Third Party & Independents: Archives

David:

Here is a Bernanke Quote from October of last year on this subject:

Although some adverse effect of population aging on future per capita output and consumption is probably inevitable, actions that we take today, in both the public and the private spheres, have the potential to mitigate those effects.

In this article the Fed predicted if we did nothing and kept savings rates exactly as they are now, the future generation would see a decline of 14% in their standard of living.

On the other hand if we increased our savings rate by 3%, (or reduced consumption by 4%) they predict the next generation would have about the same standard of living as we enjoy.

A 14% drop in gdp/capita would mean our next generation would live at about the same standard of living as Canadians do now.

This is by the same Ben Bernanke you are quoting above. Worst case senerio is that our kids would end up living at the same standard of living as Canadians.

Here is the link:

http://www.federalreserve.gov/BoardDocs/Speeches/2006/20061004/default.htm

I believe we can and should increase the savings rate by at least 3%.

Craig

Craig, given the potential for the U.S. not to act, an argument could be made for just moving to Canada now and acclimating early.

Besides, if Ben Bernanke has a bias to his reportage, it is going to be on the optimistic side. All Bush’s appointees push their words to the optimistic side. I think the record is very clear on that point.

That would suggest, that the outlook is a bit more dire than Bernanke suggests, though, his statement that the time to act is 10 years ago, speaks volumes in and of itself, about how serious and deep the costs of not acting these last 10 years are going to be.

Constantly seeing the glass half full has brought us to this point of facing dire circumstances. I think there is a valid argument to be made, that we start seeing the glass half empty lest we make the future far worse.

Also, do not forget, that Bernanke’s words are predicated on the knowable, and DO NOT include the unforeseen, and there are always unforeseens in the future, like Katrina, 9/11, and loss of international competitive edge to China and others.

The earmarks victory and the impending vetos are positive developments, and it’s better to do the right thing late than never.

It seems (and I agree with David about this) that congressional Republicans seriously lost their way in recent years, to the extent of not even being true to their own party’s principles and spending like drunken sailors. Unfortunately, having a governing majority is not a good position to be in for those who are supposed to be resisiting the expansion of government spending. A positive development for Republicans is that there are strong signs that minority status has made them reconsider their role, listen more to their base, and distance themselves on many issues from the President and his free-spending, open-borders agenda.

This apocalyptic talk about impending “national chaos and collapse” and rats deserting a sinking ship is hugely overblown, however. Anybody who thinks they’re going to achieve better lives by moving out of the country is welcome to do so. There are literally millions who’d love to take your place, so don’t let the door hit you on the way out.

David:

The time to act on almost any problem long term problem is 10 years ago. That is a phrase.

Bernanke clearly states above that some adverse effects are inevitable, but if we act now we can probably mitigate these.

Even with no change, having our children’s lifestyle reduced to our the level of Canada is not impending doom.

No Crisis,

Craig

Loyal Opp, I agree with you that it is good that the minority party attempts to hold the majority party’s feet to the fire on fiscal responsibility. But, the plain and simple fact is, it takes the majority party’s will to act responsibly, and as we saw with Democrats as the minority party, critiquing the majority party does not necessarily result in fiscal responsibility.

At the heart of the issue is that tax payers have taxes taken from them, and these same tax payers want to see as much of those taxes returned to them in the form of pork barrel spending in their communities, or other services and benefits provided by the federal government. So, how is it that the majority party which, historically understands that spending on their constituents is politically responsible in terms of reelection, can also act fiscally responsible in terms of national debt and deficits? Especially when they operate under the assumption that more taxes are a bad thing?

Rudy Guiliani said today on TV that the American tax payer doesn’t want to be taxed, they want to spend their money on their own personal choices. DUH! Is Guiliani saying each household should defend its yard against terrorists individually, that foreign aid is a waste of tax dollars, that providing insurance against poverty is a bad thing, that conducting diplomacy through a state department is a waste when individual tax payers should negotiate with foreign powers each according to their own needs?

