Since every other word out of the mouths of political pundits is “fiscal cliff”….maybe a little knowledge will help the understanding…….
All the crap that people bitch about and this one is NO where to be found……of course, a couple politicos have compared the US to Greece, most notably some on the pseudo-news channel that shall remain un-named…..my problem is that Europe and its problems will eventually come to our shores and roost and yet neither candidate has mentioned except in passing and saying one candidate sucks…….maybe these dorks need to tell the American people what is awaiting the US…….
But it does matter….even if you ignore it…..it still matters….and why is that?
AP has a beautiful explanation——-
Europe buys 22 percent of the goods America exports. U.S. companies have invested heavily in Europe. So any economic slowdown in Europe dents U.S. exports and corporate profits. But the biggest fear is that a European financial crisis will flare up and move west across the Atlantic — the way Wall Street’s 2008 crisis moved east to Europe — with dire consequences for the U.S. economy.
Europeans are struggling to repair a system that was flawed from the start. The euro, introduced in 1999, makes it easier to do business across Europe; no more changing francs to deutschemarks when French and German companies do business. But the common currency joined countries with vastly different economies and political cultures — and each got to keep running its own budget. During the 2000s, banks were willing to overlook the differences and lend at low rates to countries like Greece with dubious records of fiscal discipline. Lenders knew they’d be repaid in euros, not local currencies that could be devalued by inflation. Greece and other countries took advantage of the easy money. Their debts proved crushing after the recession hit.
To fix their finances, European countries have cut government spending and raised taxes. Greece, Portugal and Ireland had to tighten their belts to qualify for bailouts. But the austerity has taken a toll. Europe is sliding into recession. The pressure might force Greece to abandon the euro and revive its old currency, the drachma. Other countries — notably Italy and Spain — might follow Greece out of the eurozone.
Abandoning the euro would free countries from an economic straitjacket. When they joined the eurozone, they surrendered control of interest rates to the European Central Bank, so they cannot cut their own rates to boost their economies. Nor can they push down their currencies to give their exporters a price advantage and trade their way out of trouble.
But breaking up the eurozone would be dangerous. Borrowers in countries that left the eurozone would struggle to produce enough money in their weak local currencies to repay old debts denominated in much stronger euros. As debts soured, Europe’s banking system would freeze. Its economy would follow. The pain would spread. Worried about a crackup, investors are demanding higher rates on Italian and Spanish debt, driving those countries’ borrowing costs to unsustainable levels.
The Euro-Zone problems are our problems…..we will suffer as much as the countries of the EU if the wall cracks and falls in the economy’s lap….but yet it is not important enough for either candidate to try to explain the situation to the American people……
We hear daily from Repubs, Dems, Media hacks and faux economists tell us just how much trouble we are in because of China’s booming economy and their owning of our debt……you know it is so……..we are being preached to using the ever popular “Fear Factor” to push one form of thinking or another towards China…..whether it is their currency, or their manufacturing or their social policies……you have heard it all…in news stories, in debates, yada yada…..but what is the real story on China?
What is the future with China in the wings…..waiting…….
Larry Lang, chair professor of Finance at the Chinese University of Hong Kong, said in a lecture that he didn’t think was being recorded that the Chinese regime is in a serious economic crisis—on the brink of bankruptcy. In his memorable formulation: every province in China is Greece.
Lang’s assessment that the regime is bankrupt was based on five conjectures.
Firstly, that the regime’s debt sits at about 36 trillion yuan (US$5.68 trillion). This calculation is arrived at by adding up Chinese local government debt (between 16 trillion and 19.5 trillion yuan, or US$2.5 trillion and US$3 trillion), and the debt owed by state-owned enterprises (another 16 trillion, he said). But with interest of two trillion per year, he thinks things will unravel quickly.
Secondly, that the regime’s officially published inflation rate of 6.2 percent is fabricated. The real inflation rate is 16 percent, according to Lang.
