By Martin Bosworth
The American Prospect’s Harold Meyerson has an op-ed in the Washington Post today outlining the nature of the coming recession, and how our economic response is going to have to change if we’re to fix it.
“Wait,” you’re thinking, “is he saying we’re in recession? Surely not! I know it’s a worry, but no one’s actually said it’s official yet.”
Let’s take a look at the facts, then:
Citigroup, America’s largest bank, has been hit with a staggering $10 billion in losses this quarter. Naturally, the company is doing what all companies do as a first response to crisis–cutting thousands of jobs–and is begging foreign investors to pump cash into its reserves to keep it solvent.
Countrywide, America’s largest lender, reported spikes in delinquencies and foreclosures so severe that the company was looking at bankruptcy protection. It was hailed as a relief when Bank of America announced plans to buy the lender, but think about this–how bad is our economic state when our biggest giants in their respective industries are doing so poorly?
And what about the consumer, that bulwark of economic growth through spending? Well, thanks to a combination of collapsing home equity, high gas, energy, and food prices, and nearly insurmountable personal debt, consumers are falling behind on loan payments, credit card debt is on the rise, and retail sales are plummeting from lack of consumer spending.
If this isn’t a recession, it’s damn close, and like the wolf hungrily stalking its prey, will be upon us soon.
Back to Meyerson’s column. He accurately notes that the mazelike structures of current Wall Street investment strategies make it nigh-impossible to accurately oversee these transactions, which has led to so many billions of dollars’ worth of losses. Moreover, he also notes that without some serious infusion of jobs, cash, and direction from the government, this recession may deepen into a depression that will take years to recover from.
“Okay,” you may be asking, “but where can we get the money for such a thing? That’s going to be expensive!”
Well, here’s one simple idea–ending the war in Iraq immediately and bringing our troops home. Imagine what we could do with the influx of capital we’re wasting on a failed venture that has cost thousands of lives and tens of millions of dollars. I live in DC, so I used my own city as the basis for calculation:
Taxpayers in District Of Columbia will pay $2 billion for the cost of the Iraq War through 2007. For the same amount of money, the following could have been provided:
504,157 People with Health Care OR
3,465,229 Homes with Renewable Electricity OR
33,815 Public Safety Officers OR
33,333 Music and Arts Teachers OR
946,048 Scholarships for University Students OR
174 New Elementary Schools OR
6,801 Affordable Housing Units OR
620,958 Children with Health Care OR
266,133 Head Start Places for Children OR
33,333 Elementary School Teachers OR
29,432 Port Container Inspectors
Any one of these projects provides a golden opportunity for new jobs and economic revitalization for my city, or the even better long-term investment of raising kids with decent educations and the ability to make better lives for themselves. But we’ll never know, because that money went instead to turning a country into a protectorate of our empire just to keep the oil pumps working.
I said not long ago that in order to win, Democrats should run on the economy instead of Iraq, and I still hold to that. But I am rethinking that approach–instead of trying to push Iraq aside in people’s minds, Democrats and progressives should link the two together. Every dollar spent in Iraq, fighting a war started on a lie that has cost us immeasurably, is a dollar not spent on rebuilding our country’s prosperity, peace, and future solvency.
End the war, bring our troops home, and let’s get down to the equally painful business of rebuilding our country’s economic base and transiting us out from a system based on debt, consumption, greed, and graft. We’ve done it before, and we can do it again. We don’t have any choice in the matter.
Progressive Culture | Scholars & Rogues 
As much as I’d love to see that money used to help real people, it’s all debt financed, and I have a major problem with simply racking up more debt. It’s true that, if we could “find the money” to pay for Iraq, we could have “found the money” to do all those other wonderful things. But we’ve screwed over our kids bad enough already – it’s time to pull out of Iraq and simply stop spending money we don’t have.
Step 2 would be figuring out how to do those necessary things you listed and pay for them without either going to a 75% tax rate or implementing draconian spending cuts.
Brian,
And like I keep saying, the money is there. The choice you’re delineating is, as you might say, a false frame. We’re told we have to choose between draconian tax increases and equally draconian spending cuts–but who tells us this? The Congressional Budget Office? The OMB? Economists on the federal payroll? They’re juking the stats, plain and simple. Check it: http://www.warresisters.org/piechart.htm
I’m not airheaded about this–I know the amount of public spending I’m calling for will require an accounting. But we’ve gone from debt to surplus before, and we did that not in any small part due to downsizing our military operations and choking off the no-bid defense contracts. We need a strong national defense–we’ve made too many enemies now for me to deny that. But there’s a big difference between spending money to protect our country and throwing away billions on wars that never needed to be fought.