Guiliani’s entire premise is false. The majority of Americans don’t mind paying taxes. What they mind is, that those tax dollars are not acquiring the biggest bang for the buck. That the waste, corruption, and abuse of tax dollars in government contracting, to pitiful care for our veterans, to arming our nation’s future enemies are all counterproductive uses of our tax dollars. And what is the root of cause of this waste, corruption, and abuse of tax dollars? The root cause is wealthy special interest lobbyists who twist the arms of politicians, even those who truly desire far greater fiscal responsibility.

But, you won’t hear Guiliani calling for removal of wealthy special interest dollars and lobbyists from our legislative process. In fact, you would be hard pressed to find more a few dozen of 525 Congress persons who would.

So, don’t look to Republicans to solve the problem. And if anything can be expected of Democrats in this regard, it will be window dressing, and little more. Barring lobbyists from buying lunch or dinner for Congress persons, while needed, does not even begin to address the real root of monied corruption of government and its legislative processes.

Way to go, Craig. Don’t like the message, discredit the messenger and the message. So Bernanke was stating the obvious, no need to heed words of such obvious nature, eh?

Don’t like what Bernanke is saying? How about Greenspan who has been quite vocal of late, and without the encumbrance of being a political appointee?

Greenspan accurately predicted the large drop in the Chinese stock market this year. Greenspan is warning of the enormous illegal immigration problem facing the U.S. as Mexico’s oil production continues to fall as OPEC works to keep pricing from going up, causing enormous poverty in Mexico.

Does Congress have a realistic plan to deal with this? NOT! It is not even on their radar as they look to 370 miles of border barrier as a trigger for granting Amnesty to millions of Mexicans. Glass half full, or half empty?

Greenspan has been warning Congress and the American people for years about the enormous costs to be paid for fiscal irresponsible fiscal policy. There is no disagreement between Bernanke and Greenspan on this. I should think far more Americans should take these eminently trained and experienced men in economics words to heart, instead of poo-pooing such prognostications as Chicken Little proclamations.

How about Greenspan’s agreement with the following statement: “The income gap between the rich and the rest of the US population has become so wide, and is growing so fast, that it might eventually threaten the stability of democratic capitalism itself.”

Glass half empty or half full? Eternal optimists are incapable of dealing with real life problems, for obvious reasons. For optimists, there are no real life problems requiring sacrifice or solutions. Problems to be solved are anathema to optimists, who argue the future will always take care of itself, as you Craig have argued on many an occasion.

Let us not ignore that Bernanke and Greenspan are both fiscal conservative Republicans, calling for conservative action: i.e. conserve the quality of life we enjoy today, rather than squander it and our nation’s future in a myopic greed for today’s pleasures and enjoyment. They have earned my respect and credence in their words, and I am a far cry from a Republican.

David:

Way to go, Craig. Don’t like the message, discredit the messenger and the message. So Bernanke was stating the obvious, no need to heed words of such obvious nature, eh?

This is a pretty emotional response.

Not at all. I like Bernanke. From my perspective he is right on key. He is not alarmist but is laying out some facts and principles that we need to look at.

I think raising the savings rate by 3% (at least) is a great idea. That rate basically means that our children’s burden would be equal to ours.

Bernanke goes on to say the best way to do so is to reduce the budget deficit. It is important to note that he does not call be paying off the debt, or even eliminating the deficit. He mearly suggests the deficit be reduced! Great idea.

No crisis, just a need action, like every other time in history,

Craig

David:

Where I see the difference between you and Bernanke and Greenspan is that they are mainstream tilting a bit to right. You are on the far flung fringe in economics. Your views are usually draconian if not doomsday. You see America as in steep decline. They see America as having problems like it always has had. They also see the problems that we have as fixable. You see America has beyond hope and about to be flung on the ash heap of history.

You really are far out there economically at least. On many other areas you are have some pretty mainstream ideas.

You do know that in the article you quoted Greenspan is for open boarders don’t you?

Craig

Craig said: “Your views are usually draconian if not doomsday. You see America as in steep decline.”

Do you make this stuff up as you go, Craig. Do you not see the error of your own statements, for what you want to see, to justify your own views? Please, quote where I have ever said that America is currently in steep decline. That obviously not true. Yet you presume to ascribe such words to me as if I spoke them.