Thirdly, that there is serious excess capacity in the economy, and that private consumption is only 30 percent of economic activity. Lang said that beginning this July, the Purchasing Managers Index, a measure of the manufacturing industry, plunged to a new low of 50.7. This is an indication, in his view, that China’s economy is in recession.
Fourthly, that the regime’s officially published GDP of 9 percent is also fabricated. According to Lang’s data, China’s GDP has decreased 10 percent. He said that the bloated figures come from the dramatic increase in real estate development each year (accounting for up to 70 percent of GDP in 2010).
Fifthly, that taxes are too high. Last year, the taxes on Chinese businesses (including direct and indirect taxes) were at 70 percent of earnings. The individual tax rate sits at 81.6 percent, Lang said.
Once the “economic tsunami” starts, the regime will lose credibility and China will become the poorest country in the world, Lang said.
Professor Frank Xie at the University of South Carolina, Aiken, said that the idea of China going bankrupt isn’t far fetched. Major construction projects have helped inflate the GDP, he says. “On the surface, it is a big number, but inflation is even higher. So in reality, China’s economy is in recession.”
Further, Xie said that official figures shouldn’t be relied on. The regime’s vice premier, Li Keqiang for example, admitted to a U.S. diplomat that he doesn’t believe the statistics produced by lower-level officials, and when he was the governor of Liaoning Province “had to personally see the hard data.”
Cheng Xiaonong, an economist and former aide to ousted Party leader Zhao Ziyang, said that high praise of the “China model” is often made on the basis of the high-visibility construction projects, a big GDP, and much money in foreign reserves. “They pay little attention to things such as whether people’s basic rights are guaranteed, or their living standard has improved or not,” he said.
Behind the fiat control of the economy, which can have the appearance of being efficient, there is enormous waste and corruption, Cheng said. It means that little spending is done on education, welfare, the health system, etc.
Cheng says that for the last decade the Chinese regime has accumulated its wealth primarily by promoting real estate development, buying urban and suburban residential properties at low prices (or simply taking them), and selling them to developers at high prices.
According to Cheng, the goals of regime officials (to enrich themselves and increase their power) are in direct conflict with those of the people–so social injustice expands, and economic propaganda meant to portray the situation as otherwise prevails.
If this report is true…..what is to gained from lying to the American people?
My thinking was that the ratings would be lowered……and this post was going to be about that…..but the bastards best me to it…….oh well….onward and upward.
I wish that I had better news…..I hate being that guy that seems to always delivers the crappy stuff….but I do what I must to help people see what is coming…….
The economy is in the toilet….so it cannot get any worse, right? Wrong again! It will soon get a lot worse and this time it will be again on the backs of the unemployed……Washington is doping the spending cut two step and there is an economic storm approaching….NO! This time it is not he debt or the debt ceiling……..but rather the stopping of the unemployment benefits……I know…I know……I can suck the fun out of the party…..but forewarned is fore armed…….
This from Yahoo News…….
At the start of 2012, the extended unemployment benefits approved by Congress in December 2010, which cover a maximum of 99 weeks per person, will expire. Though the benefits are hardly lavish–a little more than $300 a week for most recipients–their total impact on the economy is huge, because so many Americans are currently taking advantage of them. Moody’s Analytics estimates that when the benefits expire, $37 billion will be taken out of the economy, the New York Times reports. That’s enough to exert a significant slowing effect–at a time when the recovery is already a long way from robust.
Government benefits that go to poorer Americans, like unemployment insurance, tend to boost consumer spending more than other kinds of stimulus, because people living paycheck to paycheck have little choice but to spend the money, rather than saving it. So the disappearance of jobless benefits will take money out of circulation when economic growth is seeking to gain some traction.
Indeed, economists say that the withdrawal of jobless benefits will create a major ripple effect on growth as a whole. Consumer spending accounts for around 60-70 percent of U.S. economic activity, economists say. But with so many Americans having lost wealth in the housing bust, spending has been tepid for a while, preventing the recovery from gaining any momentum. Now, the end of the extended benefits will likely soon put a further crimp in spending.
