In case you were unaware, Moody’s Investors Service put the U.S. under review for a credit rating downgrade. This is based on the dithering and gamesmanship being played in DC>

The government (meaning you and I) has bumped up against the $14.3 trillion debt limit, and political gridlock could lead to a default.

Whose to blame? Who is most at fault? What does this mean for the markets?

Its a Wednesday night open thread! Have at it!

~~~

What say ye?

Category: Markets

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

93 Responses to “Open Thread: US Put On Notice”

  1. GeorgeBurnsWasRight says:

    While I blame various politicians and the media, I think the blame eventually falls upon the voting public who have failed to educate themselves on the issues. My understanding is that fairly recent polls show a substantial majority of the public think there would be no significant problems from a default, and that if we don’t increase the debt limit this would somehow balance the budget without much difficulty. I’d hope this has changed in the past few weeks, but I doubt it. We get the politicians we elect, and increasingly only a handful of people vote.

    As far as the media are concerned, and this applies to politicians also, we’re in a negative-feedback loop. The media gives us mostly stuff that doesn’t matter. (The impact on my life of whether Casey Anthony was acquitted, sentenced to life, or executed is negligible. Yet there were networks covering the trial 24/7 and everyone else did one or more long stories every night.) But that’s where the eyeballs were. Of course, it’s cheaper and easier to cover a trial than explain more complicated things than the federal budget, so the media gravitates in that direction. And humans have herd-like tendencies, so we come to think that what the media is showing us is what must be important, and vice versa. Yet, if the public started watching serious programming, the media would provide more of it.

    Years ago Pogo summarized what I’m saying far more succinctly: “We have met the enemy, and he is us.”

  2. kscrawford says:

    The Republicans let the debt ceiling go up automatically for all the Bush II years. So why are they now suddenly saying this must go. Hey here an idea. The Republicans passed medicare part D. This was unfunded and raised the debt substantially. So why don’t we start with that. If they are so serious, then they should say we did this, we blew the money. lets cut that spending first.

  3. KmanNYC says:

    This is an absolute joke. It is all political posturing that is being blown out of proportion by the media. If Obama had a spine he would draw a line in the sand and call the republican bluff. Instead, he will likely compromise on a number of issues even though republicans have no real leverage whatsoever.

  4. Sidfinkel says:

    A large part of the fault lies with President Obama, but not for reasons you might think.

    Had the President at the beginning of this process simply said

    “Look, raising the debt ceiling is a technical matter that allows the government to pay for obligatons authorized and appropriated by the Congress. I will only accept a bill that raises the debt ceiling and has nothing else in it. I will not negotiate on this, I will not concede on this, I will not compromise on this. Deficit reduction, spending levels and tax reform are separate issues. I will commit to negotiate on those items in a separate process but I will not allow them to be part of the debt ceiling bill. If the country defaults and an economic downturn occurs, it will be because the Congress did not raise the debt ceiling, and not because of anything the Executive branch has done”

    In this case the Congerss would have caved, the public would have been impressed, the financial and business community would have rallied behind the President and his re-election chances would have improved. His continued belief that he could negotiate in good faith with people like Eric Canter is the primary cause of this problem.

  5. BennyProfane says:

    As with many of our other problems, I blame rap music.

    Seriously, though, is anybody else concerned that Michele Bachman is pretty much the front runner for the GOP nomination? This Tea Party thing has gone way too far. But, it will make for an interesting ’12 campaign year. Hold your nose.

  6. paulie46 says:

    Who cares what Moody’s says or thinks? They are irrelevant.

    Their credibility is right up there with the IMF and most neo-liberal economists, among the losers.

    Or should I say down there?

  7. JimRino says:

    It start’s with Bush, and the UnFunded Wars.
    When you don’t have a War Tax, you pay Interest: Now at 885 BILLION Dollars.

    Republicans have been Fiscally Incompetent since Reagan.

  8. JimRino says:

    The War Cost is now: 4 Trillion Dollars,
    made 10 X more Expensive by PRIVATIZING.

    Like I said, Republicans have been Fiscally Incompetent since Reagan.

  9. Global Eyes says:

    House Speaker John Boehner is to blame for chronic inflexibility. Too many Republicans have made no-tax pledges.

    Mr. Market could get upset. The Dow has never dropped 1000 points in a day.

    People and institutions make bad decisions when they’re broke…

  10. nomorespend says:

    The libertarians and many liberals and conservatives want to see a day of reckoning…for all debt to be retired or cancelled and the economy to grind to a halt…it ain’t gonna happen

  11. RW says:

    Moody’s — or any of the other rating agencies who lost what little credibility they had left rating toxic CDO squareds as AAA — is irrelevant, a minor actor in the Kabuki theater dominating the decrepit remnants of legislation and governance in Washington DC.

    We are entering the Palace of Versailles stage of our putative Republic: Courtesans engage in petty intrigues — some of which may actually result in terrible policy consequences to a populace about which the courtesans know and care nothing — while merchants seek special favors to reinforce their monopolies and mountebanks entertain.

    A credit rating for the US from mountebanks may impress some of the courtiers (they are so amusing, no?) but of course is meaningless: All that matters is how many consider US bonds and currency safer (not necessarily safe) for preservation of capital and repo collateral and that answer is already in: Real interest rates are negative and it is the safest of any left standing.

  12. beaufou says:

    Can you say last minute deal and it all goes away to the extend and pretend game.

    Too much money in too few hands not stimulating the economy though, more liquidity will not solve the problem.

  13. VennData says:

    Warren Buffett owns Moody’s, ask him whose to blame.

    Also, why doesn’t Secretary Geithner pay for this “review” like all the CDS constructors did and demand a AAA?

    And of course Michele Bachmann wasn’t a tax attorney like she said, but a tax collector, who obviously didn’t do her job since we didn’t collect enough taxes…

    http://www.rollingstone.com/politics/blogs/national-affairs/campaign-roundup-michele-bachmann-irs-tax-collector-20110711

    … her husband needs to get some converts so he can tout the success of his business and pay his fair share of taxes

    http://www.washingtonpost.com/blogs/44/post/bachmann-under-fire-over-husbands-anti-gay-therapy-practice/2011/07/13/gIQApXXbCI_blog.html

    And when Rupert Murdoch bribes a cop to tell about some celebrity issue, do the cops pay tax on that?

  14. brianinla says:

    It was only two weeks ago that QE2 ended and today Bernanke had to hint that QE3 was coming. It’s all one giant ponzi scheme where the top 2% get the majority of the newly diluted dollars. Why the hell do people still talk in terms of D and R. It’s us vs. them.

    Increasing the debt limit and making Moody’s happy will not do anything to fix this broken system.

  15. amboycharlie says:

    Regardless of Moody’s credibility, our bankers in China have already spoken out about this. We need to get our house in order. There is only one way to do it. Cut unfunded liabilities, and raise taxes. We don’t have a supply side problem any more. We have a demand side problem due to consumers being maxed out on debt, jobless, or making less money at their jobs. We are in the final stage of Capitalism, just as Marx predicted. We’ve had socialism for the finance sector since the S & L crisis. The only question now is, when will it come for the rest of us?

  16. thatguydrinksbeer says:

    What is Moody’s track record with other countries?