I have written of the coming economic perfect storm of entitlements against the limited options of large national and debt and decades of growing trade deficits, combined with the losses of competitive standing with nations like China, India, Korea and Indonesia, and the enormous costs to be born to transition from fossil fuels to alternatives and increasing demand based on increasing population. All these coming are self-evident, and not in question by those who follow such things. I add to these the paralysis of our government to act consistently and effectively over time caused by the wealthy special interest’s short term demands, and our politicians dependency upon their money for their political careers.

All these are obvious to me. Greenspan’s view of the demise of capitalist democracy you find moderate compared to my view of what’s coming if we don’t act precipitously?

It is very curious how you weigh things.

Bernanke has the obligation and responsibility to not SPook the markets precipitating premature downturns.

Greenspan is not encumbered by a political obligation of appointment nor fear of spooking the capital markets. These are two facts to consider very carefully.

I suspect Bernanke too will utter far more dire warnings after he steps away from the yoke of responsibility for our market’s investors who support capital growth in America in the very short term and intermediate term. Yes, inflation is the fed’s first priority, economic growth its second. But, since capital markets are integral to economic growth, Bernanke has an obligation to not spook them.

As for deficits vs. debt, one cannot intelligently say the debt and its incumbent opportunity costs of service on that debt, are of no consequence. Which is why Bernanke doesn’t speak of it all. It would be bad politics to do so. The Bush Administration has enough negative news to contend with.

In Fiscal Year 2006, the U. S. Government spent $406 Billion of taxpayer money on interest payments to the holders of the National Debt, nearly half of which are foreign investors. Compare that to NASA at $15 Billion, Education at $61 Billion, and Department of Transportation at $56 Billion. The opportunity costs of the interest on the debt is are already huge. And each year that the national debt increases, so do the costs of NOT being able to do other things of benefit for the nation and the taxpayers.

With rising interest rates, we could easily see our interest on the nation debt grow to one half trillion dollars per year by the end of this decade just 3 years away. And that means taxpayers will suffer a half trillion dollar loss so that foreign investors may reap a quarter trillion in profits from tax payer pocketbooks in one year alone.

So, Craig, a half trillion dollars of taxpayer dollars by 2010 spent on interest instead of education, the military, infrastructure, or health care may be of little consequence to you. And you are entitled to hold that consistently absurd point of view.

But, for most tax payers, if they understood or became aware of this situation, it would be of considerable consequence to them. This makes earmarks and pork barrel spending pale in comparison. At least some tax payers will see a new gazebo or bridge to nowhere as a result of earmark spending. Not so, with interest on the debt.

But, the reality is even worse, as every dollar spent on interest, is two dollars of government service or product which the taxpayer will never see, one dollar sent to investors of the debt, and the other dollar of government service lost, which that interest dollar could have purchased. By 2010, this double loss to taxpayers will be 1 trillion dollars per year. That is significant.

Most people care far more for keeping up with the Jones’s of the world than they care for such vague things as national debt. Heck, let’s be honest, most people don’t even care about their own debt. The total household debt in America is about the same as our country’s national debt, I believe. There is a 16 year old kid that works with me that, believe it or not, drives a Hummer to work. One day he called in to work because his brother’s truck died and was blocking him in the garage. We jokingly asked why he didn’t just push his way out, and he told us that he couldn’t because his brother’s truck was bigger. Makes you wonder what the parents drive, tanks? With points of view like this, is our government’s behavior any surprise? Since WWII we have raised three generations of selfish, short-sighted Americans, people for whom apperances mean everything. Am I the only one that finds this hubris driven government unsurprising? Lord, I hope not.

Craig, so let’s imagine for a second. The world’s largest economic engine suddenly suffers a decline of 14%. What happens to the rest of the world? And you would consider this to be no big deal?

L

The strategy used by the Bush Administration to bring the federal government to the bath tub is very effective. To think that the American economy can withstand this assult indefinetly without the serious reprocussions so well noted by David is unsettling when it comes from otherwise intelligent and well informed people.

It bring to mind how well things were going and all the hubris generated by the free market types just prior to the non crisis of 1929.

David,

Listen to what I say, not what I do.

Politics as usual, practiced by BOTH parties. Let me give you an example.

The Clinton administration preached racial equality and blacks believed him to the point of calling Clinton “the first black president”.