Oh crap! It cannot get much worse, huh? Nope! And how will our cowards in Washington handle this new crisis? I know that at times I can be a bummer and I see boogey men behind every bank account….but so far I have been pretty accurate in my concerns….
And then there is Cantor, the House majority leader who said to Jim Kramer…..
CANTOR: Jim, the most important thing we can do for somebody who’s unemployed is to see if we can get them a job. I mean, that’s what needs to be the focus. For too long in Washington now we’ve been worried about pumping up the stimulus moneys and pumping up unemployment benefits and to a certain extent you have states for which you can get unemployment for almost two years and I think those people on unemployment benefits would rather have a job. So that’s where our focus needs to be.
So if you are unemployed you will most likely be one the chess pieces in a debate in the House and if all goes like it did with the debt debate…..YOU ARE SCREWED!
I wish my question was about a visit to Ben and Jerry’s…..but unfortunately it is not but rather a crashing economy…….the debt deal has been made and it will involve tax cuts, spending cuts, balance budget and NO revenue…….and I am old enough to ask….where have I heard all this before?
But what do the people think about all the wheelin’ and dealin’?
A new USA Today/Gallup poll finds 39% of Americans approve of the debt ceiling agreement that President Obama signed into law this week with 46% opposing it.
Key finding: Only 33% of independent voters approved of the deal, while 50% disapproved.
First Read: “But if you want evidence that conservative opinion leaders (Limbaugh, Red State, DeMint) might have more sway over Republicans and conservatives than liberal opinion leaders (Krugman, Daily Kos, Bernie Sanders) have over Democrats and liberals, check out these numbers. According to the poll, 64% of Republicans and 64% of conservatives opposed the deal. By comparison, 58% of Democrats and 51% of liberals supported it. Bottom line, at least per this poll: More Democrats and liberals sided with Obama. than with the liberal opinion elite.”
But let us get back to where I have heard all this BS before?
In 1937 the Roosevelt administration attempted to balance the federal budget by curtailing public works and cutting relief employment programs, while the Federal Reserve limited credit and reduced the money supply to prevent a resurgence of inflation. These actions weakened the economy, which already suffered from a lack of business confidence, and a severe recession ensued after the stock market plunged steeply on 7 September 1937. Over the following nine months, manufacturing employment fell by almost a quarter, industrial output by a third, the stock market by half, and profits by over three-quarters. By June, as the economy began to revive, 4,000,000 workers had become jobless. A major reason for the upturn in business activity was a greater willingness to use budget deficits for economic stimulus……….Geez all that sounds darn familiar, huh? By all means Google this and see if I lie…please…do not take my word for it!
Everybody has claimed victory in the new debt deal…….the truth is these twats are just repeating the mistake made in 1937…..and that was a disaster…..and guess what? This will be also! The use of budget deficits is a proven solution for a recession……regardless of what Tea baggers want you to believe……….recent activity or the lack thereof, on Wall Street shows the reader that all is NOT well with the American economy…..and to keep playing moronic, childish little games will do NOTHING to help the country…it will NOT create demand and without demand….we have NOTHING!
A Double dip? This from the Economist magazine…..
WALL STREET is betting on a double-dip recession.
All financial-market signs now point to a return to economic contraction. The S&P 500 has dropped 9% in two weeks. American government borrowing costs are plummeting, which could conceivably be construed as a result of increased confidence in America’s finances in the wake of the debt-ceiling deal, except for three things: 1) the deal didn’t fundamentally improve America’s finances, 2) equities are tanking, and 3) so are inflation expectations. Yesterday afternoon, yields on inflation-protected Treasuries signaled a 5-year expected inflation rate of about 2.08%. That has since fallen to about 1.86%. The yield on 3-month debt is back to 0.0%, the yield on the 30-year Treasury is 3.79%, and 10-year yields are back to levels observed last August, which prompted the Fed to engage in QE2. Commodities are dropping like rocks.
If Washington continues down this road…that would be the road that that darn pesky can is on…….we have nothing to look forward to but More Economic Misery……..don’t you just love this crap?
