Friday, January 20, 2012

We assume that the people who got us into this mess...

Know what they are talking about.

Firing people and destroying households in the  process is a stupid thing to do during Depressions. But these genius' will never admit they were wrong because we keep believing they are right because the TV says so and these people who make a living reporting on what the government says never check if it's bullshit or not. (No sense in their losing their jobs).

Again, the following is nonsense: we must balance the budget because it will create hyperinflation and our children will be burdened with higher and higher taxes and it will lower their living standards. (shipping our jobs overseas lowers our living standards)

These people have been preaching this crap for 30 or 40 years that I remember and our tax rates are half what they were!

We would also, according to these these great leaders, all starve to death by 1975, we would be out of oil by 2000 and freeze to death, that Japan's economic miracle would take over the planet, the Soviets would own outer space and piss on our heads, the Ozone hole would kill everybody any minute now if we don't ban spray cans, the Euro would save Europe and we would have to beg them for money, we can save the world from evil Communist even if the world  didn't want to be, Republicans would cut the size of government even though it grows faster when they are in charge, Al Gore believes in climate change and not making money scaring dip shits in Hollywood, voting this time will be different because our candidate can put 3 sentences together in a row, and on and on.

And we still fall for more.

Put any nonsense on TV or on the College lecture circuit and  simply scare the B' Jesus out of the gullible and out comes the check books and government funds to save us.

The simple truth proven over 40 years or so since Nixon took us off the gold standard for good?

Budget deficits go to the recipients of government spending. These people have the MONEY not the government.

The Federal government has to spend every dime authorized by Congress and approved by the president therefor creating and coining the money as stipulated in our Constitution. The government in Washington can't save money even if Jesus told them to. Because the government does this it is called a deficit because they spent it on us. When they tax it back it reduces the deficit because we no longer have the money and the money disappears from existence.....Income=Outgo.

If this wasn't true we would have 50 or 60 trillion dollars in the last 20 years or so playing hot potato and prices would have exploded and we would simply shoot a few politicians and got some new ones because the only way this could happen is if the Federal government printed these trillions and handed them out in cash. 

And when is the last time that happened?

Our government only prints enough cash to handle immediate needs.

In other words, the only cash used by our system is cash that you and I need for small purchases and to replace worn dollar bills.

When we take money out of the bank or change in ruined bills the banks order cash from their account at the Fed and receive the cash to replace the demanded cash. No inflation. No budget busting here. Income=Outgo.

Inflation doesn't come from deficits driving up interest rates or anything else you heard. Interest rates are set by the Fed at their discretion. (Imagine the clowns in Congress in charge of that!)

Our only inflation is coming from the manipulation of our oil supply. I remember Nixon have a hissy fit over 4% inflation and imposed price controls.

Reason, oil price  spike after the Israeli's kicked the Arabs asses.

Once Nixon was gone, controls came off and then you have to ask Jimmy Carter about inflation after OPEC and the religious nut jobs in the Moslem countries declared war on us. Ask those of us about inflation in the '80's and how Reagan terrorized the gang in the Middle East and bribed the Iraqis, Egyptians and  Saudis with military goodies and raised interest rates through the roof.

Let's not forget no inflation for Clinton. Because of 10$ a barrel oil (Reaganomics anyone?).


Under our fiat money system it's the budget deficit which funds our military superiority, almost all of our science and medical research, keeps our old people out of the garbage can, educates the next generation, and just about everything else in our modern society and our whole economy will collapse if we slash government spending.

And if anyone thinks that cutting government spending to the bone will solve our economic problems ask him:

Whose check are you going to take away?

My mother's 600$ a month Social Security? How about eliminating both my brothers VA retirement check? I know, let's make sure my wife with Lou Gehrig's disease can't get Medicare so we can save a couple of bucks.

Hey wait, let's bring all of the troops home, fire them and throw them out on the street. Not enough? Think this old voter would vote for that or grab my gun?

You get the idea. Once the benefit is bestowed it is almost impossible to retract.

And we voted for every bit of it!

Reigning in the size of government is a laudable goal and it didn't get done. It can't be done because everyone is in on the take.

We old school conservatives lost the argument. Scaring little old ladies about budget deficits won't work. Sending our jobs overseas didn't work.

And yes the government is too intrusive, too big, and virtually unaccountable. Millions of us voted for it. It's called democracy and there is nothing that can be done to change it without murdering your political opponents and starting a new government.

No thanks. We are the way we are because we want it that way.

And it will stay that way because the system can be tinkered with a little but radical changes, killing Social Security, Medicare, or cutting 10 million or so government jobs or dismantling the Industrial-Military complex ain't going to happen!

Quit listening to the gang in charge on TV!

18 January 2012 by Cullen Roche 13 Comments
Click here to find out more!

He’s had it right all along. Deficits are good during a balance sheet says Richard Koo. Many thought the exploding budget deficit would drive the USA into hyperinflation or even just high inflation. Others said the austerity measures in Europe were going to generate a turnaround. But the one thing we’ve learned from the recent economic downturn is that fiscal deficits during a balance sheet recession are good deficits (via Richard Koo;s latest note):

“This (austerity) is akin to a doctor telling a patient suffering from pneumonia to go on a diet and get more exercise. While exercise is important, it assumes a healthy patient. If the patient is sick, he must build up his strength until he is physically capable of exercising again.

No matter how overweight a patient with pneumonia might be, the doctor’s first task is to give him the treatment he needs to fight the disease. After all, the pneumonia patient can die if treatment is delayed for too long.

Balance sheet recessions, which occur when businesses and households rush to pay down debt in spite of zero interest rates, are a kind of pneumonia. The only way to treat them is for the government to become the borrower and spender of last resort with fiscal stimulus aimed at propping up aggregate demand.

Fiscal deficits during balance sheet recessions are good deficits

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