  17. A says:

    It’s quite comical to watch what is a regular routine as managed by the political parties. Instill fear in the general populace, motivate the media to blow it out of proportion through reckless speculation stories, and then appear with a resolution in the final hours. Add some reassuring comment that “this is much better than the alternatives”, and hope that the sheep herd see’s the effort as heroic. Finally, as we’re in an election year, ensure that you take full credit for finding resolution, while ensuring that the maximum number of votes have been purchased in the process. Perhaps the best theme song for American politics is Joni Mitchell’s “The Circle Game”.

  18. river says:

    I say it is both sides fault. The Republican’s side for being intellectually dishonest to the point of being unethical and unamerican, and for Obama’s side for being such a pussy as to not call them on their bullshit (as well as not calling them on the financial crisis).

    I would wage political civil war if I was Obama, resign the presidency to Boehner, giving the Republicans rope so they can hang themselve with it, and ensuring them that all of the policies that they have been demanding Obama enact (the ones that make a fabulous soundbite to the uneducated voters on the election trail but never really get enacted once reality of the office sets in) would actually have to happen.

    Our presidency has turned into a figurehead, and our government is run by Technocrats, as evidenced by the very conservative GWB becoming the biggest socialist of our time with the passage of TARP and the very populist Obama vowing to close Gitmo and leave Iraq once gaining office, but once attained has done no such thing.

  19. louis says:

    The political battle is just theater for us sheeple, the culprits are the big banks, big pharma, big corn, etc. Their co- conspirators are the politicians and the Supreme Court. Our only hope is another civil war with current military personnel joining our cause. Or we can just buy more ipads and droids and learn to live in a Sci Fi novel.

  20. goodlife says:

    As I see it, there is no 3, 5, or 10 point plan to solve our economic woes. We will have to accept that everyone who has hitched their wagon to Government spending will be fighting it out for a while for their piece of a much smaller pie. Our standard of living will go down and so will future generations. We did this to ourselves and therefore we should start paying for our excesses and not pass the entire debt on to our grand children. These Obama, Bush rants are simply obfuscations for those who simply won’t accept the reality that we have dug ourselves a hole too deep to climb out of for the forseeable future. Moody’s or Obama or Senator Baloney walking out of meetings simply do not matter. If someone wants to show there is a plan then just attach a spreadsheet with actual numbers. I know we are ranked 30 th or 50 th or whatever in math in the world, but surely someone can come up with numbers.

  21. JasRas says:

    You know those Bugs Bunny episodes where Yosemite Sam ends up in the shed with the explosives? It’s pitch dark and to get his bearings, he lights a match, looks around and….

    That’s the fools in D.C. They have no idea what they’re messing with, groping around, someone is going to light the match… and

  22. Chief Tomahawk says:

    Geez…….. I’d rather talk about Harry Potter!

  23. Michael says:

    I think we should look at the actual data, rather than opinions…. see following:

    http://scottgrannis.blogspot.com/2011/07/federal-budget-update.html#links

    It seems clear to me that the current critical problem is the explosion in spending under Obama. Longer term is our unaffordable/wasteful SS and Medicare system. Am I missing something?

    Regards,
    Michael

  24. swag says:

    I like turtles.

  25. RSBH says:

    I think it all comes back to campaign finance reform. These folks are only doing what they get paid to do, and what keeps them in office. I’d like to think that they actually represent us, but I don’t believe that’s the case. Until we change the incentives, this is what we’re going to get. And with Citizen’s United, it’s only going to get worse.

    I also agree with others who’ve commented on the lack of public knowledge/understanding of the issues. Many issues are complicated, and anything but transparent. When you’re worried about the kids, your job, your health, it’s a little tough to find the energy to figure out what’s really going on behind the scenes.

  26. Well, at the EOD, We’re to Blame.

    the vast majority of Us are willing co-conspirators in a Scheme that We don’t, even, understand.

    for further, see some of..

    “…Corporate media will not remind you, but many of America’s brightest historical minds understood and communicated that publicly-created money (transparent government is public/group work) ends government debt and can create full-employment. This is my “top-ten” list:…”

    and, Read the viewpoints of those found on his “top-ten” list..
    ~~~
    “If a nation expects to be ignorant and free, in a state of civilization, it expects what never was and never will be.”
    — Thomas Jefferson

    Listed in: Education, Freedom
    http://www.quotedb.com/quotes/3678

    “I never believed there was one code of morality for a public and another for a private man.”
    “I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them.”
    -ibid.

    http://www.examiner.com/nonpartisan-in-national/if-government-created-money-instead-of-debt-america-s-brightest-minds-speak

  27. VennData says:

    Don’t worry, there is no shut down, it’s made up by Obama, so says Michele Bachmann

    http://www.cnsnews.com/news/article/reps-bachmanngohmertking-obama-has-been

    And the liberal media said she’s dumb. They’re wrong again!

    Palin/Bachmann 2012

  28. joe in flyover says:

    I’ll go with the rap music thing. Exposure to more than 10 seconds of that crap will make any sane person go postal.

  29. EdDunkle says:

    I blame the rich and powerful.

  30. Paglia guy says:

    Wow, what a mix of opinions. Some real beauts, here. How about this: put these secret discussions on C-Span and expose what’s really happening in these talks. Find out who really is negotiating and who is posturing. You won’t read about it in Rolling Stone but you’ll get to more truth reading their or Politico’s reporting on these debt talks.

  31. impermanence says:

    Human beings, what a pathetic lot.

  32. whskyjack says:

    It is gonna be a long election season, It’s just begun and I’m already tired of it.

    Heard some natural irony today while installing cabinets. Was listening to Fresh Air on NPR radio they were talking about why nobody was going to jail because of bank fraud. Any way during the station break the announcer came on and gave the news. Obama had raised a record $81 million.

    Jack

  33. swag says:

    It’ll be fun to watch the yield on 10 year treasuries go to 1.9% as US treasuries are downgraded and, in reaction, investors flee to US treasuries as a “safe haven.”

    What a stupid game.

  34. nicholasteague says:

    brinksmanship: the practice of pushing dangerous events to the verge of disaster in order to achieve the most advantageous outcome… it’s all in the game.

  35. socaljoe says:

    When criticized that his policies won’t work in the long term, Keynes responded that in the long term we’re all dead. Well… he’s dead, the long term has arrived, and it ain’t working.

    All Ponzi schemes fail when they can’t maintain geometric growth.

  36. elvisnixon says:

    Is time for all brave Americans to act like our great forefathers that founded our great nation.
    MOVE TO AN NEW COUNTRY WHEN YOUR OLD ONE IS RUN BY A GREEDY, INCOMPETENT ARISTOCRACY!

    I have.
    Wellington, New Zealand

    PS.
    The New Zealand dollar hit new historical highs of $0.85 today it was $0.50 when I moved here 5 years ago.

    PSS. Vote Bachmann 2012 and give the Kleptocratic American system what it deserves

  37. cdrueallen says:

    I fear the average voter (and poster on this blog, from the evidence I see) underestimates the fragility of our global financial system. It’s an organism not controlled by anyone, rich, poor, head of state, or CEO of Goldman Sachs, but it can be severely damaged by any number of human beliefs and actions. Like the belief that there was no downside to the housing market. What’s going to happen if Italian government debt goes bad at the same time our Congress refuses to raise the U.S. debt ceiling? I don’t think anyone knows, but I’m sure it won’t be pretty.

    The Bowles-Simpson deficit reduction committee came up with a reasonable proposal for reducing the deficit without collapsing the global economy, or we could raising the top marginal tax rate back to what it was throughout the 1950s, but the majority of our population and perhaps a majority of the House don’t seem to be interested in reasonable plans. So much as it goes against my investment philosophy, I’m going to start stocking up on double-short funds until the forces of sanity regain the upper hand.

