“Deficits mean future tax increases, pure and simple. Deficit spending should be viewed as a tax on future generations, and politicians who create deficits should be exposed as tax hikers.” –Ron Paul
The Debt Ceiling Reality Show approaches its grand finale in the next week. The world breathlessly awaits the shocking conclusion. The debt ceiling will be raised. The world will be saved. Wall Street will rejoice. Americans can focus on the important stuff again, like Casey Anthony’s upcoming book, who will win this week’s Toddlers and Tiaras pageant, and the latest app created for their iPads. Based on my observations over the last few weeks, I’m absolutely sure that 90% of the politicians in Washington DC would lose on Are You Smarter than a 5th Grader?
Still, the mainstream media and the performing puppet politicians need to create a fearful frenzy among the masses to insure maximum public relations exposure for their lies, misinformation, and mistruths. Wall Street will exert their control over the debate by threatening to crash the market if they don’t get what they want (aka TARP). I generally ignore the talking heads on Fox, MSNBC, CNN, and CNBC, as I could learn more from watching Cash Cab than listening to ideologues spouting their talking points. But, last night I happened to see an hour or so of Fox, CNN and MSNBC. I saw the full spectrum of right wing and left wing rhetoric and fear mongering. These stations should be ashamed to call themselves news organizations. They do not even purport to report the news. They spew talking points generated by the left and right, depending on the station’s bias. Truth is unavailable on the mainstream media.
What the public doesn’t see is the rooms filled with PR maggots in the bowels of Congress generating talking points and testing them in over night polls of the public. Their sole purpose is to generate a message that will convince the public the fiscal debacle is the fault of the other party. The goal is to gain an advantage in the next elections. The long term future of our country is unimportant to the soulless autobots that get paid to misinform and mislead the masses. Leaving unborn generations with an un-payable debt so we can selfishly cling to benefits promised to us by corrupt politicians who only made the promises so they could be elected, is the ultimate in egocentric myopia.
The deceptive talking points created in smoky backrooms in Washington DC and vetted by Madison Ave maggots are easy to detect. Each side pounds home the exact same phrases on every “news” station:
Republican Talking Points
We refuse to increase taxes on all Americans to fix a spending problem.
Spending has been out of control since Obama took control of the White House (reference $800 billion stimulus package, home buyer tax credit, and Obamacare).
Say that Obama doesn’t have a plan and mention his ten year budget.
Tell the American people Republicans are fiscally responsible and the real party of change.
The people told them to change Washington with the 2010 election.
Democratic Talking Points
The Tea Party EXTREMISTS have hijacked the Republican Party and want to destroy the country by forcing the country to default on its debt.
The Bush tax cuts and the Bush wars are to blame for the entire increase in debt and deficits.
The Republicans want to protect the richest Americans while cutting Medicare and Social Security benefits for the poor.
The Democratic Party will never cut Medicare or Social Security.
The Democrats are willing to compromise and act like adults, while the evil Republicans resist all offers to strike a deal.
Depending on your ideology, you will find yourself agreeing with the talking points that strike your fancy. Don’t worry; they’ve all been tested on sample groups of ignorant Americans in order to strike the right nerve. As I listened to that bald headed prick – James Carville – screeching on CNN last night about Bush’s wars and tax cuts causing our economic peril today, I wanted to reach into the TV screen and throttle the weasel faced demagogue. The National Debt on the day Bush took office was $5.7 trillion. On the day he left office the National Debt was $10.6 trillion, a $4.9 trillion increase in eight years. Today, the National Debt stands at $14.4 trillion, a $3.8 trillion increase in two and a half years. That sounds bipartisan to me.
The global economy is in crisis. Government intervention on a multi-trillion dollar scale is the only thing preventing a worldwide collapse into a new great depression.
This crisis is structural, not cyclical. At its core is the fact that global production, swollen by limitless credit denominated in fiat money, greatly exceeds the consumption that can be financed by the income of the individuals who comprise the world’s population. Governments around the world are borrowing, printing and spending on an unprecedented scale to absorb the global excess capacity (and to prevent asset prices from deflating), but these measures cannot continue indefinitely. The structure of the global economy is unstable and unsustainable. A catastrophic economic breakdown may be unavoidable.