Martin – you believe that pie chart is any more accurate than the government one? Why? They have an ax to grind just just as much as Bush does. They’re ignoring trust funds because the taxes are raised differently and spent independently – except that there’s no real money in the trust funds. They’re bookkeeping assets, and since Social Security is required to invest their excess revenues in Treasury bonds, those excess assets are dumped right back into the general fund where they’re spent. So much for the “trust fund.”
Just because you agree with the stats doesn’t make them any more accurate than the ones you don’t agree with. And yes, I actually do trust the CBO more than an activist group, although that’s mostly because the CBO lays out the problems and proposes solutions without adding value judgements as who which solutions are the “right” ones. The CBO let’s me decide for myself – the War Registers don’t.
The last time we went from debt to surplus was because of huge economic growth and the internet/tech investment bubble. That popped, and we slipped into a recession that was deepened by 9/11 and boneheaded decisions by Bush and the GOP Congress. So yes, it’s possible that we can “grow” ourselves out of our debt. But to do that we need fundamental economic security, something that’s radically lacking at the moment.
The decision we have is a fiscally responsible approach to rebuilding our social safety nets and enhancing our economic security vs. doing those things in a fiscally irresponsible fashion. Debt financing at this point, given our economic situation and existing debt, is fiscally irresponsible. We’re perilously close to the point where the beast starves, as Grover Norquist would say, and I’m sure that he heartily approves. We need to feed and water it some before we can ask it to run the Pony Express for us.
Simply cutting back on the military isn’t enough, even if we choose to start there. Give me reasonable suggestions that prove you’ve thought this through (and yes, I do think that you haven’t given it enough thought) instead of relied on questionable statistics from an anti-war activist group and then we can make progress on coming to a consensus or a compromise on how to move forward.
Strange nobody’s done that yet.
Also, of course, there’s bad debt and good debt — like investing in public works projects or education — that promise to pay off big time in the long run.
Brian,
I actually used that pie chart to prove a point–everyone can come up with stats that supports their argument. You’re going with the CBO stats because they support the argument you’ve already made up in your mind–that we have to choose between tax hikes and spending cuts. I agree with theirs, but even if I didn’t, it’s impossible to trust any statistics that come out of this White House, even from nonpartisan agencies like the CBO or the GAO.
Remember when you posted about Ruth Marcus and Paul Krugman? You wrote that it was accepted wisdom that SS needed to be fixed, even when Robert eloquently pointed out that this is not the case:
Ruth Marcus takes on Paul Krugman and wins this round
Yet you went back and advanced the same argument a few weeks later:
The candidates don’t care about our children
The problem is that you’re trying to get me to argue from a position that is “reasonable,” but in so doing, I am to accept the frames you’re arguing with, i.e. that we have a Hobson’s choice in front of us and there are no other alternatives. This is what you get from restricting your reading to people like Samuelson and Marcus, both of whom are paid to advance the party line on these issues.
I don’t buy your arguments, so I don’t meet you on your chosen battlefield. 🙂 Yes, I absolutely agree that our level of debt is absolutely unsustainable. But the best way to get out of debt is to generate enough income to pay that debt down. For America to meet its debt obligations, we need growth. That growth has to come from real income increases and investment, not simply spending on credit.
And to get those changes, we need jobs. If the private sector isn’t hiring, we have to empower the public sector to do it. We may have to yet raise taxes and/or cut spending, but I simply do not accept that those are our only choices.
If so doing makes me “unreasonable” to you, I can live with that. 🙂 I’m an idealist, not a pragmatist. 🙂
Russ,
Actually, they are, but it’s difficult to do so when you have such a huge noise machine fighting against the idea.
Oh, and just as a followup, here’s a piece from Lawrence Mishel, head of the Economic Policy Institute. These guys are not quacks by any stretch, and yet Mishel is advancing much of the same remedies I do:
http://www.prospect.org/cs/articles?article=time_to_take_action_on_the_recession
Quote:
Of course, the best response to rising unemployment is to put Americans back to work. As every parent, every commuter, and every environmentally conscious citizen knows, there is a huge backlog of work that needs to be done fixing schools and bridges and building energy-efficient facilities of all kinds.Nothing sums up the problem as well as a few facts: The average age of public schools is about 40 years, and these buildings need a total of at least $17 billion a year in maintenance and rehabilitation. Meanwhile, the U.S. Department of Transportation has found more than 6,000 major bridges that need to be repaired or replaced. On the environmental front, more than $4 billion of wastewater treatment projects are ready to go to construction, if funding is made available. Let’s provide the money for all these needs – schools, bridges, sewage treatment plants, and more. Every $1 billion of construction spending generates from 14,000 to 47,000 new jobs — and up to $6 billion in additional economic activity.
