The following post is by Dealbreaker reader and commenter Infinite Guest.
This is the worst time in decades to try to reduce the deficit. Unemployment is immorally high, growth remains anemic, private deleveraging shows no signs of abatement, infrastructure is rapidly deteriorating and the prospect of a stagflationary double-dip recession is all too imminent. Yet the drum beat for deficit reduction is deafening, with everyone from Standard & Poor’s to the Committee for Economic Development to the AFL-CIO keeping time, and the rest of the world joining in, marching for a cure to our ailing fiscal health. But if Dr. Dominique Strauss-Kahn prescribes it, and Dr. Zhou Xiaohuan concurs, then it’s snake oil. Don’t drink it.
To be fair, the cacophony of voices calling for deficit reduction is just that, a cacophony. Each special interest has its own rationale for deficit reduction, political, economic and otherwise, and each one places a different level of emphasis on the goal, with a different timeline, different priorities and tactics for achieving it. The AFL-CIO tepidly supports deficit reduction lite, at the bottom of a list of concerns trumped ultimately by the continuance of its own tenuous relevance. The Chinese are focused on their own political stability, now threatened by commodity inflation and their own rudderless domestic economy. The IMF needs contributor nations to appear credible if it has any hope of enforcing its agreements with debtor nations. The Tea Party misunderstands the inchoate backlash that bought them power as a mandate for Objectivism. President Obama is fighting for his political life. Standard & Poor’s, as near as I can fathom, is simply conducting a marketing exercise. But any attention paid to deficit reduction is wasted. Deficit reduction is not a legitimate strategy, period. It is merely one of the pleasant side-effects of a more balanced national economy.
Of all the various approaches floated to address our deficit, the one that seems most likely to succeed is the high-sounding “shared sacrifice.” Shared sacrifice is bullshit. It’s nationalist bullshit meant to distract pensioners from the exiguity of their pensions. It’s statist bullshit to bully the fortunate among us into silence. Shared sacrifice is what we must do when our homes are under attack by a foreign enemy. Otherwise anyone selling you shared sacrifice is picking your pocket.
The nice thing about using leverage is that when things go your way they go your way bigger. Uncle Sam has used a nice amount of leverage and at least has the sense to recognize (for the most part) that he should continue to do so. But there’s more than one kind of leverage.
At home, literally trillions of dollars are languishing on corporate balance sheets right now for a dearth of good investment opportunities. That would be crazy were it not for the stunning lack of leadership that characterizes our public sector. It’s fundamental: Who wants to invest in a country that can’t get its political act together? Chew on this: Spain is ahead of the United States in alternative energy. How is that possible? Among other advantages we have a more flexible economy, better immigration policy, a better educated and more productive labor pool on our side. Good leaders would find some way to encourage better utilization of all those factors. Or at least to stop discouraging their utilization. They may not even have to write any new legislation; they could start by conducting a better, more intelligible dialogue. Good leaders would signal something to the marketplace other than their willingness to squeeze the yield out of Treasurys at any cost. I’m not breaking any new ground when I say that private dollars invested domestically create jobs, which stimulates consumption, which improves profits. Income tax, sales tax and corporate taxes follow proportionately.
The story abroad is no different. Rather than living up to the ideal of American exceptionalism, we lean ever further toward repeating Queen Victoria’s British empire, sucking commodities out of our colonies as they grow progressively more dissatisfied with the burden of our friendship. It doesn’t end well. And like any pseudo-imperial power, we are too slow to recognize how badly we’re hurting ourselves. The core failure common to our China trade, our wars and our energy policy is that we are shipping boatloads of money overseas to people who don’t even want it. We should be recirculating that capital at home. The “how” is the same here. Our trade deficits, like our budget deficits, are only a symptom of the failure of leadership to encourage domestic investment.
Take care of the economy and the deficit will take care of itself.
+1 For using cacophony twice in the same sentance.
Yeah, well, you know, that’s just like, uh, your opinion, man.
Too long, didn’t read.
God that sucks. If I wanted to read such drivel, I know where to find Paul Krugman.
I love the “more of what caused the problem is the solution” logic. I seem to recall our previous enlightened leadership encouraging domestic investment in the form of very large houses. A few of the alternative energy companies our president has visited while campaigning have gone belly up despite huge subsidies. High speed rail, anyone?
We should aspire to be Spain? Really?
Taking care of the economy means getting rid of all the malinvestment that occurs courtesy of our government.
Chill out investopedia.
-2 for using an a in sentence.
Respectable argument… but can I see your models?
It’s “dribble,” you fuck. “Dribble.”
How about I write a piece about the new Kohler Numi Toilet – if you go to their website there’s a hedgewise appearing couple preparing to take a mutual shit in their uber-moderne hollywood hills home for all to see. Now that’s frigging comedy.
i hope this is a joke
Sweet counter argument! Where’d you read that? Ayn Rand?
WTF is with this boring amateur bullshit?
I haven’t seen failure this bad since Epstein entered a biggest dick contest at Cooper Union in 1970.