  38. AlexM says:

    Wellington is a lovely place, a bit windy, but a beautiful spot none the less.

  39. digistar says:

    Many good comments and plenty of gallows humor.

    The current state of our “democracy”, and of capitalism, are both profoundly rotten.

    I keep waiting for “the final straw” so this bad camel will break – and we can start over.

    No luck so far.

    Maybe a big, messy, long, insane, stupid, noisy, smelly, isolating, humiliating, deflating, crushing default will do it.

    Fingers crossed.

  40. Dow says:

    I feel like our politicians in Washington are a bunch of 13-year olds.

    End the wars. Close the overseas bases. Let the Bush tax cuts expire. Raise the Social Security cap. Then start dealing with actual problems for a change.

  41. ali says:

    Blame goes to USA public. 100%.

    For electing Bush II for two terms who increased the size and scope of the government
    sacrificed privacy and personal freedoms, engineered excessive taxcuts with no job growth,
    and continuing

    also for the voting public who were mostly believing that Iraq was behind 9/11,
    Obama is a muslim, trusting GOP as conservative and Democrats as progressives. They
    should have reacted like Greeks for TARP, QE1 and QE2. Instead most of them watched
    as they only cared their 401Ks, pensions and bank accounts, not the liabilities they will pass
    down to next generations.

    NASA canceled the Space Shuttle project. Instead it will produce nice Sci-Fi ideas from a
    CGI computer lab. Hence all the new technologies that could produce a lot of jobs, and
    revenue are gone. Who cancelled that project? Any guesses?

  42. NeutralObserver says:

    This is all theater to distract the public. If the Democrats were serious they would propose and pass a one sentence bill in the Senate that said raise the debt ceiling to X (whatever is required to get us to the next year) or a bill that removes the debt ceiling entirely. No amendments. Done.

    But that is not how it in this looking glass world where we are all mad.

    “But I don’t want to go among mad people,” Alice remarked.
    “Oh, you can’t help that,” said the Cat: “we’re all mad here. I’m mad. You’re mad.”
    “How do you know I’m mad?” said Alice.
    “You must be,” said the Cat, “or you wouldn’t have come here.” (Wonderland 6.53-56)

  43. Stuart says:

    ’tis neither a Democratic vs. Republican debate anymore. The real enemy at the gate is old fashion arithmetic and the power of compounding. Math IS agnostic. The event horizon has been passed. Wait until the world starts focusing on Italy.

  44. MayorQuimby says:

    I can’t believe how many are blaming the republicans. Oi vey. Forget politics for a minute. W all know both sides blame the other and try to make them look bad.

    But there are serious, factual problems here. If you all think we can afford more debt, I think your bonkers.

    I suggest big cuts in social spending to the tune of 5 – 10 pct, cuts to the military, higher tax rates for the middle class but much higher rates for the wealthy.

    Its time to STOP DIGGING and START CLIMBING.

    You want to really stimulate the economy?

    Let the dollar mean something. Encourage people to save money. Let deleveraging occur and handcuff the fed big time”

  45. icm63 says:

    Moodys largest shareholder is Warren Buffet, a democrat supporting OBAMA

    Warren has enjoyed insider knowledge for years…

    Call Warren and tell his democrat boys to back off

  46. blueoysterjoe says:

    The American people are to blame. Republicans are scared to vote to raise the limit because they don’t want to be primaried by T. Poone Bucket, a septic inspector and tea party leader from Shreveport. The Democrats are locked in paralysis because they just read a poll that said that the American public is suspicious that they prefer Hefeweisen to the Silver Bullet. And the media is busy trying to figure out if they should lead the news hour with a story about a two-headed goat or what Princess Di would look like if she was alive today wearing a funny Moustache. The common denominator in all these cases, however exaggerated for humorous effect, is the gaping stupidity of the American people.

  47. Mike in Nola says:

    @amboycharlies:

    Our bankers in China have to come along for the ride no matter what the grumbling. The only way they can sell us stuff is to accept dollars and recycle it into bonds. Check out some of Michael Pettis old posts here.
    http://mpettis.com/
    They could stop selling us stuff, but what are the chances of that?

  48. Mike in Nola says:

    BTW, longbond yields aren’t reflecting any fear that anything bad is going to happen. Solid 10 year auction today.

  49. basquebob says:

    Heard/read for years “Wall St. loves gridlock”. Wall St., welcome to gridlock.

  50. mote says:

    Best descriptive of what is happening:

    “I see your stupid and raise you two stupids.”

    —-Dylan Ratigan:

    Most responsible:

    Grover Norquist: Sign my tax pledge, but spend like a drunken sailor.
    George Bush: For his general culture of incompetence.
    The Republican Party: I hate government with a passion. So what am I doing here?
    The Tea Party : Dude, you’re gonna lose that scooter.

    “But where are the clowns?
    Quick, send in the clowns.
    Don’t bother, they’re here.”

    —-Stephen Sondheim

  51. jelley says:

    The wheels are coming off but not because of Moody’s or the debt limit but because this charade is supposed to matter. I am middle class in Dallas Fort Worth and even in the most reasonable of major hubs to live in people are starting to fall behind. I used to think that if you couldn’t make it financially in DFW you were a dumb ass but I guess times have changed.

  52. LoriInNC says:

    How can any one judge whose at fault? These are closed door sessions with no press access. All we have to go on is anecdotal comments from the so-called particpants.

    Besides blatant partisanship, what benefit does one gain from blaming one side or the other? Nothing… it’s all politics and dividing the country for political gain once again. It’s a stupid question, Mr. Ritholtz.

  53. Topspin says:

    Republicans just made the issue so clear cut yet the majority will not understand let alone remotely grasp the reality. The reality is it is war between the top 2% and everyone else and the line has been drawn at privatizing the profits and nationalizing the debt. The republicans constituents *that matter most* understand that this is the line and it must be defended, and ANY easing of the line, means they are traitors and cannot be trusted. So they would rather the debt goes up rather than give ANY revenue away and that is how it will remain. There will be no compromise. It is war to the end. That’s all they care about; their low or no taxes, offshore loopholes and subsidies. THEY HAVEN’T EVEN BEGUN TO USE THE JOBS AS A NEGOTIATING CHIP!!! So let’s just make it straight … 1) No more revenue increases 2) No closing of loopholes 3) No stopping any subsidies 4) the public WILL ACCEPT major cuts in government spending, control and 5) AFTER this has been done over the next 3 -5 years, when unemployment is officially 15% , UNDER A REPUBLICAN PRESIDENT, they will start to increase domestic hiring to appease the masses and of course these new hires WILL WORK UNDER the supervision of foreign agents most likely in Asia including some on the mainland of China.

    That is a 60% given and included in calculation for anyone with the brains and the money to care. Works perfect for any Republican candidate now including Bachmann.

    Either print it or cut it but they will not accept paying for it, at least not out of their pocket, and anything beyond the line now is something out of their pocket. Just the cost of doing business folks and these people do not pay overhead/take responsibility for workers anymore, let alone people waiting on the bench, delisted or not in rotation due to age, health, injury or personal preference for job position.