I would’ve added this piece to my initial post, but I didn’t see it until afterward. I may not have thought this through to your liking, but it may also be that I am just, to paraphrase a certain computer company, thinking differently.
Russ,
EXACTLY! That’s exactly right. Short-term pain, long-term success. Homeowners can understand this in principle–you cringe at your mortgage payment, property taxes, costs of repair, etc., but (in theory) you get a better return on your investment from the value of your house building wealth in the long term. Of course, the current slump throws that theory totally out of whack. 🙂
I’m a firm believer in there being no such thing as good debt, but if it’s that or my country reverting to the Gilded Age, I’ll take the debt.
Lots of things:
First, if you can’t trust non-partisan statistics, what the hell can you trust? Seriously, I’d love to know, because the CBO and GAO are about as close to “pure” as you’re ever going to find in these kinds of debates. And yes, I excluded the OMB for a reason – they’re much tighter tied to the White House than the CBO or GAO are to Congress.
Yep, sure did, but I disagree that Robert disagreed. I pointed out that SS needed to be fixed but, if I’m reading Robert’s comments correctly, he claimed that SS wasn’t “in crisis,” something I never actually claimed (and didn’t intend to imply). Fixing SS is necessary even if fixing it isn’t immediately required due to the lack of “crisis” regarding the funding problems it has. And Robert’s suggestion for increasing/removing the FICA cap is a fix. It’s an intelligent solution that raises the effective SS taxes. Of course, I should probably be working in my own frame here – it increases public investment in Social Security, something that I heartily support. One of Ruth Marcus’ claims that got very little attention in the discussion was that we should fix SS first precisely because it’s not in crisis – it’s easier to develop solutions to SS, and in the process work out the kinks for solving the real Medicaid and Medicare crises.
You appear to think that there is a third way to make government solvant, but you’re wrong. You can bring in more money or stop spending as much – that’s it. There are no other options. The question you seem to be asking is whether we can bring in more money via growth at a stable tax rate vs. increasing the tax rate, and that’s a fair question. What you haven’t convinced me of is that we won’t have to do all three – promote growth, increase taxes moderately, and also cut spending in various places. You seem to think that simply promoting growth and cutting spending will do it, and you may be right. But the question you haven’t answered is how you’ll cut spending without compromising on whatever it is you’re cutting, and how you’ll promote growth without making the debt problem worse (or at least not improving it). THAT’s where I want specifics, and you haven’t given me any.
I’d love to see the country put people back to work on public works projects, CityYear, and similar projects. I think you’re absolutely right, they’ll pay back huge dividends both individually and nationally. But unless we do that in a way that we can sustain, we’ll end up with a worse national balance sheet than we already have. As my economics prof said (paraphrased), the legacy of the national debt is lowered long-term economic growth. I don’t fundamentally have a problem with deficit spending, and I’m most definitely not a balanced budget supporter – I like deficit spending and rainy day funds. But if we’re going to grow ourselves out of our current problems, then we’ll have to address our ballooning debt in some fashion as the same time. And again, I’ve seen no proposals that will do that that don’t also raise taxes and/or cut spending.
This isn’t theory, Martin – we’re talking where the rubber meets the road here. This is ensuring that our national authority is beefed back up again after 8 years of Bush doing everything he could to destroy it. We’re talking about making a singularly ineffective government effective again, including strengthening parts that have atrophied under Bush and cutting back on the fat in areas that have porked up (so to speak). We’re talking about investing in our future with education, repairing our public roads, bridges, tunnels, and buildings, building out high-speed internet connections , etc. We’re talking about doing all of that while retooling our economy to run on the sun instead of carbon we dig or drill out of the ground, something that human civilization has never even contemplated dreaming about before the last few decades. Can you think about the hundreds of billions to trillions of dollars that will cost and honestly tell me we can grow our economy enough to do all that?
While I was waiting for you to respond, I read over Mishel’s full proposal. He addresses your points in ways a lot more eloquently than I have done, so let me link to that as my first set of concrete solutions: http://www.epi.org/content.cfm/bp210
I have no problem with raising taxes AND (notice I didn’t say “or”) cutting spending if we have to in order to reduce the debt. If we had to choose, I would choose spending cuts first, if only because it’s more politically palatable to sell to the public than raising taxes. And there’s plenty of fat to trim in both federal and state governments that can save us billions, even BEFORE we get to essential public service. The amount of government waste we generate is astounding–and I say this as a quintessential Big Government liberal spender. 🙂
But what I balk at is the frame, and I think that’s where we’re crossing swords. People like Mallaby, Samuelson, and Marcus studiously avoid discussing these issues in the way we are because they know who butters their bread–and the Post’s editorial mandate is to enforce corporate doctrine wherever possible. This means avoiding discussion of why we’re spending billions in a wasteful, costly, useless war and narrowing the debate to “ZOMG RAISE TAXES OR CUT SPENDING!”