Chilling by your toilet is the NKI?
haha
For anyone on either side to believe that these assholes in Washington D.C. are our fucking saviors and are going to fix this are fucking insane.
old lady Yves Smith put it a lot more succinctly in the Times-
http://www.nytimes.com/roomfordebate/2011/04/18/is-anyone-listening-to-the-standard-poors/sp-should-be-embarrassed
Every time Japan tried to lower its public-debt-to-gross-domestic-product ratio by cutting spending, the resulting drop in economic activity actually made that ratio worse. We are seeing the same results in Ireland and Latvia. The United Kingdom tried the same experiment 10 times in the last 100 years, and every time it got the same results: cutting spending to reduce budget deficits results in a fall in G.D.P. that makes the debt burden worse, not better.
How about the exiguity of your penis?
Love,
Mom
Well, when you put it like that, I guess . . . then no, maybe they aren’t our saviors. Still, though . . .
Thanks,
I appreciate you looking out for us…
- Your Brain Cells
Also get a better title. “Naughty hawks?” Sounds like Larry Craig.
Um, this is the problem
with being addicted to artificial stimulants
1) low interest rates = low hurdle rates
2) low hurdle rates = low performance hurdles
3) low performance hurdles = *actual* low performance?
This is why people get addicted to painkillers.
yours truly,
Japan (and CC: White Trash Amerika)
I appreciate Infinite Guest having an opinion and the balls to post something; that is what America is all about. The problem I have is people claiming their side is going to do something to fix it.
Bush added entitlements for seniors on Medicare with no way to pay for it.
Obama adds Libya to two wars that we should be winding down.
All I am saying is that we should be pissed off at these people who we elect for not representing what they were elected to do.
Aren’t you angry?
If we are going to have a left leaning country, then be a left leaning country and the converse is true as well for the right. Just pick a fucking path and go with it.
Imagine a sinking ship and one group is saying “stop the leak” and the other group is saying “siphon out the water”, but instead they waste all of their time bickering over which one and meanwhile the goddamn ship is fucking sinking.
do you not know the joke the title comes from?
It’s not that Epstein’s dick was small, just that it was oddly shaped.
This comment might have more merit if you spelled out “are you.”
Obviously not. Still sounds like Larry Craig.
On my 24th interview…
Wonder why they think they can get away with repeatedly campaigning one way and governing another.
OK, I’m angry. Now what?
You want to smoke some pot?
“At home, literally trillions of dollars are languishing on corporate balance sheets right now for a dearth of good investment opportunities.”
Wait, you work in finance and actually believe that there are trillions of dollars languishing on balance sheets, just lined up like little soldiers ready to go to work? My goodness.
That’s because they measure the economy with a coarse, aggregated figure like GDP. The only coarse, aggregated figure I want to see is Amanda Drury’s.
Infinite Goldbug – Why don’t you rally up Ralph Nader, Karl Marx, and all the rest of your Pinkophiles and go hold a protest at the Atlas Fuckedhimself premier?
Yeah–what’s the number of alt energy companies going belly up compare to banks and financial institutions? Oh and Spain, the Netherlands and Sweden are surpassing the US in technology. You are right we should sit back. Spend less. No job creation. What a solution!
Good thing the banks didn’t profit from the enlightenment of the previous leadership encouraging domestic investment in housing.
And, well, we can all look forward to the MBS mess–nothing like stealing houses from Americans. Too busy selling MBS instruments to follow through on due diligence.
You are just having difficulty grasping that Wall Street will no longer be the center of the economic universe and finance will be put below accounting. Get ready for the wonderful world of compliance.
Please do so, and constantly, so the rest of the country can breathe relief that bankers are not going to try to solve the problem.
Infinite Guest = Anal_yst
Basically we’ve screwed the pooch and are going to have to pay for it. Infinite Guest, in his Infinite “Wisdom”, can’t understand why we “all can’t just get along” with deficits. Well, basically because almost no one is buying our debt except the Fed and a bunch of “holy shit, we lent them how much money and then we realize they’re broke?” Central Banks. So at some point we will hyperinflate. Then we’ll pay the price anyway. One problem though: Hyperinflation punishes the very people who developed prudent financial habits such as working hard and saving for a rainy day. The “grasshoppers”, lazy and over-indebted, get a deficit reduction reward while the “ants” get stepped on and crushed.
We can not keep spending 1.6 trillion more than we take in and cutting 400BN as Obama wants (along with raising taxes; wow, kicked in the nuts and f&cked in the ass, consecutively and still no kiss, flowers or dinner first) or 600BN as Paul “I’m a Conservative since I’m willing to run a 1 Trillion deficit for 10 years” Ryan wants, isn’t going to cut it.
Well keeping a patient on lifesupport while slowly turning down the rate of O2 to the patient doesn’t really do much now does it. Sometimes you have to pull the plug.
Bess,
Could we get a title change? I showed up with some tissue and hand lotion, only to see words and no pics of any hawks, let alone some naughty ones.
-Guy that really does love nature
Jesus, that IS funny. They put the toilet in the corner in the window. It would have been better if it was facing out to the public, though.
I think I’ve found my bathroom configuration for our new guest bath.