  54. JerseyCynic says:

    THE STATUS QUO HAS TO GO

    http://www.oftwominds.com/blogjuly11/shape-of-things6-11.html

    Charles nails is again…

    “……2. A dearth of leadership. The weakness of what passes for “leadership” today is not just a matter of bad luck but of the corruption of politics to the point that it only attracts sycophants, moral midgets and sociopaths. It’s easy to blame those attracted to the game for this, but the real cause is the American people, who reject honesty in favor of artifice and promises. The American public is child-like, self-centered, myopic, ill-informed and ultimately uncaring about anything but getting their share of the swag.

    Thus anyone who promises that their share of the swag will remain untouched wins, and anyone who suggests the swag is unsustainable is rejected as “judgmental” or “negative.” To the degree a nation gets the leadership it demands, then the U.S. is in trouble. We’re now a nation of spoiled teens who get to elect their parents. No surprise, the ‘rents who never enforce any rules, never challenge their own bosses (the kleptocrats) and who dole out the most allowance win every time.

    Thus we get leaders who refuse to challenge the Financial Power Elites, cartels and fiefdoms because the Status Quo would devote all its stupendous wealth and influence to defeating a challenger, and we get leaders who refuse to be honest with the American people because that honesty is rejected as unwelcome.”

    The double-bind is two-fold: the Power Elites can’t bear to part with any of their power or wealth, so their resistance guarantees systemic collapse. The political “leadership” cannot challenge the Power Elites’ grip on the nation’s throat because the entire Status Quo has been co-opted/sold out and is now wedded to the Oligarchy as their guarantor of financial security.

    What this leads to is a Status Quo committed to a sinking ship. The very imbalances created by a Financial Elite and the enabling Central State Central Planning doom the system, but since everyone within the Status Quo depends on it for their own slice of wealth and power, then no one dares speak up in favor of reality. Complicity is the order of the day, but complicity can’t stop the ship from sinking.”
    “….

  55. Topspin says:

    MayorQuimby – way too rational. Not even on the table. We are way beyond that. Remember Barry’s post about argument and how it is not about who is factual or right or the truth. It’s about who is believed and what people actually do. If people (meaning consumers, the mass) started acting rationally, which is essentially what you argue needs to be done (start climbing), the economy is f*ck$ed. 60% of Americans are obese, our schools are ranking way down the list, etc. etc. etc. This is going to get very interesting. The people who want to give a green card away (Barry I can’t believe you actually support this crude measure) just for buying a house are ahead of the game maybe a few years, probably 5-10 at best. They anticipate when everyone realizes we live in a virtual world or boundaries, no longer geophysical. America will use the green card as a way to invite the best and brightest to our shores and we will become an amazing melting pot. We will become the biggest and greatest nation on earth times 10. The middle class will be pushed out of the nest and have to fly, and fly to another country. An American citizens rights will not be based on where they domicile but on they income, taxes and ownership rights. We will have the washing away of citizenry. American citizens will join the world citizens without geographic borders. They will be seen for their income cost and or contribution and that is it. They can either stay at home* and starve or leave and go to another country and work and live.

  56. Expat says:

    Idiocracy is supposed to take place in 2506. Looks like the director was off by almost 500 years.
    It’s not a Republican or Democrat problem. It’s an American delusion problem.

    America believes in things which don’t exist like God, angels, democracy, Horatio Alger, equality, peace, and the supremacy of the American way. Our politicians are generally centrist to right of center with occasional right-wing lunacy thrown in to appeal to places like Texas.

    There are solutions. We could freeze the debt ceiling and cut hundreds of billions from military spending without damaging any part of our social programs. We could make serious changes to the vampire squid medico-pharma industry and free up hundreds of billions into more productive parts of the economy. We could get serious about conservation and energy efficiency and ban SUV’s, sports cars, and monster trucks.

    Or we could stay “Americans”, kick the can down the road, tune into Dancing with Morons, and stuff our face with Cheetoh-stuffed Oreos.

    I think America is doomed. Like elvisnixon, I voted with my feet long ago. It’s not all that much greener, but it’s less hypocritical and less stupid where I am (sunny south of France with my orange trees).

  57. Chief Tomahawk says:

    Jeff Macke sighting!!!

    Interviewing Gary Shilling for the Yahoo Daily Ticker: http://finance.yahoo.com/blogs/daily-ticker/20-drop-housing-cause-recession-2012-says-gary-161445494.html

    Gary says further 20% drop in housing to come over the next 2 years.

    “Shilling says the shock to trigger the next recess is “another big leg-down in housing.” (An asset class the Fed has not been able to reflate.) As those familiar with Shilling know, his forecasts are generally bearish. However, in his defense, Shilling was one of the few economists who correctly predicted the dangers of the subprime mortgage market and its impact on the broader economy.

    The problem with the real estate market remains excess inventory. Based on Shilling’s research, there are 2 million to 2.5 million excess homes in the country — a supply that will take 4-5 years to work-off. The result: Housing prices will fall another 20% and underwater mortgages will balloon from 23% to 40%, he says.

    With housing slumping again, Shilling says recession is coming to a town near you in 2012.”

  58. Topspin says:

    JerseyCynic – you are correct precisely that it “guarantees systemic collapse.” Yet they know that a new system will emerge and so they have no fear or morality. They are killing a system in which place a new system will emerge. People are on the periphery and they are not managing people directly so they have no moral cause. To say they are acting directly on people presumes a responsibility most are not capable of even comprehending let alone exacting on another person. Just talk to a human and you will know they are not responsible, how could they be, they are full of the same foibles as you and I. The sooner you (in general not you JerseyCynic) disengage your identity as being one or the same as a system you have some freedom. Most people are still chained to an identity defined by business, resources, profit and things. If you are beyond that level, into the level of systems, you should find it comparatively easy to break free of systems, left mainly to focus on people. I guess its all just evolution.

  59. Topspin says:

    Chief Tomahawk – You sound down right exuberant and excited. 20% down from here is already expected I judge.

  60. champs2011 says:

    http://gmbpost.com/politics/pictures-mumbai-blast-pour-your-condolences/

    heart rendering pictures from Mumbai blasts. Condolences.

  61. JerseyCynic says:

    Topspin, once we finally understand “economics is political storytelling…” and finally close that book, we might be able to slowly break away.

    “The last official act of any government is to loot the treasury” GW

    Another good read with lots of great ideas:

    http://www.activistpost.com/2011/07/if-government-created-money-instead-of.html#more

    If government created money instead of debt: America’s brightest minds speak

    Carl Herman, Contributing Writer
    Activist Post

    The US suffers from debt-damned economics: a Robber Baron-era paradigm whereby the harder Americans work, the more in debt we collectively descend. The reason is public confusion between “money” (which the US does not create and use to facilitate trade) and “debt/credit” (which our government says is “money” and what is created). Our modern-day Robber Baron/oligarchs maintain this confusion with the willing help of US corporate media’s intentional obfuscation.

    So what do we do to stop transferring literally trillions of dollars of benefits every year from working Americans to oligarchs? With competent citizenry that understands, demands, and holds our group work (government) accountable for transparency, I recommend three concurrent strategies:

  62. fineoldcorker says:

    A sensible bunch of compromises, a shared concern for the common good, and some fortitude to drill away at paying down national debt are all that is needed to solve the debt limit issue. USA will gain so much by simply adopting an attitude of pragmatism. The ideologues are falsely and unnecessarily dividing the country.

    The divide in Congress is a reflection of the divide among citizens. It is time for citizens to engage in public debate about what compromises will be acceptable. The “extremists” must be “outed” to show the emptiness, contradictions, and foolishness of their “ideologically pure” positions so that voter support for these erodes.