We may yet have to do one or both of these things to assure we can prosper, Brian. But we can also promote growth and create jobs. You really can eat your cake and have it too, but years of being told otherwise has led us to believe such things are no longer possible.
Speaking of Social Security, did you know that there’s over $400 billion in unclaimed funds in the pool that comes from mismatched returns, illegal immigrants filing returns with stolen identities, etc.? That’s why I laugh whenever people tell me SS is broken or needs fixing–there’s a treasure trove of money in there that isn’t going to anyone. And I do agree with you and Robert about raising the FICA cap. 🙂
Martin – I read Michel’s proposal, and I approve completely. I was concerned that he wouldn’t address the fact that he was calling for deficit spending, but he did so, even pulling the discussion out into a box to make sure you noticed it and understood what that meant. All in all, a nice honest appraisal, and a refreshing change from too much of the economics BS I’ve read from partisans.
I assure you, I’m not trying to promote any frame – except my own, of course. I’m not sure I’ve ever noticed the frame you claim is coming from the Washington Post’s editorial pages, but I’ll keep my eyes open for it in the future. Of course, I may still agree with it, but I’d rather agree with something based on its merits than based on an unconsciously accepted frame.
(Sometimes I think I’m too damn cynical. And then there’s times when I wonder if I’m cynical enough. This is closer to the latter than the former – I should probably just assume that every organization out there is working to bend my mind to their frame, or to their masters’ frames, just to be safe.)
In the above article was written; “Wait,†you’re thinking, “is he saying we’re in recession? Surely not! I know it’s a worry, but no one’s actually said it’s official yet.â€
Thats not true,,,,Ron Paul said we are in one.
I think all of this recession talk is kind of putting the cart before the horse. It’s an election year, and nothing influences an election like the fear of a recession. Sometimes the irrational worrying, and the accompanying hand wringing of a possible recession result in a self-fufulling prophecy. Most people who talk of recession don’t even know what a recession is. The definition of a recession is 2 consecutive quarters of negative growth in real GDP. Free markets experience boom and bust times as part of the naturel economic cycle. The bust cycle just revalues the irrational exuberance of the boom cycle, and wrings out the excess. This is a necessary part of the economic cycle, and recycle, and there’s really nothing the government can do to prevent it. Markets and economies are so much bigger than governments. If there is a recession or depression coming, what are you doing to protect yourself?
Jeff
Soon many will be singing the old depression song–“eleven cent cotton and 40 cent meat, how in the hell can a poor family eat?” and–“Hey, brother can you spare a dime?” Damn those Fascist Republicans and their Corporate Fascists for bringing America down. What are you going to do? Google “the 14 points of Fascism” and compare to the Bush/Cheney mis-administration. Start an e-mail chain letter and send it to every one in this country or print it out and do the same. We can make a difference by informing our community and the Nation.
Why are tax increases not included in the “fix”?
The transfer of wealth started by the Reagan administration, and continued by all the administrations to date, maybe especially W. Clinton, is to blame for the lack of a viable middle class, our faltering economy and the illegal war against an idea and US citizens. The removal of regulations thus allowing concentration of media to inhibit public awareness of what was taking place is just part of the clandestine attempt to bring about this corpocracy that is the US. This lack of information is also to blame for the Iraq debacle just marking bushco as the current enforcer for this fascist platform, albeit a very aggressive enforcer.
Maybe I’m pessimistic but I don’t see any current candidate altering the path of the bus bearing down upon us. Kicinich maybe, Edwards maybe, both of whom are all but unelectable because of the media, certainly not any Republican, H. Clinton or Obama.
What we need is MORE taxes, not less or even status quo. Let’s go back to the ’50s and have an upper tax rate of 90% on income, including unearned income. Move the burden up the ladder and make the death tax for the wealthy ($5M+) and very wealthy ($100M+), an effective wealth recycler. Do away with the FICA cap altogether. Get out of Iraq and most of the other 700+ US bases around the world. Then let’s move health care to a not-for-profit system, such as Medicare. While we’re at it, remove news departments out of defense contractors control, or any other non-news corporation for that matter. Stop and remove foreign investment in our physical and financial infrastructures and assets.