Typically, you then say what actually happened in said interview. Good try though, you’re on the right track.
I heartily endorsed this article.
Dr. Gideon Gono, Zimbabwe Central Bank
Hey, if Hasbro can keep printing money and making money; why can’t the Fed?
…some guy greets me in the lobby. I seems well dressed, but a little off. It may have been that bicycle helment he was wearing. Well, he leads me down the hall and as we walk he tells me all about his accomplishments in the Special Olympics. When I get into the office, he sits down and asks me what happened in the 23rd interview. Thinking quickly I placed one hand over my mouth, while flipping the bird with the other hand.
I am currently awaiting my callback for the 25th interview.
Some good points raised. I agree that many of our leaders in congress and the senate, in both parties and in the executive branch are weak. I sometimes wonder whether Obama really has a view, or whether he just listens to his handlers, who are possibly, some of the most embittered, partisan people of this generation. His increasing pettiness is unseemly, at best, completely amateur at worst. However, what would you expect from an ex junior senator whose career prior to politics consisted of “community organizing”?
But what was the alternative. Look at McCain. Here was a guy with the experience and the will, in theory, to make the tough choices. But he listened to someone who thought he needed Palin in his campaign. The people told him what he should already of known, that there is no way an intellectual light weight, junior governor from a fringe state can be a president. We learned why intellect and experience matter, the hard way, by electing Bush. Alas, you reap what you sow. Until we as a people look beyond flash, promises and sound bites and demand to hear straight talk on difficult issues from our candidates we will get amateurs in power.
Say what you will about the tenets of National Socialism, Dude, but at least it’s an ethos.
Really, Dude, you surprise me. they’re not gonna do shit. What can they do? They’re a bunch of fuckin’ amateurs, and meanwhile, look at the bottom line: Who’s sittin’ on a million fuckin’ dollars? Am I wrong? .
This is all story, no solution. It’s not a solution to conclude that everyone at the top is corrupt or stupid. It’s not a solution to suggest that shared sacrifice is ridiculous (precisely because increasing revenue is a major component of many necessary steps, and under both Reagan and Clinton, tax rates were higher).
The main story and problem here is that nobody gave a shit about balancing budgets until you had a bunch of people (Tea Party) who needed an alternative method to express dislike for skin color (Obama’s) and decided that deficit reduction would be the perfect alternative trojan horse by which to express their ambivalence. Certain calculating others, like Dick Armey and the Koch brothers saw this racial ambivalence and figured they could capture it, bottle it in the form of reducing regulation, and make it an expression of a) their political theories or 2) their entrenched existing business interests. And certain others, like your Republican establishment, have tapped into this activist energy, and used every variant of commentary and action (“he’s different”, “he’s socialist”, he’s not like other Americans, he’s not born here, he’s elitist, he hates whites (ergo hating half himself), he’s an empty suit, he’s in over his head, he hates America) to gain support for sabotaging some of the very policies that would solve some of the problems.
If people were smart, they would support newer technologies, push upper income tax increases (temporarily or otherwise), push through entitlement reform including trimming defense and reforming the tax code, while supporting and enhancing healthcare reform (which, mind you, was the first fucking serious attempt to actually kill two birds with one stone: address deficits and improve health care).
What we have is certain people pursuing the circus and the lie (Trump, Palin, Beck), certain people just pushing hate and entertainment (LImbaugh), certain people not actally accomplishing anything, but very loudly (Michelle Bachmann… smart woman with zero accomplishments, per her Wiki page), and still others pursuing political obstruction (your average Senate Republican) and fiscal fingerpainting (your average new Republican House member). And we will remain shitless and sitting atop the stool until a more seasoned group of thinking Republicans decide that controlling one part of government does not mean you get all you want. You do a bunch of shit that will offend Repblicans, Democrats, and the average citizen, and only then will the system work.
So part of that means stop supporting people with old ideas (tax cuts only) only, or who deal in abstract nonsense, or who are too cynical to give everything a shot.
Sorry for the rant.
You go girl ! Didn’t read.
He’s a retard who believes all the crap that GE and the other corporate welfare queens dish out for the consumption of CNBC and like morons. They had a tax holiday not too long ago and got a virtual tax free repatriation. No jobs created – they used the money to buy back stock. Suck it Immelt.
Please name three Spanish IT companies with a substantial global presence.
Just to be clear– hyperinflation punishes those who hold *financial* assets, particularly debt instruments. People who hold *hard* assets– real estate, factories, mines, etc– tend to come out whole in the end.
Time to buy farmland…
Newer techologies such as… what? Faster printing presses to churn out ever-higher-denomination bank notes?
Information technology (IT) is the acquisition, processing, storage and dissemination of vocal, pictorial, textual and numerical information by a microelectronics-based combination of computing and telecommunications.[1] The term in its modern sense first appeared in a 1958 article published in the Harvard Business Review, in which authors Leavitt and Whisler commented that “the new technology does not yet have a single established name. We shall call it information technology(IT).”[2]
Alternative Energy is what part of this definition? Since when does technology begin and end with IT?
My turn next: Name the 3 Beef Processing Companies in India with a global presence.