    Some of the media are irresponsibly propagandizing “the masses”. Nothing could be healthier than to empower an awakened sheeple to think critically and resist these manipulations.

    If I were Obama, I would take action:
    (1) go for a short term debt limit compromise and not allow a default,
    (2) use the time to promote public debate and consult with the voters via a referendum which would decide the relative balance of spending vs taxation vs debt levels, and bind Congress for minimum 2 years. (A great interactive was done by the New York Times a few months ago which allowed a user to test various policy options to reach a balanced budget, which might be a useful prototype. ) AND
    (3) address the excessive influence money has on the political system with another binding referendum question proposing Constitutional limits on campaign spending – with audits. (See JerseyCynic’s post)

    The USA can break the logjams by empowering its citizens to choose their future. There IS a silver lining in these clouds – “don’t let a good crisis go to waste”.

  63. Sechel says:

    The Rating agencies have no credibility. Whether it be on structured finance or country risk. When was Greece last AAA by Moodys?

  64. rktbrkr says:

    Re Mumbai blasts.

    There were a lot of fingers pointing at the Pakis after the last terror attack and I think pressure is building to “do something” with increasing disaffection between US and Pak adding to the sauce.

    We buddied up with Pak thinking they’d help solve Muslim terror problem – turns our they were fomenting it. Stay tuned for another global crisis to be added to the pot.

  65. rktbrkr says:

    IMO the Repubs have been generally irresponsible finacially cutting taxes and remaining silent while deficits piled up with Rs in the White House and then going full tilt boogie when the Ds run deficits.

    Maybe O’B was faced with a no win situation, just sit on his thumbs and mutter “looks like we’re gonna have a depression” after Bush allowed the economy to fly into the mountaintop or try the stimulus approach. Thus far the stimulus approach hasn’t worked and a large part is because too much O’B economic policy has been a carryover of Bush.

    The Rs won the political nipple twisting contest when they got the Bush tax cuts continued and I think they’ll win the debt ceiling twistoff too. They are approaching this like financial suicide bombers with a giant default bomb strapped to their chest.

  66. mathman says:

    It isn’t just us in this economic mess. It isn’t just economic, at the root there are interrelated population and environmental factors to contend with (neither of which is seriously being considered) and everything is based on energy and EROI. Our use of cheap fossil fuel energy led to world-wide population increase, different (oil-based) farming practices forcing yields to feed everyone (and provide a surplus for a while), and environmental degradation – ya can’t just put all that stored carbon (that over millions of years has been sequestered out of the atmosphere) back into the atmosphere and NOT expect some imbalance in climate.

    So here we are: the end of cheap energy (and no leadership here on moving to anything else) creating a mad scramble for many scarce resources (including potable water) and leading to wars, the loss of jobs, housing and commercial real estate, small businesses being forced out, municipalities, states and the federal government losing ever more tax revenue (and the whole tailspin down to bankruptcy that entails), and stock markets and other means of creating wealth out of thin air all will fail in the end due to the loss of cheap energy and climate impacts.

    Welcome to the bottleneck. (Wm. R. Catton Jr.) Here’s an excerpt from a review by George Mobus (posted below):

    The realization that mankind is damaging its planet is certainly not new. Rachel Carson (The Silent Spring, 1962) may have started the trend in increasing awareness that we are doing things, in our zeal to control nature, that were starting to backfire, threatening to leave us worse off if we didn’t change our ways and attitudes. Environmentalism has largely operated on this theme for decades. We’ve been warned of environmental degradation, global warming, and peak oil, and how these are interlinked. We’ve been made immanently aware of the dangers we have ourselves created.

    Now William R. Catton, Jr., Emeritus Professor of Sociology at my state’s other PhD granting institution, Washington State University, brings on the sequel to his first book in this genre, Overshoot: The Ecological Basis of Revolutionary Change, University of Illinois Press, in which he sounded an alarm being heard more frequently. Like Speth, Catton, in that earlier book, pointed out the problems as he saw them, from the viewpoint of a sociologist, and then declared that if we heed these warnings we might yet escape the worst.

    In the sequel, Bottleneck: Humanity’s Impending Impasse, Xlibris Corporation, he drops the part about we can evade the worst. The subtitle says it all. Now he concludes that it is already too late to mend our ways and somehow avoid the collapse of civilization. Indeed the main title refers to an impending collapse of the human population. An ecological bottleneck (also called an population bottleneck) is where radical changes in the environment of a species causes a die-off of all but the most hardy of the population; hardy, that is, in terms of the selection pressures arising from the change. Of course there may be no sufficiently hardy individuals left or the ones that manage to survive cannot reproduce sufficiently to produce a new population. In that case the species goes extinct.

    Catton’s arguments for why this is the most likely outcome for humanity boil down to something I have written about in my blog for several years now. It is the rate of change that matters as much as the degree or magnitude of change when it comes to shocking a population. If we look at the rate of climate change due to anthropogenic forcing, or the rate at which our fossil fuel energy sources are depleting, or the rate of aquifer depletion, or the rate of population increase, or the rate of consumption increase per capita in the developed and developing worlds, or… You get the picture. We are changing the world in ways unfavorable to human survivability more rapidly than we can either adapt or mitigate. And we have already passed the point of no return.

    As to why we are in this state of affairs, Catton calls on several sociological theories surrounding the evolution of culture and especially the development of over-specialization or ‘division of labor’. The latter was touted by Adam Smith as the reason we were so efficient in our manufactures. And Catton, like many authors who deplore modern capitalism and corporatism, recognizes that at a time this was indeed a beneficial capacity. Today, however, he says that we overdid it and that the tendency toward deep specialization has tended to dehumanize and isolate each of us from the benefit of interpersonal relations. He further argues that we have come to think of others as instruments, mere means to our own ends. This he says is the end result of taking the abstraction of money as representing wealth too far in our thinking.

    more here: http://www.energybulletin.net/node/50821

  67. mathman,

    with this: “…– ya can’t just put all that stored carbon (that over millions of years has been sequestered out of the atmosphere) back into the atmosphere and NOT expect some imbalance in climate…”

    take it EZ on the ‘Hambone Climatologist’-spiel..

    compare it to..

    “1816 – The Year without a Summer
    Introduction
    The period 1812-1817 was one of exceptional volcanic activity, and the sheer volume of volcanic dust pumped into the atmosphere by these volcanic eruptions caused a general, temporary cooling in the earth’s climate around this time.

    This temporary climatic cooling peaked during the summer of 1816 was the peak of this cooling and the reason the peak fell in the summer of 1816 is almost certainly die to the eruption of the Tamboro volcano east of Java in April 1815 (believed to be one of the most explosive eruptions of the last 10,000 years). At the time sunspots were blamed for the unseasonable weather (Laskin 1996). Anyway, this eruption put more than 150 million tonnes of dust in the atmosphere which gradually spread around the globe acting as a veil reflecting incoming solar radiation back into space and cooling the earth (temporarily) which in turn caused a change in the world’s, and in particular the northern hemisphere’s, weather patterns. Some dust from volcanic eruptions in the West Indies in 1812 and Philippines in 1814 was also probably still the atmosphere (Lamb 1995) and this will have helped the global cooling process too.

    So if Tamboro erupted in 1815 why wasn’t the summer of 1815 rather than the summer of 1816 the year without a summer? Well, the answer is that there is a time lag between a volcanic eruption and a change in weather patterns caused by the length of time needed for stratospheric winds to distribute the volcanic dust particles around the world.