But wait, sports fans….there is more observations….this one from Newser……..
Economists say we could be headed for a second recession—and if they’re right, it’s poised to be even more devastating than the first, writes Catherine Rampell in the New York Times. That’s because the starting point for the second dip would be our current weak economy, and this time, policymakers have little room to fix things. Consumers don’t have much fat to cut, either—they did that already—meaning families would have to “cut from the bone.” Other signs round two would be a doozy: Consumer spending hasn’t grown; industrial production is down 8% compared to December 2007; and while the civilian working-age population has grown about 3% since 2007, there are 5% fewer jobs for it. Interest rates can’t go lower than their current zero, and Washington lacks the financial and political means for another stimulus. Finally, “and perhaps most worrisome,” is the fact that the economy is smaller now than it was at the beginning of the recession.
This country is in deep trouble……as long as we allow idiots to run the country and shape economic policy….the deeper the recession will get and the harder it will be to pull out of it…..
My days of Zen were interrupted by the downgrading of the US credit rating by S&P……all weekend it was it is the Tea Party’s fault…..no, it is the Dems fault…..no, it is the Pres, fault because he had a birthday….nope, it is the Repubs fault for their uncompromising stance……finally, it is S&P’s fault for not understand the nature of American politics……
Please, shut the f*ck up and get to work! It is everyone’s fault….especially the dipsticks in Washington….it is the voters fault for trusting the typical lies of politicians……the blame game is being played because NOT one of the morons in the capital have any idea how to fix the sagging economy and the approach of a double dip…instead of working for what is best for the country…..let me repeat that…..WHAT IS BEST FOR THE COUNTRY……..they had rather sink back into their ideological cave and point fingers……
Take the GOP’s economic genius, Paul Ryan….the best he could do is blame the Dems and their spending….and then there is Sen. Kerry who blames the Tea Party and finally the Tea Party spokesmen just rattled on about nothing that makes sense, economic sense, that is……..in other words NOT one of these morons has any ideas….at all!
Once again, we are confronted with a government run off of talking points…….and not one of those points will solve the problem……and once again we are confronted by politicians that have NO interest in saving the country from ruin…..their only interest is their silly little talking points and their out dated ideology…..
The politicians have allowed this to happen…..the American voter has allowed this to happen. Why do we allow these twats to continue to allow these types of people represent us? I know someone out there will have a good answer…..for the life of me…..my thoughts are….we are just plain STUPID!
It is time for EVERYBODY to Shut the F*CK up and come together and find solutions to real problems and stop chasing those non-existent boogey men!
I say it again…….IT IS THE COUNTRY, STUPID!
By now I am sure that most rational individuals have heard the bad news about the US losing its “AAA” rating……we have been degraded to “AA+”….But how and what caused this…I mean after all we did have a debt ceiling increase….so why the pee pee spanking by S&P?
If you really want to know then read their statement…..read it for yourselves!
The political brinksmanship of recent months highlights what we see as America’s governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed. The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy. Despite this year’s wide-ranging debate, in our view, the differences between political parties have proven to be extraordinarily difficult to bridge, and, as we see it, the resulting agreement fell well short of the comprehensive fiscal consolidation program that some proponents had envisaged until quite recently. Republicans and Democrats have only been able to agree to relatively modest savings on discretionary spending while delegating to the Select Committee decisions on more comprehensive measures. It appears that for now, new revenues have dropped down on the menu of policy options. In addition, the plan envisions only minor policy changes on Medicare and little change in other entitlements, the containment of which we and most other independent observers regard as key to long-term fiscal sustainability.
There is more……..
United States of America Long-Term Rating Lowered To ‘AA+’ Due To Political Risks, Rising Debt Burden; Outlook Negative* We have lowered our long-term sovereign credit rating on the United States of America to ‘AA+’ from ‘AAA’ and affirmed the ‘A-1+’ short-term rating.
* We have also removed both the short- and long-term ratings from CreditWatch negative.