That what he said.

What did he DO?

Ignored 800,000 Tutsi tribespeople being slaughtered so he could conduct a war to benefit white people in Bosnia.

Ignored 160,000 people of Darfur being slaughtered so he could conduct a war to benefit white people in Kosovo.

Gave the refugees of Kosovo everything they needed (food, water, shelter, medical supplies, etc.) and ignored the 1 million Tutsi refugees and ignored the 2 million refugees of Darfur.

Saying one thing and then doing another is “politics as usual” for BOTH parties…and that is exactly why a strong third party is ESSENTIAL to this country…so that when any one politician says, “Listen to what I say and ignore what I do” we can vote their sorry butts out and elect a person that will be held to OUR standards and NOT “politics as usual”.

Leatherankh, it is hard to disagree rationally with what you say. I can only argue that though you are right, a great majority consumer middle class has been the best insurance against revolution and civil war the world has ever seen.

It remains to be seen if all the political apathy and ignorance that comes with democratic capitalism will be its own undoing, as Karl Marx discussed. So, far, history disproves this prospect. But, if our government does not act post haste to head off America’s Perfect Economic Storm, there will be great suffering and loss experienced by millions of Americans, most of them our children, in the next few decades.

Two and a half years ago I wrote here (see link above),

[America] must move to install practical, sound, and swift measures to

1) reprioritize America’s spending, tending to American needs while ending deficits and reducing the national debt while there is still a window of opportunity to do so,

2) invest smartly and heavily in alternative energy and conservation measures to eliminate our future’s dependency on oil,

3) reverse the falling dollar, invest in education and American inventiveness in a huge way so the U.S. will have something to export in exchange for our dependency on imports, and

4) increase the minimum wage while America can still afford to, which will enhance savings, stimulate consumer demand, and shore up the hope of the lower earning 1/3 of Americans to withstand the hard times ahead with a life sustaining minimum wage.

America has made modest progress toward some of these, but, it appears to be very slow progress indeed and incomplete.

j2t2, it is most apropos’ to draw a parallel between what is coming if we don’t act and the days before the stock market crash in 1929. Though it may not be a stock market crash that precipitates the next depression or deep recession, a depression would affect many times the workers and families that it did in the 1930’s. I suspect the American people of today would not be so passive about such an event tomorrow as they were in the 1930’s. And the illegal moonshine stills of the last depression will be replaced by an incredible burst in illegal drug activity that will drive prices for illegal drugs to rock bottom pricing through the mechanism of underground competition for enough money to feed one’s family.

Jim T, in Clinton’s defense, it must be noted that he did not stretch our military to the extent Bush has trying to fight multiple front wars. There is no limit to the power of our nuclear weapons. But, there are very real and definable limits to our non-nuclear military capacity and our economic ability to sustain multiple front wars.

Did skin color play a part in the Clinton Administration’s decision as to where to send our troops? Very likely, as media coverage, intelligence, and historical and economic significance of countries favored white strife over black strife for coverage and economic impact. America then, and now (see Bush’s missile defense shield proposal for Europe causing such a row with Russia), feels an obligation to the former Eastern Bloc countries we helped liberate from the USSR.

You are correct however, that the hypocrisy knows no party limits. Democrats say they seek ethics reform, but, they are unwilling to touch the gravest ethical problem facing our political and government systems, wealthy special interest control over the legislative process. Democrats passed PayGo, but, immediately turned around and began drafting bills to be exempted from PayGo.

Am I getting senile, or didn’t Clinton go to Bosnia and Kosovo in response to a request from the UN? Did the UN request the other actions? Perhaps it is the UN that has a racial bias?

David, When we dont learn from history we are doomed to repeat it. The roaring twenties and the unbridled predatory capitalism of the day were put in check by legislation passed by the FDR administration. The loosening of the laws in the name of free trade that has been occuring during the “repub revolution” seems to indicate where we as a country are headed.
The more economically intelligent posters like LO and Craig seem to believe there are no looming crisis’s much like those economic types of the 1920”s who saw no end in sight to the stock market rise just days before the collapse.
The south americanization process we are being subjected to now, along with the repub promise to drown the federal government in the bath tub are two internal problems that will help to take this country down as much or more than the external competition from China and other countries.