    It should at this stage be pointed out that not all volcanic eruptions affect the climate – whether an eruption will affect the climate or not depends on how powerful the eruption is and what part of the atmosphere the dust from the eruption reaches. When volcanoes erupt lots of gas and dust is injected into the atmosphere. Depending on how the volcano erupts (eg vertically or horizontally) and where the volcano is a large eruption can have a cooling effect on the atmosphere which can last for 1-3 years or so. The dust and gases need to reach the Stratosphere (more than 10km above sea level) where winds at that level in the atmosphere can blow the dust and gas around the world. The dust and gas then reflect energy from the sun which would otherwise reach the earth back into space this cooling the earth and altering its weather patterns. This sort of thing has happened from time to time through the earth’s history and most recently in the early 1990’s when the eruption of Mount Pinatubo in the Philippines in 1991 cooled global temperatures in 1992 by around half a degree.

    Now, here some of the highlights of the year without a summer:…”
    http://www.dandantheweatherman.com/Bereklauw/yearnosummer.html
    http://search.yippy.com/search?query=The+Year+of+No+Summer+Volcanic+Eruption&tb=sitesearch-all&v%3Aproject=clusty

    http://seoblackhat.com/2007/03/04/global-warming-on-mars-pluto-triton-and-jupiter/
    http://www.johnstonsarchive.net/environment/warmingplanets.html

    and, with the whole neo-Malthusian line of ~Inquiry, you may do well to wonder..”Whose Hymnal are you Singing from?”

  68. Lukey says:

    I think it is inevitable. Eventually the Eurozone will collapse under the weight of its debt from decades of spending too much and earning too little. The US is about (at this point) no more than five years behind them. We spend way too much and our economy is being eaten away from the inside out by too many freeloaders and too much business activity siphoned off by tax and regulatory compliance (and with ever more of it directed at services that do nothing to build US value in an international economy) so we are losing the ability to afford this level of spending (if we ever really had it in the first place). Just thinking we can keep spending more and then raise taxes to cover it each time is stupid.

  69. DeDude says:

    When congress pass a budget they have in reality decided how much or little the debt needs to grow. We need to pass one last debt limit law. That should state that the limit is set at the highest level of debt predicted by the CBO within the following 5 years based on the passed budget. End of story – when you vote for an unbalanced budget you also vote to allow the debt to increase as an result of this imbalance. If you are unhappy with increased debt don’t pass all the spending and tax-cuts that create new debt.

  70. Transor Z says:

    The New York Times, March 19, 1876
    http://query.nytimes.com/gst/abstract.html?res=9D07EED81E3FE73BBC4152DFB566838D669FDE

    MARK TWAIN ON ST. PATRICK.

    The following letter was read at the supper of the Knights of St. Patrick in Hartford, Conn., on Friday night:

    HARTFORD, March 16.

    Richard McCloud, Esq.:

    DEAR SIR: I am very sorry that I cannot be with the Knights of St. Patrick tomorrow evening. In this Centennial year we ought all to find a peculiar pleasure in doing honor to the memory of a man whose good name has endured through fourteen centuries. We ought to find pleasure in it for the reason that at this time we naturally have a fellow-feeling for such a man. He wrought a great work in his day. He found Ireland a prosperous republic, and looked about him to see if he might find some useful thing to turn his hand to. He observed that the President of that republic was in the habit of sheltering his great officials from deserved punishment, so he lifted up his staff and smote him, and he died. He found that the Secretary of War had been so unbecomingly economical as to have laid up $12,000 a year out of a salary of $8,000, and he killed him. He found that the Secretary of the Interior always prayed over every separate and distinct barrel of salt beef that was intended for the unconverted savage, and then kept that beef himself, so he killed him also. He found that the Secretary of the Navy knew more about handling suspicious claims than he did about handling a ship, and he at once made an end of him. He found that a very foul Private Secretary had been engineered through a sham trial, so he destroyed him. He discovered that the congress which pretended to prodigious virtue was very anxious to investigate an ambassador who had dishonored the country abroad, but was equally anxious to prevent the appointment of any spotless man to a similar post; that this Congress had no God but party, no system of morals but party policy; no vision but a bat’s vision, and no reason or excuse for existing anyhow. Therefore he massacred that Congress to the last man.

    When he finished his great work he said, in his figuratively way, “Lo, I have destroyed all the reptiles in Ireland.”

    St. Patrick had no politics; his sympathies lay with the right – that was politics enough. When he came across a reptile he forgot to inquire whether he was a Democrat or a Republican, but simply exalted is staff and “let him have it.” Honored be his name – I wish we had him here to trim us up for the Centennial. But that cannot be. His staff, which was the symbol of real, not sham, reform is idle. However, we still have with us the symbol of Truth – George Washington’s little hatchet – for I know they’ve buried it.

    Yours truly,

    S. L. CLEMENS

  71. Petey Wheatstraw says:

    Man — take one night off from TBP, and miss the fireworks. At least most of the voices here are sane (if angry to the point of apoplexy).

    The Republicans set out to destroy the government of the People, and they’re less than a full step away (not that the Democrats put up any realistic resistance). As they are about to get what they bargained for, they are now trying to make sure the backlash is directed away from themselves by obfuscating. It won’t work: Revolutions eat their children.

    It is advisable to understand, and prepare for what their intentions are, namely:

    Theocracy: (don’t think that Muslms, Jews, Hindus, Buddhists, atheists or agnostics will be left alone). Eric Cantor and Joseph Lieberman, Log Cabin Republicans, take note.

    “Racial” purity: Got white?

    Sexual behavior outside the mainstream will be criminalized.

    Guns.

    Blind loyalty to an undefined cause/philosophy.

    I don’t think we, as a culture, remember how bad things can get when government fails.

    As the people are too weak and stupid to stand up for themselves, the actual point of failure will take place in a back room meeting.

    No one will come out of this unscathed.

    Sorry for the doomsday scenario, but any hope that we’ll be able to patch this back together is misplaced, and any hope that we will or can govern ourselves collectively, when we can’t do so as individuals, is wishful thinking.

    The whip comes down.

  72. JerseyCynic says:

    mathman — everything has changed too fast.

    btw, I think you might enjoy reading Les Visible:

    http://smokingmirrors.blogspot.com/2011/07/im-with-stupid-and-pround-of-it.html
    …“The fact that you are feeling all of this is a clear indication that you are in touch with the energy being expressed. The ones who should be concerned are the ones who are not. Guidance and assistance are not necessarily a call to action. Quite often they are simply transformative. What I mean is that if you are feeling something, it is acting on you and giving way is often the better part of reaction. Reacting is what we do when we bypass reflection and thinking and thinking is something we identify with personally, as if the thoughts we have are our own and they most often are not. We are each of us plugged into a greater stream of things that are nothing more than an indication of what influences us because we have that particular capacity within us. Merely seeing this goes a long way toward clearing it up and clarifying our path. Reacting and personal identification, with the wide highways of mind traffic, cause us to swim in courses that do not, most of the time, flow in the direction of our own best interests”. That was it more or less.

    Anyone who wants to see what it is that they need to personally consider needs only to look at the content and quality of thoughts that ‘pass through’ their heads. These are indications of your susceptibility. It’s similar to seeing qualities in others because they are resident within us. We don’t like to look at it this way but we should. Even when it isn’t true, it doesn’t hurt to check. Rigorous self inquiry is a necessity of those seeking the way out or… the way in.

