[americandream]

"European governments need to restructure their economies to restore the confidence of financial markets as the global economy moves into a new danger zone, World Bank president Robert Zoellick said yesterday..........

"I'm trying in a way that I can to start to condition both the political leadership and the general public you've got to do more than you're doing and you have to move more actively," he said.""

Speaks for itself

http://www.nzherald.co.nz/economy/news/ ... d=10745569

[Sixstrings]

Zoellick, a former US trade negotiator under President George W. Bush, said the debt crisis in Europe and the political quarrel in Washington over the US Government debt limit had "unleashed a wave of worry and uncertainty about the global economy" that created steep falls on share markets.

"I think over the past couple of weeks we've moved into a new danger zone," Zoellick told reporters in a joint press conference with Australian Treasurer Wayne Swan.

Hah! Well.. so an American tells the euros they need to get austere and cut back their social state a bit.. will the French listen? The Germans, Danes, or Swedes?

I wonder why he was having a joint presser with the Aussie treasurer. What's Australia got to do with this. An American in Australia saying Europeans need to cut back.

[americandream]

Zoellick, a former US trade negotiator under President George W. Bush, said the debt crisis in Europe and the political quarrel in Washington over the US Government debt limit had "unleashed a wave of worry and uncertainty about the global economy" that created steep falls on share markets.

"I think over the past couple of weeks we've moved into a new danger zone," Zoellick told reporters in a joint press conference with Australian Treasurer Wayne Swan.

Hah! Well.. so an American tells the euros they need to get austere and cut back their social state a bit.. will the French listen? The Germans, Danes, or Swedes?

I wonder why he was having a joint presser with the Aussie treasurer. What's Australia got to do with this. An American in Australia saying Europeans need to cut back.

This was more in the way of a speech to the world at large rather than being directed at just Europe, I suspect. National governments are being prepared to drop many of their tax funded services. It wont all happen tomorrow....these things take a while and much discussion.

[Sixstrings]

Well the article makes it sound like he's singling out Europe, I didn't see anything about the US:

European governments need to restructure their economies to restore the confidence of financial markets as the global economy moves into a new danger zone, World Bank president Robert Zoellick said yesterday.

BTW for anyone who doesn't know, Europeans get to pick the IMF chief and the US gets to pick an American to head the World Bank. Kind of funny, IMF chief was over here doing interviews commenting on the US now our guy is commenting on Europe.

Come on France and Germany, cut back till you look like Texas and all your new jobs pay $7-$9 per hour and it's illegal immigrants working them all. Yeah that's a good plan.

[prajeshbhat]

Well the article makes it sound like he's singling out Europe, I didn't see anything about the US:

European governments need to restructure their economies to restore the confidence of financial markets as the global economy moves into a new danger zone, World Bank president Robert Zoellick said yesterday.

BTW for anyone who doesn't know, Europeans get to pick the IMF chief and the US gets to pick an American to head the World Bank. Kind of funny, IMF chief was over here doing interviews commenting on the US now our guy is commenting on Europe.

Come on France and Germany, cut back till you look like Texas and all your new jobs pay $7-$9 per hour and it's illegal immigrants working them all. Yeah that's a good plan.

Governments telling each other to cut spending Basically means Americans want Europeans to cut spending so that they can increase theirs. It's all about oil you see. If the demand from Europe falls the price of oil will go down. So Americans can go back to happy motoring.

[Cog]

Cut it all.

[Roy]

Has anyone ever wondered what the USGOV budget would look like if it were translated into terms most people could understand?

I found it on ticker forum and would like to share because I have never seen it presented this way on the MSM. If it were maybe some people would start to grasp the fact that you can't spend more than you make forever. And they would begin to understand the ridiculousness of the recent debt limit debate and the subsequent 'cuts'.

The U.S. Congress sets a federal budget every year in the trillions of dollars. Few people know how much money that is so we created a breakdown of federal spending in simple terms. Let's put the 2011 federal budget into perspective:

U.S. income: $2,170,000,000,000
Federal budget: $3,820,000,000,000
New debt: $ 1,650,000,000,000
National debt: $14,271,000,000,000
Recent budget cut: $ 38,500,000,000 (about 1 percent of the budget)

It helps to think about these numbers in terms that we can relate to. Therefore, let's remove eight zeros from these numbers and pretend this is the household budget for the fictitious Jones family.


