is like to be responsible for someone elses future and well being.
http://krugman.blogs.nytimes.com/2007/12/19/about-my-son/?_r=0
Well, now for the tradtionial Pre-Thanksgiving three hour fight with the wife. It started yesterday when I got I call with a job that offer. Full benefits and everything else. I have been looking for that kind of job for two years now and thought it was good news. The women don't like the whole idea. There really are not that many jobs out there like this but the female laid it on me and I gave it right back. The issue us that we might have to move.
Fine then woman. I would still drive to that job anyway. Later on the fight escalated a bit. The wife does very well with finaces. There are a a shit ton of jobs out there that reqires a series 7 license. It went around for longer but she asked if I really knew anyone with a Series 7 license. I told her that I could find out about it. She won't refuses believe in herself so we looked it up and then she said that she could not offer investment advice. I hit hard back by stating that "No one else can either so why worry?"
I told her that it is simple, it is only stocks, bonds and ETF trades. Then she hit me with "Why don't you get that license?" I replied that I am just a simple farmboy and that knew this. The more she read about the series 7 test the more she was interested. I already have a wallet full of this or that license. What do you have to do for this one? I told my wife that I would with do it with her if that it is what it takes.
Well, I have to do it now if she will do it. I said I would and if you know me you know that what I say I'll do I will do. So what am into here. I understand the stock an bond markets. How hard is that test? I looked online but that was not conclusive. Are there other tests that I would to take? What should I be studying?
Spelling and grammar.
Sin tax (sic) and narrative flow
You got your wife to do something she didn't want to do. That is quite an achievement!
They'll be perfect banksters.
In ordr to make sure this debt gets paid off, O'mana has issued an executive order outlawing abortion,masturbation and bj's
Well the whores are going to be popping out babies like crazy!
Revolution wipes out all debts and all paper assets.
The country has done it before. Just about all countries have actually, it's tried and tested. 238 years was a good long run.
The problem with wiping out debt is that we own 70% of that debt. The rest is own mostly by the Chinese and Japanese. Since modern fiat currency is back by debt not gold, if we wiped out the debt, we would also wipe out the dollar.
Central Banks Made Lousy Jobs, Soaring Tax Collections, Bad For Most, Good For Bubble Markets
http://investmentwatchblog.com/central-banks-made-lousy-jobs-soaring-tax-collections-bad-for-most-good-for-bubble-markets/
Forget oil. The US will start invading foreign countries to tax their citizens next.
Here is a book chapter that examines how bad financial policy, loose money policies, hihg youth unemployment, immigration and radical Islam may cause a civil war in Europe and an ISIS style caliphate by as early as 2017.
https://eurocivilwar2017.wordpress.com/
I believe this all will be settled fairly by the following series of events. The west is bankrupt and soon will default. After the default all debt public and private will be forgiven. All fiat cash,401K, etc. will be converted to a new currency at a likley exchange rate of 10 to 1. So the more debt you have the more you will be forgiven. The more cash you have the more you will loose. A loan is essentailly a hedge against the default. We also should be preparing to start over financially.
Cheers
On an unrelated note, Happy Thanksgiving ZH members. Keep pushing the envelope, the WH trash will end up in the shredder.
Lying for money and your chicks for free! Thank God they didn't let GM go under, that would have been HORRIBLE! When the fed started unlimited printing of money we instantly became a nation of have's and have nots. If you're a have not, it is imperative that your attention be diverted to Ferguson and you become embroiled in this black/white bullshit. We simply cannot have you peek behind the curtain and see the real animals who have perverted an entire economic system for their own personal gain. You can, however, periodically spot them and their agenda, like the NYT releasing the officer's addy. They must keep this race pot boiling such that your attention is fully diverted form their gigantic theft.
It is my posiiton that the issuance of debt is essentially the equivelent of taxation. After all I have two ways to get funds form you, I can tax them or borrow them from you. Its essentially the same thing. The bet that we make when we borrow them is that inflation will cause the transparent repayment ofthis debt without it becomming a burden on a future generation and hopefullythe cost to carry does not outstrip the inflation rate. The bet is the issue that occurs if we dont get inflaion. This is pretty much the situation with oil today. Everyone figured that oil was on its way to $250 per barrel. What happens if this doesnt happen? Right, we have a mess. BTW this mess is on its way.
I have been reading Zero for ten years. The articles are interesing but the predictions have all been wrong
10 years? Surely you exaggerate :)
Predicting the future is an impossible task, a fools errand, full of pitfalls. Still we listen and soak in all that is said, we even spend a tremendous amount of money to gain an edge in knowing what maybe just around the corner. If you step back ten years in your mind, I suspect that things have not unfolded as you might have predicted.
When you see how the world has developed, the twist and turns are most unpredictable. Nowhere is this more apparent then in the economy, whether it is in the areas of interest rates and inflation or the rise and fall of companies. Surprise and awe, highlighted with bouts of shock is what we should expect going forward. More on the subject of predictions in the article below.
http://brucewilds.blogspot.com/2013/06/predicting-future-and-hindsight-mirrors.html
Happy Thanksgiving ZHers!
To make things worse an American born in 1945 can expect nearly $2.2m in lifetime net transfers from the "state" far more than they pay in, and far more than any previous group. A study by the International Monetary Fund in 2011 compared the tax bills of what different age citizens pay over their lifetime with the value of the benefits that they are forecast to receive.