    I can’t say it often enough. These are extraordinary times and there’s opportunity for change that goes well beyond anything possible before. Those who take advantage of it are going to be truly and profoundly surprised. It’s not easy because we are fighting it. We can’t seem to help ourselves. We are being controlled by the reactive mind. Still the reactive mind and you have found the gates; you have found the entry way. It appears in the quiet, following the suspension of the reactive mind.

    Do you really need any more evidence of what’s going on than what’s going on? You can see the incremental approach of massive and fundamental transformation. It is everywhere to be seen. The breakdown of the old world order is unmistakable. The shifting and scrambling to grab hold of the new controls is also unmistakable. The application of threat and force reaffirms the intent of those who are losing their grip and being driven in panic to try to take control once more. That’s not going to happen. Every action they take makes them more vulnerable and helpless in the face of irresistible change.

    We are not who or what we think we are and being open to seeing the truth of this is all we need in the way of planning and action. We are being hot-housed into a dimensional shift. Embrace it as if it were the sum total of all your aspirations because, it is.”

  73. Greg0658 says:

    “the rap music thing ….. make any sane person go postal”
    “I blame the rich and powerful”

    and I see John Lennon’s death as a turning point to retake “the religion”
    ….
    http://www.ritholtz.com/blog/2011/07/open-thread-us-put-on-notice/#comment-571161
    cdrueallen .. I agree .. but don’t be confused .. there will be survivors inside gate’eds

    http://www.ritholtz.com/blog/2011/07/open-thread-us-put-on-notice/#comment-571183
    Topspin .. I agree .. public debt private profit & every living livestock needs providing for work hand in hand .. and that advertising game “watch this its free” .. Ted Turner has that x10 utopia today

    http://www.ritholtz.com/blog/2011/07/open-thread-us-put-on-notice/#comment-571187
    ChiefTom there is a new commercial floating how building buildings is the backbone of our society
    (& I got a roof uncovered .. great thread .. gotta save the economy .. back later)

  74. Winston Munn says:

    Not to worry, either God or Walt Disney will fix this. – Average American Citizen

  75. AHodge says:

    nice. Mote
    third world markets baby
    i love the smellof default in the morning..
    got to love the Rs
    the worlds greatest experts on how govt makes business and investors feel bad….

  76. DeDude says:

    Listen US you spoiled little brad!!!

    When you take out a loan to indulge yourself with all kinds of wars and toys and tax-cuts etc. there is going to be a bill to be paid. If you refuse to pay the bill then the repo-man is going to come. So pay your freekin’ bills or the next thing you know you will look out in the back yard and see a couple of Chinese tug boats hauling away the Ronal Reagan or some other big useless toy you wasted your money on.

  77. WFTA says:

    Not to fly under false colors, I admit to being a fiscally conservative (as in revenue and spending should be pretty close to equal, depending on the breaks) liberal. I applaud the president for raising the ante, even though I think we should probably be spending more in the war on poverty. Republicans should have declared victory and accepted, but to capture the stupid (and racist) vote, they’ve ratcheted the position far beyond reason; perhaps beyond the point of no return.

    I think the statements made by Senator McConnell last night said it all: Republicans don’t care a damn about the country. For them it has become 100% partisanship.

    Beware the utopians and maximalists. They will start the killing.

  78. Unsympathetic says:

    This is 100% Republican TeaTard politics.

    Go back to their statements before these debates started : “We want to see how much we can extract from Obama” while Obama has patiently sat and carefully considered all the proposals.

    Republicans have been telling Wall Street all along: “Don’t worry, this will happen, it’s just politics” – and now they’re facing the reality that the new TeaTards in the House have grown to actually believe their own deliberate lies.

    And finally the Tards – excuse me, Republicans – pushed Obama too far, and so Obama will not sign anything that does not include a tax increase on the upper class. Epic fail on the part of the Republicans.

  79. 1stThings1st says:

    The All would be well served to go back and read, re-read, and re-read again and then sit with and try to thoroughly digest “Jersey Cynic’s” recent post. Thomas Pynchon is rumored to have said, “It doesn’t matter what the answers are if you can get them asking the wrong questions.” This is why the angst is building on all fronts. We are living in epic proportional times and yet still asking diminutive questions. No wonder! The Wheel of Life itself is shifting. No more going back. No more “good old days”. No more “business as usual”. No more secretive power organizations puppeteering the masses. Consciousness has risen up through these things and is accelerating upward. Yes, this rise “appears” to be dark; however, what appears as darkness is simply darkness appearing into our awareness from the collective sub or unconscious. Its always been there. The 1st of the 5 stages of loss that the late E. Kubler Ross wrote about is denial. We are all in “The Great Loss” (of the old way), however, since we’ve lost our Original Instructions, we do not realize it. Denying this or that the darkness has been in the collective unconscious does not make it go away any more than swimming against the tsunami of current change. The 2nd phase is anger. As you can tell from this and all blog sites, many are moving from #1 to #2. The next phase is bargaining, which you see happening also…all to avoid the 4th stage of loss…DEPRESSION. Any feeling, felt to completion, leads to wholeness. We will all go through this phase, regardless of Bernanke, reds, blues, religionists, atheists, gay or straight, rich or poor, western or eastern. We can not take the old ways with us. To the extent we do not come into current and mindful relationship with what IS, we suffer.
    “It doesn’t matter what the answers are if you can get them asking the wrong questions.”

  80. cdrueallen says:

    How do we know that the Republican House members aren’t shorting the U.S. markets themselves while they block all possible debt ceiling deals?

  81. socaljoe says:

    The US does not qualify for a AAA rating and Moody’s is not qualified to rate debt.

  82. WaveCatcher says:

    Helolo Sidfinkel (Post #4),

    Just because a previous Congress passed some spending bills doesn’t mean that the CURRENT Congress, populated by a larger number of “small government” advocates, doesn’t have the mandate to attempt to roll back some of the spending.

  83. 4whatitsworth says:

    It seems to me like we are doing all these things to avoid the next great depression.

    I would think everyone would be sick of hearing all this crap.. “let’s give these big banks zero interest loans or else”.. ok “now let’s reduce taxes or else” .. ok now “let’s increase the debt limit or else”..

    I wonder what the United States would be like if had indeed avoided the great depression. Clearly things would be different however I doubt that we would be better as a society. This time around it appears that we are avoiding what is probably a natural and well deserved hardship so I suppose we will see the consequences of that. I doubt future generations will ever term us “The greatest generation”.

  84. mathman says:

    MEH: with all due respect, sir, you can “believe” what you want, but there’s no denying (at least for me) what’s happening and its consequences (whenever the planet decides “its time”). i appreciate your taking the time to respond and i always read what you have to say. i actually hope i’m completely off base and totally wrong about this, but it doesn’t seem like we’re heading in the direction of sustainability in any way, shape or form – and it gets worse each year (as predicted by the ham-bone crowd). The example you gave is noted, but we’re talking about almost a century (as opposed to your 5 year blip and one volcanic incident) of putting ever more carbon dioxide every year into the atmosphere (and ocean). It’s reaching a tipping point, i’m afraid – it’s just chemistry and physics. Here’s a little more (i’m sorry to say) you probably will ignore, but i sincerely hope you’ll at least consider:

    http://www.smirkingchimp.com/thread/tom-engelhardt/37296/tomgram-bill-mckibben-the-great-american-carbon-bomb

    JerseyCynic: good stuff! Thanks. One of the high points of my day is reading what all you great minds have to say – from the cynical to the technical, from fun to fundamental – and linking to sites i’ve never heard of but enjoy checking out (even when i disagree). The music you all suggest, the further reading (and i do a lot of it), and just the great attitude around here – even when it’s caustic – is absolutely what i look for in a blog.