Mandate it part of ANY publishing or broadcasting organization’s public responsibility to report and present news in an objective manner in return for the use of our public airways, internet or any other decimation medium, i.e. cable tv and textbooks. which is used to convey information needed to inform the public so as to enable informed choice.
Put civics back into the curriculum of middle schools.
Not paying for Iraq and forcing the wealthy to pay their share would go a long ways towards bringing the economy under control without increasing debt.
Dana,
Obviously, you don’t pay don’t pay taxes, or have a clue.
Jeff
Jeff,
Why, such crass behavior! And here I thought a good Southern boy like yourself was raised better than that. 😉
Martin, I’m surprised that you mentioned my crass behavior, or even thought my behavior was crass. Since I’ve been reading this excellent blog, I’ve been subject to countless personal attacks, inflammatory statements, name calling, and just outright meanness. You’ll remember that I’ve even had comments deleted because the authors thought I pushed their buttons. Ever so graceful in my responses, with tact and diplomacy, I have showed remarkale restraint. I’ve never seen you come to my defense and bitch slap any of those people who were totally rude and intolerant to me.. Is there a double standard at work here?
Actually, Dana was so far out there, I had to respond in kind:)
For any crass behavoir, I sincerely apologise.
Jeff
Jeff,
Everything I stated most any progressive would be in favor of. Heck, for the sake of brevity I left out things like public financing of elections, free education through 4 years of college, almost anything to do with energy policy and sooooo many others. Would all of it happen? No. I know it’s a wish list right now, but it will happen. It has to, humanity won’t survive if it doesn’t. Humans might survive but I wouldn’t want to live in that world.
Your previous post (13) said it all. You are not in touch with the vast majority of the American middle class or current political events, either that or you’re in total denial. You don’t appear to be stupid or uneducated so for you to state that the current economic crisis is somehow just another cycle is ludicrous. Borrowing $1,400,000,000,000 for a war on a tactic and attacking and occupying a country who posed no threat is just wrong and it is by far the most important economic and social problem we face. Without those expenditures we could do so much. Could have done so much. Through dumb blind luck and a little help from the 5, the unelected Bush could have been known as the greatest President of all time, despite his lack of intellect and proclivity to mangle language. He really could have been the guy we all wanted to go have a beer with. I know, more wishful thinking.
I’m a progressive and you are not but I have to ask you a question. In your world, how does the guy who cuts your hair, the kid who mows your lawn, the waitress who serves your lunch, the taxi driver who ferries you around town and/or the janitor who sweeps your office floor, how do they protect themselves from the gross manipulation of the financial structure of this country by the political class? A single working mother with two kids cannot protect herself. Neither can most others who work for wages, which, in case you haven’t noticed, is most of the people in this country. I do pay taxes and I’ll bet that since my income is %100 earned income, I pay a much higher percentage of my income in taxes, income, hidden and otherwise, than you.
One of the definitions of insane is doing the same thing over and over while expecting a different result. Why do conservatives keep pushing the same ideas over and over when failure is all that results?
You were being crass but then I expect that from non-progressives. Normally I would have just ignored your post because you didn’t contribute anything of value to the discussion but Martin called you on it so I felt compelled to respond.
Thanks Martin. 😉
Dana,
Your wish list of things like free college education, healthcare, and the other liberal laundry list has been tried in places that have collapsed under their own weight such as the USSR.
Regarding your comment that our “Current” economic crisis is something more, just shows naivete on your part. Food consumed a greater percentage of the family’s budget in 1973, and oil prices peaked in 1980, so that can’t be it. Home ownership is at an all time high, so that can’t be it. There’s plenty of liquidity in the markets, and despite what the pundits say, there’s lots of money out there. Banks are still making loans, people are still working, paying their bills, paying their taxes. This so called crisis is just part of the inevitible cycle of free market capitalism. If you want to see some bad times, just revisit the Great Depression, or any of the other 27 panics or recessions that predated the depression. Those were real bad times, but this is a media driven blip on the economic radar screen.
You stated that you pay a higher tax rate than I do. Expressed as a percentage, I’ll say that you probably do, but I’d rather deal in dollars. You don’t pay percentages to the Treasury, you pay dollars, and I pay a lot of those dollars on a quarterly basis. It’s guys like me that pay 30% of the taxes in this country.
As far as being out of touch, you don’t know me, so please don’t make assumptions without fact based evidence.