Total annual income for the Jones family: $21,700
Amount of money the Jones family spent: $38,200
Amount of new debt added to the credit card: $16,500
Outstanding balance on the credit card: $142,710
Amount cut from the budget: $385

We can't cut it all, but I have to ask, is there any liberal/democrat/ republican here who can justify the above and say with a straight face that this is sane? That "deficits don't matter"? That this is 'change we can believe in"?

[Pops]

Average credit card debt per household with credit card debt: $15,799*

Average mortgage $200k (average home value $185k)

Mortgage, credit card, student loan, and auto loan debt $120k per household

Average income $50k ($32k average for the bottom 90%)


So as far as debt goes, I don't see the gov in any worse shape than the average guy. In fact if you could look at a balance sheet the gov is in much better shape since 80% of the public has zero equity in anything.

The cuts in the US have nothing to do with debt, they are about taxes. I think most politicians believe the economy will come back at some point, we'll jigger the rules around a little to bring down the debt and the game will continue.

But for now anyway the cuts are coming.

[prajeshbhat]

Has anyone ever wondered what the USGOV budget would look like if it were translated into terms most people could understand?

I found it on ticker forum and would like to share because I have never seen it presented this way on the MSM. If it were maybe some people would start to grasp the fact that you can't spend more than you make forever. And they would begin to understand the ridiculousness of the recent debt limit debate and the subsequent 'cuts'.

The U.S. Congress sets a federal budget every year in the trillions of dollars. Few people know how much money that is so we created a breakdown of federal spending in simple terms. Let's put the 2011 federal budget into perspective:

U.S. income: $2,170,000,000,000
Federal budget: $3,820,000,000,000
New debt: $ 1,650,000,000,000
National debt: $14,271,000,000,000
Recent budget cut: $ 38,500,000,000 (about 1 percent of the budget)

It helps to think about these numbers in terms that we can relate to. Therefore, let's remove eight zeros from these numbers and pretend this is the household budget for the fictitious Jones family.


Total annual income for the Jones family: $21,700
Amount of money the Jones family spent: $38,200
Amount of new debt added to the credit card: $16,500
Outstanding balance on the credit card: $142,710
Amount cut from the budget: $385

We can't cut it all, but I have to ask, is there any liberal/democrat/ republican here who can justify the above and say with a straight face that this is sane? That "deficits don't matter"? That this is 'change we can believe in"?

The first thing to understand is that the government is not a family. The government comprises of hundreds and thousands of politicians and bureaucrats. They are all competing against politicians of rival parties and also among each other. In order to win they have to make promises. The more promises they make the better are their chances of winning. The government will simply not function if it cuts spending. That basically means a lot of politicians will have to compromise and tell their voters and campaign contributors to p*** off. I don't think any party can maintain majority by asking their individual members to cut their budgets.
I have heard of people like Republican Ron Paul who are promising to cut spending. Even if he wins, the republican party majority won't last 2 weeks if Ron Paul tells his party members to just suck it up and forget about their "allowance". I think the Republican party is only presenting him as their poster child because of his internet fame. He does have a large cult following. Escapist young followers who are looking for a convenient alternative to the process heavy politics of Washington D.C.

The other fallacy is that people are calling this deficit spending as keynesian stimulus. Back in the 1940s, the government ran deficits in order to run factories and build infrastructure. The deficits actually created jobs. This time the government is simply borrowing money from big banks to keep them solvent and to make the american home owners feel good about their property values.

[Sixstrings]

Even if he wins, the republican party majority won't last 2 weeks if Ron Paul tells his party members to just suck it up and forget about their "allowance". I think the Republican party is only presenting him as their poster child because of his internet fame. He does have a large cult following. Escapist young followers who are looking for a convenient alternative to the process heavy politics of Washington D.C.

The other fallacy is that people are calling this deficit spending as keynesian stimulus. Back in the 1940s, the government ran deficits in order to run factories and build infrastructure. The deficits actually created jobs. This time the government is simply borrowing money from big banks to keep them solvent and to make the american home owners feel good about their property values.

There is ZERO chance Ron Paul will ever win a prez nomination.

You are right that the "government is not a family." It would be easy to just be "anti-keynsian," but thinking hard about it.. we are in a depression, without some money to juice things up you can't get out of depression. If left alone the economy will just readjust at a lower level and stay there for decades.