    Barry Ritholz – thanks for making this one of the best blogs i’ve ever encountered and with which i’m permitted to interact.

  85. DeDude says:

    @WaveCatcher;

    The most recently passed budget was passed by the current Congress. But don’t let facts get in the way of your opinion (as Colbert say “the facts have a liberal bias”).

  86. xynz says:

    Michael says:

    “It seems clear to me that the current critical problem is the explosion in spending under Obama. Longer term is our unaffordable/wasteful SS and Medicare system. Am I missing something?”

    Yeah, you’re conveniently missing the fact that there was a surplus under Clinton. The Bush tax cuts and unfunded wars are mainly responsible for this mess. Bush added 5 Trillion to the debt and in his last year in office, he racked up a $1.2 Trillion deficit.

    http://money.cnn.com/2009/01/07/news/economy/cbo_2009_budget_outlook/

    http://www.politifact.com/truth-o-meter/statements/2009/jan/22/rahm-emanuel/5-trillion-added-national-debt-under-bush/

    ———————————————————————————

    After Reagan tripled the debt and W doubled it, people like YOU only become concerned about debt when there is a Democrat in the White House

    ———————————————————————————

    People like YOU never let the facts get in the way of their talking points:

    “Longer term is our unaffordable/wasteful SS and Medicare system.”

    Right now, Social Security takes in more tax money than it’s spending….it’s the only thing in the government budget that is operating at a surplus. In 2010, FICA taxes took in $865 Billion, but the Social Security payouts were only $701 Billion. Social Security has been running at a surplus for decades, the extra money is supposed to go into a trust fund so it can be paid out for demographic bulge of the Baby Boomer retirement. But Reagan, Bush and Bush II used the FICA surplus to mask the true size of the deficits they were creating. About 4 Trillion of US debt is owed to the Social Security trust fund.

    ———————————————————————————

    When the budget is running a surplus, people like YOU and the Republicans say a surplus means there should be tax cuts. When the budget is running a deficit, people like you and the Republicans say it means there should be spending cuts AND tax cuts.

    ———————————————————————————

    NOW that all of your low tax, low wage and high debt chickens have come home to roost, YOU and your Republican co-conspirators see a golden opportunity to “starve the beast” through a default. In one fell swoop, you can destroy the most effective* New Deal and permanently hobble the possibility of any debt financed Newer Deal.

    *you can’t permit Social Security and Medicare to work and thrive, because they invalidate your “government doesn’t work” meme.

    Intellectually dishonest people like you, socalJoe, MayorQuimby and Lukey, live in a bizzaro world. In your bizzaro world, the way numbers add up depends upon which party controls the White House. In your bizzaro world, the definition of taxation depends upon who is paying: because you say that people who pay FICA and Medicare taxes aren’t really paying income taxes. In your bizzaro world, the thriving high tax, high wage, highly unionized economies of Scandinavia simply do not exist. In your bizzaro world, the low tax and low wage economy of Mexico is the preferred model (Mexico only has an 18% tax burden).

    Back in 1978, you and your cohorts started this bizzaro transformation with Proposition 13. Almost 35 years later, your grand experiment in steadily decreasing taxation coupled with union busting is about to deliver on its promise: turning the US into a Third World county, where living in comfort and security is a privilege reserved for the wealthy.

  87. cdrueallen says:

    In answer to my own question about the House Republicans shorting the U.S. markets – looks like they are. At least Eric Cantor, #2 Republican in the House, is shorting U.S. Treasuries.

    http://www.salon.com/news/politics/war_room/index.html?story=/politics/war_room/2011/06/27/eric_cantor_conflict_of_interest&source=newsletter&utm_source=contactology&utm_medium=email&utm_campaign=Salon_Daily%20Newsletter%20%28Not%20Premium%29_7_30_110

  88. mathman,

    I hear ya, esp. w/ “…but it doesn’t seem like we’re heading in the direction of sustainability in any way, shape or form – and it gets worse each year…”, I tend agree..

    I didn’t intend to make it sound like I was, totally, dismissing you’re, underlying concern..

    w/this “…“…– ya can’t just put all that stored carbon (that over millions of years has been sequestered out of the atmosphere) back into the atmosphere and NOT expect some imbalance in climate…”

    take it EZ on the ‘Hambone Climatologist’-spiel..”

    I was trying to allude to the Idea that the “Climate” is a Complex System, with many Actors (at the min.) ..

    and, here http://seoblackhat.com/2007/03/04/global-warming-on-mars-pluto-triton-and-jupiter/
    http://www.johnstonsarchive.net/environment/warmingplanets.html

    was pointing to some other ‘data points’/ observations that should allow one to consider that “It” isn’t, just, Carbon Dioxide, or Our production of it..

    here, though, w/ “…and, with the whole neo-Malthusian line of ~Inquiry, you may do well to wonder..”Whose Hymnal are you Singing from?”…”

    and, to your point, about “Sustainability”

    see some of http://search.yippy.com/search?query=Carbohydrate+Economy&tb=sitesearch-all&v%3Aproject=clusty

    much like “Climate”, “the Economy” is a Complex System — We shouldn’t pretend to “believe” that our Knowledge, of either (or, of Anything), is Complete..

    and, yes, There can be “a Better Way” ~

  89. Hey You says:

    The history of government management of money has, except for a few short happy periods, been one of incessant fraud and deception.
    – Friedrich Hayek

    “The state is the great fiction by which everybody seeks to live at the expense of everybody else.” —Frederic Bastiat

    Panics do not destroy capital; they merely reveal the extent to which it has been destroyed by its betrayal into hopelessly unproductive works.” John Mill

    A government that robs Peter to pay Paul can always depend on the support of Paul.
    George Bernard Shaw

    The significant problems we face cannot be solved at the same level of thinking we were at when we created them.
    Albert Einstein

    It’s so much easier to suggest solutions when you don’t know too much about the problem.
    Malcolm Forbes

    and my favorite:

    We don’t see things as they are, we see things as we are.
    Anais Nin

  90. Michael says:

    Dear xynz,

    You make me laugh…. ha, ha, ha, ha….

    Michael

  91. mathman,

    also, w/ http://www.smirkingchimp.com/thread/tom-engelhardt/37296/tomgram-bill-mckibben-the-great-american-carbon-bomb

    note: he mentions nothing of Water usage/despoilage, or, even, the great Sulfur mounds created by the process..

    just, “Carbon”-this, “Carbon”-that ..

    LSS: reading a steady diet of such Screeds will break your Brain.

    http://search.yippy.com/search?input-form=clusty-simple&v%3Asources=webplus&v%3Aproject=clusty&query=Athabasca+Oil+Sands+Sulfur+pollution

  92. WFTA says:

    xyzn,

    You nailed it on every point. Morning in America, the New El Salvador.

    Michael,

    Take a flying fuck at a rolling doughnut. A more nuanced retort would clearly be a waste of nuance.

    That is all.

  93. kaleberg says:

    Downgrading US government debt is like changing from Fahrenheit to Centigrade so that water boils at 100 degrees instead of 212 so you can save energy. What exactly is going to be at the top of their scale above the US government debt? Is it dollar denominated? Granted, these guys were so dumb they missed the housing bubble and put their octuple-A stamp on trillions in toxic waste. I can swear this is something out of The Onion.

    P.S. Maybe they should boost the rating? It goes to 11!