Guest Post: Are We Headed For A Second Recession?

Tyler Durden's picture

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-Michelle-'s picture

Never left the first.

the not so mighty maximiza's picture

thats what I was thinking, can you have a recession within a depression?

ratso's picture

The second recession will be a certainty if Boehner follows through with the"Destroy Obama Agenda' of the rIght wing of the Republican Party.  

They would rather destroy Obama than do what is right for America.  Such hatred can never address the problems we face rationally and logically.

BRING OUT THE CAKE!

redpill's picture

Uh, if the "Destroy Obama Agenda" and "hatred" is the political euphemism for living within your means, then I guess you can count me on board the hatewagon.

 

ratso's picture

If you are not one of the millionaires/billionaires who pays too few taxes then, my friend, you have drunk the Kool-Aid.

V in PA's picture

Wow! You're troll abilities are not high enough to comment on ZH. You need to level up and drop the obvious DNC talking points.

ratso's picture

No talking points coming from me- just the facts.  

If they look like talking points to you, you better check to see how much Kool-Aid you've had today.

redpill's picture

What facts?

The only fact that matters is that we have more debt than we'll ever be able to pay off. If/when you finally wake up from your daydream full of infantile rhetoric maybe you'll realize how utterly irrelevant your slobbering loyalty to a political party really is.

But probably not.

ratso's picture

Since I am not a member of a political party, I will consider that you have have no idea what my motives are or who I am.

The US had a higher Debt to GDP ration following WWII and we somehow turned in a stellar performance in addition to funding the Marshall Plan.

The US has plenty of life left in it as well as the abiliity to rationally address the debt problem once cooler heads prevail.

redpill's picture

You obviously don't have a clue about the structural state of the US economy today if you think it is remotely comparable to conditions following World War II.  Instead of logging onto this site and telling people they are "Kool Aid drinkers" you need to read more about how we wound up in this economic situation to begin with.  If there is anyone who is deluding themselves with sugary beverages, it is you.

ratso's picture

Didn't they ever teach you in your Philosophy Class that 'ad hominum' arguments are invalid and reflect more badly on the maker of the argument than the recipient.  They reflect a lack of content and skill in the author.  It that fits you wear it in good health.

redpill's picture

Actually one of my degrees is in Philosophy. The term is "ad hominem," by the way, and my statement was no such attack. I don't know whether you're a piece of shit or an angel, nor do I care, I wasn't commenting on your character, rather I was merely pointing out your ignorance of the structural nature of the US economy based upon your claims that current conditions are analogous to those following World War II. That observation is topical and relevant, as you couldn't be any more wrong. Although it's difficult not to dwell on the irony of someone crying "ad hominem" after they have waltzed into the thread decrying "kool aid drinkers" with whom you disagree. You're dismissed, class convenes tomorrow at the same time.

ratso's picture

"Kool-Aid drinkers" is not an ad hominem argument - thanks for the spelling correction. It refers to an entire mind set that accepts without scrutiny the right wing agenda whether it is helpful to them individually or not.  It is a mind set that bases its conclusions on preconceived ideological concepts and then reclassifies them as some form of "structural" analysis.  

JimBowie1958's picture

It is ad hominem since you are debating the motives and 'mind set' of the person you are arguing with, thus attacking the messenger.

As to your claims about the economy right after WWII, we had the only 100% intact industrial base in the world and could afford the expenditures. We also were growing markets that would buy our products with these programs.

Today, the added government spending is on top of already huge tax burdens far higher than in 1950, and much of it goes to dead-end welfare (corporate and private) and waste/fraud.

There is no valid comparison.

redpill's picture

Not to mention in those days our economic growth came from actual production.

Today our "growth" comes from consumption.  And that sounds like a contradiction because it is.

ratso's picture

Well, we now know that you didn't major in ecomonics.

WaterWings's picture

You say that like it's a bad thing.

ratso's picture

You get an F in your logic class.  Try reading the book again.

Western's picture

Your mom got an F last night.

Nikola Tesla's picture

Oh yeah, you've got that huge manufacturing industry, oh wait. That's in China now where the wages are cheap.

But you've got loads of oil and don't have to import any, oh wait, you peaked in 1970 and use 25% of the worlds oil.

 

As soon as the US $ gets removed from oil your game is over.

 

Those who are, or at least believe, that they or their country are at a great height have far further to fall than those of us humbled by how fucked up the situation really is. Come down to Earth and grow some crops.

Bringin It's picture

Agreed.  Grow some crops.

But now I see I can give you the green.  So there you go.  Nice improvrement.

JimBowie1958's picture

But you've got loads of oil and don't have to import any, oh wait, you peaked in 1970 and use 25% of the worlds oil.

We also produce $17 trillion in wealth out of $61 trillion globally, which means we produce 28% of the worlds wealth.