Globalization has put intense downward pressure on wage rates in industrialized countries at a time when the abandonment of sound money unleashed an explosion of credit that allowed industrial production around the world to soar. Tens of millions of new manufacturing jobs have been created in developing economies, but adverse demographic trends have prevented wages from rising. The prevailing wage rate in the manufacturing sector is roughly $5 per day across much of the developing world. To put this wage structure into perspective consider that two billion out of the world’s seven billion people live on less than $2 per day. This crisis then must be understood in terms of excess production relative to purchasing power.
Bill Gross, Nouriel Roubini, Laurence Kotlikoff, Steve Keen, Michel Chossudovsky and the Wall Street Journal all say that the U.S. economy is a giant Ponzi scheme.
Virtually all independent economists and financial experts say that rampant fraud was largely responsible for the financial crisis. See this and this.
But many on Wall Street and in D.C. – and many investors – believe that we should just “go with the flow”. They hope that we can restart our economy and make some more money if we just let things continue the way they are.
But the assumption that a system built on fraud can continue without crashing is false.
In fact, top economists and financial experts agree that – unless fraud is prosecuted – the economy cannot recover.
Fraud Leads to a Break Down in Trust and Instability in the Markets
As Alan Greenspan said recently:
Fraud creates very considerable instability in competitive markets. If you cannot trust your counterparties, it would not work.
Federal Reserve chairman Ben Bernanke said on CBS’s’ ’60 Minutes’ that he would be willing to increase quantitative easing to boost the US’s slow-recovering economy. Photograph: Susan Walsh/AP
Hollywood used to be the place where creative people went to cook up outlandish horror plots. But Hollywood has been displaced. Now, people go to Washington to spin their wild tales of looming disaster.
The national agenda has been dominated by such tales over the last two years. Most recently, we have had the story of the bond market vigilantes doing to the United States what they have already done to Greece, Ireland and Portugal. This story requires suspending disbelief, but people who report on economic and political issues for major news outlets are good at ignoring reality.
We’ll be all over those docs too…so stay tuned as America sinks~jude
Courtney Comstock
Tomorrow, the Fed will begrudgingly release documents that may reveal which banks would have failed without a bailout.
Ever since the Fed bailout in 2008, the public has only known that nearly every major US bank was bailed out. But of course that’s because the Fed shielded us from the knowledge of which banks actually needed a bailout.
A little background: In 2008, the Fed is said to have loaned to banks that didn’t need bailouts in order to remove the stigma of being insolvent from the banks that needed one, which could have rendered the bailouts worthless.
The Feds didn’t want it to be one group of “insolvent, very risky” banks versus one group of “solvent, solid” banks.
The documents released tomorrow may distinguish one group from the other.
So it’s no surprise that after Bloomberg’s Mark Pittman requested the forms back in 2008 (before he died in 2009) as part of the freedom of Information Act, the Federal Reserve Board appealed to the court to avoid releasing the requested information.
These are the “hot” items Bloomberg requested, the info the Fed really doesn’t want to release:
231 “term sheets” documenting Fed loans to financial firms during 2008. The records, which include the banks’ names, the amounts borrowed and the collateral posted in return.
Of course the banks don’t want these details revealed. The info could seriously damage the banks that would have failed without a bailout.
The Fed tried to use the potential havoc the data could wreak in a bid to keep the data under wraps six months ago:
“[In their appeal, the Fed said that] disclosure of the documents threatens to stigmatize borrowers and cause them “severe and irreparable competitive injury.”
But their appeal was denied.
A consortium of banks (including JP Morgan, BofA and Citi) called the Clearing House Association then filed another appeal, however, which the Fed did not join. But because the decision was appealed, the lower court’s ruling was put “on hold” until the high court returns a verdict – hence the Fed did not have to release the documents right away.
So does that mean we will definitely find out which banks needed bailing out and which didn’t? No. There’s no way of knowing.
Plus, while Dodd-Frank financial reform law mandates the Fed release details on emergency programs during the crisis, it apparently it not required to release information on discount window, which is the window that Bloomberg is sued over.
So after tomorrow, we could still be as clueless as we are now.
OR, as an Oppenheimer bank analyst put it in March:
[The release could have] “catastrophic” results, including demands for the instant disclosure of banks seeking help from the Fed, resulting in a “death sentence” for such financial institutions.
The release is set for 12 pm, and Senator Bernie Sanders is holding a conference call at 4 pm to discuss the findings with the media.