As for the people in the service economy being protected from the, as you call it “gross manipulation of the financial structure by the political class”….you think the politicos screw the little guy, yet you expect them to protect you from such manipulation and dole out entitlements. That’s not very rational.
As for your definition of insane, I haven’t heard that one before…
You said that I was being crass, but that’s something that you expect from non-progressives? I guess it’s all rainbows, lollipops and unicorns in progressive land. Y’all would never speak crassly, as you have the high moral ground and only speak nice-nice. However, you freely insult and demean people who you don’t agree with….I am the poster child for so called liberal intolerance right on this site.
However, I would like to thank you for giving me a good chuckle.
Jeff
There’s a candidate who wants to immediately end the occupation in Iraq, close over 700 bases in 130 countries, reopen and open some bases here, bring all the troops home from around the world, the hundreds of thousands of soldiers back on our soil of course spending their incomes HERE (instead of in 130 other countries), use the savings to pay down the deficit and keep the welfare state system afloat, while only deploying troops in self defense or when the people through congress demand it, and obey the constitution. Who is this presidential hopeful whose raised more money from active duty and from more actual human beings than any other candidate and wipes the floor with guilianni and thompson?
If we changed our ideologies and did spend those billions on creating new jobs and improving infrastructure, there would have been financial returns on our investments rather than throwing it down a rat hole like Iraq with little return other than the heart break of losing loved ones and a massive future financial bill in having to provide medical care for years for thousands of the wounded.
Had we invested those funds in ourselves, we would have had a far better return with well paying jobs, the creation of new industries and workers paying income taxes. It’s a no brainer. It’s called investing in yourself at home first, before you head off into a war where no one comes out the winner. If a country is going to increase its debt, better to do it when you know your going to get somethig back out of that investment. This is exactly what well run companies do and so should government. Invest in your won people and grow.
How about we slash the Military Budget by Say 75%! That would still have us spending more than the top 3 countries in the world instead of the rest of the world combined.
If we changed our ideologies and did spend those billions on creating new jobs and improving infrastructure, there would have been financial returns on our investments rather than throwing it down a rat hole like Iraq with little return other than the heart break of losing loved ones and a massive future financial bill in having to provide medical care for years for thousands of the wounded.
Had we invested those funds in ourselves, we would have had a far better return with well paying jobs, the creation of new industries and workers paying income taxes. It’s a no brainer. It’s called investing in yourself at home first, before you head off into a war where no one comes out the winner. If a country is going to increase its debt, better to do it when you know your going to get somethig back out of that investment. Private companies reinvest in themselves all the time to grow and our government should be doing the same thing.
1 thing I want to know is Colorado would need 128,670 Port Container Inspectors. Im pretty sure they dont ship a whole lot of cargo up the Colorado River.
America has been in a steady decline for 20 years now.
The Federal debt was $1.142 trillion in 1982.
On September 30, 2007 the U.S. government owed $8.993 trillion.
I would think that America is about 40 or 50 trillion in the hole and credit card debt is another trillion dollars.
The only reason America “appeared†to be recovering since the 1982 recession is because the Americans borrowed 10 trillion dollars.
America is spending 7% more then what it earns or produces each year.
The U.S. government has a ton of futurists working and calculating the financial status of the country. Just as Britain knew well in advance of it’s decline as a world economic power in 1870 and which did not occur till immediately after World War One, the American’s know too that the writing is on the wall as China takes it’s place upon the world stage.
The United States was not called a “Great Power” until about 1892.
After the Napoleonic Wars in Europe, (1814-15) there was no power on earth which was greater than the British Empire. “As good as Sterling” was the same as the U.S. dollar or “Greenback” is today. Around 1850, is when the British Empire began it’s decline.
Just as America is doing now, from 1883 to 1913, Britain increased its dependence on imported goods following the introduction of free trade.
About 1870 the German Reich emerged as a new economic player on the map of Continental Europe in the same way that China is doing so at this moment in time. In August 1914, Britain declared war against Germany in an attempt to stop the development of Germany’s economy which was a threat to British hegemony.
Immediately following the end of World War I, Britain collapsed as an “Economic Power” and America became the dominant world power. The Balfour agreement (1917) initiated by the British and giving the Jewish Folks a home in Palestine was in return for Jewish Banking assistance during World War I. Britain’s World War II costs were financed by American banks and Britain did not complete repayment of these American loans until December 2006.
There is huge anger mounting towards the government.
http://www.scrippsnews.com/911poll
“Americans are the only people I know who believe their own propaganda.”