* The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government’s medium-term debt dynamics.
* More broadly, the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned when we assigned a negative outlook to the rating on April 18, 2011.
* Since then, we have changed our view of the difficulties in bridging the gulf between the political parties over fiscal policy, which makes us pessimistic about the capacity of Congress and the Administration to be able to leverage their agreement this week into a broader fiscal consolidation plan that stabilizes the government’s debt dynamics any time soon.
* The outlook on the long-term rating is negative. We could lower the long-term rating to ‘AA’ within the next two years if we see that less reduction in spending than agreed to, higher interest rates, or new fiscal pressures during the period result in a higher general government debt trajectory than we currently assume in our base case.
Please read it again……..it is worth understanding completely before I continue….(pause here for reflection)………
Now that you understand the thinking behind the degradation……let me explain the title of this post…..the “Rat Pack” I am referring to is not the one that we all enjoyed with Frank, Dino, Sammy, et al…..NO I am talking about the bizarre collection of GOP candidates and what they think about the downgrade…..would you like to hear their thoughts? (I do not see them as thoughts but rather ass rumblings)…..
- Newt Gingrich: “The Obama disaster continues. Highest food stamp level and lowest credit rating in history in the same 24 hours.”
- Jon Huntsman: “Out-of-control spending and a lack of leadership in Washington have resulted in President Obama presiding over the first downgrade of the United States credit rating in our history. We need new leadership in Washington committed to fiscal responsibility, a balanced budget, and job-friendly policies to get America working again.”
- Mitt Romney: “America’s creditworthiness just became the latest casualty in President Obama’s failed record of leadership on the economy. Today, President Obama promised that ‘things will get better.’ But it has become increasingly clear that the only way things will get better is with new leadership in the White House.”
- Rick Santorum: “Folks, an AA rating should be so far in our rear-view mirror that no mathematical error should affect it. Tonight, I’m saddened for the millions out of work, but I’m hopeful that I will replace Barack Obama as president and get this country and its economy moving again.”
These are the people that want to run this country….and between all of them I have heard NO substantive economic plan…..only that everything is Obama’s fault…….and people will vote for this pack of morons and cowards….well NOT ME!
NO one will take responsibility for this but yet they want the rest of us to man up and take responsibility for our actions….these cowards are killing this country….I am talking about both parties and those ‘baggers that think they speak for us real people…….and yet fingers are pointing as I write……
Now my question is….will YOU, the voter, remember what this pack of cowards have done to the country you love? I am hoping you will but I will NOT hold my breath…….There is a new slogan….”It’s The Country, Stupid”!
The deal is done! Tuesday the Senate made it official and voted for the pathetic debt deal and immediately the Congress ran to the exits and on to the airport so they could go home and put on the latex gloves and knee pads and meet with their donors……the temp on Tuesday in Washington was 96 and it will be 87 on Wednesday….if that does not prove that the people are large sources of hot air, then nothing will…….
But I digress……..Did you know in their rush for the exits and the failure to do something about the FAA bill will cost the country about a billion dollars in noncollectable revenue? Just thought you would like to see just how these people are screwing the country……..but wait! There is more!
After the deal vote Senate minority leader said….”Americans do not believe that raising job killing taxes is best for the country….” (a paraphrase)…..but according to the Economic Policy Institute, a non-partisan think tank that deals with facts and figures….the deal is a job killing bill in itself…..
According to the EPI analysis the debt ceiling act will, in the long run, cost about 1.8 million jobs and will increase the debt by $241 billion…..but do not take my word for it….read the analysis for yourself…….http://t.co/9n2GZID………
Or another analysis from the EPI…….http://bit.ly/qoxWDk
I ask my readers to please read both analyses and then pass on these stories to others and maybe we can get somewhere when the losers return from their donor-a-thons in September.
What are you paying these people for? Apparently, they have NO inclination to help you or your family, then why keep putting your trust in their crap? It is time for us, the people, to take back our country from the windbags we have elected….I am all for giving Alfred E. Newman a shot….he could do no worse!