We’ll be all over the documents starting at noon tomorrow, so stay posted.
The political class and Standard-Issue Punditry (SIP) don’t “get it”: Americans have completely lost faith in their Financial Elites and government, for abundantly obvious reasons.
Anyone who believes the foreclosure crisis can be contained is deluded, because the real issue in play is the citizens’ trust in their government’s ability to govern the nation’s Financial Elites according to the rule of law. Clearly, our government has failed its citizens–utterly, completely, totally, at every level of governance (Federal, State, local) and at every level of oversight and regulation.
The bitter truth is that the nation’s Financial Power Elites are not constrained by rule of law, and as a result of this revelation Americans’ trust in their government and political class has been shattered. Despite raising their voices 600 to 1 against the TARPand related bailouts of the nation’s Financial Power Elites (who stripmined the nation’s wealth from their investment banking and mortgage banking fortresses) in 2008, the government shoved trillions of dollars of bailouts and guarantees into private hands with pathetically little control in return.In their rage at this abject, cowardly surrender of their government to the Financial Elites, the American people tossed the craven bankers-lapdogs Republicans out and replaced them with an untested young president who talked the talk and old-line Democrats.
All of whom proceeded to attach the same leash to their necks and become craven lapdogs of the Financial Elites. Less than two years after the inevitable meltdown of the Power Elites’ stripmining operation and its unprecedented rescue by the Federal government, the Financial Power Elites are once again caught flouting the laws of land as if the U.S. were a “banana republic” in which laws are “only for the little people.”
And now the inevitable calls are arising for a “Federal solution” which will bail the bankers out of the foreclosure crisis with their ownership of the political class and the nation’s wealth firmly in hand.
The people have lost their trust in their government for good reason: it has betrayed their trust.
Remember…It’s *for our *OWN GOOD* that they don’t tell us everything…after all…Who are we to meddle with the great powers [CCE =Corrupt Corporate Elitist] and information??? ~jude
In an early October report, the Treasury approximated that taxpayers would lose just $5 billion on their investment in American International Group (AIG), a tiny fraction of the $182 billion bailout AIG was originally extended.
But the New York Timesreports that according to special inspector general for TARP Neil Barofsky, the Treasury has concealed $40 billion in losses on AIG alone.
The Treasury, apparently, has been using unusual and misleading accounting practices.
“In our view, this is a significant failure in their transparency,” said Barofsky.
The United States Treasury concealed $40 billion in likely taxpayer losses on the bailout of the American International Group earlier this month, when it abandoned its usual method for valuing investments, according to a report by the special inspector general for the Troubled Asset Relief Program.
“In our view, this is a significant failure in their transparency,” said Neil M. Barofsky, the inspector general, in an interview on Monday.
In early October, the Treasury issued a report predicting that the taxpayers would ultimately lose just $5 billion on their investment in A.I.G., a remarkable outcome, since the insurance company was extended $182 billion in taxpayer money in the early months of its rescue. The prediction of a modest loss, widely reported as A.I.G., the Federal Reserve and the Treasury rushed to complete an exit plan, contrasted with an earlier prediction by the Treasury that the taxpayers would lose $45 billion.
“The American people have a right for full and complete disclosure about their investment in A.I.G.,” Mr. Barofsky said, “and the U.S. government has an obligation, when they’re describing potential losses, to give complete information.”
This is a very important read…I can not stress that enough…A lot has been done to distract us from this problem but that has definately not made it go away…
~jude
“It is absurd that the United States has a central bank that is more accountable to the financial industry than it is to the public.”
“The Rally against Obamacare for the Banks”
Dean Baker, The Guardian, 9/23/09
“…Only liquidation of the biggest banks can enable a recovery, period!! Of course, the process is complicated, especially politically. Actually, it is more than political, since the big banks control the USGovt. The response reaction from gold & silver will give loud messages to systemic failure, as money is wasted, invested in failure, and directed to the elite troughs…
The major 100 banks in the US are almost without exception insolvent, and thus do not lend. Sure, they boast a positive book value, but only after given permission to use phony FASB accounting rules. They can declare their assets at any value they wish. In fact, on many debt securities, they actually declare unrealized losses as gains…The FDIC came out this week to announce the Q2 list of problem banks went from 775 in number to 829…The main thrust of the limp activity is monetary creation, banker welfare, absurd programs, and war spending…