To put this all in perspective remember if someone works for forty years earning an average of $25,000 over their life they earn only one million dollars. The boomers are leaving a huge bill. Those aged 65 in 2010 may receive $333 billion more in benefits than they pay in taxes.This is a heavy burden to place upon the young. The article below delves deeper into this subject.
http://brucewilds.blogspot.com/2013/03/the-young-will-be-burdened.html
This is my personal take on "public" debt. It ain't mine. You won't find my signature on any contract for it. My kids are too young to sign contracts that don't exist anyway and I don't know how "future generations" can sign any debt contracts without getting born first. So I won't be contributing to no "debt repayments" anytime in my lifetime.
I'm affected like everybody else because productive supply chains are shutting down (called mainstreet economic decline), and destroyed, and the productive skills people have are going away, because the don't need them if there is no supply chain to use them in. So the funny munny debt scheme has removed the machinery needed to create wealth because we now have hoards of parasites looking over our shoulders saying, "oh you made some money, even though we fucked up your money making system (via regulation and tax confiscation), anyway give that to me, please, or I will imprison you, because we have public debts to pay, and thank you for your service and contibution." Sure dear, I'm just itching to run out there with what little real captial I can rustle up, get stressed out running around like a headless chicken trying to make a buck in this banker/bureaucrat environment, to have a parasite pitch on me and say, "oh goody you made some money, give it to me now" after he has done his best to "help" by making everybodies life in a productive supply chain untenable.
You know even if we use funny munny that has not hit the Zimbabwe crackup boom stage we could Gresham's law it away to settle our real world productive transactions and generate then store wealth in real things like gold, silver, real estate, diamonds, bitcoins, art or whatever people want, use and trade for. Funny munny that is declining in value is not a store of wealth, it is a hot potato business transaction facilitation tool (medium of exchange), that still has that use only because a mob of idiots believe its money or have no choice in the matter of using it. But now, because of "austerity", with the tax more and regulate more to support tax confiscation, the supply chains are shutting down because no speculator/entrepreneur wants to become an economic tax slave, jumping through bureaucratic regulatory hoops all day long, to sell dead broke consumers. And thats the real problem.
There are other minor problems associated with public debt like the NWO trying to accelerate their world slavery agenda towards the sociopathic vision of a fascist/feudal world society, the death and brutalization of millions that will ensue, and maybe one of those numerous cute little conflicts becoming WWIII. I can't do nothing about that though except a little prepping, praying and hoping.
But future generations paying off debts? Don't worry about that, it aint' going to happen. Unless a debt is supported by real world hard collateral it dies with the debtor. However if you tell me there is going to be a default and anyone who holds "wealth" in fiat denominated digits and scrip, will find themselves unable to trade that for anything real, I would say you are on the right track.(take money out of bank, save the 401K in something real and under your personal control). If you say maybe there will be no future generation because WWIII did happen, or if it did not happen we now have a feudal society where we rent all resources from the king who owns everything including us, or that we will still have a mongrelized mixed economy where the free market portion supports the parasite portion (like it does to a diminishing degree now) but by then the debt was monetized (crack up boomed inflation) out of existence anyway. I can identify with those outcomes, but paying back the "public debt", I don't give a fuck about that debt, and individuals like me matter, because we are not paying it back. And as for my 7 and 10 year old I can confidently assure you they don't give a flying fuck about the debt. Those of you holding fiat scrip, digits and such, be you oligarch or commoner, you are on your own with that shit.
messy
How do you respond to the State's charge that you and your family and others like you avail yourself of many of the benefits and resources that that debt bought?
To rescind the social contract just invites terrorism and anarchy?
And you do not have a the net worth to get a resident's visa to New Zealand?
Every time you buy a chocolate bar you pay the government for God knows what. Every time you drive on the road you pay a toll. I don't want nothing I don't pay for and nothing I don't earn through trade. I certainly don't want non of the stinking governments stolen lucre. I don't want non of those parasites asking me questions, I didn't sign Rousseau's social contract, and the only real terrorists are in the government, and the sociopaths behind the veil that run them.
As for net worth to go to New Zealand, I am not advocating making yourself a target by trying to wake up sheeple. Create a low effort low intensity camoflage profile for the parasites, they like when you fill in their stupid forms, but let your real life be off the grid. Invisible sheltered assets, private peaceful living and trading away from crowds of increasingly desperate people. Organize a more relaxed, less consumer/hamster on treadmill life for yourself, and watch the show. You would be doing your bit for yourself while helping to starve the beast, and you can do that right in the USA if you put your mind to it. All kinds of people live that way and have written how to books about it. Eventually this thing is going to break down and the sheeple only grow fangs when their belly is empty so leave the future consequences to the sheeple and their "leaders", they will work it out between themselves.
God bless, messy state.
History and the facts of life today militates against a satisfactory outcome for you. I hope it is not too harsh for your 7 and 10 year old. Right now the government agencies who ordinarily would be on your case have bigger fish to fry.
But once the military coup removes the powers from the Whores of Congress, the SCOTUS and the POTUS, those agencies will be freed and well equipt to go gunning for you. I hope you have the survival skills of Bear Grylls.
After that evil day is come and you and your family are on the run, I will remember you in my orisons.