What was wrong with the QE was that it was for Wall Street rather than Main Street. Also it just covered up problems.. we should have allowed the whole system to crash hard and burn in 2008 -- then rebuild. Vampire squids like AIG NEEDED to go bankrupt, and all those Euro banks like Societe Generale, every one of them should have been allowed to fail. That's the only way people learn a lesson.

If we could have had an honest to goodness Great Depression, all the bad debt would be off the books, the bad banks out of business. Then the proper role for keynsianism would be for Congress to spend money for stimulus and the Fed to print it up. What we have now is the Fed printing and stimulating, except the only people they know to hand cash out to is banksters on Wall Street. It's very inefficient, the banksters take most the money and just make bank on futures. Or invest offshore. None of that stimulates the US.

QE has helped the average Joe a little bit, but hurt him just as much by devaluing the dollars in his pocket and rocketing food and commodity inflation. It's not the QE that's so bad, but rather who gets it -- the rich and the banksters, who are doing everything with this free money BUT growing the US economy.

[evilgenius]

I think it was Peter Drucker who said that after WWII, when the economy took off, was when the government should have started balancing. He cautioned that if they didn't then when they really needed to deficit spend in order to provide stimulus they might shoot blanks. He wasn't judging Keynes, far from it. He was actually saying that Keynesian economics works when used properly.

Last night I was at dinner having this discussion about what is going on. One person jumped on Obama. I said, 'so Obama dreamed up this crisis before he got into office', pretty much blaming it on Bush. Then a Republican shot back about how unfair that was. She was right. This mess goes back a long way. The people who started this are already dead.

[Sixstrings]

I think it was Peter Drucker who said that after WWII, when the economy took off, was when the government should have started balancing. He cautioned that if they didn't then when they really needed to deficit spend in order to provide stimulus they might shoot blanks. He wasn't judging Keynes, far from it. He was actually saying that Keynesian economics works when used properly.

Yeah, but, we had to fight Korea.. and then the Cold War, that cost a lot of money. We had no choice there, it was an edge-of-armageddon Mexican standoff for decades and eventually we outspent them.

That's the problem with a balanced budget, eventually some war comes along and screws it all up. That's why throughout history nations only go to war if they can get something out of it -- you've got wind up with enough new resources at the end to make up for what was spent on the war effort.

Post WWII, the benefit side has been complicated. It's all IMF and World Bank and Western dominated capitalism. Not like the old days when it was easy to figure out if a war was worth it -- outright grabbing territory.

Libya for example.. what do we Americans get out of that. China gets the oil, French and Brits have the contracts to extract. Where do we fit in. Oh that's right, they all buy our debt.. so we fight the wars and the world buys our debt. It's all a big complicated mess.

That's why we won't ever balance our budget, because then it doesn't make sense to buy Chinese products or fight humanitarian wars if the world isn't giving us some money for our trouble (buying US treasuries). We Americans having a structural deficit is integral to how the world works -- that's why Cheney said "deficits don't matter," he understood that.

Then a Republican shot back about how unfair that was. She was right. This mess goes back a long way. The people who started this are already dead.

Well actually it is Bush's fault. The Bush tax cuts and unfunded wars were very irresponsible.

[evilgenius]

I think it was Peter Drucker who said that after WWII, when the economy took off, was when the government should have started balancing. He cautioned that if they didn't then when they really needed to deficit spend in order to provide stimulus they might shoot blanks. He wasn't judging Keynes, far from it. He was actually saying that Keynesian economics works when used properly.

Yeah, but, we had to fight Korea.. and then the Cold War, that cost a lot of money. We had no choice there, it was an edge-of-armageddon Mexican standoff for decades and eventually we outspent them.

That's the problem with a balanced budget, eventually some war comes along and screws it all up. That's why throughout history nations only go to war if they can get something out of it -- you've got wind up with enough new resources at the end to make up for what was spent on the war effort.

Post WWII, the benefit side has been complicated. It's all IMF and World Bank and Western dominated capitalism. Not like the old days when it was easy to figure out if a war was worth it -- outright grabbing territory.

Libya for example.. what do we Americans get out of that. China gets the oil, French and Brits have the contracts to extract. Where do we fit in. Oh that's right, they all buy our debt.. so we fight the wars and the world buys our debt. It's all a big complicated mess.

That's why we won't ever balance our budget, because then it doesn't make sense to buy Chinese products or fight humanitarian wars if the world is giving us some money for our trouble (buying US treasuries). We Americans having a structural deficit is integral to how the world works -- that's why Cheney said "deficits don't matter," he understood that.