Sancho Ponzi's picture

Comparing today's economy with the post-WWII economy is unrealistic, and here are four reasons why:

1) The end of cheap oil

2) Global labor arbitrage

3) Demographics

4) China

 

Bagbalm's picture

Not to mention the manufacturing base in Europe was destroyed.

bigmikeO's picture

Hey ratso, I have an idea - let's tax the millionaires and billionaires at 100% tax rate (take everything they have and throw their asses in jail) - sound good?

Oops, wait, that would only pay for 1/3 of the deficit spending for 1 year under Obummer. Hmm. 

Hey I know, why don't you write a personal check to the treasury and ask them to apply it to the debt rather than trying to steal other people's money? Or move to Cuba, I'm sure they could use another "open mind" mini-dictator.

TheMerryPrankster's picture

I like your thinking, your halfway there. The key is after confiscating or taxing  high net individuals, the government has to declare bankruptcy. Clear all debts off their books and have a tremendous surplus thanks to the low debt ratio and the new high tax structure.

Then its only a matter of time to see how long it takes for the corporatacry to loot the treasury once again leaving us with nothing but angst.

The debt level of most citizens is untenable but pales in comparison to the state and federal debts.

Obviously that which cannot be sustained won't be sustained. We should be planning how to collapse it and save what we can instead of prolonging the agony by pretending it can somehow be repaid if only we could once again have infinite growth of all things except debt for everyone forever.

the problem with living in a fairy tale, is all fairy tales end.

Hmm...'s picture

Forget the fake Right/Left arguments.  There is no Right.  There is no Left.  Both parties are controlled by the same interests:  the moneyed elite.  This of course has worsened significantly with rulings such as "money = free speech". 

Both sides are trying their best to sell out the country to the highest bidder.  Make no mistakes.  Boehner vs Obama is about as real as a WWE wrestling match.  Do you REALLY think the Undertaker hates Stone Cold Steve Austin?  (sorry, it's been 2 decades since I watched the WWF, now WWE so I don't know the feuds).

Likewise, the Kabuki theater is all haggling about how to impose austerity on the masses and even better making the masses BEG for the austerity... in the end we will see SS cuts, Medicare cuts.  We will likely not see reduction in meaningfuly pork spending.  We most certainly will not see reduction in Military spending, Ag/oil subsidies, and other Corporate welfare.

The only difference is will we be sold to Big Oil (right) or Big Finance (Left)? 

AlaricBalth's picture

As long as the American people continue to allow themselves to be deluded by the false axiom of Republicans and Democrats being two separate and distinctive entities, those who wield the true power and utilize the ancient yet effective strategy of "divide et impera" will continue to reap the spoils of this war they are waging on the middle and poorer social classes. By creating divisions among the people and promoting discord, the modern aristocracy hinders the formation of cohesive affiliations which could confront and challenge their existing, self-serving structure.

SheepDog-One's picture

Baaa! Baaaa! 'Republicrats and Demicans'! Baaaa! Enjoy the puppet show sheeple!

gabeh73's picture

Thanks for explaining the situation to ratso. I know that many in this world are still asleep, but at least if you come to zero hedge you should have the god damned respect to not come in cheerleading for whatever stupid left-right theatrics the mainstream media is putting on for the public at the moment.

DonnieD's picture

Don't you have a 24% APR JPM credit line to max out on iPads and Hope and Change buttons?

SilverRhino's picture

You're a fucking idiot.  We've never gotten out of the first depression.   Government spending doesnt count.

Obama can solve this problem overnight by submitting a budget cutting 40% spending from everywhere. 

Seer's picture

But... it's not just PUBLIC debt!  Yeah, clear out public debt and we still have everyone unemployed and in massive debt.  And if you think that being out of PUBLIC debt will magically result in business booming and rehiring I think that you're smoking something.

Don't confuse canibalism with a Happy Meal (tm).

Dr. Richard Head's picture

I believe you are missing a key component of why that public debt was put into place.  The public debt has now been used to keep the creditors of the private debt in tact (Primary dealers primarily).  Back in 2008 Bush and Obama both pushed forward an initiative to keep the insolvent creditors solvent, so that the insolvent debtors (mortgages and credit card) could continue to remain insolvent. 

Considering the recent revelation from the audit of the Federal Reserve will bring into view an additional $16 TRILLION (http://www.infowars.com/the-federal-reserve-made-16-trillion-in-secret-loans-to-their-bankster-friends/), on top of the $5 TRILLION mentioned in this article, that was purely used to keep the banks solvent and the taxpayer in continued debt consumer and mortgage debt.  At the time of the 2008 crisis the American public held around $12-14 TRILLION in mortgage and credit card debt.  $21 TRILLION of taxpayer funds have been spent to keep the $12-14 TRILLION worth of debt on top of that same tax-paying public. 