–Deborah Eisenberg, American writer–
It was Bill Clinton who bailed out the manufacturing sector and created the Dot-Com Boom because he changed the tax rules and where any company buying computer related stuff because of the “Y2K” Bug, got a complete tax write off. Immediately after the Y2K-Trip was shown to be false, the Dot-Com bust happened. The American government created the Dot-Com Boom as a means to stimulate the faltering economy.
Lets know what has happened to the economy since 9-11 ….
Airlines were bailed out and laws were introduced which reduced the amount of luggage each passenger could carry on board …. thus saving the airlines huge fuel costs.
Auto manufacturers were bailed out with military vehicle contracts in the same way that Ronnie Ray-Gun bailed out Chrysler during the Latin American wars.
Huge amounts of money was thrown at small-town America via the Home Land Security Department. Every police force has been militarized and equipped with SWAT teams.
60% of the U.S. economy is related to the construction industry.
The U.S. government bailed out the retail sector with the huge infusion of cash via home mortgages.
Let’s face it, anybody with a brain in their heads knew that it would be quite impossible to find “qualified” home buyers in a declining economic environment. But, the government needed to find a way to push money into the market place and bail out the retail sector.
This was a deliberate and intentional policy of the American government in an effort to stimulate retail sales. Before instituting this lending scheme, the American governnment brought in new personal bankruptcy laws in 2005. Then the American bankers encouraged the lending of money to unsuspecting home buyers and who can’t very easily declare personal bankruptcy. The American government used this loan scheme to pour billions into the economy. 60% of American employment is tied to the construction industry and it is American home owners who feed the retail sector.
This “Recession†is going to be worse then 1982. All the American politicians are talking about stimulating the economy but America is bankrupt. They can’t even raise enough cash to bail out the banks. Just this week, the largest bank in the U.S. had to go to Singapore and China to grab some cash to stave off bankruptcy. There is no way that they will find any cash to save the decline of America. Even the insurance companies which insured these sub-prime loans are now bankrupt.
The auto sector is bankrupt. The major auto manufacturers are selling off all their assets before they declare bankruptcy. If they did not sell their assets to India and China, then the workers are entitled to seize assets in lieu of lost pension funds. With the selling of the assets now, the shareholders are raping the pension fund and running off with the dividends now.
It is Take-Away-Time in America.
There is no way that the Government can every hope to meet all the promises made by the Capitalist system over the past 100 years. No corporate pension funds are safe and the Federal Pension Guarantee fund is bankrupt.
American’s think that they are immune from the same financial disaster which the U.S.S.R. suffered through in the 80’s or as every other past empire had happen all throughout history. In the next five years, 75 million Americans who were born after WWII, are gonna be standing in line to collect social security at 23 thousand dollars per year. In addition; Public Sector (civil servants) Retirement Benefits will cost $2.73 trillion. There is no way in hell that the Capitalist System can ever hope to keep the promises made to the Working Class over the past 50 years.
The Federal government can’t even face up to their responsibilities to those disabled folks who qualify right now for social security payments. For sure the government will not be able to meet the payments for the 75 million expected retirees during the next 5 years.
Disabled And Waiting
CBS News Investigation: Backlog In Disability Benefits System Leaves Thousands Of Vulnerable Americans Stranded
A two-month CBS News investigation has found that over the last two years, at least 16,000 people fighting for disability benefits died while awaiting a decision.
Overall, the backlog of cases now stands at 750,000 – up 150 percent since 2000.
It could take 2.5 years to get your hearing.
Examiners warned by their superiors that approving claims today could cost the government millions tomorrow.
“So are you saying, in essence, there was a quota system?†Keteyian asked.
“Every state had different numbers,†she said. “They know that a certain percentage of people, once denied, will never file an appeal.â€
January 14, 2008
Part I of II
http://www.cbsnews.com/stories…..2627.shtml
Part II of II
http://www.cbsnews.com/stories…..8129.shtml
If executives at Enron, Tyco or Worldcom resort to such financial mismanagement, cheating shareholders out of their future retirement, they end up in jail.
When politicians do it, they get re-elected.
And don’t forget the spiraling costs of health care of an aging population.
The government knows full well that the Ordinary Joe is not gonna take this sitting down. There are gonna be riots.
It was Bill Clinton who first introduced the Patriot Act and appointed a “domestic military czar”. Clinton and his furturists recognized the decline of the American empire.
Google:
Presidential Decision Directive 62, Protection Against Unconventional Threats to the Homeland and Overseas, dated May 1998, and Presidential Decision Directive 39.
We can expect to hear American’s totally demonize Chinese products and hide behind “Safety” and “Green” rather then the real truth being trade barriers. The Olympics will be shown as a “polluted” games and where China is responsible for all of America’s woes. (Just as Britian demonized Germany prior 1914.)