David,

Good comment. Our political system knows no ethical bounds…except when it will make political points. I am cynical enough to think that half (or more) of the ethics charges brought against various congressmen and women are out of jealousy. It’s the old “why didn’t I think of that first” syndrome. Maybe not…but it makes me grin sometimes.

womanmarine,

MY GOD! Does it actually take a U.N. request to do the RIGHT THING??? Isn’t the mere thought of a MILLION dead people and 3 MILLION refugees enough for someone to act?

David:

Please, quote where I have ever said that America is currently in steep decline.

It doesn’t take much smarts for rats to abandon a sinking ship.

I will be happy to change metaphors. You believe America is a sinking ship.

Either way you are out of mainstream. I don’t think there is much arguing the point is there?

L.

Craig, so let’s imagine for a second. The world’s largest economic engine suddenly suffers a decline of 14%. What happens to the rest of the world? And you would consider this to be no big deal?

Not really. It happens routinely. It’s called currency revaluation. It’s already happened with the US dollar with probably more to go.

To be exact, there is a big difference between individuals living at a 14% less living standard than a country. They are not the same.

We have some economic issues to look at but there are many solutions. Even Bernanke who David quotes clear on that point. He says if we don’t act our children’s standard of living could fall by 14% or to about the level of Canada. That is no the end of the world.

I would prefer to take action so that our children’s standard of living is higher than ours. According to Bernanke that would mean increasing our savings rate by more than 3%. We can do that by reducing (but not eliminating) the deficit.

We can still deficit spend but just not as much as the last several years. As long as the debt grows slower than the economy we build borrowing power for later on when baby boomers are aged. What would be great is to see the debt as a % of GDP drop considerably. We should see this happen soon as the deficit is pretty low.

Craig

David:

Please, quote where I have ever said that America is currently in steep decline.

I have written of the coming economic perfect storm of entitlements against the limited options of large national and debt and decades of growing trade deficits, combined with the losses of competitive standing with nations like China, India, Korea and Indonesia, and the enormous costs to be born to transition from fossil fuels to alternatives and increasing demand based on increasing population. All these coming are self-evident, and not in question by those who follow such things. I add to these the paralysis of our government to act consistently and effectively over time caused by the wealthy special interest’s short term demands, and our politicians dependency upon their money for their political careers.

In Fiscal Year 2006, the U. S. Government spent $406 Billion of taxpayer money on interest payments to the holders of the National Debt, nearly half of which are foreign investors.

$406 billion is fine by historical standards. It’s a much smaller percentage of gdp that is was in the nineties.

I’m not so sure the foreign investors is that big of a deal. US companies are bringing in about $240 Billion a year from overseas in profits which is taxable!! Looks like a wash.

So, Craig, a half trillion dollars of taxpayer dollars by 2010 spent on interest instead of education, the military, infrastructure, or health care may be of little consequence to you. And you are entitled to hold that consistently absurd point of view.

You are setting it up either or for your own purposes. It’s not either or. as for a half trillion by the year 2010, no it’s not a big deal for the size of our economy. It’s like a person making $100,000 paying out $3,000 a year in interest. No big deal.

Craig

Craig, you asserted that I said our economy IS in steep decline.

Everything you quoted of my words says COMING, not IS.

Just a a little English lesson to help you out, future tense vs. present tense have radically different meanings. Having that straight, what part of what you quoted do you disagree with, regarding what is coming in our future if Congress does not act to avert?

Percent of GDP is meaningless when communities are dying of abject poverty in the Mississippi Delta. That 406 Billion could have rescued and revitalized many dozens of these communities and prolonged life, and reinstated dignity to the existence of these poverty stricken Black Americans. Tell those folks that 406 billion was well spent last year on foreign and domestic investor’s enrichment.

Craig said: “It’s like a person making $100,000 paying out $3,000 a year in interest. No big deal.”

It is a big deal if that $3000 is diverted from needy people depending on the person making $100,000. If their debts are starving their children for lack of cash flow, it is a very BIG DEAL.

David:

Craig, you asserted that I said our economy IS in steep decline.

Everything you quoted of my words says COMING, not IS.