Then a Republican shot back about how unfair that was. She was right. This mess goes back a long way. The people who started this are already dead.

Well actually it is Bush's fault. The Bush tax cuts and unfunded wars were very irresponsible.

Good points. And I do agree that American deficits are integral to economic function. Debt is not the bogie man that most people make it out to be, no more than money is the evil in the 'love of money is the root of all evil' statement. Even as people pine for the separation of commercial and standard banking once again they mustn't forget that real wages were on the decline here long before that was repealed under Clinton. This is a crisis brought on by certain gray areas in economic thought. Gray areas that haven't yet got answers, not under a commonly understood paradigm, even if they seem to under this or that 'get tough' or 'give away' paradigm.

[KrellEnergySource]

So as far as debt goes, I don't see the gov in any worse shape than the average guy. In fact if you could look at a balance sheet the gov is in much better shape since 80% of the public has zero equity in anything.

But the accepted rationality of the average guy/average family being in debt and having zero equity is that they plan to pay off their credit cards and pay off your mortgage. It might take 30-50 years, depending on emergencies or mistakes along the way (home equity loans....), but that is the plan.

Has anyone heard a single political party, or a single politician for that matter, discussing any plan at all for bringing the national debt down from the prior year by even a single dollar in the next, say, 50 years? I haven't. Or if I missed it, what exactly is the target date for that to occur?

It's the economy. It doesn't work, and it can't be fixed in its current form. My opinion, anyhow. You can't reduce, reuse, recycle (necessary for sustainability and stewardship) while increasing manufacturing and services in the degree necessary for turning this income/outlay/debt problem around.

Brian

[americandream]

Cut it all.

Need you ask. The cuts are as inevitable as the sun rising. The complete annihalation of government by the national model. Capital must be comforted and only full access to surplus will be sufficient.

[Pops]

@ Brian

I'm not trivializing the debt, just adding some perspective.

But like I say, it isn't about cuts, it's about taxes. The wealthy are hoping to consolidate their gains before the proles get a clue and they know now that taxes are lower than they've been in 60 years they need to cut the spending to keep them low.

I mean maybe probably some passing minority actually enjoy seeing people hurting but they are inconsequential in number; sociopaths at worst but mostly just misanthropes. Those are surely small in number compared to the people who are simply greedy and can ignore the poor.

Like you say though, wealth inequality, peak oil and automation are going to take the system down sooner or later, the cuts just advance the inevitable.

[americandream]

@ Brian

I'm not trivializing the debt, just adding some perspective.

But like I say, it isn't about cuts, it's about taxes. The wealthy are hoping to consolidate their gains before the proles get a clue and they know now that taxes are lower than they've been in 60 years they need to cut the spending to keep them low.

I mean maybe probably some passing minority actually enjoy seeing people hurting but they are inconsequential in number; sociopaths at worst but mostly just misanthropes. Those are surely small in number compared to the people who are simply greedy and can ignore the poor.

Like you say though, wealth inequality, peak oil and automation are going to take the system down sooner or later, the cuts just advance the inevitable.

Good points pops. The net effect of the unwillingness of certain elements to fund the services necessary for a civilised society will be the eventual whittling away of the state to a mere shell and then eventually, the emergence of some super state to facilitate the circulation of capital. To a large extent, these things follow on from each other as night follows day so its difficult determining how any meaningful opposition can ever take a hold UNTIL something triggers a mass desire for a reversal of the natural trajectory of this process. Something on the scale that sees systemic shifts in mankind's development as a civil society, through the ages. This is not to say that we should sit back ad do nothing or that fair minded individuals such as yourself are prepared to, it merely exposes the natural tendencies in the values we base our societies on. A paradox, most definitely.

[Cog]

Civilized society=Take from me=Give to the mooch class

[Hawkcreek]

Civilized society=Take from me=Give to the mooch class

So far it looks like the mooch class has been the corporations and the rich. Check the percentage of GDP for corporate profits versus percent going to the poor. Something like 10% versus 2%.
And when you consider the corporate profits don't include the limos, BMW daily drivers for CEO's, and jets and $2000 "business" lunches it is a lot worse than that.

[americandream]

Civilized society=Take from me=Give to the mooch class

Those who condition you pay little (tax lawyers, tax planning and tax mitigation...all quite legal). Even that is too much. But you are not to know. Thats the whole point in rendering you conditioned and ignorant.