This is why all the “Domestic†terrorism laws have been introduced. Martial Law will be imposed. I think that the establishment would prefer that Obama become president because the Lower Class are more likely to listen to “One Of Their Own†as the economy crumbles.
China is the new kid on the block.
As America declares “bankruptcyâ€, a new currency will need to be in place and it will be called the “Amero†and it will be the currency for all of North America. (Mexico, U.S.A. and Canada.)
Quiz: What kind of Anarchist are you?
By BiffoTheBear
http://quizfarm.com/test.php?q_id=37281
The only reason Hitler came to power was because of the depression of the 1930’s.
Poor Folks in Europe suffered alot more then the Poor Folks in North America. The Poor Folks in Europe watched the Rich Folks flaunt their wealth during the Roaring 20’s …. and they remembered this as the Poor Folks were selling their family heirlooms in Pawnshops. It just so happened that a majority of the pawnshops were owned by Jewish Folks and Gypsies.
The Rich Folks in America are running scared! The Partiot Act is for the protection of the Rich Folks because they don’t want a Hitler-Trip to happen in America.
Unions which support or organize protests will be called extremist groups.
The media is broadcasting “Religious” themed shows because the establishment is trying to sell the Poor Folks a conscience.
As the Rich Folks walked by the Poor Homeless person upon the street during past years …. the Rich Folks don’t want the Poor Folks walking by them as they are strung-up on lamp posts.
The establishment knows that the internet is the greatest threat to them. We can expect many stories within the media which demonizes the internet and paints everyone as a pedophile. Laws will be introduced where you will need a broadcast licence to offer videos on the net. A broadcast licence costs millions and only the establishment will be able to afford them.
We can expect the American election campaign to be about how “Strong” and “Decisive” the new American president will need to be in order to take away all the promises which Corporate America made to the Working Class. American’s will be told that the loss of the social security net promised within a Capitalist System is a “Proud” part of American democracy and not something to be ashamed of.
The election campaign will be a Rodney-King-Trip of “Can’t We All Just Get Along?”
The election will only be …. a choice between Tweedledum and Tweedledummer. There is little difference between the candidates or political parties …. It will be an election of Regime Rotation between the Democrats and Republicans ….and which, in truth, provides only an illusion of a functioning democracy.
Calm
Getting out if Iraq will not get the USA out of recession! Where do you believe all the money spent on this necessary war is going? It’s paid to hundreds of thousands of Americans who work for a living manufacturing equipment and ordinance for our great military. The money goes from the government back into the society of the employed. The author of this article thinks this money would be better spent by giving it to welfare seekers. Typical of the liberal mind. That would certainly cause recession!
Are you aware that the onset of WW2 is what pulled America out of the great depression? When more people work and are productive this ends recession.
You said the war in Iraq is a failed venture. Don’t you watch the news? We are winning the war! How do you intemperate winning into failure? Why are liberals always so naïve? Liberals live in an imaginary make believe world. Citi Bank’s problems were caused by fluctuations in the real estate market. Has nothing to do with the war.
Ron Paul 2008!
This is tremendously important. Another head-turning story is that unexploded thermite chips were discovered in the Word Trade Center dust. You can watch the announcement at http://video.google.com/videoplay?docid=-4186920967571123147&hl=en
I hate to be a Ron Paul troll, but you did all the work for me!
“instead of trying to push Iraq aside in people’s minds, Democrats and progressives should link the two together. Every dollar spent in Iraq, fighting a war started on a lie that has cost us immeasurably, is a dollar not spent on rebuilding our country’s prosperity, peace, and future solvency.
End the war, bring our troops home, and let’s get down to the equally painful business of rebuilding our country’s economic base and transiting us out from a system based on debt, consumption, greed, and graft.”
Could be right out of a Ron Paul stump speech. He DOES tie the war and the economic disaster together, along with all the other spending we do abroad. “We’re paying to blow up bridges over there, then we pay to build the bridges again over there, but meanwhile our OWN bridges are collapsing and we don’t have any resources left to take care of them!” is one of his favorite quotes. Or how about “I believe that we are in a recession. And if you want to talk about rescuing our economy, you have to talk about a drastic change in our foreign policy. We can’t afford this policy of global empire!”
Incredible that you should end up a Paul supporter on policy, no matter which way you will vote. 🙂
Very true. I find it interesting about the cost of the war on DC taxpayers. Hardly seems fair considering they get no voting representation in Congress.
Article is true, BUT
The Iraq war is going on AT LEAST another FOUR YEARS.
AT LEAST