Ok, you are a doomsdayer because you say we are going to at some future point going to go over the waterfall, not that we are already over the waterfall. Either way, you are predicting our future decline.

what part of what you quoted do you disagree with, regarding what is coming in our future if Congress does not act to avert?

This is meaningless because Congress ALWAYS acts.

Besides Bernanke has already predicted that the next generation will see a 14% drop in their standard if living over our standard of living. Americans would live at the same level as people in.

I relooked at a chart on standard of living. According to your sourse above Ben Bernanke, if we do nothing, our off spring will live at a level of those currently in Europe. So I to will use Ben as a sourse and say that is what could happen.

on the other hand if we get real, Congress is going to act, and so I would expect our children to live at a higher standard of living than their European counterparts.

What do you think will happen?

Craig

Craig said: “This is meaningless because Congress ALWAYS acts.”

You mean the way they acted in 1929, or the way they acted in 1986 to the illegal immigration problem, or the way they continue to NOT act in the New Orleans, or the way they acted before the Savings and Loan bail out, or the way they acted to allow the Enron, Adelphia, and other such scandals to occur, or the way they acted from 1967 to 1971 with regard to the civil unrest and riots in our major cities?

Yeah, right, Craig. They always ACT alright, too often like ostriches with their heads in the sand. Sometimes they even prevent worse case scenarios, but, not often. Congress is RE-actionary most of the time, not preemptive, as history teaches in abundance.

RE-acting to recessions and depressions or loss of competitive advantage in the global marketplace does the American tax payer and nation no damn bloody good at all when a little preemptive action was disregarded. Ounce of prevention is worth a pound of cure, is a lesson Congress refuses to learn, due to its dependence upon wealthy special interests for reelection and ‘guidance’ in legislating.

David:

They always act. To assume Congress will do nothing is nonsense. The one thing that is for certain is that Congress will act. To assume no laws will be passed between now and doomsday is not credible.

So I repeat, what do you think will happen?

Craig

Craig, since you did not respond to my points made in my previous comment, there’s little point in responding to your last.

Congress acted in 1986 to the illegal immigration problem. In 2007, the problem is far, far worse and working Americans are suffering as a result. That alone makes my point about the perfect economic storm, which poses far larger challenges to solutions than illegal immigration ever did.

David:

I did respond. I said the premise of your comment was not practical. Congress and the President will act on your concerns. Of course it is wide open to debate as to whether they will act wisely.

Here is your question:

Having that straight, what part of what you quoted do you disagree with, regarding what is coming in our future if Congress does not act to avert?

Here is my response:

Your question is not practical because Congress will act to avert. It is wide open to debate whether Congress will act wisely.

Even though I believe Congress will act, if they do not, Ben Bernanke who you quote often has said that Federal Reserve projections show no action could result in a 14% decline in our children’s standard of living. This would produce a standard of living roughly equal to that of today’s Europeans.

The are incorrect in calling the future economic issues you list a perfect storm. A perfect storm comes by surprize in order to be perfect.

Next question?

Craig

Guess you are incapable of handling more than one issue at a time. Bernanke’s comment does not refer to all the conditions I describe, only one, entitlements. Greenspan, no longer required to be the White House’s optimist, has far more dire warnings about the viability of democratic capitalism in our country, if we fail to act right away, prudently, and effectively in heading off the consequences of inaction or inadequate action.

But, that’s OK, sometimes reality can be overwhelming which gives justification to denial as a coping mechanism.

David:

Greenspan hasn’t changed that much since retirement. The realities of the age wave as well and entitlements has been known for decades. I just read a speech by Greenspan from 2005 to congress noting the work that needs to be done. Basically he states we need to cut entitlements as higher tax rates do not correspond to equal amounts of income because they retard growth.

Greenspan, no longer required to be the White House’s optimist, has far more dire warnings about the viability of democratic capitalism in our country

He felt that way when he was the White House optimist:

http://www.csmonitor.com/2005/0614/p01s03-usec.html

But, that’s OK, sometimes reality can be overwhelming which gives justification to denial as a coping mechanism.

It is only overwelming because your economics is a one legged stool. (Debt)

Add income and asset growth and you will see a more optimistic picture.

Craig