The facts are simple.  $21 TRILLION (That we know of so far) was used to prop up the Primary Dealer banks, and their subsidiaries overseas.  This burden was shifted onto the public debt. The public remained in their own mortgage and credit card debt, payable to these same primary dealer fucks, and is now being evicted from their homes.

Had the right thing been done - liquidation of the bad debt - we could have recovered by now and business would indeed be booming.  Instead we have a kleptocracy that insists on diverting productive capital, as well as ledger created capital, to unproductive banks and wall street cronies. All of the while the public harnesses the losses incurred by those banks on top of being in continual indentured debt servitude. 

We were sold out and those that aren't paying attention are the problem now. 

Bringin It's picture

Good Doctor.  I wish I could give you another green arrow. 

those that aren't paying attention are the problem now.

Seer's picture

"I believe you are missing a key component of why that public debt was put into place.  The public debt has now been used to keep the creditors of the private debt in tact"

You may have been answering to the sub-thread's original, but... no, I have NEVER mistaken how this precipitated; yes, I was well aware from the very get-go as to what was happening, that it was a shift of debt from the private to public sector (and that the private sector is STILL fucked up).

But, this is all about counting Monopoly (tm) money.  It's all a side show to the great unwind that was ALWAYS to occur as a result of basing our entire economic structure on growth while constrained by a finite planet.  OOPS!  This is why the theives, who have always been among us, have become more open and brazen, for they too have felt the pressures to come out from behind the curtain to steal from us...

Kayman's picture

Bonuses all around Gentlemen, bonuses all around.

Popo's picture

34 junks and counting for ratso.

'Looks like the majority here are for responsible finances, an end to government largess,  and an end to public-sector salaries that outweigh private sector salaries by 30-40%.    

Ratso, on the other hand favors the public descending further into debt serfdom with policies that destroy the dollar.

 

66Sexy's picture

"We must keep the people busy with political antagonisms. We'll therefore speed up the question of reform for the democratic party,? and protection for the republican party.

By divinding the electorate this way, we'll be able to have them spend their energies at struggling amongst themselves on questions that have no importance to us."

United States Bankers Magazine, 1892.

"We must go forward, cautiously, and consolodate each acquire position, because already the 'inferior social stratum of society (us)' is giving unceasing signs of agitation.

Let us make use of the courts...When, throught he laws intervention, the common people shall have lost their homes, they will be more easy to control and govern, they shall not be able to resist the strong hand of government acting in accordance with the control of? the leaders of finance." US Bankers Magazine, 1892.

More like: BRING OUT YOUR DEAD.

rwe2late's picture

 The economy will continue to deteriorate regardless which PR team the plutocrats are publicly represented by,  whether they be represented by the red team, or the blue team, or a "compromise" of the two matters not.

The "economy"  is being ruined by lack of investment in proper physical infrastructure (water, sewage, transportation, agriculture, etc.) and malinvestment in warmaking, policing, imprisonment, environmental destruction, corporate and financial largesse. The inequities of wealth correspond to the inequities of political power.

The cost of providing so-called "entitlements" (like food, medical care, and shelter) is more than offset by the profits from providing poor nutrition, expensive medicine, and housing bailouts.

Nothing meaningful will change so long as the plutocrat-run corporatocracy  remains in power.

downrodeo's picture

We wouldn't even have to go there if we just would quit calling a spade a jackrabbit...

Norsky's picture

Very first thing that came to mind! 

 

Must have missed the exit sign with the first one.

redpill's picture

Give the nice lady a prize for she is correct.  A return to "growth" fueled by the Federal Reserve goosing the stock market with devalued currency was never, and can never be a recovery, rather it is only a temporary distortion of the data that when finally exhausted returns right back to where it was.

The reality is we need to let this economy reorganize instead of trying everything we can think of to preserve the status quo.  The more we try to preserve the false illusion the worse it will be in the long run.  It's rather like Michael Jackson and his plastic surgery.  He never should have started on the road to begin with, and by the end he was making it worse with every additional operation until his nose finally fell off.

Lady Liberty is looking like Joan Rivers these days.

Don Keot's picture

Redpill, you know they will continue until they can't.  None of them have the balls to admit it.  Did you catch Boehner's comment to Obama's speech.  He said his plan will "delay the default".  Was this a slip of the tongue?

Don Keot's picture

Redpill, you know they will continue until they can't.  None of them have the balls to admit it.  Did you catch Boehner's comment to Obama's speech.  He said his plan will "delay the default".  Was this a slip of the tongue?

Don Keot's picture

Redpill, you know they will continue until they can't.  None of them have the balls to admit it.  Did you catch Boehner's comment to Obama's speech.  He said his plan will "delay the default".  Was this a slip of the tongue?